Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 14, 2022 | Jun. 30, 2021 | |
Document Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
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 | $ 23.7 | ||
Documents Incorporated by Reference | Certain sections of the registrant's definitive Proxy Statement for the 2022 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 | 2021 | ||
Document Fiscal Period Focus | FY | ||
Class A common stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 79,395,944 | ||
Class B common stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 25,691,729 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Boston, Massachusetts |
Auditor Firm ID | 42 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 1,706 | $ 2,130 |
Short-term investments | 693 | 462 |
Accounts receivable, net | 226 | 110 |
Inventories | 69 | 52 |
Prepaid expenses and other current assets | 318 | 292 |
Total current assets | 3,012 | 3,046 |
Operating lease right-of-use assets | 849 | 808 |
Property and equipment, net | 674 | 684 |
Other non-current assets | 35 | 32 |
Total assets | 4,570 | 4,570 |
Current liabilities | ||
Accounts payable | 1,166 | 1,157 |
Other current liabilities | 1,051 | 1,009 |
Total current liabilities | 2,217 | 2,166 |
Long-term debt | 3,052 | 2,659 |
Operating lease liabilities, net of current | 892 | 870 |
Other non-current liabilities | 28 | 67 |
Total liabilities | 6,189 | 5,762 |
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, 2021 and 2020 | 0 | 0 |
Additional paid-in capital | 337 | 699 |
Accumulated deficit | (1,949) | (1,886) |
Accumulated other comprehensive loss | (7) | (5) |
Total stockholders' deficit | (1,619) | (1,192) |
Total liabilities and stockholders' deficit | 4,570 | 4,570 |
Class A common stock | ||
Stockholders’ deficit: | ||
Common stock | 0 | 0 |
Class B common stock | ||
Stockholders’ deficit: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
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) | 79,150,937 | 72,980,490 |
Common stock, shares outstanding (in shares) | 79,150,937 | 72,980,490 |
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) | 25,691,761 | 26,564,234 |
Common stock, shares outstanding (in shares) | 25,691,761 | 26,564,234 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Net revenue | $ 13,708 | $ 14,145 | $ 9,127 |
Cost of goods sold | 9,813 | 10,033 | 6,980 |
Gross profit | 3,895 | 4,112 | 2,147 |
Operating expenses: | |||
Customer service and merchant fees | 584 | 510 | 357 |
Advertising | 1,378 | 1,412 | 1,096 |
Selling, operations, technology, general and administrative | 2,015 | 1,830 | 1,624 |
Customer service center impairment and other charges | 12 | 0 | 0 |
Total operating expenses | 3,989 | 3,752 | 3,077 |
(Loss) income from operations | (94) | 360 | (930) |
Interest expense, net | (32) | (146) | (55) |
Other (expense), net | (4) | (9) | 3 |
(Loss) income before income taxes | (130) | 205 | (982) |
Provision for income taxes, net | 1 | 20 | 3 |
Net (loss) income | $ (131) | $ 185 | $ (985) |
(Loss) earnings per share: | |||
Basic (in dollars per share) | $ (1.26) | $ 1.93 | $ (10.68) |
Diluted (in dollars per shares) | $ (1.26) | $ 1.86 | $ (10.68) |
Weighted-average number of shares of common stock outstanding used in computing per share amounts: | |||
Basic (in shares) | 104 | 96 | 92 |
Diluted (in shares) | 104 | 99 | 92 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (131) | $ 185 | $ (985) |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (2) | (3) | 0 |
Comprehensive (loss) income | $ (133) | $ 182 | $ (985) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) shares in Millions, $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Class A and Class B Common Stock | Additional Paid-In Capital | Additional Paid-In CapitalCumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2018 | 91 | |||||||
Beginning balance at Dec. 31, 2018 | $ (331) | $ 3 | $ 0 | $ 754 | $ (1,083) | $ 3 | $ (2) | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net (loss) income | (985) | (985) | ||||||
Issuance of common stock upon vesting of RSUs (in shares) | 3 | |||||||
Shares withheld related to net settlement of RSUs | (2) | (2) | ||||||
Equity-based compensation expense | $ 240 | 240 | ||||||
Cumulative effect of adopting new accounting standard | Accounting Standards Update 2016-02 [Member] | |||||||
Equity component of issuance of convertible notes, net of premium paid on capped calls (Note 6) | $ 131 | 131 | ||||||
Ending balance (in shares) at Dec. 31, 2019 | 94 | |||||||
Ending balance at Dec. 31, 2019 | (944) | (6) | $ 0 | 1,123 | (2,065) | (6) | (2) | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net (loss) income | 185 | 185 | ||||||
Other comprehensive income (loss) | (3) | (3) | ||||||
Issuance of common stock upon vesting of RSUs (in shares) | 3 | |||||||
Equity-based compensation expense | $ 294 | 294 | ||||||
Cumulative effect of adopting new accounting standard | Accounting Standards Update 2016-13 [Member] | |||||||
Repurchase of common stock (in shares) | (1) | |||||||
Repurchase of common stock | $ (380) | (380) | ||||||
Shares issued upon conversion of convertible notes (Note 6) (in shares) | 4 | |||||||
Shares issued upon conversion of convertible notes (Note 6) | 426 | 426 | ||||||
Reacquisition of equity component from repurchases and conversions of convertible notes, net of taxes (Note 6) | (842) | (842) | ||||||
Equity component of issuance of convertible notes, net of premium paid on capped calls (Note 6) | 78 | 78 | ||||||
Ending balance (in shares) at Dec. 31, 2020 | 100 | |||||||
Ending balance at Dec. 31, 2020 | (1,192) | $ (631) | $ 0 | 699 | $ (699) | (1,886) | $ 68 | (5) |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net (loss) income | (131) | (131) | ||||||
Other comprehensive income (loss) | (2) | (2) | ||||||
Issuance of common stock upon vesting of RSUs (in shares) | 2 | |||||||
Equity-based compensation expense | $ 372 | 372 | ||||||
Cumulative effect of adopting new accounting standard | Adoption of ASU 2020-06 | |||||||
Repurchase of common stock (in shares) | (1) | |||||||
Repurchase of common stock | $ (300) | (300) | ||||||
Shares issued upon conversion of convertible notes (Note 6) (in shares) | 4 | |||||||
Shares issued upon conversion of convertible notes (Note 6) | 265 | 265 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 105 | |||||||
Ending balance at Dec. 31, 2021 | $ (1,619) | $ 0 | $ 337 | $ (1,949) | $ (7) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from (for) operating activities: | |||
Net (loss) income | $ (131) | $ 185 | $ (985) |
Adjustments to reconcile net (loss) income to net cash flows from (for) operating activities | |||
Depreciation and amortization | 322 | 286 | 192 |
Equity-based compensation | 344 | 276 | 227 |
Amortization of discount and issuance costs on convertible notes | 7 | 134 | 62 |
Loss on impairment | 12 | 0 | 0 |
Other non-cash adjustments | 6 | 13 | (2) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (118) | (15) | (49) |
Inventories | (17) | 10 | (15) |
Prepaid expenses and other current assets | (28) | (61) | (32) |
Other assets | 0 | (1) | (1) |
Accounts payable and other current liabilities | 9 | 532 | 393 |
Other liabilities | 4 | 58 | 13 |
Net cash flows from (for) operating activities | 410 | 1,417 | (197) |
Cash flows for investing activities: | |||
Purchase of short- and long-term investments | (989) | (481) | (554) |
Sale and maturities of short- and long-term investments | 749 | 580 | 115 |
Purchase of property and equipment | (101) | (186) | (272) |
Site and software development costs | (179) | (149) | (129) |
Other investing activities, net | 5 | 0 | (15) |
Net cash flows for investing activities | (515) | (236) | (855) |
Cash flows (for) from financing activities: | |||
Proceeds from borrowings | 0 | 200 | 0 |
Repayment of borrowings | 0 | (200) | 0 |
Proceeds from issuance of convertible notes, net of issuance costs | 0 | 2,028 | 935 |
Premiums paid for capped call confirmations | 0 | (255) | (145) |
Payments to extinguish convertible debt | 0 | (1,040) | 0 |
Repurchase of common stock | (300) | (380) | 0 |
Other financing activities, net | (3) | 0 | (3) |
Net cash flows (for) from financing activities | (303) | 353 | 787 |
Effect of exchange rate changes on cash and cash equivalents | (16) | 13 | (2) |
Net (decrease) increase in cash and cash equivalents | (424) | 1,547 | (267) |
Cash and cash equivalents: | |||
Beginning of year | 2,130 | 583 | 850 |
End of year | 1,706 | 2,130 | 583 |
Supplemental Cash Flow Information: | |||
Cash paid for interest on long-term debt | 27 | 17 | 8 |
Non-cash impact to equity upon conversion of convertible notes, net of taxes | 265 | 307 | 0 |
Purchase of property and equipment included in accounts payable and other liabilities | $ 41 | $ 30 | $ 41 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
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 thirty-three million products from over 23,000 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. Fairway Insurance Inc. U.S. Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair Deutschland Ltd. & Co. KG Germany CastleGate Logistics Canada Inc. Canada Wayfair Canada ULC Canada CastleGate Logistics Hong Kong Limited Hong Kong Wayfair (BVI) Ltd. British Virgin Islands Wayfair Shanghai Ltd. China Wayfair Poland sp. z o.o Poland In the current year, Wayfair changed its presentation from thousands to millions. As a result of the change in presentation, prior period amounts in the consolidated financial statements and notes thereto have been reclassified to conform to current period presentation and certain current and prior period amounts may not recalculate due to rounding. 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. 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 and certificates of deposits with original maturities of three months or less, are carried at cost, which approximates fair value. Investments Wayfair classifies investments in certificates of deposits and marketable securities with original maturities of greater than three months as short-term investments and long-term investments on our consolidated balance sheets. 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. From time to time, Wayfair may enter into equity investments that align with our organizational strategies and growth initiatives. Equity investments in companies for which we do not have the ability to exercise significant influence are accounted for at estimated fair value, with adjustments for observable changes in prices or impairments, and are classified as other non-current assets on our consolidated balance sheets with adjustments recognized in other (expense) income, net on our consolidated statements of operations. Each reporting period, we perform a qualitative assessment to evaluate whether each investment is impaired. Our assessment includes a review of recent operating results and trends, recent sales or acquisitions of the investee securities and other readily observable information. If the investment is impaired, we write it down to its estimated fair value. Equity investments are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control, over an investee, and we classify equity-method investments as other non-current assets on our consolidated balance sheets. Our share of the earnings or losses as reported by equity-method investees, amortization of basis differences, related gains or losses, and impairments, if any, are recognized in our consolidated statements of operations. Each reporting period, we evaluate whether declines in fair value below carrying value are other-than-temporary and if so, we write down the investment to its estimated fair value. Concentrations of Credit Risk Financial instruments that subject Wayfair to credit risk consist of cash and cash equivalents, short-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, 2021 and 2020, Wayfair had $187 million and $281 million in banks located outside of the U.S. The risk for short-term investments is minimized by Wayfair's policy of investing in financial instruments issued by highly-rated financial institutions. Accounts Receivable, 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, 2021 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, Net 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. 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 as a single lease component for our corporate headquarters offices and field offices. For all other lease arrangements, we account for lease and non-lease components separately. 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, 2021 and 2020 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 (BVI) Ltd. Euro Wayfair (UK) Limited Pound sterling CastleGate Logistics Canada Inc. Canadian dollar Wayfair Canada ULC Canadian dollar CastleGate Logistics Hong Kong Limited Hong Kong dollar Wayfair Shanghai Ltd. Yuan Wayfair Poland sp. z.o.o. Polish zloty 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 (loss) income below net (loss) income 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 (loss) income. Revenue Recognition Wayfair primarily generates 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 within other current liabilities, 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 within other current liabilities, 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 the price we pay to suppliers for products purchased by Wayfair, 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 $2.1 billion, $2.0 billion and $1.4 billion, for the years ended December 31, 2021, 2020 and 2019. 