Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38953 | |
Entity Registrant Name | TheRealReal, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-1234222 | |
Entity Address, Address Line One | 55 Francisco Street | |
Entity Address, Address Line Two | Suite 400 | |
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, $0.00001 par value | |
Trading Symbol | REAL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 103,353,116 | |
Entity central index key | 0001573221 | |
Current fiscal year end date | --12-31 | |
Document fiscal year focus | 2023 | |
Document fiscal period focus | Q3 | |
Amendment flag | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 170,811 | $ 293,793 |
Accounts receivable, net | 13,564 | 12,207 |
Inventory, net | 24,657 | 42,967 |
Prepaid expenses and other current assets | 20,933 | 23,291 |
Total current assets | 229,965 | 372,258 |
Property and equipment, net | 106,806 | 112,679 |
Operating lease right-of-use assets | 94,680 | 127,955 |
Restricted cash | 15,757 | 0 |
Other assets | 5,473 | 2,749 |
Total assets | 452,681 | 615,641 |
Current liabilities | ||
Accounts payable | 8,088 | 11,902 |
Accrued consignor payable | 66,525 | 81,543 |
Operating lease liabilities, current portion | 19,856 | 20,776 |
Other accrued and current liabilities | 82,459 | 93,292 |
Total current liabilities | 176,928 | 207,513 |
Operating lease liabilities, net of current portion | 109,907 | 125,118 |
Convertible senior notes, net | 451,768 | 449,848 |
Other noncurrent liabilities | 4,097 | 3,254 |
Total liabilities | 742,700 | 785,733 |
Commitments and contingencies (Note 11) | ||
Stockholders’ deficit: | ||
Common stock, $0.00001 par value; 500,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 103,310,783 and 99,088,172 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 1 | 1 |
Additional paid-in capital | 807,912 | 781,060 |
Accumulated deficit | (1,097,932) | (951,153) |
Total stockholders’ deficit | (290,019) | (170,092) |
Total liabilities and stockholders’ deficit | $ 452,681 | $ 615,641 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 103,310,783 | 99,088,172 |
Common stock, shares, outstanding (in shares) | 103,310,783 | 99,088,172 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 133,172 | $ 142,703 | $ 405,931 | $ 443,838 |
Cost of revenue: | ||||
Total cost of revenue | 39,100 | 56,926 | 135,702 | 191,757 |
Gross profit | 94,072 | 85,777 | 270,229 | 252,081 |
Operating expenses: | ||||
Marketing | 11,591 | 13,511 | 44,460 | 48,455 |
Operations and technology | 61,038 | 70,782 | 194,645 | 207,159 |
Selling, general and administrative | 44,788 | 47,012 | 138,959 | 147,410 |
Restructuring | (856) | 0 | 37,396 | 275 |
Total operating expenses | 116,561 | 131,305 | 415,460 | 403,299 |
Loss from operations | (22,489) | (45,528) | (145,231) | (151,218) |
Interest income | 2,260 | 1,002 | 6,717 | 1,360 |
Interest expense | (2,673) | (2,675) | (8,018) | (8,014) |
Other income (expense), net | 0 | 6 | 0 | 133 |
Loss before provision for income taxes | (22,902) | (47,195) | (146,532) | (157,739) |
Provision for income taxes | 47 | 63 | 247 | 96 |
Net loss attributable to common stockholders | $ (22,949) | $ (47,258) | $ (146,779) | $ (157,835) |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.22) | $ (0.49) | $ (1.45) | $ (1.66) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.22) | $ (0.49) | $ (1.45) | $ (1.66) |
Shares used to compute net loss per share attributable to common stockholders, basic (in shares) | 102,648,790 | 96,696,417 | 101,087,793 | 95,036,618 |
Shares used to compute net loss per share attributable to common stockholders, diluted (in shares) | 102,648,790 | 96,696,417 | 101,087,793 | 95,036,618 |
Consignment revenue | ||||
Revenue: | ||||
Total revenue | $ 102,852 | $ 93,874 | $ 302,072 | $ 274,780 |
Cost of revenue: | ||||
Total cost of revenue | 13,577 | 15,206 | 43,681 | 43,193 |
Direct revenue | ||||
Revenue: | ||||
Total revenue | 17,356 | 34,005 | 63,196 | 125,474 |
Cost of revenue: | ||||
Total cost of revenue | 15,686 | 28,721 | 61,162 | 105,415 |
Shipping services revenue | ||||
Revenue: | ||||
Total revenue | 12,964 | 14,824 | 40,663 | 43,584 |
Cost of revenue: | ||||
Total cost of revenue | $ 9,837 | $ 12,999 | $ 30,859 | $ 43,149 |
Condensed Statements of Stockho
Condensed Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2021 | 92,960,066 | ||||||
Beginning balance at Dec. 31, 2021 | $ 73,128 | $ (98,632) | $ 1 | $ 841,255 | $ (112,052) | $ (768,128) | $ 13,420 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon exercise of options (in shares) | 417,428 | ||||||
Issuance of common stock upon exercise of options | 637 | 637 | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares) | 922,610 | ||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes | (2) | (2) | |||||
Stock-based compensation expense | 12,964 | 12,964 | |||||
Net loss | (57,412) | (57,412) | |||||
Ending balance (in shares) at Mar. 31, 2022 | 94,300,104 | ||||||
Ending balance at Mar. 31, 2022 | (69,317) | $ 1 | 742,802 | (812,120) | |||
Beginning balance (in shares) at Dec. 31, 2021 | 92,960,066 | ||||||
Beginning balance at Dec. 31, 2021 | 73,128 | $ (98,632) | $ 1 | 841,255 | $ (112,052) | (768,128) | $ 13,420 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (157,835) | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 97,927,443 | ||||||
Ending balance at Sep. 30, 2022 | (141,255) | $ 1 | 771,287 | (912,543) | |||
Beginning balance (in shares) at Mar. 31, 2022 | 94,300,104 | ||||||
Beginning balance at Mar. 31, 2022 | (69,317) | $ 1 | 742,802 | (812,120) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon exercise of options (in shares) | 94,601 | ||||||
Issuance of common stock upon exercise of options | 328 | 328 | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares) | 848,646 | ||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes | (23) | (23) | |||||
Issuance of common stock for exercises under ESPP (in shares) | 282,226 | ||||||
Issuance of common stock for exercises under ESPP | 900 | 900 | |||||
Stock-based compensation expense | 14,164 | 14,164 | |||||
Net loss | (53,165) | (53,165) | |||||
Ending balance (in shares) at Jun. 30, 2022 | 95,525,577 | ||||||
Ending balance at Jun. 30, 2022 | (107,113) | $ 1 | 758,171 | (865,285) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon exercise of options (in shares) | 1,416,611 | ||||||
Issuance of common stock upon exercise of options | 1,941 | 1,941 | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares) | 985,255 | ||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes | (6) | (6) | |||||
Stock-based compensation expense | 11,181 | 11,181 | |||||
Net loss | (47,258) | (47,258) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 97,927,443 | ||||||
Ending balance at Sep. 30, 2022 | $ (141,255) | $ 1 | 771,287 | (912,543) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 99,088,172 | 99,088,172 | |||||
Beginning balance at Dec. 31, 2022 | $ (170,092) | $ 1 | 781,060 | (951,153) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares) | 1,064,260 | ||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes | (208) | (208) | |||||
Stock-based compensation expense | 9,280 | 9,280 | |||||
Net loss | (82,500) | (82,500) | |||||
Ending balance (in shares) at Mar. 31, 2023 | 100,152,432 | ||||||
Ending balance at Mar. 31, 2023 | $ (243,520) | $ 1 | 790,132 | (1,033,653) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 99,088,172 | 99,088,172 | |||||
Beginning balance at Dec. 31, 2022 | $ (170,092) | $ 1 | 781,060 | (951,153) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (146,779) | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 103,310,783 | 103,310,783 | |||||
Ending balance at Sep. 30, 2023 | $ (290,019) | $ 1 | 807,912 | (1,097,932) | |||
Beginning balance (in shares) at Mar. 31, 2023 | 100,152,432 | ||||||
Beginning balance at Mar. 31, 2023 | (243,520) | $ 1 | 790,132 | (1,033,653) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon exercise of options (in shares) | 2,000 | ||||||
Issuance of common stock upon exercise of options | 3 | 3 | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares) | 1,512,391 | ||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes | (103) | (103) | |||||
Issuance of common stock for exercises under ESPP (in shares) | 469,199 | ||||||
Issuance of common stock for exercises under ESPP | 446 | 446 | |||||
Stock-based compensation expense | 8,920 | 8,920 | |||||
Net loss | (41,330) | (41,330) | |||||
Ending balance (in shares) at Jun. 30, 2023 | 102,136,022 | ||||||
Ending balance at Jun. 30, 2023 | (275,584) | $ 1 | 799,398 | (1,074,983) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock upon exercise of options (in shares) | 6,511 | ||||||
Issuance of common stock upon exercise of options | 16 | 16 | |||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes (in shares) | 1,168,250 | ||||||
Issuance of common stock upon vesting of restricted stock units, net of shares withheld for employee taxes | (203) | (203) | |||||
Stock-based compensation expense | 8,701 | 8,701 | |||||
Net loss | $ (22,949) | (22,949) | |||||
Ending balance (in shares) at Sep. 30, 2023 | 103,310,783 | 103,310,783 | |||||
Ending balance at Sep. 30, 2023 | $ (290,019) | $ 1 | $ 807,912 | $ (1,097,932) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (146,779) | $ (157,835) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 23,530 | 20,255 |
Stock-based compensation expense | 26,293 | 37,020 |
Reduction of operating lease right-of-use assets | 12,999 | 14,598 |
Bad debt expense | 1,565 | 1,133 |
Accrued interest on convertible notes | 575 | 575 |
Accretion of debt discounts and issuance costs | 1,920 | 1,942 |
Loss on disposal/sale of property and equipment and impairment of capitalized proprietary software | 182 | 432 |
Property, plant, equipment, and right-of-use asset impairments | 33,817 | 0 |
Provision for inventory write-downs and shrinkage | 8,836 | 1,798 |
Gain on lease termination | (738) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,922) | (2,119) |
Inventory, net | 9,474 | 6,243 |
Prepaid expenses and other current assets | 1,897 | (6,543) |
Other assets | (2,856) | (391) |
Operating lease liability | (21,399) | (13,074) |
Accounts payable | (1,550) | 4,067 |
Accrued consignor payable | (15,018) | 729 |
Other accrued and current liabilities | (1,499) | (4,494) |
Other noncurrent liabilities | (118) | 409 |
Net cash used in operating activities | (71,791) | (95,255) |
Cash flow from investing activities: | ||
Capitalized proprietary software development costs | (9,870) | (9,847) |
Purchases of property and equipment | (25,528) | (16,408) |
Net cash used in investing activities | (35,398) | (26,255) |
Cash flow from financing activities: | ||
Proceeds from exercise of stock options | 19 | 2,906 |
Proceeds from issuance of stock in connection with the Employee Stock Purchase Program | 446 | 900 |
Taxes paid related to restricted stock vesting | (501) | (28) |
Net cash provided by (used in) financing activities | (36) | 3,778 |
Net decrease in cash, cash equivalents and restricted cash | (107,225) | (117,732) |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 293,793 | 418,171 |
End of period | 186,568 | 300,439 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 5,522 | 5,496 |
Cash paid for income taxes | 227 | 256 |
