Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40819 | |
Entity Registrant Name | Toast, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-4168768 | |
Entity Address, Address Line One | 401 Park Drive | |
Entity Address, City or Town | Boston, | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02215 | |
City Area Code | 617 | |
Local Phone Number | 297-1005 | |
Title of 12(b) Security | Class A common stock, par value of $0.000001 per share | |
Trading Symbol | TOST | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001650164 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 425,261,924 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 114,945,975 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 514 | $ 547 |
Marketable securities | 516 | 474 |
Accounts receivable, net | 95 | 77 |
Inventories, net | 98 | 110 |
Deferred costs, net | 56 | 44 |
Prepaid expenses and other current assets | 201 | 155 |
Total current assets | 1,480 | 1,407 |
Property and equipment, net | 69 | 61 |
Operating lease right-of-use assets | 23 | 77 |
Intangible assets, net | 28 | 29 |
Goodwill | 113 | 107 |
Restricted cash | 49 | 28 |
Deferred costs, non-current | 59 | 38 |
Other non-current assets | 13 | 14 |
Total non-current assets | 354 | 354 |
Total assets | 1,834 | 1,761 |
Current liabilities: | ||
Accounts payable | 27 | 30 |
Operating lease liabilities | 10 | 14 |
Deferred revenue | 38 | 39 |
Accrued expenses and other current liabilities | 499 | 413 |
Total current liabilities | 574 | 496 |
Warrants to purchase common stock | 72 | 68 |
Operating lease liabilities, non-current | 22 | 80 |
Deferred revenue, non-current | 14 | 7 |
Other long-term liabilities | 3 | 12 |
Total liabilities | 685 | 663 |
Commitments and Contingencies (Note 14) | ||
Stockholders’ Equity: | ||
Preferred stock- par value $0.000001; 100,000,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Treasury stock, at cost; 225,000 shares outstanding at September 30, 2023 and December 31, 2022 | 0 | 0 |
Accumulated other comprehensive loss | (2) | (2) |
Additional paid-in capital | 2,738 | 2,477 |
Accumulated deficit | (1,587) | (1,377) |
Total stockholders’ equity | 1,149 | 1,098 |
Total liabilities and stockholders’ equity | 1,834 | 1,761 |
Class A common stock | ||
Stockholders’ Equity: | ||
Common stock | 0 | 0 |
Class B common stock | ||
Stockholders’ Equity: | ||
Common stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Stockholders’ Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 225,000 | 225,000 |
Class A common stock | ||
Stockholders’ Equity: | ||
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common stock, authorized (in shares) | 7,000,000,000 | 7,000,000,000 |
Common stock, issued (in shares) | 423,611,258 | 353,094,009 |
Common stock, outstanding (in shares) | 423,611,258 | 353,094,009 |
Class B common stock | ||
Stockholders’ Equity: | ||
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common stock, authorized (in shares) | 700,000,000 | 700,000,000 |
Common stock, issued (in shares) | 114,944,182 | 169,933,289 |
Common stock, outstanding (in shares) | 114,944,182 | 169,933,289 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 1,032 | $ 752 | $ 2,829 | $ 1,963 |
Costs of revenue: | ||||
Amortization of acquired intangible assets | 1 | 1 | 4 | 4 |
Total costs of revenue | 806 | 601 | 2,221 | 1,610 |
Gross profit | 226 | 151 | 608 | 353 |
Operating expenses: | ||||
Sales and marketing | 100 | 84 | 299 | 232 |
Research and development | 87 | 74 | 264 | 203 |
General and administrative | 98 | 78 | 276 | 203 |
Total operating expenses | 285 | 236 | 839 | 638 |
Loss from operations | (59) | (85) | (231) | (285) |
Other income (expense): | ||||
Interest income, net | 10 | 3 | 27 | 5 |
Change in fair value of warrant liability | 18 | (21) | (5) | 102 |
Other income (expense), net | 0 | 1 | 0 | (1) |
Loss before benefit (provision) for income taxes | (31) | (102) | (209) | (179) |
Benefit (provision) for income taxes | 0 | 4 | (1) | 4 |
Net loss | $ (31) | $ (98) | $ (210) | $ (175) |
Net loss per share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ (0.06) | $ (0.19) | $ (0.40) | $ (0.34) |
Diluted (in dollars per share) | $ (0.09) | $ (0.19) | $ (0.40) | $ (0.54) |
Weighted average shares used in computing net loss per share: | ||||
Basic (in shares) | 535,219,532 | 513,719,867 | 529,535,807 | 509,507,937 |
Diluted (in shares) | 536,534,932 | 513,719,867 | 529,535,807 | 510,000,352 |
Subscription services | ||||
Revenue: | ||||
Total revenue | $ 131 | $ 90 | $ 358 | $ 230 |
Costs of revenue: | ||||
Cost of revenue | 43 | 29 | 118 | 81 |
Financial technology solutions | ||||
Revenue: | ||||
Total revenue | 856 | 628 | 2,338 | 1,628 |
Costs of revenue: | ||||
Cost of revenue | 674 | 494 | 1,828 | 1,289 |
Hardware | ||||
Revenue: | ||||
Total revenue | 34 | 27 | 106 | 86 |
Costs of revenue: | ||||
Cost of revenue | 58 | 52 | 181 | 165 |
Professional services | ||||
Revenue: | ||||
Total revenue | 11 | 7 | 27 | 19 |
Costs of revenue: | ||||
Cost of revenue | $ 30 | $ 25 | $ 90 | $ 71 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (31) | $ (98) | $ (210) | $ (175) |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) on marketable securities, net of tax effect of $0 | 0 | 1 | 0 | (2) |
Currency translation adjustments | 0 | 0 | 0 | (1) |
Total other comprehensive income (loss) | 0 | 1 | 0 | (3) |
Comprehensive loss | $ (31) | $ (97) | $ (210) | $ (178) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (losses) on marketable securities, net of tax | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Millions | Total | Class A and Class B Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2021 | 507,170,365 | |||||
Beginning balance at Dec. 31, 2021 | $ 1,091 | $ 0 | $ 0 | $ 2,194 | $ (1,102) | $ (1) |
Beginning balance (in shares) at Dec. 31, 2021 | 225,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock (in shares) | (33,475) | |||||
Issuance of common stock upon net exercise of common stock warrants (in shares) | 371,573 | |||||
Issuance of common stock upon net exercise of common stock warrants | 18 | 18 | ||||
Issuance of common stock upon exercise of common stock options (in shares) | 6,360,377 | |||||
Issuance of common stock upon exercise of common stock options | 12 | 12 | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 3,511,292 | |||||
Stock-based compensation expense | 172 | 172 | ||||
Vesting of restricted stock | 3 | 3 | ||||
Issuance of common stock in connection with business combinations (in shares) | 1,375,407 | |||||
Issuance of common stock in connection with business combinations | 1 | 1 | ||||
Currency translation adjustments | (1) | (1) | ||||
Unrealized gain (loss) on marketable securities | (2) | (2) | ||||
Net loss | (175) | (175) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 518,755,539 | |||||
Ending balance at Sep. 30, 2022 | 1,119 | $ 0 | $ 0 | 2,400 | (1,277) | (4) |
Ending balance (in shares) at Sep. 30, 2022 | 225,000 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 507,170,365 | |||||
Beginning balance at Dec. 31, 2021 | 1,091 | $ 0 | $ 0 | 2,194 | (1,102) | (1) |
Beginning balance (in shares) at Dec. 31, 2021 | 225,000 | |||||
Ending balance (in shares) at Dec. 31, 2022 | 523,027,298 | |||||
Ending balance at Dec. 31, 2022 | $ 1,098 | $ 0 | $ 0 | 2,477 | (1,377) | (2) |
Ending balance (in shares) at Dec. 31, 2022 | 225,000 | 225,000 | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 513,406,811 | |||||
Beginning balance at Jun. 30, 2022 | $ 1,150 | $ 0 | $ 0 | 2,334 | (1,179) | (5) |
Beginning balance (in shares) at Jun. 30, 2022 | 225,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of common stock options (in shares) | 1,950,077 | |||||
Issuance of common stock upon exercise of common stock options | 5 | 5 | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 2,060,423 | |||||
Stock-based compensation expense | 60 | 60 | ||||
Vesting of restricted stock | 1 | 1 | ||||
Issuance of common stock in connection with business combinations (in shares) | 1,338,228 | |||||
Currency translation adjustments | 0 | |||||
Unrealized gain (loss) on marketable securities | 1 | 1 | ||||
Net loss | (98) | (98) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 518,755,539 | |||||
Ending balance at Sep. 30, 2022 | 1,119 | $ 0 | $ 0 | 2,400 | (1,277) | (4) |
Ending balance (in shares) at Sep. 30, 2022 | 225,000 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 523,027,298 | |||||
