Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Entity registrant name | TheRealReal, Inc. | |
Trading symbol | REAL | |
Entity central index key | 0001573221 | |
Current fiscal year end date | --12-31 | |
Entity filer category | Large Accelerated Filer | |
Document type | 10-Q | |
Document period end date | Mar. 31, 2021 | |
Document fiscal year focus | 2021 | |
Document fiscal period focus | Q1 | |
Amendment flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Interactive Data Current | Yes | |
Entity common stock, shares outstanding | 90,809,675 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-38953 | |
Entity Tax Identification Number | 45-1234222 | |
Entity Address, Address Line One | 55 Francisco Street | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94133 | |
City Area Code | 855 | |
Local Phone Number | 435-5893 | |
Title of 12(b) Security | Common stock, $0.00001 par value | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 547,859 | $ 350,846 |
Short-term investments | 4,017 | |
Accounts receivable, net | 5,994 | 7,213 |
Inventory | 49,502 | 42,321 |
Prepaid expenses and other current assets | 15,267 | 17,072 |
Total current assets | 618,622 | 421,469 |
Property and equipment, net | 66,637 | 63,454 |
Operating lease right-of-use assets | 143,331 | 118,136 |
Other assets | 2,156 | 2,050 |
Total assets | 830,746 | 605,109 |
Current liabilities | ||
Accounts payable | 9,260 | 14,346 |
Accrued consignor payable | 54,484 | 57,053 |
Operating lease liabilities, current portion | 15,275 | 14,999 |
Other accrued and current liabilities | 63,394 | 61,862 |
Total current liabilities | 142,413 | 148,260 |
Operating lease liabilities, net of current portion | 140,775 | 115,084 |
Convertible senior notes, net | 336,112 | 149,188 |
Other noncurrent liabilities | 1,541 | 1,284 |
Total liabilities | 620,841 | 413,816 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Common stock, $0.00001 par value; 500,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 90,675,268 and 89,301,664 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 1 | 1 |
Additional paid-in capital | 797,918 | 723,302 |
Accumulated other comprehensive income | 11 | |
Accumulated deficit | (588,014) | (532,021) |
Total stockholders’ equity | 209,905 | 191,293 |
Total liabilities and stockholders’ equity | $ 830,746 | $ 605,109 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 90,675,268 | 89,301,664 |
Common stock, shares, outstanding | 90,675,268 | 89,301,664 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue: | ||
Total revenue | $ 98,817 | $ 78,028 |
Cost of revenue: | ||
Total cost of revenue | 40,479 | 29,042 |
Gross profit | 58,338 | 48,986 |
Operating expenses: | ||
Marketing | 15,561 | 12,922 |
Operations and technology | 51,934 | 40,737 |
Selling, general and administrative | 43,616 | 35,104 |
Total operating expenses | 111,111 | 88,763 |
Loss from operations | (52,773) | (39,777) |
Interest income | 87 | 1,286 |
Interest expense | (3,296) | (20) |
Other income (expense), net | 17 | 8 |
Loss before provision for income taxes | (55,965) | (38,503) |
Provision (benefit) for income taxes | 28 | |
Net loss attributable to common stockholders | $ (55,993) | $ (38,503) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.62) | $ (0.44) |
Shares used to compute net loss per share attributable to common stockholders, basic and diluted | 90,044,082 | 86,588,796 |
Consignment and Service Revenue | ||
Revenue: | ||
Total revenue | $ 75,082 | $ 65,086 |
Cost of revenue: | ||
Total cost of revenue | 20,114 | 18,088 |
Direct Revenue | ||
Revenue: | ||
Total revenue | 23,735 | 12,942 |
Cost of revenue: | ||
Total cost of revenue | $ 20,365 | $ 10,954 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (55,993) | $ (38,503) |
Other comprehensive income (loss), net of tax: | ||
Unrealized gain (loss) on investments | (11) | 314 |
Comprehensive loss | $ (56,004) | $ (38,189) |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance at Dec. 31, 2019 | $ 338,928 | $ 1 | $ 693,426 | $ 7 | $ (354,506) |
Beginning balance, shares at Dec. 31, 2019 | 85,872,320 | ||||
Issuance of common stock upon exercise of options | 2,564 | 2,564 | |||
Issuance of common stock upon exercise of options, shares | 964,085 | ||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes | (151) | (151) | |||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes, shares | 14,289 | ||||
Stock-based compensation expense | 3,410 | 3,410 | |||
Other comprehensive income (loss) | 314 | 314 | |||
Net loss | (38,503) | (38,503) | |||
Ending balance at Mar. 31, 2020 | 306,562 | $ 1 | 699,249 | 321 | (393,009) |
Ending balance, shares at Mar. 31, 2020 | 86,850,694 | ||||
Beginning balance at Dec. 31, 2020 | 191,293 | $ 1 | 723,302 | 11 | (532,021) |
Beginning balance, shares at Dec. 31, 2020 | 89,301,664 | ||||
Issuance of common stock upon exercise of options | 3,973 | 3,973 | |||
Issuance of common stock upon exercise of options, shares | 543,963 | ||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes, shares | 829,641 | ||||
Stock-based compensation expense | 11,278 | 11,278 | |||
Purchase of capped calls | (33,666) | (33,666) | |||
Equity component of convertible senior notes, net of issuance costs | 93,031 | 93,031 | |||
Other comprehensive income (loss) | (11) | $ (11) | |||
Net loss | (55,993) | (55,993) | |||
Ending balance at Mar. 31, 2021 | $ 209,905 | $ 1 | $ 797,918 | $ (588,014) | |
Ending balance, shares at Mar. 31, 2021 | 90,675,268 |
Condensed Statements of Stock_2
Condensed Statements of Stockholders' Equity (Unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Equity Component of Convertible Senior Notes | |
Stock issuance costs | $ 3,131 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (55,993) | $ (38,503) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 5,435 | 4,145 |
Stock-based compensation expense | 10,919 | 3,410 |
Reduction of operating lease right-of-use assets | 4,755 | 4,121 |
Bad debt expense | 455 | |
Accrued interest on convertible notes | 1,469 | |
Accretion of debt discounts and issuance costs | 1,815 | |
Other adjustments | 5 | (184) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 1,219 | 4,235 |
Inventory | (7,181) | (1,106) |
Prepaid expenses and other current assets | 1,769 | 2,356 |
Other assets | (106) | (365) |
Operating lease liability | (3,983) | (2,721) |
Accounts payable | (5,072) | (2,206) |
Accrued consignor payable | (2,569) | (19,331) |
Other accrued and current liabilities | (547) | (8,865) |
Other noncurrent liabilities | 257 | (412) |
Net cash used in operating activities | (47,808) | (54,971) |
Cash flow from investing activities: | ||
Purchases of short-term investments | (73,280) | |
Proceeds from maturities of short-term investments | 4,000 | 114,020 |
Capitalized proprietary software development costs | (2,405) | (1,480) |
Purchases of property and equipment | (5,925) | (6,486) |
Net cash provided by (used in) investing activities | (4,330) | 32,774 |
Cash flow from financing activities: | ||
Proceeds from issuance of 2028 convertible senior notes, net of issuance costs | 278,844 | |
Purchase of capped calls | (33,666) | |
Proceeds from exercise of stock options | 3,973 | 2,564 |
Taxes paid related to restricted stock vesting | (151) | |
Net cash provided by financing activities | 249,151 | 2,413 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 197,013 | (19,784) |
Cash, cash equivalents, and restricted cash | ||
Beginning of period | 350,846 | 154,446 |
End of period | 547,859 | 134,662 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 7 | 4 |
Supplemental disclosures of non-cash investing and financing activities | ||
Property and equipment additions not yet paid in cash | 2,434 | 2,266 |
Capitalized proprietary software development costs additions not yet paid in cash | 430 | 756 |
Issuance costs associated with issuance of 2025 and 2028 convertible senior notes included in other accrued and current liabilities | 1,173 | |
Stock-based compensation capitalized to proprietary software development costs | $ 359 | $ 0 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Note 1. Description of Business and Basis of Presentation Organization and Description of Business The RealReal, Inc. (the “Company”) is an online marketplace for authenticated, consigned luxury goods across multiple categories, including women’s, men’s, kids’, jewelry and watches, and home and art. The Company was incorporated in the state of Delaware on March 29, 2011 and is headquartered in San Francisco, California. Impact of the Coronavirus (“COVID-19”) Pandemic In the year ended December 31, 2020, the COVID-19 pandemic materially impacted the Company's business operations and results of operations. resulting in operations below full capacity In-person concierge consignment appointments were temporarily suspended. Luxury consignment offices and retail stores were temporarily closed. During the second half of fiscal year 2020 all luxury consignment offices and retail stores were open. In-person concierge an option for our consignor base augmented with virtual appointments. In the first quarter of fiscal year 2021, the Company resumed in-person concierge consignment appointments in various areas. The authentication centers and retail stores experience intermittent closures to perform safety and cleaning procedures. The Company believes that its financial resources will allow it to manage the anticipated impact of COVID-19 on the Company’s business operations for the foreseeable future. The Company believes its existing cash and cash equivalents as of March 31, 2021 will be sufficient to meet its working capital and capital expenditures needs for at least the next 12 months. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. The Company’s functional and reporting currency is the U.S. dollar. The condensed balance sheet as of December 31, 2020 included herein was derived from the audited financial statements as of that date. The accompanying unaudited condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to state fairly the Company’s financial position, results of operations, comprehensive loss, and stockholders’ equity, and cash flows for the periods presented. Certain changes in presentation have been made to conform the prior period presentation to the current period reporting. Such reclassifications did not affect total revenues, operating income, or net income. We have made certain presentation changes to reclassify loss (gain) on retirement of property and equipment, accretion of unconditional grant liability, and amortization of premiums (discounts) on short-term investments to other adjustments within operating cash flows in the Condensed Statements of Cash Flows. These unaudited condensed financial statements should be read in conjunction with the Company’s financial statements and notes included in our Annual Report on Form 10-K filed with the SEC on March 1, 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to revenue recognition, including the returns reserve, valuation of inventory, software development costs, incremental borrowing rates related to lease liability, fair value of the liability component of convertible senior notes, valuation of deferred taxes, and other contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. Net Loss per Share Attributable to Common Stockholders The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method determines net loss per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available or attributable to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s convertible senior notes are participating securities as they give the holders the right to receive dividends if dividends or distributions declared to the common stockholders is equal to or greater than the last reported sale price of the Company’s common stock on the trading day immediately preceding the ex-dividend date for such dividend or distribution No . For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares and assumed conversion of the convertible senior notes are not assumed to have been issued within the calculation, if their effect is anti-dilutive. Revenue Recognition The Company generates revenue from the sale of pre-owned luxury goods through its online marketplace and retail stores. Consignment and Service Revenue The Company provides a service to sell pre-owned luxury goods on behalf of consignors to buyers through its online marketplace and retail stores. The Company retains a percentage of the proceeds received as payment for its consignment service, which the Company refers to as its take rate. The Company reports consignment revenue on a net basis as an agent and not the gross amount collected from the buyer. Title to the consigned goods remains with the consignor until transferred to the buyer upon purchase of the consigned goods and expiration of the allotted return period. The Company does not take title of consigned goods at any time except in certain cases where returned goods become Company-owned inventory. The Company recognizes consignment revenue upon purchase of the consigned good by the buyer as its performance obligation of providing consignment services to the consignor is satisfied at that point. Consignment revenue is recognized net of estimated returns, cancellations, buyer incentives and adjustments. The Company recognizes a returns reserve based on historical experience, which is recorded in other accrued and current liabilities on the condensed balance sheets (see Note 5). Sales tax assessed by governmental authorities is excluded from revenue. Certain transactions provide consignors with a material right resulting from the tiered