Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Jan. 31, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37879 | ||
Entity Registrant Name | TRADE DESK, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 27-1887399 | ||
Entity Address, Address Line One | 42 N. Chestnut Street | ||
Entity Address, City or Town | Ventura | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 93001 | ||
City Area Code | 805 | ||
Local Phone Number | 585-3434 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.000001 per share | ||
Trading Symbol | TTD | ||
Security Exchange Name | NASDAQ | ||
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 Emerging Growth Company | false | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 34,083,149,160 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2023. | ||
Entity Central Index Key | 0001671933 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 445,017,931 | ||
Class B common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 43,918,900 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Los Angeles, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 895,129 | $ 1,030,506 |
Short-term investments, net | 485,159 | 416,080 |
Accounts receivable, net of allowance for credit losses of $12,826 and $10,477 as of December 31, 2023 and 2022, respectively | 2,870,313 | 2,347,195 |
Prepaid expenses and other current assets | 63,353 | 51,836 |
TOTAL CURRENT ASSETS | 4,313,954 | 3,845,617 |
Property and equipment, net | 161,422 | 173,759 |
Operating lease assets | 197,732 | 220,396 |
Deferred income taxes | 154,849 | 94,028 |
Other assets, non-current | 60,730 | 46,879 |
TOTAL ASSETS | 4,888,687 | 4,380,679 |
Current liabilities: | ||
Accounts payable | 2,317,318 | 1,871,419 |
Accrued expenses and other current liabilities | 137,996 | 105,474 |
Operating lease liabilities | 55,524 | 52,430 |
TOTAL CURRENT LIABILITIES | 2,510,838 | 2,029,323 |
Operating lease liabilities, non-current | 180,369 | 208,527 |
Other liabilities, non-current | 33,261 | 27,490 |
TOTAL LIABILITIES | 2,724,468 | 2,265,340 |
Commitments and contingencies (Note 13) | 0 | 0 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, par value $0.000001; 100,000 shares authorized, zero shares issued and outstanding as of December 31, 2023 and 2022 | 0 | 0 |
Common stock, par value $0.000001 Class A, 1,000,000 shares authorized; 444,997 and 446,456 shares issued and outstanding as of December 31, 2023 and 2022, respectively Class B, 95,000 shares authorized; 43,919 and 44,012 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 0 | 0 |
Additional paid-in capital | 1,967,265 | 1,449,825 |
Retained earnings | 196,954 | 665,514 |
TOTAL STOCKHOLDERS’ EQUITY | 2,164,219 | 2,115,339 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 4,888,687 | $ 4,380,679 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts receivable, allowance for credit losses | $ 12,826 | $ 10,477 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Preferred stock, authorized shares (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Class A common stock | ||
Common stock | ||
Common stock, authorized shares (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 444,997,000 | 446,456,000 |
Common stock, shares outstanding (in shares) | 444,997,000 | 446,456,000 |
Class B common stock | ||
Common stock | ||
Common stock, authorized shares (in shares) | 95,000,000 | 95,000,000 |
Common stock, shares issued (in shares) | 43,919,000 | 44,012,000 |
Common stock, shares outstanding (in shares) | 43,919,000 | 44,012,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Revenue | $ 1,946,120 | $ 1,577,795 | $ 1,196,467 |
Operating expenses: | |||
Platform operations | 365,598 | 281,123 | 221,554 |
Sales and marketing | 447,970 | 337,975 | 249,298 |
Technology and development | 411,794 | 319,876 | 226,137 |
General and administrative | 520,278 | 525,167 | 374,661 |
Total operating expenses | 1,745,640 | 1,464,141 | 1,071,650 |
Income from operations | 200,480 | 113,654 | 124,817 |
Other expense (income): | |||
Interest expense (income), net | (68,508) | (12,755) | 1,030 |
Foreign currency exchange loss (gain), net | 993 | (961) | 1,751 |
Total other expense (income), net | (67,515) | (13,716) | 2,781 |
Income before income taxes | 267,995 | 127,370 | 122,036 |
Provision for (benefit from) income taxes | 89,055 | 73,985 | (15,726) |
Net income | $ 178,940 | $ 53,385 | $ 137,762 |
Earnings per share: | |||
Basic (in dollars per share) | $ 0.37 | $ 0.11 | $ 0.29 |
Diluted (in dollars per share) | $ 0.36 | $ 0.11 | $ 0.28 |
Weighted-average shares outstanding: | |||
Basic (in shares) | 489,261 | 486,937 | 476,851 |
Diluted (in shares) | 500,182 | 499,925 | 498,540 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | |
Balance at beginning of period (in shares) at Dec. 31, 2020 | [1] | 473,401 | |||
Balance at beginning of period at Dec. 31, 2020 | $ 1,013,145 | $ 538,778 | $ 474,367 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of common stock options (in shares) | [1] | 7,361 | |||
Exercise of common stock options | 61,476 | 61,476 | |||
Issuance of common stock under employee stock purchase plan (in shares) | [1] | 1,719 | |||
Issuance of common stock under employee stock purchase plan | 29,229 | 29,229 | |||
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (in shares) | [1] | 935 | |||
Issuance of restricted stock, net of forfeitures and shares withheld for taxes | (56,855) | (56,855) | |||
Issuance of restricted stock related to acquisition (in shares) | [1] | 25 | |||
Issuance of restricted stock related to acquisition | 1,816 | 1,816 | |||
Stock-based compensation | 340,733 | 340,733 | |||
Net income | 137,762 | 137,762 | |||
Balance at end of period (in shares) at Dec. 31, 2021 | [1] | 483,441 | |||
Balance at end of period at Dec. 31, 2021 | 1,527,306 | 915,177 | 612,129 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of common stock options (in shares) | [1] | 4,497 | |||
Exercise of common stock options | 47,525 | 47,525 | |||
Issuance of common stock under employee stock purchase plan (in shares) | [1] | 1,121 | |||
Issuance of common stock under employee stock purchase plan | 33,062 | 33,062 | |||
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (in shares) | [1] | 1,409 | |||
Issuance of restricted stock, net of forfeitures and shares withheld for taxes | (48,595) | (48,595) | |||
Stock-based compensation | 502,656 | 502,656 | |||
Net income | 53,385 | 53,385 | |||
Balance at end of period (in shares) at Dec. 31, 2022 | [1] | 490,468 | |||
Balance at end of period at Dec. 31, 2022 | 2,115,339 | 1,449,825 | 665,514 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of common stock options (in shares) | [1] | 5,232 | |||
Exercise of common stock options | 60,525 | 60,525 | |||
Issuance of common stock under employee stock purchase plan (in shares) | [1] | 886 | |||
Issuance of common stock under employee stock purchase plan | 38,482 | 38,482 | |||
Issuance of restricted stock, net of forfeitures and shares withheld for taxes (in shares) | [1] | 2,450 | |||
Issuance of restricted stock, net of forfeitures and shares withheld for taxes | (78,516) | (78,516) | |||
Stock-based compensation | 496,949 | 496,949 | |||
Repurchases of Class A common stock (in shares) | [1] | (10,120) | |||
Repurchases of Class A common stock | (647,500) | (647,500) | |||
Net income | 178,940 | 178,940 | |||
Balance at end of period (in shares) at Dec. 31, 2023 | [1] | 488,916 | |||
Balance at end of period at Dec. 31, 2023 | $ 2,164,219 | $ 1,967,265 | $ 196,954 | ||
[1] Refer to Note 9—Capitalization for discussion of the Company’s two classes of common stock. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
OPERATING ACTIVITIES: | |||
Net income | $ 178,940 | $ 53,385 | $ 137,762 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 80,418 | 54,425 | 42,219 |
Stock-based compensation | 491,621 | 498,642 | 337,413 |
Deferred income taxes | (61,597) | (11,507) | (16,777) |
Noncash lease expense | 48,955 | 44,115 | 40,315 |
Provision for expected credit losses on accounts receivable | 2,960 | 3,203 | 1,456 |
Other | (20,379) | 622 | 5,803 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (554,012) | (291,747) | (444,342) |
Prepaid expenses and other current and non-current assets | (26,815) | 50,655 | 1,648 |
Accounts payable | 475,463 | 187,119 | 309,410 |
Accrued expenses and other current and non-current liabilities | 35,681 | 8,168 | 7,596 |
Operating lease liabilities | (52,913) | (48,346) | (43,990) |
Net cash provided by operating activities | 598,322 | 548,734 | 378,513 |
INVESTING ACTIVITIES: | |||
Purchases of investments | (608,379) | (553,295) | (278,387) |
Sales of investments | 0 | 1,977 | 4,539 |
Maturities of investments | 555,806 | 338,829 | 253,444 |
Purchases of property and equipment | (46,790) | (84,160) | (54,804) |
Capitalized software development costs | (8,230) | (7,725) | (5,169) |
Business acquisition | 0 | 0 | (13,261) |
Net cash used in investing activities | (107,593) | (304,374) | (93,638) |
FINANCING ACTIVITIES: | |||
Repurchases of Class A common stock | (646,597) | 0 | 0 |
Payment of debt financing costs | 0 | 0 | (1,924) |
Proceeds from exercise of stock options | 60,525 | 47,525 | 61,476 |
Proceeds from employee stock purchase plan | 38,482 | 33,062 | 29,229 |
Taxes paid related to net settlement of restricted stock awards | (78,516) | (48,595) | (56,855) |
Net cash provided by (used in) financing activities | (626,106) | 31,992 | 31,926 |
Increase (decrease) in cash and cash equivalents | (135,377) | 276,352 | 316,801 |
Cash and cash equivalents—Beginning of year | 1,030,506 | 754,154 | 437,353 |
Cash and cash equivalents—End of year | 895,129 | 1,030,506 | 754,154 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 151,899 | 4,211 | 3,608 |
Cash paid for interest | 967 | 995 | 518 |
Cash paid for operating lease liabilities | 63,256 | 57,862 | 52,974 |
Operating lease assets obtained in exchange for operating lease liabilities | 27,237 | 29,881 | 25,356 |
Capitalized assets financed by accounts payable | 4,684 | 2,166 | 5,907 |
Tenant improvements paid by lessor | 0 | 1,453 | 0 |
Asset retirement obligation | 1,076 | 438 | 1,705 |
Stock-based compensation included in capitalized software development costs | $ 5,328 | $ 4,014 | $ 3,320 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Nature of Operations | Note 1—Nature of Operations The Trade Desk, Inc. (the “Company”) is a global technology company that empowers buyers of advertising. Through the Company’s self-service, cloud-based platform, ad buyers can create, manage and optimize more expressive data-driven digital advertising campaigns across ad formats and channels, including video (which includes connected television (“CTV”)), display, audio, digital-out-of-home, native and social, on a multitude of devices, such as computers, mobile devices, televisions and streaming devices. The Company’s platform integrations with major inventory, publisher and data partners provide ad buyers reach and decisioning capabilities, and the Company’s enterprise application programming interfaces (“APIs”) enable its clients to customize and expand platform functionality. The Company is a Delaware corporation formed in November 2009 and headquartered in Ventura, California with offices in various cities in North America, Europe, Asia and Australia. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2—Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the operations of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. On June 16, 2021, the Company effected a ten-for-one stock split (the “Stock Split”) of the Company’s common stock in the form of a stock dividend. Each stockholder of record on June 9, 2021 received nine additional shares of common stock for each then-held share. Trading began on a stock split-adjusted basis on June 17, 2021. The number of shares subject to outstanding equity awards and the exercise prices of the outstanding stock option awards were also adjusted to reflect the effect of the Stock Split. All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates. Management regularly evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for credit losses, (3) operating lease assets and liabilities, including the incremental borrowing rate and terms and provisions of each lease (4) the useful lives of property and equipment and capitalized software development costs, (5) income taxes, (6) assumptions used in the option pricing models to determine the fair value of stock-based compensation and (7) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances; the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. As of December 31, 2023, the impacts to the Company’s business due to geopolitical developments and macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, supply chain disruptions and economic growth continue to evolve. As a result, many of the Company’s estimates and assumptions, including the allowance for credit losses, consider macroeconomic factors in the market, which require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change materially in future periods. Revenue Recognition The Company generates revenue from clients who enter into agreements with the Company to use its platform to purchase advertising inventory, data and other add-on features. The Company charges its clients a platform fee, which is a percentage of a client’s purchases through the platform. In addition, the Company invoices its clients for the cost of advertising inventory purchased, plus data and any add-on features purchased through the platform. The Company determines revenue recognition through the following steps: • Identification of a contract with a client; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the performance obligations are satisfied. The Company maintains agreements with each client and supplier in the form of master service agreements (“MSAs”), which set out the terms of the relationship and access to the Company’s platform. The Company’s performance obligation is to provide the use of its platform to clients to develop ad campaigns and select the advertising inventory, data and other add-on features. The Company charges clients a platform fee, based on a percentage of a client’s purchases through the platform. The Company recognizes revenue for its platform fee at a point in time when a transaction is completed, which is when a bid is won and the client’s purchase occurs through the platform. The transaction price is determined based on the consideration the Company expects to be entitled in exchange for the completion of the transaction. The associated fees are generally not subject to refund or adjustment after a bid is won. Historically, any refunds and adjustments have not been material. Generally, the Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, third-party data and other add-on features (collectively, “Supplier Features”). Judgment is required to determine whether the Company is the principal and reports revenue on a gross basis for Supplier Features or the agent and reports revenue on a net basis for the amount of platform fees charged to the client. The Company determined that it is not primarily responsible for the purchase of Supplier Features. Rather, the Company’s primary responsibility is to provide the platform that enables clients to bid on advertising inventory and use data and other add-on features in designing and executing their campaigns. The Company does not control the Supplier Features prior to the purchase by the client, and it does not have pricing latitude with respect to the cost of such features. The platform fee the Company charges clients is a percentage of their purchases through its platform, similar to a commission, and the platform fee is not contingent on the results of an advertising campaign. Based on these and other factors, the Company determined that it is not the principal in the purchase and sale of Supplier Features and, therefore, reports revenue on a net basis for the platform fees charged to clients. From time to time, the Company may enter into agreements with data suppliers where the purchased data is used to inform and improve the platform, generally at no additional charge to customers outside of the standard fees. Costs associated with this data (“data-related costs”) are recorded in platform operations expense. The Company generally bills clients for the gross amount of Supplier Features they purchase through its platform and the platform fees (“Gross Billings”), net of allowances. When clients have direct payment relationships with advertising inventory suppliers, the Company bills these clients only for third-party data, other add-on features and its platform fees. The Company invoices its clients monthly for the purchases occurring during the month. Typically, invoice payment terms are between 30 to 90 days. However, certain agency clients have sequential liability terms where payment is not due to the Company until the agency has received payment from its advertiser clients. Accounts receivable is recorded based on Gross Billings, which are the amounts the Company is responsible to collect. Accounts payable is recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Refer to Note 12—Segment and Geographic Information for geographic information related to Gross Billings. Operating Expenses The Company classifies its operating expenses into four categories and allocates overhead such as information technology infrastructure, rent, office support and occupancy charges based on headcount for all these categories: Platform Operations. Platform operations expense consists of expenses related to hosting the Company’s platform, which includes “internet traffic” associated with the viewing of available impressions or queries per second (“QPS”), purchasing data used to inform and improve the platform and providing support to clients. Platform operations expense includes hosting costs, personnel costs, data-related costs and amortization of acquired technology and capitalized software costs for platform development. Personnel costs include salaries, bonuses, stock-based compensation and employee benefit costs attributable to personnel who support the platform and provide clients with platform support. The Company capitalizes certain costs associated with platform development in other assets, non-current on its consolidated balance sheet and amortizes these costs into platform operations expense over their estimated useful lives. Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred. Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, as well as third-party consultant costs associated with the ongoing development of the Company’s platform and integrations with advertising and data inventory suppliers. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense. General and Administrative. The Company’s general and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs associated with the Company’s executive, finance, legal, human resources, compliance and other administrative personnel, as well as accounting and legal professional services fees and credit loss expense. Stock-based compensation in general and administrative expenses also includes expense related to the CEO Performance Option, which was granted in 2021. Stock-Based Compensation Stock-based compensation expense related to stock options, restricted stock awards and units (collectively, “restricted stock”) and awards granted under the Company’s employee stock purchase plan (“ESPP”) is measured and recognized in the consolidated financial statements based on the fair value of the awards granted. The fair values of the ESPP and stock option awards are estimated on the grant date using the Black-Scholes option-pricing model, except for the CEO Performance Option, granted in 2021, that was estimated using the Monte Carlo valuation model. The fair value of restricted stock is calculated using the closing market price of the Company’s common stock on the date of grant. Determining the fair value of stock options and ESPP awards requires judgment. The Company’s use of the valuation models requires the input of subjective assumptions. The assumptions used in the Company’s valuation models represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company will continue to use judgment in evaluating the assumptions related to its stock-based compensation. These assumptions and estimates are as follows: Risk-Free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities approximating the expected term of the awards. Expected Term. For stock options, given the insufficient historical data relating to stock option exercises, the Company applies the simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period. Volatility. Prior to 2020, the Company determined the price volatility based on a blend of the historical volatilities of a publicly traded peer group, implied volatilities from its traded options, and its historical volatility, based on daily price observations over a period equivalent to the expected term of the award. During 2020, the Company eliminated the peer group from this analysis and began to determine its price volatility based on a blend of historical and implied volatilities. Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero. Derived Service Period . The stock-compensation expense attribution period for the CEO Performance Option, which was granted in 2021, was developed based on a Monte Carlo simulation of daily stock prices over the performance period. The ESPP and the CEO Performance Option have a six one Stock-based compensation expense related to stock options and restricted stock is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. Stock-based compensation for the CEO Performance Option is recognized on a graded-vesting basis over a derived service period of approximately five years but may be accelerated if the vesting criteria are met prior to the estimated performance period. Stock-based compensation expense for ESPP awards is recognized on a graded-vesting attribution basis over the requisite service period of each award. The Company accounts for forfeitures as they occur. Income Taxes Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in its income tax provision in the accompanying consolidated statements of operations. The Company makes assumptions, judgments and estimates to determine the current income tax provision, tax benefits from uncertain tax positions, deferred tax asset and liabilities and valuation allowance recorded against a deferred tax asset. The assumptions, judgments and estimates relative to the current income tax provision (benefit) take into account current tax laws, their interpretation and possible results of foreign and domestic tax audits. Changes in tax law, and their interpretation, could significantly impact the income taxes provided in the Company’s consolidated financial statements. The evaluation of the Company’s uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, and matters related to the allocation of international taxation rights between countries. Although management believes the Company’s reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the Company’s reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination or the refinement of an estimate. Assumptions, judgments and estimates relative to the amount of deferred income taxes, and any applicable valuation allowances, take into account future taxable income. Any of the assumptions, judgments and estimates mentioned above could cause the actual income tax obligations to differ from estimates. Earnings Per Share Basic earnings per share is calculated by dividing net income by the weighted-average number of common stock shares outstanding. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common stock shares outstanding adjusted for the potentially dilutive impact of stock options, restricted stock and ESPP using the two-class method required for participating securities. Restricted stock awards are considered to be participating securities due to their non-forfeitable dividend rights. Cash, Cash Equivalents and Marketable Securities The Company classifies all investments that are readily convertible to known amounts of cash and have maturities of three months or less from the date of purchase as cash equivalents, which consist primarily of money market funds and commercial paper and those with stated maturities of greater than three months as marketable securities, which primarily consist of corporate debt securities and U.S. government and agency securities. Investments in marketable securities with maturities beyond one year are also classified as short-term available-for-sale securities based on their highly liquid nature and because they are available for current operations. Cash equivalents and marketable securities are carried at fair value. Realized gains and losses are recognized in other expense (income), net on the consolidated statement of operations. Unrealized gains and losses, net of taxes, are included in stockholders' equity. The Company uses Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326 or “CECL”), to assess the investment portfolio for impairment at the individual security level and evaluates all securities in an unrealized loss position to determine if the impairment is credit related (resulting in realized credit loss, recorded in earnings) or non-credit related (resulting in an unrealized loss, recorded in stockholders' equity). The Company has not recorded any impairment charges for unrealized losses in the periods presented. Credit losses recorded in the statements of operations for the years ended 2023, 2022 and 2021 were not material. Refer to Note 6—Cash, Cash Equivalents and Short-Term Investments, Net for additional information regarding the fair value of cash equivalents and marketable securities. Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company performs ongoing credit evaluations of its clients and certain advertisers when the Company’s agreements with its clients contain sequential liability terms such that client payments are not due to the Company until the client has received payment from its clients who are advertisers. The Company maintains an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense on the consolidated statements of operations. The Company applies ASC 326 to assess the allowance for credit losses. ASC 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company’s impairment model utilizes an expected loss methodology in place of an incurred loss methodology related to its marketable securities and the related allowance for credit losses . Industry-specific default rates are applied to receivables subject to sequential liability or receivables for which the Company is engaged with the advertiser directly. For the years ended December 31, 2023 and 2022, the Company’s assessment considered business and market disruptions caused by macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, economic growth, supply chain disruptions and the COVID-19 pandemic, and estimates of credit defaults by industry. The Company continues to monitor the financial implications of these macroeconomic factors on expected credit losses by reviewing the allowance for credit losses on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The following table presents changes in the accounts receivable allowance for credit losses (in thousands): Year Ended December 31, 2023 2022 2021 Beginning balance $ 10,477 $ 7,374 $ 7,253 Add: provision for expected credit losses 2,960 3,203 1,456 Less: write-offs, net of recoveries (611) (100) (1,335) Ending balance $ 12,826 $ 10,477 $ 7,374 Property and Equipment, Net Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the following estimated useful lives: Years Computer and networking equipment 2 – 3 Purchased software 3 – 5 Furniture, fixtures and office equipment 5 Leasehold improvements * ____________ * Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter. Repair and maintenance costs are charged to expense as incurred, while improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results. Capitalized Software Development Costs The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and benefit-related expenses for employees who are directly associated with and devote time to software development projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expense in the consolidated statements of operations. Software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized to platform operations expense using a straight-line method over the estimated useful life of two years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. The Company does not transfer ownership of its internally developed software, or lease its software, to third parties. Cloud computing arrangements (“CCAs”), such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs. If a CCA includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses. If a CCA does not include a software license, the service element of the arrangement is accounted for as a service contract. The Company capitalized certain implementation costs for its CCAs that are service contracts, which are included in other assets, non-current . The Company amortizes capitalized implementation costs in a CCA over the life of the service contract. The Company capitalized $4 million of CCA implementation costs in 2023 and $2 million of CCA implementation costs in 2022. Amortization expense was $2 million, $2 million and $1 million for 2023, 2022 and 2021, respectively. Operating Leases The Company enters into operating leases for its offices, which have lease terms of up to 10 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year with proper notification. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have finance leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right. Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. Operating lease assets also include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives received. The Company has elected to not separate lease and non-lease components. Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, referred to as noncash lease expense, along with the change in the operating lease liabilities are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term. Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors. Refer to Note 8—Leases for additional information. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs 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. Observable inputs are based on market data obtained from independent sources. The carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. The carrying value of the line of credit approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2. Certain long-lived assets including capitalized software development costs are also subject to measurement at fair value on a non-recurring basis if they are deemed to be impaired as a result of an impairment review. To date, no material impairments have been recorded on those assets. Concentration of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions, and its cash levels exceed the Federal Deposit Insurance Corporation federally insured limits. Short-term investments consist of investments in U.S. government securities, U.S. government agency securities, and high-credit quality corporate debt securities and commercial paper. If all of the Company’s individual client contractual relationships were aggregated at the holding company level, one holding company would represent more than 10% of Gross Billings in 2023 and 2022, and two holding companies would each represent more than 10% of Gross Billings in 2021. In 2023, one holding company accounted for 12% of Gross Billings. In 2022, one holding company accounted for 11% of Gross Billings. In 2021, two holding companies accounted for 11% and 10% of Gross Billings, respectively. The Company generally does not have contractual relationships with holding companies. Rather, in most cases, the Company enters into separate contracts and billing relationships with various of their individual agencies and account for those agencies as separate clients. As of December 31, 2023, two clients each accounted for at least 10%, and collectively accounted for 31%, of consolidated accounts receivable. As of December 31, 2022, four clients each accounted for at least 10%, and collectively accounted for 49%, of consolidated accounts receivable. As of December 31, 2023, two suppliers each accounted for at least 10%, and collectively accounted for 31%, of consolidated accounts payable. As of December 31, 2022, two suppliers each accounted for at least 10% and collectively accounted for 25% of consolidated accounts payable. Foreign Currency Transactions The Company’s reporting currency is the U.S. Dollar, and the functional currency of each of the Company’s subsidiaries is the U.S. Dollar. Transactions in foreign currencies are translated into U.S. Dollars at the rates of exchange in effect at the date of the transaction. Net transaction gains or losses are included in foreign currency exchange loss (gain), net in the accompanying consolidated statements of operations. The Company enters into forward contracts |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 3—Earnings Per Share The Company has two classes of common stock, Class A and Class B. Basic and diluted earnings per share (“EPS”) attributable to common stockholders for Class A and Class B common stock were the same because they were entitled to the same liquidation and dividend rights. The computation of basic and diluted EPS is as follows (in thousands, except per share amounts): Year Ended December 31, 2023 2022 2021 Numerator: Net income $ 178,940 $ 53,385 $ 137,762 Denominator: Weighted-average shares outstanding—basic 489,261 486,937 476,851 Effect of dilutive securities 10,921 12,988 21,689 Weighted-average shares outstanding—diluted 500,182 499,925 498,540 Basic earnings per share $ 0.37 $ 0.11 $ 0.29 Diluted earnings per share $ 0.36 $ 0.11 $ 0.28 Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share 5,580 10,707 1,699 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 4—Property and Equipment, Net Major classes of property and equipment were as follows (in thousands): As of December 31, 2023 2022 Computer and networking equipment $ 145,424 $ 113,053 Purchased software 10,424 10,451 Furniture and fixtures 25,632 23,545 Construction in progress (1) 8,487 10,904 Leasehold improvements 129,992 121,700 319,959 279,653 Less: Accumulated depreciation (158,537) (105,894) $ 161,422 $ 173,759 ____________ (1) Includes leasehold improvement projects that are not yet ready for intended use. Depreciation expense for 2023, 2022 and 2021 was $62 million, $42 million and $34 million, respectively. For the years ended December 31, 2023, 2022 and 2021 there were no material impairment charges to property and equipment. |