Beginning balance at Dec. 31, 2022 | $ 1,098 | $ 0 | $ 0 | 2,477 | (1,377) | (2) |
Beginning balance (in shares) at Dec. 31, 2022 | 225,000 | 225,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock (in shares) | (44,440) | |||||
Issuance of common stock upon net exercise of common stock warrants (in shares) | 19,494 | |||||
Issuance of common stock upon net exercise of common stock warrants | $ 1 | 1 | ||||
Issuance of common stock upon exercise of common stock options (in shares) | 6,479,120 | 6,479,120 | ||||
Issuance of common stock upon exercise of common stock options | $ 20 | 20 | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 7,733,268 | |||||
Stock-based compensation expense | 216 | 216 | ||||
Vesting of restricted stock | 2 | 2 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 727,849 | |||||
Issuance of common stock under employee stock purchase plan | 11 | 11 | ||||
Issuance of common stock in connection with business combinations (in shares) | 65,962 | |||||
Issuance of common stock in connection with business combinations | 1 | 1 | ||||
Currency translation adjustments | 0 | |||||
Unrealized gain (loss) on marketable securities | 0 | |||||
Charitable contribution stock-based expense (in shares) | 546,889 | |||||
Issuance of common stock in connection with charitable contribution | 10 | 10 | ||||
Net loss | (210) | (210) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 538,555,440 | |||||
Ending balance at Sep. 30, 2023 | $ 1,149 | $ 0 | $ 0 | 2,738 | (1,587) | (2) |
Ending balance (in shares) at Sep. 30, 2023 | 225,000 | 225,000 | ||||
Beginning balance (in shares) at Jun. 30, 2023 | 532,936,724 | |||||
Beginning balance at Jun. 30, 2023 | $ 1,079 | $ 0 | $ 0 | 2,637 | (1,556) | (2) |
Beginning balance (in shares) at Jun. 30, 2023 | 225,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of common stock options (in shares) | 1,688,813 | |||||
Issuance of common stock upon exercise of common stock options | 9 | 9 | ||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 2,942,251 | |||||
Stock-based compensation expense | 75 | 75 | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 440,763 | |||||
Issuance of common stock under employee stock purchase plan | 7 | 7 | ||||
Currency translation adjustments | 0 | |||||
Unrealized gain (loss) on marketable securities | 0 | |||||
Charitable contribution stock-based expense (in shares) | 546,889 | |||||
Issuance of common stock in connection with charitable contribution | 10 | 10 | ||||
Net loss | (31) | (31) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 538,555,440 | |||||
Ending balance at Sep. 30, 2023 | $ 1,149 | $ 0 | $ 0 | $ 2,738 | $ (1,587) | $ (2) |
Ending balance (in shares) at Sep. 30, 2023 | 225,000 | 225,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (210) | $ (175) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 22 | 18 |
Stock-based compensation expense | 206 | 167 |
Amortization of deferred costs | 44 | 32 |
Change in fair value of warrant liability | 5 | (102) |
Credit loss expense | 44 | 18 |
Stock-based charitable contribution expense | 10 | 0 |
Asset impairments | 15 | 0 |
Other | (14) | 1 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (24) | (30) |
Prepaid expenses and other current assets | (7) | (17) |
Deferred costs, net | (77) | (53) |
Inventories, net | 13 | (53) |
Accounts payable | (3) | (12) |
Accrued expenses and other current liabilities | 17 | 91 |
Deferred revenue | 6 | (9) |
Other assets and liabilities | (4) | (13) |
Net cash provided by (used in) operating activities | 43 | (137) |
Cash flows from investing activities: | ||
Cash paid for acquisition, net of cash acquired | (9) | (46) |
Capitalized software | (27) | (10) |
Purchases of property and equipment | (4) | (13) |
Purchases of marketable securities | (479) | (187) |
Proceeds from the sale of marketable securities | 23 | 41 |
Maturities of marketable securities | 414 | 190 |
Other investing activities | (3) | 0 |
Net cash used in investing activities | (85) | (25) |
Cash flows from financing activities: | ||
Change in customer funds obligations, net | 27 | 26 |
Proceeds from issuance of common stock | 31 | 12 |
Payment of contingent consideration | 0 | (2) |
Net cash provided by financing activities | 58 | 36 |
Net increase (decrease) in cash, cash equivalents, cash held on behalf of customers and restricted cash | 16 | (126) |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (1) | (1) |
Cash, cash equivalents, cash held on behalf of customers and restricted cash at beginning of period | 635 | 851 |
Cash, cash equivalents, cash held on behalf of customers and restricted cash at end of period | 650 | 724 |
Reconciliation of cash, cash equivalents, cash held on behalf of customers and restricted cash | ||
Cash and cash equivalents | 514 | 644 |
Cash held on behalf of customers | 87 | 61 |
Restricted cash | 49 | 19 |
Total cash, cash equivalents, cash held on behalf of customers and restricted cash | 650 | 724 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of Class B common stock upon exercise of common stock warrants | $ 1 | $ 18 |
Description of Business, Basis
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies | Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies Toast, Inc. (“we,” or “the Company”), is a cloud-based all-in-one digital technology platform purpose-built for the entire restaurant community. We provide a comprehensive platform of software as a service (SaaS) products and financial technology solutions, including integrated payment processing, restaurant-grade hardware, and a broad ecosystem of third-party partners. We serve as the restaurant operating system, connecting front of house and back of house operations across dine in, take out and delivery channels. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, and the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly our financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2023 or any other future interim periods. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, or the 2022 Annual Report. The Condensed Consolidated Balance Sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date. Risks and Uncertainties We are subject to a number of risks and uncertainties, including global events and macroeconomic conditions such as inflation and its potential impact on consumer spending, rising interest rates, global supply chain issues, and public health concerns, which may also impact consumer behavior, the restaurant industry, and our business. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Reclassifications Certain amounts in prior period financial statements have been reclassified to conform to the current period presentation. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: September 30, 2023 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 251 $ — $ — $ 251 Commercial paper — 88 — 88 Certificates of deposit — 41 — 41 Corporate bonds — 71 — 71 U.S. government agency securities — 80 — 80 Treasury securities — 154 — 154 Asset-backed securities — 82 — 82 $ 251 $ 516 $ — $ 767 Liabilities: Warrants to purchase common stock $ — $ — $ 72 $ 72 $ — $ — $ 72 $ 72 December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 483 $ — $ — $ 483 Commercial paper — 140 — 140 Certificates of deposit — 104 — 104 Corporate bonds — 109 — 109 U.S. government agency securities — 33 — 33 Treasury securities — 60 — 60 Asset-backed securities — 28 — 28 $ 483 $ 474 $ — $ 957 Liabilities: Warrants to purchase common stock $ — $ — $ 68 $ 68 Contingent consideration — — 4 4 $ — $ — $ 72 $ 72 During the nine months ended September 30, 2023 and 2022, there were no transfers into or out of Level 3 measurements within the fair value hierarchy. Valuation of Warrants to Purchase Common Stock The fair value of the warrants was determined using the Black-Scholes option-pricing model. The following table indicates the weighted-average assumptions made in estimating the fair value as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Risk-free interest rate 4.7 % 4.1 % Contractual term (in years) 4 4 Expected volatility 68.3 % 60.3 % Expected dividend yield — % — % Exercise price per share $ 17.16 $ 17.16 Fair Value of Liabilities The following tables provide a roll-forward of the aggregate fair value of our common stock warrant liability for which fair value is determined using Level 3 inputs: Common Stock Warrant Balance as