consignor commission plan. Under this plan, the amount an individual consignor receives for future sales of consigned goods may be dependent on previous consignment sales for that consignor within his/her consignment period. Accordingly, in certain consignment transactions, a small portion of the Company’s consignment revenue is allocated to such material right using the portfolio method and recorded as deferred revenue, which is recorded in other accrued and current liabilities on the condensed balance sheets. The Company charges shipping fees to buyers and has elected to treat shipping and handling activities performed after control transfers to the buyer as fulfillment activities. All outbound shipping and handling costs are accounted for as fulfillment costs in cost of consignment and service revenue at the time revenue is recognized. The Company also generates subscription revenue from monthly memberships allowing buyers early access to shop for luxury goods. The buyers receive the early access and other benefits over the term of the subscription period, which represents a single stand-ready performance obligation. Therefore, the subscription fees paid by the buyer are recognized over the monthly subscription period. Subscription revenue was not material in the three months ended March 31, 2021 and 2020. Direct Revenue The Company generates direct revenue from the sale of Company-owned inventory. The Company recognizes direct revenue on a gross basis upon shipment of the purchased good to the buyer as the Company acts as the principal in the transaction. Direct revenue is recognized net of estimated returns, buyer incentives and adjustments. Sales tax assessed by governmental authorities is excluded from revenue. Cost of direct revenue is also recognized upon shipment to the buyer in an amount equal to that paid to the consignor from the original consignment sale, an amount equal to that paid as a direct purchase from a third party, or the lower of cost of the inventory purchased and its net realizable value. Incentives Incentives, which include platform-wide discounts and buyer incentives, may periodically be offered to buyers. Platform-wide discounts are made available to all buyers on the online marketplace. Buyer incentives apply to specific buyers and consist of coupons or promotions that offer credits in connection with purchases on the Company’s platform, and do not impact the commissions paid to consignors. These are treated as a reduction of consignment and service revenue and direct revenue. Additionally, the Company periodically offers commission exceptions to consignors to optimize its supply. These are treated as reduction of consignment and service revenue The Company may offer a certain type of buyer incentive in the form of site credits to buyers on current transactions to be applied towards future transactions, which are included in other accrued and current liabilities on the balance sheets. Contract Liabilities The Company’s contractual liabilities consist of deferred revenue for material rights primarily related to the tiered consignor commission plan, which are recognized as revenue using a portfolio approach based on the pattern of exercise, and certain unredeemed site credits, which were immaterial as of March 31, 2021 and December 31, 2020. Contract liabilities are recorded in other accrued and current liabilities on the balance sheets and are generally expected to be recognized within one year. Contract liabilities were immaterial as of March 31, 2021 and December 31, 2020. Cost of Revenue Cost of consignment and service revenue consist of shipping costs, credit card fees, packaging, customer service personnel-related costs, website hosting services, and consignor inventory adjustments relating to lost or damaged products. Cost of direct revenue consists of the cost of goods sold, credit card fees, packaging, customer service personnel-related costs, website hosting services, and inventory adjustments. Stock-based Compensation Stock-based compensation expense related to employees and nonemployees is measured based on the grant-date fair value of the awards. Compensation expense is recognized in the statements of operations over the period during which the employee is required to perform services in exchange for the award (the vesting period of the applicable award) using the straight-line method. The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model and accounts for forfeitures as they occur. The fair value of restricted stock units (“RSUs”) is estimated based on the fair market value of the Company’s common stock on the date of grant, which is determined based on the closing price of the Company’s common stock. The fair value of each purchase under the employee stock purchase plan (ESPP) is estimated at the beginning of the offering period using the Black-Scholes option pricing model. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents primarily consist of investments in short-term money market funds and amounts invested in U.S. treasury securities . As of March 31, 2021 and December 31, 2020, the Company had no restricted cash. Short-term Investments T he Company has classified and accounted for its short-term investments as available-for-sale which are carried at fair value on its condensed balance sheets. Available-for-sale securities with remaining maturities of 12 months or less are classified as short term and available-for-sale securities with remaining maturities greater than 12 months are classified as long term. Available-for-sale investments are reported at fair value based on quoted market prices and other observable market data. The Company records any unrealized gains and losses within accumulated other comprehensive income (loss) as a component of stockholders’ equity, of which there were none as of March 31, 2021 and December 31, 2020. The Company evaluates its short-term investments periodically for possible impairment. Inventory Inventory consists of finished goods arising from goods returned after the title has transferred from the buyer to the Company as well as finished goods from direct purchases from vendors and consignors. The cost of inventory is an amount equal to that paid to the consignor or vendors. Inventory is valued at the lower of cost or net realizable value using the specific identification method and the Company records provisions, as appropriate, to write down obsolete and excess inventory to estimated net realizable value. After the inventory value is reduced, adjustments are not made to increase it from the estimated net realizable value. Our provisions to write down obsolete and excess inventory to net realizable value were not material for the three months ended March 31, 2021 and 2020. Return reserves, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in other accrued and current liabilities on the condensed balance sheets and were $14.5 million and $18.3 million as of March 31, 2021 and December 31, 2020, respectively. Included in inventory on the Company’s condensed balance sheets are assets totaling $3.4 million and $7.4 million as of March 31, 2021 and December 31, 2020, respectively, for the rights to recover products from customers associated with its liabilities for return reserves. Software Development Costs Proprietary software includes the costs of developing the Company’s internal proprietary business platform and automation projects. The Company capitalizes qualifying proprietary software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed and (2) it is probable that the software will be completed and used for its intended function. Such costs are capitalized in the period incurred. Capitalization ceases and amortization begins when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. Leases Contracts that have been determined to convey the right to use an identified asset are evaluated for classification as an operating or finance lease. For the Company’s operating leases, the Company records a lease liability based on the present value of the lease payments at lease inception, using the applicable incremental borrowing rate. The Company estimates the incremental borrowing rate by developing its own synthetic credit rating, corresponding yield curve, and the terms of each lease at the lease commencement date The Company has elected the practical expedients that allows for the combination of lease components and non-lease components and to record short-term leases as lease expense on a straight-line basis on the condensed statements of operations. Variable lease payments are recorded as expense as they are incurred. The Company has finance leases for vehicles and equipment, and the amounts of finance lease right-of-use assets and finance lease liabilities have been immaterial to date. Convertible Senior Notes, net Convertible debt instruments that may be settled in cash or other assets, or partially in cash, upon conversion, are separately accounted for as long-term debt and equity components (or conversion feature). T he debt component represents the Company’s contractual obligation to pay principal and interest and the equity component represents the Company’s option to convert the debt security into equity of the Company or the equivalent amount of cash. Upon issuance, the Company allocated the debt component on the basis of the estimated fair value of a similar liability that does not have an associated convertible feature and the remaining proceeds are allocated to the equity component. The bifurcation of the debt and equity components resulted in a debt discount for the aforementioned notes . The Company uses the effective interest method to amortize the debt discount to interest expense over the amortization period which is the expected life of the debt. Capped Call Transactions In June 2020 and March 2021, in connection with the issuance of its convertible senior notes, the Company entered into Capped Call Transactions (see Note 6). The Capped Call Transactions are expected generally to reduce the potential dilution to the holders of the Company’s common stock upon any conversion of the and/or offset any cash payments the Company is required to make in excess of the principal amount of converted , with such reduction and/or offset subject to a cap based on the cap price. The capped calls are classified in stockholders’ equity as a reduction to additional paid-in capital and are not subsequently remeasured as long as the conditions for equity classification continue to be met. Debt Issuance Costs Debt issuance costs are amortized to interest expense over the estimated life of the related debt based on the effective interest method. The Company presents debt issuance costs on the condensed balance sheets as a direct deduction from the associated debt. A portion of debt issuance costs incurred in connection with the convertible senior notes issued in June 2020 and March 2021 was related to the equity component and was recorded as a reduction to additional paid in capital and is not amortized to interest expense over the estimated life of the related debt. Concentrations of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, accounts receivable, and investments. At times, such amount may exceed federally-insured limits. The Company reduces credit risk by placing its cash and cash equivalents, restricted cash, and investments with major financial institutions within the United States . As of March 31, 2021 and December 31, 2020, there were no customers that represented 10% or more of the Company’s accounts receivable balance and there were no customers that individually exceeded 10% of the Company’s total revenue for each of the three months ended March 31, 2021 and 2020. Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity which simplifies accounting for convertible instruments Under this ASU, the embedded conversion features will no longer be separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-term Investments | 3 Months Ended |