Capitalized Software Developmen
Capitalized Software Development Costs | 12 Months Ended |
Dec. 31, 2023 | |
Research and Development [Abstract] | |
Capitalized Software Development Costs | Note 5—Capitalized Software Development Costs Capitalized software development costs, included in other assets, non-current, were as follows (in thousands): As of December 31, 2023 2022 Capitalized software development costs, gross $ 32,333 $ 24,829 Less: Accumulated amortization (15,432) (6,285) Capitalized software development costs, net $ 16,901 $ 18,544 Amortization expense was $14 million, $7 million and $5 million for 2023, 2022 and 2021, respectively. For the years ended December 31, 2023, 2022 and 2021 there were no material impairment charges to capitalized software development costs. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-Term Investments, Net | 12 Months Ended |
Dec. 31, 2023 | |
Cash, Cash Equivalents, and Short-Term Investments [Abstract] | |
Cash, Cash Equivalents and Short-Term Investments, Net | Note 6—Cash, Cash Equivalents and Short-Term Investments, Net Cash, cash equivalents and short-term investments in marketable securities were as follows (in thousands): As of December 31, 2023 Cash and Short-Term Total Cash $ 289,512 — $ 289,512 Level 1: Money market funds 560,673 — 560,673 Level 2: Commercial paper 36,013 168,224 204,237 Corporate debt securities — 185,465 185,465 U.S. government and agency securities 8,931 131,470 140,401 Total $ 895,129 $ 485,159 $ 1,380,288 As of December 31, 2022 Cash and Short-Term Total Cash $ 339,717 — $ 339,717 Level 1: Money market funds 640,233 — 640,233 Level 2: Commercial paper 50,556 126,507 177,063 Corporate debt securities — 180,502 180,502 U.S. government and agency securities — 109,071 109,071 Total $ 1,030,506 $ 416,080 $ 1,446,586 The Company’s gross unrealized gains or losses from its short-term investments, recorded at fair value, for the years ended December 31, 2023, 2022 and 2021 were immaterial. The contractual maturities of the Company’s short-term investments are as follows (in thousands): December 31, 2023 Due in one year $ 439,486 Due in one to two years 45,673 Total $ 485,159 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 7—Debt Credit Facility On June 15, 2021, the Company and a syndicate of banks, led by JPMorgan Chase Bank, N.A., as agent, entered into a Loan and Security Agreement (the “Credit Facility”). The Credit Facility consists of a $450 million revolving loan facility, with a $20 million sublimit for swingline borrowings and a $15 million sublimit for the issuance of letters of credit. Under certain circumstances, the Company has the right to increase the Credit Facility by an amount not to exceed $300 million. The Credit Facility is collateralized by substantially all of the Company’s assets, including a pledge of certain of its accounts receivable, deposit accounts, intellectual property, investment property, and equipment. On December 17, 2021, the Company amended the Credit Facility to expand the process for issuing letters of credit and the related invoicing, particularly with respect to letters of credit not denominated in U.S. Dollars. On February 9, 2023, the Company further amended its Credit Facility (as amended, the “Amended Credit Facility”) to transition from a variable interest rate based on the London Interbank Offered Rate to a variable interest rate based on the secured overnight financing rate (“SOFR”). Loans under the Amended Credit Facility bear interest at a rate equal to, at the Company’s option, an annual rate of either a Base Rate or an adjusted term SOFR rate (defined as SOFR for a specified term plus a credit spread adjustment of 10 basis points, subject to a 0% floor), plus an applicable margin (“Base Rate Borrowings” and “Term SOFR Borrowings”). The Base Rate is defined as a rate per annum for any day equal to the greatest of (1) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States, (2) the New York Federal Reserve Bank Rate in effect on such day plus half of 1% and (3) the adjusted term SOFR rate for a one-month interest period on such day plus 1%. The applicable margin is between 0.25% to 1.25% for Base Rate Borrowings and between 1.25% and 2.25% for Term SOFR Borrowings based on the Company maintaining certain leverage ratios. The fee for undrawn amounts under the Amended Credit Facility ranges, based on the applicable leverage, from 0.200% to 0.350%. The Company is also required to pay customary letter of credit fees, as necessary. As of December 31, 2023, the Company did not have an outstanding debt balance under the Amended Credit Facility. Availability under the Amended Credit Facility was $445 million as of December 31, 2023, which is net of outstanding letters of credit of $5 million. The Amended Credit Facility matures, and all outstanding amounts become due and payable, on June 15, 2026. The Amended Credit Facility contains customary conditions to borrowings, events of default and covenants, including covenants that restrict the Company’s ability to sell assets, make changes to the nature of the Company’s business, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distributions or redeem or repurchase capital stock or make other investments, engage in transactions with affiliates and make payments in respect of subordinated debt. The Amended Credit Facility also requires the Company to maintain compliance with a maximum ratio of consolidated funded debt to consolidated EBITDA of 3.50 to 1.00. As of December 31, 2023, the Company was in compliance with all covenants. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 8—Leases The components of lease expense were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 48,866 $ 51,918 $ 50,798 Short-term lease cost 1,898 1,668 969 Variable lease cost 12,901 9,140 6,742 Sublease income (2,208) (2,490) (2,734) Total lease cost $ 61,457 $ 60,236 $ 55,775 Supplemental information related to leases were as follows: Year Ended December 31, 2023 2022 Weighted-average remaining lease term 5.2 years 6.1 years Weighted-average discount rate 3.6 % 3.1 % Maturities of lease commitments as of December 31, 2023 were as follows (in thousands): Year Amount 2024 $ 62,412 2025 59,141 2026 56,200 2027 48,503 2028 44,059 Thereafter 51,173 Total undiscounted lease commitments 321,488 Less: commitments for leases not yet commenced (63,340) Less: interest (22,255) Present value of lease liabilities 235,893 Less: operating lease liabilities, current (55,524) Operating lease liabilities, non-current $ 180,369 |
Capitalization
Capitalization | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Capitalization | Note 9—Capitalization The Class A and Class B common stock have the same rights and preferences including rights to dividends, except the Class B is entitled to ten votes per share and the Class A is entitled to one vote per share. Each share of Class B common stock is convertible into one share of Class A common stock at any time at the option of the holder. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, except for certain transfers described in the Company’s restated certificate of incorporation, including, without limitation, certain transfers for tax and estate planning purposes. The Company’s certificate of incorporation provides that all Class B common stock will convert automatically into Class A common stock on December 22, 2025 unless converted prior to such date. The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock. In February 2023, the Company’s board of directors approved a share repurchase program with authorization to purchase up to $700 million of its Class A common stock. The share repurchase program, which has no expiration date, is designed to help offset the impact of future share dilution from employee stock issuances. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion, depending on market conditions and corporate needs. Open market repurchases are structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of Class A common stock, and may be modified, suspended or terminated at any time at the discretion of the Company’s board of directors. During the year ended December 31, 2023, the Company repurchased and subsequently retired 10 million shares of its Class A common stock for an aggregate repurchase amount of $648 million, which included an immaterial amount related to the 1% excise tax on net share repurchases as a result of the Inflation Reduction Act of 2022 (“IRA”). As of December 31, 2023, $53 million remained available and authorized for repurchases. Activity under the share repurchase program was recognized in the consolidated financial statements on a trade-date basis. In February 2024, an additional $647 million was authorized under this program, bringing the total amount for future repurchases back to $700 million. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-Based Compensation Expense Stock-based compensation expense recorded in the consolidated statements of operations was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Platform operations $ 21,048 $ 18,285 $ 15,913 Sales and marketing 75,924 64,442 50,671 Technology and development 120,823 94,822 57,791 General and administrative 273,826 321,093 213,038 Total $ 491,621 $ 498,642 $ 337,413 On September 30, 2023, David R. Pickles stepped down as the Company’s Chief Technology Officer and from the Company’s board of directors. As a result, Mr. Pickles and the Company mutually agreed to cancel his unvested stock options and restricted stock without payment or replacement, resulting in the recognition of $14 million in incremental stock-based compensation expense, which is included in technology and development expense for the year ended December 31, 2023. No amount of stock-based compensation expense for these cancelled options and restricted stock remains unamortized. For the years ended December 31, 2023, 2022 and 2021, the Company recognized tax benefits on total stock-based compensation expense, which are reflected in the provision for (benefit from) income taxes in the consolidated statements of operations, of $53 million, $48 million and $104 million, respectively. For the years ended December 31, 2023, 2022 and 2021, the tax benefit realized related to restricted stock vested and stock options exercised during the period was $91 million, $72 million and $121 million, respectively. Stock-Based Award Plans The Company is authorized to issue stock options, restricted stock awards, restricted stock units, stock appreciation rights and other stock-based and cash-based awards under its 2016 Incentive Award Plan. As of December 31, 2023, 81.2 million shares remained available for grant under the Company’s 2016 Incentive Award Plan. The number of shares authorized for grant is subject to increase each year on January 1, equal to the lesser of (a) 4% of the common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year and (b) such smaller number of shares as determined by the board of directors. On January 1, 2024, the number of shares authorized for grant under the Company’s 2016 Incentive Award Plan was increased by 19.6 million shares in accordance with plan provisions. Stock Options Stock options granted under the Company’s stock incentive plans generally vest over four years, subject to the holder’s continued service through the vesting date and expire no later than 10 years from the date of grant. The following summarizes stock option activity: Shares Under Options (in thousands) Weighted- Average Exercise Price Weighted- Average Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2022 15,418 $ 19.82 Granted 2,891 62.77 Exercised (5,232) 11.49 Expired/Forfeited/Cancelled (819) 56.63 Outstanding as of December 31, 2023 12,258 $ 31.05 6.0 $ 507,343 Exercisable as of December 31, 2023 9,029 $ 19.96 5.0 $ 472,019 The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted-average assumptions used to value options granted to employees for the periods presented were as follows: Year Ended December 31, 2023 2022 2021 Expected term (years) 6.0 6.0 6.0 Expected volatility 64.4 % 66.5 % 64.3 % Risk-free interest rate 3.71 % 2.91 % 1.04 % Estimated dividend yield — % — % — % The weighted-average grant date fair value per share of stock options granted for the years ended December 31, 2023, 2022 and 2021 and were $38.69, $37.65 and $43.57, respectively. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 were $276 million, $232 million and $538 million, respectively. At December 31, 2023, the Company had unrecognized stock-based compensation relating to stock options of approximately $120 million, which is expected to be recognized over a weighted-average period of 2.8 years. CEO Performance Option In October 2021 , the Company granted a market-based performance award to the Company’s Chief Executive Officer (the “CEO Performance Option”) under the Company’s 2016 Incentive Award Plan. If specified target goals for the per share price of the Company’s Class A common stock (ranging from $90.00 to $340.00 per share) and certain other vesting conditions are satisfied, including the CEO’s continued service, the CEO may purchase up to a target amount of 16 million shares of Class A common stock, subject to adjustment as discussed in the following sentence, to be earned in eight equal tranches over a maximum term of 10 years. These target shares are subject to decrease or increase by up to 20% for each tranche based on the relative total shareholder return (“TSR”) of the Company’s Class A common stock as compared to the TSR of the Nasdaq-100 Index at each vesting tranche, for a maximum of 19.2 million shares. The CEO Performance Option has an exercise price of $68.29 per share and a grant-date fair value of approximately $819 million, which is expected to be expensed on a graded-vesting basis over a derived service period of approximately five years but may be accelerated if the vesting criteria are met prior to the estimated performance period. The grant-date fair value was estimated based on a Monte Carlo valuation model using the following assumptions: Expected volatility 63.4 % Risk-free interest rate 1.55 % Estimated dividend yield — % The CEO Performance Option has a one At December 31, 2022, the CEO Performance Option had outstanding options of 19.2 million. No options were exercised, forfeited or expired during the fiscal year ended December 31, 2023. At December 31, 2023, the CEO Performance Option had outstanding options of 19.2 million with an aggregate intrinsic value of $70 million and a weighted-average contractual life of 7.8 years. At December 31, 2023, the CEO Performance Option had 2.4 million exercisable options with an aggregate intrinsic value of $9 million and a weighted-average contractual life of 7.8 years. On December 10, 2021, the expense related to the first tranche of the award was accelerated due to early stock price achievement. Stock-based compensation expense of $158 million for the CEO Performance Option, including the accelerated tranche, was recorded as a component of general and administrative expense in the fourth quarter of 2021. No such acceleration occurred during the years ended December 31, 2023 and 2022. Stock-based compensation expense of $198 million and $262 million for the CEO Performance Option was recorded as a component of general and administrative expense during the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, the Company had unrecognized stock-based compensation relating to the CEO Performance Option of $201 million that is expected to be recognized over a weighted-average period of 1.6 years, assuming no acceleration of vesting. Restricted Stock Restricted stock awards generally vest over four years, subject to the holder’s continued service through the vesting date. The following summarizes restricted stock activity: Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested as of December 31, 2022 8,747 $ 57.41 Granted 6,898 63.81 Vested (3,575) 55.01 Forfeited/Cancelled (1,524) 58.74 Unvested as of December 31, 2023 10,546 $ 62.22 At December 31, 2023, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $605 million, which is expected to be recognized over a weighted-average period of 2.9 years. Employee Stock Purchase Plan In September 2016, the Company established an ESPP with 8.0 million shares of Class A common stock available for issuance. As of December 31, 2023, 14.4 million shares remained available for grant under this plan. The number of shares authorized for grant is subject to increase each year on January 1, equal to the lesser of (a) 8.0 million shares, (b) 1% of the Class A common stock outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (c) such smaller number of shares as determined by the Company’s board of directors. On January 1, 2024, the number of shares available for issuance under the Company’s ESPP increased by 4.4 million shares in accordance with plan provisions. Under the ESPP, all eligible employees are permitted to contribute up to 100% of their compensation, generally through payroll deductions, to purchase shares of Class A common stock, subject to applicable ESPP and statutory limits. The ESPP provides for offering periods generally up to two years, with purchases occurring and new offering periods commencing generally every six months. ESPP purchases generally occur on May 15th and November 15th each year. At each purchase date, employees are able to purchase shares at 85% of the lower of (1) the closing market price per share of Class A common stock on the employee’s enrollment into the applicable offering period and (2) the closing market price per share of Class A common stock on the purchase date. The ESPP has an automatic reset feature, whereby the offering period resets if the fair value of the Company’s common stock on a purchase date is less than that on the original offering date. The fair value of ESPP shares was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2023 2022 2021 Expected term (years) 0.9 1.0 0.6 Expected volatility 60.3 % 74.1 % 62.3 % Risk-free interest rate 4.95 % 2.53 % 0.09 % Estimated dividend yield — % — % — % The ESPP has a six At December 31, 2023, the Company had unrecognized stock-based compensation relating to ESPP awards of approximately $12 million, which is expected to be recognized over a weighted-average period of 0.7 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11—Income Taxes The following are the domestic and foreign components of the Company’s income before income taxes (in thousands): Year Ended December 31, 2023 2022 2021 Domestic $ 328,853 $ 169,891 $ 193,048 Foreign (60,858) (42,521) (71,012) Income before income taxes $ 267,995 $ 127,370 $ 122,036 The following are the components of the provision for (benefit from) income taxes (in thousands): Year Ended December 31, 2023 2022 2021 Current: Federal $ 120,049 $ 61,904 $ 10,332 State and local 24,827 34,797 (10,417) Foreign 5,000 3,068 2,435 Total current provision 149,876 99,769 2,350 Deferred: Federal (51,822) (2,380) (21,287) State and local (7,842) (23,465) 3,193 Foreign (1,157) 61 18 Total deferred provision (60,821) (25,784) (18,076) Total provision for (benefit from) income taxes $ 89,055 $ 73,985 $ (15,726) A reconciliation of the statutory tax rate to the effective tax rate for the periods presented is as follows: Year Ended December 31, 2023 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal benefit 5.0 7.0 (5.3) Foreign income at other than U.S. rates (1) 6.2 9.5 14.2 Stock-based compensation 8.3 31.0 (29.9) Meals and entertainment 1.0 0.4 0.2 Nondeductible compensation 0.3 1.6 1.7 Research and development credit (8.7) (11.8) (15.3) Other permanent items 0.1 (0.6) 0.5 Effective income tax rate 33.2 % 58.1 % (12.9) % ____________ (1) For the years ended December 31, 2023, 2022, and 2021, includes the impact of the valuation allowance associated with the United Kingdom (“U.K.”). For additional information, see discussion below. Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities (in thousands): As of December 31, 2023 2022 Reserves and allowances $ 8,401 $ 5,428 Accrued expenses 12,217 7,466 Net operating losses 231,597 182,124 Research and development tax credit 18,220 17,359 Stock-based compensation 25,727 21,207 Prepaid expenses (944) (1,122) Property and equipment (27,952) (29,020) Intangibles (1) 180,573 200,113 Capitalized software development costs 112,736 61,670 Operating lease assets (39,826) (45,493) Operating lease liabilities 48,153 54,657 Other 1,776 1,258 Valuation allowance (415,829) (381,619) Total deferred tax assets, net $ 154,849 $ 94,028 ____________ (1) As of December 31, 2023 and 2022, includes intangibles associated with international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. During 2023, management recorded an additional $34 million to maintain a full valuation allowance against its U.K. net deferred tax assets, based on the history of cumulative losses and the conclusion that future taxable profit may not be available for the utilization of the deferred tax assets for U.K. income tax purposes. As of December 31, 2023, the Company had federal, state and foreign net operating loss carryforwards of approximately $2 million, $10 million and $1,001 million, respectively. The federal, state and foreign net operating loss carryforwards are subject to limitations under applicable federal, state and foreign tax law. Federal net operating loss carryforward will carry forward indefinitely. State net operating loss carryforwards have varied expiration years beginning in 2032. Foreign net operating losses carry forward indefinitely. As of December 31, 2023, the Company had state and foreign research and development tax credits of approximately $29 million and $2 million, respectively, which can be carried forward as prescribed under applicable state and foreign tax law. State and foreign research and development tax credits carry forward indefinitely. As of December 31, 2023, unremitted earnings of the subsidiaries outside of the United States were approximately $7 million, on which no state taxes have been paid. The Company’s intention is to indefinitely reinvest these earnings outside the United States upon distribution of those earnings in the form of a dividend or otherwise, the Company would be subject to both state income taxes and withholding taxes payable to various foreign countries. The amounts of such tax liabilities that might be payable upon repatriation of foreign earnings are not material. As of December 31, 2023, the Company had gross unrecognized tax benefits of approximately $98 million, $71 million of which is a reduction to deferred tax assets and the remaining $27 million which would affect the Company’s effective tax rate if recognized. As of December 31, 2022, the Company had gross unrecognized tax benefits of approximately $91 million, $70 million of which is a reduction to deferred tax assets and the remaining $21 million which would affect the Company’s effective tax rate if recognized. The following table presents changes in gross unrecognized tax benefits (in thousands): Year Ended December 31, 2023 2022 (1) 2021 (1) Beginning balance $ 90,932 $ 86,331 $ 66,875 Increases related to prior year tax positions 229 — 13,075 Decreases related to prior year tax positions — (84) — Increases related to current year tax positions 6,601 4,685 6,381 Settlements (59) — — Expiration of statute of limitations — — — Ending balance $ 97,703 $ 90,932 $ 86,331 ____________ (1) Includes the impact of a statutory rate change in the U.K. Interest and penalties related to the Company’s unrecognized tax benefits accrued as of December 31, 2023 were not material. The Company files U.S. federal, state and foreign tax returns. The Company is currently under examination by the Internal Revenue Service for the years ended December 31, 2015, 2016, 2017, 2018, 2019 and 2020. The Company is also currently under examination by various state jurisdictions. The Company does not expect to materially reduce its unrecognized tax benefits during the next twelve months. The Company remains subject to examination for its federal and state tax returns for the periods 2015 through 2022, and 2019 through 2022, respectively. The majority of the Company’s foreign subsidiaries remain subject to examination by local taxing authorities for 2017 and subsequent years. On August 16, 2022, the IRA (as defined in Note 9 —Capitalization ) was signed into law for tax years beginning after December 31, 2022. There was no impact to the Company’s provision for income taxes, effective tax rate, unrecognized tax benefits or deferred income tax positions for the year ended December 31, 2023 from the IRA. The IRA did not result in a material excise tax on net stock repurchases for the year ended December 31, 2023. In 2021, the Organization for Economic Cooperation and Development (“OECD”) announced an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. The Company does not currently anticipate that the legislation will have a material impact on its provision for income taxes or effective tax rate. The Company continues to monitor for evolving tax legislation in the individual jurisdictions in which it operates and for changes to its operations that could be impacted by legislation. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2023 | |
Segments, Geographical Areas [Abstract] | |
Segment and Geographic Information | Note 12—Segment and Geographic Information The Company has one primary business activity and operates in one reportable and operating segment. The Company reports revenue net of amounts it pays suppliers for the cost of Supplier Features. The Company generally bills clients based on Gross Billings, which is the gross amount of Supplier Features they purchase through its platform and the platform fees, net of allowances. The Company’s accounts receivable are recorded at the amount of Gross Billings for the amounts it is responsible to collect, and accounts payable are recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Gross Billings, based on the address of the clients or client affiliates, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 United States $ 8,216,446 $ 6,696,743 $ 5,286,191 International 1,214,207 937,824 843,436 Total $ 9,430,653 $ 7,634,567 $ 6,129,627 Property and equipment, net and operating lease assets presented by principal geographic area, were as follows (in thousands): As of December 31, 2023 2022 United States $ 278,998 $ 316,000 International 80,156 78,155 Total $ 359,154 $ 394,155 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13—Commitments and Contingencies As of December 31, 2023, the Company had non-cancelable operating lease commitments for office space that were recorded as operating lease liabilities on the consolidated balance sheets. Refer to Note 8 — Leases for additional information regarding lease commitments. As of December 31, 2023, the Company had non-cancelable commitments to its hosting services and hardware providers as well as commitments to providers of software as a service. As of December 31, 2023, these purchase obligations were as follows (in thousands): Year Amount 2024 $ 155,703 2025 125,368 2026 118,676 2027 19,667 2028 — $ 419,414 Guarantees and Indemnification In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to clients, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements, and thus, there are no claims that the Company is aware of that could have a material effect on the Company’s balance sheet, statement of operations or statement of cash flows. Accordingly, no amounts for any obligation have been recorded as of December 31, 2023 and 2022. Litigation From time to time, the Company is subject to various legal proceedings, litigation and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings, litigation and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. On May 27, 2022, a stockholder of the Company filed a derivative lawsuit captioned Huizenga v. Green, et al., No. 2022-0461, asserting claims on behalf of the Company against certain members of the Company’s board of directors in the Court of Chancery of the State of Delaware. On June 27, 2022, a second derivative lawsuit captioned Pfeiffer v. Green, et al., No. 2022-0560 was filed in the Court of Chancery of the State of Delaware alleging substantially similar claims. Those lawsuits were consolidated on August 18, 2022, and a lead plaintiff was appointed on October 7, 2022. The two complaints allege generally that the Defendants breached their fiduciary duties to the Company and its stockholders in connection with the negotiation and approval of the CEO Performance Option. The plaintiffs seek a court order rescinding the CEO Performance Option and monetary damages. On November 10, 2022, the plaintiffs filed a consolidated complaint, and on January 12, 2023, the Defendants moved to dismiss the consolidated complaint. On March 24, 2023, plaintiffs filed an opposition to defendants’ motions to dismiss. Defendants filed their replies in support of their motions to dismiss on May 19, 2023. Oral argument on the motions has been set for April 3, 2024. Litigation is inherently uncertain and there can be no assurance regarding the likelihood that the motions to dismiss or defense of the various actions will be successful. Employment Contracts The Company has entered into agreements with severance terms with certain employees and officers, all of whom are employed on an at-will basis, subject to certain severance obligations in the event of certain involuntary terminations. The Company may be required to accelerate the vesting of certain stock options in the event of changes in control, as defined and involuntary terminations. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 178,940 | $ 53,385 | $ 137,762 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Rule 10b5-1 Arrangement Adopted | true | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | true | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Jeff T. Green [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On November 13, 2023, our Chief Executive Officer, Jeff T. Green, through a personal trust over which he is a trustee, modified a trading plan with respect to the sale of our Class A common stock intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), which he had previously adopted on June 15, 2023. The modified plan covers the sale of up to 866,901 shares. The modified plan will terminate at the earlier of the execution of all trading orders in the plan or May 15, 2024. | |
June 2023 Plan [Member] | Jeff T. Green [Member] | ||
Trading Arrangements, by Individual | ||
Name | Jeff T. Green | |
Title | Chief Executive Officer | |
Termination Date | November 13, 2023 | |
November 2023 Plan [Member] | Jeff T. Green [Member] | ||
Trading Arrangements, by Individual | ||
Name | Jeff T. Green | |
Title | Chief Executive Officer | |
Adoption Date | November 13, 2023 | |
Termination Date | May 15, 2024 | |
Arrangement Duration | 184 days | |