of December 31, 2022 $ 68 Change in fair value 5 Settlement (1) Balance as of September 30, 2023 $ 72 Common Stock Warrant Liability Balance as of December 31, 2021 $ 181 Change in fair value (102) Settlement (18) Balance as of September 30, 2022 $ 61 |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities The amortized cost, gross unrealized holding losses and fair value of marketable securities, excluding accrued interest receivable, consisted of the following: September 30, 2023 Amortized Cost Gross Unrealized Losses Fair Value Commercial paper $ 88 $ — $ 88 Certificates of deposit 41 — 41 Corporate bonds 71 — 71 U.S. government agency securities 80 — 80 Treasury securities 156 (2) 154 Asset-backed securities 82 — 82 Total $ 518 $ (2) $ 516 December 31, 2022 Amortized Cost Gross Unrealized Losses Fair Value Commercial paper $ 140 $ — $ 140 Certificates of deposit 104 — 104 Corporate bonds 110 (1) 109 U.S. government agency securities 33 — 33 Treasury securities 61 (1) 60 Asset-backed securities 28 — 28 Total $ 476 $ (2) $ 474 The fair values of marketable securities by contractual maturities at September 30, 2023: September 30, Due within 1 year $ 340 Due after 1 year through 5 years 172 Due after 5 years and thereafter 4 Total marketable securities $ 516 We review marketable securities for impairment during each reporting period to determine if any of the securities have experienced an other-than-temporary decline in fair value. There were no impairment losses or expected credit losses related to our marketable securities during the three and nine months ended September 30, 2023 and 2022. |
Loan Servicing Activities and A
Loan Servicing Activities and Acquired Loans Receivable, Net | 9 Months Ended |
Sep. 30, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Loan Servicing Activities and Acquired Loans Receivable, Net | Loan Servicing Activities and Acquired Loans Receivable, Net We service loans originated by our bank partner and assume liability for loan defaults on a limited basis based on a specified percentage of the total loans originated, which are measured on a quarterly basis. If the merchant’s payments are delayed for a defined period of time, the loan is considered delinquent and we are required to purchase the loan from our bank partner. The loan purchase, net of expected recoveries, reduces our potential liability with respect to the quarterly cohort of loans from which the defaulted loan originated. This obligation represents a financial guarantee with a contingent aspect related to our contingent obligation to purchase defaulted loans, and a non-contingent aspect related to our obligation to perform under the guarantee. We recognize a liability for both these elements which are included in accrued expenses and other current liabilities on our Condensed Consolidated Balance Sheets. Changes in the contingent liability for expected credit losses for the three and nine months ended September 30, 2023 and 2022 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Beginning balance $ 22 $ 5 $ 14 $ 2 Credit loss expense 16 6 38 11 Reductions due to loan purchase (9) (3) (23) (5) Ending balance $ 29 $ 8 $ 29 $ 8 The balance of the non-contingent stand-ready liability was $11 and $6, respectively, as of September 30, 2023 and December 31, 2022. |
Lessee Arrangements
Lessee Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Lessee Arrangements | Lessee Arrangements During the second quarter of fiscal year 2023, we entered into an agreement to terminate the lease for a portion of our corporate headquarters in Boston, MA, and modify the remaining lease term to end on December 31, 2024. As a result, we agreed to pay a net fee of $11. We recorded a net charge of $12 within general and administrative expenses on our Condensed Consolidated Statement of Operations, inclusive of a loss on impairment of certain property plant and equipment associated with the terminated portion of the lease. The components of lease expense were as follows for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease expense $ 2 $ 6 $ 10 $ 17 Variable lease expense 1 1 2 3 Total $ 3 $ 7 $ 12 $ 20 The following table summarizes supplemental cash flow information related to cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 Operating cash flows for operating leases $ (13) $ (19) Supplemental non-cash amounts of increases in lease liabilities from obtaining right-of-use assets/ (decreases) of lease liabilities from lease terminations and modifications (54) 11 Total $ (67) $ (8) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Revolving Line of Credit On March 2, 2023, we entered into an amendment to our revolving credit facility agreement, as amended, the 2021 Facility, to replace the London Interbank Offered Rate, or LIBOR, with the Secured Overnight Financing Rate, or SOFR. Under the terms of the amendment, interest on loans will be determined based on loan type and accrue at an annual rate, as defined in the agreement, of 1.50% per annum; or 0.5% per annum plus the highest of: (i) the Prime Rate, (ii) the Federal Reserve Bank of New York Rate plus 0.5%, or (iii) the Adjusted SOFR based upon loan duration plus 1.00%. The 2021 Facility is subject to a minimum liquidity covenant of $250. As of September 30, 2023 and December 31, 2022, no amounts were drawn or outstanding under the 2021 Facility which had $330 available as of each period end. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Delphi Display Systems, Inc. On February 14, 2023, we acquired 100% of the outstanding capital stock of Delphi Display Systems, Inc., or Delphi, a provider of digital display solutions and drive-thru technology, for a total purchase price of $10, to extend our growing suite of products benefiting quick-service restaurants and enterprise brands. We have not finalized the purchase price allocation. The purchase price was preliminarily allocated to goodwill, intangible assets and other net assets of $6, $3 and $1, respectively. Intangible assets consisted of $2 of developed technology and $1 of customer relationships, each with estimated useful lives of 5 years. Goodwill is not deductible for tax purposes, and primarily attributable to synergies expected to arise after the acquisition. The operating results of Delphi have been reflected in our results of operations from the date of the acquisition, but were not material to our consolidated financial statements. |
Other Balance Sheet Information
Other Balance Sheet Information | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Balance Sheet Information | Other Balance Sheet Information Accounts receivable, net consisted of the following: September 30, December 31, Accounts receivable $ 65 $ 45 Unbilled receivables 41 44 Less: Allowance for credit losses (11) (12) Accounts receivable, net $ 95 $ 77 Our allowance for credit losses was comprised of the following: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Beginning balance $ (10) $ (5) $ (12) $ (4) Additions (4) (4) (7) (7) Write offs 3 1 8 3 Ending balance $ (11) $ (8) $ (11) $ (8) Prepaid expenses and other current assets consisted of the following: September 30, December 31, Cash held on behalf of customers $ 87 $ 60 Prepaid expenses 22 27 Deposits for inventory purchases 10 20 Other current assets 82 48 $ 201 $ 155 Accrued expenses and current liabilities consisted of the following: September 30, December 31, Accrued transaction-based costs $ 224 $ 181 Accrued payroll and bonus 50 59 Customer funds obligation 87 60 Accrued expenses 54 45 Accrued commissions 20 15 Contingent liability for expected credit losses 29 14 Other liabilities 35 39 $ 499 $ 413 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following table summarizes the activity in deferred revenue: Nine Months Ended September 30, 2023 2022 Deferred revenue, beginning of year $ 46 $ 56 Deferred revenue, end of period 52 48 Revenue recognized in the period from amounts included in deferred revenue at the beginning of period $ 38 $ 45 As of September 30, 2023, approximately $617 of revenue is expected to be recognized from remaining performance obligations for customer contracts. We expect to recognize revenue of approximately $569 from these remaining performance obligations over the next 24 months, with the balance recognized thereafter. The following tables summarize the activity in deferred contract acquisition costs and the classification of deferred costs: Nine