Supplemental disclosures of non-cash investing and financing activities | ||
Property and equipment additions not yet paid in cash | 2,293 | 4,487 |
Capitalized proprietary software development costs additions not yet paid in cash | 1,070 | 2,159 |
Stock-based compensation capitalized to proprietary software development costs | $ 608 | $ 1,289 |
Description of Business and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 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 fashion, men’s fashion, and jewelry and watches. The Company was incorporated in the state of Delaware on March 29, 2011 and is headquartered in San Francisco, California. 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, 2022 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, stockholders’ equity, and cash flows for the periods presented. For the three and nine months ended September 30, 2023 and 2022, comprehensive loss is equal to net loss as the Company has no other comprehensive income (loss) item in the periods presented. The Company has made a presentation change to reclassify provision for inventory write-downs and shrinkage from inventory, net and to reclassify gain on lease termination from operating lease liability within operating cash flows in the condensed statements of cash flows. Additionally, the Company has made a presentation change to the Company's condensed statements of operations to reclassify its legal settlement expenses to selling, general and administrative expense and to reclassify its restructuring expenses from marketing, operations and technology, and sales, general and administrative operating expenses. Changes to reclassify amounts in the prior periods have been made to conform to the current period presentation. 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 February 28, 2023. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies 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, standalone selling price related to revenue transactions, valuation of inventory, software development costs, stock-based compensation, incremental borrowing rates related to lease liability, 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. The disclosures provided herein should be read in conjunction with the audited financial statements and notes thereto included in our 2022 Form 10-K. See “Part II - Item 8. Financial Statements and Supplementary Data - Note 2” in our 2022 Form 10-K for a complete summary of our significant accounting policies. 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 as if the instruments had been converted into shares of common stock. No undistributed earnings were allocated to the participating securities as the contingent event is not satisfied as of the reporting date. 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. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that include products and services that are capable of being distinct and accounted for as separate performance obligations as described below. The transaction price requires an allocation across consignment services, sales of Company-owned inventory, and shipping services. Estimation is required in the determination of the services' stand-alone selling price (“SSP”). Consignment 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. SSP is estimated using observable stand-alone consignment sales which are conducted without shipping services. 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 impact of the deferral has not been material to the financial statements. 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 and nine months ended September 30, 2023 and 2022. 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. SSP is estimated using observable stand-alone sales of Company-owned inventory which are conducted without shipping services, when available, or a market assessment approach. 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. Shipping Services Revenue The Company provides a service to ship purchased items to buyers and a service to ship items from buyers back to the Company. The Company determines itself to be the principal in this arrangement. The Company charges a fee to buyers for this service and has elected to treat shipping and handling activities performed as a separate performance obligation. For shipping services revenue, the Company's SSP is estimated using a market approach considering external and internal data points on the stand-alone sales price of the shipping service. All outbound shipping and handling costs for buyers are accounted for as cost of shipping services and recognized as the shipping activity occurs. The Company also generates shipping services revenue from the shipping fees for consigned products returned by buyers to the Company within policy. The Company recognizes shipping revenue and associated costs over time as the shipping activity occurs, which is generally one to three days after shipment. 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 revenue and direct revenue. Additionally, the Company periodically offers commission exceptions to the standard consignment rates to consignors to optimize its supply. These are treated as a reduction of consignment revenue at the time of sale. 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 condensed balance sheets. Contract Liabilities The Company’s contractual liabilities primarily 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 buyer incentives. 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 September 30, 2023 and December 31, 2022. Cost of Revenue Cost of consignment revenue consist of 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. Cost of shipping services revenue consists of the outbound shipping and handling costs to deliver purchased items to buyers, the shipping costs for consigned products returned by buyers to the Company within policy, and an allocation of the credit card fees associated with the shipping fee charged. Stock-based Compensation The Company incurs stock-based compensation expense from stock options, restricted stock units (“RSUs”), performance based restricted stock units (“PSUs”) subject to performance or market conditions, and employee stock purchase plan (“ESPP”) purchase rights. Stock-based compensation expense related to employees and nonemployees is measured based on the grant-date fair value of the awards. The Company estimates the fair value of stock options granted and the purchase rights issued under the ESPP using the Black-Scholes option pricing model. The fair value of 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. 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 for awards with only a service condition. To determine the grant-date fair value of the Company's stock-based payment awards for PSUs subject to performance conditions, the quoted stock price on the date of grant is used. The stock-based compensation expense for PSUs with performance conditions is recognized based on the estimated number of shares that the Company expects will vest and is adjusted on a quarterly basis using the estimated achievement of financial performance targets. For PSUs subject to market conditions, the grant-date fair value is determined using the Monte Carlo simulation model which utilizes multiple input variables to estimate the probability that market conditions will be achieved. These variables include the Company's expected stock price volatility over the expected term of the award, the risk-free interest rate for the expected term of the award, and expected dividends. For PSUs with market conditions, the stock-based compensation expense is recognized on a tranche by tranche basis over the requisite service period using the fair value derived from the Monte Carlo simulation model. The compensation expense will be recognized regardless of whether the market condition is ever satisfied, provided the requisite service period is satisfied. For all awards, the Company accounts for forfeitures as they occur. 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. Restricted cash consists of cash deposited with a financial institution as collateral for the Company’s letters of credit for its facility leases and the Company’s credit cards. The Company had $15.8 million and $0 in restricted cash as of September 30, 2023 and December 31, 2022, respectively. The following table provides a reconciliation of cash, cash equivalents and restricted cash for the nine months ended September 30, 2023 that sum to the total of the same amounts shown in the statements of cash flows (in thousands): September 30, 2023 December 31, 2022 September 30, 2022 Cash and cash equivalents $ 170,811 $ 293,793 $ 300,439 Restricted cash 15,757 — — Total cash, cash equivalents and restricted cash $ 186,568 $ 293,793 $ 300,439 Inventory, Net 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 and 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. Additionally, inventory is recorded net of an allowance for shrinkage which represents the risk of physical loss of inventory. Provisions for inventory shrinkage are estimated based on historical experience and are adjusted based upon physical inventory counts. Provisions to write down inventory to net realizable value and provisions for inventory shrinkage were $8.8 million and $1.8 million for the nine months ended September 30, 2023 and 2022, respectively. 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 $23.2 million and $22.2 million as of September 30, 2023 and December 31, 2022, respectively. Included in inventory on the Company’s condensed balance sheets are assets totaling $7.2 million and $6.1 million as of September 30, 2023 and December 31, 2022, 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. Impairment of Long-lived Assets The carrying amounts of long-lived assets, including right-of-use assets, property and equipment, net and capitalized proprietary software, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets to be held and used is measured by comparing the carrying amount of assets to future undiscounted net cash flows the assets are expected to generate over their remaining life. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the revised shorter useful life. 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 corresponding right-of-use asset is recorded based on the corresponding lease liability at lease inception, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred and any tenant incentives allowed for under the lease. The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be exercised at the inception of the lease. Operating lease right-of-use assets, current portion of operating lease liabilities, and operating lease liabilities, net of current portion are included on the Company’s condensed balance sheets. 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 Prior to the adoption of ASU 2020-06 on January 1, 2022, convertible debt instruments that may be settled in cash or other assets, or partially in cash, upon conversion, were separately accounted for as long-term debt and equity components (or conversion feature). The debt component represented the Company’s contractual obligation to pay principal and interest and the equity component represented 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. Following the adoption of ASU 2020-06, there is no bifurcation of the liability and equity components of the 3.00% Convertible Senior Notes due 2025 (the “2025 Notes”) and the 1.00% Convertible Senior Notes due 2028 (the “2028 Notes” and, together with the 2025 Notes, the “Notes”), and the entire principal of the Notes are accounted for as long-term 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 7). 