Mar. 31, 2021 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Short-term Investments | Note 3. Cash, Cash Equivalents and Short-term Investments The following tables summarize the estimated value of the Company’s cash, cash equivalents and short-term investments (in thousands): March 31, 2021 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 343,491 $ — $ — $ 343,491 Money market funds 204,368 — — 204,368 Total cash and cash equivalents $ 547,859 $ — $ — $ 547,859 December 31, 2020 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 150,520 $ — $ — $ 150,520 Money market funds 200,326 — — 200,326 Total cash and cash equivalents $ 350,846 $ — $ — $ 350,846 Short-term investments: Corporate bonds $ 4,006 $ 11 $ — $ 4,017 Total short-term investments $ 4,006 $ 11 $ — $ 4,017 As of December 31, 2020, the contractual maturity for the short-term investments is less than one year. For the three months ended March 31, 2021 and 2020, the Company recognized no material realized gains or losses on short-term investments. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 4. Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis on the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the periods presented. Assets and Liabilities Measured at Fair Value on a Recurring Basis As of March 31, 2021, the Company’s cash equivalents solely consisted of money market funds, which amounted to $204.4 million. Money market funds are measured at net asset value per share and are excluded from cash equivalents in the fair value hierarchy table. The following table provides the financial instruments measured at fair value (in thousands) as of December 31, 2020: December 31, 2020 Level 1 Level 2 Level 3 Total Assets (1) Short-term investments: Corporate bonds $ — $ 4,017 $ — $ 4,017 Total short-term investments $ — $ 4,017 $ — $ 4,017 (1) Money market funds are measured at net asset value per share and are excluded from cash equivalents in the fair value hierarchy table. The amounts of the money market funds (in thousands) was $200,326 at 12/31/20. Fair Value Measurements of Other Financial Instruments The following table presents the carrying amounts and estimated fair values of the financial instruments that are not recorded at fair value on the condensed balance sheets (in millions): March 31, 2021 Net Carrying Amount Estimated Fair Value 2025 Convertible senior notes $ 150.3 $ 186.1 2028 Convertible senior notes $ 185.8 $ 286.4 The principal amounts of the 2025 convertible senior notes and the 2028 convertible senior notes are $172.5 million and $287.5 million, respectively. The difference between the principal amounts of the convertible senior notes and their respective net carrying amounts are the unamortized debt issuance costs and the unamortized debt discount (See Note 6). As of March 31, 2021, the fair value of the 2025 convertible senior notes and the 2028 convertible senior notes, which differs from their carrying value is determined by prices for the convertible senior notes observed in market trading. The market for trading of the convertible senior notes is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs, such as interest rates based on the market price on the last trading day for the period. Based on the closing price of the Company’s common stock on March 31, 2021, the if-converted values of the 2025 Notes exceeded the principal amounts by $47.1 million. |
Condensed Balance Sheet Compone
Condensed Balance Sheet Components | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Condensed Balance Sheet Components | Note 5. Condensed Balance Sheet Components Property and Equipment, Net Property and equipment, net is recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded on a straight-line basis over the estimated useful lives of the respective assets. Property and equipment, net consists of the following (in thousands): March 31, 2021 December 31, 2020 Proprietary software $ 27,075 $ 24,218 Furniture and equipment 30,485 27,687 Automobiles 668 668 Leasehold improvements 55,748 52,828 113,976 105,401 Less: accumulated depreciation and amortization (47,339 ) (41,947 ) Property and equipment, net $ 66,637 $ 63,454 Depreciation and amortization expense on property and equipment was $5.4 million and $4.1 million for the three months ended March 31, 2021 and 2020, respectively. Other Accrued and Current Liabilities Other accrued and current liabilities consist of the following (in thousands): March 31, 2021 December 31, 2020 Returns reserve $ 14,479 $ 18,327 Accrued compensation 16,786 13,406 Accrued marketing and outside services 9,947 10,790 Site credit liability 6,159 5,475 Accrued sales tax and other taxes 7,246 6,870 Deferred revenue 2,008 1,617 Accrued interest 1,685 216 Other 5,084 5,161 Other accrued and current liabilities $ 63,394 $ 61,862 |
Convertible Senior Notes, Net
Convertible Senior Notes, Net | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes, Net | Note 6. Convertible Senior Notes, Net 2025 Convertible Senior Notes In June 2020, the Company issued an aggregate principal of $172.5 million of its 3.00% Convertible Senior Notes due 2025 (2025 Notes), pursuant to an indenture between the Company and U.S. Bank National Association, as trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The 2025 Notes include $22.5 million in aggregate principal amount of the 2025 Notes sold to the initial purchasers resulting from the exercise in full of their option to purchase additional Notes. The 2025 Notes will mature on June 15, 2025, unless earlier redeemed or repurchased by the Company or converted. The Company received net proceeds from the 2025 Notes offering of approximately $165.8 million, after deducting the initial purchasers’ discount and commission and offering expenses. The Company used approximately $22.5 million of the net proceeds from the 2025 Notes offering to fund the net cost of entering into the capped call transactions described below. The Company intends to use the remainder of the net proceeds for general corporate purposes. The 2025 Notes accrue interest at a rate of 3.00% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The initial conversion rate applicable to the 2025 Notes is 56.2635 shares of common stock per $1,000 principal amount of 2025 Notes (which is equivalent to an initial conversion price of approximately $17.77 per share of the Company’s common stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a corporate event, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2025 Notes in connection with such corporate event. The 2025 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after June 20, 2023 if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the related redemption notice. In addition, calling any Note for redemption will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. Prior to March 15, 2025, the 2025 Notes will be convertible only under the following circumstances: • During any calendar quarter (and only during such calendar quarter) beginning after September 30, 2020, if, the last reported sale price per share of the Company’s common stock exceeds 130% of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter; • During the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day; • Upon the occurrence of specified corporate transactions; or • If the Company calls any notes for redemption. On and after March 15, 2025, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2025 Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. Upon conversion, the 2025 Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. It is the Company’s current intent to settle conversions of the through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock. The conditions allowing holders of the 2025 Notes to convert were not met as of March 31, 2021. The 2025 Notes are unsecured and unsubordinated obligations of the Company and will rank senior in right of payment to any of future indebtedness of the Company that is expressly subordinated in right of payment to the 2025 Notes; rank equal in right of payment to any existing and future unsecured indebtedness of the Company that is not so subordinated; be effectively subordinated in right of payment to any secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness; and be structurally subordinated to all existing and future indebtedness and other liabilities and obligations incurred by future subsidiaries of the Company. If bankruptcy, insolvency, or reorganization occurs with respect to the Company (and not solely with respect to a significant subsidiary of the Company), then the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes then outstanding will immediately become due and payable without any further action or notice by any person. If an event of default (other than bankruptcy, insolvency, or reorganization with respect to the Company and not solely with respect to a significant subsidiary of the Company) occurs and is continuing, then, with the exception of certain reporting events of default, the trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of notes then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2025 Notes then outstanding to become due and payable immediately. In accounting for the issuance of the 2025 Notes, the Company separately accounted for the liability and equity components of the 2025 Notes by allocating the proceeds between the liability component and the embedded conversion options, or equity component, due to Company’s ability to settle the 2025 Notes in cash, its common stock, or a combination of cash and common stock at Company’s option. The allocation was done by first estimating the fair value of the liability component and the residual value was assigned to the equity component. The value of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature using a discounted cash flow approach to derive the value of a debt instrument using the expected cash flows and the estimated yield related to the convertible notes. , with a corresponding amount recorded as a discount on the initial issuance of the 2025 Notes of approximately $19.8 million. The debt discount was recorded to equity and is being amortized to the debt liability over the life of the Notes using the effective interest method. The net carrying amount of the liability component of the 2025 Notes was as follows: March 31, 2021 December 31, 2020 Principal $ 172,500 $ 172,500 Unamortized debt discount (17,074 ) (17,945 ) Unamortized debt issuance costs (5,105 ) (5,367 ) Net carrying amount $ 150,321 $ 149,188 The net carrying amount of the equity component of the 2025 Notes was as follows: March 31, 2021 Proceeds allocated to the conversion options (debt discount) $ 19,787 Issuance costs (767 ) Net carrying amount $ 19,020 In connection with the issuance of the 2025 Notes, the Company incurred approximately $6.7 million of debt issuance costs, which primarily consisted of initial purchasers’ discounts and legal and other professional fees. The Company allocated these costs to the liability and equity components based on the allocation of the proceeds. The portion of these costs allocated to the equity component totaling approximately $0.8 million was recorded as a reduction to additional paid-in capital. The portion of these costs initially allocated to the liability component totaling approximately $5.9 million was recorded as a reduction in the carrying value of the debt on the condensed balance sheets and is amortized to interest expense using the effective interest method over the expected life of the 2025 Notes or approximately its five-year The following table sets forth the amounts recorded in interest expense related to the 2025 Notes: Three Months Ended March 31, 2021 Contractual interest expense $ 1,294 Amortization of debt discount 871 Amortization of debt issuance costs 263 Total interest and amortization expense $ 2,428 Future minimum payments under the 2025 Notes as of March 31, 2021, are as follows: Fiscal Year Amount Remainder of 2021 $ 5,175 2022 5,175 2023 5,175 2024 5,175 2025 175,088 Total future payments 195,788 Less amounts representing interest (23,288 ) Total principal amount $ 172,500 2028 Convertible Senior Notes In March 2021, the Company issued an aggregate principal of $287.5 million of its 1.00% Convertible Senior Notes due 2028, pursuant to an indenture between the Company and U.S. Bank National Association, as trustee, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The 2028 Notes issued in the Note Offering include $37.5 million in aggregate principal amount of the 2028 Notes sold to the initial purchasers resulting from the exercise in full of their option to purchase additional Notes. The 2028 Notes will mature on March 1, 2028, unless earlier redeemed or repurchased by the Company or converted. The Company received net proceeds from the 2028 Notes offering of approximately $278.1 million, after deducting the initial purchasers’ discount and commission and offering expenses. The Company used approximately $33.7 million of the net proceeds from the 2028 Notes offering to fund the net cost of entering into the capped call transactions described below. The Company intends to use the remainder of the net proceeds for general corporate purposes. The 2028 Notes accrue interest at a rate of 1.00% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2021. The initial conversion rate applicable to the 2028 Notes is 31.4465 shares of common stock per $1,000 principal amount of 2028 Notes (which is equivalent to an initial conversion price of approximately $31.80 per share of the Company’s common stock). The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a corporate event, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2028 Notes in connection with such corporate event. The 2028 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after March 5, 2025 if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately before the date the Company sends the related redemption notice. In addition, calling any Note for redemption will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. Prior to December 1, 2027, the 2028 Notes will be convertible only under the following circumstances: • During any calendar quarter (and only during such calendar quarter) beginning after June 30, 2021, if, the last reported sale price per share of the Company’s common stock exceeds 130% of the applicable conversion price on each applicable trading day for at least 20 trading days (whether or not consecutive) in the period of the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter • During the five business day period after any five consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day • Upon the occurrence of specified corporate transactions; or • If the Company calls any notes for redemption. On and after December 1, 2027, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2028 Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. Upon conversion, the 2028 Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock. It is the Company’s current intent to settle conversions of the through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of its common stock. The 2028 Notes are unsecured and unsubordinated obligations of the Company and will rank senior in right of payment to any of future indebtedness of the Company