Months Ended September 30, 2023 2022 Beginning balance $ 82 $ 55 Capitalization of sales commissions costs 77 53 Amortization of sales commissions costs (44) (32) Ending balance $ 115 $ 76 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense recognized for the three and nine months ended September 30, 2023 and 2022, is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Costs of revenue $ 11 $ 8 $ 32 $ 24 Sales and marketing 15 12 43 37 Research and development 23 18 69 52 General and administrative 22 19 62 54 Total Stock based compensation $ 71 $ 57 $ 206 $ 167 Stock-based compensation expense of $4 and $10, respectively, was capitalized as software development costs during the three and nine months ended September 30, 2023. Stock-based compensation expense of $3 and $5, respectively, was capitalized as software development costs during each of the three and nine months ended September 30, 2022. Stock Options The fair value of each option grant was estimated on its grant date using the Black-Scholes option-pricing model. The following table indicates the weighted-average assumptions made in estimating the fair value for the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 Risk-free interest rate 3.90 % 2.37 % Expected term (in years) 6.1 6.1 Expected volatility 56.19 % 52.28 % Expected dividend yield — % — % Weighted-average fair value of common stock $ 18.01 $ 17.20 Weighted-average grant date fair value $ 10.24 $ 8.89 The following is a summary of stock option activity under our stock option plans for the nine months ended September 30, 2023: (in millions, except share and per share amounts) Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (1) Outstanding as of December 31, 2022 53,728,512 $ 5.98 6.9 $ 655 Granted 3,147,911 18.01 Exercised (6,479,120) 3.07 Forfeited (1,077,890) 13.09 Outstanding as of September 30, 2023 49,319,413 $ 6.98 6.5 $ 587 Options vested and expected to vest as of September 30, 2023 47,502,892 $ 6.73 6.4 $ 577 Options exercisable as of September 30, 2023 42,553,432 $ 5.17 6.1 $ 576 (1 ) The aggregate intrinsic value was determined as the difference between the closing price of the Class A common stock on the last trading day of September 2023, or the date of exercise, as appropriate, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their in-the-money options at period end. There were no options granted during the three months ended September 30, 2023. The weighted average grant date fair value of options granted during the three months ended September 30, 2022 was $15.94. The aggregate intrinsic values of options exercised was $30 and $116, respectively, during the three and nine months ended September 30, 2023 and $31 and $112, respectively, during the three and nine months ended September 30, 2022. As of September 30, 2023, total unrecognized stock-based compensation expense related to option awards was $92 and is expected to be recognized over the remaining weighted-average service period of 2.7 years . Restricted Stock Units The following table summarizes RSU activity during the nine months ended September 30, 2023 : RSU Weighted Average Grant Date Fair Value Unvested balance as of December 31, 2022 31,242,263 $ 22.11 Granted 13,848,380 $ 18.82 Vested (7,759,507) $ 21.69 Forfeited (2,109,436) $ 21.77 Unvested balance as of September 30, 2023 35,221,700 $ 20.93 The weighted average grant-date fair value of RSUs granted during the three months ended September 30, 2023 and 2022 was $22.41 and $17.37, respectively. The weighted average grant-date fair value of RSUs granted during the nine months ended September 30, 2022 was 18.23. The fair value of RSUs vested during the three months ended September 30, 2023 and 2022 was $66 and $32, respectively. The fair value of RSUs vested during the nine months ended September 30, 2023 and 2022 was $159 and $61, respectively. As of September 30, 2023, total unrecognized stock-based compensation expense related to the RSUs was $532 and is expected to be recognized over the remaining weighted-average service period of 3 years. As of September 30, 2023, we had 67,377,775 shares of Class A common stock available for future issuance under our 2021 Stock Option and Incentive Plan. 2021 Employee Stock Purchase Plan In 2021, our Board adopted, and our stockholders approved, the 2021 Employee Stock Purchase Plan ("ESPP") which became effective on September 23, 2021. As of September 30, 2023, 21,212,317 shares of our Class A common stock were available for issuance to participating employees who are allowed to purchase shares of Class A common stock at a price equal to 85% of its fair market value at the beginning or the end of the offering period, whichever is lower. During the three months ended September 30, 2023, 440,763 shares were purchased under the ESPP at $15.51 per share, resulting in cash proceeds of $7. During the nine months ended September 30, 2023, 727,849 shares were purchased under the ESPP at $15.57 per share, resulting in cash proceeds of $11. No shares were purchased under the ESPP during the three and nine months ended September 30, 2022. Restricted Stock The number of issued and outstanding shares of Class A and Class B common stock subject to restrictions as of September 30, 2023 and December 31, 2022, were 881,133 and 2,703,538, respectively. As of September 30, 2023, this included 30,015 shares of Class A common stock and Class B common stock issued upon the early exercise of stock options and 851,118 shares of restricted Class A common stock issued to certain members of management of Delphi and Sling, Inc. as part of their consideration in connection with the acquisitions. As of December 31, 2022, this included 1,365,310 shares of Class A common stock and Class B common stock issued upon the early exercise of stock options and 1,338,228 shares of restricted Class A common stock issued to certain members of management of Sling, Inc. as part of their consideration in connection with the acquisition in 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective income tax rate was (0.2)% and 4.0% for the three months ended September 30, 2023 and 2022 , respectively, and was (0.5)% and 2.0% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate for each period differs from the statutory rate primarily as a result of having a full valuation allowance maintained against our deferred tax assets, along with the release of a portion of our valuation allowance as a result of acquisitions. The benefit (provision) for income taxes was $0 and $4 for the three months ended September 30, 2023 and 2022, respectively, and $(1) and $4 for the nine months ended September 30, 2023 and 2022, respectively. The change in the benefit (provision) is primarily driven by changes in the provision recorded on the earnings of our non-US subsidiaries and a non-recurring benefit recognized in the three and nine months ended September 30, 2022 from the acquisition of Sling of $5. The non-recurring benefit resulted from the release of a portion of our valuation allowance due to temporary differences available as a source of income to realize the benefit of certain pre-existing Toast, Inc. deferred tax assets. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders Basic net loss per share is determined by dividing net loss by the weighted average shares outstanding for the period. We analyze the potential dilutive effect of stock options, unvested restricted stock, RSUs, our ESPP, and warrants to purchase common stock, during periods we generate net income, or when income is recognized related to changes in fair value of warrant liabilities. During the three months ended September 30, 2023 and nine months ended September 30, 2022, we recorded a gain on fair value remeasurement of warrant liabilities which was added back to net loss to adjust for the dilutive impact of the warrants. We adjusted the weighted average shares outstanding for the incremental dilutive shares using the treasury stock method. During the nine months ended September 30, 2023, we recorded a loss on fair value remeasurement of warrants to purchase common stock which are excluded from the computation of diluted net loss per share due to their anti-dilutive impact. During the three months ended September 30, 2022, the exercise price for the warrants to purchase common stock exceeded the average trading price of our Class A common stock for the period, and therefore the warrants were