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 convertible senior notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted convertible senior notes, 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. The Company monitors the conditions for equity classification, which continues to be met. Debt Issuance Costs Debt issuance costs, which consist of direct incremental legal, consulting, banking and accounting fees related to the anticipated debt offering, 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. The Company adopted ASU 2020-06 as of January 1, 2022 using the modified retrospective method. Prior to the adoption of ASU 2020-06 on January 1, 2022, a portion of debt issuance costs incurred in connection with the convertible senior notes issued in June 2020 and March 2021 was allocated to the equity component and was recorded as a reduction to additional paid in capital and was not amortized to interest expense over the estimated life of the related debt. Following the adoption of ASU 2020-06, the debt issuance costs previously allocated to the equity component of both the Notes were reclassified to debt. As such, all of the debt issuance costs are recorded as a direct deduction from the related principal debt amounts on the balance sheet, and are all amortized to interest expense over the estimated remaining life of the related debt. Concentrations of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, restricted cash and accounts receivable. At times, such amount may exceed federally-insured limits. The Company is closely monitoring ongoing events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally. The Company reduces credit risk by placing its cash, cash equivalents, restricted cash and investments with major financial institutions with high credit ratings within the United States. The Company has not experienced any realized losses on cash, cash equivalents and restricted cash to date; however, no assurances can be provided. As of September 30, 2023 and December 31, 2022, 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 nine months ended September 30, 2023 and 2022. Recently Adopted Accounting Pronouncements There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s condensed financial statements and footnote disclosures, from those disclosed in the 2022 Annual Report on Form 10-K. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 9 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents The following tables summarize the estimated value of the Company’s cash and cash equivalents (in thousands) and do not include restricted cash. There are no unrealized gains or losses related to the restricted cash balance. September 30, 2023 Amortized Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 40,467 $ — $ — $ 40,467 Money market funds 130,344 — — 130,344 Total cash and cash equivalents $ 170,811 $ — $ — $ 170,811 December 31, 2022 Amortized Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 275,742 $ — $ — $ 275,742 Money market funds 18,051 — — 18,051 Total cash and cash equivalents $ 293,793 $ — $ — $ 293,793 |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 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 September 30, 2023 and December 31, 2022, the Company’s cash equivalents solely consisted of money market funds, which amounted to $130.3 million and $18.1 million, respectively. Money market funds are measured at net asset value per share and are excluded from the fair value hierarchy. 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): September 30, 2023 Net Carrying Amount Estimated Fair Value 2025 Convertible senior notes $ 170.2 $ 152.6 2028 Convertible senior notes $ 281.5 $ 220.3 The principal amounts of the 2025 Notes and the 2028 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 (See Note 7). |
Condensed Balance Sheet Compone
Condensed Balance Sheet Components | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Condensed Balance Sheet Components | 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): September 30, December 31, Proprietary software $ 43,003 $ 39,017 Furniture and equipment 47,612 47,692 Automobiles 2,114 2,119 Leasehold improvements 82,698 86,986 Property and equipment, gross 175,427 175,814 Less: accumulated depreciation and amortization (68,621) (63,135) Property and equipment, net $ 106,806 $ 112,679 Depreciation and amortization expense on property and equipment was $7.6 million and $6.6 million for the three months ended September 30, 2023 and 2022, respectively, and $22.9 million and $19.7 million for the nine months ended September 30, 2023 and 2022, respectively. During the three and nine months ended September 30, 2023, the Company recorded $0.3 million and $7.5 million of impairment of leasehold improvements and disposal of fixed assets, respectively, related to the closures of several of its office and retail locations as part of the savings plan the Company implemented. Other Accrued and Current Liabilities Other accrued and current liabilities consist of the following (in thousands): September 30, December 31, Returns reserve $ 23,205 $ 22,233 Accrued compensation 20,267 15,111 Accrued legal 473 484 Accrued sales tax and other taxes 7,094 8,531 Site credit liability 15,491 11,813 Accrued marketing and outside services 5,195 8,729 Accrued property and equipment 1,242 11,417 Accrued shipping 2,268 5,715 Deferred revenue 1,646 3,549 Accrued interest 1,741 1,166 Other 3,837 4,544 Other accrued and current liabilities $ 82,459 $ 93,292 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DebtRevolving Credit AgreementIn April 2021, the Company entered into a loan and security agreement (“Revolving Credit 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 was set to expire in April 2023. In April 2023 the Company signed an amendment with the lender to extend the credit facility through June 2023. As of June 30, 2023, $0 had been drawn on the Revolving Credit Agreement, and the credit facility has expired and was not renewed. |
Convertible Senior Notes, Net
Convertible Senior Notes, Net | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes, Net | Convertible Senior Notes, Net In June 2020, the Company issued an aggregate principal of $172.5 million of its 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. In March 2021, the Company issued an aggregate principal of $287.5 million of its 2028 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. The 2028 Notes 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 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 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 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, and 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, in each case 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, in the case of the 2025 Notes, and December 1, 2027, in the case of the 2028 Notes, the applicable Notes will be convertible only under the following circumstances: • During any calendar quarter (and only during such calendar quarter), 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, in the case of the 2025 Notes, and December 1, 2027, in the case of the 2028 Notes, until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their Notes, in multiples of $1,000 principal amount, at any time, regardless of the foregoing circumstances. Upon conversion, the 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 2025 Notes and the 2028 Notes 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 either the 2025 Notes or the 2028 Notes to convert were not met as of September 30, 2023. The 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 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 2025 Notes or 2028 Notes, as applicable, 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 or 2028 Notes, as applicable, as applicable, the outstanding to become due and payable immediately. Prior to the adoption of ASU 2020-06 on January 1, 2022 and in accounting for the issuance of the 2025 Notes and the 2028 Notes, the Company separately accounted for the liability and equity components of the 2025 Notes and 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 applicable series of 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. For the 2025 Notes, the interest rate of 5.67% was used to compute the initial fair value of the liability component of $152.7 million, with a corresponding amount recorded as a discount on the initial issuance of the 2025 Notes of approximately $19.8 million. For the 2028 Notes, 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. For the 2025 Notes and the 2028 Notes, the debt discount was recorded to equity and was amortized to the debt liability over the life of the Notes using the effective interest method. For the 2025 Notes and the 2028 Notes, the equity component was not remeasured as long as it continued to meet the conditions for equity classification. 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. Prior to the adoption of ASU 2020-06 on January 1, 2022, 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 was amortized to interest expense using the effective interest method over the expected life of the 2025 Notes or approximately its five-year term. The effective interest rate on the liability component of the 2025 Notes for the period from the date of issuance through December 31, 2021 was 6.4%. 