Aggregate Available | 866,901 | 866,901 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the operations of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. On June 16, 2021, the Company effected a ten-for-one stock split (the “Stock Split”) of the Company’s common stock in the form of a stock dividend. Each stockholder of record on June 9, 2021 received nine additional shares of common stock for each then-held share. Trading began on a stock split-adjusted basis on June 17, 2021. The number of shares subject to outstanding equity awards and the exercise prices of the outstanding stock option awards were also adjusted to reflect the effect of the Stock Split. All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the Stock Split. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from these estimates. Management regularly evaluates its estimates, primarily those related to: (1) revenue recognition criteria, including the determination of revenue reporting as net versus gross in the Company’s revenue arrangements, (2) allowances for credit losses, (3) operating lease assets and liabilities, including the incremental borrowing rate and terms and provisions of each lease (4) the useful lives of property and equipment and capitalized software development costs, (5) income taxes, (6) assumptions used in the option pricing models to determine the fair value of stock-based compensation and (7) the recognition and disclosure of contingent liabilities. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances; the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. As of December 31, 2023, the impacts to the Company’s business due to geopolitical developments and macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, supply chain disruptions and economic growth continue to evolve. As a result, many of the Company’s estimates and assumptions, including the allowance for credit losses, consider macroeconomic factors in the market, which require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change materially in future periods. |
Revenue Recognition | Revenue Recognition The Company generates revenue from clients who enter into agreements with the Company to use its platform to purchase advertising inventory, data and other add-on features. The Company charges its clients a platform fee, which is a percentage of a client’s purchases through the platform. In addition, the Company invoices its clients for the cost of advertising inventory purchased, plus data and any add-on features purchased through the platform. The Company determines revenue recognition through the following steps: • Identification of a contract with a client; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the performance obligations are satisfied. The Company maintains agreements with each client and supplier in the form of master service agreements (“MSAs”), which set out the terms of the relationship and access to the Company’s platform. The Company’s performance obligation is to provide the use of its platform to clients to develop ad campaigns and select the advertising inventory, data and other add-on features. The Company charges clients a platform fee, based on a percentage of a client’s purchases through the platform. The Company recognizes revenue for its platform fee at a point in time when a transaction is completed, which is when a bid is won and the client’s purchase occurs through the platform. The transaction price is determined based on the consideration the Company expects to be entitled in exchange for the completion of the transaction. The associated fees are generally not subject to refund or adjustment after a bid is won. Historically, any refunds and adjustments have not been material. Generally, the Company reports revenue net of amounts it pays suppliers for the cost of advertising inventory, third-party data and other add-on features (collectively, “Supplier Features”). Judgment is required to determine whether the Company is the principal and reports revenue on a gross basis for Supplier Features or the agent and reports revenue on a net basis for the amount of platform fees charged to the client. The Company determined that it is not primarily responsible for the purchase of Supplier Features. Rather, the Company’s primary responsibility is to provide the platform that enables clients to bid on advertising inventory and use data and other add-on features in designing and executing their campaigns. The Company does not control the Supplier Features prior to the purchase by the client, and it does not have pricing latitude with respect to the cost of such features. The platform fee the Company charges clients is a percentage of their purchases through its platform, similar to a commission, and the platform fee is not contingent on the results of an advertising campaign. Based on these and other factors, the Company determined that it is not the principal in the purchase and sale of Supplier Features and, therefore, reports revenue on a net basis for the platform fees charged to clients. From time to time, the Company may enter into agreements with data suppliers where the purchased data is used to inform and improve the platform, generally at no additional charge to customers outside of the standard fees. Costs associated with this data (“data-related costs”) are recorded in platform operations expense. The Company generally bills clients for the gross amount of Supplier Features they purchase through its platform and the platform fees (“Gross Billings”), net of allowances. When clients have direct payment relationships with advertising inventory suppliers, the Company bills these clients only for third-party data, other add-on features and its platform fees. The Company invoices its clients monthly for the purchases occurring during the month. Typically, invoice payment terms are between 30 to 90 days. However, certain agency clients have sequential liability terms where payment is not due to the Company until the agency has received payment from its advertiser clients. Accounts receivable is recorded based on Gross Billings, which are the amounts the Company is responsible to collect. Accounts payable is recorded at the net amount payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis. Refer to Note 12—Segment and Geographic Information for geographic information related to Gross Billings. |
Operating Expenses | Operating Expenses The Company classifies its operating expenses into four categories and allocates overhead such as information technology infrastructure, rent, office support and occupancy charges based on headcount for all these categories: Platform Operations. Platform operations expense consists of expenses related to hosting the Company’s platform, which includes “internet traffic” associated with the viewing of available impressions or queries per second (“QPS”), purchasing data used to inform and improve the platform and providing support to clients. Platform operations expense includes hosting costs, personnel costs, data-related costs and amortization of acquired technology and capitalized software costs for platform development. Personnel costs include salaries, bonuses, stock-based compensation and employee benefit costs attributable to personnel who support the platform and provide clients with platform support. The Company capitalizes certain costs associated with platform development in other assets, non-current on its consolidated balance sheet and amortizes these costs into platform operations expense over their estimated useful lives. Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred. Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, as well as third-party consultant costs associated with the ongoing development of the Company’s platform and integrations with advertising and data inventory suppliers. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense. General and Administrative. The Company’s general and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs associated with the Company’s executive, finance, legal, human resources, compliance and other administrative personnel, as well as accounting and legal professional services fees and credit loss expense. Stock-based compensation in general and administrative expenses also includes expense related to the CEO Performance Option, which was granted in 2021. |
Sales and Marketing | Sales and Marketing. Sales and marketing expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and commission costs, for the Company’s sales and marketing personnel. Sales and marketing expense also includes costs for market development programs, marketing events, advertising and promotional and other marketing activities. Commissions costs are expensed as incurred. |
Technology and Development | Technology and Development. The Company’s technology and development expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation and employee benefits costs, as well as third-party consultant costs associated with the ongoing development of the Company’s platform and integrations with advertising and data inventory suppliers. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in other assets, non-current on the Company’s consolidated balance sheet. The Company amortizes capitalized software development costs relating to the Company’s platform to platform operations expense. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense related to stock options, restricted stock awards and units (collectively, “restricted stock”) and awards granted under the Company’s employee stock purchase plan (“ESPP”) is measured and recognized in the consolidated financial statements based on the fair value of the awards granted. The fair values of the ESPP and stock option awards are estimated on the grant date using the Black-Scholes option-pricing model, except for the CEO Performance Option, granted in 2021, that was estimated using the Monte Carlo valuation model. The fair value of restricted stock is calculated using the closing market price of the Company’s common stock on the date of grant. Determining the fair value of stock options and ESPP awards requires judgment. The Company’s use of the valuation models requires the input of subjective assumptions. The assumptions used in the Company’s valuation models represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company will continue to use judgment in evaluating the assumptions related to its stock-based compensation. These assumptions and estimates are as follows: Risk-Free Interest Rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities approximating the expected term of the awards. Expected Term. For stock options, given the insufficient historical data relating to stock option exercises, the Company applies the simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period. Volatility. Prior to 2020, the Company determined the price volatility based on a blend of the historical volatilities of a publicly traded peer group, implied volatilities from its traded options, and its historical volatility, based on daily price observations over a period equivalent to the expected term of the award. During 2020, the Company eliminated the peer group from this analysis and began to determine its price volatility based on a blend of historical and implied volatilities. Dividend Yield. The dividend yield assumption is based on the Company’s history and current expectations of dividend payouts. The Company has never declared or paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future, so the Company used an expected dividend yield of zero. Derived Service Period . The stock-compensation expense attribution period for the CEO Performance Option, which was granted in 2021, was developed based on a Monte Carlo simulation of daily stock prices over the performance period. The ESPP and the CEO Performance Option have a six one Stock-based compensation expense related to stock options and restricted stock is recognized on a straight-line basis over the requisite service periods of the awards, which is generally four years. Stock-based compensation for the CEO Performance Option is recognized on a graded-vesting basis over a derived service period of approximately five years but may be accelerated if the vesting criteria are met prior to the estimated performance period. Stock-based compensation expense for ESPP awards is recognized on a graded-vesting attribution basis over the requisite service period of each award. The Company accounts for forfeitures as they occur. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based upon the net tax effects of the differences between the Company’s consolidated financial statements carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. A valuation allowance is used to reduce some or all of the deferred tax assets if, based upon the weight of available evidence, it is more likely than not that those deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties accrued related to its uncertain tax positions in its income tax provision in the accompanying consolidated statements of operations. The Company makes assumptions, judgments and estimates to determine the current income tax provision, tax benefits from uncertain tax positions, deferred tax asset and liabilities and valuation allowance recorded against a deferred tax asset. The assumptions, judgments and estimates relative to the current income tax provision (benefit) take into account current tax laws, their interpretation and possible results of foreign and domestic tax audits. Changes in tax law, and their interpretation, could significantly impact the income taxes provided in the Company’s consolidated financial statements. The evaluation of the Company’s uncertain tax positions involves significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws, and matters related to the allocation of international taxation rights between countries. Although management believes the Company’s reserves are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the Company’s reserves. Reserves are adjusted considering changing facts and circumstances, such as the closing of a tax examination or the refinement of an estimate. Assumptions, judgments and estimates relative to the amount of deferred income taxes, and any applicable valuation allowances, take into account future taxable income. Any of the assumptions, judgments and estimates mentioned above could cause the actual income tax obligations to differ from estimates. |
Earnings Per Share | Earnings Per Share |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The Company classifies all investments that are readily convertible to known amounts of cash and have maturities of three months or less from the date of purchase as cash equivalents, which consist primarily of money market funds and commercial paper and those with stated maturities of greater than three months as marketable securities, which primarily consist of corporate debt securities and U.S. government and agency securities. Investments in marketable securities with maturities beyond one year are also classified as short-term available-for-sale securities based on their highly liquid nature and because they are available for current operations. Cash equivalents and marketable securities are carried at fair value. Realized gains and losses are recognized in other expense (income), net on the consolidated statement of operations. Unrealized gains and losses, net of taxes, are included in stockholders' equity. The Company uses Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326 or “CECL”), to assess the investment portfolio for impairment at the individual security level and evaluates all securities in an unrealized loss position to determine if the impairment is credit related (resulting in realized credit loss, recorded in earnings) or non-credit related (resulting in an unrealized loss, recorded in stockholders' equity). The Company has not recorded any impairment charges for unrealized losses in the periods presented. Credit losses recorded in the statements of operations for the years ended 2023, 2022 and 2021 were not material. Refer to Note 6—Cash, Cash Equivalents and Short-Term Investments, Net for additional information regarding the fair value of cash equivalents and marketable securities. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the invoiced amount, are unsecured and do not bear interest. The Company performs ongoing credit evaluations of its clients and certain advertisers when the Company’s agreements with its clients contain sequential liability terms such that client payments are not due to the Company until the client has received payment from its clients who are advertisers. The Company maintains an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense on the consolidated statements of operations. The Company applies ASC 326 to assess the allowance for credit losses. ASC 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company’s impairment model utilizes an expected loss methodology in place of an incurred loss methodology related to its marketable securities and the related allowance for credit losses . Industry-specific default rates are applied to receivables subject to sequential liability or receivables for which the Company is engaged with the advertiser directly. For the years ended December 31, 2023 and 2022, the Company’s assessment considered business and market disruptions caused by macroeconomic factors, such as changes in interest rates, inflation, foreign currency exchange rates, economic growth, supply chain disruptions and the COVID-19 pandemic, and estimates of credit defaults by industry. The Company continues to monitor the financial implications of these macroeconomic factors on expected credit losses by reviewing the allowance for credit losses on a quarterly basis. Account balances are charged off against the allowance when the Company believes it is probable the receivable will not be recovered. The following table presents changes in the accounts receivable allowance for credit losses (in thousands): Year Ended December 31, 2023 2022 2021 Beginning balance $ 10,477 $ 7,374 $ 7,253 Add: provision for expected credit losses 2,960 3,203 1,456 Less: write-offs, net of recoveries (611) (100) (1,335) Ending balance $ 12,826 $ 10,477 $ 7,374 |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are recorded at historical cost, less accumulated depreciation and amortization. Depreciation is computed using the straight-line method based upon the following estimated useful lives: Years Computer and networking equipment 2 – 3 Purchased software 3 – 5 Furniture, fixtures and office equipment 5 Leasehold improvements * ____________ * Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter. Repair and maintenance costs are charged to expense as incurred, while improvements are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Company’s operating results. |