anti-dilutive and excluded from the computation of diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022: (in millions, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net loss, basic $ (31) $ (98) $ (210) $ (175) Gain on change in fair value of warrant liability 18 — — 102 Net loss, diluted $ (49) $ (98) $ (210) $ (277) Denominator: Weighted average shares of common stock outstanding—basic 535,219,532 513,719,867 529,535,807 509,507,937 Effect of dilutive securities: Warrants to purchase Class B common stock 1,315,400 — — 492,415 Weighted average shares of common stock outstanding—diluted 536,534,932 513,719,867 529,535,807 510,000,352 Net loss per share, basic $ (0.06) $ (0.19) $ (0.40) $ (0.34) Net loss per share, diluted $ (0.09) $ (0.19) $ (0.40) $ (0.54) We excluded the following potential shares of common stock from the computation of diluted net loss per share because including them would have an anti-dilutive effect for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Options to purchase Class A common stock and Class B common stock 49,319,413 55,688,962 49,319,413 55,688,962 Unvested restricted stock 881,133 3,309,223 881,133 3,309,223 Unvested restricted stock units 35,221,700 28,848,298 35,221,700 28,848,298 Warrants to purchase Class B common stock — 6,902,633 6,790,080 — Employee Stock Purchase Plan 62,538 24,588 62,538 24,588 85,484,784 94,773,704 92,274,864 87,871,071 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have significant operations in the United States, Ireland, and India. We did not generate material revenue in any country other than the United States during the three and nine months ended September 30, 2023 and 2022. The following table sets forth the breakdown of long-lived assets based on geography: September 30, December 31, United States $ 79 $ 122 Ireland 8 10 India 4 5 Other 1 1 Total long-lived assets $ 92 $ 138 Tangible long-lived assets consist of property and equipment and operating lease right-of-use assets. Long-lived assets are based upon the country in which the asset is located. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments We have non-cancelable purchase obligations with hardware suppliers and cloud service providers. As of September 30, 2023, there were no material changes outside the ordinary course of business to our commitments, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022. Legal Proceedings From time to time, we may be involved in legal actions arising in the ordinary course of business. Each of these matters is subject to various uncertainties, and it is possible that some of these matters may be resolved unfavorably. We establish accruals for losses that management deems to be probable and subject to a reasonable estimate. We do not expect any claims with a reasonably possible adverse outcome to have a material impact. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (31) | $ (98) | $ (210) | $ (175) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 shares | Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Brian Elworthy [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On September 8, 2023, Brian Elworthy, our General Counsel and Corporate Secretary, entered into a trading plan pursuant to Rule 10b5-1 of the Exchange Act. Mr. Elworthy’s Rule 10b5-1 trading plan provides for the sale from time to time of a maximum of 263,534 shares of our Class A common stock pursuant to the terms of the plan. Mr. Elworthy’s Rule 10b5-1 trading plan expires on May 31, 2024, or earlier if all transactions under the trading arrangement are completed. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). | |
Name | Brian Elworthy | |
Title | General Counsel and Corporate Secretary | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | September 8, 2023 | |
Arrangement Duration | 266 days | |
Aggregate Available | 263,534 | 263,534 |
Description of Business, Basi_2
Description of Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, and the rules and regulations of the Securities and Exchange Commission, or SEC, regarding interim financial reporting. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly our financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2023 or any other future interim periods. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. |
Reclassifications | Reclassifications Certain amounts in prior period financial statements have been reclassified to conform to the current period presentation. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured on Recurring Basis | The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy used to determine such fair values: September 30, 2023 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 251 $ — $ — $ 251 Commercial paper — 88 — 88 Certificates of deposit — 41 — 41 Corporate bonds — 71 — 71 U.S. government agency securities — 80 — 80 Treasury securities — 154 — 154 Asset-backed securities — 82 — 82 $ 251 $ 516 $ — $ 767 Liabilities: Warrants to purchase common stock $ — $ — $ 72 $ 72 $ — $ — $ 72 $ 72 December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 483 $ — $ — $ 483 Commercial paper — 140 — 140 Certificates of deposit — 104 — 104 Corporate bonds — 109 — 109 U.S. government agency securities — 33 — 33 Treasury securities — 60 — 60 Asset-backed securities — 28 — 28 $ 483 $ 474 $ — $ 957 Liabilities: Warrants to purchase common stock $ — $ — $ 68 $ 68 Contingent consideration — — 4 4 $ — $ — $ 72 $ 72 |
Schedule of Measurement Inputs and Valuation Techniques | The following table indicates the weighted-average assumptions made in estimating the fair value as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Risk-free interest rate 4.7 % 4.1 % Contractual term (in years) 4 4 Expected volatility 68.3 % 60.3 % Expected dividend yield — % — % Exercise price per share $ 17.16 $ 17.16 |
Schedule of Liabilities Measured on Recurring and Nonrecurring Basis | The following tables provide a roll-forward of the aggregate fair value of our common stock warrant liability for which fair value is determined using Level 3 inputs: Common Stock Warrant Balance as of December 31, 2022 $ 68 Change in fair value 5 Settlement (1) Balance as of September 30, 2023 $ 72 Common Stock Warrant Liability Balance as of December 31, 2021 $ 181 Change in fair value (102) Settlement (18) Balance as of September 30, 2022 $ 61 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Debt Securities Available-for-sale | The amortized cost, gross unrealized holding losses and fair value of marketable securities, excluding accrued interest receivable, consisted of the following: September 30, 2023 Amortized Cost Gross Unrealized Losses Fair Value Commercial paper $ 88 $ — $ 88 Certificates of deposit 41 — 41 Corporate bonds 71 — 71 U.S. government agency securities 80 — 80 Treasury securities 156 (2) 154 Asset-backed securities 82 — 82 Total $ 518 $ (2) $ 516 December 31, 2022 Amortized Cost Gross Unrealized Losses Fair Value Commercial paper $ 140 $ — $ 140 Certificates of deposit 104 — 104 Corporate bonds 110 (1) 109 U.S. government agency securities 33 — 33 Treasury securities 61 (1) 60 Asset-backed securities 28 — 28 Total $ 476 $ (2) $ 474 The fair values of marketable securities by contractual maturities at September 30, 2023: September 30, Due within 1 year $ 340 Due after 1 year through 5 years 172 Due after 5 years and thereafter 4 Total marketable securities $ 516 |
Loan Servicing Activities and_2
Loan Servicing Activities and Acquired Loans Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Off-Balance Sheet Credit Loss Liability | Changes in the contingent liability for expected credit losses for the three and nine months ended September 30, 2023 and 2022 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Beginning balance $ 22 $ 5 $ 14 $ 2 Credit loss expense 16 6 38 11 Reductions due to loan purchase (9) (3) (23) (5) Ending balance $ 29 $ 8 $ 29 $ 8 |
Lessee Arrangements (Tables)
Lessee Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease Cost | The components of lease expense were as follows for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease expense $ 2 $ 6 $ 10 $ 17 Variable lease expense 1 1 2 3 Total $ 3 $ 7 $ 12 $ 20 The following table summarizes supplemental cash flow information related to cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 Operating cash flows for operating leases $ (13) $ (19) Supplemental non-cash amounts of increases in lease liabilities from obtaining right-of-use assets/ (decreases) of lease liabilities from lease terminations and modifications (54) 11 Total $ (67) $ (8) |