that is expressly subordinated in right of payment to the 2028 Notes; rank equal in right of payment to any existing and future unsecured indebtedness of the Company that is not so subordinated; be effectively subordinated in right of payment to any secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness; and be structurally subordinated to all existing and future indebtedness and other liabilities and obligations incurred by future subsidiaries of the Company. If bankruptcy, insolvency, or reorganization occurs with respect to the Company (and not solely with respect to a significant subsidiary of the Company), then the principal amount of, and all accrued and unpaid interest on, all of the 2028 Notes then outstanding will immediately become due and payable without any further action or notice by any person. If an event of default (other than bankruptcy, insolvency, or reorganization with respect to the Company and not solely with respect to a significant subsidiary of the Company) occurs and is continuing, then, with the exception of certain reporting events of default, the trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of notes then outstanding, by notice to us and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the 2028 Notes then outstanding to become due and payable immediately. In accounting for the issuance of the 2028 Notes, the Company separately accounted for the liability and equity components of the 2028 Notes by allocating the proceeds between the liability component and the embedded conversion options, or equity component, due to Company’s ability to settle the 2028 Notes in cash, its common stock, or a combination of cash and common stock at Company’s option. The allocation was done by first estimating the fair value of the liability component and the residual value was assigned to the equity component. The value of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected the Company’s non-convertible debt borrowing rate for similar debt. The interest rate of 7.18% was used to compute the initial fair value of the liability component of $191.3 million, with a corresponding amount recorded as a discount on the initial issuance of the 2028 Notes of approximately $96.2 million. The net carrying amount of the liability component of the 2028 Notes was as follows: March 31, 2021 Principal $ 287,500 Unamortized debt discount (95,522 ) Unamortized debt issuance costs (6,188 ) Net carrying amount $ 185,790 The net carrying amount of the equity component of the 2028 Notes was as follows: March 31, 2021 Proceeds allocated to the conversion options (debt discount) $ 96,162 Issuance costs (3,131 ) Net carrying amount $ 93,031 In connection with the issuance of the 2028 Notes, the Company incurred approximately $9.4 million of debt issuance costs, which primarily consisted of initial purchasers’ discounts and legal and other professional fees. The Company allocated these costs to the liability and equity components based on the allocation of the proceeds. The portion of these costs allocated to the equity component totaling approximately $3.1 million was recorded as a reduction to additional paid-in capital. The portion of these costs allocated to the liability component totaling approximately $6.2 million was recorded as a reduction in the carrying value of the debt on the condensed balance sheets and is amortized to interest expense using the effective interest method over the expected life of the 2028 Notes or approximately its seven-year The following table sets forth the amounts recorded in interest expense related to the 2028 Notes from the date of issuance through March 31, 2021: Three Months Ended March 31, 2021 Contractual interest expense $ 176 Amortization of debt discount 640 Amortization of debt issuance costs 41 Total interest and amortization expense $ 857 Future minimum payments under the 2028 Notes as of March 31, 2021, are as follows: Fiscal Year Amount Remainder of 2021 $ 1,382 2022 2,875 2023 2,875 2024 2,875 2025 2,875 2026 2,875 2027 2,875 2028 288,937 Total future payments 307,569 Less amounts representing interest (20,069 ) Total principal amount $ 287,500 Capped Call Transactions with Respect to the 2025 and 2028 Notes In connection with the issuance of the 2025 Notes and 2028 Notes, including the initial purchasers’ exercise of the option to purchase additional Notes, the Company entered into capped call transactions (2025 Capped Calls and 2028 Capped Calls) with respect to its common stock with certain financial institutions (collectively, the “Counterparties”). The Company paid an aggregate amount of approximately $22.5 million and $33.7 million in connection with the 2025 Capped Calls and 2028 Capped Calls to the Counterparties, respectively. The 2025 Capped Calls and 2028 Capped Calls cover approximately 9,705,454 shares and 9,040,869 shares of the Company’s common stock at a strike price that corresponds to the initial conversion price of the 2025 and 2028 Notes, respectively. The 2025 and 2028 Capped Calls are subject to anti-dilution adjustments that are intended to be substantially identical to those in the 2025 and 2028 Notes, and are exercisable upon conversion of the 2025 and 2028 Notes. The 2025 and 2028 Capped Calls are subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including merger events, tender offer and announcement events. In addition, the 2025 and 2028 Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the 2025 and 2028 Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. The 2025 Capped Calls settle in components commencing on April 16, 2025 with the last component scheduled to expire on June 12, 2025 . The 2028 Capped Calls settle in components commencing on December 31, 2027 with the last component scheduled to expire on February 28, 2028 . The cap price of the 2025 Capped Call is initially $27.88 per share, which represents a premium of 100.0% over the closing price of the Company’s common stock of $13.94 per share on June 10, 2020, and is subject to certain adjustments under the terms of the capped call transactions. The cap price of the 2028 Capped Call is initially $48.00 per share, which represents a premium of 100.0% over the closing price of the Company’s common stock of $24.00 per share on March 3, 2021, and is subject to certain adjustments under the terms of the capped call transactions. The Company expects to receive from the Counterparties a number of shares of the Company’s common stock or, at the Company’s election (subject to certain conditions), cash, with an aggregate market value (or, in the case of cash settlement, in an amount) approximately equal to the product of such excess times the number of shares of the Company’s common stock relating to the 2025 and 2028 Capped Calls being exercised. These Capped Call instruments meet the conditions outlined in ASC 815-40 to be classified in stockholders’ equity, are not accounted for as derivatives, and are not subsequently remeasured as long as the conditions for equity classification continue to be met. The Company recorded a reduction to additional paid-in capital of approximately $22.5 million and $33.7 million related to the premium payments for the 2025 and 2028 Capped Call transactions. |
Share-based Compensation Plans
Share-based Compensation Plans | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation Plans | Note 7 . Share-based Compensation Plans 2011 Equity Incentive Plan In 2011, the Company adopted the Equity Incentive Plan (2011 Plan) authorizing the granting of incentive stock options (ISOs) and non-statutory stock options (NSOs) to eligible participants for up to 12,987,255 shares of common stock. Under the 2011 Plan, incentive stock options and non-statutory stock options are to be granted at an exercise price that is no less than 100% of the fair value of the stock at the date of grant. Options generally vest over four years and are exercisable for up to 10 years after the date of grant. Incentive stock options granted to stockholders who own more than 10% of the outstanding stock of the Company at the time of grant must be issued at an exercise price no less than 110% of the fair value of the stock on the date of grant. The 2011 Plan has been replaced by the Company’s 2019 Plan as defined below with respect to future equity awards. 2019 Equity Incentive Plan In connection with the Company’s initial public offering, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan allows the Company to grant stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to participants. Subject to the terms and conditions of the 2019 Plan, the initial number of shares authorized for grants under the 2019 Plan is 8,000,000. These available shares increase annually by an amount equal to the lesser of 8,000,000 shares, 5% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or the number of shares determined by the Company’s board of directors. On August 4, 2020, the Company’s board of directors approved an increase of shares available for grant under the 2019 Plan by Employee Stock Purchase Plan In connection with the Company’s initial public offering, the Company adopted the Employee Stock Purchase Plan (ESPP). The Employee Stock Purchase Plan permits employees to purchase shares of common stock during six-month offering periods at a purchase price equal to the lesser of (1) 85% of the fair market value of a share of common stock on the first business day of such offering period and (2) 85% of the fair market value of a share of common stock on the last business day of such offering period. he Company selected the Black-Scholes option-pricing model as the method for determining the estimated fair value for the Company’s 2019 ESPP. Stock-based Compensation Total stock-based compensation expense by function was as follows (in thousands): Three Months Ended March 31, 2021 2020 Marketing $ 736 $ 188 Operations and technology 4,696 1,478 Selling, general and administrative 5,487 1,744 Total $ 10,919 $ 3,410 During the three months ended March 31, 2021, the Company capitalized $0.4 million of stock-based compensation expense to proprietary software. During the three months ended March 31, 2020, we did not capitalize any stock-based compensation expense. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 8 . Leases The Company leases its corporate offices, retail spaces and authentication centers under various noncancelable operating leases with terms ranging from one year to fifteen years. The Company recorded operating lease costs of $7.3 million and $6.0 million for the three months ended March 31, 2021 and 2020, respectively. The Company also incurred $1.3 million and $0.9 million of variable lease costs for the three months ended March 31, 2021 and 2020, respectively. The variable lease costs are comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance. Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands): Fiscal Year Amount Remainder of 2021 $ 17,216 2022 26,796 2023 25,388 2024 25,134 2025 25,810 Thereafter 78,814 Total future minimum payments $ 199,158 Less: Imputed interest (43,108 ) Present value of operating lease liabilities $ 156,050 As of March 31, 2021, the Company has entered into operating lease agreements that have not yet commenced. The Company will determine the classification at the commencement date for each lease, but currently expects these leases to be classified as operating leases. Pending execution of the landlord's obligations to prepare leased spaces for occupancy, the Company expects these leases to commence on various dates in the year ended December 31, 2021. As of March 31, 2021, the Company’s estimated undiscounted lease payments for leases that have not yet commenced were as follows (in thousands): Fiscal Year Lease payments for leases not yet commenced Remainder of 2021 $ 342 2022 725 2023 760 2024 692 2025 575 Thereafter 1,907 Total undiscounted lease payments expected to be capitalized $ 5,001 Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating cash flows used for operating leases $ 6,541 $ 4,597 Operating lease assets obtained in exchange for operating lease liabilities $ 29,950 $ 18,122 The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows: March 31, 2021 Weighted average remaining lease term 7.6 years Weighted average discount rate 6.6 % The Company has leases for certain vehicles that are classified as finance leases. The finance lease right-of-use asset and finance lease liabilities for these vehicle leases are immaterial as of March 31, 2021 and December 31, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9. Commitments and Contingencies Noncancelable Purchase Commitments The Company has commitments for cloud services and other services in the ordinary course of business with varying expiration terms through 2023. As of March 31, 2021, there were no material changes to the Company’s noncancelable purchase commitments disclosed in the financial statements in the Annual Report on Form 10-K. Other Commitments In January 2018, the Company and the University of Arizona Foundation entered into an endowment agreement (the “Endowment Agreement”) to establish a fund (the “Fund”) to create and grow a gemology degree program in the Department of Geosciences at the University of Arizona (the “University”). The Company agreed to donate a total of $2.0 million, payable in four annual installments of $0.5 million starting in January 2018. There are no conditions that the University must meet to receive the funds nor any penalties to the University for nonperformance. The Endowment Agreement directs the use of the funds but contains no binding restrictions on the use of the funds. On the execution of the Endowment Agreement, the Company recognized $1.7 million expense for the estimated fair value of the grant, using a discount rate of 10%, to selling, general and administrative expenses in the statements of operations. The Company recognized a corresponding liability for the remaining installment payments and will recognize accretion of the liability as interest expense over the remaining term of the Endowment Agreement. Interest expense related to the accretion of the grant liability was not material in the three months ended March 31, 2021 and 2020. As of March 31, 2021, there was no outstanding liability, as the final annual installment of $0.5 million was made during the three months ended March 31, 2021. As of December 31, 2020, the outstanding liability was $0.5 million, which is included in other accrued and current liabilities on the condensed balance sheets. Contingencies From time to time, the Company is subject to, and it is presently involved in, litigation and other legal proceedings and from time to time, the Company receives inquiries from government agencies. Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company discloses material contingencies when a loss is not probable but reasonably possible. On November 14, 2018, Chanel, Inc. (“Chanel”) filed a lawsuit against the Company in the U.S. District Court for the Southern District of New York bringing various trademark and advertising-related claims under the Lanham Act and New York state law analogues. Chanel alleges, among other things, that the Company has misrepresented certain counterfeit Chanel products as authentic Chanel products, that the Company’s resale of Chanel products confuses consumers into believing that Chanel is affiliated with the Company and involved in authenticating consignors’ goods and that only Chanel is capable of authenticating second-hand Chanel goods. The Court issued an Opinion & Order on March 30, 2020 denying in part and granting in part the Company’s motion to dismiss. The Company filed its answer and affirmative defenses on May 29, 2020. Chanel’s claims are now in the discovery phase. On November 3, 2020, with the court’s permission, the Company filed a motion to amend its answer to add counterclaims against Chanel alleging anticompetitive conduct in violation of the federal and state antitrust laws as well as tortious interference. That motion was granted on February 24, 2021, permitting the Company to file its amended pleading. The Company filed its Amended Answer, Affirmative Defenses, and Counterclaims on February 25, 2021. On March 8, 2021, Chanel filed a motion to dismiss the Company’s counterclaims and to strike one of the Company’s affirmative defenses. The Company filed its opposition to Chanel’s motion on April 1, 2021. A decision on that motion is pending. A joint stipulation and order staying the case for three months was entered on April 5, 2021, while the parties attempt mediation. This litigation is in its early stages and the final outcome , including the Company’s liability, if any, with respect to Chanel’s claims, is uncertain. Chanel could in the future assert additional trademark and advertising or other claims against the Company in this or other proceedings. An unfavorable outcome in this or similar litigation could adversely affect the Company’s business and could lead to other similar lawsuits. The Company is not able to predict or reasonably estimate the ultimate outcome or possible losses relating to this claim. On September 10, 2019, a purported shareholder class action complaint was filed against the Company, its officers and directors and the underwriters of its IPO in the Superior Court of the State of California in the County of San Mateo. Three additional purported class actions, also alleging claims arising from the IPO were subsequently filed in Marin County and San Francisco County Superior Courts. The San Mateo case was voluntarily dismissed, refiled in Marin County Superior Court and consolidated with the cases there. On January 10, 2020, the Marin County plaintiffs filed a consolidated amended complaint. The plaintiffs in the San Francisco Superior Court case have filed a request for dismissal. Separately an additional purported class action was filed in the United States District Court for the Northern District of California on November 25, 2019. On February 12, 2020, a lead plaintiff was appointed in the federal action and an Amended Consolidated Complaint was filed on March 31, 2020. Defendants’ filed a demurrer and motion to strike in the state court action on March 13, 2020 and filed a motion to stay the proceedings in favor of the federal action on May 1, 2020. On August 4, 2020, the court granted defendants’ motion to stay the state court action and deferred ruling on the demurrer and motion to strike pending the outcome of the federal court action. A motion to dismiss the Amended and Consolidated Complaint in the federal court action was filed on May 15, 2020. On March 31, 2021, the court entered an order on the motion to dismiss, dismissing the Securities Exchange Act of 1934 (the “Exchange Act”) claims and some of the claims alleged under the Securities Act of 1933 (the “Securities Act”). The court provided plaintiffs with an opportunity to amend the complaint and, on April 30, 2021, plaintiffs filed a Second Amended Complaint in federal court. The state court complaint, and the Second Amended Complaint in federal court each allege claims under the Securities Act of 1933 on behalf of a purported class of shareholders who acquired the Company’s stock pursuant to or traceable to the registration statement for the Company’s IPO. The federal complaint also alleges claims under the Exchange Act on behalf of a purported class of shareholders who purchased the Company’s stock from June 27, 2019 through November 20, 2019. very early stage and there can be no assurance that the Company will be successful in its defense. For this same reason, the Company cannot currently estimate the loss or the range of possible losses it may experience in connection with this litigation. Indemnifications In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to vendors, directors, officers and other parties with respect to certain matters including, but not limited to, losses arising out of the breach of such agreements, intellectual property infringement claims made by third parties and other liabilities relating to or arising from the Company's various services, or its acts or omissions. The Company has not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in its financial statements. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10. Income Taxes The quarterly income tax provision reflects an estimate of the corresponding quarter’s state taxes in the United States. The Company has reviewed all positive and negative evidence associated with the realizability of its deferred tax assets, and continues to maintain a full valuation allowance as of March 31, 2021. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “Act”) was signed into law. The Act provides various forms of income tax relief to companies including additional carryback opportunities for net operating losses (NOLs), and the potential offset of 100% of taxable income with NOLs (as opposed to only 80% before the Act’s enactment). The Act also temporarily increases the interest deductibility threshold from 30% to 50% of adjusted taxable income. Further, some companies can immediately expense qualified improvement property, instead of depreciating those costs over 39 years, for income tax purposes. Additionally, if improvement property is capitalized, the life to be used for amortization has been reduced from 39 years to 15 years. Given the Company’s tax attributes, specifically large net operating loss carryforwards, the Act and related provisions do not create immediate material tax relief. However, the Company continues to monitor the various tax provisions. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Note 11. Net Loss Per Share Attributable to Common Stockholders A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net loss per share attributable to common stockholders is as follows (in thousands, except share and per share data): Three Months Ended March 31, 2021 2020 Numerator Net loss attributable to common stockholders $ (55,993 ) $ (38,503 ) Denominator Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted 90,044,082 86,588,796 Net loss per share attributable to common stockholders, basic and diluted $ (0.62 ) $ (0.44 ) The following securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive (on an as-converted basis): March 31, 2021 2020 Options to purchase common stock 4,807,661 7,988,747 Restricted stock units 6,784,012 1,752,275 Estimated shares issuable under the Employee Stock Purchase Plan 61,766 — Assumed conversion of the Convertible Senior Notes 18,746,323 — Total 30,399,762 9,741,022 The Convertible Senior Notes issued in June 2020 and in March 2021 are convertible, based on the applicable conversion rate, into cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. The impact of the assumed conversion to diluted net loss per share is computed on an as-converted basis. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events Revolving Credit Agreement In April 2021, the Company entered into a loan and security agreement with a lender, to provide a revolving line of credit of up to $50 million. Advances on the line of credit bear interest payable monthly at a variable annual rate equal to the greater of the prime rate plus 0.50% or 4.25%. The credit facility expires in April 2023 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Significant items subject to such estimates and assumptions include those related to revenue recognition, including the returns reserve, valuation of inventory, software development costs, incremental borrowing rates related to lease liability, fair value of the liability component of convertible senior notes, valuation of deferred taxes, and other contingencies. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method determines net loss per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available or attributable to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s convertible senior notes are participating securities as they give the holders the right to receive dividends if dividends or distributions declared to the common stockholders is equal to or greater than the last reported sale price of the Company’s common stock on the trading day immediately preceding the ex-dividend date for such dividend or distribution No . For periods in which the Company reports net losses, diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, because potentially dilutive common shares and assumed conversion of the convertible senior notes are not assumed to have been issued within the calculation, if their effect is anti-dilutive. |
Revenue Recognition | Revenue Recognition The Company generates revenue from the sale of pre-owned luxury goods through its online marketplace and retail stores. Consignment and Service Revenue The Company provides a service to sell pre-owned luxury goods on behalf of consignors to buyers through its online marketplace and retail stores. The Company retains a percentage of the proceeds received as payment for its consignment service, which the Company refers to as its take rate. The Company reports consignment revenue on a net basis as an agent and not the gross amount collected from the buyer. Title to the consigned goods remains with the consignor until transferred to the buyer upon purchase of the consigned goods and expiration of the allotted return period. The Company does not take title of consigned goods at any time except in certain cases where returned goods become Company-owned inventory. The Company recognizes consignment revenue upon purchase of the consigned good by the buyer as its performance obligation of providing consignment services to the consignor is satisfied at that point. Consignment revenue is recognized net of estimated returns, cancellations, buyer incentives and adjustments. The Company recognizes a returns reserve based on historical experience, which is recorded in other accrued and current liabilities on the condensed balance sheets (see Note 5). Sales tax assessed by governmental authorities is excluded from revenue. Certain transactions provide consignors with a material right resulting from the tiered consignor commission plan. Under this plan, the amount an individual consignor receives for future sales of consigned goods may be dependent on previous consignment sales for that consignor within his/her consignment period. Accordingly, in certain consignment transactions, a small portion of the Company’s consignment revenue is allocated to such material right using the portfolio method and recorded as deferred revenue, which is recorded in other accrued and current liabilities on the condensed balance sheets. The Company charges shipping fees to buyers and has elected to treat shipping and handling activities performed after control transfers to the buyer as fulfillment activities. All outbound shipping and handling costs are accounted for as fulfillment costs in cost of consignment and service revenue at the time revenue is recognized. The Company also generates subscription revenue from monthly memberships allowing buyers early access to shop for luxury goods. The buyers receive the early access and other benefits over the term of the subscription period, which represents a single stand-ready performance obligation. Therefore, the subscription fees paid by the buyer