Capitalized Software Development Costs | Capitalized Software Development Costs The Company capitalizes certain costs associated with creating and enhancing internally developed software related to the Company’s technology infrastructure. These costs include personnel and benefit-related expenses for employees who are directly associated with and devote time to software development projects, and external direct costs of materials and services consumed in developing or obtaining the software. Software development costs that do not qualify for capitalization, as further discussed below, are expensed as incurred and recorded in technology and development expense in the consolidated statements of operations. Software development activities typically consist of three stages: (1) the planning phase; (2) the application and infrastructure development stage; and (3) the post-implementation stage. Costs incurred in the planning and post implementation phases, including costs associated with the post-configuration training and repairs and maintenance of the developed technologies, are expensed as incurred. The Company capitalizes costs associated with software developed when the preliminary project stage is completed, management implicitly or explicitly authorizes and commits to funding the project and it is probable that the project will be completed and perform as intended. Costs incurred in the application and infrastructure development phases, including significant enhancements and upgrades, are capitalized. Capitalization ends once a project is substantially complete and the software is ready for its intended purpose. Software development costs are amortized to platform operations expense using a straight-line method over the estimated useful life of two years, commencing when the software is ready for its intended use. The straight-line recognition method approximates the manner in which the expected benefit will be derived. The Company does not transfer ownership of its internally developed software, or lease its software, to third parties. Cloud computing arrangements (“CCAs”), such as software as a service and other hosting arrangements, are evaluated for capitalized implementation costs in a similar manner as capitalized software development costs. If a CCA includes a software license, the software license element of the arrangement is accounted for in a manner consistent with the acquisition of other software licenses. If a CCA does not include a software license, the service element of the arrangement is accounted for as a service contract. The Company capitalized certain implementation costs for its CCAs that are service contracts, which are included in other assets, non-current |
Operating Leases | Operating Leases The Company enters into operating leases for its offices, which have lease terms of up to 10 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year with proper notification. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company does not have finance leases. The Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities represent its obligation to make lease payments arising from the aforementioned right. Operating lease assets and liabilities are initially recorded based on the present value of lease payments over the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate, based on the information available at the lease commencement date in determining the present value of its expected lease payments. Operating lease assets also include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives received. The Company has elected to not separate lease and non-lease components. Operating lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of operations. The related amortization, referred to as noncash lease expense, along with the change in the operating lease liabilities are separately presented within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term. Certain leases contain provisions for property-related costs that are variable in nature for which the Company is responsible, including common area maintenance and other property operating services. These costs are calculated based on a variety of factors including property values, tax and utility rates, property services fees and other factors. Refer to Note 8—Leases for additional information. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, which are the following: Level 1—Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs 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. Observable inputs are based on market data obtained from independent sources. The carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. The carrying value of the line of credit approximates fair value based on borrowing rates currently available to the Company for financing with similar terms and were determined to be Level 2. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains its cash and cash equivalents with financial institutions, and its cash levels exceed the Federal Deposit Insurance Corporation federally insured limits. Short-term investments consist of investments in U.S. government securities, U.S. government agency securities, and high-credit quality corporate debt securities and commercial paper. |
Foreign Currency Transactions | Foreign Currency Transactions The Company’s reporting currency is the U.S. Dollar, and the functional currency of each of the Company’s subsidiaries is the U.S. Dollar. Transactions in foreign currencies are translated into U.S. Dollars at the rates of exchange in effect at the date of the transaction. Net transaction gains or losses are included in foreign currency exchange loss (gain), net in the accompanying consolidated statements of operations. |
Business Combinations | Business Combinations The results of a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business are generally recorded at their estimated fair values on the acquisition date, which may require management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages valuation specialists to assist in determining the fair values of these acquired assets and liabilities. Any excess consideration over the fair value of these acquired assets and liabilities assumed is recognized as goodwill. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which adds requirements to report significant expenses, requirements for entities with a single reportable segment to provide all disclosures otherwise required under Topic 280 and requirements to report segment information on an interim basis, among other clarifications and requirements. This guidance will be effective on a retrospective basis for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and interim periods beginning with the Company’s Quarterly Report Form 10-Q for the fiscal quarter ended March 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and notes. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires greater disaggregation of information and consistent categories in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective on a prospective basis, with an option to apply it retrospectively, for annual periods beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and notes. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Changes in Accounts Receivable Allowance for Credit Losses | The following table presents changes in the accounts receivable allowance for credit losses (in thousands): Year Ended December 31, 2023 2022 2021 Beginning balance $ 10,477 $ 7,374 $ 7,253 Add: provision for expected credit losses 2,960 3,203 1,456 Less: write-offs, net of recoveries (611) (100) (1,335) Ending balance $ 12,826 $ 10,477 $ 7,374 |
Schedule of Useful Lives of PPE | Depreciation is computed using the straight-line method based upon the following estimated useful lives: Years Computer and networking equipment 2 – 3 Purchased software 3 – 5 Furniture, fixtures and office equipment 5 Leasehold improvements * ____________ * Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the useful life of the assets, whichever is shorter. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted EPS | The computation of basic and diluted EPS is as follows (in thousands, except per share amounts): Year Ended December 31, 2023 2022 2021 Numerator: Net income $ 178,940 $ 53,385 $ 137,762 Denominator: Weighted-average shares outstanding—basic 489,261 486,937 476,851 Effect of dilutive securities 10,921 12,988 21,689 Weighted-average shares outstanding—diluted 500,182 499,925 498,540 Basic earnings per share $ 0.37 $ 0.11 $ 0.29 Diluted earnings per share $ 0.36 $ 0.11 $ 0.28 Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share 5,580 10,707 1,699 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Major Classes of Property and Equipment | Major classes of property and equipment were as follows (in thousands): As of December 31, 2023 2022 Computer and networking equipment $ 145,424 $ 113,053 Purchased software 10,424 10,451 Furniture and fixtures 25,632 23,545 Construction in progress (1) 8,487 10,904 Leasehold improvements 129,992 121,700 319,959 279,653 Less: Accumulated depreciation (158,537) (105,894) $ 161,422 $ 173,759 ____________ (1) Includes leasehold improvement projects that are not yet ready for intended use. |
Capitalized Software Developm_2
Capitalized Software Development Costs (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Research and Development [Abstract] | |
Schedule of Capitalized Computer Software, Net | Capitalized software development costs, included in other assets, non-current, were as follows (in thousands): As of December 31, 2023 2022 Capitalized software development costs, gross $ 32,333 $ 24,829 Less: Accumulated amortization (15,432) (6,285) Capitalized software development costs, net $ 16,901 $ 18,544 |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-Term Investments, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Cash, Cash Equivalents, and Short-Term Investments [Abstract] | |
Schedule of Cash, Cash Equivalents and Net Short-term Investments in Marketable Securities | Cash, cash equivalents and short-term investments in marketable securities were as follows (in thousands): As of December 31, 2023 Cash and Short-Term Total Cash $ 289,512 — $ 289,512 Level 1: Money market funds 560,673 — 560,673 Level 2: Commercial paper 36,013 168,224 204,237 Corporate debt securities — 185,465 185,465 U.S. government and agency securities 8,931 131,470 140,401 Total $ 895,129 $ 485,159 $ 1,380,288 As of December 31, 2022 Cash and Short-Term Total Cash $ 339,717 — $ 339,717 Level 1: Money market funds 640,233 — 640,233 Level 2: Commercial paper 50,556 126,507 177,063 Corporate debt securities — 180,502 180,502 U.S. government and agency securities — 109,071 109,071 Total $ 1,030,506 $ 416,080 $ 1,446,586 |
Schedule of Contractual Maturities of Short-Term Investments | The contractual maturities of the Company’s short-term investments are as follows (in thousands): December 31, 2023 Due in one year $ 439,486 Due in one to two years 45,673 Total $ 485,159 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of lease expense were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Operating lease cost $ 48,866 $ 51,918 $ 50,798 Short-term lease cost 1,898 1,668 969 Variable lease cost 12,901 9,140 6,742 Sublease income (2,208) (2,490) (2,734) Total lease cost $ 61,457 $ 60,236 $ 55,775 |
Summary of Supplemental Information Related to Leases | Supplemental information related to leases were as follows: Year Ended December 31, 2023 2022 Weighted-average remaining lease term 5.2 years 6.1 years Weighted-average discount rate 3.6 % 3.1 % |
Summary of Maturities of Lease Commitments | Maturities of lease commitments as of December 31, 2023 were as follows (in thousands): Year Amount 2024 $ 62,412 2025 59,141 2026 56,200 2027 48,503 2028 44,059 Thereafter 51,173 Total undiscounted lease commitments 321,488 Less: commitments for leases not yet commenced (63,340) Less: interest (22,255) Present value of lease liabilities 235,893 Less: operating lease liabilities, current (55,524) Operating lease liabilities, non-current $ 180,369 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense recorded in the consolidated statements of operations was as follows (in thousands): Year Ended December 31, 2023 2022 2021 Platform operations $ 21,048 $ 18,285 $ 15,913 Sales and marketing 75,924 64,442 50,671 Technology and development 120,823 94,822 57,791 General and administrative 273,826 321,093 213,038 Total $ 491,621 $ 498,642 $ 337,413 |
Summary of Stock Option Activity | The following summarizes stock option activity: Shares Under Options (in thousands) Weighted- Average Exercise Price Weighted- Average Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2022 15,418 $ 19.82 Granted 2,891 62.77 Exercised (5,232) 11.49 Expired/Forfeited/Cancelled (819) 56.63 Outstanding as of December 31, 2023 12,258 $ 31.05 6.0 $ 507,343 Exercisable as of December 31, 2023 9,029 $ 19.96 5.0 $ 472,019 |
Schedule of Weighted-Average Assumptions Used to Value Options Granted to Employees | The fair value of options on the date of grant was estimated based on the Black-Scholes option pricing model. The weighted-average assumptions used to value options granted to employees for the periods presented were as follows: Year Ended December 31, 2023 2022 2021 Expected term (years) 6.0 6.0 6.0 Expected volatility 64.4 % 66.5 % 64.3 % Risk-free interest rate 3.71 % 2.91 % 1.04 % Estimated dividend yield — % — % — % The grant-date fair value was estimated based on a Monte Carlo valuation model using the following assumptions: Expected volatility 63.4 % Risk-free interest rate 1.55 % Estimated dividend yield — % |
Summary of Restricted Stock Activity | The following summarizes restricted stock activity: Shares (in thousands) Weighted- Average Grant Date Fair Value Per Share Unvested as of December 31, 2022 8,747 $ 57.41 Granted 6,898 63.81 Vested (3,575) 55.01 Forfeited/Cancelled (1,524) 58.74 Unvested as of December 31, 2023 10,546 $ 62.22 |
Schedule of Weighted-Average Assumptions Used to Estimate the Fair Value of ESPP Shares | The fair value of ESPP shares was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions: Year Ended December 31, 2023 2022 2021 Expected term (years) 0.9 1.0 0.6 Expected volatility 60.3 % 74.1 % 62.3 % Risk-free interest rate 4.95 % 2.53 % 0.09 % Estimated dividend yield — % — % — % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Domestic and Foreign Components of Income Before Income Taxes | The following are the domestic and foreign components of the Company’s income before income taxes (in thousands): Year Ended December 31, 2023 2022 2021 Domestic $ 328,853 $ 169,891 $ 193,048 Foreign (60,858) (42,521) (71,012) Income before income taxes $ 267,995 $ 127,370 $ 122,036 |