Other Balance Sheet Informati_2
Other Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable, net consisted of the following: September 30, December 31, Accounts receivable $ 65 $ 45 Unbilled receivables 41 44 Less: Allowance for credit losses (11) (12) Accounts receivable, net $ 95 $ 77 |
Schedule of Accounts Receivable Allowance for Credit Loss | Our allowance for credit losses was comprised of the following: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Beginning balance $ (10) $ (5) $ (12) $ (4) Additions (4) (4) (7) (7) Write offs 3 1 8 3 Ending balance $ (11) $ (8) $ (11) $ (8) |
Schedule of Prepaid and Other Current Assets | Prepaid expenses and other current assets consisted of the following: September 30, December 31, Cash held on behalf of customers $ 87 $ 60 Prepaid expenses 22 27 Deposits for inventory purchases 10 20 Other current assets 82 48 $ 201 $ 155 |
Schedule of Accounts Payable and Accrued Liabilities | Accrued expenses and current liabilities consisted of the following: September 30, December 31, Accrued transaction-based costs $ 224 $ 181 Accrued payroll and bonus 50 59 Customer funds obligation 87 60 Accrued expenses 54 45 Accrued commissions 20 15 Contingent liability for expected credit losses 29 14 Other liabilities 35 39 $ 499 $ 413 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Asset Contract Liability and Receivable | The following table summarizes the activity in deferred revenue: Nine Months Ended September 30, 2023 2022 Deferred revenue, beginning of year $ 46 $ 56 Deferred revenue, end of period 52 48 Revenue recognized in the period from amounts included in deferred revenue at the beginning of period $ 38 $ 45 |
Schedule of Capitalized Contract Cost | The following tables summarize the activity in deferred contract acquisition costs and the classification of deferred costs: Nine Months Ended September 30, 2023 2022 Beginning balance $ 82 $ 55 Capitalization of sales commissions costs 77 53 Amortization of sales commissions costs (44) (32) Ending balance $ 115 $ 76 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | Stock-based compensation expense recognized for the three and nine months ended September 30, 2023 and 2022, is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Costs of revenue $ 11 $ 8 $ 32 $ 24 Sales and marketing 15 12 43 37 Research and development 23 18 69 52 General and administrative 22 19 62 54 Total Stock based compensation $ 71 $ 57 $ 206 $ 167 |
Schedule of Stock Options Valuation Assumptions | The following table indicates the weighted-average assumptions made in estimating the fair value for the nine months ended September 30, 2023 and 2022: Nine Months Ended September 30, 2023 2022 Risk-free interest rate 3.90 % 2.37 % Expected term (in years) 6.1 6.1 Expected volatility 56.19 % 52.28 % Expected dividend yield — % — % Weighted-average fair value of common stock $ 18.01 $ 17.20 Weighted-average grant date fair value $ 10.24 $ 8.89 |
Schedule of Stock Option Activity | The following is a summary of stock option activity under our stock option plans for the nine months ended September 30, 2023: (in millions, except share and per share amounts) Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (1) Outstanding as of December 31, 2022 53,728,512 $ 5.98 6.9 $ 655 Granted 3,147,911 18.01 Exercised (6,479,120) 3.07 Forfeited (1,077,890) 13.09 Outstanding as of September 30, 2023 49,319,413 $ 6.98 6.5 $ 587 Options vested and expected to vest as of September 30, 2023 47,502,892 $ 6.73 6.4 $ 577 Options exercisable as of September 30, 2023 42,553,432 $ 5.17 6.1 $ 576 (1 ) The aggregate intrinsic value was determined as the difference between the closing price of the Class A common stock on the last trading day of September 2023, or the date of exercise, as appropriate, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their in-the-money options at period end. |
Schedule of Restricted Stock Unit Activity | The following table summarizes RSU activity during the nine months ended September 30, 2023 : RSU Weighted Average Grant Date Fair Value Unvested balance as of December 31, 2022 31,242,263 $ 22.11 Granted 13,848,380 $ 18.82 Vested (7,759,507) $ 21.69 Forfeited (2,109,436) $ 21.77 Unvested balance as of September 30, 2023 35,221,700 $ 20.93 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share Basic and Diluted | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022: (in millions, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Numerator: Net loss, basic $ (31) $ (98) $ (210) $ (175) Gain on change in fair value of warrant liability 18 — — 102 Net loss, diluted $ (49) $ (98) $ (210) $ (277) Denominator: Weighted average shares of common stock outstanding—basic 535,219,532 513,719,867 529,535,807 509,507,937 Effect of dilutive securities: Warrants to purchase Class B common stock 1,315,400 — — 492,415 Weighted average shares of common stock outstanding—diluted 536,534,932 513,719,867 529,535,807 510,000,352 Net loss per share, basic $ (0.06) $ (0.19) $ (0.40) $ (0.34) Net loss per share, diluted $ (0.09) $ (0.19) $ (0.40) $ (0.54) |
Schedule of Antidilutive Securities Excluded from Computation of Net Loss Per Share | We excluded the following potential shares of common stock from the computation of diluted net loss per share because including them would have an anti-dilutive effect for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Options to purchase Class A common stock and Class B common stock 49,319,413 55,688,962 49,319,413 55,688,962 Unvested restricted stock 881,133 3,309,223 881,133 3,309,223 Unvested restricted stock units 35,221,700 28,848,298 35,221,700 28,848,298 Warrants to purchase Class B common stock — 6,902,633 6,790,080 — Employee Stock Purchase Plan 62,538 24,588 62,538 24,588 85,484,784 94,773,704 92,274,864 87,871,071 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Long-lived Assets by Geographic Areas | The following table sets forth the breakdown of long-lived assets based on geography: September 30, December 31, United States $ 79 $ 122 Ireland 8 10 India 4 5 Other 1 1 Total long-lived assets $ 92 $ 138 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants to purchase common stock | $ 72 | $ 68 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 767 | 957 |
Warrants to purchase common stock | 72 | 68 |
Contingent consideration | 4 | |
Total liabilities | 72 | 72 |
Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 251 | 483 |
Warrants to purchase common stock | 0 | 0 |
Contingent consideration | 0 | |
Total liabilities | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 516 | 474 |
Warrants to purchase common stock | 0 | 0 |
Contingent consideration | 0 | |
Total liabilities | 0 | 0 |
Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Warrants to purchase common stock | 72 | 68 |
Contingent consideration | 4 | |
Total liabilities | 72 | 72 |
Money market funds | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 251 | 483 |
Money market funds | Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 251 | 483 |
Money market funds | Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Money market funds | Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Commercial paper | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 88 | 140 |
Commercial paper | Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Commercial paper | Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 88 | 140 |
Commercial paper | Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Certificates of deposit | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 41 | 104 |
Certificates of deposit | Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Certificates of deposit | Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 41 | 104 |
Certificates of deposit | Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Corporate bonds | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 71 | 109 |
Corporate bonds | Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Corporate bonds | Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 71 | 109 |
Corporate bonds | Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
U.S. government agency securities | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 80 | 33 |
U.S. government agency securities | Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