are recognized over the monthly subscription period. Subscription revenue was not material in the three months ended March 31, 2021 and 2020. Direct Revenue The Company generates direct revenue from the sale of Company-owned inventory. The Company recognizes direct revenue on a gross basis upon shipment of the purchased good to the buyer as the Company acts as the principal in the transaction. Direct revenue is recognized net of estimated returns, buyer incentives and adjustments. Sales tax assessed by governmental authorities is excluded from revenue. Cost of direct revenue is also recognized upon shipment to the buyer in an amount equal to that paid to the consignor from the original consignment sale, an amount equal to that paid as a direct purchase from a third party, or the lower of cost of the inventory purchased and its net realizable value. Incentives Incentives, which include platform-wide discounts and buyer incentives, may periodically be offered to buyers. Platform-wide discounts are made available to all buyers on the online marketplace. Buyer incentives apply to specific buyers and consist of coupons or promotions that offer credits in connection with purchases on the Company’s platform, and do not impact the commissions paid to consignors. These are treated as a reduction of consignment and service revenue and direct revenue. Additionally, the Company periodically offers commission exceptions to consignors to optimize its supply. These are treated as reduction of consignment and service revenue The Company may offer a certain type of buyer incentive in the form of site credits to buyers on current transactions to be applied towards future transactions, which are included in other accrued and current liabilities on the balance sheets. Contract Liabilities The Company’s contractual liabilities consist of deferred revenue for material rights primarily related to the tiered consignor commission plan, which are recognized as revenue using a portfolio approach based on the pattern of exercise, and certain unredeemed site credits, which were immaterial as of March 31, 2021 and December 31, 2020. Contract liabilities are recorded in other accrued and current liabilities on the balance sheets and are generally expected to be recognized within one year. Contract liabilities were immaterial as of March 31, 2021 and December 31, 2020. |
Cost of Revenue | Cost of Revenue Cost of consignment and service revenue consist of shipping costs, credit card fees, packaging, customer service personnel-related costs, website hosting services, and consignor inventory adjustments relating to lost or damaged products. Cost of direct revenue consists of the cost of goods sold, credit card fees, packaging, customer service personnel-related costs, website hosting services, and inventory adjustments. |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense related to employees and nonemployees is measured based on the grant-date fair value of the awards. Compensation expense is recognized in the statements of operations over the period during which the employee is required to perform services in exchange for the award (the vesting period of the applicable award) using the straight-line method. The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model and accounts for forfeitures as they occur. The fair value of restricted stock units (“RSUs”) is estimated based on the fair market value of the Company’s common stock on the date of grant, which is determined based on the closing price of the Company’s common stock. The fair value of each purchase under the employee stock purchase plan (ESPP) is estimated at the beginning of the offering period using the Black-Scholes option pricing model. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. Cash equivalents primarily consist of investments in short-term money market funds and amounts invested in U.S. treasury securities . As of March 31, 2021 and December 31, 2020, the Company had no restricted cash. |
Short-term Investments | Short-term Investments T he Company has classified and accounted for its short-term investments as available-for-sale which are carried at fair value on its condensed balance sheets. Available-for-sale securities with remaining maturities of 12 months or less are classified as short term and available-for-sale securities with remaining maturities greater than 12 months are classified as long term. Available-for-sale investments are reported at fair value based on quoted market prices and other observable market data. The Company records any unrealized gains and losses within accumulated other comprehensive income (loss) as a component of stockholders’ equity, of which there were none as of March 31, 2021 and December 31, 2020. The Company evaluates its short-term investments periodically for possible impairment. |
Inventory | Inventory Inventory consists of finished goods arising from goods returned after the title has transferred from the buyer to the Company as well as finished goods from direct purchases from vendors and consignors. The cost of inventory is an amount equal to that paid to the consignor or vendors. Inventory is valued at the lower of cost or net realizable value using the specific identification method and the Company records provisions, as appropriate, to write down obsolete and excess inventory to estimated net realizable value. After the inventory value is reduced, adjustments are not made to increase it from the estimated net realizable value. Our provisions to write down obsolete and excess inventory to net realizable value were not material for the three months ended March 31, 2021 and 2020. Return reserves, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in other accrued and current liabilities on the condensed balance sheets and were $14.5 million and $18.3 million as of March 31, 2021 and December 31, 2020, respectively. Included in inventory on the Company’s condensed balance sheets are assets totaling $3.4 million and $7.4 million as of March 31, 2021 and December 31, 2020, respectively, for the rights to recover products from customers associated with its liabilities for return reserves. |
Software Development Costs | Software Development Costs Proprietary software includes the costs of developing the Company’s internal proprietary business platform and automation projects. The Company capitalizes qualifying proprietary software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (1) the preliminary project stage is completed and (2) it is probable that the software will be completed and used for its intended function. Such costs are capitalized in the period incurred. Capitalization ceases and amortization begins when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. |
Leases | Leases Contracts that have been determined to convey the right to use an identified asset are evaluated for classification as an operating or finance lease. For the Company’s operating leases, the Company records a lease liability based on the present value of the lease payments at lease inception, using the applicable incremental borrowing rate. The Company estimates the incremental borrowing rate by developing its own synthetic credit rating, corresponding yield curve, and the terms of each lease at the lease commencement date The Company has elected the practical expedients that allows for the combination of lease components and non-lease components and to record short-term leases as lease expense on a straight-line basis on the condensed statements of operations. Variable lease payments are recorded as expense as they are incurred. The Company has finance leases for vehicles and equipment, and the amounts of finance lease right-of-use assets and finance lease liabilities have been immaterial to date. |
Convertible Senior Notes, net | Convertible Senior Notes, net Convertible debt instruments that may be settled in cash or other assets, or partially in cash, upon conversion, are separately accounted for as long-term debt and equity components (or conversion feature). T he debt component represents the Company’s contractual obligation to pay principal and interest and the equity component represents the Company’s option to convert the debt security into equity of the Company or the equivalent amount of cash. Upon issuance, the Company allocated the debt component on the basis of the estimated fair value of a similar liability that does not have an associated convertible feature and the remaining proceeds are allocated to the equity component. The bifurcation of the debt and equity components resulted in a debt discount for the aforementioned notes . The Company uses the effective interest method to amortize the debt discount to interest expense over the amortization period which is the expected life of the debt. |
Capped Call Transactions | Capped Call Transactions In June 2020 and March 2021, in connection with the issuance of its convertible senior notes, the Company entered into Capped Call Transactions (see Note 6). The Capped Call Transactions are expected generally to reduce the potential dilution to the holders of the Company’s common stock upon any conversion of the and/or offset any cash payments the Company is required to make in excess of the principal amount of converted , with such reduction and/or offset subject to a cap based on the cap price. The capped calls are classified in stockholders’ equity as a reduction to additional paid-in capital and are not subsequently remeasured as long as the conditions for equity classification continue to be met. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are amortized to interest expense over the estimated life of the related debt based on the effective interest method. The Company presents debt issuance costs on the condensed balance sheets as a direct deduction from the associated debt. A portion of debt issuance costs incurred in connection with the convertible senior notes issued in June 2020 and March 2021 was related to the equity component and was recorded as a reduction to additional paid in capital and is not amortized to interest expense over the estimated life of the related debt. |
Concentrations of Credit Risks | Concentrations of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, accounts receivable, and investments. At times, such amount may exceed federally-insured limits. The Company reduces credit risk by placing its cash and cash equivalents, restricted cash, and investments with major financial institutions within the United States . As of March 31, 2021 and December 31, 2020, there were no customers that represented 10% or more of the Company’s accounts receivable balance and there were no customers that individually exceeded 10% of the Company’s total revenue for each of the three months ended March 31, 2021 and 2020. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity which simplifies accounting for convertible instruments Under this ASU, the embedded conversion features will no longer be separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-term Investments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Cash And Cash Equivalents [Abstract] | |
Summary of Estimated Value of Cash, Cash Equivalents and Short-term Investments | The following tables summarize the estimated value of the Company’s cash, cash equivalents and short-term investments (in thousands): March 31, 2021 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 343,491 $ — $ — $ 343,491 Money market funds 204,368 — — 204,368 Total cash and cash equivalents $ 547,859 $ — $ — $ 547,859 December 31, 2020 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 150,520 $ — $ — $ 150,520 Money market funds 200,326 — — 200,326 Total cash and cash equivalents $ 350,846 $ — $ — $ 350,846 Short-term investments: Corporate bonds $ 4,006 $ 11 $ — $ 4,017 Total short-term investments $ 4,006 $ 11 $ — $ 4,017 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value | The following table provides the financial instruments measured at fair value (in thousands) as of December 31, 2020: December 31, 2020 Level 1 Level 2 Level 3 Total Assets (1) Short-term investments: Corporate bonds $ — $ 4,017 $ — $ 4,017 Total short-term investments $ — $ 4,017 $ — $ 4,017 |
Schedule of Carrying Values and Estimated Fair Values | The following table presents the carrying amounts and estimated fair values of the financial instruments that are not recorded at fair value on the condensed balance sheets (in millions): March 31, 2021 Net Carrying Amount Estimated Fair Value 2025 Convertible senior notes $ 150.3 $ 186.1 2028 Convertible senior notes $ 185.8 $ 286.4 |
Condensed Balance Sheet Compo_2
Condensed Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands): March 31, 2021 December 31, 2020 Proprietary software $ 27,075 $ 24,218 Furniture and equipment 30,485 27,687 Automobiles 668 668 Leasehold improvements 55,748 52,828 113,976 105,401 Less: accumulated depreciation and amortization (47,339 ) (41,947 ) Property and equipment, net $ 66,637 $ 63,454 |
Schedule of Other Accrued and Current Liabilities | Other accrued and current liabilities consist of the following (in thousands): March 31, 2021 December 31, 2020 Returns reserve $ 14,479 $ 18,327 Accrued compensation 16,786 13,406 Accrued marketing and outside services 9,947 10,790 Site credit liability 6,159 5,475 Accrued sales tax and other taxes 7,246 6,870 Deferred revenue 2,008 1,617 Accrued interest 1,685 216 Other 5,084 5,161 Other accrued and current liabilities $ 63,394 $ 61,862 |
Convertible Senior Notes, Net (
Convertible Senior Notes, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
2025 Convertible Senior Notes as Liability Component | |
