Wayfair (W) 10-K 25 Feb 21 2020 FY Annual report Financial data

Cover

Cover - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2020	Feb. 15, 2021	Jun. 30, 2020
Document Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-36666
Entity Registrant Name	Wayfair Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-4791999
Entity Address, Address Line One	4 Copley Place
Entity Address, City or Town	Boston,
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02116
City Area Code	617
Local Phone Number	532-6100
Title of 12(b) Security	Class A Common Stock, $0.001 par value
Trading Symbol	W
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
ICFR Auditor Attestation Flag	true
Entity Public Float			$ 13.1
Documents Incorporated by Reference	Certain sections of the registrant's definitive Proxy Statement for the 2021 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Rule 14A not later than 120 days after end of this fiscal year covered by this Form 10-K are incorporated by reference into Part III of this Form 10-K.
Entity Central Index Key	0001616707
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Class A common stock
Document Information
Entity Common Stock, Shares Outstanding		77,016,878
Class B common stock
Document Information
Entity Common Stock, Shares Outstanding		26,564,197

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 2,129,440	$ 582,753
Short-term investments	461,698	404,252
Accounts receivable, net	110,299	99,720
Inventories	52,152	61,692
Prepaid expenses and other current assets	292,213	228,721
Total current assets	3,045,802	1,377,138
Operating lease right-of-use assets	808,375	763,400
Property and equipment, net	684,306	624,544
Long-term investments	0	155,690
Other noncurrent assets	31,446	32,276
Total assets	4,569,929	2,953,048
Current liabilities
Accounts payable	1,156,624	908,097
Other current liabilities	1,008,970	703,422
Total current liabilities	2,165,594	1,611,519
Long-term debt	2,659,243	1,456,195
Operating lease liabilities	869,958	822,602
Other noncurrent liabilities	67,031	6,940
Total liabilities	5,761,826	3,897,256
Commitments and contingencies (Note 7)
Stockholders’ deficit:
Convertible preferred stock, $0.001 par value per share: 10,000,000 shares authorized and none issued at December 31, 2020 and 2019	0	0
Additional paid-in capital	698,482	1,122,548
Accumulated deficit	(1,885,950)	(2,065,423)
Accumulated other comprehensive loss	(4,529)	(1,427)
Total stockholders' deficit	(1,191,897)	(944,208)
Total liabilities and stockholders' deficit	4,569,929	2,953,048
Class A common stock
Stockholders’ deficit:
Common stock	73	67
Class B common stock
Stockholders’ deficit:
Common stock	$ 27	$ 27

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Convertible redeemable preferred units, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible redeemable preferred units, shares authorized (in shares)	10,000,000	10,000,000
Convertible redeemable preferred units, shares issued (in shares)	0	0
Class A common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	72,980,490	66,642,611
Common stock, shares outstanding (in shares)	72,980,490	66,642,611
Class B common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	164,000,000	164,000,000
Common stock, shares issued (in shares)	26,564,234	26,957,815
Common stock, shares outstanding (in shares)	26,564,234	26,957,815

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Net revenue	$ 14,145,156	$ 9,127,057	$ 6,779,174
Cost of goods sold	10,032,985	6,979,725	5,192,451
Gross profit	4,112,171	2,147,332	1,586,723
Operating expenses:
Customer service and merchant fees	509,559	356,727	260,046
Advertising	1,412,173	1,095,840	774,189
Selling, operations, technology, general and administrative	1,830,090	1,624,706	1,025,767
Total operating expenses	3,751,822	3,077,273	2,060,002
Income (loss) from operations	360,349	(929,941)	(473,279)
Interest (expense), net	(146,397)	(54,514)	(28,560)
Other (expense) income, net	(8,633)	2,881	(204)
Income (loss) before income taxes	205,319	(981,574)	(502,043)
Provision for income taxes, net	20,323	3,010	2,037
Net income (loss)	$ 184,996	$ (984,584)	$ (504,080)
Earnings (loss) per share:
Basic (in dollars per share)	$ 1.93	$ (10.68)	$ (5.63)
Diluted (in dollars per shares)	$ 1.86	$ (10.68)	$ (5.63)
Weighted-average number of shares of common stock outstanding used in computing per share amounts:
Basic (in shares)	95,825	92,200	89,472
Diluted (in shares)	99,337	92,200	89,472

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 184,996	$ (984,584)	$ (504,080)
Other comprehensive income (loss):
Foreign currency translation adjustments	(3,085)	120	553
Net unrealized (loss) gain on available-for-sale investments	(17)	233	30
Comprehensive income (loss)	$ 181,894	$ (984,231)	$ (503,497)

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Class A and Class B Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 31, 2017			88,209
Beginning balance at Dec. 31, 2017	$ (48,329)	$ 4,657	$ 88	$ 537,212	$ (583,266)	$ 4,657	$ (2,363)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	(504,080)				(504,080)
Other comprehensive income (loss)	583						583
Exercise of options to purchase common stock (in shares)			46
Exercise of options to purchase common stock	138			138
Issuance of common stock upon vesting of RSUs (in shares)			2,504
Issuance of common stock upon vesting of RSUs	3		$ 3
Shares withheld related to net settlement of RSUs (in shares)			(11)
Shares withheld related to net settlement of RSUs	(1,284)			(1,284)
Equity-based compensation expense	$ 133,638			133,638
Cumulative effect of adopting new accounting standard	us-gaap:AccountingStandardsUpdate201409Member
Equity component of issuance of convertible notes, net of premium paid on capped calls (Note 6)	$ 83,953			83,953
Ending balance (in shares) at Dec. 31, 2018			90,748
Ending balance at Dec. 31, 2018	(330,721)	1,850	$ 91	753,657	(1,082,689)	1,850	(1,780)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	(984,584)				(984,584)
Other comprehensive income (loss)	353						353
Exercise of options to purchase common stock (in shares)			35
Exercise of options to purchase common stock	113			113
Issuance of common stock upon vesting of RSUs (in shares)			2,836
Issuance of common stock upon vesting of RSUs	3		$ 3
Shares withheld related to net settlement of RSUs (in shares)			(19)
Shares withheld related to net settlement of RSUs	(2,236)			(2,236)
Equity-based compensation expense	$ 240,448			240,448
Cumulative effect of adopting new accounting standard	us-gaap:AccountingStandardsUpdate201602Member
Equity component of issuance of convertible notes, net of premium paid on capped calls (Note 6)	$ 130,566			130,566
Ending balance (in shares) at Dec. 31, 2019			93,600
Ending balance at Dec. 31, 2019	(944,208)	$ (5,523)	$ 94	1,122,548	(2,065,423)	$ (5,523)	(1,427)
Increase (Decrease) in Stockholders' Equity
Net income (loss)	184,996				184,996
Other comprehensive income (loss)	(3,102)						(3,102)
Exercise of options to purchase common stock (in shares)			25
Exercise of options to purchase common stock	439			439
Issuance of common stock upon vesting of RSUs (in shares)			3,015
Issuance of common stock upon vesting of RSUs	3		$ 3
Equity-based compensation expense	$ 293,488			293,488
Cumulative effect of adopting new accounting standard	us-gaap:AccountingStandardsUpdate201613Member
Repurchase of common stock (in shares)			(1,256)
Repurchase of common stock	$ (380,237)		$ (1)	(380,236)
Shares issued upon conversion of convertible notes (Note 6) (in shares)			4,161
Shares issued upon conversion of convertible notes (Note 6)	426,166		$ 4	426,162
Reacquisition of equity component from repurchases and conversions of convertible notes, net of taxes (Note 6)	(842,337)			(842,337)
Equity component of issuance of convertible notes, net of premium paid on capped calls (Note 6)	78,418			78,418
Ending balance (in shares) at Dec. 31, 2020			99,545
Ending balance at Dec. 31, 2020	$ (1,191,897)		$ 100	$ 698,482	$ (1,885,950)		$ (4,529)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net income (loss)	$ 184,996	$ (984,584)	$ (504,080)
Adjustments to reconcile net income (loss) to net cash from (for) operating activities
Depreciation and amortization	285,711	192,419	123,542
Equity-based compensation	276,208	227,451	127,564
Amortization of discount and issuance costs on convertible notes	134,288	62,111	22,585
Other non-cash adjustments	12,638	(1,691)	(56)
Changes in operating assets and liabilities:
Accounts receivable, net	(14,726)	(49,187)	(12,792)
Inventories	9,947	(15,631)	(18,319)
Prepaid expenses and other current assets	(61,259)	(32,590)	(65,195)
Other assets	(532)	(1,329)	(8,157)
Accounts payable and other current liabilities	531,526	393,013	385,647
Other liabilities	57,934	13,200	34,122
Net cash from (for) operating activities	1,416,731	(196,818)	84,861
Cash flows from investing activities:
Purchase of short- and long-term investments	(481,670)	(553,858)	(99,002)
Sale and maturities of short-and long-term investments	580,153	115,468	61,068
Purchase of property and equipment	(186,040)	(271,742)	(159,205)
Site and software development costs	(148,394)	(129,138)	(62,750)
Other investing activities, net	(124)	(15,567)	(398)
Net cash for investing activities	(236,075)	(854,837)	(260,287)
Cash flows from financing activities:
Proceeds from borrowings	200,000	0	0
Repayment of borrowings	(200,000)	0	0
Proceeds from issuance of convertible notes, net of issuance costs	2,027,758	935,146	562,047
Premiums paid for capped call confirmations	(255,024)	(145,728)	(93,438)
Payments to extinguish convertible debt	(1,040,349)	0	0
Repurchase of common stock	(380,237)	0	0
Other financing activities, net	440	(2,914)	(1,146)
Net cash from financing activities	352,588	786,504	467,463
Effect of exchange rate changes on cash and cash equivalents	13,443	(1,557)	(1,536)
Net increase (decrease) in cash and cash equivalents	1,546,687	(266,708)	290,501
Cash and cash equivalents:
Beginning of year	582,753	849,461	558,960
End of year	2,129,440	582,753	849,461
Supplemental Cash Flow Information:
Cash paid for interest on long-term debt	17,407	7,763	1,554
Non-cash impact to equity upon conversion of convertible debt, net of taxes	306,889	0	0
Cash paid for interest on finance lease obligations	0	0	9,058
Construction costs capitalized under finance lease obligations and other leases	0	0	125,796
Purchase of property and equipment included in accounts payable and other liabilities	$ 29,915	$ 41,181	$ 15,383

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Description of Business and Basis of Presentation Wayfair Inc. is one of the world's largest online destinations for the home. Through its e-commerce business model, Wayfair offers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over twenty-two million products from over 16,000 suppliers. These financial statements consolidate the operations and accounts of Wayfair Inc. and its wholly-owned subsidiaries. Unless the context indicates otherwise, references to “we,” “us” and “our” refer to Wayfair Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated. Below is a summary of Wayfair’s wholly-owned subsidiaries with operations: Subsidiary Location Wayfair LLC U.S. CastleGate Logistics Inc. U.S. CastleGate Trade Services LLC U.S. SK Retail, Inc. U.S. Wayfair Maine LLC U.S. Wayfair Transportation LLC U.S. Wayfair Securities Corporation U.S. Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair Deutschland Ltd. & Co. KG Germany Wayfair Deutschland GP Ltd. Germany CastleGate Logistics Canada Inc. Canada CastleGate Logistics Hong Kong Limited Hong Kong Wayfair (BVI) Ltd. British Virgin Islands Use of Estimates We prepared the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). 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, as well as the disclosure of contingent assets and liabilities, at the date of and during the reported period of the consolidated financial statements. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period presentation. Cash and Cash Equivalents Wayfair considers all highly liquid investments purchased with an original maturity (at the date of purchase) of three months or less to be the equivalent of cash. Cash equivalents, which consist primarily of money market accounts, are carried at cost, which approximates fair value. Investments Investments consist of certificates of deposits and marketable securities with original maturities of greater than three months. Short-term investments mature in less than twelve months from the balance sheet date. We determine the cost basis of an investment sold using the specific identification method. To the extent the amortized cost basis of the available-for-sale debt securities exceeds the fair value, management assesses the debt securities for credit loss, however management considers the risk of credit loss to be minimized by Wayfair's policy of investing in financial instruments issued by highly-rated financial institutions. When assessing the risk of credit loss, management considers factors such as the severity and the reason of the decline in value (i.e., any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security) and management's intended holding period and time horizon for selling. During the years ended December 31, 2020, 2019 and 2018, Wayfair did not recognize any credit losses related to its available-for-sale debt securities. Further, as of December 31, 2020 and 2019, Wayfair did not record an allowance for credit losses related to its available-for-sale debt securities. Concentrations of Credit Risk Financial instruments that subject Wayfair to credit risk consist of cash and cash equivalents, short- and long-term investments and accounts receivable. The risk for cash and cash equivalents is minimized by Wayfair's policy to maintain these balances with major financial institutions of high-credit quality. At times, cash balances may exceed federally insured limits; however, to date, Wayfair has not incurred any losses on these investments. As of December 31, 2020 and 2019, Wayfair had $281.0 million and $48.2 million in banks located outside of the U.S. The risk for short- and long-term investments is minimized by Wayfair's policy of investing in financial instruments issued by highly-rated financial institutions. Accounts Receivables, Net Accounts receivable are stated net of the allowance for credit losses, which are recorded based on historical losses as well as management's expectation of future collections. Uncollectible amounts are written off against the allowance after all collection efforts have been exhausted. Wayfair's exposure to credit loss is minimized through fraud assessments performed prior to customer checkout and Wayfair's policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. Further, management believes credit risk is mitigated since approximately 99% of the net revenue recognized for the twelve months ended December 31, 2020 was collected in advance of recognition. Inventories Inventories consisting of finished goods are stated at the lower of cost or net realizable value, determined by the first-in, first-out (FIFO) method, and consist of product for resale. Inventory costs consist of cost of product and inbound shipping and handling costs. Inventory costs also include direct and indirect labor costs, rent and depreciation expense associated with Wayfair's fulfillment centers. Inventory valuation requires Wayfair to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, liquidations and expected recoverable values of each disposition category. Deferred Costs In-Transit Deferred costs in-transit to customers are recorded in prepaid expenses and other current assets. Property and Equipment Property and equipment are stated at cost, net of depreciation. Expenditures for maintenance and repairs are charged to expense as incurred, whereas betterments are capitalized as additions to property and equipment. Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets as follows: Class Range of Life Furniture and computer equipment 3 to 7 Site and software development costs 2 Leasehold improvements The lesser of useful life or lease term Site and Software Development Costs Wayfair capitalizes certain costs associated with the development of its sites and internal-use software products after the preliminary project stage is complete and until the site enhancements or software is ready for its intended use. Wayfair also capitalizes implementation costs incurred in cloud computing hosting arrangements. Upgrades and enhancements are capitalized if they will result in added functionality. Capitalized costs are amortized over a two-year period. Costs incurred in the preliminary stages of development, after the software is ready for its intended use and for maintenance of internal-use software are expensed as incurred. Long-Lived Assets Wayfair reviews long-lived assets for impairment whenever events or changes in circumstances, such as service discontinuance or technological obsolescence, indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, Wayfair compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the asset. Leases Wayfair generally leases office and warehouse facilities under noncancelable agreements. Upon each agreement's commencement date, we determine if the agreement is part of an arrangement that is or that contains a lease, determine the lease classification and recognize right-of-use ("ROU") assets and lease liabilities for all leases with the exception of leases with terms of 12 months or less. We have arrangements with lease and non-lease components, and we account for lease and non-lease components separately for our warehouse and fulfillment center arrangements. For all other lease arrangements, we account for lease and non-lease components as a single lease component. Operating lease ROU assets are classified in operating lease right-of-use assets in the consolidated balance sheets. Operating lease liabilities are classified as other current liabilities and operating lease liabilities based on when lease payments are due. As of December 31, 2020 and 2019 we did not have material finance lease arrangements. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term at the lease commencement date. As most of our leases do not provide an implicit rate, we use an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The determination of the IBR requires judgment and is primarily based on publicly available information for companies within the same industry and with similar credit profiles. We adjust the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. The ROU asset also includes any lease payments made prior to the commencement date and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We review ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the ROU asset may not be recoverable. When such events occur, we compare the carrying amount of the ROU asset to the undiscounted expected future cash flows related to the ROU asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the ROU asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the ROU asset. Contingent Liabilities Wayfair has certain contingent liabilities that arise in the ordinary course of business activities. Wayfair accrues for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. Wayfair does not accrue for contingent losses that, in our judgment, we consider to be reasonably possible, but not probable; however, we disclose the range of such reasonably possible losses. Foreign Currency Translation The functional currency of Wayfair is the U.S. dollar, while the functional currencies of certain wholly-owned subsidiaries outside the U.S. are as follows: Subsidiary Functional Currency Wayfair Stores Limited Euro Wayfair Deutschland Ltd & Co KG Euro Wayfair Deutschland GP Ltd. Euro Wayfair (BVI) Ltd. Euro Wayfair (UK) Limited Pound sterling CastleGate Logistics Canada Inc. Canadian dollar CastleGate Logistics Hong Kong Limited Hong Kong dollar The financial statements of Wayfair are translated to U.S. dollars using year-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Translation adjustments arising from the use of differing exchange rates from period to period are included in other comprehensive income (loss) below net income (loss) and accumulated other comprehensive loss within total stockholders’ deficit. Transaction gains and losses are included in other (expense) income, net, which is reflected in net income (loss). Revenue Recognition Wayfair primarily generated net revenue through product sales on its family of sites. Wayfair recognizes net revenue on product sales through Wayfair's family of sites using the gross method when Wayfair has concluded it controls the product before it is transferred to the customer. Wayfair controls products when it is the entity responsible for fulfilling the promise to the customer and takes responsibility for the acceptability of the goods, assumes inventory risk from shipment through the delivery date, has discretion in establishing prices and selects the suppliers of products sold. Wayfair recognizes net revenue from sales of its products upon delivery to the customer. As Wayfair ships a large volume of packages through multiple carriers, actual delivery dates may not always be available and as such Wayfair estimates delivery dates based on historical data. Net revenue from product sales includes shipping costs charged to the customer and is recorded net of taxes collected from customers, which are recorded in other current liabilities and are remitted to governmental authorities. Cash discounts and rebates earned by customers at the time of purchase and estimates for sales return allowances are deducted from gross revenue in determining net revenue. Wayfair maintains a membership rewards program for customer purchases made with our private label Wayfair credit card and co-branded Mastercard ("Credit Card Program"). In exchange for providing intellectual property as part of the Credit Card Program, we record net revenues based on spending activity and the profitability of the card portfolio. Spending activity of the underlying accounts represents customer purchases used with their respective cards, and the profitability of the card portfolio is based on the financial performance of the underlying credit portfolio. Net revenue from contracts with customers is disaggregated by geographic region because this manner of disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 13, Segment and Geographic Information , for additional detail. Wayfair has three types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased, which are initially recorded in unearned revenue, and are recognized as net revenue when the products are delivered, (ii) unredeemed gift cards and site credits, which are initially recorded in unearned revenue, and are recognized in the period they are redeemed, and (iii) membership rewards redeemable for future purchases, which are earned by customers on purchases made through the Credit Card Program, and are initially recorded in other current liabilities, and recognized as net revenue when redeemed. The portion of gift cards and store credits not expected to be redeemed are recognized as net revenue based on a pattern of historical redemptions, which are substantially within twenty-four months from the date of issuance. Cost of Goods Sold Costs of Goods sold consists of: Product Costs: Wayfair capitalizes into inventory costs for the purchase price we pay to suppliers of products sold, direct and indirect labor costs, rent, depreciation and inbound shipping and handling costs. Product costs are offset by rebates Wayfair earns through allowances and supplier incentive programs. Wayfair earns rebates when goods are shipped, and amounts earned and due from suppliers under these rebate programs are included in other current assets and are reflected as a reduction of cost of goods sold. Vendor allowances earned on Wayfair owned inventory reduce the carrying cost of inventory and are recognized in cost of goods sold when the inventory is sold. Product costs are also offset by media and merchandising offerings provided to our suppliers, which are not considered distinct from the purchase of goods from those suppliers. Shipping and Fulfillment Costs: Shipping costs include outbound shipping costs. Fulfillment costs include costs incurred to operate and staff our fulfillment centers and provide other inbound supply chain services such as ocean freight and drayage. Costs to operate and staff the CastleGate and WDN networks include rent and depreciation expenses associated with various facilities, costs to receive, inspect, pick, package and prepare customer orders for delivery, and direct and indirect labor costs including payroll, payroll-related benefits and equity-based compensation. Shipping and Fulfillment costs are offset by fees earned by providing logistic services to suppliers including order fulfillment, warehousing and inbound supply chain services such as ocean freight and drayage through Wayfair's CastleGate business. Fulfillment fees are earned upon completion of preparing customer orders for shipment, warehousing fees are earned upon completion of each storage date and inbound supply chain services are earned on a straight-line basis as the shipments move from origin to destination. Shipping and Fulfillment costs were $2.0 billion, $1.4 billion and $1.1 billion, for the years ended December 31, 2020, 2019 and 2018. Customer Service and Merchant Fees Customer service and merchant fees consist of labor-related costs, including payroll, payroll-related benefits and equity-based compensation of our employees involved in customer service activities, merchant processing fees associated with customer payments made by credit cards and debit cards and other variable fees. Merchant processing fees totaled $267.7 million, $179.7 million and $133.4 million in the years ended December 31, 2020, 2019 and 2018. Advertising Advertising consists of direct response performance marketing costs, such as display advertising, paid search advertising, social media advertising, search engine optimization, comparison shopping engine advertising, television advertising, direct mail, catalog and print advertising. Costs for advertising are expensed when the advertising begins. Prepayments for advertising that has not been incurred are included in prepaid expenses and other current assets, and advertising costs that have been incurred but not paid are included in other current liabilities. Selling, Operations, Technology, General and Administrative Selling, operations, technology, general and administrative expenses primarily include labor-related costs, including equity-based compensation, of our operations group, which includes our supply chain and logistics team, our technology team that builds and supports our sites, category managers, buyers, site merchandisers, merchants, marketers and the team who executes our advertising strategy, and our corporate general and administrative team, which includes human resources, finance and accounting personnel. Also included are administrative and professional service fees which include audit and legal fees, insurance, depreciation, rent and other corporate expenses. Equity-Based Compensation Wayfair recognizes its equity-based payments to employees and non-employees as gross expense over the service period based on their grant date fair values with actual forfeitures recognized as they occur. Wayfair has granted stock options, restricted common stock and restricted stock units. Restricted stock values are determined based on the quoted market price of our Class A common stock on the date of grant. Income Taxes Income taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Wayfair records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized. As of December 31, 2020, we maintained a full valuation allowance against our net worldwide deferred tax asset. Wayfair determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. We evaluate at the end of each reporting period whether some or all of the undistributed earnings of our foreign subsidiaries are permanently reinvested. Our position is based upon several factors including management's evaluation of Wayfair and its subsidiaries' financial requirements, the short- and long-term operational and fiscal objectives of Wayfair and the tax consequences associated with the repatriation of earnings. Earnings (Loss) Per Share Wayfair follows the two-class method when computing earnings (loss) per share for its two issued classes of common stock - Class A and Class B. Basic earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period plus, if dilutive, common stock equivalents outstanding during the period and stock issuable upon conversion of our convertible debt instruments. Wayfair's common stock equivalents consist of shares issuable upon the release of restricted stock units, and to a lesser extent, the incremental shares of common stock issuable upon the exercise of stock options. The dilutive effect of these common stock equivalents is reflected in diluted earnings (loss) per share by application of the treasury stock method. The dilutive effect of shares issuable upon conversion of our convertible debt instruments are included in the calculation of diluted earnings (loss) per share under the if-converted method. For periods in which Wayfair has reported net losses, diluted earnings (loss) per share is the same as basic earnings (loss) per share, as the effects of common stock equivalents outstanding and shares issuable upon conversion of convertible debt instruments are antidilutive and therefore excluded from the calculation of diluted earnings (loss) per share. Wayfair allocates undistributed earnings between the classes on a one-to-one basis when computing earnings (loss) per share. As a result, basic and diluted earnings (loss) per Class A and Class B shares are equivalent. Adoption of New Accounting Principles Wayfair adopted ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , as subsequently amended (“ASU 2016-13”) on January 1, 2020, using the modified retrospective transition method. This ASU revised how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. As of January 1, 2020, our adoption of ASU 2016-13 resulted in a $5.5 million cumulative adjustment to our accumulated deficit. Wayfair adopted ASU No. 2016-02, Leases ("ASU 2016-02") on January 1, 2019, using the modified retrospective approach. Wayfair also elected the package of practical expedients, which among other things, allowed Wayfair to carry forward historical lease classification. The adoption of the standard resulted in (1) the derecognition of building assets and finance lease obligations for certain leases that did not pass the sale-leaseback criteria, (2) the derecognition of construction in progress assets and other long-term liabilities for certain lease arrangements whereby Wayfair was no longer considered the deemed construction owner of the construction projects and (3) the recognition of operating lease ROU assets and lease liabilities for lease arrangements with an initial term greater than twelve months. New Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). This ASU simplifies the accounting for convertible instruments by removing the separation models for convertible debt with cash conversion features and convertible instruments with a beneficial conversion feature. Under ASU 2020-06, a convertible debt instrument with those features will generally be reported as a single liability at its amortized cost with no separate accounting for the embedded conversion features. We expect the elimination of these models will reduce reported interest expense for Wayfair’s existing convertible instruments currently falling under the scope of those models. ASU 2020-06 requires the application of the if-converted method when calculating diluted earnings per share, eliminating our ability to use the treasury stock method when certain conditions are met. The ASU is effective for annual reporting periods beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

Supplemental Financial Statemen

Supplemental Financial Statement Disclosures	12 Months Ended
	Dec. 31, 2020
Balance Sheet Components Disclosure [Abstract]
Supplemental Financial Statement Disclosures	2. Supplemental Financial Statement Disclosures Accounts Receivable, Net For the year ended December 31, 2020, we reported accounts receivable of $110.3 million, net of allowance for credit losses of $21.4 million. For the year ended December 31, 2019, we reported accounts receivable of $99.7 million, net of allowance for credit losses of $22.8 million. Other than the adjustment related to the adoption of ASU 2016-13, changes in the allowance for credit losses were not material for the year ended December 31, 2020. Prepaid Expenses and Other Current Assets The following table presents the components of prepaid expenses and other current assets as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Prepaid expenses and other current assets: Deferred costs in transit $ 156,240 $ 104,947 Prepaid expenses 50,205 46,177 Supplier receivables and credits receivable 62,165 48,328 Other current assets 23,603 29,269 Total prepaid expenses and other current assets $ 292,213 $ 228,721 Other Noncurrent Assets The following table presents the components of other noncurrent assets as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Other noncurrent assets: Goodwill and intangible assets, net $ 17,263 $ 18,809 Other noncurrent assets 14,183 13,467 Total other noncurrent assets $ 31,446 $ 32,276 Amortization expense related to intangible assets was $1.5 million, $0.8 million and $0.9 million for the years ended December 31, 2020, 2019 and 2018. Goodwill was $0.4 million for the years ended December 31, 2020 and 2019. For the years ended December 31, 2020, 2019 and 2018, no impairment of goodwill or intangible assets had been recorded. Other Current Liabilities The following table presents the components of other current liabilities as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Other current liabilities: Unearned revenue $ 292,525 $ 167,641 Employee compensation and related benefits 155,574 141,922 Short-term lease liability (Note 5) 97,286 91,104 Advertising 90,251 71,597 Sales tax payable 104,502 62,173 Sales return allowance 72,835 38,042 Other accrued expenses and current liabilities 195,997 130,943 Total other current liabilities $ 1,008,970 $ 703,422 Contractual liabilities included in unearned revenue and other accrued expenses and current liabilities were $292.5 million and $5.6 million, respectively, at December 31, 2020, and $167.6 million and $4.6 million, respectively, at December 31, 2019. During the year ended December 31, 2020, Wayfair recognized $142.3 million and $3.4 million of net revenue included in unearned revenue and other accrued expenses and current liabilities, which was recorded as of December 31, 2019.

Cash and Cash Equivalents, Inve

Cash and Cash Equivalents, Investments and Fair Value Measurements	12 Months Ended
	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Cash and Cash Equivalents, Investments, and Fair Value Measurements	3. Cash and Cash Equivalents, Investments and Fair Value Measurements Investments As of December 31, 2020 and 2019, all of Wayfair’s marketable securities, which primarily consisted of corporate bonds and other government obligations that are priced at fair value, were classified as available-for-sale investments. During the year ended December 31, 2020, Wayfair collected $161.3 million of proceeds from the sale of long-term investments and recognized a realized gain of $0.8 million. During the years ended December 31, 2019 and 2018, Wayfair did not have any realized gains or losses. The following tables present details of Wayfair’s investment securities as of December 31, 2020 and 2019: December 31, 2020 Amortized Gross Gross Estimated (in thousands) Short-term: Investment securities $ 461,683 $ 20 $ (5) $ 461,698 Long-term: Investment securities — — — — Total $ 461,683 $ 20 $ (5) $ 461,698 December 31, 2019 Amortized Gross Gross Estimated (in thousands) Short-term: Investment securities $ 404,294 $ 20 $ (62) $ 404,252 Long-term: Investment securities 155,616 92 (18) 155,690 Total $ 559,910 $ 112 $ (80) $ 559,942 Fair Value Measurements Wayfair's financial assets and liabilities are measured at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The three levels of inputs used to measure fair value are as follows: ▪ Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities ▪ Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full-term of the asset or liability ▪ Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability This hierarchy requires Wayfair to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. We classify our cash equivalents and certificate of deposits within Level 1 because we value these investments using quoted market prices. The fair value of our Level 1 financial assets is based on quoted market prices of the identical underlying security. We classify short- and long-term investments within Level 2 because unadjusted quoted prices for identical or similar assets in markets are not active. None of our assets are classified as Level 3. The following tables set forth the fair value of Wayfair's financial assets measured at fair value on a recurring basis as of December 31, 2020 and 2019: December 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Cash $ 638,621 $ — $ — $ 638,621 Cash equivalents 1,490,819 — — 1,490,819 Total cash and cash equivalents 2,129,440 — — 2,129,440 Short-term investments: Investment securities — 461,698 — 461,698 Other noncurrent assets: Certificate of deposit 5,200 — — 5,200 Long-term: Investment securities — — — — Total $ 2,134,640 $ 461,698 $ — $ 2,596,338 December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Cash $ 308,521 $ — $ — $ 308,521 Cash equivalents 274,232 — — 274,232 Total cash and cash equivalents 582,753 — — 582,753 Short-term investments: Investment securities — 404,252 — 404,252 Other noncurrent assets: Certificate of deposit 5,076 — — 5,076 Long-term: Investment securities — 155,690 — 155,690 Total $ 587,829 $ 559,942 $ — $ 1,147,771

Property and Equipment, net

Property and Equipment, net	12 Months Ended
	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Property and Equipment, net	4. Property and Equipment, net The following table summarizes property and equipment, net as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Furniture and computer equipment $ 527,777 $ 509,120 Site and software development costs 431,546 297,252 Leasehold improvements 398,874 228,514 Construction in progress 28,806 45,503 1,387,003 1,080,389 Less: Accumulated depreciation and amortization (702,697) (455,845) Property and equipment, net $ 684,306 $ 624,544

Leases

Leases	12 Months Ended
	Dec. 31, 2020
Leases [Abstract]
Leases	5. Leases Wayfair has lease arrangements for warehouse, Wayfair Delivery Network facilities, which includes consolidation centers, cross docks and last mile delivery facilities and office spaces. These leases expire at various dates through 2034. Operating lease expense was $158.6 million, $122.0 million and $66.7 million in 2020, 2019 and 2018. Sublease income was $11.2 million in 2020 and immaterial in 2019 and 2018. The following table presents other information related to leases: Year Ended December 31, 2020 2019 (in thousands) Supplemental cash flows information: Cash payments included in operating cash flows from lease arrangements $ 157,267 $ 109,163 Right-of-use assets obtained in exchange for lease obligations $ 133,814 $ 301,053 December 31, 2020 December 31, Additional lease information: Weighted average remaining lease term 8 years 10 years Weighted average discount rate 6.5 % 6.7 % Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows: Amount (in thousands) 2021 $ 149,590 2022 165,624 2023 160,487 2024 157,219 2025 150,788 Thereafter 467,014 Total future minimum lease payments 1,250,722 Less: Imputed interest (283,478) Total $ 967,244 The following table presents total operating leases liabilities: December 31, 2020 (in thousands) Balance sheet line item: Other current liabilities $ 97,286 Operating lease liabilities 869,958 Total operating leases $ 967,244 As of December 31, 2020, Wayfair had additional operating lease commitments that had not yet commenced of approximately $127.9 million to be contractually delivered in 2021 with lease terms ranging between 2 to 15 years.

Debt and Other Financing

Debt and Other Financing	12 Months Ended
	Dec. 31, 2020
Debt Disclosure [Abstract]
Debt and Other Financing	6. Debt and Other Financing The following table presents the outstanding principal amount and carrying value of debt and other financing as of the dates presented: December 31, 2020 December 31, 2019 Debt Instrument Principal Amount Unamortized Debt Discount Net Carrying Amount Principal Amount Unamortized Debt Discount Net Carrying Amount (in thousands) Revolving Credit Facility $ — $ — 2022 Notes $ 18,036 $ (1,596) 16,440 $ 431,250 $ (59,830) 371,420 2024 Notes 575,000 (132,892) 442,108 575,000 (161,275) 413,725 2026 Notes 948,750 (242,911) 705,839 948,750 (277,700) 671,050 2025 Notes 1,518,000 (289,954) 1,228,046 — — — 2025 Accreting Notes 288,464 (21,654) 266,810 — — — Total Debt $ 2,659,243 $ 1,456,195 Short-term debt $ — $ — Long-term debt $ 2,659,243 $ 1,456,195 Revolving Credit Facility Wayfair Inc., and certain of its subsidiaries (together, the “Guarantors”), and Wayfair Inc.’s wholly-owned subsidiary Wayfair LLC, as borrower (the "Borrower"), have a credit agreement with certain lenders, which provides for a $200 million senior secured revolving credit facility that matures on February 21, 2022 (the “Revolver”). Wayfair has issued letters of credit, primarily as security for certain lease agreements, for approximately $57.0 million as of December 31, 2020, which reduces the availability of credit under the Revolver. Any amounts outstanding under the Revolver are due at maturity. In addition, subject to the terms and conditions set forth in the credit agreement, Wayfair is required to make certain mandatory prepayments prior to maturity. In August 2020, in connection with the 2020 Repurchase Program, Wayfair amended the credit agreement to increase Wayfair’s stock repurchase basket in the negative covenant for restricted payments. In October 2020, Wayfair also increased the revolving loan commitment to $200 million through an incremental commitment joinder. In 2020, Wayfair borrowed under the Revolver, and Wayfair had repaid all borrowings as of December 31, 2020. As a result, there were no revolving loans outstanding under the Revolver as of December 31, 2020. Wayfair’s obligations under the Revolver are guaranteed by the Guarantors. The obligations of the Borrower and the Guarantors are secured by first-priority liens on substantially all of the assets of the Borrower and the Guarantors, including, with certain exceptions, all of the capital stock of Wayfair Inc.’s domestic subsidiaries and 65% of the capital stock of Wayfair Inc.’s first-tier foreign subsidiaries. Revolver borrowings bear interest through maturity at a variable rate based upon, at the Borrower’s option, either the Eurodollar rate or the base rate (which is the highest of (x) Citibank’s prime rate, (y) one-half of 1.00% in excess of the federal funds effective rate and (z) 1.00% in excess of the one-month Eurodollar rate), plus, in each case an applicable margin. As of December 31, 2020, the applicable margin for Eurodollar rate loans was 1.50% per annum and the applicable margin for base rate loans was 0.50% per annum. The applicable margin is subject to specified changes depending on Wayfair’s liquidity, as defined in the credit agreement. The Revolver contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict the ability of Wayfair LLC and the Guarantors, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments and change the nature of their businesses. The Revolver also contains customary events of default, subject to thresholds and grace periods, including, among others, payment default, covenant default, cross default to other material indebtedness and judgment default. In addition, the Revolver requires Wayfair to maintain certain levels of free cash flow, as defined in the credit agreement. As of December 31, 2020, Wayfair was in compliance with all covenants. Convertible Non-Accreting Notes The following table summarizes certain terms related to our outstanding convertible notes, excluding the 2025 Accreting Notes: Convertible Non-Accreting Notes Maturity Date Annual Coupon Rate Annual Effective Interest Rate Payment Dates for Semi-Annual Interest Payments in Arrears 2022 Notes September 1, 2022 0.375% 6.0% March 1 and September 1 2024 Notes November 1, 2024 1.125% 8.1% May 1 and November 1 2026 Notes August 15, 2026 1.00% 6.4% February 15 and August 15 2025 Notes October 1, 2025 0.625% 5.2% April 1 and October 1 In September 2017, Wayfair issued $431.25 million in aggregate principal amount of 0.375% Convertible Senior Notes due 2022 (the "2022 Notes"), which includes the exercise in full of a $56.25 million option granted to the initial purchasers. In connection with the 2022 Notes, Wayfair entered into capped calls that covered, initially, the number of shares of Wayfair’s Class A common stock underlying the 2022 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2022 Notes (the “2022 Capped Calls”). In November 2018, Wayfair issued $575.0 million in aggregate principal amount of 1.125% Convertible Senior Notes due 2024 (the "2024 Notes"), which included the exercise in full of a $75.0 million option granted to the initial purchasers. In connection with the 2024 Notes, Wayfair entered into capped calls that covered, initially, the number of shares of Wayfair’s Class A common stock underlying the 2024 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2024 Notes (the “2024 Capped Calls”). In August 2019, Wayfair issued $948.75 million in aggregate principal amount of 1.00% Convertible Senior Notes due 2026 (the "2026 Notes"), which included the exercise in full of a $123.75 million option granted to the initial purchasers. In connection with the 2026 Notes, Wayfair entered into capped calls that covered, initially, the number of shares of Wayfair’s Class A common stock underlying the 2026 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2026 Notes (the “2026 Capped Calls”). In August 2020, Wayfair issued $1.518 billion in aggregate principal amount of 0.625% Convertible Senior Notes due 2025 (the “2025 Notes”, and together with the 2022 Notes, 2024 Notes, 2026 Notes, the “Non-Accreting Notes”), which included the exercise in full of a $198.0 million option granted to the initial purchasers. In connection with the issuance of the 2025 Notes, Wayfair entered into capped calls that covered, initially, the number of shares of Wayfair’s Class A common stock underlying the 2025 Notes, subject to anti-dilution adjustments substantially similar to those applicable to the 2025 Notes (the “2025 Capped Calls”). Convertible Accreting Notes In April 2020, Wayfair issued $535.0 million in aggregate original principal amount of 2.50% Accreting Convertible Senior Notes due 2025 (the "2025 Accreting Notes", and collectively with the Non-Accreting Notes, the “Notes”) to GHEP VII Aggregator, L.P ("Great Hill"), CBEP Investments, LLC ("Charlesbank") and The Spruce House Partnership LLC. The 2025 Accreting Notes are fully and unconditionally guaranteed on a senior unsecured basis by Wayfair LLC, a wholly-owned subsidiary of Wayfair Inc., as guarantor. No cash interest is payable on the 2025 Accreting Notes. Instead, the 2025 Accreting Notes accrue interest at a rate of 2.50% per annum, which accretes to the principal amount on April 1 and October 1 of each year. The 2025 Accreting Notes will mature on April 1, 2025, unless earlier purchased, redeemed or converted. The annual effective interest rate of the 2025 Accreting Notes is 4.4%. Seniority of Notes The Notes are general senior unsecured obligations of Wayfair. The Notes rank senior in right of payment to any of Wayfair’s future indebtedness that is expressly subordinated in right of payment to the Notes, rank equal in right of payment to Wayfair’s existing and future unsecured indebtedness that is not so subordinated and are effectively subordinated in right of payment to any of Wayfair’s secured indebtedness to the extent of the value of the assets securing such indebtedness. The Non-Accreting Notes are structurally subordinated to all existing and future indebtedness and liabilities of Wayfair’s subsidiaries, including Wayfair LLC’s guaranty of the 2025 Accreting Notes, and the 2025 Accreting Notes are structurally subordinated to all existing and future indebtedness and liabilities of Wayfair’s subsidiaries (other than Wayfair LLC). Indentures The Notes are governed by separate indentures between Wayfair, as issuer, and U.S. Bank National Association, as trustee. The Non-Accreting Notes indenture also includes Wayfair LLC, as guarantor. Each indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the respective notes then outstanding may declare the entire principal amount of the respective notes plus accrued interest, if any, to be immediately due and payable. Conversion and Redemption Terms of the Notes Wayfair's Notes will mature at their maturity date unless earlier purchased, redeemed or converted. The Notes’ initial conversion terms are summarized below: Convertible Notes Maturity Date Free Convertibility Date Initial Conversion Rate per $1,000 Principal Initial Conversion Price Redemption Date 2022 Notes September 1, 2022 June 1, 2022 9.6100 $104.06 September 8, 2020 2024 Notes November 1, 2024 August 1, 2024 8.5910 $116.40 May 8, 2022 2026 Notes August 15, 2026 May 15, 2026 6.7349 $148.48 August 20, 2023 2025 Notes October 1, 2025 July 1, 2025 2.3972 $417.15 October 4, 2022 2025 Accreting Notes April 1, 2025 - 13.7931 $72.50 May 9, 2023 The conversion rate is subject to adjustment upon the occurrence of certain specified events, including certain distributions and dividends to all or substantially all of the holders of Wayfair’s Class A common stock, but will not be adjusted for accrued and unpaid interest. Wayfair will settle any conversions of the Non-Accreting Notes in cash, shares of Wayfair’s Class A common stock or a combination thereof, with the form of consideration determined at Wayfair’s election. The holders of the Non-Accreting Notes may convert all or a portion of the notes prior to certain conversion dates (the “Free Convertibility Date”) under the following circumstances (in each case, as applicable to each series of Non-Accreting Notes): • during any calendar quarter (and only during such calendar quarter) after December 31, 2020, if the last reported sale price of Wayfair’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five ten • if Wayfair calls the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and • upon the occurrence of specified corporate events (as set forth in the applicable indenture) On or after the applicable Free Convertibility Date until the close of business on the second scheduled trading day immediately preceding the applicable maturity date, holders of the Non-Accreting Notes may convert their Non-Accreting Notes at any time. The following Non-Accreting Notes are convertible during the calendar quarter ended March 31, 2021: the 2022 Notes, the 2024 Notes and the 2026 Notes. The 2025 Notes are not convertible during the first quarter of 2021. The holders of the 2025 Accreting Notes may convert all or a portion of their 2025 Accreting Notes at any time prior to the second business day immediately preceding the maturity date. Wayfair will settle any conversion of 2025 Accreting Notes with a number of shares of Wayfair’s Class A common stock per $1,000 original principal amount of 2025 Accreting Notes equal to the accreted principal amount of such original principal amount of 2025 Accreting Notes divided by the conversion price. Upon the occurrence of a fundamental change (as defined in the applicable indenture), holders of the Notes may require Wayfair to repurchase all or a portion of the Notes for cash at a price equal to 100% of the principal amount (or accreted principal amount) of the Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date (such interest to be included in the accreted principal amount for the 2025 Accreting Notes). Holders of the Non-Accreting Notes who convert their respective notes in connection with a make-whole fundamental change or a notice of redemption (each as defined in the indenture) may be entitled to a premium in the form of an increase in the conversion rate of the respective notes. Holders of the 2025 Accreting Notes who convert in connection with a make-whole fundamental change (as defined in the applicable indenture) may be entitled to a premium in the form of an increase in the conversion rate. Wayfair may not redeem the Notes prior to certain dates (the “Redemption Date”). On or after the applicable Redemption Date, Wayfair may redeem for cash all or part of the applicable series of Notes if the last reported sale price of Wayfair’s Class A common stock equals or exceeds 130% (Non-Accreting Notes) or 276% (2025 Accreting Notes) of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which Wayfair provides notice of redemption, during any 30 consecutive trading days ending on, and including the trading day immediately preceding the date on which Wayfair provides notice of the redemption. The redemption price will be either 100% of the principal amount (or accreted principal amount) of the notes to be redeemed, plus accrued and unpaid interest, if any, or the if-converted value holder elects to convert their Notes upon receiving notice of redemption. Accounting for Non-Accreting Notes In accounting for the issuance of the Non-Accreting Notes, Wayfair separated the Non-Accreting Notes into liability and equity components. The carrying amount of each Non-Accreting Note's liability component was calculated by measuring the fair value of a similar liability that did not have an associated convertible feature. The carrying amount of each Non-Accreting Note's equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to Wayfair's own stock, was determined by deducting the fair value of the Non-Accreting Note's liability component from the par value of the Non-Accreting Note. The difference between the carrying amount of the Non-Accreting Note and the liability component represents the debt discount for the Non-Accreting Note, which was recorded as a direct deduction from the related debt liabilities and is amortized to interest expense using the effective interest method over the term of the Non-Accreting Note. The equity components of the 2022 Notes, 2024 Notes, 2026 Notes and 2025 Notes of approximately $95.8 million, $181.5 million, $280.3 million and $297.4 million, respectively, are included in additional paid-in capital and are not remeasured as long as they continue to meet the conditions for equity classification. Wayfair allocated transaction costs related to the components of the Non-Accreting Notes using the same proportions as the proceeds from the corresponding Non-Accreting Notes. Transaction costs attributable to the liability components were recorded as direct deductions from the related debt liabilities and amortized to interest expense over the terms of the corresponding Non-Accreting Notes, and transaction costs attributable to the equity components were netted with the corresponding equity components in shareholders’ deficit. Accounting for Accreting Notes In accounting for the issuance of the 2025 Accreting Notes, Wayfair determined there was a beneficial conversion feature, which represents the excess of the fair value of the underlying common stock at the commitment date less the effective conversion price of the shares convertible at that time. The beneficial conversion feature of $39.4 million was recorded to additional paid-in capital and represents a debt discount to the 2025 Accreting Notes, which was recorded as a direct deduction from the related debt liability. It is amortized to interest expense using the effective interest method over the term of the 2025 Accreting Notes. All transaction costs incurred were recorded as a direct deduction from the related debt liability and are amortized to interest expense using the effective interest method over the term of the 2025 Accreting Notes. Interest for the 2025 Accreting Notes is amortized to interest expense using the effective interest method over the term of the 2025 Accreting Notes and recorded to other long-term liabilities. Upon accretion to the principal amount on April 1 and October 1 of each year, Wayfair will reclassify the interest accrued as of that date to long-term debt. The beneficial conversion feature for additional shares, which would be issued upon conversion of paid-in-kind interest, is recorded as additional interest expense and additional paid-in capital over the term of the 2025 Accreting Notes as such interest accrues. Proceeds from Notes Transactions The net proceeds from the sale of the 2022 Notes, 2024 Notes, 2026 Notes, 2025 Notes and 2025 Accreting Notes were approximately $420.4 million, $562.0 million, $935.1 million, $1.5 billion and $527.4 million, respectively, after deducting the initial purchasers’ discounts, if applicable, and the offering expenses payable by Wayfair. We used approximately $44.2 million, $93.4 million, $145.7 million and $255.0 million of the net proceeds from the 2022 Notes, 2024 Notes, 2026 Notes and 2025 Notes, respectively, to purchase the Capped Calls. We intend to use the remainder of the net proceeds from the Notes for working capital and general corporate purposes, including, but not limited to, operating and capital expenditures. We may also use a portion of the net proceeds to finance acquisitions, strategic transactions, investments, repurchases of our Class A common stock or the repayment, redemption, purchase or exchange of indebtedness (including the Notes). Extinguishment and Conversions of Notes In August 2020, Wayfair used $1.0 billion of the net proceeds from the issuance of the 2025 Notes to repurchase for cash in privately negotiated repurchase transactions $343.4 million in aggregate principal amount of the 2022 Notes. Additionally, in 2020, $69.8 million aggregate principal of the 2022 Notes were settled upon conversion by the holders for 670,610 shares of Wayfair’s Class A common stock. In accounting for these transactions, Wayfair allocated $380.2 million of the total fair value of the consideration received from the 2025 Notes to the debt component of the repurchased 2022 Notes by estimating the fair value of a similar liability that did not have an associated convertible feature. The $12.8 million loss on extinguishment of the 2022 Notes recorded to other (expense) income, net, primarily represents the difference between the total fair value of consideration allocated to the debt component and the $368.8 million carrying value, net of the remaining unamortized debt discount and debt issuance costs. Wayfair applied the $832.0 million residual value of the total fair value of the consideration to the equity component in additional paid-in capital. In October 2020, Charlesbank converted $253.1 million of accreted principal of the 2025 Accreting Notes and received 3,490,175 shares of Wayfair’s Class A common stock. Upon Charlesbank's conversion of the 2025 Accreting Notes, the remaining debt discount for those notes of $19.8 million was immediately recognized as interest expense in the fourth quarter of 2020. In January 2021, Great Hill converted $253.1 million of accreted principal of the 2025 Accreting Notes and received 3,490,175 shares of Wayfair's Class A common stock. Interest Expense The following table presents total interest expense recognized for the Notes for the years ended December 31: Year Ended December 31, 2020 2019 Convertible Notes Contractual Interest Expense Debt Discount Amortization Total Interest Expense Contractual Interest Expense Debt Discount Amortization Total Interest Expense (in thousands) 2022 Notes $ 1,054 $ 13,775 $ 14,829 $ 1,617 $ 20,080 $ 21,697 2024 Notes 6,469 28,382 34,851 6,469 26,161 32,630 2026 Notes 9,488 34,759 44,247 3,342 12,205 15,547 2025 Notes 3,611 20,369 23,980 — — — 2025 Accreting Notes 8,324 25,438 33,762 — — — Total $ 28,946 $ 122,723 $ 151,669 $ 11,428 $ 58,446 $ 69,874 Fair Value of Notes The estimated fair value of the 2022 Notes, 2024 Notes, 2026 Notes, 2025 Notes and 2025 Accreting Notes was $38.4 million, $1.2 billion, $1.6 billion, $1.4 billion and $923.7 million, respectively, as of December 31, 2020. The estimated fair value of the Non-Accreting Notes was determined through consideration of quoted market prices. The estimated fair value of the 2025 Accreting Notes was determined through an option pricing model using Level 3 inputs including volatility and credit spread. The fair values of the Non-Accreting Notes and the 2025 Accreting Notes are classified as Level 2 and Level 3, respectively, as defined in Note 3, Cash and Cash Equivalents, Investments and Fair Value Measurements . The if-converted value of the 2022 Notes, 2024 Notes, 2026 Notes and 2025 Accreting Notes exceeded the principal value by $21.1 million, $540.5 million, $494.1 million and $610.0 million, respectively, as of December 31, 2020. The if-converted value of the 2025 Notes did not exceed the principal value as of December 31, 2020. Capped Calls The 2022 Capped Calls, 2024 Capped Calls, 2026 Capped Calls and 2025 Capped Calls (collectively, the "Capped Calls") are expected generally to reduce the potential dilution and/or offset the cash payments Wayfair is required to make in excess of the principal amount of the Notes upon conversion of the Notes if the market price per share of Wayfair’s Class A common stock is greater than the strike price of the applicable Capped Call (which corresponded to the initial conversion price of the applicable Non-Accreting Notes and is subject to certain adjustments under the terms of the applicable Capped Call), with such reduction and/or offset subject to a cap based on the cap price of the applicable Capped Calls (the "Initial Cap Price"). The Capped Calls can, at Wayfair’s option, remain outstanding until their maturity date, even if all or a portion of the Non-Accreting Notes are converted, repurchased or redeemed prior to such date. Each of the Capped Calls has an initial cap price per share of Wayfair’s Class A common stock, which represented a premium over the last reported sale price (or, with respect to the 2025 Capped Calls, the volume-weighted average price) of Wayfair’s Class A common stock on the date the corresponding Non-Accreting Notes were priced (the "Cap Price Premium"), and is subject to certain adjustments under the terms of the corresponding agreements. Collectively, the Capped Calls cover, initially, the number of shares of Wayfair’s Class A common stock underlying the Non-Accreting Notes, subject to anti-dilution adjustments substantially similar to those applicable to the Non-Accreting Notes. The initial terms for the Capped Calls are presented below: Capped Calls Maturity Date Initial Cap Price Cap Price Premium 2022 Capped Calls September 1, 2022 $154.16 100% 2024 Capped Calls November 1, 2024 $219.63 150% 2026 Capped Calls August 15, 2026 $280.15 150% 2025 Capped Calls October 1, 2025 $787.08 150% The Capped Calls are separate transactions from the Non-Accreting Notes, are not subject to the terms of the Non-Accreting Notes and will not affect any holder’s rights under the Non-Accreting Notes. Similarly, holders of the Non-Accreting Notes do not have any rights with respect to the Capped Calls. The Capped Calls do not meet the criteria for separate accounting as a derivative as they are indexed to Wayfair's stock. The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within shareholders’ deficit.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	7. Commitments and Contingencies Purchase Obligations Wayfair has entered into purchase obligations that represent enforceable and legally binding software license commitments. Our payments due under these purchase obligations are $97.4 million in 2021, $121.2 million in 2022, $114.6 million in 2023 and no other commitments thereafter. These payments exclude payments for contracts that are able to be canceled, both in full or in part, since they do not represent legally binding arrangements. Collection of Sales or Other Similar Taxes Wayfair has historically collected and remitted sales tax based on the locations of its physical operations. On June 21, 2018, the U.S. Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair Inc., 17-494. Among other things, the Court held that a state may require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state, overturning existing court precedent. Several states and other taxing jurisdictions have presented, or indicated that they may present, Wayfair with sales tax assessments. The aggregate assessments received as of December 31, 2020 are not material to Wayfair's business and Wayfair does not expect the Court's decision to have a significant impact on its business. Legal Matters From time to time Wayfair is involved in claims that arise during the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, Wayfair does not currently believe that the outcome of any of these other legal matters will have a material adverse effect on Wayfair's results of operation or financial condition. Regardless of the outcome, litigation can be costly and time consuming, as it can divert management's attention from important business matters and initiatives, negatively impacting Wayfair's overall operations. In addition, Wayfair may also find itself at greater risk to outside party claims as it increases its operations in jurisdictions where the laws with respect to the potential liability of online retailers are uncertain, unfavorable, or unclear. On November 18, 2020, certain of our present and former directors, along with Great Hill Partners, L.P., Great Hill, Charlesbank Capital Partners, LLC and Charlesbank, were named as defendants in a shareholder derivative lawsuit filed in the Court of Chancery of the State of Delaware by the Equity-League Pension Trust Fund. Wayfair is named as a nominal defendant. The derivative complaint primarily alleges that the director defendants breached their fiduciary duties with respect to Wayfair’s issuance of the 2025 Accreting Notes, and further alleges that the non-director defendants were unjustly enriched on the basis of

Employee Benefit Plans

Employee Benefit Plans	12 Months Ended
	Dec. 31, 2020
Retirement Benefits [Abstract]
Employee Benefit Plans	8. Employee Benefit Plans Wayfair has a defined-contribution, incentive savings plan pursuant to Section 401(k) of the Internal Revenue Code. The plan covers all full-time employees who have reached the age of 21 years. Employees may elect to defer compensation up to a dollar limit (as allowable by the Internal Revenue Code), of which up to 4% of an employee's salary will be matched by Wayfair. The amounts deferred by the employee and the matching amounts contributed by Wayfair both vest immediately. The amount expensed under the plan totaled approximately $31.7 million, $27.9 million and $18.2 million in the years ended December 31, 2020, 2019 and 2018.

Stockholders' Deficit

Stockholders' Deficit	12 Months Ended
	Dec. 31, 2020
Equity [Abstract]
Stockholders’ Deficit	9. Stockholders’ Deficit Preferred Stock Wayfair authorized 10,000,000 shares of undesignated preferred stock, $0.001 par value per share, for future issuance. As of December 31, 2020, Wayfair had no shares of undesignated preferred stock issued or outstanding. Common Stock Wayfair authorized 500,000,000 shares of Class A common stock, $0.001 par value per share, and 164,000,000 shares of Class B common stock, $0.001 par value per share, of which 72,980,490 and 66,642,611 shares of Class A common stock and 26,564,234 and 26,957,815 shares of Class B common stock were outstanding as of December 31, 2020 and 2019. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. In addition, upon the date on which the outstanding shares of Class B common stock represent less than 10% of the aggregate number of shares of the then outstanding Class A common stock and Class B common stock, or in the event of the affirmative vote or written consent of holders of at least 66 2/3% of the outstanding shares of Class B common stock, all outstanding shares of Class B common stock shall convert automatically into Class A common stock. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to receive dividends out of funds legally available if Wayfair's Board of Directors (the "Board"), in its discretion, determines to issue dividends and then only at the times and in the amounts that the Board may determine. Since Wayfair's initial public offering through December 31, 2020, 55,474,180 shares of Class B common stock were converted to Class A common stock. Stock Repurchase Program

Equity-Based Compensation

Equity-Based Compensation	12 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Equity-Based Compensation	10. Equity-Based Compensation The Board adopted the 2014 Incentive Award Plan ("2014 Plan") to grant cash and equity incentive awards to eligible participants in order to attract, motivate and retain talent. The 2014 Plan is administered by the Board for awards to non-employee directors and by the compensation committee of the Board for other participants and provides for the issuance of stock options, SARs, restricted common stock, restricted stock units ("RSUs"), performance shares, stock payments, cash payments, dividend awards and other incentives. Prior to the adoption of the 2014 Plan, Wayfair LLC issued certain equity awards pursuant to the Wayfair LLC Amended and Restated Common Unit Plan (the "2010 Plan"), which was administered by the Board of Wayfair LLC. Awards issued under the 2010 Plan that remain outstanding currently represent Class A or Class B common stock of Wayfair Inc. The 2014 Plan initially made 8,603,066 shares of Class A common stock available for future award grants. The 2014 Plan also contains an evergreen provision whereby the shares available for future grants are increased on the first day of each calendar year from January 1, 2016 through and including January 1, 2024. As of January 1, 2021, 6,224,792 shares of Class A common stock were available for future grant under the 2014 Plan. Shares or RSUs forfeited, withheld for minimum statutory tax obligations, and unexercised stock option lapses from the 2010 and 2014 Plans are available for future grants under the 2014 Plan. The following table presents activity relating to stock options for the year ended December 31, 2020: Shares Weighted-Average Weighted-Average Outstanding at December 31, 2019 43,606 $ 3.00 1.5 Options exercised (24,560) $ 3.01 Outstanding and exercisable at December 31, 2020 19,046 $ 2.99 0.5 The intrinsic value of stock options exercised was $4.6 million and $4.8 million for the years ended December 31, 2020 and 2019. Aggregate intrinsic value of stock options outstanding and currently exercisable is $4.2 million as of December 31, 2020. All stock options were fully vested at December 31, 2020. The following table presents activity relating to RSUs for the year ended December 31, 2020: Shares Weighted-Average Unvested at December 31, 2019 8,112,736 $ 95.69 RSUs granted 2,441,898 $ 196.04 RSUs vested (3,015,462) $ 97.15 RSUs forfeited/canceled (1,563,873) $ 105.42 Outstanding as of December 31, 2020 5,975,299 $ 134.03 The intrinsic value of RSUs vested was $562.3 million and $358.6 million for the years ended December 31, 2020 and 2019. The aggregate intrinsic value of RSUs unvested was $1.3 billion as of December 31, 2020. Unrecognized equity-based compensation expense related to RSUs expected to vest over time is $728.3 million with a weighted-average remaining vesting term of 1.2 years as of December 31, 2020. Equity-based compensation was classified as follows in the consolidated statements of operations for the years ended December 31: Year Ended December 31, 2020 2019 2018 (in thousands) Cost of goods sold $ 9,494 $ 5,376 $ 2,549 Customer service and merchant fees 14,835 9,286 5,524 Selling, operations, technology, general and administrative 251,879 212,789 119,491 Total equity-based compensation $ 276,208 $ 227,451 $ 127,564 Equity-based compensation costs capitalized as site and software development costs was $17.3 million for the year ended December 31, 2020. The amount qualifying for capitalization during the years ended December 31, 2019 and 2018 was not material.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	11. Income Taxes The components of the provision for income taxes, net for the years ended December 31, 2020, 2019 and 2018 are presented below: Year ended 2020 2019 2018 (in thousands) Current: Federal $ — $ — $ — State 7,817 874 744 Foreign 2,164 2,136 78 Deferred: Federal 9,036 — (86) State 1,306 — (24) Foreign — — 1,325 Provision for income taxes, net $ 20,323 $ 3,010 $ 2,037 The actual provision for income taxes, net differs from the expected provision for income taxes computed at the U.S. Federal statutory tax rate of 21% due to the following: Year Ended December 31, 2020 2019 2018 (in thousands) Provision for income taxes at the federal statutory rate $ 43,116 $ (206,131) $ (105,429) State income tax expense, net of federal benefit 18,518 (40,136) (22,584) Foreign tax rate differential 18,591 24,346 14,976 Non-deductible equity-based compensation expense 7,671 6,604 3,267 Windfall benefits from equity-based compensation (51,024) (28,915) (29,003) Change in valuation allowance (26,982) 236,863 119,370 Change in tax rate (847) (2,293) 197 Limitation on officer's compensation 8,103 6,509 5,283 Debt integration termination — — 9,236 Other 3,177 6,163 6,724 Provision for income taxes, net $ 20,323 $ 3,010 $ 2,037 We recorded a provision for income taxes, net of $20.3 million, representing an effective tax rate of 9.88%. The effective tax rate differs from the U.S. Federal statutory rate of 21% primarily as a result of excess tax benefits on equity awards for U.S. employees and the valuation allowance maintained against our worldwide net deferred tax asset. The components of income (loss) before income taxes determined by tax jurisdiction, are as follows: Year Ended December 31, 2020 2019 2018 (in thousands) U.S. $ 399,973 $ (699,347) $ (327,356) Foreign (194,654) (282,227) (174,687) Total $ 205,319 $ (981,574) $ (502,043) The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities for the periods presented are as follows: December 31, 2020 2019 (in thousands) Deferred tax assets: Accounts receivable $ 5,507 $ 5,909 Inventories 1,048 871 Net operating loss carryforwards 433,543 470,199 Equity-based compensation expense 12,720 14,929 Intangibles 9,274 10,675 Accrued payroll 36,580 21,395 Accrued expenses and reserves 23,633 14,539 Charitable contributions — 872 Leases 255,381 239,259 Gross deferred tax assets 777,686 778,648 Less: Valuation allowance (328,116) (412,898) Net deferred tax assets 449,570 365,750 Deferred tax liabilities: Prepaid expenses $ (4,889) $ (5,930) Capitalized technology (35,261) (27,354) Property and equipment (41,543) (14,191) Operating lease right-of-use asset (211,727) (197,680) Convertible debt (167,043) (120,447) 481(a) adjustments (8,103) — Other (1,934) (148) Total deferred tax liabilities (470,500) (365,750) Non-current net deferred tax assets (liabilities) $ (20,930) $ — The valuation allowance decreased by $84.8 million during 2020. The decrease in the valuation allowance is the result of Wayfair utilizing its deferred tax assets related to historical net operating losses to offset current year taxable income, as well as a decrease in valuation allowance through equity as a result of the deferred tax liability recorded related to our convertible debt issuances. This is partially offset by establishing a valuation allowance against the current year operating losses of our foreign entities. In determining the need for a valuation allowance, Wayfair has given consideration to the cumulative book income and loss positions of each of its entities as well as its worldwide cumulative income position. We have assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to carry-back net operating losses, the existence of reversing temporary differences, the availability of tax planning strategies and available sources of future taxable income. At December 31, 2020, we maintain a full valuation allowance against our worldwide net deferred tax assets. As of December 31, 2020, Wayfair had federal net operating loss carryforwards available to offset future federal taxable income of $1.2 billion. In addition, Wayfair had state net operating loss carryforwards available in the amount of $1.0 billion which are available to offset future state taxable income. Of the federal net operating loss carryforwards, $150.7 million begin to expire in the year ending December 31, 2037. The remaining $1.0 billion of federal net operating loss carryforwards do not expire. The state net operating loss carryforwards begin to expire in the year ending December 31, 2023. Our ability to utilize these federal and state net operating loss carryforwards may be limited in the future if we experience an ownership change pursuant to Internal Revenue Code Section 382. An ownership change occurs when the ownership percentages of 5% or greater stockholders change by more than 50% over a three-year period. Through December 31, 2020, we have determined that none of our tax attributes were subject to such a restrictive limitation. As of December 31, 2020, Wayfair also had foreign net operating loss carryforwards available to offset future foreign income of $949.8 million. The Canadian net operating loss of $18.2 million will expire in the year ending December 31, 2038. The remaining foreign net operating loss carryforwards do not expire. As of December 31, 2020, Wayfair has not provided for U.S. deferred income taxes on undistributed earnings of its foreign subsidiaries of approximately $6.0 million since these earnings are deemed to be indefinitely reinvested. Upon distribution of those earnings in the form of dividends or otherwise, we could be subject to income taxes as well as withholding taxes. The amount of taxes attributable to the undistributed earnings is immaterial. Wayfair establishes reserves for uncertain tax positions based on management's assessment of exposures associated with tax deductions, permanent tax differences and tax credits. The tax reserves are analyzed periodically and adjustments are made as events occur to warrant adjustment to the reserve. Reserves for uncertain tax positions as of December 31, 2020 and 2019 are not material and would not impact the effective tax rate if recognized as a result of the valuation allowance maintained against our net deferred tax assets. Wayfair's policy is to recognize interest and penalties related to unrecognized tax benefits and penalties as a component of the provision for income taxes, net. Related to the unrecognized tax benefits noted above, we did not accrue any penalties and interest during 2020, 2019 or 2018 because we believe that such additional interest and penalties would be insignificant. Wayfair's tax jurisdictions include the U.S., the UK, Germany, Ireland, Canada, Hong Kong and the British Virgin Islands. The statute of limitations with respect to our U.S. federal income taxes has expired for years prior to 2017. The relevant U.S. state statutes vary and years prior to 2016 are generally closed. The statute of limitations for our foreign income taxes vary, but have expired for years prior to 2016. However, preceding years remain open to examination by U.S. federal and state and foreign taxing authorities to the extent of future utilization of net operating losses generated in each preceding year.

Earning (Loss) per Share

Earning (Loss) per Share	12 Months Ended
	Dec. 31, 2020
Earnings Per Share [Abstract]
Earnings (Loss) per Share	12. Earnings (Loss) per Share The following table presents the calculation of basic and diluted earnings (loss) per share: Year Ended December 31, 2020 2019 2018 (in thousands, except per share data) Numerator: Numerator for basic EPS - Net income (loss) $ 184,996 $ (984,584) $ (504,080) Effect of dilutive securities: Interest expense associated with convertible debt instruments — — — Numerator for diluted EPS - net income (loss) available to common stockholders after the effect of dilutive securities $ 184,996 $ (984,584) $ (504,080) Denominator: Denominator for basic EPS - weighted-average number of shares of common stock outstanding 95,825 92,200 89,472 Effect of dilutive securities: Employee stock options 29 — — Restricted stock units 3,483 — — Convertible debt instruments — — — Dilutive potential common shares 3,512 — — Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 99,337 92,200 89,472 Earnings (Loss) per Share: Basic $ 1.93 $ (10.68) $ (5.63) Diluted $ 1.86 $ (10.68) $ (5.63) The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted earnings (loss) per share were as follows: Year Ended December 31, 2020 2019 2018 (in thousands) Outstanding employee stock options — 44 80 Unvested restricted common stock — — 20 Unvested restricted stock units 192 8,113 7,971 Shares related to convertible debt instruments 20,115 15,474 9,084 Total 20,307 23,631 17,155 Wayfair may settle conversions of the Non-Accreting Notes in cash, shares of Wayfair's Class A common stock or any combination thereof at its election. Wayfair will settle conversions of the 2025 Accreting Notes in shares. T he Capped Calls are generally expected to reduce the potential dilution of Wayfair's Class A common stock upon any conversion of the Notes and/or offset the cash payments Wayfair is required to make in excess of the principal amount of the Notes upon conversion of the Notes if the market price per share of Wayfair’s Class A common stock is greater than the strike price of the Capped Calls (which corresponded to the initial conversion price of the Non-Accreting Notes and is subject to certain adjustments under the terms of the Capped Calls), with such reduction and/or offset subject to the Initial Cap Price. The number of shares of Wayfair's Class A common stock potentially issuable and obtainable at the respective conversion prices of the Notes and the Capped Calls, respectively, as of December 31, 2020, are as follows: 2022 Notes / 2022 Capped Calls 2024 Notes / 2024 Capped Calls 2026 Notes / 2026 Capped Calls 2025 Accreting Notes 2025 Notes / 2025 Capped Calls (in thousands) Shares potentially issuable from convertible debt instruments 173 4,940 6,390 3,979 3,639 Shares obtainable from the exercise of capped calls (1,347) (2,322) (3,003) — (1,710) Total (1,174) 2,618 3,387 3,979 1,929 For more information on the structure of the Notes and the Capped Calls, including potential adjustments to the conversion prices used to determine the shares presented in the preceding table, see Note 6, Debt and Other Financing .

Segment and Geographic Informat

Segment and Geographic Information	12 Months Ended
	Dec. 31, 2020
Segment Reporting [Abstract]
Segment and Geographic Information	13. Segment and Geographic Information Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated on a regular basis by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources to an individual segment and in assessing performance. Wayfair’s CODM is its Chief Executive Officer. Wayfair's operating and reportable segments are the U.S. and International. These segments reflect the way the CODM allocates resources and evaluates financial performance, which is based upon each segment's Adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) before depreciation and amortization, equity-based compensation and related taxes, interest (expense), net, other (expense) income, net, provision for income taxes, net, non-recurring items and other items not indicative of our ongoing operating performance. These charges are excluded from the evaluation of segment performance because it facilitates reportable segment performance comparisons on a period-to-period basis as these costs may vary independent of business performance. The accounting policies of the segments are the same as those described in Note 1, Summary of Significant Accounting Policies. Wayfair allocates certain operating expenses to the operating and reportable segments, including customer service and merchant fees and selling, operations, technology, general and administrative expenses based on the usage and relative contribution provided to the segments. It excludes from the allocations certain operating expense lines, including depreciation and amortization, equity-based compensation and related taxes, interest (expense), net, other (expense) income, net and provision for income taxes, net. There are no revenue transactions between Wayfair's reportable segments. U.S. The U.S. segment primarily consists of amounts earned through product sales through Wayfair's family of sites in the U.S. International The International segment primarily consists of amounts earned through product sales through Wayfair's international sites. Net revenue from external customers for each group of similar products and services are not reported to the CODM. Separate identification of this information for purposes of segment disclosure is impractical, as it is not readily available and the cost to develop it would be excessive. No individual country outside the U.S. provided greater than 10% of consolidated net revenue. The following tables present net revenues and Adjusted EBITDA attributable to Wayfair’s reportable segments for the periods presented: Year Ended December 31, 2020 2019 2018 (in thousands) U.S. net revenue $ 11,900,658 $ 7,764,831 $ 5,813,070 International net revenue 2,244,498 1,362,226 966,104 Total net revenue $ 14,145,156 $ 9,127,057 $ 6,779,174 Year Ended December 31, 2020 2019 2018 (in thousands) Adjusted EBITDA: U.S. $ 1,041,892 $ (179,010) $ (19,049) International (95,004) (317,534) (195,937) Total reportable segments Adjusted EBITDA 946,888 (496,544) (214,986) Less: reconciling items (1) (761,892) (488,040) (289,094) Net income (loss) $ 184,996 $ (984,584) $ (504,080) (1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net income (loss): Year Ended December 31, 2020 2019 2018 (in thousands) Depreciation and amortization $ 285,711 $ 192,419 $ 123,542 Equity-based compensation and related taxes 296,872 240,978 136,415 Interest expense, net 146,397 54,514 28,560 Other expense (income), net 8,633 (2,881) 204 Provision for income taxes, net 20,323 3,010 2,037 Other (1) 3,956 — (1,664) Total reconciling items $ 761,892 $ 488,040 $ 289,094 (1) We recorded a $4.0 million loss related to severance costs associated with February 2020 workforce reductions. The values were recorded in selling, operations, technology, general and administrative expenses. In 2018, we terminated the lease of a warehouse we had vacated in 2017 and recorded a one-time gain of $1.7 million related to the difference in the expected future net lease commitments and the actual costs incurred to terminate the lease. The following table presents long-lived assets attributable to Wayfair's reportable segments reconciled to the amounts: Year Ended December 31, 2020 2019 (in thousands) Geographic long-lived assets: U.S. $ 718,681 $ 731,963 International 163,753 144,803 Total reportable segment long-lived assets 882,434 876,766 Plus: reconciling corporate long-lived assets 610,247 511,178 Total long-lived assets $ 1,492,681 $ 1,387,944 U.S. and International long-lived assets consist of property and equipment, net and operating lease ROU assets. Corporate long-lived assets consist of property and equipment, net and operating lease ROU assets at our corporate facilities. The following table presents total assets attributable to Wayfair's reportable segments reconciled to consolidated amounts: Year Ended December 31, 2020 2019 (in thousands) Assets by segment: U.S. $ 1,122,391 $ 1,076,733 International 214,707 190,167 Total reportable segment assets 1,337,098 1,266,900 Plus: reconciling corporate assets 3,232,831 1,686,148 Total assets $ 4,569,929 $ 2,953,048

Related Party Transactions

Related Party Transactions	12 Months Ended
	Dec. 31, 2020
Related Party Transactions [Abstract]
Related Party Transactions	14. Related Party Transactions As discussed in Note 6, Debt and Other Financing , in April 2020, pursuant to the terms of the amended and restated purchase agreement, dated April 7, 2020 (the "Purchase Agreement"), Wayfair issued $535.0 million in aggregate original principal amount of 2025 Accreting Notes. The issuance of the 2025 Accreting Notes constitutes a related party transaction because of Michael W. Choe's positions as a director of Wayfair (as of May 12, 2020) and Managing Director and Chief Executive Officer of Charlesbank Capital Partners, LLC, the sole owner of the ultimate general partner of Charlesbank, a party to the Purchase Agreement; Michael Kumin's positions as a director of Wayfair and a Managing Partner at Great Hill Partners, LP, Manager of the ultimate general partner of Great Hill, a party to the Purchase Agreement; and the limited partnership interests held by Niraj Shah and Steve Conine, Wayfair's co-founders and co-chairmen, in affiliates of Great Hill and Charlesbank.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation Wayfair Inc. is one of the world's largest online destinations for the home. Through its e-commerce business model, Wayfair offers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over twenty-two million products from over 16,000 suppliers. These financial statements consolidate the operations and accounts of Wayfair Inc. and its wholly-owned subsidiaries. Unless the context indicates otherwise, references to “we,” “us” and “our” refer to Wayfair Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated. Below is a summary of Wayfair’s wholly-owned subsidiaries with operations: Subsidiary Location Wayfair LLC U.S. CastleGate Logistics Inc. U.S. CastleGate Trade Services LLC U.S. SK Retail, Inc. U.S. Wayfair Maine LLC U.S. Wayfair Transportation LLC U.S. Wayfair Securities Corporation U.S. Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair Deutschland Ltd. & Co. KG Germany Wayfair Deutschland GP Ltd. Germany CastleGate Logistics Canada Inc. Canada CastleGate Logistics Hong Kong Limited Hong Kong Wayfair (BVI) Ltd. British Virgin Islands
Use of Estimates	Use of Estimates We prepared the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). 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, as well as the disclosure of contingent assets and liabilities, at the date of and during the reported period of the consolidated financial statements. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period presentation.
Cash and Cash Equivalents	Cash and Cash Equivalents Wayfair considers all highly liquid investments purchased with an original maturity (at the date of purchase) of three months or less to be the equivalent of cash. Cash equivalents, which consist primarily of money market accounts, are carried at cost, which approximates fair value.
Investments	Investments Investments consist of certificates of deposits and marketable securities with original maturities of greater than three months. Short-term investments mature in less than twelve months from the balance sheet date. We determine the cost basis of an investment sold using the specific identification method. To the extent the amortized cost basis of the available-for-sale debt securities exceeds the fair value, management assesses the debt securities for credit loss, however management considers the risk of credit loss to be minimized by Wayfair's policy of investing in financial instruments issued by highly-rated financial institutions. When assessing the risk of credit loss, management considers factors such as the severity and the reason of the decline in value (i.e., any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security) and management's intended holding period and time
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that subject Wayfair to credit risk consist of cash and cash equivalents, short- and long-term investments and accounts receivable. The risk for cash and cash equivalents is minimized by Wayfair's policy to maintain these balances with major financial institutions of high-credit quality. At times, cash balances may exceed federally insured limits; however, to date, Wayfair has not incurred any losses on these investments. As of December 31, 2020 and 2019, Wayfair had $281.0 million and $48.2 million in banks located outside of the U.S. The risk for short- and long-term investments is minimized by Wayfair's policy of investing in financial instruments issued by highly-rated financial institutions.
Accounts Receivables, Net	Accounts Receivables, Net Accounts receivable are stated net of the allowance for credit losses, which are recorded based on historical losses as well as management's expectation of future collections. Uncollectible amounts are written off against the allowance after all collection efforts have been exhausted. Wayfair's exposure to credit loss is minimized through fraud assessments performed prior to customer checkout and Wayfair's policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. Further, management believes credit risk is mitigated since approximately 99% of the net revenue recognized for the twelve months ended December 31, 2020 was collected in advance of recognition.
Inventories	Inventories Inventories consisting of finished goods are stated at the lower of cost or net realizable value, determined by the first-in, first-out (FIFO) method, and consist of product for resale. Inventory costs consist of cost of product and inbound shipping and handling costs. Inventory costs also include direct and indirect labor costs, rent and depreciation expense associated with Wayfair's fulfillment centers. Inventory valuation requires Wayfair to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, liquidations and expected recoverable values of each disposition category.
Deferred Costs In-Transit	Deferred Costs In-Transit Deferred costs in-transit to customers are recorded in prepaid expenses and other current assets.
Property and Equipment	Property and Equipment Property and equipment are stated at cost, net of depreciation. Expenditures for maintenance and repairs are charged to expense as incurred, whereas betterments are capitalized as additions to property and equipment. Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets as follows: Class Range of Life Furniture and computer equipment 3 to 7 Site and software development costs 2 Leasehold improvements The lesser of useful life or lease term
Site and Software Development Costs	Site and Software Development CostsWayfair capitalizes certain costs associated with the development of its sites and internal-use software products after the preliminary project stage is complete and until the site enhancements or software is ready for its intended use. Wayfair also capitalizes implementation costs incurred in cloud computing hosting arrangements. Upgrades and enhancements are capitalized if they will result in added functionality. Capitalized costs are amortized over a two-year period. Costs incurred in the preliminary stages of development, after the software is ready for its intended use and for maintenance of internal-use software are expensed as incurred.
Long-Lived Assets	Long-Lived AssetsWayfair reviews long-lived assets for impairment whenever events or changes in circumstances, such as service discontinuance or technological obsolescence, indicate that the carrying amount of the long-lived asset may not be recoverable. When such events occur, Wayfair compares the carrying amount of the asset to the undiscounted expected future cash flows related to the asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the asset.
Leases	Leases Wayfair generally leases office and warehouse facilities under noncancelable agreements. Upon each agreement's commencement date, we determine if the agreement is part of an arrangement that is or that contains a lease, determine the lease classification and recognize right-of-use ("ROU") assets and lease liabilities for all leases with the exception of leases with terms of 12 months or less. We have arrangements with lease and non-lease components, and we account for lease and non-lease components separately for our warehouse and fulfillment center arrangements. For all other lease arrangements, we account for lease and non-lease components as a single lease component. Operating lease ROU assets are classified in operating lease right-of-use assets in the consolidated balance sheets. Operating lease liabilities are classified as other current liabilities and operating lease liabilities based on when lease payments are due. As of December 31, 2020 and 2019 we did not have material finance lease arrangements. Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term at the lease commencement date. As most of our leases do not provide an implicit rate, we use an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The determination of the IBR requires judgment and is primarily based on publicly available information for companies within the same industry and with similar credit profiles. We adjust the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. The ROU asset also includes any lease payments made prior to the commencement date and excludes lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We review ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the ROU asset may not be recoverable. When such events occur, we compare the carrying amount of the ROU asset to the undiscounted expected future cash flows related to the ROU asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the ROU asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the ROU asset.
Contingent Liabilities	Contingent Liabilities Wayfair has certain contingent liabilities that arise in the ordinary course of business activities. Wayfair accrues for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. Wayfair does not accrue for contingent losses that, in our judgment, we consider to be reasonably possible, but not probable; however, we disclose the range of such reasonably possible losses.
Foreign Currency Translation	Foreign Currency Translation The functional currency of Wayfair is the U.S. dollar, while the functional currencies of certain wholly-owned subsidiaries outside the U.S. are as follows: Subsidiary Functional Currency Wayfair Stores Limited Euro Wayfair Deutschland Ltd & Co KG Euro Wayfair Deutschland GP Ltd. Euro Wayfair (BVI) Ltd. Euro Wayfair (UK) Limited Pound sterling CastleGate Logistics Canada Inc. Canadian dollar CastleGate Logistics Hong Kong Limited Hong Kong dollar The financial statements of Wayfair are translated to U.S. dollars using year-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Translation adjustments arising from the use of differing exchange rates from period to period are included in other comprehensive income (loss) below net income (loss) and accumulated other comprehensive loss within total stockholders’ deficit. Transaction gains and losses are included in other (expense) income, net, which is reflected in net income (loss).
Revenue Recognition	Revenue Recognition Wayfair primarily generated net revenue through product sales on its family of sites. Wayfair recognizes net revenue on product sales through Wayfair's family of sites using the gross method when Wayfair has concluded it controls the product before it is transferred to the customer. Wayfair controls products when it is the entity responsible for fulfilling the promise to the customer and takes responsibility for the acceptability of the goods, assumes inventory risk from shipment through the delivery date, has discretion in establishing prices and selects the suppliers of products sold. Wayfair recognizes net revenue from sales of its products upon delivery to the customer. As Wayfair ships a large volume of packages through multiple carriers, actual delivery dates may not always be available and as such Wayfair estimates delivery dates based on historical data. Net revenue from product sales includes shipping costs charged to the customer and is recorded net of taxes collected from customers, which are recorded in other current liabilities and are remitted to governmental authorities. Cash discounts and rebates earned by customers at the time of purchase and estimates for sales return allowances are deducted from gross revenue in determining net revenue. Wayfair maintains a membership rewards program for customer purchases made with our private label Wayfair credit card and co-branded Mastercard ("Credit Card Program"). In exchange for providing intellectual property as part of the Credit Card Program, we record net revenues based on spending activity and the profitability of the card portfolio. Spending activity of the underlying accounts represents customer purchases used with their respective cards, and the profitability of the card portfolio is based on the financial performance of the underlying credit portfolio. Net revenue from contracts with customers is disaggregated by geographic region because this manner of disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 13, Segment and Geographic Information , for additional detail. Wayfair has three types of contractual liabilities: (i) cash collections from its customers prior to delivery of products purchased, which are initially recorded in unearned revenue, and are recognized as net revenue when the products are delivered, (ii) unredeemed gift cards and site credits, which are initially recorded in unearned revenue, and are recognized in the period they are redeemed, and (iii) membership rewards redeemable for future purchases, which are earned by customers on purchases made through the Credit Card Program, and are initially recorded in other current liabilities, and recognized as net revenue when redeemed. The portion of gift cards and store credits not expected to be redeemed are recognized as net revenue based on a pattern of historical redemptions, which are substantially within twenty-four months from the date of issuance.
Costs of Goods Sold	Cost of Goods Sold Costs of Goods sold consists of: Product Costs: Wayfair capitalizes into inventory costs for the purchase price we pay to suppliers of products sold, direct and indirect labor costs, rent, depreciation and inbound shipping and handling costs. Product costs are offset by rebates Wayfair earns through allowances and supplier incentive programs. Wayfair earns rebates when goods are shipped, and amounts earned and due from suppliers under these rebate programs are included in other current assets and are reflected as a reduction of cost of goods sold. Vendor allowances earned on Wayfair owned inventory reduce the carrying cost of inventory and are recognized in cost of goods sold when the inventory is sold. Product costs are also offset by media and merchandising offerings provided to our suppliers, which are not considered distinct from the purchase of goods from those suppliers. Shipping and Fulfillment Costs: Shipping costs include outbound shipping costs. Fulfillment costs include costs incurred to operate and staff our fulfillment centers and provide other inbound supply chain services such as ocean freight and drayage. Costs to operate and staff the CastleGate and WDN networks include rent and depreciation expenses associated with various facilities, costs to receive, inspect, pick, package and prepare customer orders for delivery, and direct and indirect labor costs including payroll, payroll-related benefits and equity-based compensation. Shipping and Fulfillment costs are offset by fees earned by providing logistic services to suppliers including order fulfillment, warehousing and inbound supply chain services such as ocean freight and drayage through Wayfair's CastleGate business. Fulfillment fees are earned upon completion of preparing customer orders for shipment, warehousing fees are earned upon completion of each storage date and inbound supply chain services are earned on a straight-line basis as the shipments move from origin to destination. Shipping and Fulfillment costs were $2.0 billion, $1.4 billion and $1.1 billion, for the years ended December 31, 2020, 2019 and 2018.
Customer Service and Merchant Fees	Customer Service and Merchant FeesCustomer service and merchant fees consist of labor-related costs, including payroll, payroll-related benefits and equity-based compensation of our employees involved in customer service activities, merchant processing fees associated with customer payments made by credit cards and debit cards and other variable fees. Merchant processing fees totaled $267.7 million, $179.7 million and $133.4 million in the years ended December 31, 2020, 2019 and 2018.
Advertising	Advertising Advertising consists of direct response performance marketing costs, such as display advertising, paid search advertising, social media advertising, search engine optimization, comparison shopping engine advertising, television advertising, direct mail, catalog and print advertising. Costs for advertising are expensed when the advertising begins. Prepayments for advertising that has not been incurred are included in prepaid expenses and other current assets, and advertising costs that have been incurred but not paid are included in other current liabilities.
Selling, Operations, Technology, General and Administrative	Selling, Operations, Technology, General and Administrative Selling, operations, technology, general and administrative expenses primarily include labor-related costs, including equity-based compensation, of our operations group, which includes our supply chain and logistics team, our technology team that builds and supports our sites, category managers, buyers, site merchandisers, merchants, marketers and the team who executes our advertising strategy, and our corporate general and administrative team, which includes human resources, finance and accounting personnel. Also included are administrative and professional service fees which include audit and legal fees, insurance, depreciation, rent and other corporate expenses.
Equity-Based Compensation	Equity-Based Compensation Wayfair recognizes its equity-based payments to employees and non-employees as gross expense over the service period based on their grant date fair values with actual forfeitures recognized as they occur. Wayfair has granted stock options, restricted common stock and restricted stock units. Restricted stock values are determined based on the quoted market price of our Class A common stock on the date of grant.
Income Taxes	Income Taxes Income taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Wayfair records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized. As of December 31, 2020, we maintained a full valuation allowance against our net worldwide deferred tax asset. Wayfair determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. We evaluate at the end of each reporting period whether some or all of the undistributed earnings of our foreign subsidiaries are permanently reinvested. Our position is based upon several factors including management's evaluation of Wayfair and its subsidiaries' financial requirements, the short- and long-term operational and fiscal objectives of Wayfair and the tax consequences associated with the repatriation of earnings.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Wayfair follows the two-class method when computing earnings (loss) per share for its two issued classes of common stock - Class A and Class B. Basic earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period plus, if dilutive, common stock equivalents outstanding during the period and stock issuable upon conversion of our convertible debt instruments. Wayfair's common stock equivalents consist of shares issuable upon the release of restricted stock units, and to a lesser extent, the incremental shares of common stock issuable upon the exercise of stock options. The dilutive effect of these common stock equivalents is reflected in diluted earnings (loss) per share by application of the treasury stock method. The dilutive effect of shares issuable upon conversion of our convertible debt instruments are included in the calculation of diluted earnings (loss) per share under the if-converted method. For periods in which Wayfair has reported net losses, diluted earnings (loss) per share is the same as basic earnings (loss) per share, as the effects of common stock equivalents outstanding and shares issuable upon conversion of convertible debt instruments are antidilutive and therefore excluded from the calculation of diluted earnings (loss) per share. Wayfair allocates undistributed earnings between the classes on a one-to-one basis when computing earnings (loss) per share. As a result, basic and diluted earnings (loss) per Class A and Class B shares are equivalent.
Adoption of New Accounting Principle and New Accounting Pronouncements	Adoption of New Accounting Principles Wayfair adopted ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , as subsequently amended (“ASU 2016-13”) on January 1, 2020, using the modified retrospective transition method. This ASU revised how entities account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. As of January 1, 2020, our adoption of ASU 2016-13 resulted in a $5.5 million cumulative adjustment to our accumulated deficit. Wayfair adopted ASU No. 2016-02, Leases ("ASU 2016-02") on January 1, 2019, using the modified retrospective approach. Wayfair also elected the package of practical expedients, which among other things, allowed Wayfair to carry forward historical lease classification. The adoption of the standard resulted in (1) the derecognition of building assets and finance lease obligations for certain leases that did not pass the sale-leaseback criteria, (2) the derecognition of construction in progress assets and other long-term liabilities for certain lease arrangements whereby Wayfair was no longer considered the deemed construction owner of the construction projects and (3) the recognition of operating lease ROU assets and lease liabilities for lease arrangements with an initial term greater than twelve months. New Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). This ASU simplifies the accounting for convertible instruments by removing the separation models for convertible debt with cash conversion features and convertible instruments with a beneficial conversion feature. Under ASU 2020-06, a convertible debt instrument with those features will generally be reported as a single liability at its amortized cost with no separate accounting for the embedded conversion features. We expect the elimination of these models will reduce reported interest expense for Wayfair’s existing convertible instruments currently falling under the scope of those models. ASU 2020-06 requires the application of the if-converted method when calculating diluted earnings per share, eliminating our ability to use the treasury stock method when certain conditions are met. The ASU is effective for annual reporting periods beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. We are currently evaluating the impact of the adoption of this ASU on our consolidated financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2020
Accounting Policies [Abstract]
Summary of the Wholly-Owned Subsidiaries of the Company	Below is a summary of Wayfair’s wholly-owned subsidiaries with operations: Subsidiary Location Wayfair LLC U.S. CastleGate Logistics Inc. U.S. CastleGate Trade Services LLC U.S. SK Retail, Inc. U.S. Wayfair Maine LLC U.S. Wayfair Transportation LLC U.S. Wayfair Securities Corporation U.S. Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair Deutschland Ltd. & Co. KG Germany Wayfair Deutschland GP Ltd. Germany CastleGate Logistics Canada Inc. Canada CastleGate Logistics Hong Kong Limited Hong Kong Wayfair (BVI) Ltd. British Virgin Islands
Schedule of Estimated Useful Lives Property Plant and Equipment	Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets as follows: Class Range of Life Furniture and computer equipment 3 to 7 Site and software development costs 2 Leasehold improvements The lesser of useful life or lease term
Summary of Subsidiaries' Functional Currencies	The functional currency of Wayfair is the U.S. dollar, while the functional currencies of certain wholly-owned subsidiaries outside the U.S. are as follows: Subsidiary Functional Currency Wayfair Stores Limited Euro Wayfair Deutschland Ltd & Co KG Euro Wayfair Deutschland GP Ltd. Euro Wayfair (BVI) Ltd. Euro Wayfair (UK) Limited Pound sterling CastleGate Logistics Canada Inc. Canadian dollar CastleGate Logistics Hong Kong Limited Hong Kong dollar

Supplemental Financial Statem_2

Supplemental Financial Statement Disclosures (Tables)	12 Months Ended
	Dec. 31, 2020
Balance Sheet Components Disclosure [Abstract]
Components of Prepaid Expenses and Other Current Assets	The following table presents the components of prepaid expenses and other current assets as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Prepaid expenses and other current assets: Deferred costs in transit $ 156,240 $ 104,947 Prepaid expenses 50,205 46,177 Supplier receivables and credits receivable 62,165 48,328 Other current assets 23,603 29,269 Total prepaid expenses and other current assets $ 292,213 $ 228,721
Components of Other Noncurrent Assets	The following table presents the components of other noncurrent assets as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Other noncurrent assets: Goodwill and intangible assets, net $ 17,263 $ 18,809 Other noncurrent assets 14,183 13,467 Total other noncurrent assets $ 31,446 $ 32,276
Components of Other Current Liabilities	The following table presents the components of other current liabilities as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Other current liabilities: Unearned revenue $ 292,525 $ 167,641 Employee compensation and related benefits 155,574 141,922 Short-term lease liability (Note 5) 97,286 91,104 Advertising 90,251 71,597 Sales tax payable 104,502 62,173 Sales return allowance 72,835 38,042 Other accrued expenses and current liabilities 195,997 130,943 Total other current liabilities $ 1,008,970 $ 703,422

Cash and Cash Equivalents, In_2

Cash and Cash Equivalents, Investments and Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Schedule of Marketable Securities	The following tables present details of Wayfair’s investment securities as of December 31, 2020 and 2019: December 31, 2020 Amortized Gross Gross Estimated (in thousands) Short-term: Investment securities $ 461,683 $ 20 $ (5) $ 461,698 Long-term: Investment securities — — — — Total $ 461,683 $ 20 $ (5) $ 461,698 December 31, 2019 Amortized Gross Gross Estimated (in thousands) Short-term: Investment securities $ 404,294 $ 20 $ (62) $ 404,252 Long-term: Investment securities 155,616 92 (18) 155,690 Total $ 559,910 $ 112 $ (80) $ 559,942
Schedule of the Fair Value of the Company's Financial Assets Measured at Fair Value on a Recurring Basis Based on the Three-tier Value Hierarchy	The following tables set forth the fair value of Wayfair's financial assets measured at fair value on a recurring basis as of December 31, 2020 and 2019: December 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Cash $ 638,621 $ — $ — $ 638,621 Cash equivalents 1,490,819 — — 1,490,819 Total cash and cash equivalents 2,129,440 — — 2,129,440 Short-term investments: Investment securities — 461,698 — 461,698 Other noncurrent assets: Certificate of deposit 5,200 — — 5,200 Long-term: Investment securities — — — — Total $ 2,134,640 $ 461,698 $ — $ 2,596,338 December 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Cash and cash equivalents: Cash $ 308,521 $ — $ — $ 308,521 Cash equivalents 274,232 — — 274,232 Total cash and cash equivalents 582,753 — — 582,753 Short-term investments: Investment securities — 404,252 — 404,252 Other noncurrent assets: Certificate of deposit 5,076 — — 5,076 Long-term: Investment securities — 155,690 — 155,690 Total $ 587,829 $ 559,942 $ — $ 1,147,771

Property and Equipment, net (Ta

Property and Equipment, net (Tables)	12 Months Ended
	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, net	The following table summarizes property and equipment, net as of December 31, 2020 and 2019: December 31, 2020 2019 (in thousands) Furniture and computer equipment $ 527,777 $ 509,120 Site and software development costs 431,546 297,252 Leasehold improvements 398,874 228,514 Construction in progress 28,806 45,503 1,387,003 1,080,389 Less: Accumulated depreciation and amortization (702,697) (455,845) Property and equipment, net $ 684,306 $ 624,544

Leases (Tables)

Leases (Tables)	12 Months Ended
	Dec. 31, 2020
Leases [Abstract]
Other Information Related to Leases	The following table presents other information related to leases: Year Ended December 31, 2020 2019 (in thousands) Supplemental cash flows information: Cash payments included in operating cash flows from lease arrangements $ 157,267 $ 109,163 Right-of-use assets obtained in exchange for lease obligations $ 133,814 $ 301,053 December 31, 2020 December 31, Additional lease information: Weighted average remaining lease term 8 years 10 years Weighted average discount rate 6.5 % 6.7 %
Future Minimum Lease Payments	Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows: Amount (in thousands) 2021 $ 149,590 2022 165,624 2023 160,487 2024 157,219 2025 150,788 Thereafter 467,014 Total future minimum lease payments 1,250,722 Less: Imputed interest (283,478) Total $ 967,244
Operating Leases, Balance Sheet Items	The following table presents total operating leases liabilities: December 31, 2020 (in thousands) Balance sheet line item: Other current liabilities $ 97,286 Operating lease liabilities 869,958 Total operating leases $ 967,244

Debt and Other Financing (Table

Debt and Other Financing (Tables)	12 Months Ended
	Dec. 31, 2020
Debt Disclosure [Abstract]
Schedule of Outstanding Principal and Carrying Value	The following table presents the outstanding principal amount and carrying value of debt and other financing as of the dates presented: December 31, 2020 December 31, 2019 Debt Instrument Principal Amount Unamortized Debt Discount Net Carrying Amount Principal Amount Unamortized Debt Discount Net Carrying Amount (in thousands) Revolving Credit Facility $ — $ — 2022 Notes $ 18,036 $ (1,596) 16,440 $ 431,250 $ (59,830) 371,420 2024 Notes 575,000 (132,892) 442,108 575,000 (161,275) 413,725 2026 Notes 948,750 (242,911) 705,839 948,750 (277,700) 671,050 2025 Notes 1,518,000 (289,954) 1,228,046 — — — 2025 Accreting Notes 288,464 (21,654) 266,810 — — — Total Debt $ 2,659,243 $ 1,456,195 Short-term debt $ — $ — Long-term debt $ 2,659,243 $ 1,456,195
Schedule of Convertible Notes	The following table summarizes certain terms related to our outstanding convertible notes, excluding the 2025 Accreting Notes: Convertible Non-Accreting Notes Maturity Date Annual Coupon Rate Annual Effective Interest Rate Payment Dates for Semi-Annual Interest Payments in Arrears 2022 Notes September 1, 2022 0.375% 6.0% March 1 and September 1 2024 Notes November 1, 2024 1.125% 8.1% May 1 and November 1 2026 Notes August 15, 2026 1.00% 6.4% February 15 and August 15 2025 Notes October 1, 2025 0.625% 5.2% April 1 and October 1 Wayfair's Notes will mature at their maturity date unless earlier purchased, redeemed or converted. The Notes’ initial conversion terms are summarized below: Convertible Notes Maturity Date Free Convertibility Date Initial Conversion Rate per $1,000 Principal Initial Conversion Price Redemption Date 2022 Notes September 1, 2022 June 1, 2022 9.6100 $104.06 September 8, 2020 2024 Notes November 1, 2024 August 1, 2024 8.5910 $116.40 May 8, 2022 2026 Notes August 15, 2026 May 15, 2026 6.7349 $148.48 August 20, 2023 2025 Notes October 1, 2025 July 1, 2025 2.3972 $417.15 October 4, 2022 2025 Accreting Notes April 1, 2025 - 13.7931 $72.50 May 9, 2023
Schedule Of Interest Expense Related to Notes	The following table presents total interest expense recognized for the Notes for the years ended December 31: Year Ended December 31, 2020 2019 Convertible Notes Contractual Interest Expense Debt Discount Amortization Total Interest Expense Contractual Interest Expense Debt Discount Amortization Total Interest Expense (in thousands) 2022 Notes $ 1,054 $ 13,775 $ 14,829 $ 1,617 $ 20,080 $ 21,697 2024 Notes 6,469 28,382 34,851 6,469 26,161 32,630 2026 Notes 9,488 34,759 44,247 3,342 12,205 15,547 2025 Notes 3,611 20,369 23,980 — — — 2025 Accreting Notes 8,324 25,438 33,762 — — — Total $ 28,946 $ 122,723 $ 151,669 $ 11,428 $ 58,446 $ 69,874
Schedule of Initial Terms for Capped Calls	The initial terms for the Capped Calls are presented below: Capped Calls Maturity Date Initial Cap Price Cap Price Premium 2022 Capped Calls September 1, 2022 $154.16 100% 2024 Capped Calls November 1, 2024 $219.63 150% 2026 Capped Calls August 15, 2026 $280.15 150% 2025 Capped Calls October 1, 2025 $787.08 150%

Equity-Based Compensation (Tabl

Equity-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Activity Relating to Stock Options	The following table presents activity relating to stock options for the year ended December 31, 2020: Shares Weighted-Average Weighted-Average Outstanding at December 31, 2019 43,606 $ 3.00 1.5 Options exercised (24,560) $ 3.01 Outstanding and exercisable at December 31, 2020 19,046 $ 2.99 0.5
Activity Relating to Restricted Stock Units	The following table presents activity relating to RSUs for the year ended December 31, 2020: Shares Weighted-Average Unvested at December 31, 2019 8,112,736 $ 95.69 RSUs granted 2,441,898 $ 196.04 RSUs vested (3,015,462) $ 97.15 RSUs forfeited/canceled (1,563,873) $ 105.42 Outstanding as of December 31, 2020 5,975,299 $ 134.03
Equity-Based Compensation	Equity-based compensation was classified as follows in the consolidated statements of operations for the years ended December 31: Year Ended December 31, 2020 2019 2018 (in thousands) Cost of goods sold $ 9,494 $ 5,376 $ 2,549 Customer service and merchant fees 14,835 9,286 5,524 Selling, operations, technology, general and administrative 251,879 212,789 119,491 Total equity-based compensation $ 276,208 $ 227,451 $ 127,564

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Components of Provision for Income Taxes, Net	The components of the provision for income taxes, net for the years ended December 31, 2020, 2019 and 2018 are presented below: Year ended 2020 2019 2018 (in thousands) Current: Federal $ — $ — $ — State 7,817 874 744 Foreign 2,164 2,136 78 Deferred: Federal 9,036 — (86) State 1,306 — (24) Foreign — — 1,325 Provision for income taxes, net $ 20,323 $ 3,010 $ 2,037
Schedule of Difference in the Company's Expected Tax Expense (Benefit) as Computed by Applying the U.S. Federal Corporate Rate to Income Before Tax Expense (Benefit), and Actual Tax is Reconciled	The actual provision for income taxes, net differs from the expected provision for income taxes computed at the U.S. Federal statutory tax rate of 21% due to the following: Year Ended December 31, 2020 2019 2018 (in thousands) Provision for income taxes at the federal statutory rate $ 43,116 $ (206,131) $ (105,429) State income tax expense, net of federal benefit 18,518 (40,136) (22,584) Foreign tax rate differential 18,591 24,346 14,976 Non-deductible equity-based compensation expense 7,671 6,604 3,267 Windfall benefits from equity-based compensation (51,024) (28,915) (29,003) Change in valuation allowance (26,982) 236,863 119,370 Change in tax rate (847) (2,293) 197 Limitation on officer's compensation 8,103 6,509 5,283 Debt integration termination — — 9,236 Other 3,177 6,163 6,724 Provision for income taxes, net $ 20,323 $ 3,010 $ 2,037
Schedule of Components of Income Tax Expense (Benefit) Determined by Tax Jurisdiction	The components of income (loss) before income taxes determined by tax jurisdiction, are as follows: Year Ended December 31, 2020 2019 2018 (in thousands) U.S. $ 399,973 $ (699,347) $ (327,356) Foreign (194,654) (282,227) (174,687) Total $ 205,319 $ (981,574) $ (502,043)
Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities	The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities for the periods presented are as follows: December 31, 2020 2019 (in thousands) Deferred tax assets: Accounts receivable $ 5,507 $ 5,909 Inventories 1,048 871 Net operating loss carryforwards 433,543 470,199 Equity-based compensation expense 12,720 14,929 Intangibles 9,274 10,675 Accrued payroll 36,580 21,395 Accrued expenses and reserves 23,633 14,539 Charitable contributions — 872 Leases 255,381 239,259 Gross deferred tax assets 777,686 778,648 Less: Valuation allowance (328,116) (412,898) Net deferred tax assets 449,570 365,750 Deferred tax liabilities: Prepaid expenses $ (4,889) $ (5,930) Capitalized technology (35,261) (27,354) Property and equipment (41,543) (14,191) Operating lease right-of-use asset (211,727) (197,680) Convertible debt (167,043) (120,447) 481(a) adjustments (8,103) — Other (1,934) (148) Total deferred tax liabilities (470,500) (365,750) Non-current net deferred tax assets (liabilities) $ (20,930) $ —

Earnings (Loss) per Share (Tabl

Earnings (Loss) per Share (Tables)	12 Months Ended
	Dec. 31, 2020
Earnings Per Share [Abstract]
Schedule of Calculation of Basic and Diluted Net Loss Per Share	The following table presents the calculation of basic and diluted earnings (loss) per share: Year Ended December 31, 2020 2019 2018 (in thousands, except per share data) Numerator: Numerator for basic EPS - Net income (loss) $ 184,996 $ (984,584) $ (504,080) Effect of dilutive securities: Interest expense associated with convertible debt instruments — — — Numerator for diluted EPS - net income (loss) available to common stockholders after the effect of dilutive securities $ 184,996 $ (984,584) $ (504,080) Denominator: Denominator for basic EPS - weighted-average number of shares of common stock outstanding 95,825 92,200 89,472 Effect of dilutive securities: Employee stock options 29 — — Restricted stock units 3,483 — — Convertible debt instruments — — — Dilutive potential common shares 3,512 — — Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 99,337 92,200 89,472 Earnings (Loss) per Share: Basic $ 1.93 $ (10.68) $ (5.63) Diluted $ 1.86 $ (10.68) $ (5.63)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted earnings (loss) per share were as follows: Year Ended December 31, 2020 2019 2018 (in thousands) Outstanding employee stock options — 44 80 Unvested restricted common stock — — 20 Unvested restricted stock units 192 8,113 7,971 Shares related to convertible debt instruments 20,115 15,474 9,084 Total 20,307 23,631 17,155
Shares Issued at Conversion and Capped Call Transactions	The number of shares of Wayfair's Class A common stock potentially issuable and obtainable at the respective conversion prices of the Notes and the Capped Calls, respectively, as of December 31, 2020, are as follows: 2022 Notes / 2022 Capped Calls 2024 Notes / 2024 Capped Calls 2026 Notes / 2026 Capped Calls 2025 Accreting Notes 2025 Notes / 2025 Capped Calls (in thousands) Shares potentially issuable from convertible debt instruments 173 4,940 6,390 3,979 3,639 Shares obtainable from the exercise of capped calls (1,347) (2,322) (3,003) — (1,710) Total (1,174) 2,618 3,387 3,979 1,929

Segment and Geographic Inform_2

Segment and Geographic Information (Tables)	12 Months Ended
	Dec. 31, 2020
Segment Reporting [Abstract]
Activity Related to Net Revenue and Adjusted EBITDA by Segment	The following tables present net revenues and Adjusted EBITDA attributable to Wayfair’s reportable segments for the periods presented: Year Ended December 31, 2020 2019 2018 (in thousands) U.S. net revenue $ 11,900,658 $ 7,764,831 $ 5,813,070 International net revenue 2,244,498 1,362,226 966,104 Total net revenue $ 14,145,156 $ 9,127,057 $ 6,779,174 Year Ended December 31, 2020 2019 2018 (in thousands) Adjusted EBITDA: U.S. $ 1,041,892 $ (179,010) $ (19,049) International (95,004) (317,534) (195,937) Total reportable segments Adjusted EBITDA 946,888 (496,544) (214,986) Less: reconciling items (1) (761,892) (488,040) (289,094) Net income (loss) $ 184,996 $ (984,584) $ (504,080) (1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net income (loss): Year Ended December 31, 2020 2019 2018 (in thousands) Depreciation and amortization $ 285,711 $ 192,419 $ 123,542 Equity-based compensation and related taxes 296,872 240,978 136,415 Interest expense, net 146,397 54,514 28,560 Other expense (income), net 8,633 (2,881) 204 Provision for income taxes, net 20,323 3,010 2,037 Other (1) 3,956 — (1,664) Total reconciling items $ 761,892 $ 488,040 $ 289,094 (1) We recorded a $4.0 million loss related to severance costs associated with February 2020 workforce reductions. The values were recorded in selling, operations, technology, general and administrative expenses. In 2018, we terminated
Schedule of Long-lived Assets by Geographic Area	The following table presents long-lived assets attributable to Wayfair's reportable segments reconciled to the amounts: Year Ended December 31, 2020 2019 (in thousands) Geographic long-lived assets: U.S. $ 718,681 $ 731,963 International 163,753 144,803 Total reportable segment long-lived assets 882,434 876,766 Plus: reconciling corporate long-lived assets 610,247 511,178 Total long-lived assets $ 1,492,681 $ 1,387,944
Assets By Segment	The following table presents total assets attributable to Wayfair's reportable segments reconciled to consolidated amounts: Year Ended December 31, 2020 2019 (in thousands) Assets by segment: U.S. $ 1,122,391 $ 1,076,733 International 214,707 190,167 Total reportable segment assets 1,337,098 1,266,900 Plus: reconciling corporate assets 3,232,831 1,686,148 Total assets $ 4,569,929 $ 2,953,048

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) supplier in Thousands, product in Millions	12 Months Ended
	Dec. 31, 2020USD ($)classsupplierproduct	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)
Organization, Consolidation and Presentation of Financial Statements
Number of products offered (over) | product	22
Number of suppliers providing products offered (over) | supplier	16
Investments, Debt and Equity Securities
Credit losses recognized	$ 0	$ 0
Allowance for credit losses	0	0	$ 0
Concentrations of Credit Risk
Cash and cash equivalents and short-term investments held in banks located outside the U.S.	$ 281,000,000	48,200,000
Accounts Receivable
Revenue recognized, percent collected	99.00%
Leases
Finance lease arrangements	$ 0	0
Cost of Goods Sold
Cost of goods sold	10,032,985,000	6,979,725,000	5,192,451,000
Merchant Processing Fees
Merchant processing fees	$ 267,700,000	179,700,000	133,400,000
Earnings Per Share
Number of classes of common stock | class	2
Adoption of New Accounting Principle – Allowance for Credit Losses
Adoption of ASU, cumulative adjustment	$ 1,191,897,000	944,208,000	330,721,000	$ 48,329,000
Cumulative Effect, Period of Adoption, Adjustment
Adoption of New Accounting Principle – Allowance for Credit Losses
Adoption of ASU, cumulative adjustment		5,523,000	(1,850,000)	(4,657,000)
Shipping and Fulfillment
Cost of Goods Sold
Cost of goods sold	2,000,000,000	1,400,000,000	1,100,000,000
Retained Earnings
Adoption of New Accounting Principle – Allowance for Credit Losses
Adoption of ASU, cumulative adjustment	$ 1,885,950,000	2,065,423,000	1,082,689,000	583,266,000
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment
Adoption of New Accounting Principle – Allowance for Credit Losses
Adoption of ASU, cumulative adjustment		$ 5,523,000	$ (1,850,000)	$ (4,657,000)
Furniture and computer equipment | Minimum
Property, plant and equipment
Estimated useful lives	3 years
Furniture and computer equipment | Maximum
Property, plant and equipment
Estimated useful lives	7 years
Site and software development costs
Property, plant and equipment
Estimated useful lives	2 years

Supplemental Financial Statem_3

Supplemental Financial Statement Disclosures - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Balance Sheet Components Disclosure [Abstract]
Accounts receivable, net	$ 110,299	$ 99,720
Accounts receivable allowance	$ 21,400	$ 22,800

Supplemental Financial Statem_4

Supplemental Financial Statement Disclosures - Components of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Prepaid expenses and other current assets:
Deferred costs in transit	$ 156,240	$ 104,947
Prepaid expenses	50,205	46,177
Supplier receivables and credits receivable	62,165	48,328
Other current assets	23,603	29,269
Total prepaid expenses and other current assets	$ 292,213	$ 228,721

Supplemental Financial Statem_5

Supplemental Financial Statement Disclosures - Components of Other Noncurrent Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Other noncurrent assets:
Goodwill and intangible assets, net	$ 17,263	$ 18,809
Other noncurrent assets	14,183	13,467
Total other noncurrent assets	$ 31,446	$ 32,276

Supplemental Financial Statem_6

Supplemental Financial Statement Disclosures - Other Noncurrent Assets - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Balance Sheet Components Disclosure [Abstract]
Amortization expense related to intangible assets	$ 1,500,000	$ 800,000	$ 900,000
Goodwill	400,000	400,000
Impairment of goodwill or intangible assets	$ 0	$ 0	$ 0

Supplemental Financial Statem_7

Supplemental Financial Statement Disclosures - Components of Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Other current liabilities:
Employee compensation and related benefits	$ 155,574	$ 141,922
Short-term lease liability (Note 5)	97,286	91,104
Advertising	90,251	71,597
Sales tax payable	104,502	62,173
Sales return allowance	72,835	38,042
Other accrued expenses and current liabilities	195,997	130,943
Total other current liabilities	$ 1,008,970	$ 703,422

Supplemental Financial Statem_8

Supplemental Financial Statement Disclosures - Other Current Liabilities - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Unearned revenue
Other Current Liabilities
Contract liabilities	$ 292,525	$ 167,641
Revenue recognized that was included in deferred revenue	142,300
Other current liabilities
Other Current Liabilities
Contract liabilities	5,600	$ 4,600
Revenue recognized that was included in deferred revenue	$ 3,400

Cash and Cash Equivalents, In_3

Cash and Cash Equivalents, Investments and Fair Value Measurements - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Realized gains or losses	$ 800,000	$ 0	$ 0
Long-term Investment securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Proceeds from sale of investments	$ 161,300,000

Cash and Cash Equivalents, In_4

Cash and Cash Equivalents, Investments and Fair Value Measurements - Schedule of Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair value measurements
Amortized Cost	$ 461,683	$ 559,910
Gross Unrealized Gains	20	112
Gross Unrealized Losses	(5)	(80)
Estimated Fair Value	461,698	559,942
Short-term Investment securities
Fair value measurements
Amortized Cost	461,683	404,294
Gross Unrealized Gains	20	20
Gross Unrealized Losses	(5)	(62)
Estimated Fair Value	461,698	404,252
Long-term Investment securities
Fair value measurements
Amortized Cost	0	155,616
Gross Unrealized Gains	0	92
Gross Unrealized Losses	0	(18)
Estimated Fair Value	$ 0	$ 155,690

Cash and Cash Equivalents, In_5

Cash and Cash Equivalents, Investments and Fair Value Measurements - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair value measurements
Cash and cash equivalents	$ 2,129,440	$ 582,753
Total	2,596,338	1,147,771
Investment securities
Fair value measurements
Short term investments	461,698	404,252
Long term investments	0	155,690
Certificate of deposit
Fair value measurements
Other non-current assets	5,200	5,076
Cash
Fair value measurements
Cash and cash equivalents	638,621	308,521
Cash equivalents
Fair value measurements
Cash and cash equivalents	1,490,819	274,232
Level 1
Fair value measurements
Cash and cash equivalents	2,129,440	582,753
Total	2,134,640	587,829
Level 1 | Investment securities
Fair value measurements
Short term investments	0	0
Long term investments	0	0
Level 1 | Certificate of deposit
Fair value measurements
Other non-current assets	5,200	5,076
Level 1 | Cash
Fair value measurements
Cash and cash equivalents	638,621	308,521
Level 1 | Cash equivalents
Fair value measurements
Cash and cash equivalents	1,490,819	274,232
Level 2
Fair value measurements
Cash and cash equivalents	0	0
Total	461,698	559,942
Level 2 | Investment securities
Fair value measurements
Short term investments	461,698	404,252
Long term investments	0	155,690
Level 2 | Certificate of deposit
Fair value measurements
Other non-current assets	0	0
Level 2 | Cash
Fair value measurements
Cash and cash equivalents	0	0
Level 2 | Cash equivalents
Fair value measurements
Cash and cash equivalents	0	0
Level 3
Fair value measurements
Cash and cash equivalents	0	0
Total	0	0
Level 3 | Investment securities
Fair value measurements
Short term investments	0	0
Long term investments	0	0
Level 3 | Certificate of deposit
Fair value measurements
Other non-current assets	0	0
Level 3 | Cash
Fair value measurements
Cash and cash equivalents	0	0
Level 3 | Cash equivalents
Fair value measurements
Cash and cash equivalents	$ 0	$ 0

Property and Equipment, net - S

Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and equipment, net
Property and equipment, gross	$ 1,387,003,000	$ 1,080,389,000
Less: Accumulated depreciation and amortization	(702,697,000)	(455,845,000)
Property and equipment, net	684,306,000	624,544,000
Depreciation and amortization	284,200,000	191,600,000	$ 122,600,000
Impairment of long-lived assets	0	0	0
Furniture and computer equipment
Property and equipment, net
Property and equipment, gross	527,777,000	509,120,000
Site and software development costs
Property and equipment, net
Property and equipment, gross	431,546,000	297,252,000
Depreciation and amortization	131,600,000	81,600,000	$ 51,300,000
Capitalized computer software, accumulated amortization	157,600,000	123,500,000
Leasehold improvements
Property and equipment, net
Property and equipment, gross	398,874,000	228,514,000
Construction in progress
Property and equipment, net
Property and equipment, gross	$ 28,806,000	$ 45,503,000

Property and Equipment, net - N

Property and Equipment, net - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and equipment, net
Depreciation and amortization	$ 284,200,000	$ 191,600,000	$ 122,600,000
Impairment of long-lived assets	0	0	0
Site and software development costs
Property and equipment, net
Depreciation and amortization	131,600,000	81,600,000	$ 51,300,000
Capitalized computer software, accumulated amortization	$ 157,600,000	$ 123,500,000

Leases - Narrative (Details)

Leases - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Lessee, Lease, Description
Operating lease expense	$ 158,600	$ 122,000	$ 66,700
Sublease income	(11,200)	$ 0	$ 0
Operating leases not yet commenced	$ 127,900
Minimum
Lessee, Lease, Description
Operating leases not yet commenced, term of contract	2 years
Maximum
Lessee, Lease, Description
Operating leases not yet commenced, term of contract	15 years

Leases - Other Information Rela

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Supplemental cash flows information:
Cash payments included in operating cash flows from lease arrangements	$ 157,267	$ 109,163
Right-of-use assets obtained in exchange for lease obligations	$ 133,814	$ 301,053
Additional lease information:
Weighted average remaining lease term	8 years	10 years
Weighted average discount rate	6.50%	6.70%

Leases - Future Minimum Lease P

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2020USD ($)
Leases [Abstract]
2021	$ 149,590
2022	165,624
2023	160,487
2024	157,219
2025	150,788
Thereafter	467,014
Total future minimum lease payments	1,250,722
Less: Imputed interest	(283,478)
Total	$ 967,244

Leases - Operating Leases Balan

Leases - Operating Leases Balance Sheet Location (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Other current liabilities	$ 97,286	$ 91,104
Operating lease liabilities	869,958	$ 822,602
Total operating leases	$ 967,244
Other current liabilities	us-gaap:OtherLiabilitiesCurrent	us-gaap:OtherLiabilitiesCurrent

Debt and Other Financing - Sche

Debt and Other Financing - Schedule of Outstanding Principal and Carrying Value (Details) - USD ($)	Dec. 31, 2020	Aug. 31, 2020	Apr. 30, 2020	Dec. 31, 2019	Nov. 30, 2018	Sep. 30, 2017
Debt Instrument
Long-term Debt, Total	$ 2,659,243,000			$ 1,456,195,000
Convertible Debt
Debt Instrument
Long-term Debt, Total	2,659,243,000			1,456,195,000
Short-term debt	0			0
Convertible Debt | 2022 Notes
Debt Instrument
Principal Amount	18,036,000			431,250,000		$ 431,250,000
Unamortized Debt Discount	(1,596,000)			(59,830,000)
Long-term Debt, Total	16,440,000	$ 368,800,000		371,420,000
Convertible Debt | 2024 Notes
Debt Instrument
Principal Amount	575,000,000			575,000,000	$ 575,000,000
Unamortized Debt Discount	(132,892,000)			(161,275,000)
Long-term Debt, Total	442,108,000			413,725,000
Convertible Debt | 2026 Notes
Debt Instrument
Principal Amount	948,750,000			948,750,000
Unamortized Debt Discount	(242,911,000)			(277,700,000)
Long-term Debt, Total	705,839,000			671,050,000
Convertible Debt | 2025 Notes
Debt Instrument
Principal Amount	1,518,000,000	$ 1,518,000,000		0
Unamortized Debt Discount	(289,954,000)			0
Long-term Debt, Total	1,228,046,000			0
Convertible Debt | 2025 Accreting Notes
Debt Instrument
Principal Amount	288,464,000		$ 535,000,000	0
Unamortized Debt Discount	(21,654,000)			0
Long-term Debt, Total	266,810,000			0
Convertible Debt | Revolving Credit Facility
Debt Instrument
Long-term Debt, Total	$ 0			$ 0

Debt and Other Financing - Narr

Debt and Other Financing - Narrative (Details)	Aug. 19, 2019	Jan. 31, 2021USD ($)shares	Oct. 31, 2020USD ($)shares	Aug. 31, 2020USD ($)	Aug. 31, 2019USD ($)	Nov. 30, 2018USD ($)	Sep. 30, 2017USD ($)	Dec. 31, 2020USD ($)dayshares	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Apr. 30, 2020USD ($)	Apr. 07, 2020USD ($)
Debt Instrument
Long-term debt								$ 2,659,243,000	$ 1,456,195,000
Option included in issuance of notes								2,027,758,000	935,146,000	$ 562,047,000
Beneficial conversion feature of notes								78,418,000	130,566,000	83,953,000
Premiums paid for capped call confirmations								$ 255,024,000	145,728,000	$ 93,438,000
Revolving Credit Facility
Debt Instrument
Borrower Obligations, capital stock of first-tier foreign subsidiaries, percent								65.00%
Effective interest rate, percentage								0.05%
Revolving Credit Facility | Eurodollar
Debt Instrument
Basis spread								1.00%
Applicable margin								0.0150
Revolving Credit Facility | Base Rate
Debt Instrument
Applicable margin								0.0050
Senior Secured Revolving Credit Facility | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity			$ 200,000,000
Letters of credit outstanding, amount								$ 57,000,000
Long-term debt								0
2025 Notes
Debt Instrument
Proceeds from issuance of convertible notes, net of issuance costs				$ 1,000,000,000
2025 Accreting Notes
Debt Instrument
Effective interest rate, percentage											4.40%
Beneficial conversion feature of notes								39,400,000
Convertible Debt
Debt Instrument
Long-term debt								2,659,243,000	1,456,195,000
Convertible Debt | Revolving Credit Facility
Debt Instrument
Long-term debt								0	0
Convertible Debt | 2022 Notes
Debt Instrument
Long-term debt				368,800,000				$ 16,440,000	371,420,000
Effective interest rate, percentage								6.00%
Principal Amount							$ 431,250,000	$ 18,036,000	431,250,000
Interest rate, stated percentage							0.375%
Option included in issuance of notes							$ 56,250,000
Equity component of notes								95,800,000
Proceeds from issuance of convertible notes, net of issuance costs								420,400,000
Premiums paid for capped call confirmations								44,200,000
Aggregate principal amount of repurchased Notes				343,400,000
Debt conversion, principal amount								$ 69,800,000
Loss on debt repurchase				(12,800,000)
Debt repurchase amount, portion allocated to equity component				832,000,000
Debt conversion, converted, shares issued (in shares) | shares								670,610
Debt, fair value								$ 38,400,000
Convertible debt, if-converted value in excess of principal								21,100,000
Convertible Debt | 2024 Notes
Debt Instrument
Long-term debt								$ 442,108,000	413,725,000
Effective interest rate, percentage								8.10%
Principal Amount						$ 575,000,000		$ 575,000,000	575,000,000
Interest rate, stated percentage						1.125%
Option included in issuance of notes						$ 75,000,000
Equity component of notes								181,500,000
Proceeds from issuance of convertible notes, net of issuance costs								562,000,000
Premiums paid for capped call confirmations								93,400,000
Debt, fair value								1,200,000,000
Convertible debt, if-converted value in excess of principal								540,500,000
Convertible Debt | 2026 Notes
Debt Instrument
Long-term debt								$ 705,839,000	671,050,000
Effective interest rate, percentage								6.40%
Principal Amount								$ 948,750,000	948,750,000
Interest rate, stated percentage					1.00%
Option included in issuance of notes					$ 123,750,000
Equity component of notes								280,300,000
Proceeds from issuance of convertible notes, net of issuance costs								935,100,000
Premiums paid for capped call confirmations								145,700,000
Debt, fair value								1,600,000,000
Convertible debt, if-converted value in excess of principal								494,100,000
Convertible Debt | 2025 Notes
Debt Instrument
Long-term debt								$ 1,228,046,000	0
Effective interest rate, percentage								5.20%
Principal Amount				1,518,000,000				$ 1,518,000,000	0
Interest rate, stated percentage			0.625%
Option included in issuance of notes				198,000,000
Equity component of notes								297,400,000
Proceeds from issuance of convertible notes, net of issuance costs								1,500,000,000
Premiums paid for capped call confirmations								255,000,000
Debt repurchase amount, portion allocated to debt component				$ 380,200,000				380,200,000
Debt, fair value								1,400,000,000
Convertible Debt | 2025 Accreting Notes
Debt Instrument
Long-term debt								266,810,000	0
Principal Amount								$ 288,464,000	$ 0		$ 535,000,000
Interest rate, stated percentage											2.50%
Trading days (whether or not consecutively) | day								20
Trading days (consecutive) | day								30
Percentage of conversion stock price								276.00%
Principal amount of Notes								$ 1,000
Redemption price, percentage of principal amount to be redeemed								100.00%
Proceeds from issuance of convertible notes, net of issuance costs								$ 527,400,000
Debt, fair value								923,700,000
Convertible debt, if-converted value in excess of principal								$ 610,000,000
Convertible Debt | 2025 Accreting Notes | Director
Debt Instrument
Principal Amount												$ 535,000,000
Convertible Debt | 2025 Accreting Notes | Charlesbank
Debt Instrument
Long-term debt			$ 19,800,000
Convertible Debt | 2025 Accreting Notes | Class A common stock | Charlesbank
Debt Instrument
Debt conversion, principal amount			$ 253,100,000
Debt conversion, converted, shares issued (in shares) | shares			3,490,175
Convertible Debt | 2025 Accreting Notes | Class A common stock | Great Hill | Subsequent Event
Debt Instrument
Debt conversion, principal amount		$ 253,100,000
Debt conversion, converted, shares issued (in shares) | shares		3,490,175
Convertible Debt | Indentures
Debt Instrument
Default percentage of aggregate principal amount, of notes outstanding (not less than)								25.00%
Convertible Debt | Non-Accreting Notes
Debt Instrument
Trading days (whether or not consecutively) | day								20
Trading days (consecutive) | day								30
Percentage of conversion stock price								130.00%
During number of business day period	5 days
Consecutive trading day period (after any)								10 days
Principal amount of Notes								$ 1,000
Measurement period percentage (less than)								98.00%

Debt and Other Financing - Conv

Debt and Other Financing - Convertible Non-Accreting Notes (Details) - Convertible Debt	Dec. 31, 2020	Oct. 31, 2020	Aug. 31, 2019	Nov. 30, 2018	Sep. 30, 2017
2022 Notes
Debt Instrument
Annual Coupon Rate					0.375%
Annual Effective Interest Rate	6.00%
2024 Notes
Debt Instrument
Annual Coupon Rate				1.125%
Annual Effective Interest Rate	8.10%
2026 Notes
Debt Instrument
Annual Coupon Rate			1.00%
Annual Effective Interest Rate	6.40%
2025 Notes
Debt Instrument
Annual Coupon Rate		0.625%
Annual Effective Interest Rate	5.20%

Debt and Other Financing - Co_2

Debt and Other Financing - Conversion and Redemption Terms of the Notes (Details) - Convertible Debt	12 Months Ended
	Dec. 31, 2020$ / shares
2022 Notes
Debt Instrument
Initial Conversion Rate per $1,000 Principal	0.00961
Initial Conversion Price (in usd per share)	$ 104.06
2024 Notes
Debt Instrument
Initial Conversion Rate per $1,000 Principal	0.008591
Initial Conversion Price (in usd per share)	$ 116.40
2026 Notes
Debt Instrument
Initial Conversion Rate per $1,000 Principal	0.0067349
Initial Conversion Price (in usd per share)	$ 148.48
2025 Notes
Debt Instrument
Initial Conversion Rate per $1,000 Principal	0.0023972
Initial Conversion Price (in usd per share)	$ 417.15
2025 Accreting Notes
Debt Instrument
Initial Conversion Rate per $1,000 Principal	0.0137931
Initial Conversion Price (in usd per share)	$ 72.50

Debt and Other Financing - Sc_2

Debt and Other Financing - Schedule of Interest Expense Related to Notes (Details) - Convertible Debt - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Debt Instrument
Contractual Interest Expense	$ 28,946	$ 11,428
Debt Discount Amortization	122,723	58,446
Total Interest Expense	151,669	69,874
2022 Notes
Debt Instrument
Contractual Interest Expense	1,054	1,617
Debt Discount Amortization	13,775	20,080
Total Interest Expense	14,829	21,697
2024 Notes
Debt Instrument
Contractual Interest Expense	6,469	6,469
Debt Discount Amortization	28,382	26,161
Total Interest Expense	34,851	32,630
2026 Notes
Debt Instrument
Contractual Interest Expense	9,488	3,342
Debt Discount Amortization	34,759	12,205
Total Interest Expense	44,247	15,547
2025 Notes
Debt Instrument
Contractual Interest Expense	3,611	0
Debt Discount Amortization	20,369	0
Total Interest Expense	23,980	0
2025 Accreting Notes
Debt Instrument
Contractual Interest Expense	8,324	0
Debt Discount Amortization	25,438	0
Total Interest Expense	$ 33,762	$ 0

Debt and Other Financing - Sc_3

Debt and Other Financing - Schedule of Initial Terms for Capped Calls (Details) - Convertible Debt - Class A common stock	12 Months Ended
	Dec. 31, 2020$ / shares
2022 Capped Calls
Debt Instrument
Initial Cap Price (in usd per share)	$ 154.16
Cap Price Premium (as percent)	100.00%
2024 Capped Calls
Debt Instrument
Initial Cap Price (in usd per share)	$ 219.63
Cap Price Premium (as percent)	150.00%
2026 Capped Calls
Debt Instrument
Initial Cap Price (in usd per share)	$ 280.15
Cap Price Premium (as percent)	150.00%
2025 Capped Calls
Debt Instrument
Initial Cap Price (in usd per share)	$ 787.08
Cap Price Premium (as percent)	150.00%

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	Dec. 31, 2020USD ($)
Commitments and Contingencies Disclosure [Abstract]
Purchase obligations, 2021	$ 97.4
Purchase obligations, 2022	121.2
Purchase obligations, 2023	$ 114.6

Employee Benefit Plans (Details

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Employee Benefit Plans
Age of the full-time employees qualified to participate in the defined contribution plan	21 years
Expense related to savings plan recognized	$ 31.7	$ 27.9	$ 18.2
Maximum
Employee Benefit Plans
Matching contribution by employer as a percentage of employee's considered compensation	4.00%

Stockholders' Deficit (Details)

Stockholders' Deficit (Details)	12 Months Ended
	Dec. 31, 2020USD ($)vote$ / sharesshares	Aug. 31, 2020USD ($)	Aug. 21, 2020USD ($)	Dec. 31, 2019$ / sharesshares	Dec. 31, 2018USD ($)
Preferred Stock
Preferred stock, shares authorized (in shares)	10,000,000
Preferred stock, par value (in dollars per share) | $ / shares	$ 0.001
Preferred stock, shares issued (in shares)	0
Preferred stock, shares outstanding (in shares)	0
Stock Repurchase Program
Repurchase authorized amount | $			$ 700,000,000		$ 200,000,000
Repurchase average price (in dollars per share) | $ / shares	$ 302.71
2025 Notes | Convertible Debt
Stock Repurchase Program
Debt repurchase amount, portion allocated to debt component | $	$ 380,200,000	$ 380,200,000
Class A common stock
Common stock
Common stock, shares authorized (in shares)	500,000,000			500,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001			$ 0.001
Common stock, shares outstanding (in shares)	72,980,490			66,642,611
Number of votes each holder is entitled | vote	1
Class B common stock
Common stock
Common stock, shares authorized (in shares)	164,000,000			164,000,000
Common stock, par value (in dollars per share) | $ / shares	$ 0.001			$ 0.001
Common stock, shares outstanding (in shares)	26,564,234			26,957,815
Number of votes each holder is entitled | vote	10
Conversion ratio	1
Conversion ratio upon transfer	1
Number of shares converted into Class A shares (in shares)	55,474,180
Class B common stock | Maximum
Common stock
Aggregate number of shares outstanding Class A common stock and Class B common stock that will automatically convert (less than)	10.00%
Class B common stock | Minimum
Common stock
Percentage of outstanding shares of class B common stock that shall convert automatically in event of affirmative vote or written consent of holders for automatic conversion	66.67%

Equity-Based Compensation - Nar

Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2021
Site and software development costs
Equity based compensation
Equity-based compensation costs capitalized	$ (17.3)
Employee stock options
Equity based compensation
Intrinsic value of stock options exercised	4.6	$ 4.8
Aggregate intrinsic value of stock options outstanding	4.2
Aggregate intrinsic value of stock options exercisable	4.2
Restricted stock units
Equity based compensation
Intrinsic value of stock vested	562.3	$ 358.6
Aggregate intrinsic value of stock unvested	1,300
Unrecognized equity-based compensation	$ 728.3
Weighted average remaining vesting term	1 year 2 months 12 days
2014 Plan
Equity based compensation
Number of shares available for future grant (in shares)	8,603,066
2014 Plan | Subsequent Event
Equity based compensation
Number of shares available for future grant (in shares)			6,224,792

Equity-Based Compensation - Sum

Equity-Based Compensation - Summary of Activity Related to Stock Options (Details ) - Employee stock options - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Shares
Outstanding at the beginning of the period (in shares)	43,606
Options exercised (in shares)	(24,560)
Outstanding and exercisable at the end of the period (in shares)	19,046	43,606
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 3
Options exercised (in dollars per share)	3.01
Outstanding and exercisable at the end of the period (in dollars per share)	$ 2.99	$ 3
Weighted-Average Remaining Contractual Term (Years)
Outstanding	6 months	1 year 6 months
Exercisable at the end of the period	6 months

Equity-Based Compensation - S_2

Equity-Based Compensation - Summary of Activity Relating to RSU's (Details) - Restricted stock units	12 Months Ended
	Dec. 31, 2020$ / sharesshares
Shares
Unvested at the beginning of the period (in shares) | shares	8,112,736
RSU's granted (in shares) | shares	2,441,898
RSUs vested (in shares) | shares	(3,015,462)
RSUs forfeited/cancelled (in shares) | shares	(1,563,873)
Unvested at the end of the period (in shares) | shares	5,975,299
Weighted-Average Grant Date Fair Value
Unvested at the beginning of the period (in dollars per share) | $ / shares	$ 95.69
RSUs granted (in dollars per share) | $ / shares	196.04
RSUs vested (in dollars per share) | $ / shares	97.15
RSUs forfeited/cancelled (in dollars per share) | $ / shares	105.42
Unvested at the end of the period (in dollars per share) | $ / shares	$ 134.03

Equity-Based Compensation - Cla

Equity-Based Compensation - Classified Equity-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Equity based compensation
Equity-based compensation	$ 276,208	$ 227,451	$ 127,564
Cost of goods sold
Equity based compensation
Equity-based compensation	9,494	5,376	2,549
Customer service and merchant fees
Equity based compensation
Equity-based compensation	14,835	9,286	5,524
Selling, operations, technology, general and administrative
Equity based compensation
Equity-based compensation	$ 251,879	$ 212,789	$ 119,491

Income Taxes - Components of Pr

Income Taxes - Components of Provision for Income Taxes, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current:
Federal	$ 0	$ 0	$ 0
State	7,817	874	744
Foreign	2,164	2,136	78
Deferred:
Federal	9,036	0	(86)
State	1,306	0	(24)
Foreign	0	0	1,325
Provision for income taxes, net	$ 20,323	$ 3,010	$ 2,037

Income Taxes - Narrative (Detai

Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating Loss Carryforwards [Line Items]
U.S. Federal statutory tax rate (as a percent)	21.00%	21.00%	21.00%
Provision for income taxes, net	$ 20,323	$ 3,010	$ 2,037
Effective tax rate (almost), percent	9.88%
Valuation allowance decrease	$ 84,800
Federal net operating loss carryforwards	1,200,000
State net operating loss carryforwards	1,000,000
Operating loss carryforwards, subject to expiration	150,700
Operating loss carryforwards not subject to expiration	1,000,000
Foreign operating loss carryforwards	949,800
Undistributed earnings of the entity's foreign subsidiaries	6,000
Foreign Tax Authority
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards, subject to expiration	$ 18,200

Income Taxes - Actual Provision

Income Taxes - Actual Provision For Income Taxes, Net Differs from Expected Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Reconciliation of the U.S. federal corporate rate to to income before tax expense (benefit), and actual tax
Provision for income taxes at the federal statutory rate	$ 43,116	$ (206,131)	$ (105,429)
State income tax expense, net of federal benefit	18,518	(40,136)	(22,584)
Foreign tax rate differential	18,591	24,346	14,976
Non-deductible equity-based compensation expense	7,671	6,604	3,267
Windfall benefits from equity-based compensation	(51,024)	(28,915)	(29,003)
Change in valuation allowance	(26,982)	236,863	119,370
Change in tax rate	(847)	(2,293)	197
Limitation on officer's compensation	8,103	6,509	5,283
Debt integration termination	0	0	9,236
Other	3,177	6,163	6,724
Provision for income taxes, net	$ 20,323	$ 3,010	$ 2,037

Income Taxes - Components of In

Income Taxes - Components of Income (Loss) Before Income Taxes Determined by Tax Jurisdiction (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income (loss) from continuing operations:
U.S.	$ 399,973	$ (699,347)	$ (327,356)
Foreign	(194,654)	(282,227)	(174,687)
Income (loss) before income taxes	$ 205,319	$ (981,574)	$ (502,043)

Income Taxes - Tax Effects of T

Income Taxes - Tax Effects of Temporary Differences That Give Rise to Significant Portions of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Accounts receivable, net	$ 5,507	$ 5,909
Inventories	1,048	871
Net operating loss carryforwards	433,543	470,199
Equity-based compensation expense	12,720	14,929
Intangibles	9,274	10,675
Accrued payroll	36,580	21,395
Accrued expenses and reserves	23,633	14,539
Charitable contributions	0	872
Leases	255,381	239,259
Gross deferred tax assets	777,686	778,648
Less: Valuation allowance	(328,116)	(412,898)
Net deferred tax assets	449,570	365,750
Deferred tax liabilities:
Prepaid expenses	(4,889)	(5,930)
Capitalized technology	(35,261)	(27,354)
Property and equipment	(41,543)	(14,191)
Operating lease right-of-use asset	(211,727)	(197,680)
Convertible debt	(167,043)	(120,447)
481(a) adjustments	(8,103)	0
Other	(1,934)	(148)
Total deferred tax liabilities	(470,500)	(365,750)
Non-current net deferred tax assets (liabilities)	$ (20,930)	$ 0

Earnings (Loss) per Share - Cal

Earnings (Loss) per Share - Calculation of Basic and Diluted Earnings (Loss ) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Numerator for basic EPS - Net income (loss)	$ 184,996	$ (984,584)	$ (504,080)
Effect of dilutive securities:
Interest expense associated with convertible debt instruments	0	0	0
Numerator for diluted EPS - net income (loss) available to common stockholders after the effect of dilutive securities	$ 184,996	$ (984,584)	$ (504,080)
Denominator:
Denominator for basic EPS - weighted-average number of shares of common stock outstanding (in shares)	95,825	92,200	89,472
Effect of dilutive securities:
Convertible debt instruments (in shares)	0	0	0
Dilutive potential common shares (in shares)	3,512	0	0
Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities (in shares)	99,337	92,200	89,472
Earnings (loss) per share:
Basic (in dollars per share)	$ 1.93	$ (10.68)	$ (5.63)
Diluted (in dollars per shares)	$ 1.86	$ (10.68)	$ (5.63)
Employee stock options
Effect of dilutive securities:
Incremental common shares attributable to dilutive effect of share-based payment award (in shares)	29	0	0
Restricted stock units
Effect of dilutive securities:
Incremental common shares attributable to dilutive effect of share-based payment award (in shares)	3,483	0	0

Earnings (Loss) per Share - Ant

Earnings (Loss) per Share - Antidilutive Securities (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares)	20,307	23,631	17,155
Outstanding employee stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares)	0	44	80
Unvested restricted common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares)	0	0	20
Unvested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares)	192	8,113	7,971
Shares related to convertible debt instruments
Antidilutive Securities Excluded from Computation of Earnings Per Share
Common stock outstanding that have been excluded from the computation of diluted earnings (loss) per share (in shares)	20,115	15,474	9,084

Earnings (Loss) per Share - Sch

Earnings (Loss) per Share - Schedule of Shares of Stock Potentially Issuable for Convertible Debt and Capped Call Transactions (Details) - Convertible Debt - Class A common stock shares in Thousands	12 Months Ended
	Dec. 31, 2020shares
2022 Notes / 2022 Capped Calls
Class of Stock
Shares potentially issuable from convertible debt instruments (in shares)	173
Shares obtainable from the exercise of capped call transactions (in shares)	(1,347)
Total (in shares)	(1,174)
2024 Notes / 2024 Capped Calls
Class of Stock
Shares potentially issuable from convertible debt instruments (in shares)	4,940
Shares obtainable from the exercise of capped call transactions (in shares)	(2,322)
Total (in shares)	2,618
2026 Notes / 2026 Capped Calls
Class of Stock
Shares potentially issuable from convertible debt instruments (in shares)	6,390
Shares obtainable from the exercise of capped call transactions (in shares)	(3,003)
Total (in shares)	3,387
2025 Accreting Notes
Class of Stock
Shares potentially issuable from convertible debt instruments (in shares)	3,979
Shares obtainable from the exercise of capped call transactions (in shares)	0
Total (in shares)	3,979
2025 Notes / 2025 Capped Calls
Class of Stock
Shares potentially issuable from convertible debt instruments (in shares)	3,639
Shares obtainable from the exercise of capped call transactions (in shares)	(1,710)
Total (in shares)	1,929

Segment and Geographic Inform_3

Segment and Geographic Information - Net Revenues and Adjusted EBITDA (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information
Total net revenue	$ 14,145,156	$ 9,127,057	$ 6,779,174
Adjusted EBITDA	946,888	(496,544)	(214,986)
Less: reconciling items	(761,892)	(488,040)	(289,094)
Net income (loss)	184,996	(984,584)	(504,080)
Depreciation and amortization	285,711	192,419	123,542
Equity-based compensation and related taxes	296,872	240,978	136,415
Interest (expense), net	146,397	54,514	28,560
Other expense (income), net	8,633	(2,881)	204
Provision for income taxes, net	20,323	3,010	2,037
Other	3,956	0	(1,664)
Total reconciling items	761,892	488,040	289,094
Selling, operations, technology, general and administrative	1,830,090	1,624,706	1,025,767
Severance Costs
Segment Reporting Information
Selling, operations, technology, general and administrative	4,000
One-time Termination Benefits
Segment Reporting Information
Selling, operations, technology, general and administrative			1,700
U.S.
Segment Reporting Information
Total net revenue	11,900,658	7,764,831	5,813,070
Adjusted EBITDA	1,041,892	(179,010)	(19,049)
International
Segment Reporting Information
Total net revenue	2,244,498	1,362,226	966,104
Adjusted EBITDA	$ (95,004)	$ (317,534)	$ (195,937)

Segment and Geographic Inform_4

Segment and Geographic Information - Long-lived Assets by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Geographic long-lived assets:
Long-lived assets	$ 1,492,681	$ 1,387,944
Plus: reconciling corporate long-lived assets
Geographic long-lived assets:
Long-lived assets	610,247	511,178
Operating Segments | U.S.
Geographic long-lived assets:
Long-lived assets	718,681	731,963
Operating Segments | International
Geographic long-lived assets:
Long-lived assets	163,753	144,803
Total reportable segment long-lived assets
Geographic long-lived assets:
Long-lived assets	$ 882,434	$ 876,766

Segment and Geographic Inform_5

Segment and Geographic Information - Assets by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets by segment:
Total assets	$ 4,569,929	$ 2,953,048
Plus: reconciling corporate assets
Assets by segment:
Total assets	3,232,831	1,686,148
Operating Segments | U.S.
Assets by segment:
Total assets	1,122,391	1,076,733
Operating Segments | International
Assets by segment:
Total assets	214,707	190,167
Segment Reconciling Items
Assets by segment:
Total assets	$ 1,337,098	$ 1,266,900

Related Party Transactions (Det

Related Party Transactions (Details) - 2025 Accreting Notes - Convertible Debt - USD ($)	Dec. 31, 2020	Apr. 30, 2020	Apr. 07, 2020	Dec. 31, 2019
Related Party Transaction
Principal Amount	$ 288,464,000	$ 535,000,000		$ 0
Director
Related Party Transaction
Principal Amount			$ 535,000,000