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 $275 million, $268 million and $180 million in the years ended December 31, 2021, 2020 and 2019. 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. 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. (Loss) Earnings Per Share Wayfair follows the two-class method when computing (loss) earnings per share for its two issued classes of common stock - Class A and Class B. Basic (loss) earnings per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted (loss) earnings 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 (loss) earnings 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 (loss) earnings per share under the if-converted method. For periods in which Wayfair has reported net losses, diluted (loss) earnings per share is the same as basic (loss) earnings 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 (loss) earnings per share. Wayfair allocates undistributed earnings between the classes on a one-to-one basis when computing (loss) earnings per share. As a result, basic and diluted (loss) earnings per Class A and Class B shares are equivalent. Adoption of New Accounting Principles Convertible Debt Wayfair adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") on January 1, 2021 using the modified retrospective approach for all financial instruments that are outstanding as of the adoption date. The new standard eliminates the cash conversion and beneficial conversion feature models that previously required separate accounting for conversion features. Entities that had those conversion features will report less interest expense as those conversion features were recorded as debt discounts which were amortized over the term of the debt. In addition, this ASU requires the application of the if-converted method when calculating diluted earnings per share. Under the new standard, the conversion of debt that is accounted for as a liability in its entirety will not result in any gain or loss if the conversion feature is exercised according to the original conversion terms. If those terms allowed the issuer to include cash as part of the settlement of the conversion feature, the issuer will first reduce the carrying amount of the convertible debt, including any unamortized premium, discount or issuance costs, by the value of the cash or other assets transferred and then recognize the remaining carrying value of the debt in the capital accounts. The adoption of ASU 2020-06 resulted in the following adjustments to the consolidated balance sheets: January 1, 2021 Adoption of ASU 2020-06 December 31, (in millions) Balance sheet line item: Long-term debt $ 3,310 $ 651 $ 2,659 Other non-current liabilities $ 47 $ (20) $ 67 Additional paid-in capital $ — $ (699) $ 699 Accumulated deficit $ (1,818) $ 68 $ (1,886) The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted loss per share for the year ended December 31, 2021: Under ASU 2020-06 Difference Under Legacy Accounting Loss per share: Basic $ (1.26) $ 1.33 $ (2.59) Diluted $ (1.26) $ 1.33 $ (2.59) The adoption of ASU 2020-06 did not materially impact our cash flows or compliance with debt covenants. Income Taxes Wayfair adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes on January 1, 2021, using the modified retrospective approach. This ASU simplifies the accounting for income taxes, removes certain exceptions to the general principles in Topic 740, and clarifies and amends existing guidance to improve consistent application. The effect of adoption of the new guidance was not material to our consolidated financial statements. |
Supplemental Financial Statemen
Supplemental Financial Statement Disclosures | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Components Disclosure [Abstract] | |
Supplemental Financial Statement Disclosures | 2. Supplemental Financial Statement Disclosures Accounts Receivable, Net As of December 31, 2021, we reported accounts receivable of $226 million, net of allowance for credit losses of $12 million. As of December 31, 2020, we reported accounts receivable of $110 million, net of allowance for credit losses of $21 million. The changes in the allowance for credit losses were not material for the year ended December 31, 2021. Management believes credit risk is mitigated since approximately 99% of the net revenue recognized for the year ended December 31, 2021 was collected in advance of recognition. Prepaid Expenses and Other Current Assets The following table presents the components of prepaid expenses and other current assets as of December 31, 2021 and 2020: December 31, 2021 2020 (in millions) Prepaid expenses and other current assets: Deferred costs in transit $ 122 $ 156 Prepaid expenses 93 50 Supplier receivables and credits receivable 70 62 Other current assets 33 24 Total prepaid expenses and other current assets $ 318 $ 292 Other Non-current Assets The following table presents the components of other non-current assets as of December 31, 2021 and 2020: December 31, 2021 2020 (in millions) Other non-current assets: Goodwill and intangible assets, net $ 16 $ 17 Other non-current assets 19 15 Total other non-current assets $ 35 $ 32 Amortization expense related to intangible assets was $1 million, $2 million and $1 million for the years ended December 31, 2021, 2020 and 2019. Goodwill was $0.4 million for the years ended December 31, 2021 and 2020. For the years ended December 31, 2021, 2020 and 2019, 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, 2021 and 2020: December 31, 2021 2020 (in millions) Other current liabilities: Unearned revenue $ 299 $ 293 Employee compensation and related benefits 176 155 Short-term lease liability (Note 5) 110 97 Advertising 83 90 Sales tax payable 61 105 Sales return allowance 61 73 Other accrued expenses and current liabilities 261 196 Total other current liabilities $ 1,051 $ 1,009 Contractual liabilities included in unearned revenue and other accrued expenses and current liabilities were $299 million and $7 million, respectively, at December 31, 2021, and $293 million and $6 million, respectively, at December 31, 2020. During the year ended December 31, 2021, Wayfair recognized $237 million and $5 million of net revenue included in unearned revenue and other accrued expenses and current liabilities, which was recorded as of December 31, 2020. |
Cash and Cash Equivalents, Inve
Cash and Cash Equivalents, Investments and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 and 2020, 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. Wayfair did not have any realized gains nor losses during the years ended December 31, 2021 and 2019. During the year ended December 31, 2020, Wayfair collected $161 million of proceeds from the sale of long-term investments and recognized a realized gain of $1 million. During the years ended December 31, 2021, December 31, 2020 and December 31, 2019, Wayfair did not recognize any credit losses related to its available-for-sale debt securities. Further, as of December 31, 2021 and December 31, 2020, Wayfair did not record an allowance for credit losses related to its available-for-sale debt securities. In the second quarter of 2021, Wayfair entered into an agreement with a vendor in which Wayfair received warrants to acquire shares of the vendor’s common stock. In the third quarter of 2021, the vendor completed an initial public offering of its common stock. As of December 31, 2021, these warrants, which vest over a five-year period, were valued at approximately $3 million and were classified in other non-current assets. We recorded a decrease in the fair value of the warrants in the year ended December 31, 2021 of $3 million in other (expense) income, net on our consolidated statements of operations. Furthermore, we have committed to make $20 million of other equity investments in connection with our impact investment initiatives. In 2021, Wayfair made a $5 million initial investment which was accounted for under the equity method and presented in other non-current assets. The following tables present details of Wayfair’s investment securities as of December 31, 2021 and 2020: December 31, 2021 Amortized Gross Gross Estimated (in millions) Short-term: Investment securities $ 693 $ — $ — $ 693 Total $ 693 $ — $ — $ 693 December 31, 2020 Amortized Gross Gross Estimated (in millions) Short-term: Investment securities $ 462 $ — $ — $ 462 Total $ 462 $ — $ — $ 462 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-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, 2021 and 2020: December 31, 2021 Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents: Cash $ 906 $ — $ — $ 906 Cash equivalents 800 — — 800 Total cash and cash equivalents 1,706 — — 1,706 Short-term investments: Investment securities — 693 — 693 Total $ 1,706 $ 693 $ — $ 2,399 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents: Cash $ 639 $ — $ — $ 639 Cash equivalents 1,491 — — 1,491 Total cash and cash equivalents 2,130 — — 2,130 Short-term investments: Investment securities — 462 — 462 Other non-current assets: Certificate of deposit 5 — — 5 Total $ 2,135 $ 462 $ — $ 2,597 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 and 2020: December 31, 2021 2020 (in millions) Furniture and computer equipment $ 557 $ 528 Site and software development costs 592 431 Leasehold improvements 457 399 Construction in progress 35 29 1,641 1,387 Less: Accumulated depreciation and amortization (967) (703) Property and equipment, net $ 674 $ 684 Depreciation and amortization expense was $322 million, $284 million and $192 million, of which $171 million, $132 million and $82 million was attributable to the amortization expense of site and software development costs for the years ended December 31, 2021, 2020 and 2019. For the year ended December 31, 2021, in connection with the consolidation of certain customer service centers in identified U.S. locations, we recorded a charge of $5 million for the non-cash accelerated depreciation of fixed assets. Refer to Note 5, Leases |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | 5. Leases Wayfair has lease arrangements for warehouses, 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 2036. Operating lease expense was $160 million, $159 million and $122 million in 2021, 2020 and 2019. Sublease income was $17 million in 2021 and $11 million in 2020 and immaterial in 2019. The following table presents other information related to leases: Year Ended December 31, 2021 2020 2019 (in millions) Supplemental cash flows information: Cash payments included in operating cash flows from lease arrangements $ 169 $ 157 $ 109 Right-of-use assets obtained in exchange for lease obligations $ 183 $ 134 $ 301 December 31, 2021 December 31, December 31, Additional lease information: Weighted average remaining lease term 8 years 8 years 10 years Weighted average discount rate 6.0 % 6.5 % 6.7 % Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows: Amount (in millions) 2022 $ 162 2023 181 2024 177 2025 168 2026 155 Thereafter 422 Total future minimum lease payments 1,265 Less: Imputed interest (263) Total $ 1,002 The following table presents total operating leases liabilities: December 31, 2021 December 31, (in millions) Balance sheet line item: Other current liabilities $ 110 $ 97 Operating lease liabilities 892 870 Total operating leases liabilities $ 1,002 $ 967 As of December 31, 2021, the Company has entered into $304 million of additional operating leases, primarily related to build-to-suit warehouse and retail leases that have not yet commenced. As the Company does not control the underlying assets during the construction period, the company is not considered the owner of the construction project for accounting purposes. These operating leases will commence between 2022 and 2026 with lease terms of 2 to 20 years. Customer service center impairment and other charges During the year ended December 31, 2021, we enacted a plan to consolidate certain customer service centers in identified U.S. locations. As a result, we recorded a charge of $12 million during the year ended December 31, 2021, which included $6 million for the non-cash impairment of ROU assets, $5 million for the non-cash accelerated depreciation of fixed assets and the remainder for other items. |
Debt and Other Financing