Schedule of Net Carrying Amount of Notes | The net carrying amount of the liability component of the 2025 Notes was as follows: March 31, 2021 December 31, 2020 Principal $ 172,500 $ 172,500 Unamortized debt discount (17,074 ) (17,945 ) Unamortized debt issuance costs (5,105 ) (5,367 ) Net carrying amount $ 150,321 $ 149,188 |
2025 Convertible Senior Notes as as Equity Component | |
Schedule of Net Carrying Amount of Notes | The net carrying amount of the equity component of the 2025 Notes was as follows: March 31, 2021 Proceeds allocated to the conversion options (debt discount) $ 19,787 Issuance costs (767 ) Net carrying amount $ 19,020 |
2025 Convertible Senior Notes | |
Amounts Recorded in Interest Expense Related to Notes | The following table sets forth the amounts recorded in interest expense related to the 2025 Notes: Three Months Ended March 31, 2021 Contractual interest expense $ 1,294 Amortization of debt discount 871 Amortization of debt issuance costs 263 Total interest and amortization expense $ 2,428 |
Schedule of Future Minimum Payments Under Notes | Future minimum payments under the 2025 Notes as of March 31, 2021, are as follows: Fiscal Year Amount Remainder of 2021 $ 5,175 2022 5,175 2023 5,175 2024 5,175 2025 175,088 Total future payments 195,788 Less amounts representing interest (23,288 ) Total principal amount $ 172,500 |
2028 Convertible Senior Notes as Liability Component | |
Schedule of Net Carrying Amount of Notes | The net carrying amount of the liability component of the 2028 Notes was as follows: March 31, 2021 Principal $ 287,500 Unamortized debt discount (95,522 ) Unamortized debt issuance costs (6,188 ) Net carrying amount $ 185,790 |
2028 Convertible Senior Notes as as Equity Component | |
Schedule of Net Carrying Amount of Notes | The net carrying amount of the equity component of the 2028 Notes was as follows: March 31, 2021 Proceeds allocated to the conversion options (debt discount) $ 96,162 Issuance costs (3,131 ) Net carrying amount $ 93,031 |
2028 Convertible Senior Notes | |
Amounts Recorded in Interest Expense Related to Notes | The following table sets forth the amounts recorded in interest expense related to the 2028 Notes from the date of issuance through March 31, 2021: Three Months Ended March 31, 2021 Contractual interest expense $ 176 Amortization of debt discount 640 Amortization of debt issuance costs 41 Total interest and amortization expense $ 857 |
Schedule of Future Minimum Payments Under Notes | Future minimum payments under the 2028 Notes as of March 31, 2021, are as follows: Fiscal Year Amount Remainder of 2021 $ 1,382 2022 2,875 2023 2,875 2024 2,875 2025 2,875 2026 2,875 2027 2,875 2028 288,937 Total future payments 307,569 Less amounts representing interest (20,069 ) Total principal amount $ 287,500 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Total Stock-based Compensation Expense, by Function | Total stock-based compensation expense by function was as follows (in thousands): Three Months Ended March 31, 2021 2020 Marketing $ 736 $ 188 Operations and technology 4,696 1,478 Selling, general and administrative 5,487 1,744 Total $ 10,919 $ 3,410 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands): Fiscal Year Amount Remainder of 2021 $ 17,216 2022 26,796 2023 25,388 2024 25,134 2025 25,810 Thereafter 78,814 Total future minimum payments $ 199,158 Less: Imputed interest (43,108 ) Present value of operating lease liabilities $ 156,050 |
Schedule of Estimated Undiscounted Lease Payments for Leases | As of March 31, 2021, the Company’s estimated undiscounted lease payments for leases that have not yet commenced were as follows (in thousands): Fiscal Year Lease payments for leases not yet commenced Remainder of 2021 $ 342 2022 725 2023 760 2024 692 2025 575 Thereafter 1,907 Total undiscounted lease payments expected to be capitalized $ 5,001 |
Schedule of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands): Three Months Ended March 31, 2021 2020 Operating cash flows used for operating leases $ 6,541 $ 4,597 Operating lease assets obtained in exchange for operating lease liabilities $ 29,950 $ 18,122 |
Schedule of Weighted Average Remaining Lease Term and Discount Rate for Operating Leases | The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows: March 31, 2021 Weighted average remaining lease term 7.6 years Weighted average discount rate 6.6 % |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Loss Per Share | A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net loss per share attributable to common stockholders is as follows (in thousands, except share and per share data): Three Months Ended March 31, 2021 2020 Numerator Net loss attributable to common stockholders $ (55,993 ) $ (38,503 ) Denominator Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted 90,044,082 86,588,796 Net loss per share attributable to common stockholders, basic and diluted $ (0.62 ) $ (0.44 ) |
Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share | The following securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have been anti-dilutive (on an as-converted basis): March 31, 2021 2020 Options to purchase common stock 4,807,661 7,988,747 Restricted stock units 6,784,012 1,752,275 Estimated shares issuable under the Employee Stock Purchase Plan 61,766 — Assumed conversion of the Convertible Senior Notes 18,746,323 — Total 30,399,762 9,741,022 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($)Customer | Mar. 31, 2020Customer | Dec. 31, 2020USD ($)Customer | |
Summary Of Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 0 | $ 0 | |
Impairments due to credit loss | 0 | 0 | |
Unrealized gains and losses within accumulated other comprehensive income (loss) | 0 | 0 | |
Rights to recover products from customers | $ 3,400,000 | $ 7,400,000 | |
Accounts Receivable | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of major customers | Customer | 0 | 0 | |
Total Revenue | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of major customers | Customer | 0 | 0 | |
Other Accrued and Current Liabilities | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Inventory return reserves allowances | $ 14,500,000 | $ 18,300,000 | |
Common Stock | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Dividend or distribution declared | $ 0 |
Cash, Cash Equivalents and Sh_3
Cash, Cash Equivalents and Short-term Investments - Summary of Estimated Value of Cash, Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Cash And Cash Equivalents [Line Items] | ||
Cash and cash equivalents, amortized cost | $ 547,859 | $ 350,846 |
Cash and cash equivalents, fair value | 547,859 | 350,846 |
Short-term investments, amortized cost | 4,006 | |
Short-term investments, unrealized gain | 11 | |
Short-term investments, fair value | 4,017 | |
Cash | ||
Cash And Cash Equivalents [Line Items] | ||
Cash and cash equivalents, amortized cost | 343,491 | 150,520 |
Cash and cash equivalents, fair value | 343,491 | 150,520 |
Money Market Funds | ||
Cash And Cash Equivalents [Line Items] | ||
Cash and cash equivalents, amortized cost | 204,368 | 200,326 |
Cash and cash equivalents, fair value | $ 204,368 | 200,326 |
Corporate Bonds | ||
Cash And Cash Equivalents [Line Items] | ||
Short-term investments, amortized cost | 4,006 | |
Short-term investments, unrealized gain | 11 | |
Short-term investments, fair value | $ 4,017 |
Cash, Cash Equivalents and Sh_4
Cash, Cash Equivalents and Short-term Investments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Maximum | |
Cash And Cash Equivalents [Line Items] | |
Short term investments contractual maturity term | 1 year |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Asset transfers Level 1 to Level 2 | $ 0 | $ 0 |
Asset transfers Level 2 to Level 1 | 0 | 0 |
Asset transfers into Level 3 | 0 | 0 |
Asset transfers out of Level 3 | 0 | 0 |
Liabilities transfers Level 1 to Level 2 | 0 | 0 |
Liabilities transfers Level 2 to Level 1 | 0 | 0 |
Liability transfers into Level 3 | 0 | 0 |
Liability transfers out of Level 3 | 0 | 0 |
Cash and cash equivalents, fair value | 547,859,000 | 350,846,000 |
2025 Convertible Senior Notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Aggregate principal amount | 172,500,000 | |
Debt instrument, convertible, if-converted value in excess of principal | 47,100,000 | |
2028 Convertible Senior Notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Aggregate principal amount | 287,500,000 | |
Recurring | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | $ 204,400,000 | $ 200,326,000 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Financial Instruments Measured at Fair Value (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Assets | |
Short-term investments | $ 4,017 |
Recurring | |
Assets | |
Short-term investments | 4,017 |
Recurring | Corporate Bonds | |
Assets | |
Short-term investments | 4,017 |
Recurring | Level 2 | |
Assets | |
Short-term investments | 4,017 |
Recurring | Level 2 | Corporate Bonds | |
Assets | |
Short-term investments | $ 4,017 |
Fair Value Measurement - Sche_2
Fair Value Measurement - Schedule of Financial Instruments Measured at Fair Value (Parenthetical) (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | $ 547,859 | $ 350,846 |
Recurring | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | $ 204,400 | $ 200,326 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values (Details) $ in Millions | Mar. 31, 2021USD ($) |
Net Carrying Amount | 2025 Convertible Senior Notes | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Convertible senior notes | $ 150.3 |
Net Carrying Amount | 2028 Convertible Senior Notes | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Convertible senior notes | 185.8 |
Estimated Fair Value | 2025 Convertible Senior Notes | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Convertible senior notes | 186.1 |
Estimated Fair Value | 2028 Convertible Senior Notes | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Convertible senior notes | $ 286.4 |
Condensed Balance Sheet Compo_3
Condensed Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 113,976 | $ 105,401 |
Less: accumulated depreciation and amortization | (47,339) | (41,947) |
Property and equipment, net | 66,637 | 63,454 |
Proprietary Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 27,075 | 24,218 |
Furniture And Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 30,485 | 27,687 |
Automobiles | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 668 | 668 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 55,748 | $ 52,828 |
Condensed Balance Sheet Compo_4
Condensed Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization expense on property and equipment | $ 5.4 | $ 4.1 |
Condensed Balance Sheet Compo_5
Condensed Balance Sheet Components - Schedule of Other Accrued and Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Payables And Accruals [Abstract] | ||
Returns reserve | $ 14,479 | $ 18,327 |
Accrued compensation | 16,786 | 13,406 |
Accrued marketing and outside services | 9,947 | 10,790 |
Site credit liability | 6,159 | 5,475 |
Accrued sales tax and other taxes | 7,246 | 6,870 |
Deferred revenue | 2,008 | 1,617 |
Accrued interest | 1,685 | 216 |
Other | 5,084 | 5,161 |
Other accrued and current liabilities | $ 63,394 | $ 61,862 |
Convertible Senior Notes, Net -
Convertible Senior Notes, Net - Additional Information (Details) | Mar. 03, 2021$ / shares | Jun. 10, 2020$ / shares | Mar. 31, 2021USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Mar. 31, 2021USD ($)d$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares |
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of convertible senior notes | $ 278,844,000 | |||||
Purchase of capped call transactions | 33,666,000 | |||||
Equity component of convertible senior notes, net of issuance costs | 93,031,000 | |||||
2025 Convertible Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 172,500,000 | $ 172,500,000 | $ 172,500,000 | $ 172,500,000 | ||
Notes interest rate | 3.00% | 3.00% | 3.00% | 3.00% | ||
Debt instrument, maturity date | Jun. 15, 2025 | |||||
Proceeds from issuance of convertible senior notes | $ 165,800,000 | |||||
Purchase of capped call transactions | $ 22,500,000 | |||||
Notes frequency of periodic payment | semi-annually | |||||
Number of shares per $1,000 principal amount | shares | 56.2635 | |||||
Initial conversion price | $ / shares | $ 17.77 | |||||
Notes, threshold percentage of stock price trigger | 130.00% | |||||
Notes, threshold trading days | d | 20 | |||||
Notes, threshold consecutive trading days | d | 30 | |||||
Percentage on aggregate principal amount of notes to be payable upon the event of default | 25.00% | |||||
Interest rate used to compute initial fair value of liability | 5.67% | |||||
Fair value of liability | $ 152,700,000 | $ 152,700,000 | $ 152,700,000 | |||
Discount on initial issuance | 19,800,000 | 19,800,000 | 19,800,000 | |||
Debt issuance costs | 6,700,000 | 6,700,000 | 6,700,000 | |||
Equity component of convertible senior notes, net of issuance costs | 800,000 | |||||
Liability component recorded as a reduction in carrying value of debt | $ 5,900,000 | $ 5,900,000 | $ 5,900,000 | |||
Amortization period | 5 years | |||||
Effective Interest rate | 6.40% | |||||
2025 Convertible Senior Notes | Capped Call Transactions | ||||||
Debt Instrument [Line Items] | ||||||
Payment to counterparties for purchased calls | $ 22,500,000 | |||||
Common stock subject to adjustment and exercisable upon conversion of initial notes | shares | 9,705,454 | 9,705,454 | 9,705,454 | |||
Expiration date | Jun. 12, 2025 | |||||
Cap price of capped transactions | $ / shares | 27.88 | |||||