Components of Provision for (Benefit from) Income Taxes | The following are the components of the provision for (benefit from) income taxes (in thousands): Year Ended December 31, 2023 2022 2021 Current: Federal $ 120,049 $ 61,904 $ 10,332 State and local 24,827 34,797 (10,417) Foreign 5,000 3,068 2,435 Total current provision 149,876 99,769 2,350 Deferred: Federal (51,822) (2,380) (21,287) State and local (7,842) (23,465) 3,193 Foreign (1,157) 61 18 Total deferred provision (60,821) (25,784) (18,076) Total provision for (benefit from) income taxes $ 89,055 $ 73,985 $ (15,726) |
Reconciliation of Statutory Tax Rate to Effective Tax Rate | A reconciliation of the statutory tax rate to the effective tax rate for the periods presented is as follows: Year Ended December 31, 2023 2022 2021 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal benefit 5.0 7.0 (5.3) Foreign income at other than U.S. rates (1) 6.2 9.5 14.2 Stock-based compensation 8.3 31.0 (29.9) Meals and entertainment 1.0 0.4 0.2 Nondeductible compensation 0.3 1.6 1.7 Research and development credit (8.7) (11.8) (15.3) Other permanent items 0.1 (0.6) 0.5 Effective income tax rate 33.2 % 58.1 % (12.9) % ____________ (1) For the years ended December 31, 2023, 2022, and 2021, includes the impact of the valuation allowance associated with the United Kingdom (“U.K.”). For additional information, see discussion below. |
Tax Effects of Temporary Differences that Give Rise to a Significant Portion of Deferred Tax Assets and Deferred Tax Liabilities | Set forth below are the tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities (in thousands): As of December 31, 2023 2022 Reserves and allowances $ 8,401 $ 5,428 Accrued expenses 12,217 7,466 Net operating losses 231,597 182,124 Research and development tax credit 18,220 17,359 Stock-based compensation 25,727 21,207 Prepaid expenses (944) (1,122) Property and equipment (27,952) (29,020) Intangibles (1) 180,573 200,113 Capitalized software development costs 112,736 61,670 Operating lease assets (39,826) (45,493) Operating lease liabilities 48,153 54,657 Other 1,776 1,258 Valuation allowance (415,829) (381,619) Total deferred tax assets, net $ 154,849 $ 94,028 ____________ (1) As of December 31, 2023 and 2022, includes intangibles associated with international restructuring, net of amortization, offset by a reserve for uncertain tax position. See discussion below. |
Schedule of Changes in Gross Unrecognized Tax Benefits | The following table presents changes in gross unrecognized tax benefits (in thousands): Year Ended December 31, 2023 2022 (1) 2021 (1) Beginning balance $ 90,932 $ 86,331 $ 66,875 Increases related to prior year tax positions 229 — 13,075 Decreases related to prior year tax positions — (84) — Increases related to current year tax positions 6,601 4,685 6,381 Settlements (59) — — Expiration of statute of limitations — — — Ending balance $ 97,703 $ 90,932 $ 86,331 ____________ (1) Includes the impact of a statutory rate change in the U.K. |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segments, Geographical Areas [Abstract] | |
Gross Billings, Based on Billing Address of Clients or Client Affiliates | Gross Billings, based on the address of the clients or client affiliates, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 United States $ 8,216,446 $ 6,696,743 $ 5,286,191 International 1,214,207 937,824 843,436 Total $ 9,430,653 $ 7,634,567 $ 6,129,627 |
Property and Equipment, Net and Operating Lease Assets, Presented by Principal Geographic Area | Property and equipment, net and operating lease assets presented by principal geographic area, were as follows (in thousands): As of December 31, 2023 2022 United States $ 278,998 $ 316,000 International 80,156 78,155 Total $ 359,154 $ 394,155 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Purchase Obligations | As of December 31, 2023, these purchase obligations were as follows (in thousands): Year Amount 2024 $ 155,703 2025 125,368 2026 118,676 2027 19,667 2028 — $ 419,414 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Basis of Presentation and Principles of Consolidation (Details) | Jun. 16, 2021 shares |
Accounting Policies [Abstract] | |
Stock split ratio | 10 |
Additional shares of common stock | 9 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Stock-Based Compensation (Details) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | ||||
Dividend yield | 0% | |||
Requisite service period | 4 years | |||
Forfeiture method | The Company accounts for forfeitures as they occur. | |||
Performance Option | ||||
Basis of Presentation and Summary of Significant Accounting Policies | ||||
Holding period for sale or transfer of purchased or vested shares | 1 year | |||
Performance Option | Chief Executive Officer | ||||
Basis of Presentation and Summary of Significant Accounting Policies | ||||
Dividend yield | 0% | 0% | ||
Derived service period | 5 years | |||
ESPP | ||||
Basis of Presentation and Summary of Significant Accounting Policies | ||||
Dividend yield | 0% | 0% | 0% | |
Holding period for sale or transfer of purchased or vested shares | 6 months |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Changes in Accounts Receivable Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts receivable, allowance for credit loss [Roll Forward] | |||
Beginning balance | $ 10,477 | $ 7,374 | $ 7,253 |
Add: provision for expected credit losses | 2,960 | 3,203 | 1,456 |
Less: write-offs, net of recoveries | (611) | (100) | (1,335) |
Ending balance | $ 12,826 | $ 10,477 | $ 7,374 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment, Net (Detail) | Dec. 31, 2023 |
Computer and networking equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Computer and networking equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Purchased software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Purchased software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Furniture, fixtures and office equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Capitalized Software Development Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Software development cost, amortization period | 2 years | ||
Service contracts included in other assets , noncurrent | $ 16,901 | $ 18,544 | |
Amortization expenses | 14,000 | 7,000 | $ 5,000 |
Cloud Computing Arrangement | |||
Basis of Presentation and Summary of Significant Accounting Policies | |||
Service contracts included in other assets , noncurrent | 4,000 | 2,000 | |
Amortization expenses | $ 2,000 | $ 2,000 | $ 1,000 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Operating Leases (Detail) | Dec. 31, 2023 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Remaining lease term | 10 years |
Option to extend operating leases, term (in years) | 5 years |
Option to terminate operating leases, term (in years) | 1 year |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Impairments of long-lived assets | $ 0 | $ 0 | $ 0 |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Concentration of Risk (Detail) | 12 Months Ended | ||
Dec. 31, 2023 HoldingCompany Client Supplier | Dec. 31, 2022 Client Supplier HoldingCompany | Dec. 31, 2021 HoldingCompany | |
Concentration Risk [Line Items] | |||
Number of holding companies | HoldingCompany | 1 | 1 | 2 |
Revenue Benchmark | Customer Concentration Risk | Holding Company One | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 12% | 11% | 11% |
Revenue Benchmark | Customer Concentration Risk | Holding Company Two | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10% | ||
Consolidated Accounts Receivable | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of clients | Client | 2 | 4 | |
Consolidated Accounts Receivable | Customer Concentration Risk | Two Clients | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 31% | ||
Consolidated Accounts Receivable | Customer Concentration Risk | Four Clients | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 49% | ||
Trade Accounts Payable | Supplier Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of suppliers | Supplier | 2 | 2 | |
Trade Accounts Payable | Supplier Concentration Risk | Two Suppliers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 31% | 25% |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies - Foreign Currency Transactions (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Minimum | ||
Foreign Currency Translation [Line Items] | ||
Forward contracts terms | 30 days | |
Maximum | ||
Foreign Currency Translation [Line Items] | ||
Forward contracts terms | 60 days | |
Forward Contracts | ||
Foreign Currency Translation [Line Items] | ||
Notional amounts of open forward contracts | $ 263 | $ 142 |
Basis of Presentation and Su_13
Basis of Presentation and Summary of Significant Accounting Policies - Business Combinations (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 USD ($) | Dec. 31, 2023 business | Dec. 31, 2022 business | Dec. 31, 2021 business | |
Business Acquisition [Line Items] | ||||
Number of businesses acquired | business | 0 | 0 | 0 | |
Technology Company | ||||
Business Acquisition [Line Items] | ||||
Business combination, purchase price | $ 18 | |||
Non-deductible goodwill | $ 11 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) | Dec. 31, 2023 Class |
Earnings Per Share [Abstract] | |
Number of classes of common stock | 2 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted EPS (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net income | $ 178,940 | $ 53,385 | $ 137,762 |
Denominator: | |||
Weighted-average shares outstanding—basic (in shares) | 489,261 | 486,937 | 476,851 |
Effect of dilutive securities (in shares) | 10,921 | 12,988 | 21,689 |
Weighted-average shares outstanding—diluted (in shares) | 500,182 | 499,925 | 498,540 |
Basic earnings per share (in dollars per share) | $ 0.37 | $ 0.11 | $ 0.29 |
Diluted earnings per share (in dollars per share) | $ 0.36 | $ 0.11 | $ 0.28 |
Anti-dilutive equity awards under stock-based award plans excluded from the determination of diluted earnings per share (in shares) | 5,580 | 10,707 | 1,699 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Major Classes of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 319,959 | $ 279,653 |
Less: Accumulated depreciation | (158,537) | (105,894) |
Property and equipment, net | 161,422 | 173,759 |
Computer and networking equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 145,424 | 113,053 |
Purchased software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,424 | 10,451 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 25,632 | 23,545 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 8,487 | 10,904 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 129,992 | $ 121,700 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 62,000,000 | $ 42,000,000 | $ 34,000,000 |
Impairment charges to property and equipment | $ 0 | $ 0 | $ 0 |
Capitalized Software Developm_3
Capitalized Software Development Costs - Schedule of Capitalized Computer Software, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Research and Development [Abstract] | ||
Capitalized software development costs, gross | $ 32,333 | $ 24,829 |
Less: Accumulated amortization | (15,432) | (6,285) |
Capitalized software development costs, net | $ 16,901 | $ 18,544 |
Capitalized Software Developm_4
Capitalized Software Development Costs - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research and Development [Abstract] | |||
Amortization expenses | $ 14,000,000 | $ 7,000,000 | $ 5,000,000 |
Impairment charges | $ 0 | $ 0 | $ 0 |
Cash, Cash Equivalents and Sh_3
Cash, Cash Equivalents and Short-Term Investments, Net - Schedule of Cash, Cash Equivalents and Net Short-term Investments in Marketable Securities (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule Of Available For Sale Securities [Line Items] | ||
Cash and cash equivalents | $ 895,129 | $ 1,030,506 |
Short-Term Investments, Net | 485,159 | 416,080 |
Total | 1,380,288 | 1,446,586 |
Cash | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cash and cash equivalents | 289,512 | 339,717 |
Total | 289,512 | 339,717 |
Level 1 | Money market funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cash and cash equivalents | 560,673 | 640,233 |
Total | 560,673 | 640,233 |
Level 2 | Commercial paper | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cash and cash equivalents | 36,013 | 50,556 |
Short-Term Investments, Net | 168,224 | 126,507 |
Total | 204,237 | 177,063 |
Level 2 | Corporate debt securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-Term Investments, Net | 185,465 | 180,502 |
Total | 185,465 | 180,502 |
Level 2 | U.S. government and agency securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Cash and cash equivalents | 8,931 | 0 |
Short-Term Investments, Net | 131,470 | 109,071 |
Total | $ 140,401 | $ 109,071 |
Cash, Cash Equivalents and Sh_4
Cash, Cash Equivalents and Short-Term Investments, Net - Schedule of Contractual Maturities of Short-Term Investments (Detail) $ in Thousands | Dec. 31, 2023 USD ($) |
Cash, Cash Equivalents, and Short-Term Investments [Abstract] | |
Due in one year | $ 439,486 |
Due in one to two years | 45,673 |
Total | $ 485,159 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Feb. 09, 2023 | Jun. 15, 2021 | Dec. 31, 2023 |
Loan and Security Agreement Revolving Loan Facility | |||
Long-term debt: | |||
Line of credit facility | $ 450,000,000 | ||
Loan and Security Agreement Revolving Loan Facility Swingline Borrowings | |||
Long-term debt: | |||
Line of credit facility | 20,000,000 | ||
Loan and Security Agreement Revolving Loan Facility Letter of Credit | |||
Long-term debt: | |||
Line of credit facility | 15,000,000 | ||
Loan and Security Agreement | |||
Long-term debt: | |||
Line of credit maximum amount right to increase | $ 300,000,000 | ||
Amended Credit Facility | |||
Long-term debt: | |||
Outstanding debt balance | $ 0 | ||
Availability under the credit facility | 445,000,000 | ||
Outstanding letters of credit | $ 5,000,000 | ||
Maximum ratio of consolidated funded debt to consolidated EBITDA | 350% | ||
Amended Credit Facility | Minimum | |||
Long-term debt: | |||
Fee percentage for undrawn amounts | 0.20% | ||
Amended Credit Facility | Maximum | |||
Long-term debt: | |||
Fee percentage for undrawn amounts | 0.35% | ||
Amended Credit Facility | NYFRB Rate | |||
Long-term debt: | |||
Basis spread on variable rate | 0.50% | ||
Amended Credit Facility | Base Rate | Minimum | |||
Long-term debt: | |||
Basis spread on variable rate | 0.25% | ||
Amended Credit Facility | Base Rate | Maximum | |||
Long-term debt: | |||
Basis spread on variable rate | 1.25% | ||
Amended Credit Facility | SOFR Rate | |||
Long-term debt: | |||
Variable rate floor | 0% | ||
Basis spread on variable rate | 0.10% | ||
Amended Credit Facility | SOFR Rate | Minimum | |||
Long-term debt: | |||
Basis spread on variable rate | 1.25% | ||
Amended Credit Facility | SOFR Rate | Maximum | |||
Long-term debt: | |||
Basis spread on variable rate | 2.25% | ||
Amended Credit Facility | Adjusted SOFR Rate | |||
Long-term debt: | |||
Basis spread on variable rate | 1% |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 48,866 | $ 51,918 | $ 50,798 |
Short-term lease cost | 1,898 | 1,668 | 969 |
Variable lease cost | 12,901 | 9,140 | 6,742 |
Sublease income | (2,208) | (2,490) | (2,734) |
Total lease cost | $ 61,457 | $ 60,236 | $ 55,775 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Information Related to Leases (Detail) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term | 5 years 2 months 12 days | 6 years 1 month 6 days |
Weighted-average discount rate | 3.60% | 3.10% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Commitments (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 62,412 | |
2025 | 59,141 | |
2026 | 56,200 | |
2027 | 48,503 | |
2028 | 44,059 | |
Thereafter | 51,173 | |
Total undiscounted lease commitments | 321,488 | |
Less: commitments for leases not yet commenced | (63,340) | |
Less: interest | (22,255) | |
Present value of lease liabilities | 235,893 | |
Less: operating lease liabilities, current | (55,524) | $ (52,430) |
Operating lease liabilities, non-current | $ 180,369 | $ 208,527 |
Capitalization - Common and Pre
Capitalization - Common and Preferred Stock (Detail) $ in Thousands, shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) Vote shares | Feb. 15, 2024 USD ($) | Feb. 28, 2023 USD ($) | |
Class of Stock [Line Items] | |||