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 $6.3 million was recorded as a reduction in the carrying value of the debt on the condensed balance sheets and was amortized to interest expense using the effective interest method over the expected life of the 2028 Notes or approximately its seven-year term. The effective interest rate on the liability component of the 2028 Notes for the period from the date of issuance through December 31, 2021 was 7.5%. On January 1, 2022, the Company adopted ASU 2020-06 based on a modified retrospective transition method. Under such transition, prior period information for both the 2025 and 2028 Notes has not been retrospectively adjusted. In accounting for the 2025 Notes after the adoption of ASU 2020-06, the 2025 Notes are accounted for as a single liability, and the carrying amount of the Notes is $170.2 million as of September 30, 2023 , with principal of $172.5 million, net of unamortized issuance costs of $2.3 million. The 2025 Notes were classified as long term liabilities as of September 30, 2023 . The issuance costs related to the 2025 Notes are being amortized to interest expense over the expected life of the 2025 Notes or approximately its five-year term at an effective interest rate of 3.74%. In accounting for the 2028 Notes after the adoption of ASU 2020-06, the 2028 Notes are accounted for as a single liability, and the carrying amount of the Notes is $281.5 million as of September 30, 2023 , with principal of $287.5 million, net of unamortized issuance costs of $6.0 million. The 2028 Notes were classified as long term liabilities as of September 30, 2023 . The issuance costs related to the 2028 Notes are being amortized to interest expense over the expected life of the 2028 Notes or approximately its seven-year term at an effective interest rate of 1.45%. The following tables present the outstanding principal amount, unamortized debt issuance costs, and net carrying amount of the 2025 Notes and the 2028 Notes as of the dates indicated (in thousands): 2025 Notes September 30, December 31, Principal $ 172,500 $ 172,500 Unamortized debt issuance costs (2,262) (3,204) Net carrying amount $ 170,238 $ 169,296 2028 Notes September 30, December 31, Principal $ 287,500 $ 287,500 Unamortized debt issuance costs (5,970) (6,948) Net carrying amount $ 281,530 $ 280,552 The following tables set forth the amounts recorded in interest expense related to the 2025 Notes as of the dates indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 1,294 $ 1,293 $ 3,881 $ 3,881 Amortization of debt issuance costs 314 326 942 978 Total interest and amortization expense $ 1,608 $ 1,619 $ 4,823 $ 4,859 The following tables set forth the amounts recorded in interest expense related to the 2028 Notes as of the dates indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 719 $ 718 $ 2,156 $ 2,156 Amortization of debt issuance costs 327 323 978 964 Total interest and amortization expense $ 1,046 $ 1,041 $ 3,134 $ 3,120 Future minimum payments under the 2025 Notes and the 2028 Notes as of September 30, 2023, are as follows (in thousands): Amount Fiscal Year 2025 Notes 2028 Notes Remainder of 2023 $ 2,587 $ — 2024 5,175 2,875 2025 175,088 2,875 2026 — 2,875 2027 — 2,875 2028 — 288,937 Total future payments 182,850 300,437 Less amounts representing interest (10,350) (12,937) Total principal amount $ 172,500 $ 287,500 Capped Call Transactions with Respect to the 2025 Notes 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 with respect to its common stock with certain financial institutions (collectively, the “Counterparties”). The Company paid an aggregate amount of approximately $22.5 million to the Counterparties in connection with the 2025 capped call transactions (the “2025 Capped Calls”) and $33.7 million to the Counterparties in connection with the 2028 capped call transactions and (the “2028 Capped Calls” and, together with the 2025 Capped Calls, the “Capped Calls”). 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 Notes and the 2028 Notes, respectively. The 2025 Capped Calls and the 2028 Capped Calls are subject to anti-dilution adjustments that are intended to be substantially identical to those in the 2025 Notes and the 2028 Notes, as applicable, and are exercisable upon conversion of the 2025 Notes or the 2028 Notes, as applicable. The 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 Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the 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 Capped Call and 2028 Capped Call transactions. |
Share-based Compensation Plans
Share-based Compensation Plans | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation Plans | Share-based Compensation Plans 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. In February 2022, the Company granted PSUs with financial performance targets to certain employees of the Company. The number of units issued will depend on the achievement of financial metrics relative to the approved performance targets, and can range from 0% to 150% of the target amount. The PSUs are subject to continuous service with the Company and will vest after approximately three years. The PSUs are measured using the fair value at the date of grant. The compensation expense associated with PSUs is recognized based on the estimated number of shares that the Company expects will vest and may be adjusted based on interim estimates of performance against the performance condition. During the three and nine months ended September 30, 2023, the Company has not recognized stock-based compensation expense as attainment of financial performance targets is not considered probable. In March 2023, the Company granted PSUs under the 2019 Plan subject to the achievement of both market and service conditions to certain employees of the Company . The number of units vested will depend on the achievement of approved market conditions and continuous service with the Company. The PSUs are eligible to vest in three tranches over a five-year performance period. The PSUs are measured using the Monte Carlo simulation to obtain the fair value at the date of grant based on the probability that the market conditions will be met. The compensation expense associated with the PSUs is based on the fair value and is recognized over the requisite service period. The compensation expense will be recognized regardless of whether the market condition is ever satisfied, provided the requisite service period is satisfied. As of September 30, 2023, there was $50.6 million of total unrecognized compensation expense related to RSUs and PSUs, which are expected to be recognized over the remaining weighted-average vesting period of approximately 2.3 years. As of September 30, 2023, there was no unrecognized compensation expense related to options. Inducement Grants The Company granted stock-based awards outside of the 2019 Plan to the Company’s new Chief Executive Officer and the Chief Technology and Product Officer. These awards were granted as inducements material to their commencement of employment and entry into offer letters with the Company, in accordance with Nasdaq Listing Rule 5635(c)(4). The inducement pool consisted of a total of 3,075,000 shares of the Company's common stock, which includes (a) 1,500,000 shares of PSUs that are eligible to vest based on market and service conditions in four tranches over a five-year performance period and (b) 1,575,000 shares of RSUs generally subject to the same terms and conditions as grants that are made under the 2019 Plan. As of September 30, 2023, the unrecognized expense for the PSUs is $1.4 million and the unrecognized expense for RSUs is $2.2 million. Employee Stock Purchase Plan In connection with the Company’s initial public offering, the Company adopted the Employee Stock Purchase Plan (the “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. The initial number of shares of common stock that could be issued under the employee stock purchase plan was 1,750,000 shares. These available shares increase by an amount equal to the lesser of 1,750,000 shares, 1% of the number of shares of common stock outstanding on the immediately preceding December 31, or the number of shares determined by the Company’s board of directors. There were 469,199 shares purchased by employees under the ESPP during the nine months ended September 30, 2023. There were 282,226 shares purchased by employees under the ESPP during the nine months ended September 30, 2022. There were no shares purchased by employees under the ESPP during the three months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, total unrecognized compensation costs related to the 2019 ESPP was $0.1 million which will be amortized over the remaining weighted-average vesting period of approximately 0.12 years. Stock-based Compensation Total stock-based compensation expense by function was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Marketing $ 382 $ 567 $ 1,181 $ 1,774 Operations and technology 3,115 5,038 10,107 15,903 Selling, general and administrative 5,039 5,236 15,005 19,343 Total $ 8,536 $ 10,841 $ 26,293 $ 37,020 During the three months ended September 30, 2023 and 2022, the Company capitalized $0.2 million and $0.4 million of stock-based compensation expense to proprietary software, respectively. During the nine months ended September 30, 2023 and 2022, the Company capitalized $0.6 million and $1.3 million of stock-based compensation expense to proprietary software, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | 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 $5.1 million and $7.2 million for the three months ended September 30, 2023 and 2022, respectively, and $17.9 million and $21.7 million for the nine months ended September 30, 2023 and 2022, respectively. The Company also incurred $1.2 million and $1.5 million of variable lease costs for the three months ended September 30, 2023 and 2022, respectively, and $3.8 million and $4.3 million of variable lease costs for the nine months ended September 30, 2023 and 2022, respectively. The variable lease costs are comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance. Due to the office and store closures in the nine months ended September 30, 2023, the Company reviewed its right-of-use assets for impairment. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows using discount rate and other quantitative and qualitative factors. As a result, the Company recorded $26.3 million related to the impairment of certain office and store right-of-use assets, for the nine months ended September 30, 2023. No additional impairment was recorded during the three months ended September 30, 2023. The impairment charges are included in restructuring in the condensed statements of operations. During the three months ended September 30, 2023, the Company entered into agreements to amend certain of its operating leases. The lease for the Company's corporate headquarters in San Francisco, CA was amended to remove one floor of leased space, and the lease for the Company's offices in New York, NY, was amended to remove two floors of leased space. Additionally, during the nine months ended September 30, 2023, the Company terminated the operating leases for retail locations in Austin, TX, Atlanta, GA, and Miami, FL. The Company treated the lease termination amendments as lease modifications for accounting purposes as of the applicable effective dates of such terminations which resulted in a decrease of $5.7 million and $7.5 million to the related lease liabilities for the three and nine months ended September 30, 2023, respectively, and $1.4 million to the related right-of-use assets for the nine months ended September 30, 2023. The Company recorded a net gain on the lease terminations of $1.2 million and $0.7 million during the three and nine months ended September 30, 2023, respectively. The net gain on lease terminations is included in restructuring in the condensed statement of operations. Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands): Fiscal Year Amount Remainder of 2023 $ 7,084 2024 26,794 2025 27,706 2026 27,534 2027 23,528 Thereafter 40,666 Total future minimum payments $ 153,312 Less: Imputed interest (23,549) Present value of operating lease liabilities $ 129,763 Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands): Nine Months Ended September 30, 2023 2022 Operating cash flows used for operating leases $ 27,028 $ 20,138 Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications) $ 6,006 $ 2,156 The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows: September 30, 2023 Weighted average remaining lease term 5.7 years Weighted average discount rate 6.0 % The Company has leases for certain vehicles and equipment that are classified as finance leases. The finance lease right-of-use asset and finance lease liabilities for these vehicle and equipment leases are immaterial as of September 30, 2023 and December 31, 2022. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In February 2023, the Company announced a savings plan to reduce its real estate presence and operating expenses through closure of certain retail and office locations (referred to as the “Real Estate Reduction Plan”) and workforce reduction. During the nine months ended September 30, 2023 , the Company closed two flagship stores (San Francisco, California and Chicago, Illinois), two neighborhood stores (Atlanta, Georgia and Austin, Texas), and two luxury consignment offices (Miami, Florida and Washington, D.C.), including any co-located logistics hubs, and reduced its office spaces in San Francisco, California. For the nine months ended September 30, 2023 , the Company recognized $37.4 million in restructuring which consisted of right-of-use asset impairment charge of $26.3 million, leasehold improvements impairment charge of $7.5 million, employee severance of $3.0 million, and other related charges of $1.3 million, partially offset by a $0.7 million gain on lease terminations. The restructuring related charges were recorded on a separate line item in the Company's condensed statement of operations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 2027. As of September 30, 2023, 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. 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. sued the Company in the U.S. District Court for the Southern District of New York. The Complaint alleged federal and state law claims of trademark infringement, unfair competition, and false advertising. On February 1, 2019, Chanel, Inc. filed its First Amended Complaint that included substantially similar claims against the Company. On March 4, 2019, the Company filed a Motion to Dismiss the First Amended Complaint, which was granted in part and dismissed in part on March 30, 2020. The surviving claims against the Company include trademark infringement under 15 U.S.C. § 1114, false advertising under 15 U.S.C. § 1125, and unfair competition under New York common law. On May 29, 2020, the Company filed its Answer to the Amended Complaint. On November 3, 2020, the Company sought leave to amend its Answer to assert counterclaims against Chanel, Inc. for violations of the Sherman Act, 15 U.S.C. §§ 1 & 2, the Donnelly Act, N.Y. Gen. Bus. Law. § 340, and New York common law. The motion for leave to amend was granted on February 24, 2021. On February 25, 2021, the Company filed its First Amended Answer, Affirmative Defenses and Counterclaims against Chanel. The Company’s Counterclaims allege violations of the Sherman Act, 15 U.S.C. §§ 1 & 2, the Donnelly Act, N.Y. Gen. Bus. Law. § 340, and New York common law. On March 18, 2021, Chanel moved to dismiss the Company’s Counterclaims and moved to strike the Company’s unclean hands affirmative defense. Decisions on Chanel’s motion to dismiss and motion strike are pending. The parties agreed to a stay in April 2021 to engage in settlement discussions. After several mediation sessions, the parties were unable to reach a resolution, and the stay was lifted in November 2021. Chanel then sought a partial stay of discovery on the Company's counterclaims and unclean hands defense while Chanel's motion to dismiss and strike those claims are pending, and on March 10, 2022, the Court granted Chanel's request. The parties have continued to engage in fact discovery regarding Chanel's counterfeiting and false advertising claims against the Company. Fact discovery was scheduled to be completed by August 15, 2023. However, on July 19, 2023, the Court ordered a stay of the case at the parties’ request to enable the parties to attempt mediation again. The parties are scheduling mediation in early 2024. The final outcome of this litigation, including our liability, if any, with respect to Chanel’s claims, is uncertain. 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. Beginning on September 10, 2019, purported shareholder class action complaints were filed against the Company, its officers and directors and the underwriters of its IPO in the San Mateo Superior Court, Marin County Superior Court, and the United States District Court for the Northern District of California. On July 27, 2021, the Company reached an agreement in principle to settle the shareholder class action. On November 5, 2021, plaintiff filed the executed stipulation of settlement and motion for preliminary approval of the settlement with the federal court. On March 24, 2022, the court entered an order preliminarily approving the settlement. On July 28, 2022, the court entered an order finally approving the settlement and dismissing the case. The financial terms of the stipulation of settlement provide that the Company will pay $11.0 million within thirty (30) days of the later of preliminary approval of the settlement or plaintiff’s counsel providing payment instructions. The Company paid the settlement amount on March 29, 2022 with available resources and recorded approximately $11.0 million for the year ended December 31, 2021 under our Operating expenses as a Legal settlement. One of the plaintiffs in the Marin County case opted out of the federal settlement and is pursuing the claim in Marin County Superior Court. The stay of the state court case has been lifted, and the opt out plaintiff filed an amended complaint on October 31, 2022 alleging putative class claims under the Securities Act Act of 1933 (the “Securities Act”) on behalf of the two shareholders who opted out of the settlement and those who purchased stock from November 21, 2019 through March 9, 2020, based on purported new revelations. The claims are for alleged violations of Sections 11 and 15 of the Securities Act. A hearing on the forthcoming motion for class certification has been set for May 7, 2024. While the Company intends to defend vigorously against this litigation, there can be no assurance that the Company will be successful in its defense. For this reason, the Company cannot currently estimate the loss or 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 | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's provision for income taxes were immaterial for the three and nine months ended September 30, 2023 and 2022. The Company does not update its deferred tax assets during interim periods. Although the Company does not update its deferred tax assets during interim periods, the Company adjusted deferred tax assets and corresponding valuation allowance for the impact of the true up of the US return filing in the second quarter of 2023 upon further evaluation of deductions related to stock compensation. The Company maintained a full valuation allowance of $255.2 million against its gross deferred tax assets which were $291.8 million as of September 30, 2023. The deferred tax assets were primarily comprised of federal and state tax net operating loss carryforwards. Utilization of the net operating loss carryforwards may be subject to annual limitation due to historical or future ownership percentage change rules provided by the Internal Revenue Code of 1986, and similar state provisions. The annual limitation may result in the expiration of certain net operating loss carryforwards before their utilization. As of September 30, 2023, the Company had unrecognized tax benefits under ASC 740 Income Taxes of $3.0 million and no applicable interest. There were no unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate as of September 30, 2023. The Company's policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision. The Company does not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months. Due to historical losses, all years are open to examination and adjustment by the taxing authorities. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | 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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net loss attributable to common stockholders $ (22,949) $ (47,258) $ (146,779) $ (157,835) Denominator Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted 102,648,790 96,696,417 101,087,793 95,036,618 Net loss per share attributable to common stockholders, basic and diluted $ (0.22) $ (0.49) $ (1.45) $ (1.66) 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): September 30, 2023 2022 Options to purchase common stock 1,138,465 1,862,110 Restricted stock units 14,191,427 12,429,858 Estimated shares issuable under the Employee Stock Purchase Plan 373,262 478,406 Assumed conversion of the Convertible Senior Notes 18,746,323 18,746,323 Total 34,449,477 33,516,697 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
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, standalone selling price related to revenue transactions, valuation of inventory, software development costs, stock-based compensation, incremental borrowing rates related to lease liability, 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. The disclosures provided herein should be read in conjunction with the audited financial statements and notes thereto included in our 2022 Form 10-K. See “Part II - Item 8. Financial Statements and Supplementary Data - Note 2” in our 2022 Form 10-K for a complete summary of our significant accounting policies. |
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 as if the instruments had been converted into shares of common stock. No undistributed earnings were allocated to the participating securities as the contingent event is not satisfied as of the reporting date. 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. Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that include products and services that are capable of being distinct and accounted for as separate performance obligations as described below. The transaction price requires an allocation across consignment services, sales of Company-owned inventory, and shipping services. Estimation is required in the determination of the services' stand-alone selling price (“SSP”). Consignment 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. SSP is estimated using observable stand-alone consignment sales which are conducted without shipping services. 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 impact of the deferral has not been material to the financial statements. 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 and nine months ended September 30, 2023 and 2022. 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. SSP is estimated using observable stand-alone sales of Company-owned inventory which are conducted without shipping services, when available, or a market assessment approach. 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. Shipping Services Revenue The Company provides a service to ship purchased items to buyers and a service to ship items from buyers back to the Company. The Company determines itself to be the principal in this arrangement. The Company charges a fee to buyers for this service and has elected to treat shipping and handling activities performed as a separate performance obligation. For shipping services revenue, the Company's SSP is estimated using a market approach considering external and internal data points on the stand-alone sales price of the shipping service. All outbound shipping and handling costs for buyers are accounted for as cost of shipping services and recognized as the shipping activity occurs. The Company also generates shipping services revenue from the shipping fees for consigned products returned by buyers to the Company within policy. The Company recognizes shipping revenue and associated costs over time as the shipping activity occurs, which is generally one to three days after shipment. 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 revenue and direct revenue. Additionally, the Company periodically offers commission exceptions to the standard consignment rates to consignors to optimize its supply. These are treated as a reduction of consignment revenue at the time of sale. 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 condensed balance sheets. Contract Liabilities The Company’s contractual liabilities primarily 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 buyer incentives. 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 September 30, 2023 and December 31, 2022. |