U.S. government agency securities | Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 80 | 33 |
U.S. government agency securities | Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Treasury securities | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 154 | 60 |
Treasury securities | Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Treasury securities | Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 154 | 60 |
Treasury securities | Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Asset-backed securities | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 82 | 28 |
Asset-backed securities | Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Asset-backed securities | Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 82 | 28 |
Asset-backed securities | Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Weighted Average Assumptions (Details) - Level 3 | Sep. 30, 2023 | Dec. 31, 2022 |
Risk-free interest rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants, measurement inputs | 0.047 | 0.041 |
Contractual term (in years) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants, measurement inputs | 4 | 4 |
Expected volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants, measurement inputs | 0.683 | 0.603 |
Expected dividend yield | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants, measurement inputs | 0 | 0 |
Exercise price per share | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants, measurement inputs | 17.16 | 17.16 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Schedule of Rollforward of Level 3 Inputs (Details) - Common Stock Warrants - Common Stock Warrant Liability - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | $ 68 | $ 181 |
Change in fair value | 5 | (102) |
Settlement | (1) | (18) |
Ending balance | $ 72 | $ 61 |
Marketable Securities - Schedul
Marketable Securities - Schedule of Available-for-Sale Securities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 518 | $ 476 |
Gross Unrealized Losses | (2) | (2) |
Fair Value | 516 | 474 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 88 | 140 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 88 | 140 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 41 | 104 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 41 | 104 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 71 | 110 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 71 | 109 |
U.S. government agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 80 | 33 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 80 | 33 |
Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 156 | 61 |
Gross Unrealized Losses | (2) | (1) |
Fair Value | 154 | 60 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 82 | 28 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 82 | $ 28 |
Marketable Securities - Sched_2
Marketable Securities - Scheduled Maturities of Available-for-Sale Securities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Investments, Debt and Equity Securities [Abstract] | ||
Due within 1 year | $ 340 | |
Due after 1 year through 5 years | 172 | |
Due after 5 years and thereafter | 4 | |
Total marketable securities | $ 516 | $ 474 |
Loan Servicing Activities and_3
Loan Servicing Activities and Acquired Loans Receivable, Net - Schedule of Rollforward of Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Off-Balance Sheet, Credit Loss, Liability [Roll Forward] | ||||
Beginning balance | $ 22 | $ 5 | $ 14 | $ 2 |
Credit loss expense | 16 | 6 | 38 | 11 |
Reductions due to loan purchase | (9) | (3) | (23) | (5) |
Ending balance | $ 29 | $ 8 | $ 29 | $ 8 |
Loan Servicing Activities and_4
Loan Servicing Activities and Acquired Loans Receivable, Net - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Non-contingent Stand-ready Liability | ||
Guarantor Obligations [Line Items] | ||
Guarantee liability | $ 11 | $ 6 |
Lessee Arrangements - Narrative
Lessee Arrangements - Narrative (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease, termination fee | $ 11 |
General and administrative | |
Lessee, Lease, Description [Line Items] | |
Operating lease, termination fee | $ 12 |
Lessee Arrangements - Schedule
Lessee Arrangements - Schedule of Components of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease expense | $ 2 | $ 6 | $ 10 | $ 17 |
Variable lease expense | 1 | 1 | 2 | 3 |
Total | $ 3 | $ 7 | $ 12 | $ 20 |
Lessee Arrangements - Schedul_2
Lessee Arrangements - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ (13) | $ (19) |
Supplemental non-cash amounts of increases in lease liabilities from obtaining right-of-use assets/ (decreases) of lease liabilities from lease terminations and modifications | (54) | 11 |
Total | $ (67) | $ (8) |
Debt (Details)
Debt (Details) - Revolving Credit Facility - 2021 Credit Facility - Line of Credit - USD ($) | Mar. 02, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Minimum liquidity amount | $ 250,000,000 | ||
Long term debt, amount available | $ 0 | $ 0 | |
Maximum borrowing capacity | $ 330,000,000 | ||
London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.50% | ||
Prime Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.50% | ||
Federal Reserve Bank of New York Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.50% | ||
Adjusted SOFR Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate (as a percent) | 1% |
Business Combinations - Delphi
Business Combinations - Delphi Display Systems, Inc (Details) - USD ($) $ in Millions | Feb. 14, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 113 | $ 107 | |
Delphi Display Systems, Inc | |||
Business Acquisition [Line Items] | |||
Voting interest acquired (as a percent) | 100% | ||
Consideration transferred | $ 10 | ||
Goodwill | 6 | ||
Intangible assets | 3 | ||
Other assets | 1 | ||
Delphi Display Systems, Inc | Developed Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 2 | ||
Finite lived intangibles acquired, weighted average useful life (in years) | 5 years | ||
Delphi Display Systems, Inc | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 1 | ||
Finite lived intangibles acquired, weighted average useful life (in years) | 5 years |
Other Balance Sheet Informati_3
Other Balance Sheet Information - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Accounts receivable | $ 65 | $ 45 | ||||
Unbilled receivables | 41 | 44 | ||||
Less: Allowance for credit losses | (11) | $ (10) | (12) | $ (8) | $ (5) | $ (4) |
Accounts receivable, net | $ 95 | $ 77 |
Other Balance Sheet Informati_4
Other Balance Sheet Information - Schedule of Allowance For Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ (10) | $ (5) | $ (12) | $ (4) |
Additions | (4) | (4) | (7) | (7) |
Write offs | 3 | 1 | 8 | 3 |
Ending balance | $ (11) | $ (8) | $ (11) | $ (8) |
Other Balance Sheet Informati_5
Other Balance Sheet Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash held on behalf of customers | $ 87 | $ 60 | $ 61 |
Prepaid expenses | 22 | 27 | |
Deposits for inventory purchases | 10 | 20 | |
Other current assets | 82 | 48 | |
Prepaid expenses and other current assets | $ 201 | $ 155 |
Other Balance Sheet Informati_6
Other Balance Sheet Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued transaction-based costs | $ 224 | $ 181 |
Accrued payroll and bonus | 50 | 59 |
Customer funds obligation | 87 | 60 |
Accrued expenses | 54 | 45 |
Accrued commissions | 20 | 15 |
Contingent liability for expected credit losses | 29 | 14 |
Other liabilities | 35 | 39 |
Accrued expenses and other current liabilities | $ 499 | $ 413 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Schedule of Activity of Deferred Revenue (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||||
Deferred revenue | $ 52 | $ 48 | $ 46 | $ 56 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of period | $ 38 | $ 45 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 617 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 569 |
Remaining performance obligation, period (in months) | 24 months |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Capitalized Costs (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Increase (Decrease) in Capitalized Contract Costs [Roll Forward] | ||
Beginning balance | $ 82 | $ 55 |
Capitalization of sales commissions costs | 77 | 53 |
Amortization of sales commissions costs | (44) | (32) |
Ending balance | $ 115 | $ 76 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total Stock based compensation | $ 71 | $ 57 | $ 206 | $ 167 |
Costs of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total Stock based compensation | 11 | 8 | 32 | 24 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total Stock based compensation | 15 | 12 | 43 | 37 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total Stock based compensation | 23 | 18 | 69 | 52 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total Stock based compensation | $ 22 | $ 19 | $ 62 | $ 54 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation included in capitalized software | $ 4,000,000 | $ 3,000,000 | $ 10,000,000 | $ 5,000,000 | |
Granted (in shares) | 0 | 3,147,911 | |||
Weighted average fair value per share of options granted (in dollars per share) | $ 15.94 | ||||
Aggregate intrinsic value of options exercised | $ 30,000,000 | $ 31,000,000 | $ 116,000,000 | $ 112,000,000 | |
Unrecognized stock-based compensation expense related to options | $ 92,000,000 | $ 92,000,000 | |||
Expected period for recognition (in years) | 2 years 8 months 12 days | ||||
Issuance of common stock under employee stock purchase plan (in shares) | 440,763 | 0 | 727,849 | 0 | |
Issuance of common stock under employee stock purchase plan | $ 7,000,000 | $ 11,000,000 | |||
Shares exercised (in shares) | 6,479,120 | ||||
Stock based compensation | 71,000,000 | $ 57,000,000 | $ 206,000,000 | $ 167,000,000 | |
Pledge One Percent Movement | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual pledged percentage of maximum (as a percent) | 1% | ||||
Stock based compensation | $ 10,000,000 | $ 0 | $ 10,000,000 | $ 0 | |
Class A and Class B Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock issued (in shares) | 2,942,251 | 2,060,423 | 7,733,268 | 3,511,292 | |
Shares exercised (in shares) | 1,688,813 | 1,950,077 | 6,479,120 | 6,360,377 | |
Issuance of common stock in connection with business combinations (in shares) | 1,338,228 | 65,962 | 1,375,407 | ||
Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance (in shares) | 67,377,775 | 67,377,775 | |||
RSU | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average fair value per share of options granted (in dollars per share) | $ 22.41 | $ 17.37 | $ 18.23 | ||
Expected period for recognition (in years) | 3 years | ||||
Fair value of RSUs vested | $ 66,000,000 | $ 32,000,000 | $ 159,000,000 | $ 61,000,000 | |
Total unrecognized stock-based compensation expense related to RSUs | $ 532,000,000 | $ 532,000,000 | |||
Restricted stock outstanding (in shares) | 35,221,700 | 35,221,700 | 31,242,263 | ||
Shares exercised (in shares) | 30,015 | 1,365,310 | |||
RSU | Class A and Class B Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock issued (in shares) | 881,133 | 2,703,538 | |||
Restricted stock outstanding (in shares) | 881,133 | 881,133 | 2,703,538 | ||
RSU | Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of common stock in connection with business combinations (in shares) | 851,118 | 1,338,228 | |||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average fair value per share of options granted (in dollars per share) | $ 15.51 | $ 15.57 | |||
Share based compensation arrangement by share based payment award, discount from market price (as percent) | 85% | ||||
Employee Stock Purchase Plan | Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance (in shares) | 21,212,317 | 21,212,317 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Weighted Average Assumptions (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average grant date fair value (in dollars per share) | $ 15.94 | ||
Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 3.90% | 2.37% | |
Expected term (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days | |
Expected volatility | 56.19% | 52.28% | |
Expected dividend yield | 0% | 0% | |
Weighted-average fair value of common stock (in dollars per share) | $ 17.20 | $ 18.01 | $ 17.20 |
Weighted-average grant date fair value (in dollars per share) | $ 10.24 | $ 8.89 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Shares | |||
Beginning balance (in shares) | 53,728,512 | ||
Granted (in shares) | 0 | 3,147,911 | |
Exercised (in shares) | (6,479,120) | ||
Forfeited (in shares) | (1,077,890) | ||
Ending balance (in shares) | 49,319,413 | 49,319,413 | 53,728,512 |
Options vested and expected to vest (in shares) | 47,502,892 | 47,502,892 | |
Options exercisable (in shares) | 42,553,432 | 42,553,432 | |
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 5.98 | ||
Granted (in dollars per share) | 18.01 | ||
Exercised (in dollars per share) | 3.07 | ||
Forfeited (in dollars per share) | 13.09 | ||
Ending balance (in dollars per share) | $ 6.98 | 6.98 | $ 5.98 |
Options vested and expected to vest, Weighted average exercise price (in dollars per share) | 6.73 | 6.73 | |
Options exercisable, Weighted average exercise price per share (in dollars per share) | $ 5.17 | $ 5.17 | |
Weighted Average Remaining Contractual Term (Years) | |||
Options outstanding (in years) | 6 years 6 months | 6 years 10 months 24 days | |
Options vested and expected to vest | 6 years 4 months 24 days | ||
Options exercisable (in years) | 6 years 1 month 6 days | ||
Aggregate Intrinsic Value | |||
Options outstanding | $ 587 | $ 587 | $ 655 |
Options vested and expected to vest | 577 | 577 | |
Options exercisable | $ 576 | $ 576 |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of RSU Activity (Details) - RSU | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
RSU | |
Beginning balance (in shares) | shares | 31,242,263 |
Granted (in shares) | shares | 13,848,380 |
Vested (in shares) | shares | (7,759,507) |
Forfeited (in shares) | shares | (2,109,436) |
Ending balance (in shares) | shares | 35,221,700 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 22.11 |
Granted (in dollars per share) | $ / shares | 18.82 |
Vested (in dollars per share) | $ / shares | 21.69 |
Forfeited (in dollars per share) | $ / shares | 21.77 |
Ending balance (in dollars per share) | $ / shares | $ 20.93 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | (0.20%) | 4% | (0.50%) | 2% |
Benefit (provision) for income taxes | $ 0 | $ 4 | $ (1) | $ 4 |
Non-recurring income tax benefit from acquisition | $ 5 | $ 5 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Schedule of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net loss, basic | $ (31) | $ (98) | $ (210) | $ (175) |
Gain on change in fair value of warrant liability | 18 | 0 | 0 | 102 |
Net loss, diluted | $ (49) | $ (98) | $ (210) | $ (277) |
Denominator: | ||||
Weighted average shares of common stock outstanding - basic (in shares) | 535,219,532 | 513,719,867 | 529,535,807 | 509,507,937 |
Effect of dilutive securities: | ||||
Warrants to purchase Class B common stock (in shares) | 1,315,400 | 0 | 0 | 492,415 |
Weighted average shares of common stock outstanding - diluted (in shares) | 536,534,932 | 513,719,867 | 529,535,807 | 510,000,352 |
Net loss per share, basic (in dollars per share) | $ (0.06) | $ (0.19) | $ (0.40) | $ (0.34) |
Net loss per share, diluted (in dollars per share) | $ (0.09) | $ (0.19) | $ (0.40) | $ (0.54) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Schedule of Antidilutive Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earnings per share (in shares) | 85,484,784 | 94,773,704 | 92,274,864 | 87,871,071 |
Options to purchase Class A common stock and Class B common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earnings per share (in shares) | 49,319,413 | 55,688,962 | 49,319,413 | 55,688,962 |
Unvested restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earnings per share (in shares) | 881,133 | 3,309,223 | 881,133 | 3,309,223 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earnings per share (in shares) | 35,221,700 | 28,848,298 | 35,221,700 | 28,848,298 |
Common Stock Warrant Liability | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earnings per share (in shares) | 0 | 6,902,633 | 6,790,080 | 0 |
Employee Stock Purchase Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive shares excluded from computation of earnings per share (in shares) | 62,538 | 24,588 | 62,538 | 24,588 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 92 | $ 138 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 79 | 122 |
Ireland | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 8 | 10 |
India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 4 | 5 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 1 | $ 1 |