Derivative cap price as percentage on common stock price per share | 100.00% | |||||
Closing price of common stock per share | $ / shares | $ 13.94 | |||||
Reduction to additional paid premium payments for capped call transactions | $ 22,500,000 | |||||
2025 Convertible Senior Notes | Conversion Option One | ||||||
Debt Instrument [Line Items] | ||||||
Notes, threshold percentage of stock price trigger | 130.00% | |||||
Notes, threshold trading days | d | 20 | |||||
Notes, threshold consecutive trading days | d | 30 | |||||
2025 Convertible Senior Notes | Conversion Option Two | ||||||
Debt Instrument [Line Items] | ||||||
Notes, threshold percentage of stock price trigger | 98.00% | |||||
Notes, threshold consecutive trading days | d | 5 | |||||
Notes, threshold trading days | d | 5 | |||||
2025 Convertible Senior Notes | Initial Purchasers | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 22,500,000 | |||||
2028 Convertible Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 287,500,000 | $ 287,500,000 | $ 287,500,000 | |||
Notes interest rate | 1.00% | 1.00% | 1.00% | |||
Debt instrument, maturity date | Mar. 1, 2028 | |||||
Proceeds from issuance of convertible senior notes | $ 278,100,000 | |||||
Purchase of capped call transactions | $ 33,700,000 | |||||
Notes frequency of periodic payment | semi-annually | |||||
Number of shares per $1,000 principal amount | shares | 31.4465 | |||||
Initial conversion price | $ / shares | $ 31.80 | $ 31.80 | $ 31.80 | |||
Notes, threshold percentage of stock price trigger | 130.00% | |||||
Notes, threshold trading days | d | 20 | |||||
Notes, threshold consecutive trading days | d | 30 | |||||
Percentage on aggregate principal amount of notes to be payable upon the event of default | 25.00% | |||||
Interest rate used to compute initial fair value of liability | 7.18% | |||||
Fair value of liability | $ 191,300,000 | $ 191,300,000 | $ 191,300,000 | |||
Discount on initial issuance | 96,200,000 | 96,200,000 | 96,200,000 | |||
Debt issuance costs | 9,400,000 | 9,400,000 | 9,400,000 | |||
Equity component of convertible senior notes, net of issuance costs | 3,100,000 | |||||
Liability component recorded as a reduction in carrying value of debt | $ 6,200,000 | $ 6,200,000 | $ 6,200,000 | |||
Amortization period | 7 years | |||||
Effective Interest rate | 7.50% | |||||
2028 Convertible Senior Notes | Capped Call Transactions | ||||||
Debt Instrument [Line Items] | ||||||
Payment to counterparties for purchased calls | $ 33,700,000 | |||||
Common stock subject to adjustment and exercisable upon conversion of initial notes | shares | 9,040,869 | 9,040,869 | 9,040,869 | |||
Expiration date | Feb. 28, 2028 | |||||
Cap price of capped transactions | $ / shares | 48 | |||||
Derivative cap price as percentage on common stock price per share | 100.00% | |||||
Closing price of common stock per share | $ / shares | $ 24 | |||||
Reduction to additional paid premium payments for capped call transactions | $ 33,700,000 | |||||
2028 Convertible Senior Notes | Conversion Option One | ||||||
Debt Instrument [Line Items] | ||||||
Notes, threshold percentage of stock price trigger | 130.00% | |||||
Notes, threshold trading days | d | 20 | |||||
Notes, threshold consecutive trading days | d | 30 | |||||
2028 Convertible Senior Notes | Conversion Option Two | ||||||
Debt Instrument [Line Items] | ||||||
Notes, threshold percentage of stock price trigger | 98.00% | |||||
Notes, threshold consecutive trading days | d | 5 | |||||
Notes, threshold trading days | d | 5 | |||||
2028 Convertible Senior Notes | Initial Purchasers | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 37,500,000 | $ 37,500,000 | $ 37,500,000 |
Convertible Senior Notes, Net_2
Convertible Senior Notes, Net - Schedule of Net Carrying Amount of Liability Component of Notes (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
2025 Convertible Senior Notes as Liability Component | ||
Debt Disclosure [Line Items] | ||
Principal | $ 172,500,000 | $ 172,500,000 |
Unamortized debt discount | (17,074,000) | (17,945,000) |
Unamortized debt issuance costs | (5,105,000) | (5,367,000) |
Net carrying amount | 150,321,000 | $ 149,188,000 |
2028 Convertible Senior Notes as Liability Component | ||
Debt Disclosure [Line Items] | ||
Principal | 287,500,000 | |
Unamortized debt discount | (95,522,000) | |
Unamortized debt issuance costs | (6,188,000) | |
Net carrying amount | $ 185,790,000 |
Convertible Senior Notes, Net_3
Convertible Senior Notes, Net - Schedule of Net Carrying Amount of Equity Component of Notes (Details) $ in Thousands | Mar. 31, 2021USD ($) |
2025 Convertible Senior Notes as as Equity Component | |
Debt Disclosure [Line Items] | |
Proceeds allocated to the conversion options (debt discount) | $ 19,787 |
Issuance costs | (767) |
Net carrying amount | 19,020 |
2028 Convertible Senior Notes as as Equity Component | |
Debt Disclosure [Line Items] | |
Proceeds allocated to the conversion options (debt discount) | 96,162 |
Issuance costs | (3,131) |
Net carrying amount | $ 93,031 |
Convertible Senior Notes, Net_4
Convertible Senior Notes, Net - Amounts Recorded in Interest Expense Related to Notes (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
2025 Convertible Senior Notes | |
Debt Disclosure [Line Items] | |
Contractual interest expense | $ 1,294 |
Amortization of debt discount | 871 |
Amortization of debt issuance costs | 263 |
Total interest and amortization expense | 2,428 |
2028 Convertible Senior Notes | |
Debt Disclosure [Line Items] | |
Contractual interest expense | 176 |
Amortization of debt discount | 640 |
Amortization of debt issuance costs | 41 |
Total interest and amortization expense | $ 857 |
Convertible Senior Notes, Net_5
Convertible Senior Notes, Net - Schedule of Future Minimum Payments Under Notes (Details) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
2025 Convertible Senior Notes | ||
Debt Disclosure [Line Items] | ||
Remainder of 2021 | $ 5,175,000 | |
2022 | 5,175,000 | |
2023 | 5,175,000 | |
2024 | 5,175,000 | |
2025 | 175,088,000 | |
Total future payments | 195,788,000 | |
Less amounts representing interest | (23,288,000) | |
Total principal amount | 172,500,000 | $ 172,500,000 |
2028 Convertible Senior Notes | ||
Debt Disclosure [Line Items] | ||
Remainder of 2021 | 1,382,000 | |
2022 | 2,875,000 | |
2023 | 2,875,000 | |
2024 | 2,875,000 | |
2025 | 2,875,000 | |
2026 | 2,875,000 | |
2027 | 2,875,000 | |
2028 | 288,937,000 | |
Total future payments | 307,569,000 | |
Less amounts representing interest | (20,069,000) | |
Total principal amount | $ 287,500,000 |
Share-based Compensation Plan_2
Share-based Compensation Plans - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2011 | Aug. 04, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation capitalized to proprietary software development costs | $ 359 | $ 0 | ||
Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares authorized | 1,750,000 | |||
Annual increase in number of shares, percentage of shares of outstanding common stock | 1.00% | |||
Increase in shares available for grant | 858,723 | |||
Number of shares purchased | 0 | 0 | ||
Unrecognized compensation costs | $ 100 | |||
Weighted average period expect to recognized | 1 month 6 days | |||
Employee Stock Purchase Plan | First Business Day | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Options granted as percentage on fair value of stock | 85.00% | |||
Employee Stock Purchase Plan | Last Business Day | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Options granted as percentage on fair value of stock | 85.00% | |||
Maximum | Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Annual increase in available number of authorized shares | 1,750,000 | |||
2011 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Percentage of maximum incentive stock options granted to stockholders | 10.00% | |||
2011 Plan | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Options exercisable period | 10 years | |||
2011 Plan | Incentive and Non-statutory Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares authorized | 12,987,255 | |||
2011 Plan | Incentive and Non-statutory Stock Options | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Options granted as percentage on fair value of stock | 100.00% | |||
2011 Plan | Incentive Stock Options | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Options granted as percentage on fair value of stock | 110.00% | |||
2019 Equity Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares authorized | 8,000,000 | |||
Annual increase in number of shares, percentage of shares of outstanding common stock | 5.00% | |||
Increase in shares available for grant | 4,293,616 | |||
2019 Equity Incentive Plan | Maximum | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Annual increase in available number of authorized shares | 8,000,000 |
Share-based Compensation Plan_3
Share-based Compensation Plans - Schedule of Total Stock-based Compensation Expense by Function (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 10,919 | $ 3,410 |
Marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 736 | 188 |
Operations and Technology | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | 4,696 | 1,478 |
Selling, General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 5,487 | $ 1,744 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Line Items] | ||
Operating lease costs | $ 7.3 | $ 6 |
Variable lease costs | $ 1.3 | $ 0.9 |
Operating lease agreements that not yet commenced, description | As of March 31, 2021, the Company has entered into operating lease agreements that have not yet commenced. | |
Estimated undiscounted lease payments not yet commenced, description | As of March 31, 2021, the Company’s estimated undiscounted lease payments for leases that have not yet commenced | |
Minimum | ||
Leases [Line Items] | ||
Operating lease term | 1 year | |
Maximum | ||
Leases [Line Items] | ||
Operating lease term | 15 years |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 17,216 |
2022 | 26,796 |
2023 | 25,388 |
2024 | 25,134 |
2025 | 25,810 |
Thereafter | 78,814 |
Total future minimum payments | 199,158 |
Less: Imputed interest | (43,108) |
Present value of operating lease liabilities | $ 156,050 |
Leases - Schedule of Estimated
Leases - Schedule of Estimated Undiscounted Lease Payments for Leases (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 342 |
2022 | 725 |
2023 | 760 |
2024 | 692 |
2025 | 575 |
Thereafter | 1,907 |
Total undiscounted lease payments expected to be capitalized | $ 5,001 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating cash flows used for operating leases | $ 6,541 | $ 4,597 |
Operating lease assets obtained in exchange for operating lease liabilities | $ 29,950 | $ 18,122 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate For Operating Leases (Details) | Mar. 31, 2021 |
Leases [Abstract] | |
Weighted average remaining lease term | 7 years 7 months 6 days |
Weighted average discount rate | 6.60% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2018USD ($)Installment | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Other Commitments [Line Items] | |||
Annual installment | $ 0.5 | ||
Other Accrued and Current Liabilities | |||
Other Commitments [Line Items] | |||
Outstanding liability | $ 0 | $ 0.5 | |
Selling, General and Administrative | |||
Other Commitments [Line Items] | |||
Estimated fair value of grant expense | $ 1.7 | ||
Fair value of grant, discount rate | 10.00% | ||
Endowment Agreement | |||
Other Commitments [Line Items] | |||
Donation fund | $ 2 | ||
Annual installment payment of donation fund | $ 0.5 | ||
Number of annual installments | Installment | 4 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - Coronavirus Aid, Relief, and Economic Security Act (CARES) | Mar. 27, 2020 |
Operating Loss Carryforwards [Line Items] | |
Potential offset percentage of taxable income with NOLs | 100.00% |
Potential offset of taxable income before act enactment percentage | 80.00% |
Reduced life for income tax if improvement property capitalized | 15 years |
Minimum | |
Operating Loss Carryforwards [Line Items] | |
Temporarily increases the interest deductibility threshold percentage of adjusted taxable income | 30.00% |
Maximum | |
Operating Loss Carryforwards [Line Items] | |
Temporarily increases the interest deductibility threshold percentage of adjusted taxable income | 50.00% |
Depreciating costs over for income tax purposes | 39 years |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Schedule of Reconciliation of Numerator and Denominator Used in Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator | ||
Net loss attributable to common stockholders | $ (55,993) | $ (38,503) |
Denominator | ||
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted | 90,044,082 | 86,588,796 |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.62) | $ (0.44) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 30,399,762 | 9,741,022 |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 4,807,661 | 7,988,747 |
Restricted Stock Units | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 6,784,012 | 1,752,275 |
Employee Stock Purchase Plan | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 61,766 | |
Convertible Senior Notes | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted net loss per share | 18,746,323 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - Revolving Credit $ in Thousands | 1 Months Ended |
Apr. 30, 2021USD ($) | |
Subsequent Event [Line Items] | |
Line of credit facility,maximum borrowing capacity | $ 50 |
Line of credit facility, variable annual rate | 0.50% |
Notes interest rate | 4.25% |
Line of credit facility, expires in month and year | 2023-04 |