Cost of Revenue | Cost of Revenue Cost of consignment revenue consist of 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. Cost of shipping services revenue consists of the outbound shipping and handling costs to deliver purchased items to buyers, the shipping costs for consigned products returned by buyers to the Company within policy, and an allocation of the credit card fees associated with the shipping fee charged. |
Stock-based Compensation | Stock-based Compensation The Company incurs stock-based compensation expense from stock options, restricted stock units (“RSUs”), performance based restricted stock units (“PSUs”) subject to performance or market conditions, and employee stock purchase plan (“ESPP”) purchase rights. Stock-based compensation expense related to employees and nonemployees is measured based on the grant-date fair value of the awards. The Company estimates the fair value of stock options granted and the purchase rights issued under the ESPP using the Black-Scholes option pricing model. The fair value of 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. 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 for awards with only a service condition. To determine the grant-date fair value of the Company's stock-based payment awards for PSUs subject to performance conditions, the quoted stock price on the date of grant is used. The stock-based compensation expense for PSUs with performance conditions is recognized based on the estimated number of shares that the Company expects will vest and is adjusted on a quarterly basis using the estimated achievement of financial performance targets. For PSUs subject to market conditions, the grant-date fair value is determined using the Monte Carlo simulation model which utilizes multiple input variables to estimate the probability that market conditions will be achieved. These variables include the Company's expected stock price volatility over the expected term of the award, the risk-free interest rate for the expected term of the award, and expected dividends. For PSUs with market conditions, the stock-based compensation expense is recognized on a tranche by |
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. Restricted cash consists of cash deposited with a financial institution as collateral for the Company’s letters of credit for its facility leases and the Company’s credit cards. The Company had $15.8 million and $0 in restricted cash as of September 30, 2023 and December 31, 2022, respectively. The following table provides a reconciliation of cash, cash equivalents and restricted cash for the nine months ended September 30, 2023 that sum to the total of the same amounts shown in the statements of cash flows (in thousands): September 30, 2023 December 31, 2022 September 30, 2022 Cash and cash equivalents $ 170,811 $ 293,793 $ 300,439 Restricted cash 15,757 — — Total cash, cash equivalents and restricted cash $ 186,568 $ 293,793 $ 300,439 |
Inventory, Net | Inventory, Net 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 and 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. Additionally, inventory is recorded net of an allowance for shrinkage which represents the risk of physical loss of inventory. Provisions for inventory shrinkage are estimated based on historical experience and are adjusted based upon physical inventory counts. Provisions to write down inventory to net realizable value and provisions for inventory shrinkage were $8.8 million and $1.8 million for the nine months ended September 30, 2023 and 2022, respectively. 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 $23.2 million and $22.2 million as of September 30, 2023 and December 31, 2022, respectively. Included in inventory on the Company’s condensed balance sheets are assets totaling $7.2 million and $6.1 million as of September 30, 2023 and December 31, 2022, 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. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The carrying amounts of long-lived assets, including right-of-use assets, property and equipment, net and capitalized proprietary software, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets to be held and used is measured by comparing the carrying amount of assets to future undiscounted net cash flows the assets are expected to generate over their remaining life. |
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 corresponding right-of-use asset is recorded based on the corresponding lease liability at lease inception, adjusted for payments made to the lessor at or before the commencement date, initial direct costs incurred and any tenant incentives allowed for under the lease. The Company does not include optional renewal terms or early termination provisions unless the Company is reasonably certain such options would be exercised at the inception of the lease. Operating lease right-of-use assets, current portion of operating lease liabilities, and operating lease liabilities, net of current portion are included on the Company’s condensed balance sheets. 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 and Debt Issuance Costs | Convertible Senior Notes, Net Prior to the adoption of ASU 2020-06 on January 1, 2022, convertible debt instruments that may be settled in cash or other assets, or partially in cash, upon conversion, were separately accounted for as long-term debt and equity components (or conversion feature). The debt component represented the Company’s contractual obligation to pay principal and interest and the equity component represented 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. Following the adoption of ASU 2020-06, there is no bifurcation of the liability and equity components of the 3.00% Convertible Senior Notes due 2025 (the “2025 Notes”) and the 1.00% Convertible Senior Notes due 2028 (the “2028 Notes” and, together with the 2025 Notes, the “Notes”), and the entire principal of the Notes are accounted for as long-term debt. Debt Issuance Costs Debt issuance costs, which consist of direct incremental legal, consulting, banking and accounting fees related to the anticipated debt offering, 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. The Company adopted ASU 2020-06 as of January 1, 2022 using the modified retrospective method. Prior to the adoption of ASU 2020-06 on January 1, 2022, a portion of debt issuance costs incurred in connection with the convertible senior notes issued in June 2020 and March 2021 was allocated to the equity component and was recorded as a reduction to additional paid in capital and was not amortized to interest expense over the estimated life of the related debt. Following the adoption of ASU 2020-06, the debt issuance costs previously allocated to the equity component of both the Notes were |
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 7). 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 convertible senior notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted convertible senior notes, 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. The Company monitors the conditions for equity classification, which continues to be met. |
Concentrations of Credit Risks | Concentrations of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, restricted cash and accounts receivable. At times, such amount may exceed federally-insured limits. The Company is closely monitoring ongoing events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally. The Company reduces credit risk by placing its cash, cash equivalents, restricted cash and investments with major financial institutions with high credit ratings within the United States. The Company has not experienced any realized losses on cash, cash equivalents and restricted cash to date; however, no assurances can be provided. As of September 30, 2023 and December 31, 2022, 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 nine months ended September 30, 2023 and 2022. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s condensed financial statements and footnote disclosures, from those disclosed in the 2022 Annual Report on Form 10-K. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash for the nine months ended September 30, 2023 that sum to the total of the same amounts shown in the statements of cash flows (in thousands): September 30, 2023 December 31, 2022 September 30, 2022 Cash and cash equivalents $ 170,811 $ 293,793 $ 300,439 Restricted cash 15,757 — — Total cash, cash equivalents and restricted cash $ 186,568 $ 293,793 $ 300,439 |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash for the nine months ended September 30, 2023 that sum to the total of the same amounts shown in the statements of cash flows (in thousands): September 30, 2023 December 31, 2022 September 30, 2022 Cash and cash equivalents $ 170,811 $ 293,793 $ 300,439 Restricted cash 15,757 — — Total cash, cash equivalents and restricted cash $ 186,568 $ 293,793 $ 300,439 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Estimated Value of Cash and Cash Equivalents | The following tables summarize the estimated value of the Company’s cash and cash equivalents (in thousands) and do not include restricted cash. There are no unrealized gains or losses related to the restricted cash balance. September 30, 2023 Amortized Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 40,467 $ — $ — $ 40,467 Money market funds 130,344 — — 130,344 Total cash and cash equivalents $ 170,811 $ — $ — $ 170,811 December 31, 2022 Amortized Unrealized Unrealized Fair Cash and cash equivalents: Cash $ 275,742 $ — $ — $ 275,742 Money market funds 18,051 — — 18,051 Total cash and cash equivalents $ 293,793 $ — $ — $ 293,793 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amounts 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): September 30, 2023 Net Carrying Amount Estimated Fair Value 2025 Convertible senior notes $ 170.2 $ 152.6 2028 Convertible senior notes $ 281.5 $ 220.3 |
Condensed Balance Sheet Compo_2
Condensed Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following (in thousands): September 30, December 31, Proprietary software $ 43,003 $ 39,017 Furniture and equipment 47,612 47,692 Automobiles 2,114 2,119 Leasehold improvements 82,698 86,986 Property and equipment, gross 175,427 175,814 Less: accumulated depreciation and amortization (68,621) (63,135) Property and equipment, net $ 106,806 $ 112,679 |