Share repurchase program, aggregate repurchase amount | $ 647,500 | ||
Class B common stock | |||
Class of Stock [Line Items] | |||
Number of votes per share of common stock | Vote | 10 | ||
Ratio for conversion into Class A common stock | 1 | ||
Class A common stock | |||
Class of Stock [Line Items] | |||
Number of votes per share of common stock | Vote | 1 | ||
Class A common stock | 2023 Stock Repurchase Program | |||
Class of Stock [Line Items] | |||
Share repurchase program, authorized amount | $ 700,000 | ||
Share repurchase program, shares repurchased and retired (in shares) | shares | 10 | ||
Share repurchase program, aggregate repurchase amount | $ 648,000 | ||
Share repurchase program, amount available and authorized for repurchases remaining | $ 53,000 | ||
Class A common stock | 2023 Stock Repurchase Program | Subsequent Event | |||
Class of Stock [Line Items] | |||
Share repurchase program, additional repurchase amount | $ 647,000 | ||
Share repurchase program, amount available and authorized for repurchases remaining | $ 700,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | $ 491,621 | $ 498,642 | $ 337,413 |
Platform operations | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | 21,048 | 18,285 | 15,913 |
Sales and marketing | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | 75,924 | 64,442 | 50,671 |
Technology and development | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | 120,823 | 94,822 | 57,791 |
General and administrative | |||
Stock-based compensation expense, by operating expense category | |||
Stock-based compensation expense | $ 273,826 | $ 321,093 | $ 213,038 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-Based Compensation | |||
Tax benefit on stock-based compensation expense | $ 53 | $ 48 | $ 104 |
Tax benefit to stock options exercised | 91 | $ 72 | $ 121 |
Chief Technology Officer | Technology and development | |||
Stock-Based Compensation | |||
Stock-based compensation cost | $ 14 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Award Plans - Additional Information (Detail) - 2016 Incentive Award Plan - shares shares in Millions | Jan. 01, 2024 | Dec. 31, 2023 |
Stock-Based Compensation | ||
Shares remained available for grant | 81.2 | |
Maximum annual increase in shares available for issuance, percentage of outstanding shares | 4% | |
Subsequent Event | ||
Stock-Based Compensation | ||
Number of additional shares authorized for grant | 19.6 |
Stock-Based Compensation - St_3
Stock-Based Compensation - Stock Options - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Option | |||
Stock-Based Compensation | |||
Weighted average grant date fair value per share | $ 38.69 | $ 37.65 | $ 43.57 |
Total intrinsic value of options exercised | $ 276 | $ 232 | $ 538 |
Unrecognized stock-based compensation | $ 120 | ||
Unrecognized stock-based compensation, recognition period | 2 years 9 months 18 days | ||
2016 Incentive Award Plan | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Stock incentive plans, expiration period | 10 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - Share-based Payment Arrangement, Option - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shares Under Option | |||
Outstanding at the beginning of the period (in shares) | 15,418 | ||
Granted (in shares) | 2,891 | ||
Exercised (in shares) | (5,232) | ||
Expired/Forfeited/Cancelled (in shares) | (819) | ||
Outstanding at the end of the period (in shares) | 12,258 | 15,418 | |
Exercisable at end of period (in shares) | 9,029 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 19.82 | ||
Granted (in dollars per share) | 62.77 | ||
Exercised (in dollars per share) | 11.49 | ||
Expired/Forfeited/Cancelled (in dollars per share) | 56.63 | ||
Outstanding at the end of the period (in dollars per share) | 31.05 | $ 19.82 | |
Exercisable at end of period (in dollars per share) | $ 19.96 | ||
Stock Options, additional disclosures | |||
Weighted-Average Contractual Life, outstanding | 6 years | ||
Weighted-Average Contractual Life, exercisable | 5 years | ||
Aggregate Intrinsic Value, Exercised | $ 276,000 | $ 232,000 | $ 538,000 |
Aggregate Intrinsic Value, Outstanding | 507,343 | ||
Aggregate Intrinsic Value, Exercisable | $ 472,019 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Weighted-Average Assumptions Used to Value Options Granted to Employees (Detail) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average assumptions used to value options granted to employees | |||
Estimated dividend yield | 0% | ||
Share-based Payment Arrangement, Option | |||
Weighted average assumptions used to value options granted to employees | |||
Expected term (years) | 6 years | 6 years | 6 years |
Expected volatility | 64.40% | 66.50% | 64.30% |
Risk-free interest rate | 3.71% | 2.91% | 1.04% |
Estimated dividend yield | 0% | 0% | 0% |
Stock-Based Compensation - CEO
Stock-Based Compensation - CEO Performance Option - Additional Information (Detail) - Performance Option - Chief Executive Officer $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 10, 2021 USD ($) | Oct. 31, 2021 USD ($) tranche $ / shares shares | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares | |
Stock-Based Compensation | ||||
Derived service period | 5 years | |||
2016 Incentive Award Plan | ||||
Stock-Based Compensation | ||||
Stock-based compensation expense | $ | $ 158 | $ 198 | $ 262 | |
Unrecognized stock-based compensation | $ | $ 201 | |||
Weighted-average period for recognition of stock based expense (in years) | 1 year 7 months 6 days | |||
2016 Incentive Award Plan | Class A common stock | ||||
Stock-Based Compensation | ||||
Target amount of shares that can be purchased | 16,000,000 | |||
Number of tranches | tranche | 8 | |||
Increase/decrease of shares to be purchased based on relative shareholder return | 20% | |||
Vesting period | 10 years | |||
Granted (in shares) | 19,200,000 | |||
Exercise price (in dollars per share) | $ / shares | $ 68.29 | |||
Grant-date fair value | $ | $ 819 | |||
Derived service period | 5 years | |||
Holding period for sales after the first offering period | 1 year | |||
Share-based compensation, options granted | 19,200,000 | 19,200,000 | ||
Exercise of common stock options (in shares) | 0 | |||
Share-based compensation, options forfeited or expired | 0 | |||
Share-based compensation, options outstanding with aggregate intrinsic value | $ | $ 70 | |||
Share-based compensation, options outstanding with weighted average contractual life | 7 years 9 months 18 days | |||
Share-based compensation, options exercisable with aggregate intrinsic value | $ | $ 9 | |||
Exercisable at end of period (in shares) | 2,400,000 | |||
Share-based compensation, options exercisable with weighted-average contractual life | 7 years 9 months 18 days | |||
2016 Incentive Award Plan | Class A common stock | Maximum | ||||
Stock-Based Compensation | ||||
Target price per share | $ / shares | $ 340 | |||
2016 Incentive Award Plan | Class A common stock | Minimum | ||||
Stock-Based Compensation | ||||
Target price per share | $ / shares | $ 90 |
Stock-Based Compensation - CE_2
Stock-Based Compensation - CEO Performance Option (Detail) | 1 Months Ended | 12 Months Ended |
Oct. 31, 2021 | Dec. 31, 2023 | |
Stock-Based Compensation | ||
Estimated dividend yield | 0% | |
Performance Option | Chief Executive Officer | ||
Stock-Based Compensation | ||
Expected volatility | 63.40% | |
Risk-free interest rate | 1.55% | |
Estimated dividend yield | 0% | 0% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-Based Compensation | |||
Stock-based compensation expense | $ 491,621 | $ 498,642 | $ 337,413 |
Restricted Stock | |||
Stock-Based Compensation | |||
Vesting period | 4 years | ||
Unrecognized employee stock-based compensation | $ 605,000 | ||
Weighted-average period for recognition of stock based expense (in years) | 2 years 10 months 24 days |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Restricted Stock Activity (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Shares (in thousands) | |
Unvested, Shares, beginning balance (in shares) | shares | 8,747 |
Granted (in shares) | shares | 6,898 |
Vested (in shares) | shares | (3,575) |
Forfeited/Cancelled (in shares) | shares | (1,524) |
Unvested, Shares, ending balance (in shares) | shares | 10,546 |
Weighted- Average Grant Date Fair Value Per Share | |
Unvested, beginning balance (in dollars per share) | $ / shares | $ 57.41 |
Granted (in dollars per share) | $ / shares | 63.81 |
Vested (in dollars per share) | $ / shares | 55.01 |
Forfeited/Cancelled (in dollars per share) | $ / shares | 58.74 |
Unvested, ending balance (in dollars per share) | $ / shares | $ 62.22 |
Stock-Based Compensation - ESPP
Stock-Based Compensation - ESPP - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 01, 2024 | Sep. 30, 2016 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-Based Compensation | |||||
Stock-based compensation expense | $ 491,621 | $ 498,642 | $ 337,413 | ||
ESPP | |||||
Stock-Based Compensation | |||||
Shares remained available for grant | 14,400,000 | ||||
Maximum annual increase in shares available for grant (in shares) | 8,000,000 | ||||
Maximum employee payroll deduction (as a percent) | 100% | ||||
Maximum offering period | 2 years | ||||
Period between purchases | 6 months | ||||
Price of ESPP shares as percentage of market price | 85% | ||||
Holding period for purchases after the first offering period | 6 months | ||||
Stock-based compensation expense | $ 24,000 | $ 50,000 | $ 62,000 | ||
Unrecognized employee stock-based compensation | $ 12,000 | ||||
Unrecognized stock-based compensation, recognition period | 8 months 12 days | ||||
ESPP | Subsequent Event | |||||
Stock-Based Compensation | |||||
Number of additional shares authorized for grant | 4,400,000 | ||||
ESPP | Class A common stock | |||||
Stock-Based Compensation | |||||
Stock available for issuance (in shares) | 8,000,000 | ||||
Maximum annual increase in shares available for issuance, percentage of outstanding shares | 1% |
Stock-Based Compensation - ES_2
Stock-Based Compensation - ESPP (Detail) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted-average assumptions used to estimate the fair value of ESPP shares | |||
Estimated dividend yield | 0% | ||
ESPP | |||
Weighted-average assumptions used to estimate the fair value of ESPP shares | |||
Expected term (years) | 10 months 24 days | 1 year | 7 months 6 days |
Expected volatility | 60.30% | 74.10% | 62.30% |
Risk-free interest rate | 4.95% | 2.53% | 0.09% |
Estimated dividend yield | 0% | 0% | 0% |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | |||
Income before income taxes | $ 267,995 | $ 127,370 | $ 122,036 |
Domestic | |||
Income Tax Contingency [Line Items] | |||
Income before income taxes | 328,853 | 169,891 | 193,048 |
Foreign | |||
Income Tax Contingency [Line Items] | |||
Income before income taxes | $ (60,858) | $ (42,521) | $ (71,012) |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for (Benefit from) Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 120,049 | $ 61,904 | $ 10,332 |
State and local | 24,827 | 34,797 | (10,417) |
Foreign | 5,000 | 3,068 | 2,435 |
Total current provision | 149,876 | 99,769 | 2,350 |
Deferred: | |||
Federal | (51,822) | (2,380) | (21,287) |
State and local | (7,842) | (23,465) | 3,193 |
Foreign | (1,157) | 61 | 18 |
Total deferred provision | (60,821) | (25,784) | (18,076) |
Total provision for (benefit from) income taxes | $ 89,055 | $ 73,985 | $ (15,726) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory income tax rate | 21% | 21% | 21% |
State and local income taxes, net of federal benefit | 5% | 7% | (5.30%) |
Foreign income at other than U.S. rates | 6.20% | 9.50% | 14.20% |
Stock-based compensation | 8.30% | 31% | (29.90%) |
Meals and entertainment | 1% | 0.40% | 0.20% |
Nondeductible compensation | 0.30% | 1.60% | 1.70% |
Research and development credit | (8.70%) | (11.80%) | (15.30%) |
Other permanent items | 0.10% | (0.60%) | 0.50% |
Effective income tax rate | 33.20% | 58.10% | (12.90%) |
Income Taxes - Tax Effects of T
Income Taxes - Tax Effects of Temporary Differences that Give Rise to Significant Portion of Deferred Tax Assets and Deferred Tax Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets (liabilities): | ||
Reserves and allowances | $ 8,401 | $ 5,428 |
Accrued expenses | 12,217 | 7,466 |
Net operating losses | 231,597 | 182,124 |
Research and development tax credit | 18,220 | 17,359 |
Stock-based compensation | 25,727 | 21,207 |
Prepaid expenses | (944) | (1,122) |
Property and equipment | (27,952) | (29,020) |
Intangibles | 180,573 | 200,113 |
Capitalized software development costs | 112,736 | 61,670 |
Operating lease assets | (39,826) | (45,493) |
Operating lease liabilities | 48,153 | 54,657 |
Other | 1,776 | 1,258 |
Valuation allowance | (415,829) | (381,619) |
Total deferred tax assets, net | $ 154,849 | $ 94,028 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | ||||
Research and development tax credits | $ 18,220 | $ 17,359 | ||
Cash paid for income taxes | 151,899 | 4,211 | $ 3,608 | |
Gross unrecognized tax benefits | 97,703 | 90,932 | $ 86,331 | $ 66,875 |
Unrecognized tax benefits, reduction to deferred tax assets | 71,000 | 70,000 | ||
Unrecognized tax benefits that would impact effective tax rate | 27,000 | 21,000 | ||
Other Liabilities, Noncurrent | ||||
Income Tax Contingency [Line Items] | ||||
Gross unrecognized tax benefits | 98,000 | $ 91,000 | ||
Federal | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 2,000 | |||
State | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 10,000 | |||
Research and development tax credits | 29,000 | |||
Foreign | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 1,001,000 | |||
Research and development tax credits | 2,000 | |||
UNITED KINGDOM | ||||
Income Tax Contingency [Line Items] | ||||
Additional valuation allowance recorded | 34,000 | |||
International | ||||
Income Tax Contingency [Line Items] | ||||
Unremitted earnings of subsidiaries, foreign | 7,000 | |||
International | State | ||||
Income Tax Contingency [Line Items] | ||||
Cash paid for income taxes | $ 0 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 90,932 | $ 86,331 | $ 66,875 |
Increases related to prior year tax positions | 229 | 0 | 13,075 |
Decreases related to prior year tax positions | 0 | (84) | 0 |
Increases related to current year tax positions | 6,601 | 4,685 | 6,381 |
Settlements | (59) | 0 | 0 |
Expiration of statute of limitations | 0 | 0 | 0 |
Ending balance | $ 97,703 | $ 90,932 | $ 86,331 |
Segment and Geographical Inform
Segment and Geographical Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2023 Business Segment | |
Segments, Geographical Areas [Abstract] | |
Number of business activity | Business | 1 |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Segment and Geographical Info_2
Segment and Geographical Information - Gross Billings, Based on Billing Address of Clients or Client Affiliates (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues From External Customers and Long-Lived Assets [Line Items] | |||
Gross Billings | $ 9,430,653 | $ 7,634,567 | $ 6,129,627 |
US | |||
Revenues From External Customers and Long-Lived Assets [Line Items] | |||
Gross Billings | 8,216,446 | 6,696,743 | 5,286,191 |
International | |||
Revenues From External Customers and Long-Lived Assets [Line Items] | |||
Gross Billings | $ 1,214,207 | $ 937,824 | $ 843,436 |
Segment and Geographical Info_3
Segment and Geographical Information - Property and Equipment, Net and Operating Lease Assets, Presented by Principal Geographic Area (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Revenues From External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net and operating lease assets | $ 359,154 | $ 394,155 |
US | ||
Revenues From External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net and operating lease assets | 278,998 | 316,000 |
International | ||
Revenues From External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net and operating lease assets | $ 80,156 | $ 78,155 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Purchase Obligations (Detail) $ in Thousands | Dec. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2024 | $ 155,703 |
2025 | 125,368 |
2026 | 118,676 |
2027 | 19,667 |
2028 | 0 |
Total | $ 419,414 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | ||
Jun. 27, 2022 complaint | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Other Commitments [Line Items] | |||
Number of litigation complaints | complaint | 2 | ||
Indemnifications | |||
Other Commitments [Line Items] | |||
Recorded obligation | $ | $ 0 | $ 0 |