Debt and Other Financing | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 December 31, 2020 Debt Instrument Principal Amount Unamortized Debt Discount Net Carrying Amount Principal Amount Unamortized Debt Discount Net Carrying Amount (in millions) Revolving Credit Facility $ — $ — 2022 Notes $ 3 $ — 3 $ 18 $ (2) 16 2024 Notes 575 (6) 569 575 (133) 442 2026 Notes 949 (9) 940 949 (243) 706 2025 Notes 1,518 (13) 1,505 1,518 (290) 1,228 2025 Accreting Notes 36 (1) 35 289 (22) 267 Total Debt $ 3,052 $ 2,659 Short-term debt $ — $ — Long-term debt $ 3,052 $ 2,659 Revolving Credit Facility On March 24, 2021, Wayfair and certain of its subsidiaries (together, the “Guarantors”) and Wayfair LLC, a wholly-owned subsidiary of Wayfair, as borrower (the “Borrower”), entered into a new credit agreement (the “Credit Agreement”) with the lending institutions from time-to-time parties thereto and Citibank, N.A., in its capacity as administrative agent, collateral agent, swingline lender and a letter of credit issuer. The Credit Agreement provides for a $600 million senior secured revolving credit facility that matures on March 24, 2026 (the “Revolver”). The Revolver replaced our previous $200 million senior secured revolving credit facility (the “Previous Revolver”), which was set to mature on February 21, 2022. Wayfair paid all amounts owed under the Previous Revolver and terminated all lending commitments thereunder. Debt issuance costs for the Revolver are included in other non-current assets and are amortized to interest expense over the Revolver’s term. There were no revolving loans outstanding under the Revolver as of December 31, 2021. Under the Credit Agreement, the Borrower may, from time to time, request letters of credit, which reduce the availability of credit under the Revolver. Wayfair had approximately $59 million outstanding letters of credit as of December 31, 2021, primarily as security for lease agreements, which reduced 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, the Borrower is required to make certain mandatory prepayments prior to maturity. The proceeds of the Revolver may be used to finance working capital, to refinance existing indebtedness and to provide funds for permitted acquisitions, repurchases of equity interests and other general corporate purposes. The Borrower’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’s domestic subsidiaries and 65% of the capital stock of Wayfair’s first-tier foreign subsidiaries. On October 11, 2021, the parties amended the Credit Agreement ("Amendment No. 1") to reflect technical and administrative changes related to the phase out of LIBOR and the implementation of SONIA with respect to loans denominated in Pounds Sterling. Following Amendment No. 1, the Revolver borrowings bear interest through maturity at a variable rate based upon, at the Borrower’s option, (i) the LIBOR rate, (ii) the base rate (which is the highest of (x) the 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 LIBOR rate) or (3) with respect to loans denominated in Pounds Sterling, the RFR rate (which is the greater of (x) the SONIA rate and (y) 0.00%), plus, in each case an applicable margin. As of December 31, 2021, the applicable margin for LIBOR loans is 1.25% per annum, the applicable margin for base rate loans is 0.25% per annum and the applicable margin for RFR loans is 1.2826% per annum. The applicable margin is subject to specified changes depending on Wayfair’s Consolidated Senior Secured Debt to Consolidated EBITDA Ratio, as defined in the Credit Agreement. The Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict the ability of the Borrower 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, or 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 Credit Agreement requires Wayfair to maintain a Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (as defined in the Credit Agreement) of 4.0 to 1.0, subject to a 0.5 step-up following certain permitted acquisitions. We do not expect any of these restrictions to affect or limit our ability to conduct business in the ordinary course. As of December 31, 2021, 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% 0.9% March 1 and September 1 2024 Notes November 1, 2024 1.125% 1.5% May 1 and November 1 2026 Notes August 15, 2026 1.00% 1.2% February 15 and August 15 2025 Notes October 1, 2025 0.625% 0.9% 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 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 2.7%. 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), 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, 2022: the 2022 Notes, the 2024 Notes and the 2026 Notes. The 2025 Notes are not convertible during the first quarter of 2022. 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 the Notes After the Adoption of ASU 2020-06 Wayfair adopted ASU 2020-06 on January 1, 2021 as further described in Note 1, Summary of Significant Accounting Policies . Following the adoption of ASU 2020-06, the Notes are recorded as a single unit within liabilities in the consolidated balance sheets as the conversion features within the Notes are not derivatives that require bifurcation and the Notes do not involve a substantial premium. Transaction costs to issue the Notes were recorded as direct deductions from the related debt liabilities and amortized to interest expense using the effective interest method over the terms of the corresponding Notes. Interest for the Accreting Notes is amortized to interest expense, net using the effective interest method over the term of the Accreting Notes and recorded to other long-term liabilities in the consolidated balance sheets. 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. Accounting for the Notes Before the Adoption of ASU 2020-06 Prior to the adoption of ASU 2020-06, 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 $96 million, $182 million, $280 million and $297 million, respectively, were included in additional paid-in capital and were not remeasured as long as they continued 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. In accounting for the issuance of the 2025 Accreting Notes, Wayfair determined there was a beneficial conversion feature, which represented 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 million was recorded to additional paid-in capital and represented 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 were amortized to interest expense using the effective interest method over the term of the 2025 Accreting Notes. Interest for the 2025 Accreting Notes was 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 reclassified 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, was recorded as additional interest expense and additional paid-in capital over the term of the 2025 Accreting Notes as such interest accrued. 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 million, $562 million, $935 million, $1.5 billion and $527 million, respectively, after deducting the initial purchasers’ discounts, if applicable, and the offering expenses payable by Wayfair. We used approximately $44 million, $93 million, $146 million and $255 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). Conversions of Notes in 2021 After the Adoption of ASU 2020-06 During the year ended December 31, 2021, holders of the 2022 Notes and 2026 Notes converted $15 million of aggregate principal and received 147,414 shares of Wayfair’s Class A common stock. During the year ended December 31, 2021, Great Hill converted $253 million of accreted principal of the 2025 Accreting Notes and received 3,490,175 shares of Wayfair's Class A common stock. In aggregate, these conversions increased additional paid-in capital by $265 million for the year ended December 31, 2021 Extinguishment and Conversions of Notes in 2020 Before the Adoption of ASU 2020-06 During the year ended December 31, 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 million in aggregate principal amount of the 2022 Notes. Additionally, in 2020, $70 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 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 $13 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 $369 million carrying value, net of the remaining unamortized debt discount and debt issuance costs. Wayfair applied the $832 million residual value of the total fair value of the consideration to the equity component in additional paid-in capital. During the year ended December 31, 2020, Charlesbank converted $253 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 $20 million was immediately recognized as interest expense in the fourth quarter of 2020. Interest Expense The following table presents total interest expense recognized for the Notes for the years ended December 31: Year Ended December 31, 2021 2020 Convertible Notes Contractual Interest Expense Debt Discount Amortization Total Interest Expense Contractual Interest Expense Debt Discount Amortization Total Interest Expense (in millions) 2022 Notes $ — $ — $ — $ 1 $ 14 $ 15 2024 Notes 7 2 9 6 28 34 2026 Notes 9 2 11 10 35 45 2025 Notes 10 3 13 4 20 24 2025 Accreting Notes (1) — (1) 8 26 34 Total $ 25 $ 7 $ 32 $ 29 $ 123 $ 152 Fair Value of Notes The estimated fair value of the 2022 Notes, 2024 Notes, 2026 Notes, 2025 Notes and 2025 Accreting Notes was $5 million, $1.0 billion, $1.4 billion, $1.4 billion and $95 million, respectively, as of December 31, 2021. 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 $2 million, $363 million, $265 million and $59 million, respectively, as of December 31, 2021. The if-converted value of the 2025 Notes did not exceed the principal value as of December 31, 2021. 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, 2021 | |
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 and freight commitments. Our payments due under these purchase obligations are $237 million in 2022, $36 million in 2023, $29 million in 2024, $1 million in 2025, 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, 2021 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 was named as a nominal defendant. The derivative complaint primarily alleged that the director defendants breached their fiduciary duties with respect to Wayfair’s issuance of the 2025 Accreting Notes, and further alleged that the non-director defendants were unjustly enriched on the basis of the issuance. The complaint asserted causes of action for breach of fiduciary duty and unjust enrichment and sought |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
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 $35 million, $32 million and $28 million in the years ended December 31, 2021, 2020 and 2019. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021, 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 79,150,937 and 72,980,490 shares of Class A common stock and 25,691,761 and 26,564,234 shares of Class B common stock were outstanding as of December 31, 2021 and 2020. 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, 2021, 56,346,653 shares of Class B common stock were converted to Class A common stock. Stock Repurchase Program On August 21, 2020, the Board authorized the repurchase of up to $700 million of Wayfair’s Class A common stock in the open market, through privately negotiated transactions, or otherwise, including pursuant to a Rule 10b5-1 plan (the “2020 Repurchase Program”). On August 10, 2021, the Board authorized a new $1.0 billion share repurchase program on the same terms (the “2021 Repurchase Program”, together with the 2020 Repurchase Program, the "Repurchase Programs"). There is no stated expiration for the Repurchase Programs. Wayfair will begin repurchasing shares under the 2021 Repurchase Program upon the completion of the 2020 Repurchase Program. During the years ended December 31, 2021 and December 31, 2020, Wayfair repurchased $300 million and $380 million under authorized stock repurchase programs at an average price of $305.43 and $302.71 per share of Class A common stock, respectively. In 2022, Wayfair repurchased approximately $75 million under the Repurchase Programs at an average price of $136.80 per share of Class A common stock. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
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, 2022, 6,443,150 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, 2021: Shares Weighted-Average Weighted-Average Outstanding at December 31, 2020 19,046 $ 2.99 0.5 Options exercised (19,026) $ 2.99 Options forfeited/canceled (20) 3.42 Outstanding and exercisable at December 31, 2021 — $ — — The intrinsic value of stock options exercised was $6 million and $5 million for the years ended December 31, 2021 and 2020. The following table presents activity relating to RSUs for the year ended December 31, 2021: Shares Weighted-Average Unvested at December 31, 2020 5,975,299 $ 134.03 RSUs granted 3,094,056 $ 269.88 RSUs vested (2,624,087) $ 128.36 RSUs forfeited/canceled (1,215,560) $ 172.28 Outstanding as of December 31, 2021 5,229,708 $ 208.62 The intrinsic value of RSUs vested was $735 million and $562 million for the years ended December 31, 2021 and 2020. The aggregate intrinsic value of RSUs unvested was $1.0 billion as of December 31, 2021. Unrecognized equity-based compensation expense related to RSUs expected to vest over time is $992 million with a weighted-average remaining vesting term of 1.3 years as of December 31, 2021. Equity-based compensation was classified as follows in the consolidated statements of operations for the years ended December 31: Year Ended December 31, 2021 2020 2019 (in millions) Cost of goods sold $ 12 $ 9 $ 5 Customer service and merchant fees 25 15 9 Selling, operations, technology, general and administrative 307 252 213 Total equity-based compensation $ 344 $ 276 $ 227 Equity-based compensation costs capitalized as site and software development costs were $28 million and $17 million for the years ended December 31, 2021 and December 31, 2020. The amount qualifying for capitalization during the year ended December 31, 2019 was not material. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The components of the provision for income taxes, net for the years ended December 31, 2021, 2020 and 2019 are presented below: 2021 2020 2019 (in millions) Current: Federal $ — $ — $ — State (1) 8 1 Foreign 1 2 2 Deferred: Federal — 9 — State 1 1 — Foreign — — — Provision for income taxes, net $ 1 $ 20 $ 3 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, 2021 2020 2019 (in millions) (Benefit) provision for income taxes at the federal statutory rate $ (27) $ 43 $ (206) State income tax expense, net of federal benefit (1) 19 (40) Foreign tax rate differential 26 19 24 Non-deductible equity-based compensation expense 9 7 6 Windfall benefits from equity-based compensation (70) (51) (29) Change in valuation allowance 97 (27) 237 Limitation on officer's compensation 6 8 7 Intangible property basis step-up (43) — — Other 4 2 4 Provision for income taxes, net $ 1 $ 20 $ 3 The components of (loss) income before income taxes determined by tax jurisdiction, are as follows: Year Ended December 31, 2021 2020 2019 (in millions) U.S. $ 171 $ 400 $ (700) Foreign (301) (195) (282) Total $ (130) $ 205 $ (982) 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, 2021 2020 (in millions) Deferred tax assets: Accounts receivable $ 3 $ 6 Inventories 2 1 Net operating loss carryforwards 499 434 Equity-based compensation expense 18 13 Intangible property 51 9 Accrued payroll 31 36 Accrued expenses and reserves 22 24 Leases 269 255 Other 1 — Gross deferred tax assets 896 778 Less: Valuation allowance (568) (328) Net deferred tax assets 328 450 Deferred tax liabilities: Prepaid expenses $ (8) $ (5) Capitalized technology (42) (35) Property and equipment (35) (42) Operating lease right-of-use asset (228) (212) Convertible debt (8) (167) 481(a) adjustments (5) (8) Other (3) (2) Total deferred tax liabilities (329) (471) Non-current net deferred tax liabilities $ (1) $ (21) The valuation allowance increased by $240 million during 2021. The increase in the valuation allowance is the result of Wayfair establishing a valuation allowance related to the current year operating losses, the adoption of ASU 2020-06, the basis adjustment to intangible property, and adjustments to our operating loss carryforwards when we filed our returns. 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, 2021, we maintained a full valuation allowance against substantially all of our worldwide net deferred tax assets. As of December 31, 2021, Wayfair had federal net operating loss carryforwards available to offset future federal taxable income of $1.3 billion. In addition, Wayfair had state net operating loss carryforwards available in the amount of $1.1 billion which are available to offset future state taxable income. Of the federal net operating loss carryforwards, $163 million begin to expire in the year ending December 31, 2037. The remaining $1.2 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, 2021, we have determined that none of our tax attributes were subject to such a restrictive limitation. As of December 31, 2021, Wayfair also had foreign net operating loss carryforwards available to offset future foreign income of $1.2 billion. The Canadian net operating loss of $33 million will expire in the year ending December 31, 2038. The remaining foreign net operating loss carryforwards do not expire. As of December 31, 2021, Wayfair has not provided for deferred income taxes on outside basis differences in its foreign subsidiaries of approximately $309 million since these basis differences are deemed to be indefinitely reinvested, or it is within the control of Wayfair to recognize these basis differences on a tax-free basis. Upon realization of the outside basis differences 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 outside basis differences, if realized, is expected to be 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, 2021 and 2020 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 2021, 2020 or 2019 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 2018. 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. |
(Loss) Earnings per Share
(Loss) Earnings per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings per Share | 12. (Loss) Earnings per Share The following table presents the calculation of basic and diluted (loss) earnings per share: Year Ended December 31, 2021 2020 2019 (in millions, except per share data) Numerator: Numerator for basic EPS - Net (loss) income $ (131) $ 185 $ (985) Effect of dilutive securities: Interest expense associated with convertible debt instruments — — — Numerator for diluted EPS - net (loss) income available to common stockholders after the effect of dilutive securities $ (131) $ 185 $ (985) Denominator: Denominator for basic EPS - weighted-average number of shares of common stock outstanding 104 96 92 Effect of dilutive securities: Restricted stock units — 3 — Convertible debt instruments — — — Dilutive potential common shares — 3 — Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 104 99 92 (Loss) Earnings per Share: Basic $ (1.26) $ 1.93 $ (10.68) Diluted $ (1.26) $ 1.86 $ (10.68) The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted (loss) earnings per share were as follows: Year Ended December 31, 2021 2020 2019 (in millions) Unvested restricted stock units 5 — 8 Shares related to convertible debt instruments 15 20 16 Total 20 20 24 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 to the extent the market price per share of Wayfair’s Class A common stock is greater than the strike price of the Capped Calls (which corresponds to the initial conversion prices of the Non-Accreting Notes, subject to certain adjustments under the terms of the Capped Calls), with such reduction and/or offset capped at the Initial Cap Price. As of December 31, 2021, the number of shares of Wayfair's Class A common stock potentially issuable at the respective conversion prices of the 2022 Notes, 2024 Notes, 2026 Notes, 2025 Notes and 2025 Accreting Notes is 25,976 shares, 4,939,825 shares, 6,389,662 shares, 3,638,950 shares and 500,917 shares. Under the Capped Calls outstanding as of December 31, 2021, the maximum cash value obtainable of the 2022 Capped Calls, 2024 Capped Calls, 2026 Capped Calls and 2025 Capped Calls, if exercised at maturity, is $208 million, $510 million, $841 million and $1.3 billion. For more information on the structure of the Notes and the Capped Calls, see Note 6, Debt and Other Financing . |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2021 | |
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 (loss) income 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, 2021 2020 2019 (in millions) U.S. net revenue $ 11,249 $ 11,901 $ 7,765 International net revenue 2,459 2,244 1,362 Total net revenue $ 13,708 $ 14,145 $ 9,127 Year Ended December 31, 2021 2020 2019 (in millions) Adjusted EBITDA: U.S. $ 782 $ 1,042 $ (179) International (168) (95) (318) Total reportable segments Adjusted EBITDA 614 947 (497) Less: reconciling items (1) (745) (762) (488) Net (loss) income $ (131) $ 185 $ (985) (1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net (loss) income: Year Ended December 31, 2021 2020 2019 (in millions) Depreciation and amortization $ 322 $ 286 $ 192 Equity-based compensation and related taxes 374 297 241 Interest expense, net 32 146 55 Other expense (income), net 4 9 (3) Provision for income taxes, net 1 20 3 Other (1) 12 4 — Total reconciling items $ 745 $ 762 $ 488 (1) In the year ended December 31, 2021, we recorded $12 million of customer service center impairment and other charges related to our plan to consolidate customer service centers. In the year ended December 31, 2020, we recorded a $4 million charge in selling, operations, technology, general and administrative expenses for severance costs associated with February 2020 workforce reductions. The following table presents long-lived assets attributable to Wayfair's reportable segments reconciled to the amounts: Year Ended December 31, 2021 2020 (in millions) Geographic long-lived assets: U.S. $ 690 $ 718 International 247 164 Total reportable segment long-lived assets 937 882 Plus: reconciling corporate long-lived assets 586 610 Total long-lived assets $ 1,523 $ 1,492 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, 2021 2020 (in millions) Assets by segment: U.S. $ 1,234 $ 1,122 International 315 215 Total reportable segment assets 1,549 1,337 Plus: reconciling corporate assets 3,021 3,233 Total assets $ 4,570 $ 4,570 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
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 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, 2021 | |
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 thirty-three million products from over 23,000 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. Fairway Insurance Inc. U.S. Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair Deutschland Ltd. & Co. KG Germany CastleGate Logistics Canada Inc. Canada Wayfair Canada ULC Canada CastleGate Logistics Hong Kong Limited Hong Kong Wayfair (BVI) Ltd. British Virgin Islands Wayfair Shanghai Ltd. China Wayfair Poland sp. z o.o Poland In the current year, Wayfair changed its presentation from thousands to millions. As a result of the change in presentation, prior period amounts in the consolidated financial statements and notes thereto have been reclassified to conform to current period presentation and certain current and prior period amounts may not recalculate due to rounding. |
Use of Estimates | Use of EstimatesWe 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. |
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 and certificates of deposits with original maturities of three months or less, are carried at cost, which approximates fair value. |
Investments | Investments Wayfair classifies investments in certificates of deposits and marketable securities with original maturities of greater than three months as short-term investments and long-term investments on our consolidated balance sheets. 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. From time to time, Wayfair may enter into equity investments that align with our organizational strategies and growth initiatives. Equity investments in companies for which we do not have the ability to exercise significant influence are accounted for at estimated fair value, with adjustments for observable changes in prices or impairments, and are classified as other non-current assets on our consolidated balance sheets with adjustments recognized in other (expense) income, net on our consolidated statements of operations. Each reporting period, we perform a qualitative assessment to evaluate whether each investment is impaired. Our assessment includes a review of recent operating results and trends, recent sales or acquisitions of the investee securities and other readily observable information. If the investment is impaired, we write it down to its estimated fair value. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that subject Wayfair to credit risk consist of cash and cash equivalents, short-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, 2021 and 2020, Wayfair had $187 million and $281 million in banks located outside of the U.S. The risk for short-term investments is minimized by Wayfair's policy of investing in financial instruments issued by highly-rated financial institutions. |
Accounts Receivables, Net | Accounts Receivable, 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, 2021 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, Net 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. 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 as a single lease component for our corporate headquarters offices and field offices. For all other lease arrangements, we account for lease and non-lease components separately. 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, 2021 and 2020 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 (BVI) Ltd. Euro Wayfair (UK) Limited Pound sterling CastleGate Logistics Canada Inc. Canadian dollar Wayfair Canada ULC Canadian dollar CastleGate Logistics Hong Kong Limited Hong Kong dollar Wayfair Shanghai Ltd. Yuan Wayfair Poland sp. z.o.o. Polish zloty 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 (loss) income below net (loss) income 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 (loss) income. |
Revenue Recognition | Revenue Recognition Wayfair primarily generates 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. |
Costs of Goods Sold | Cost of Goods Sold Costs of goods sold consists of: Product Costs: Wayfair capitalizes into inventory the price we pay to suppliers for products purchased by Wayfair, 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. |
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 $275 million, $268 million and $180 million in the years ended December 31, 2021, 2020 and 2019. |
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. 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. |
(Loss) Earnings Per Share | (Loss) Earnings Per Share Wayfair follows the two-class method when computing (loss) earnings per share for its two issued classes of common stock - Class A and Class B. Basic (loss) earnings per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted (loss) earnings 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 (loss) earnings 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 (loss) earnings per share under the if-converted method. For periods in which Wayfair has reported net losses, diluted (loss) earnings per share is the same as basic (loss) earnings 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 (loss) earnings per share. Wayfair allocates undistributed earnings between the classes on a one-to-one basis when computing (loss) earnings per share. As a result, basic and diluted (loss) earnings per Class A and Class B shares are equivalent. |
Adoption of New Accounting Principle and New Accounting Pronouncements | Adoption of New Accounting Principles Convertible Debt Wayfair adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") on January 1, 2021 using the modified retrospective approach for all financial instruments that are outstanding as of the adoption date. The new standard eliminates the cash conversion and beneficial conversion feature models that previously required separate accounting for conversion features. Entities that had those conversion features will report less interest expense as those conversion features were recorded as debt discounts which were amortized over the term of the debt. In addition, this ASU requires the application of the if-converted method when calculating diluted earnings per share. Under the new standard, the conversion of debt that is accounted for as a liability in its entirety will not result in any gain or loss if the conversion feature is exercised according to the original conversion terms. If those terms allowed the issuer to include cash as part of the settlement of the conversion feature, the issuer will first reduce the carrying amount of the convertible debt, including any unamortized premium, discount or issuance costs, by the value of the cash or other assets transferred and then recognize the remaining carrying value of the debt in the capital accounts. The adoption of ASU 2020-06 resulted in the following adjustments to the consolidated balance sheets: January 1, 2021 Adoption of ASU 2020-06 December 31, (in millions) Balance sheet line item: Long-term debt $ 3,310 $ 651 $ 2,659 Other non-current liabilities $ 47 $ (20) $ 67 Additional paid-in capital $ — $ (699) $ 699 Accumulated deficit $ (1,818) $ 68 $ (1,886) The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted loss per share for the year ended December 31, 2021: Under ASU 2020-06 Difference Under Legacy Accounting Loss per share: Basic $ (1.26) $ 1.33 $ (2.59) Diluted $ (1.26) $ 1.33 $ (2.59) The adoption of ASU 2020-06 did not materially impact our cash flows or compliance with debt covenants. Income Taxes Wayfair adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes on January 1, 2021, using the modified retrospective approach. This ASU simplifies the accounting for income taxes, removes certain exceptions to the general principles in Topic 740, and clarifies and amends existing guidance to improve consistent application. The effect of adoption of the new guidance was not material to our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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. Fairway Insurance Inc. U.S. Wayfair Stores Limited Republic of Ireland Wayfair (UK) Limited United Kingdom Wayfair Deutschland Ltd. & Co. KG Germany CastleGate Logistics Canada Inc. Canada Wayfair Canada ULC Canada CastleGate Logistics Hong Kong Limited Hong Kong Wayfair (BVI) Ltd. British Virgin Islands Wayfair Shanghai Ltd. China Wayfair Poland sp. z o.o Poland |
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 (BVI) Ltd. Euro Wayfair (UK) Limited Pound sterling CastleGate Logistics Canada Inc. Canadian dollar Wayfair Canada ULC Canadian dollar CastleGate Logistics Hong Kong Limited Hong Kong dollar Wayfair Shanghai Ltd. Yuan Wayfair Poland sp. z.o.o. Polish zloty |
Schedule of Adoption of ASU 2020-06 | The adoption of ASU 2020-06 resulted in the following adjustments to the consolidated balance sheets: January 1, 2021 Adoption of ASU 2020-06 December 31, (in millions) Balance sheet line item: Long-term debt $ 3,310 $ 651 $ 2,659 Other non-current liabilities $ 47 $ (20) $ 67 Additional paid-in capital $ — $ (699) $ 699 Accumulated deficit $ (1,818) $ 68 $ (1,886) The adoption of ASU 2020-06 resulted in the following adjustments to our calculations of basic and diluted loss per share for the year ended December 31, 2021: Under ASU 2020-06 Difference Under Legacy Accounting Loss per share: Basic $ (1.26) $ 1.33 $ (2.59) Diluted $ (1.26) $ 1.33 $ (2.59) |
Supplemental Financial Statem_2
Supplemental Financial Statement Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 and 2020: December 31, 2021 2020 (in millions) Prepaid expenses and other current assets: Deferred costs in transit $ 122 $ 156 Prepaid expenses 93 50 Supplier receivables and credits receivable 70 62 Other current assets 33 24 Total prepaid expenses and other current assets $ 318 $ 292 |
Components of Other Noncurrent Assets | The following table presents the components of other non-current assets as of December 31, 2021 and 2020: December 31, 2021 2020 (in millions) Other non-current assets: Goodwill and intangible assets, net $ 16 $ 17 Other non-current assets 19 15 Total other non-current assets $ 35 $ 32 |
Components of Other Current Liabilities | The following table presents the components of other current liabilities as of December 31, 2021 and 2020: December 31, 2021 2020 (in millions) Other current liabilities: Unearned revenue $ 299 $ 293 Employee compensation and related benefits 176 155 Short-term lease liability (Note 5) 110 97 Advertising 83 90 Sales tax payable 61 105 Sales return allowance 61 73 Other accrued expenses and current liabilities 261 196 Total other current liabilities $ 1,051 $ 1,009 |
Cash and Cash Equivalents, In_2
Cash and Cash Equivalents, Investments and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Marketable Securities | The following tables present details of Wayfair’s investment securities as of December 31, 2021 and 2020: December 31, 2021 Amortized Gross Gross Estimated (in millions) Short-term: Investment securities $ 693 $ — $ — $ 693 Total $ 693 $ — $ — $ 693 December 31, 2020 Amortized Gross Gross Estimated (in millions) Short-term: Investment securities $ 462 $ — $ — $ 462 Total $ 462 $ — $ — $ 462 |
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, 2021 and 2020: December 31, 2021 Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents: Cash $ 906 $ — $ — $ 906 Cash equivalents 800 — — 800 Total cash and cash equivalents 1,706 — — 1,706 Short-term investments: Investment securities — 693 — 693 Total $ 1,706 $ 693 $ — $ 2,399 December 31, 2020 Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents: Cash $ 639 $ — $ — $ 639 Cash equivalents 1,491 — — 1,491 Total cash and cash equivalents 2,130 — — 2,130 Short-term investments: Investment securities — 462 — 462 Other non-current assets: Certificate of deposit 5 — — 5 Total $ 2,135 $ 462 $ — $ 2,597 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, net | The following table summarizes property and equipment, net as of December 31, 2021 and 2020: December 31, 2021 2020 (in millions) Furniture and computer equipment $ 557 $ 528 Site and software development costs 592 431 Leasehold improvements 457 399 Construction in progress 35 29 1,641 1,387 Less: Accumulated depreciation and amortization (967) (703) Property and equipment, net $ 674 $ 684 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Other Information Related to Leases | The following table presents other information related to leases: Year Ended December 31, 2021 2020 2019 (in millions) Supplemental cash flows information: Cash payments included in operating cash flows from lease arrangements $ 169 $ 157 $ 109 Right-of-use assets obtained in exchange for lease obligations $ 183 $ 134 $ 301 December 31, 2021 December 31, December 31, Additional lease information: Weighted average remaining lease term 8 years 8 years 10 years Weighted average discount rate 6.0 % 6.5 % 6.7 % |
Future Minimum Lease Payments | Future minimum lease payments under non-cancellable leases as of December 31, 2021 were as follows: Amount (in millions) 2022 $ 162 2023 181 2024 177 2025 168 2026 155 Thereafter 422 Total future minimum lease payments 1,265 Less: Imputed interest (263) Total $ 1,002 |
Operating Leases, Balance Sheet Items | The following table presents total operating leases liabilities: December 31, 2021 December 31, (in millions) Balance sheet line item: Other current liabilities $ 110 $ 97 Operating lease liabilities 892 870 Total operating leases liabilities $ 1,002 $ 967 |
Debt and Other Financing (Table
Debt and Other Financing (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 December 31, 2020 Debt Instrument Principal Amount Unamortized Debt Discount Net Carrying Amount Principal Amount Unamortized Debt Discount Net Carrying Amount (in millions) Revolving Credit Facility $ — $ — 2022 Notes $ 3 $ — 3 $ 18 $ (2) 16 2024 Notes 575 (6) 569 575 (133) 442 2026 Notes 949 (9) 940 949 (243) 706 2025 Notes 1,518 (13) 1,505 1,518 (290) 1,228 2025 Accreting Notes 36 (1) 35 289 (22) 267 Total Debt $ 3,052 $ 2,659 Short-term debt $ — $ — Long-term debt $ 3,052 $ 2,659 |
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% 0.9% March 1 and September 1 2024 Notes November 1, 2024 1.125% 1.5% May 1 and November 1 2026 Notes August 15, 2026 1.00% 1.2% February 15 and August 15 2025 Notes October 1, 2025 0.625% 0.9% 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, 2021 2020 Convertible Notes Contractual Interest Expense Debt Discount Amortization Total Interest Expense Contractual Interest Expense Debt Discount Amortization Total Interest Expense (in millions) 2022 Notes $ — $ — $ — $ 1 $ 14 $ 15 2024 Notes 7 2 9 6 28 34 2026 Notes 9 2 11 10 35 45 2025 Notes 10 3 13 4 20 24 2025 Accreting Notes (1) — (1) 8 26 34 Total $ 25 $ 7 $ 32 $ 29 $ 123 $ 152 |
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, 2021 | |
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, 2021: Shares Weighted-Average Weighted-Average Outstanding at December 31, 2020 19,046 $ 2.99 0.5 Options exercised (19,026) $ 2.99 Options forfeited/canceled (20) 3.42 Outstanding and exercisable at December 31, 2021 — $ — — |
Activity Relating to Restricted Stock Units | The following table presents activity relating to RSUs for the year ended December 31, 2021: Shares Weighted-Average Unvested at December 31, 2020 5,975,299 $ 134.03 RSUs granted 3,094,056 $ 269.88 RSUs vested (2,624,087) $ 128.36 RSUs forfeited/canceled (1,215,560) $ 172.28 Outstanding as of December 31, 2021 5,229,708 $ 208.62 |
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, 2021 2020 2019 (in millions) Cost of goods sold $ 12 $ 9 $ 5 Customer service and merchant fees 25 15 9 Selling, operations, technology, general and administrative 307 252 213 Total equity-based compensation $ 344 $ 276 $ 227 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021, 2020 and 2019 are presented below: 2021 2020 2019 (in millions) Current: Federal $ — $ — $ — State (1) 8 1 Foreign 1 2 2 Deferred: Federal — 9 — State 1 1 — Foreign — — — Provision for income taxes, net $ 1 $ 20 $ 3 |
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, 2021 2020 2019 (in millions) (Benefit) provision for income taxes at the federal statutory rate $ (27) $ 43 $ (206) State income tax expense, net of federal benefit (1) 19 (40) Foreign tax rate differential 26 19 24 Non-deductible equity-based compensation expense 9 7 6 Windfall benefits from equity-based compensation (70) (51) (29) Change in valuation allowance 97 (27) 237 Limitation on officer's compensation 6 8 7 Intangible property basis step-up (43) — — Other 4 2 4 Provision for income taxes, net $ 1 $ 20 $ 3 |
Schedule of Components of Income Tax Expense (Benefit) Determined by Tax Jurisdiction | The components of (loss) income before income taxes determined by tax jurisdiction, are as follows: Year Ended December 31, 2021 2020 2019 (in millions) U.S. $ 171 $ 400 $ (700) Foreign (301) (195) (282) Total $ (130) $ 205 $ (982) |
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, 2021 2020 (in millions) Deferred tax assets: Accounts receivable $ 3 $ 6 Inventories 2 1 Net operating loss carryforwards 499 434 Equity-based compensation expense 18 13 Intangible property 51 9 Accrued payroll 31 36 Accrued expenses and reserves 22 24 Leases 269 255 Other 1 — Gross deferred tax assets 896 778 Less: Valuation allowance (568) (328) Net deferred tax assets 328 450 Deferred tax liabilities: Prepaid expenses $ (8) $ (5) Capitalized technology (42) (35) Property and equipment (35) (42) Operating lease right-of-use asset (228) (212) Convertible debt (8) (167) 481(a) adjustments (5) (8) Other (3) (2) Total deferred tax liabilities (329) (471) Non-current net deferred tax liabilities $ (1) $ (21) |
(Loss) Earnings per Share (Tabl
(Loss) Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 (loss) earnings per share: Year Ended December 31, 2021 2020 2019 (in millions, except per share data) Numerator: Numerator for basic EPS - Net (loss) income $ (131) $ 185 $ (985) Effect of dilutive securities: Interest expense associated with convertible debt instruments — — — Numerator for diluted EPS - net (loss) income available to common stockholders after the effect of dilutive securities $ (131) $ 185 $ (985) Denominator: Denominator for basic EPS - weighted-average number of shares of common stock outstanding 104 96 92 Effect of dilutive securities: Restricted stock units — 3 — Convertible debt instruments — — — Dilutive potential common shares — 3 — Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities 104 99 92 (Loss) Earnings per Share: Basic $ (1.26) $ 1.93 $ (10.68) Diluted $ (1.26) $ 1.86 $ (10.68) |
Schedule of Antidilutive Securities Excluded from Computation of (Loss) Earnings Per Share | The potential common shares from anti-dilutive securities excluded from the weighted-average shares of common stock used to calculate diluted (loss) earnings per share were as follows: Year Ended December 31, 2021 2020 2019 (in millions) Unvested restricted stock units 5 — 8 Shares related to convertible debt instruments 15 20 16 Total 20 20 24 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 2020 2019 (in millions) U.S. net revenue $ 11,249 $ 11,901 $ 7,765 International net revenue 2,459 2,244 1,362 Total net revenue $ 13,708 $ 14,145 $ 9,127 Year Ended December 31, 2021 2020 2019 (in millions) Adjusted EBITDA: U.S. $ 782 $ 1,042 $ (179) International (168) (95) (318) Total reportable segments Adjusted EBITDA 614 947 (497) Less: reconciling items (1) (745) (762) (488) Net (loss) income $ (131) $ 185 $ (985) (1) The following adjustments are made to reconcile total reportable segments Adjusted EBITDA to consolidated net (loss) income: Year Ended December 31, 2021 2020 2019 (in millions) Depreciation and amortization $ 322 $ 286 $ 192 Equity-based compensation and related taxes 374 297 241 Interest expense, net 32 146 55 Other expense (income), net 4 9 (3) Provision for income taxes, net 1 20 3 Other (1) 12 4 — Total reconciling items $ 745 $ 762 $ 488 (1) In the year ended December 31, 2021, we recorded $12 million of customer service center impairment and other charges related to our plan to consolidate customer service centers. In the year ended December 31, 2020, we recorded a $4 million charge in selling, operations, technology, general and administrative expenses for severance costs associated with February 2020 workforce reductions. |
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, 2021 2020 (in millions) Geographic long-lived assets: U.S. $ 690 $ 718 International 247 164 Total reportable segment long-lived assets 937 882 Plus: reconciling corporate long-lived assets 586 610 Total long-lived assets $ 1,523 $ 1,492 |
Assets By Segment | The following table presents total assets attributable to Wayfair's reportable segments reconciled to consolidated amounts: Year Ended December 31, 2021 2020 (in millions) Assets by segment: U.S. $ 1,234 $ 1,122 International 315 215 Total reportable segment assets 1,549 1,337 Plus: reconciling corporate assets 3,021 3,233 Total assets $ 4,570 $ 4,570 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) supplier in Thousands | 12 Months Ended | |||
Dec. 31, 2021USD ($)classsupplier | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements | ||||
Number of suppliers providing products offered (over) | supplier | 23 | |||
Concentrations of Credit Risk | ||||
Cash and cash equivalents and short-term investments held in banks located outside the U.S. | $ 187,000,000 | $ 281,000,000 | ||
Collection in advance of recognition | 99.00% | |||
Leases | ||||
Finance lease arrangements | $ 0 | 0 | ||
Cost of Goods Sold | ||||
Cost of goods sold | 9,813,000,000 | 10,033,000,000 | $ 6,980,000,000 | |
Merchant Processing Fees | ||||
Merchant processing fees | 275,000,000 | 268,000,000 | 180,000,000 | |
Customer service center impairment and other charges | ||||
Customer service center impairment and other charges | 12,000,000 | 0 | 0 | |
Impairment of right-of-use (“ROU”) assets | 6,000,000 | |||
Accelerated depreciation of fixed assets | $ 5,000,000 | |||
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 | $ 1,619,000,000 | 1,192,000,000 | 944,000,000 | $ 331,000,000 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
Adoption of New Accounting Principle – Allowance for Credit Losses | ||||
Adoption of ASU, cumulative adjustment | 631,000,000 | 6,000,000 | (3,000,000) | |
Shipping and Fulfillment | ||||
Cost of Goods Sold | ||||
Cost of goods sold | 2,100,000,000 | 2,000,000,000 | 1,400,000,000 | |
Retained Earnings | ||||
Adoption of New Accounting Principle – Allowance for Credit Losses | ||||
Adoption of ASU, cumulative adjustment | $ 1,949,000,000 | 1,886,000,000 | 2,065,000,000 | 1,083,000,000 |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | ||||
Adoption of New Accounting Principle – Allowance for Credit Losses | ||||
Adoption of ASU, cumulative adjustment | $ (68,000,000) | $ 6,000,000 | $ (3,000,000) | |
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 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Adoption of ASU 2020-06 (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Long-term debt | $ 3,052 | $ 2,659 | $ 3,310 | |
Other non-current liabilities | 28 | 67 | 47 | |
Additional paid-in capital | 337 | 699 | 0 | |
Accumulated deficit | $ (1,949) | $ (1,886) | (1,818) | |
Basic (in dollars per share) | $ (1.26) | $ 1.93 | $ (10.68) | |
Diluted (in dollars per shares) | (1.26) | $ 1.86 | $ (10.68) | |
Difference | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Basic (in dollars per share) | 1.33 | |||
Diluted (in dollars per shares) | 1.33 | |||
Under Legacy Accounting | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Basic (in dollars per share) | (2.59) | |||
Diluted (in dollars per shares) | $ (2.59) | |||
Adoption of ASU 2020-06 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Long-term debt | 651 | |||
Other non-current liabilities | (20) | |||
Additional paid-in capital | (699) | |||
Accumulated deficit | $ 68 |
Supplemental Financial Statem_3
Supplemental Financial Statement Disclosures - Accounts Receivable, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Balance Sheet Components Disclosure [Abstract] | ||
Accounts receivable, net | $ 226 | $ 110 |
Accounts receivable allowance | $ 12 | $ 21 |
Collection in advance of recognition | 99.00% |
Supplemental Financial Statem_4
Supplemental Financial Statement Disclosures - Components of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid expenses and other current assets: | ||
Deferred costs in transit | $ 122 | $ 156 |
Prepaid expenses | 93 | 50 |
Supplier receivables and credits receivable | 70 | 62 |
Other current assets | 33 | 24 |
Total prepaid expenses and other current assets | $ 318 | $ 292 |
Supplemental Financial Statem_5
Supplemental Financial Statement Disclosures - Components of Other Noncurrent Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Other non-current assets: | ||
Goodwill and intangible assets, net | $ 16 | $ 17 |
Other non-current assets: | 19 | 15 |
Total other non-current assets | $ 35 | $ 32 |
Supplemental Financial Statem_6
Supplemental Financial Statement Disclosures - Other Noncurrent Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Balance Sheet Components Disclosure [Abstract] | |||
Amortization expense related to intangible assets | $ 1,000,000 | $ 2,000,000 | $ 1,000,000 |
Goodwill | 400,000 | 400,000 | |
Impairment of goodwill or intangible assets | 0 | 0 | $ 0 |
Unearned revenue | $ 299,000,000 | $ 293,000,000 |
Supplemental Financial Statem_7
Supplemental Financial Statement Disclosures - Components of Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Other current liabilities: | ||
Unearned revenue | $ 299 | $ 293 |
Employee compensation and related benefits | 176 | 155 |
Short-term lease liability | 110 | 97 |
Advertising | 83 | 90 |
Sales tax payable | 61 | 105 |
Sales return allowance | 61 | 73 |
Other accrued expenses and current liabilities | 261 | 196 |
Total other current liabilities | $ 1,051 | $ 1,009 |
Supplemental Financial Statem_8
Supplemental Financial Statement Disclosures - Other Current Liabilities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Other Current Liabilities | ||
Contract liabilities | $ 299 | $ 293 |
Unearned revenue | ||
Other Current Liabilities | ||
Contract liabilities | 293 | |
Revenue recognized that was included in deferred revenue | 237 | |
Other current liabilities | ||
Other Current Liabilities | ||
Contract liabilities | 7 | $ 6 |
Revenue recognized that was included in deferred revenue | $ 5 |
Cash and Cash Equivalents, In_3
Cash and Cash Equivalents, Investments and Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Debt securities, available-for-sale, realized gain | $ 0 | $ 1,000,000 | $ 0 | |
Allowance for credit losses | 0 | 0 | $ 0 | |
Credit losses recognized | $ 0 | 0 | 0 | |
Other equity investments | 20,000,000 | 20,000,000 | ||
Equity method investments | $ 5,000,000 | $ 5,000,000 | ||
Long-term Investment securities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Proceeds from sale of investments | $ 161,000,000 | |||
Warrant | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||||
Vesting period | 5 years | |||
Payments to acquire other investments | $ 3,000,000 | |||
Change in the value of the warrants | $ (3,000,000) |
Cash and Cash Equivalents, In_4
Cash and Cash Equivalents, Investments and Fair Value Measurements - Schedule of Marketable Securities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair value measurements | ||
Amortized Cost | $ 693 | $ 462 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 693 | 462 |
Short-term Investment securities | ||
Fair value measurements | ||
Amortized Cost | 693 | 462 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 693 | $ 462 |
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 Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair value measurements | ||
Cash and cash equivalents | $ 1,706 | $ 2,130 |
Total | 2,399 | 2,597 |
Investment securities | ||
Fair value measurements | ||
Short term investments | 693 | 462 |
Certificate of deposit | ||
Fair value measurements | ||
Other non-current assets | 5 | |
Cash | ||
Fair value measurements | ||
Cash and cash equivalents | 906 | 639 |
Cash equivalents | ||
Fair value measurements | ||
Cash and cash equivalents | 800 | 1,491 |
Level 1 | ||
Fair value measurements | ||
Cash and cash equivalents | 1,706 | 2,130 |
Total | 1,706 | 2,135 |
Level 1 | Investment securities | ||
Fair value measurements | ||
Short term investments | 0 | 0 |
Level 1 | Certificate of deposit | ||
Fair value measurements | ||
Other non-current assets | 5 | |
Level 1 | Cash | ||
Fair value measurements | ||
Cash and cash equivalents | 906 | 639 |
Level 1 | Cash equivalents | ||
Fair value measurements | ||
Cash and cash equivalents | 800 | 1,491 |
Level 2 | ||
Fair value measurements | ||
Cash and cash equivalents | 0 | 0 |
Total | 693 | 462 |
Level 2 | Investment securities | ||
Fair value measurements | ||
Short term investments | 693 | 462 |
Level 2 | Certificate of deposit | ||
Fair value measurements | ||
Other non-current assets | 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 |
Level 3 | Certificate of deposit | ||
Fair value measurements | ||
Other non-current assets | 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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment, net | |||
Property and equipment, gross | $ 1,641,000,000 | $ 1,387,000,000 | |
Less: Accumulated depreciation and amortization | (967,000,000) | (703,000,000) | |
Property and equipment, net | 674,000,000 | 684,000,000 | |
Depreciation and amortization | 322,000,000 | 284,000,000 | $ 192,000,000 |
Impairment of long-lived assets | 0 | 0 | |
Furniture and computer equipment | |||
Property and equipment, net | |||
Property and equipment, gross | 557,000,000 | 528,000,000 | |
Site and software development costs | |||
Property and equipment, net | |||
Property and equipment, gross | 592,000,000 | 431,000,000 | |
Depreciation and amortization | 171,000,000 | 132,000,000 | $ 82,000,000 |
Capitalized computer software, accumulated amortization | 193,000,000 | 158,000,000 | |
Leasehold improvements | |||
Property and equipment, net | |||
Property and equipment, gross | 457,000,000 | 399,000,000 | |
Construction in progress | |||
Property and equipment, net | |||
Property and equipment, gross | $ 35,000,000 | $ 29,000,000 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and equipment, net | |||
Depreciation and amortization | $ 322,000,000 | $ 284,000,000 | $ 192,000,000 |
Accelerated depreciation of fixed assets | 5,000,000 | ||
Impairment of long-lived assets | 0 | 0 | |
Site and software development costs | |||
Property and equipment, net | |||
Depreciation and amortization | 171,000,000 | 132,000,000 | $ 82,000,000 |
Capitalized computer software, accumulated amortization | $ 193,000,000 | $ 158,000,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description | |||
Operating lease expense | $ 160 | $ 159 | $ 122 |
Sublease income | 17 | 11 | |
Leases not yet commenced | 304 | ||
Customer service center impairment and other charges | 12 | $ 0 | $ 0 |
Impairment of right-of-use (“ROU”) assets | 6 | ||
Accelerated depreciation of fixed assets | $ 5 | ||
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 | 20 years |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental cash flows information: | |||
Cash payments included in operating cash flows from lease arrangements | $ 169 | $ 157 | $ 109 |
Right-of-use assets obtained in exchange for lease obligations | $ 183 | $ 134 | $ 301 |
Additional lease information: | |||
Weighted average remaining lease term | 8 years | 8 years | 10 years |
Weighted average discount rate | 6.00% | 6.50% | 6.70% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 162 | |
2023 | 181 | |
2024 | 177 | |
2025 | 168 | |
2026 | 155 | |
Thereafter | 422 | |
Total future minimum lease payments | 1,265 | |
Less: Imputed interest | (263) | |
Total | $ 1,002 | $ 967 |
Leases - Operating Leases Balan
Leases - Operating Leases Balance Sheet Location (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Other current liabilities | $ 110 | $ 97 |
Operating lease liabilities | 892 | 870 |
Total operating leases liabilities | $ 1,002 | $ 967 |
Other current liabilities | Other current liabilities | Other current liabilities |
Debt and Other Financing - Sche
Debt and Other Financing - Schedule of Outstanding Principal and Carrying Value (Details) - USD ($) | Dec. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | Aug. 31, 2020 | Apr. 30, 2020 | Aug. 31, 2019 | Nov. 30, 2018 | Sep. 30, 2017 |
Debt Instrument | ||||||||
Long-term Debt, Total | $ 3,052,000,000 | $ 3,310,000,000 | $ 2,659,000,000 | |||||
Convertible Debt | ||||||||
Debt Instrument | ||||||||
Long-term Debt, Total | 3,052,000,000 | 2,659,000,000 | ||||||
Short-term debt | 0 | 0 | ||||||
Convertible Debt | 2022 Notes | ||||||||
Debt Instrument | ||||||||
Principal Amount | 3,000,000 | 18,000,000 | $ 431,250,000 | |||||
Unamortized Debt Discount | 0 | (2,000,000) | ||||||
Long-term Debt, Total | 3,000,000 | 16,000,000 | $ 369,000,000 | |||||
Convertible Debt | 2024 Notes | ||||||||
Debt Instrument | ||||||||
Principal Amount | 575,000,000 | 575,000,000 | $ 575,000,000 | |||||
Unamortized Debt Discount | (6,000,000) | (133,000,000) | ||||||
Long-term Debt, Total | 569,000,000 | 442,000,000 | ||||||
Convertible Debt | 2026 Notes | ||||||||
Debt Instrument | ||||||||
Principal Amount | 949,000,000 | 949,000,000 | $ 948,750,000 | |||||
Unamortized Debt Discount | (9,000,000) | (243,000,000) | ||||||
Long-term Debt, Total | 940,000,000 | 706,000,000 | ||||||
Convertible Debt | 2025 Notes | ||||||||
Debt Instrument | ||||||||
Principal Amount | 1,518,000,000 | 1,518,000,000 | $ 1,518,000,000 | |||||
Unamortized Debt Discount | (13,000,000) | (290,000,000) | ||||||
Long-term Debt, Total | 1,505,000,000 | 1,228,000,000 | ||||||
Convertible Debt | 2025 Accreting Notes | ||||||||
Debt Instrument | ||||||||
Principal Amount | 36,000,000 | 289,000,000 | $ 535,000,000 | |||||
Unamortized Debt Discount | (1,000,000) | (22,000,000) | ||||||
Long-term Debt, Total | 35,000,000 | 267,000,000 | ||||||
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 | Aug. 31, 2020USD ($) | Aug. 31, 2019USD ($) | Nov. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2021USD ($)dayshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($) | Mar. 24, 2021USD ($) | Jan. 01, 2021USD ($) | Apr. 30, 2020USD ($) |
Debt Instrument | |||||||||||
Long-term debt | $ 3,052,000,000 | $ 2,659,000,000 | $ 3,310,000,000 | ||||||||
Option included in issuance of notes | 0 | 2,028,000,000 | $ 935,000,000 | ||||||||
Beneficial conversion feature of notes | 78,000,000 | 131,000,000 | |||||||||
Premiums paid for capped call confirmations | $ 0 | 255,000,000 | $ 145,000,000 | ||||||||
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 | Base Rate | |||||||||||
Debt Instrument | |||||||||||
Applicable margin | 0.0025 | ||||||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument | |||||||||||
Basis spread | 1.00% | ||||||||||
Applicable margin | 0.0125 | ||||||||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) Swap Rate | |||||||||||
Debt Instrument | |||||||||||
Applicable margin | 0 | ||||||||||
Revolving Credit Facility | Risk-free Rate | |||||||||||
Debt Instrument | |||||||||||
Applicable margin | 0.012826 | ||||||||||
Senior Secured Revolving Credit Facility | |||||||||||
Debt Instrument | |||||||||||
EBITDA ratio (in percentage) | 4 | ||||||||||
Subject to step-up permitted acquisition Ratio (in percentage) | 0.5 | ||||||||||
Senior Secured Revolving Credit Facility | Revolving Credit Facility | |||||||||||
Debt Instrument | |||||||||||
Maximum borrowing capacity | $ 600,000,000 | ||||||||||
Letters of credit outstanding, amount | $ 59,000,000 | ||||||||||
Borrowing under credit agreement | 0 | ||||||||||
Senior Secured Revolving Credit Facility | Replaced Revolving Credit Facility | |||||||||||
Debt Instrument | |||||||||||
Maximum borrowing capacity | $ 200,000,000 | ||||||||||
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 | 2.70% | ||||||||||
Beneficial conversion feature of notes | 39,000,000 | ||||||||||
Convertible Debt | |||||||||||
Debt Instrument | |||||||||||
Long-term debt | 3,052,000,000 | 2,659,000,000 | |||||||||
Contractual Interest Expense | 25,000,000 | 29,000,000 | |||||||||
Convertible Debt | Revolving Credit Facility | |||||||||||
Debt Instrument | |||||||||||
Long-term debt | 0 | 0 | |||||||||
Convertible Debt | 2022 Notes | |||||||||||
Debt Instrument | |||||||||||
Long-term debt | $ 369,000,000 | $ 3,000,000 | 16,000,000 | ||||||||
Effective interest rate, percentage | 0.90% | ||||||||||
Principal Amount | $ 431,250,000 | $ 3,000,000 | 18,000,000 | ||||||||
Interest rate, stated percentage | 0.375% | ||||||||||
Option included in issuance of notes | $ 56,250,000 | ||||||||||
Equity component of notes | 96,000,000 | ||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | 420,000,000 | ||||||||||
Premiums paid for capped call confirmations | 44,000,000 | ||||||||||
Aggregate principal amount of repurchased Notes | 343,000,000 | ||||||||||
Debt conversion, principal amount | 70,000,000 | ||||||||||
Contractual Interest Expense | 0 | $ 1,000,000 | |||||||||
Debt repurchase amount, portion allocated to debt component | 832,000,000 | ||||||||||
Debt conversion, converted, shares issued (in shares) | shares | 670,610 | ||||||||||
Loss on debt repurchase | (13,000,000) | ||||||||||
Debt, fair value | 5,000,000 | ||||||||||
Convertible debt, if-converted value in excess of principal | 2,000,000 | ||||||||||
Convertible Debt | 2024 Notes | |||||||||||
Debt Instrument | |||||||||||
Long-term debt | $ 569,000,000 | $ 442,000,000 | |||||||||
Effective interest rate, percentage | 1.50% | ||||||||||
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 | 182,000,000 | ||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | 562,000,000 | ||||||||||
Premiums paid for capped call confirmations | 93,000,000 | ||||||||||
Contractual Interest Expense | 7,000,000 | 6,000,000 | |||||||||
Debt, fair value | 1,000,000,000 | ||||||||||
Convertible debt, if-converted value in excess of principal | 363,000,000 | ||||||||||
Convertible Debt | 2026 Notes | |||||||||||
Debt Instrument | |||||||||||
Long-term debt | $ 940,000,000 | 706,000,000 | |||||||||
Effective interest rate, percentage | 1.20% | ||||||||||
Principal Amount | $ 948,750,000 | $ 949,000,000 | 949,000,000 | ||||||||
Interest rate, stated percentage | 1.00% | ||||||||||
Option included in issuance of notes | $ 123,750,000 | ||||||||||
Equity component of notes | 280,000,000 | ||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | 935,000,000 | ||||||||||
Premiums paid for capped call confirmations | 146,000,000 | ||||||||||
Contractual Interest Expense | 9,000,000 | 10,000,000 | |||||||||
Debt, fair value | 1,400,000,000 | ||||||||||
Convertible debt, if-converted value in excess of principal | 265,000,000 | ||||||||||
Convertible Debt | 2025 Notes | |||||||||||
Debt Instrument | |||||||||||
Long-term debt | $ 1,505,000,000 | 1,228,000,000 | |||||||||
Effective interest rate, percentage | 0.90% | ||||||||||
Principal Amount | $ 1,518,000,000 | $ 1,518,000,000 | 1,518,000,000 | ||||||||
Interest rate, stated percentage | 0.625% | ||||||||||
Option included in issuance of notes | $ 198,000,000 | ||||||||||
Equity component of notes | 297,000,000 | ||||||||||
Proceeds from issuance of convertible notes, net of issuance costs | 1,500,000,000 | ||||||||||
Premiums paid for capped call confirmations | 255,000,000 | ||||||||||
Contractual Interest Expense | 10,000,000 | 4,000,000 | |||||||||
Debt repurchase amount, portion allocated to debt component | $ 380,000,000 | ||||||||||
Debt, fair value | 1,400,000,000 | ||||||||||
Convertible Debt | 2025 Accreting Notes | |||||||||||
Debt Instrument | |||||||||||
Long-term debt | 35,000,000 | 267,000,000 | |||||||||
Principal Amount | $ 36,000,000 | 289,000,000 | $ 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 | $ 527,000,000 | ||||||||||
Debt conversion, principal amount | 253,000,000 | ||||||||||
Contractual Interest Expense | (1,000,000) | $ 8,000,000 | |||||||||
Debt conversion, converted, shares issued (in shares) | shares | 3,490,175 | ||||||||||
Debt, fair value | 95,000,000 | ||||||||||
Convertible debt, if-converted value in excess of principal | 59,000,000 | ||||||||||
Convertible Debt | 2025 Accreting Notes | Class A common stock | |||||||||||
Debt Instrument | |||||||||||
Debt conversion, increased additional paid in capital | 265,000,000 | ||||||||||
Convertible Debt | 2025 Accreting Notes | Class A common stock | Charlesbank | |||||||||||
Debt Instrument | |||||||||||
Debt conversion, principal amount | $ 15,000,000 | ||||||||||
Debt conversion, converted, shares issued (in shares) | shares | 147,414 | ||||||||||
Convertible Debt | 2025 Accreting Notes | Class A common stock | Great Hill | |||||||||||
Debt Instrument | |||||||||||
Debt conversion, principal amount | $ 253,000,000 | ||||||||||
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) | 12 Months Ended | |||||
Dec. 31, 2021 | Aug. 31, 2020 | Apr. 30, 2020 | Aug. 31, 2019 | Nov. 30, 2018 | Sep. 30, 2017 | |
2025 Accreting Notes | ||||||
Debt Instrument | ||||||
Annual Effective Interest Rate | 2.70% | |||||
Convertible Debt | 2022 Notes | ||||||
Debt Instrument | ||||||
Initial Conversion Rate per $1,000 Principal | 0.00961 | |||||
Annual Coupon Rate | 0.375% | |||||
Annual Effective Interest Rate | 0.90% | |||||
Convertible Debt | 2024 Notes | ||||||
Debt Instrument | ||||||
Initial Conversion Rate per $1,000 Principal | 0.008591 | |||||
Annual Coupon Rate | 1.125% | |||||
Annual Effective Interest Rate | 1.50% | |||||
Convertible Debt | 2026 Notes | ||||||
Debt Instrument | ||||||
Initial Conversion Rate per $1,000 Principal | 0.0067349 | |||||
Annual Coupon Rate | 1.00% | |||||
Annual Effective Interest Rate | 1.20% | |||||
Convertible Debt | 2025 Notes | ||||||
Debt Instrument | ||||||
Initial Conversion Rate per $1,000 Principal | 0.0023972 | |||||
Annual Coupon Rate | 0.625% | |||||
Annual Effective Interest Rate | 0.90% | |||||
Convertible Debt | 2025 Accreting Notes | ||||||
Debt Instrument | ||||||
Initial Conversion Rate per $1,000 Principal | 0.0137931 | |||||
Annual Coupon Rate | 2.50% |
Debt and Other Financing - Co_2
Debt and Other Financing - Conversion and Redemption Terms of the Notes (Details) - Convertible Debt | Dec. 31, 2021$ / shares |
2022 Notes | |
Debt Instrument | |
Initial Conversion Price (in usd per share) | $ 104.06 |
2024 Notes | |
Debt Instrument | |
Initial Conversion Price (in usd per share) | 116.4 |
2026 Notes | |
Debt Instrument | |
Initial Conversion Price (in usd per share) | 148.48 |
2025 Notes | |
Debt Instrument | |
Initial Conversion Price (in usd per share) | 417.15 |
2025 Accreting Notes | |
Debt Instrument | |
Initial Conversion Price (in usd per share) | $ 72.5 |
Debt and Other Financing - Sc_2
Debt and Other Financing - Schedule of Interest Expense Related to Notes (Details) - Convertible Debt - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument | |||
Contractual Interest Expense | $ 25 | $ 29 | |
Debt Discount Amortization | 7 | 123 | |
Total Interest Expense | 32 | 152 | |
2022 Notes | |||
Debt Instrument | |||
Contractual Interest Expense | 0 | 1 | |
Debt Discount Amortization | 0 | 14 | |
Total Interest Expense | 0 | 15 | |
2024 Notes | |||
Debt Instrument | |||
Contractual Interest Expense | 7 | 6 | |
Debt Discount Amortization | 2 | 28 | |
Total Interest Expense | 9 | 34 | |
2026 Notes | |||
Debt Instrument | |||
Contractual Interest Expense | 9 | 10 | |
Debt Discount Amortization | 2 | 35 | |
Total Interest Expense | 11 | 45 | |
2025 Notes | |||
Debt Instrument | |||
Contractual Interest Expense | 10 | 4 | |
Debt Discount Amortization | 3 | 20 | |
Total Interest Expense | 13 | 24 | |
2025 Accreting Notes | |||
Debt Instrument | |||
Contractual Interest Expense | (1) | 8 | |
Debt Discount Amortization | 0 | 26 | |
Total Interest Expense | $ 20 | $ (1) | $ 34 |
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, 2021$ / 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) | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligations, 2022 | $ 237,000,000 |
Purchase obligations, 2023 | 36,000,000 |
Purchase obligations, 2024 | 29,000,000 |
Purchase obligations, 2025 | 1,000,000 |
Purchase obligation, thereafter | $ 0 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 | $ 35 | $ 32 | $ 28 |
Maximum | |||
Employee Benefit Plans | |||
Matching contribution by employer as a percentage of employee's considered compensation | 4.00% |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) | 2 Months Ended | 12 Months Ended | |||
Feb. 24, 2022USD ($)$ / shares | Dec. 31, 2021USD ($)vote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Aug. 10, 2021USD ($) | Aug. 21, 2020USD ($) | |
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 | |||||
Treasury stock, value, acquired, cost method | $ | $ 300,000,000 | $ 380,000,000 | |||
Additional Paid-In Capital | |||||
Stock Repurchase Program | |||||
Treasury stock, value, acquired, cost method | $ | $ 300,000,000 | $ 380,000,000 | |||
Additional Paid-In Capital | Subsequent Event | |||||
Stock Repurchase Program | |||||
Treasury stock, value, acquired, cost method | $ | $ 75,000,000 | ||||
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) | 79,150,937 | 72,980,490 | |||
Number of votes each holder is entitled | vote | 1 | ||||
Class A common stock | 2021 Repurchase Program | |||||
Stock Repurchase Program | |||||
Repurchase authorized amount | $ | $ 1,000,000,000 | $ 700,000,000 | |||
Class A common stock | 2020 Repurchase Program | |||||
Stock Repurchase Program | |||||
Stock repurchase program, average repurchase price per share (USD per share) | $ / shares | $ 305.43 | $ 302.71 | |||
Class A common stock | 2020 Repurchase Program | Subsequent Event | |||||
Stock Repurchase Program | |||||
Stock repurchase program, average repurchase price per share (USD per share) | $ / shares | $ 136.80 | ||||
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) | 25,691,761 | 26,564,234 | |||
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) | 56,346,653 | ||||
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, 2021 | Dec. 31, 2020 | Jan. 01, 2022 | |
Site and software development costs | |||
Equity based compensation | |||
Equity-based compensation costs capitalized | $ 28 | $ 17 | |
Employee stock options | |||
Equity based compensation | |||
Intrinsic value of stock options exercised | 6 | 5 | |
Restricted stock units | |||
Equity based compensation | |||
Intrinsic value of stock vested | 735 | $ 562 | |
Aggregate intrinsic value of stock unvested | 1,000 | ||
Unrecognized equity-based compensation | $ 992 | ||
Weighted average remaining vesting term | 1 year 3 months 18 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) | 6,443,150 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Activity Related to Stock Options (Details) - Employee stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||
Outstanding at the beginning of the period (in shares) | 19,046 | |
Options exercised (in shares) | (19,026) | |
Options forfeited/canceled (in shares) | (20) | |
Outstanding at the end of the period (in shares) | 0 | 19,046 |
Exercisable at the end of the period (in shares) | 0 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 2.99 | |
Options exercised (in dollars per share) | 2.99 | |
Options forfeited/canceled (in dollars per share) | 3.42 | |
Outstanding at the end of the period (in dollars per share) | 0 | $ 2.99 |
Exercisable at the end of the period (in dollars per share) | $ 0 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding | 0 years | 6 months |
Exercisable at the end of the period | 0 years |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Activity Relating to RSU's (Details) - Restricted stock units | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Shares | |
Unvested at the beginning of the period (in shares) | shares | 5,975,299 |
RSU's granted (in shares) | shares | 3,094,056 |
RSUs vested (in shares) | shares | (2,624,087) |
RSUs forfeited/cancelled (in shares) | shares | (1,215,560) |
Unvested at the end of the period (in shares) | shares | 5,229,708 |
Weighted-Average Grant Date Fair Value | |
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 134.03 |
RSUs granted (in dollars per share) | $ / shares | 269.88 |
RSUs vested (in dollars per share) | $ / shares | 128.36 |
RSUs forfeited/cancelled (in dollars per share) | $ / shares | 172.28 |
Unvested at the end of the period (in dollars per share) | $ / shares | $ 208.62 |
Equity-Based Compensation - Cla
Equity-Based Compensation - Classified Equity-Based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Equity based compensation | |||
Equity-based compensation | $ 344 | $ 276 | $ 227 |
Cost of goods sold | |||
Equity based compensation | |||
Equity-based compensation | 12 | 9 | 5 |
Customer service and merchant fees | |||
Equity based compensation | |||
Equity-based compensation | 25 | 15 | 9 |
Selling, operations, technology, general and administrative | |||
Equity based compensation | |||
Equity-based compensation | $ 307 | $ 252 | $ 213 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Taxes, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | (1) | 8 | 1 |
Foreign | 1 | 2 | 2 |
Deferred: | |||
Federal | 0 | 9 | 0 |
State | 1 | 1 | 0 |
Foreign | 0 | 0 | 0 |
Provision for income taxes, net | $ 1 | $ 20 | $ 3 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 | $ 1 | $ 20 | $ 3 |
Valuation allowance increase | 240 | ||
Federal net operating loss carryforwards | 1,300 | ||
State net operating loss carryforwards | 1,100 | ||
Operating loss carryforwards, subject to expiration | 163 | ||
Operating loss carryforwards not subject to expiration | 1,200 | ||
Foreign operating loss carryforwards | 1,200 | ||
Undistributed earnings of the entity's foreign subsidiaries | 309 | ||
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards, subject to expiration | $ 33 |
Income Taxes - Actual Provision
Income Taxes - Actual Provision For Income Taxes, Net Differs from Expected Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of the U.S. federal corporate rate to to income before tax expense (benefit), and actual tax | |||
(Benefit) provision for income taxes at the federal statutory rate | $ (27) | $ 43 | $ (206) |
State income tax expense, net of federal benefit | (1) | 19 | (40) |
Foreign tax rate differential | 26 | 19 | 24 |
Non-deductible equity-based compensation expense | 9 | 7 | 6 |
Windfall benefits from equity-based compensation | (70) | (51) | (29) |
Change in valuation allowance | 97 | (27) | 237 |
Limitation on officer's compensation | 6 | 8 | 7 |
Intangible property basis step-up | (43) | 0 | 0 |
Other | 4 | 2 | 4 |
Provision for income taxes, net | $ 1 | $ 20 | $ 3 |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) Before Income Taxes Determined by Tax Jurisdiction (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income (loss) from continuing operations: | |||
U.S. | $ 171 | $ 400 | $ (700) |
Foreign | (301) | (195) | (282) |
(Loss) income before income taxes | $ (130) | $ 205 | $ (982) |
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 Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Accounts receivable | $ 3 | $ 6 |
Inventories | 2 | 1 |
Net operating loss carryforwards | 499 | 434 |
Equity-based compensation expense | 18 | 13 |
Intangible property | 51 | 9 |
Accrued payroll | 31 | 36 |
Accrued expenses and reserves | 22 | 24 |
Leases | 269 | 255 |
Other | 1 | 0 |
Gross deferred tax assets | 896 | 778 |
Less: Valuation allowance | (568) | (328) |
Net deferred tax assets | 328 | 450 |
Deferred tax liabilities: | ||
Prepaid expenses | (8) | (5) |
Capitalized technology | (42) | (35) |
Property and equipment | (35) | (42) |
Operating lease right-of-use asset | (228) | (212) |
Convertible debt | (8) | (167) |
481(a) adjustments | (5) | (8) |
Other | (3) | (2) |
Total deferred tax liabilities | (329) | (471) |
Non-current net deferred tax liabilities | $ (1) | $ (21) |
(Loss) Earnings per Share - Cal
(Loss) Earnings per Share - Calculation of Basic and Diluted Earnings (Loss ) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Numerator for basic EPS - Net (loss) income | $ (131) | $ 185 | $ (985) |
Effect of dilutive securities: | |||
Interest expense associated with convertible debt instruments | 0 | 0 | 0 |
Numerator for diluted EPS - net (loss) income available to common stockholders after the effect of dilutive securities | $ (131) | $ 185 | $ (985) |
Denominator: | |||
Denominator for basic EPS - weighted-average number of shares of common stock outstanding (in shares) | 104 | 96 | 92 |
Effect of dilutive securities: | |||
Convertible debt instruments (in shares) | 0 | 0 | 0 |
Dilutive potential common shares (in shares) | 0 | 3 | 0 |
Denominator for diluted EPS - adjusted weighted-average number of shares of common stock outstanding after the effect of dilutive securities (in shares) | 104 | 99 | 92 |
(Loss) earnings per share: | |||
Basic (in dollars per share) | $ (1.26) | $ 1.93 | $ (10.68) |
Diluted (in dollars per shares) | $ (1.26) | $ 1.86 | $ (10.68) |
Restricted stock units | |||
Effect of dilutive securities: | |||
Incremental common shares attributable to dilutive effect of share-based payment award (in shares) | 0 | 3 | 0 |
(Loss) Earnings per Share - Ant
(Loss) Earnings per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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) | 20,000,000 | 20,000,000 | 24,000,000 |
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) | 5,000,000 | 0 | 8,000,000 |
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) | 15,000,000 | 20,000,000 | 16,000,000 |
Shares related to convertible debt instruments | A 2025 Notes Transaction | Class A 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) | 3,638,950 |
(Loss) Earnings per Share - Nar
(Loss) Earnings per Share - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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) | 20,000,000 | 20,000,000 | 24,000,000 |
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) | 15,000,000 | 20,000,000 | 16,000,000 |
Shares related to convertible debt instruments | A 2022 Notes Transaction | Class A 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) | 25,976 | ||
Shares related to convertible debt instruments | A 2024 Notes Transaction | Class A 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) | 4,939,825 | ||
Shares related to convertible debt instruments | A 2026 Notes Transaction | Class A 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) | 6,389,662 | ||
Shares related to convertible debt instruments | A 2025 Notes Transaction | Class A 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) | 3,638,950 | ||
Shares related to convertible debt instruments | 2025 Accreting Notes | Class A 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) | 500,917 | ||
Shares related to convertible debt instruments | A 2022 Capped Call Transactions | |||
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) | 208,000,000 | ||
Shares related to convertible debt instruments | A 2024 Capped Call Transactions | |||
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) | 510,000,000 | ||
Shares related to convertible debt instruments | A 2026 Capped Call Transactions | |||
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) | 841,000,000 | ||
Shares related to convertible debt instruments | A 2025 Capped Call Transactions | |||
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) | 1,300,000,000 |
Segment and Geographic Inform_3
Segment and Geographic Information - Net Revenues and Adjusted EBITDA (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information | |||
Total net revenue | $ 13,708 | $ 14,145 | $ 9,127 |
Adjusted EBITDA | 614 | 947 | (497) |
Less: reconciling items | (745) | (762) | (488) |
Net (loss) income | (131) | 185 | (985) |
Depreciation and amortization | 322 | 286 | 192 |
Equity-based compensation and related taxes | 374 | 297 | 241 |
Interest expense, net | 32 | 146 | 55 |
Other expense (income), net | 4 | 9 | (3) |
Provision for income taxes, net | 1 | 20 | 3 |
Other | 12 | 4 | 0 |
Total reconciling items | 745 | 762 | 488 |
Customer service center impairment and other charges | 12 | 0 | 0 |
Selling, operations, technology, general and administrative | 2,015 | 1,830 | 1,624 |
Severance Costs | |||
Segment Reporting Information | |||
Selling, operations, technology, general and administrative | 4 | ||
U.S. | |||
Segment Reporting Information | |||
Total net revenue | 11,249 | 11,901 | 7,765 |
Adjusted EBITDA | 782 | 1,042 | (179) |
International | |||
Segment Reporting Information | |||
Total net revenue | 2,459 | 2,244 | 1,362 |
Adjusted EBITDA | $ (168) | $ (95) | $ (318) |
Segment and Geographic Inform_4
Segment and Geographic Information - Long-lived Assets by Segment (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Geographic long-lived assets: | ||
Long-lived assets | $ 1,523 | $ 1,492 |
Plus: reconciling corporate long-lived assets | ||
Geographic long-lived assets: | ||
Long-lived assets | 586 | 610 |
Operating Segments | U.S. | ||
Geographic long-lived assets: | ||
Long-lived assets | 690 | 718 |
Operating Segments | International | ||
Geographic long-lived assets: | ||
Long-lived assets | 247 | 164 |
Total reportable segment long-lived assets | ||
Geographic long-lived assets: | ||
Long-lived assets | $ 937 | $ 882 |
Segment and Geographic Inform_5
Segment and Geographic Information - Assets by Segment (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets by segment: | ||
Total assets | $ 4,570 | $ 4,570 |
Plus: reconciling corporate assets | ||
Assets by segment: | ||
Total assets | 3,021 | 3,233 |
Operating Segments | U.S. | ||
Assets by segment: | ||
Total assets | 1,234 | 1,122 |
Operating Segments | International | ||
Assets by segment: | ||
Total assets | 315 | 215 |
Segment Reconciling Items | ||
Assets by segment: | ||
Total assets | $ 1,549 | $ 1,337 |
Related Party Transactions (Det
Related Party Transactions (Details) - 2025 Accreting Notes - Convertible Debt - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2020 | Apr. 07, 2020 |
Related Party Transaction | ||||
Principal Amount | $ 36,000,000 | $ 289,000,000 | $ 535,000,000 | |
Director | ||||
Related Party Transaction | ||||
Principal Amount | $ 535,000,000 |