Schedule of Other Accrued and Current Liabilities | Other accrued and current liabilities consist of the following (in thousands): September 30, December 31, Returns reserve $ 23,205 $ 22,233 Accrued compensation 20,267 15,111 Accrued legal 473 484 Accrued sales tax and other taxes 7,094 8,531 Site credit liability 15,491 11,813 Accrued marketing and outside services 5,195 8,729 Accrued property and equipment 1,242 11,417 Accrued shipping 2,268 5,715 Deferred revenue 1,646 3,549 Accrued interest 1,741 1,166 Other 3,837 4,544 Other accrued and current liabilities $ 82,459 $ 93,292 |
Convertible Senior Notes, Net (
Convertible Senior Notes, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Notes | The following tables present the outstanding principal amount, unamortized debt issuance costs, and net carrying amount of the 2025 Notes and the 2028 Notes as of the dates indicated (in thousands): 2025 Notes September 30, December 31, Principal $ 172,500 $ 172,500 Unamortized debt issuance costs (2,262) (3,204) Net carrying amount $ 170,238 $ 169,296 2028 Notes September 30, December 31, Principal $ 287,500 $ 287,500 Unamortized debt issuance costs (5,970) (6,948) Net carrying amount $ 281,530 $ 280,552 |
Schedule of Amounts Recorded in Interest Expense Related to Notes | The following tables set forth the amounts recorded in interest expense related to the 2025 Notes as of the dates indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 1,294 $ 1,293 $ 3,881 $ 3,881 Amortization of debt issuance costs 314 326 942 978 Total interest and amortization expense $ 1,608 $ 1,619 $ 4,823 $ 4,859 The following tables set forth the amounts recorded in interest expense related to the 2028 Notes as of the dates indicated (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Contractual interest expense $ 719 $ 718 $ 2,156 $ 2,156 Amortization of debt issuance costs 327 323 978 964 Total interest and amortization expense $ 1,046 $ 1,041 $ 3,134 $ 3,120 |
Schedule of Future Minimum Payments Under Notes | Future minimum payments under the 2025 Notes and the 2028 Notes as of September 30, 2023, are as follows (in thousands): Amount Fiscal Year 2025 Notes 2028 Notes Remainder of 2023 $ 2,587 $ — 2024 5,175 2,875 2025 175,088 2,875 2026 — 2,875 2027 — 2,875 2028 — 288,937 Total future payments 182,850 300,437 Less amounts representing interest (10,350) (12,937) Total principal amount $ 172,500 $ 287,500 |
Share-based Compensation Plans
Share-based Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Marketing $ 382 $ 567 $ 1,181 $ 1,774 Operations and technology 3,115 5,038 10,107 15,903 Selling, general and administrative 5,039 5,236 15,005 19,343 Total $ 8,536 $ 10,841 $ 26,293 $ 37,020 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 2023 $ 7,084 2024 26,794 2025 27,706 2026 27,534 2027 23,528 Thereafter 40,666 Total future minimum payments $ 153,312 Less: Imputed interest (23,549) Present value of operating lease liabilities $ 129,763 |
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): Nine Months Ended September 30, 2023 2022 Operating cash flows used for operating leases $ 27,028 $ 20,138 Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications) $ 6,006 $ 2,156 |
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: September 30, 2023 Weighted average remaining lease term 5.7 years Weighted average discount rate 6.0 % |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net loss attributable to common stockholders $ (22,949) $ (47,258) $ (146,779) $ (157,835) Denominator Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic and diluted 102,648,790 96,696,417 101,087,793 95,036,618 Net loss per share attributable to common stockholders, basic and diluted $ (0.22) $ (0.49) $ (1.45) $ (1.66) |
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): September 30, 2023 2022 Options to purchase common stock 1,138,465 1,862,110 Restricted stock units 14,191,427 12,429,858 Estimated shares issuable under the Employee Stock Purchase Plan 373,262 478,406 Assumed conversion of the Convertible Senior Notes 18,746,323 18,746,323 Total 34,449,477 33,516,697 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2020 | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted cash | $ 15,757,000 | $ 0 | $ 0 | ||
Provision for inventory write-downs and shrinkage | 8,836,000 | $ 1,798,000 | |||
Rights to recover products from customers | $ 7,200,000 | 6,100,000 | |||
2025 Convertible senior notes | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Notes interest rate | 3% | 3% | |||
2028 Convertible senior notes | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Notes interest rate | 1% | 1% | |||
Other Accrued and Current Liabilities | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Inventory return reserves allowances | $ 23,200,000 | $ 22,200,000 | |||
Common Stock | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Dividend or distribution declared | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 170,811 | $ 293,793 | $ 300,439 | |
Restricted cash | 15,757 | 0 | 0 | |
Total cash, cash equivalents and restricted cash | $ 186,568 | $ 293,793 | $ 300,439 | $ 418,171 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 170,811 | $ 293,793 | $ 300,439 |
Cash and cash equivalents, fair value | 170,811 | 293,793 | |
Restricted Cash | |||
Cash and Cash Equivalents [Line Items] | |||
Unrealized gain | 0 | ||
Unrealized loss | 0 | ||
Cash | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 40,467 | 275,742 | |
Cash and cash equivalents, fair value | 40,467 | 275,742 | |
Money market funds | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 130,344 | 18,051 | |
Cash and cash equivalents, fair value | $ 130,344 | $ 18,051 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | $ 170,811 | $ 293,793 |
2025 Convertible senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate principal amount | 172,500 | |
2028 Convertible senior notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate principal amount | 287,500 | |
Recurring | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents, fair value | $ 130,300 | $ 18,100 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Carrying Amounts and Estimated Fair Values (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Net Carrying Amount | 2025 Convertible senior notes | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Net Carrying Amount | $ 170.2 |
Net Carrying Amount | 2028 Convertible senior notes | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Net Carrying Amount | 281.5 |
Estimated Fair Value | 2025 Convertible senior notes | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Estimated Fair Value | 152.6 |
Estimated Fair Value | 2028 Convertible senior notes | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Estimated Fair Value | $ 220.3 |
Condensed Balance Sheet Compo_3
Condensed Balance Sheet Components - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 175,427 | $ 175,814 |
Less: accumulated depreciation and amortization | (68,621) | (63,135) |
Property and equipment, net | 106,806 | 112,679 |
Proprietary software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 43,003 | 39,017 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 47,612 | 47,692 |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,114 | 2,119 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 82,698 | $ 86,986 |
Condensed Balance Sheet Compo_4
Condensed Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | ||||
Depreciation and amortization expense on property and equipment | $ 7.6 | $ 6.6 | $ 22.9 | $ 19.7 |
Impairment of leasehold | $ 0.3 | $ 7.5 |
Condensed Balance Sheet Compo_5
Condensed Balance Sheet Components - Schedule of Other Accrued and Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Returns reserve | $ 23,205 | $ 22,233 |
Accrued compensation | 20,267 | 15,111 |
Accrued legal | 473 | 484 |
Accrued sales tax and other taxes | 7,094 | 8,531 |
Site credit liability | 15,491 | 11,813 |
Accrued marketing and outside services | 5,195 | 8,729 |
Accrued property and equipment | 1,242 | 11,417 |
Accrued shipping | 2,268 | 5,715 |
Deferred revenue | 1,646 | 3,549 |
Accrued interest | 1,741 | 1,166 |
Other | 3,837 | 4,544 |
Other accrued and current liabilities | $ 82,459 | $ 93,292 |
Debt (Details)
Debt (Details) - Revolving Credit - USD ($) | 1 Months Ended | |
Apr. 30, 2021 | Jun. 30, 2023 | |
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 | |
Line of credit facility, variable annual rate | 0.50% | |
Notes interest rate | 4.25% | |
Balance drawn on line of credit | $ 0 |
Convertible Senior Notes, Net -
Convertible Senior Notes, Net - Additional Information (Details) | 1 Months Ended | 9 Months Ended | 10 Months Ended | 19 Months Ended | ||||
Mar. 31, 2021 USD ($) $ / shares | Jun. 30, 2020 USD ($) $ / shares | Sep. 30, 2023 USD ($) day shares | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2022 USD ($) | Mar. 03, 2021 $ / shares | Jun. 10, 2020 $ / shares | |
2025 Convertible senior notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 172,500,000 | |||||||
Proceeds from issuance of 2028 convertible senior notes, net of issuance costs | 165,800,000 | |||||||
Purchase of capped call transactions | $ 22,500,000 | |||||||
Notes interest rate | 3% | 3% | ||||||
Initial conversion rate | 5.62635% | |||||||
Initial conversion price (in dollars per share) | $ / shares | $ 17.77 | |||||||
Notes, threshold percentage of stock price trigger | 130% | |||||||
Notes, threshold trading days | day | 20 | |||||||
Notes, threshold consecutive trading days | day | 30 | |||||||
Percentage on aggregate principal amount of notes to be payable upon the event of default | 25% | |||||||
Interest rate used to compute initial fair value of liability | 5.67% | |||||||
Fair value of liability | $ 152,700,000 | |||||||
Discount on initial issuance | 19,800,000 | |||||||
Debt issuance costs | 6,700,000 | |||||||
Convertible debt premium amount | 800,000 | |||||||
Unamortized debt issuance costs | $ 5,900,000 | $ 2,262,000 | $ 3,204,000 | |||||
Amortization period | 5 years | |||||||
Effective interest rate | 3.74% | 6.40% | ||||||
Long-term debt | $ 170,238,000 | 169,296,000 | ||||||
Total future payments | $ 172,500,000 | 172,500,000 | ||||||
Debt instrument, term | 5 years | |||||||
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 (in shares) | shares | 9,705,454 | |||||||
Cap price of capped transactions (in dollars per share) | $ / shares | $ 27.88 | |||||||
Cap price as percentage on common stock price per share | 100% | |||||||
Closing price of common stock (in dollars 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% | |||||||
Notes, threshold trading days | day | 20 | |||||||
Notes, threshold consecutive trading days | day | 30 | |||||||
2025 Convertible senior notes | Conversion Option Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes, threshold percentage of stock price trigger | 98% | |||||||
Notes, threshold trading days | day | 5 | |||||||
Notes, threshold consecutive trading days | day | 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 | |||||||
Proceeds from issuance of 2028 convertible senior notes, net of issuance costs | 278,100,000 | |||||||
Purchase of capped call transactions | $ 33,700,000 | |||||||
Notes interest rate | 1% | 1% | ||||||
Initial conversion rate | 3.14465% | |||||||
Initial conversion price (in dollars per share) | $ / shares | $ 31.80 | |||||||
Interest rate used to compute initial fair value of liability | 7.18% | |||||||
Fair value of liability | $ 191,300,000 | |||||||
Discount on initial issuance | 96,200,000 | |||||||
Debt issuance costs | 9,400,000 | |||||||
Convertible debt premium amount | 3,100,000 | |||||||
Unamortized debt issuance costs | $ 6,300,000 | $ 5,970,000 | 6,948,000 | |||||
Amortization period | 7 years | |||||||
Effective interest rate | 1.45% | 7.50% | ||||||
Long-term debt | $ 281,530,000 | 280,552,000 | ||||||
Total future payments | $ 287,500,000 | $ 287,500,000 | ||||||
Debt instrument, term | 7 years | |||||||
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 (in shares) | shares | 9,040,869 | |||||||
Cap price of capped transactions (in dollars per share) | $ / shares | $ 48 | |||||||
Cap price as percentage on common stock price per share | 100% | |||||||
Closing price of common stock (in dollars per share) | $ / shares | $ 24 | |||||||
Reduction to additional paid premium payments for capped call transactions | 33,700,000 | |||||||
2028 Convertible senior notes | Initial Purchasers | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 37,500,000 |
Convertible Senior Notes, Net_2
Convertible Senior Notes, Net - Schedule of Net Carrying Amount of Liability Component of Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2020 |
2025 Convertible senior notes | ||||
Debt Disclosure [Line Items] | ||||
Principal | $ 172,500 | $ 172,500 | ||
Unamortized debt issuance costs | (2,262) | (3,204) | $ (5,900) | |
Net carrying amount | 170,238 | 169,296 | ||
2028 Convertible senior notes | ||||
Debt Disclosure [Line Items] | ||||
Principal | 287,500 | 287,500 | ||
Unamortized debt issuance costs | (5,970) | (6,948) | $ (6,300) | |
Net carrying amount | $ 281,530 | $ 280,552 |
Convertible Senior Notes, Net_3
Convertible Senior Notes, Net - Schedule of Amounts Recorded in Interest Expense Related to Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
2025 Convertible senior notes | ||||
Debt Disclosure [Line Items] | ||||
Contractual interest expense | $ 1,294 | $ 1,293 | $ 3,881 | $ 3,881 |
Amortization of debt issuance costs | 314 | 326 | 942 | 978 |
Total interest and amortization expense | 1,608 | 1,619 | 4,823 | 4,859 |
2028 Convertible senior notes | ||||
Debt Disclosure [Line Items] | ||||
Contractual interest expense | 719 | 718 | 2,156 | 2,156 |
Amortization of debt issuance costs | 327 | 323 | 978 | 964 |
Total interest and amortization expense | $ 1,046 | $ 1,041 | $ 3,134 | $ 3,120 |
Convertible Senior Notes, Net_4
Convertible Senior Notes, Net - Schedule of Future Minimum Payments Under Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
2025 Convertible senior notes | ||
Debt Disclosure [Line Items] | ||
Remainder of 2023 | $ 2,587 | |
2024 | 5,175 | |
2025 | 175,088 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Total future payments | 182,850 | |
Less amounts representing interest | (10,350) | |
Total principal amount | 172,500 | $ 172,500 |
2028 Convertible senior notes | ||
Debt Disclosure [Line Items] | ||
Remainder of 2023 | 0 | |
2024 | 2,875 | |
2025 | 2,875 | |
2026 | 2,875 | |
2027 | 2,875 | |
2028 | 288,937 | |
Total future payments | 300,437 | |
Less amounts representing interest | (12,937) | |
Total principal amount | $ 287,500 | $ 287,500 |
Share-based Compensation Plan_2
Share-based Compensation Plans - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2023 tranche | Feb. 28, 2022 | Sep. 30, 2023 USD ($) tranche shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2023 USD ($) tranche shares | Sep. 30, 2022 USD ($) shares | Dec. 31, 2019 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation capitalized to proprietary software development costs | $ | $ 200 | $ 400 | $ 608 | $ 1,289 | |||
Estimated shares issuable under the Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | 1,750,000 | 1,750,000 | |||||
Annual increase in number of shares, percentage of shares of outstanding common stock | 1% | 1% | |||||
Unrecognized compensation costs | $ | $ 100 | $ 100 | |||||
Weighted average period expect to recognized | 1 month 13 days | ||||||
Options granted as percentage on fair value of stock | 85% | ||||||
Number of shares purchased (in shares) | 0 | 0 | 469,199 | 282,226 | |||
Maximum | Estimated shares issuable under the Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase in available number of authorized shares (in shares) | 1,750,000 | 1,750,000 | |||||
2019 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Annual increase in available number of authorized shares (in shares) | 8,000,000 | ||||||
Annual increase in number of shares, percentage of shares of outstanding common stock | 5% | ||||||
2019 Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | 8,000,000 | ||||||
Inducement Grants | Founder and CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Nonvested, number of shares (in shares) | 3,075,000 | 3,075,000 | |||||
Restricted Stock Units And Performance Share Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation costs | $ | $ 50,600 | $ 50,600 | |||||
Weighted average period expect to recognized | 2 years 3 months 18 days | ||||||
Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation costs | $ | $ 0 | $ 0 | |||||
PSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options vesting period | 3 years | ||||||
PSUs | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target, percentage | 150% | ||||||
PSUs | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance target, percentage | 0% | ||||||
PSUs | 2019 Plan | Founder and CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options vesting period | 5 years | ||||||
Number of tranche | tranche | 3 | ||||||
PSUs | Inducement Grants | Founder and CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options vesting period | 5 years | ||||||
Number of tranche | tranche | 4 | 4 | |||||
Unrecognized compensation costs | $ | $ 1,400 | $ 1,400 | |||||
Nonvested, number of shares (in shares) | 1,500,000 | 1,500,000 | |||||
Restricted stock units | Inducement Grants | Founder and CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation costs | $ | $ 2,200 | $ 2,200 | |||||
Nonvested, number of shares (in shares) | 1,575,000 | 1,575,000 |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | $ 8,536 | $ 10,841 | $ 26,293 | $ 37,020 |
Marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | 382 | 567 | 1,181 | 1,774 |
Operations and technology | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | 3,115 | 5,038 | 10,107 | 15,903 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total | $ 5,039 | $ 5,236 | $ 15,005 | $ 19,343 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) floor | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Leases [Line Items] | ||||
Operating lease costs | $ 5,100 | $ 7,200 | $ 17,900 | $ 21,700 |
Variable lease costs | 1,200 | $ 1,500 | 3,800 | 4,300 |
Right-of-use asset impairment charge | 0 | 26,300 | ||
Lease liability adjustment | 21,399 | 13,074 | ||
Gain on lease termination | $ 1,200 | 738 | $ 0 | |
NEW YORK | ||||
Leases [Line Items] | ||||
Number of floors terminated upon lease amendment | floor | 2 | |||
Austin, TX, Atlanta, GA, and Miami, FL | ||||
Leases [Line Items] | ||||
Lease liability adjustment | $ 5,700 | 7,500 | ||
Right of use asset adjustment | $ 1,400 | |||
Minimum | ||||
Leases [Line Items] | ||||
Operating lease term | 1 year | 1 year | ||
Maximum | ||||
Leases [Line Items] | ||||
Operating lease term | 15 years | 15 years |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
Remainder of 2023 | $ 7,084 |
2024 | 26,794 |
2025 | 27,706 |
2026 | 27,534 |
2027 | 23,528 |
Thereafter | 40,666 |
Total future minimum payments | 153,312 |
Less: Imputed interest | (23,549) |
Present value of operating lease liabilities | $ 129,763 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows used for operating leases | $ 27,028 | $ 20,138 |
Operating lease assets obtained in exchange for operating lease liabilities (including remeasurement of right-of-use assets and lease liabilities due to lease modifications) | $ 6,006 | $ 2,156 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate For Operating Leases (Details) | Sep. 30, 2023 |
Leases [Abstract] | |
Weighted average remaining lease term | 5 years 8 months 12 days |
Weighted average discount rate | 6% |
Restructuring (Details)
Restructuring (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 flagship_store | Sep. 30, 2023 neighborhood_store | Sep. 30, 2023 consignment_office | Sep. 30, 2022 USD ($) | |
Restructuring and Related Activities [Abstract] | |||||||
Restructuring and related cost, number of positions eliminated | 2 | 2 | 2 | ||||
Restructuring | $ (856) | $ 0 | $ 37,396 | $ 275 | |||
Right-of-use asset impairment charge | 0 | 26,300 | |||||
Impairment of leasehold | 300 | 7,500 | |||||
Employee severance | 3,000 | ||||||
Other related charges | 1,300 | ||||||
Gain on lease termination | $ 1,200 | $ 738 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Class Actions Complaint Filed In San Mateo County, California $ in Millions | 12 Months Ended | ||
Oct. 31, 2022 plaintiff | Jul. 28, 2022 USD ($) plaintiff | Dec. 31, 2021 USD ($) | |
Other Commitments [Line Items] | |||
Litigation settlement, amount awarded to other party | $ | $ 11 | ||
Payment period for amount awarded to other party | 30 days | ||
Legal settlement | $ | $ 11 | ||
Number of plaintiffs that opted out | plaintiff | 1 | ||
Number of plaintiffs that opted out or purchased stock | plaintiff | 2 |
Income Taxes (Details)
Income Taxes (Details) | Sep. 30, 2023 USD ($) |
Income Tax Disclosure [Abstract] | |
Valuation allowance | $ 255,200,000 |
Net deferred tax assets | 291,800,000 |
Unrecognized tax benefits | 3,000,000 |
Unrecognized tax benefits, interest | 0 |
Unrecognized tax benefits that would impact effective tax rate | $ 0 |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||||
Net loss attributable to common stockholders, basic | $ (22,949) | $ (47,258) | $ (146,779) | $ (157,835) |
Net loss attributable to common stockholders, diluted | $ (22,949) | $ (47,258) | $ (146,779) | $ (157,835) |
Denominator | ||||
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, basic (in shares) | 102,648,790 | 96,696,417 | 101,087,793 | 95,036,618 |
Weighted-average common shares outstanding used to calculate net loss per share attributable to common stockholders, diluted (in shares) | 102,648,790 | 96,696,417 | 101,087,793 | 95,036,618 |
Net loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.22) | $ (0.49) | $ (1.45) | $ (1.66) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.22) | $ (0.49) | $ (1.45) | $ (1.66) |
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 | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 34,449,477 | 33,516,697 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 1,138,465 | 1,862,110 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 14,191,427 | 12,429,858 |
Estimated shares issuable under the Employee Stock Purchase Plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 373,262 | 478,406 |
Assumed conversion of the Convertible Senior Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 18,746,323 | 18,746,323 |
Uncategorized Items - real-2023
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |