Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 01, 2020 | Jun. 28, 2019 | |
Document Information [Line Items] | |||
Entity Registrant Name | Switch, Inc. | ||
Entity Central Index Key | 0001710583 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 863.2 | ||
Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 94,877,065 | ||
Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 146,410,385 | ||
Class C | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 24,721 | $ 81,560 |
Accounts receivable, net of allowance of $309 and $426, respectively | 23,365 | 17,654 |
Prepaid expenses | 7,137 | 6,781 |
Other current assets | 3,817 | 2,332 |
Total current assets | 59,040 | 108,327 |
Property and equipment, net | 1,551,117 | 1,302,770 |
Long-term deposit | 3,429 | 3,333 |
Deferred income taxes | 114,372 | 28,550 |
Other assets | 45,785 | 17,050 |
TOTAL ASSETS | 1,773,743 | 1,460,030 |
CURRENT LIABILITIES: | ||
Long-term debt, current portion | 6,000 | 6,000 |
Accounts payable | 19,477 | 20,501 |
Accrued salaries and benefits | 5,828 | 5,258 |
Accrued expenses | 14,718 | 9,778 |
Accrued construction payables | 37,269 | 12,729 |
Deferred revenue, current portion | 14,991 | 12,322 |
Deferred revenue, current portion | 10,800 | |
Customer deposits | 10,830 | 9,962 |
Operating lease liability, current portion | 4,805 | |
Finance lease liability, current portion | 12 | |
Total current liabilities | 113,930 | 75,028 |
Long-term debt, net | 745,372 | 580,566 |
Operating lease liability | 26,142 | |
Finance lease liability | 57,614 | 19,466 |
Deferred revenue | 27,852 | 22,260 |
Liabilities under tax receivable agreement | 162,076 | 52,535 |
Other long-term liabilities | 13,112 | 1,823 |
TOTAL LIABILITIES | 1,146,098 | 751,678 |
Commitments and contingencies (Note 7 and Note 9) | ||
STOCKHOLDER’S EQUITY | ||
Preferred stock | 0 | 0 |
Additional paid in capital | 204,711 | 140,191 |
Retained earnings | 2,420 | 2,693 |
Accumulated other comprehensive income | 79 | 79 |
Total Switch, Inc. stockholders’ equity | 207,451 | 143,210 |
Noncontrolling interest | 420,194 | 565,142 |
TOTAL STOCKHOLDERS’ EQUITY | 627,645 | 708,352 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 1,773,743 | 1,460,030 |
Class A | ||
STOCKHOLDER’S EQUITY | ||
Common stock | 90 | 55 |
Class B | ||
STOCKHOLDER’S EQUITY | ||
Common stock | 151 | 149 |
Class C | ||
STOCKHOLDER’S EQUITY | ||
Common stock | $ 0 | $ 43 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Allowance for accounts receivable | $ 309 | $ 426 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Shares issued (in shares) | 0 | 0 |
Shares outstanding (in shares) | 0 | 0 |
Class A | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 89,768,000 | 55,218,000 |
Common stock, shares outstanding (in shares) | 89,768,000 | 55,218,000 |
Class B | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 151,047,000 | 148,481,000 |
Common stock, shares outstanding (in shares) | 151,047,000 | 148,481,000 |
Class C | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 0 | 42,945,000 |
Common stock, shares outstanding (in shares) | 0 | 42,945,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenue | $ 462,310 | $ 405,860 | $ 378,275 |
Cost of revenue | 242,679 | 224,413 | 198,230 |
Gross profit | 219,631 | 181,447 | 180,045 |
Selling, general and administrative expense | 142,704 | 126,768 | 160,569 |
Impact fee expense | 649 | ||
Income from operations | 76,927 | 54,679 | 18,827 |
Other income (expense): | |||
Interest expense, including $1,636, $1,636, and $1,303, respectively, in amortization of debt issuance costs | (29,236) | (26,370) | (25,079) |
Equity in net losses of investments | 0 | (331) | (1,077) |
Loss on extinguishment of debt | (3,565) | ||
Loss on interest rate swaps | (14,917) | 0 | 0 |
Other | 1,481 | 3,283 | 1,333 |
Total other expense | (42,672) | (23,418) | (28,388) |
Income (loss) before income taxes | 34,255 | 31,261 | (9,561) |
Income tax (expense) benefit | (2,713) | (1,943) | 981 |
Net income (loss) | 31,542 | 29,318 | (8,580) |
Less: net income attributable to noncontrolling interest | 22,625 | 25,266 | 6,628 |
Net income (loss) attributable to Switch, Inc. | $ 8,917 | $ 4,052 | $ (15,208) |
Net income (loss) per share (Note 14): | |||
Basic net income per share (in dollars per share) | $ 0.12 | $ 0.09 | $ (1.88) |
Diluted (in dollars per share) | $ 0.11 | $ 0.09 | $ (1.88) |
Weighted average shares used in computing net income (loss) per share (Note 14): | |||
Basic (in shares) | 76,501 | 45,682 | 8,074 |
Diluted (in shares) | 246,329 | 45,753 | 8,074 |
Other comprehensive income: | |||
Foreign currency translation adjustment, net of tax of $0 | $ 0 | $ 331 | $ 908 |
Comprehensive income (loss) | 31,542 | 29,649 | (7,672) |
Less: comprehensive income attributable to noncontrolling interest | 22,625 | 25,549 | 6,732 |
Comprehensive income (loss) attributable to Switch, Inc. | $ 8,917 | $ 4,100 | $ (14,404) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Amortization of debt issuance costs | $ 1,636 | $ 1,636 | $ 1,303 |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | $ 0 | $ 0 | $ 0 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Class A | Members’ Equity | Common StockClass A | Common StockClass B | Common StockClass C | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Noncontrolling Interest |
Balance at Dec. 31, 2016 | $ 278,363 | $ 279,056 | $ (693) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | (8,580) | |||||||||
Dividends declared | $ (500) | |||||||||
Foreign currency translation adjustment | 908 | |||||||||
Balance (in shares) at Dec. 31, 2017 | 35,938,000 | 173,624,000 | 42,945,000 | |||||||
Balance at Dec. 31, 2017 | 742,133 | $ 36 | $ 174 | $ 43 | $ 107,008 | 1,602 | 31 | $ 633,239 | ||
Balance at Dec. 31, 2017 | $ 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | 29,318 | 4,052 | 25,266 | |||||||
Equity-based compensation expense | 35,733 | 13,057 | 22,676 | |||||||
Issuance of common stock (in shares) | 19,100,000 | 131,000 | ||||||||
Issuance of common stock | (1,232) | $ 0 | (1,232) | |||||||
Distributions to noncontrolling interest | (11,617) | (11,617) | ||||||||
Dividends declared | (2,961) | (2,961) | ||||||||
Foreign currency translation adjustment | 331 | 48 | 283 | |||||||
Issuance of restricted stock awards (in shares) | 61,000 | |||||||||
Issuance of restricted stock awards | $ 0 | |||||||||
Exchanges of noncontrolling interest for Class A common stock (in shares) | 19,088,000 | (19,088,000) | ||||||||
Exchanges of noncontrolling interest for Class A common stock | $ 19 | $ (19) | 53,403 | (53,403) | ||||||
Repurchase of common units and cancellation of Class B common stock (in shares) | (6,100,000) | (6,055,000) | ||||||||
Repurchase of common units and cancellation of Class B common stock | $ (60,644) | $ (6) | (9,085) | (51,553) | ||||||
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interest for Class A common stock | (52,535) | (52,535) | ||||||||
Net deferred tax assets resulting from exchanges of noncontrolling interest for Class A common stock | 29,512 | 29,512 | ||||||||
Settlement of option loans | 314 | 63 | 251 | |||||||
Balance (in shares) at Dec. 31, 2018 | 55,218,000 | 148,481,000 | 42,945,000 | |||||||
Balance at Dec. 31, 2018 | 708,352 | $ 55 | $ 149 | $ 43 | 140,191 | 2,693 | 79 | 565,142 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income (loss) | 31,542 | 8,917 | 22,625 | |||||||
Equity-based compensation expense | 29,524 | 15,487 | 14,037 | |||||||
Issuance of common stock (in shares) | 34,000,000 | 484,000 | ||||||||
Issuance of common stock | (1,418) | $ 1 | (3,130) | 1,711 | ||||||
Distributions to noncontrolling interest | (20,106) | (20,106) | ||||||||
Dividends declared | (9,414) | (9,414) | ||||||||
Foreign currency translation adjustment | 0 | |||||||||
Issuance of restricted stock awards (in shares) | 80,000 | |||||||||
Issuance of restricted stock awards | 0 | |||||||||
Exchanges of noncontrolling interest for Class A common stock (in shares) | 33,986,000 | (33,986,000) | ||||||||
Exchanges of noncontrolling interest for Class A common stock | $ 0 | $ 34 | $ (34) | 101,450 | (101,450) | |||||
Repurchase of common units and cancellation of Class B common stock (in shares) | (6,400,000) | (6,393,000) | ||||||||
Repurchase of common units and cancellation of Class B common stock | $ (91,046) | $ (7) | (28,334) | (62,705) | ||||||
Conversion of Class C common stock to Class B common stock (in shares) | 42,945,000 | (42,945,000) | ||||||||
Conversion of Class C common stock to Class B common stock | $ 43 | $ (43) | ||||||||
Recognition of tax receivable agreement liability resulting from exchanges of noncontrolling interest for Class A common stock | (109,541) | (109,541) | ||||||||
Net deferred tax assets resulting from exchanges of noncontrolling interest for Class A common stock | 88,588 | 88,588 | ||||||||
Balance (in shares) at Dec. 31, 2019 | 89,768,000 | 151,047,000 | 0 | |||||||
Balance at Dec. 31, 2019 | 627,645 | $ 90 | $ 151 | $ 0 | $ 204,711 | 2,420 | 79 | 420,194 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Cumulative adjustment due to adoption of new revenue recognition standard | $ 1,164 | $ 224 | $ 0 | $ 940 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared (in dollars per share) | $ 0.1176 | $ 0.0588 | $ 0.0147 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 31,542 | $ 29,318 | $ (8,580) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 119,945 | 106,666 | 89,124 |
Loss on disposal of property and equipment | 586 | 1,206 | 569 |
Deferred income taxes | 2,713 | 1,943 | (981) |
Amortization of debt issuance costs | 1,636 | 1,636 | 1,303 |
Loss on extinguishment of debt | 3,565 | ||
(Benefit) provision for doubtful accounts | (73) | 207 | 423 |
Unrealized loss on interest rate swaps | 14,014 | 0 | 0 |
Equity in net losses of investments | 0 | 331 | 1,077 |
Equity-based compensation | 29,524 | 35,733 | 84,790 |
Amortization of portfolio energy credits | 1,844 | 2,467 | 169 |
Cost of revenue for sales-type lease | 1,082 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (5,492) | (187) | (6,435) |
Prepaid expenses | (775) | (1,744) | (1,116) |
Other current assets | (545) | (231) | (261) |
Other assets | 3,447 | (5,353) | (1,221) |
Accounts payable | (892) | (312) | 5,079 |
Accrued salaries and benefits | 570 | 47 | 991 |
Accrued expenses | 2,198 | 3,309 | (2,435) |
Accrued impact fee expense | (27,018) | ||
Deferred revenue | 12,437 | 2,196 | 6,006 |
Customer deposits | 868 | ||
Customer deposits | 1,328 | 1,695 | |
Operating lease liabilities | (4,886) | ||
Other long-term liabilities | (330) | (230) | (143) |
Net cash provided by operating activities | 209,413 | 178,330 | 146,601 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of property and equipment | (307,712) | (275,524) | (402,561) |
Acquisition of intangible asset | 0 | (25) | (32) |
Proceeds from sale of property and equipment | 33 | 62 | 100 |
Proceeds from notes receivable | 211 | ||
Purchase of portfolio energy credits | (1,703) | (2,608) | (169) |
Net cash used in investing activities | (309,382) | (278,095) | (402,451) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of Class A common stock, net of offering costs | 572,432 | ||
Proceeds from borrowings | 170,000 | 0 | 976,000 |
Repayment of borrowings, including finance lease liabilities | (6,876) | (6,333) | (854,991) |
Payment of debt issuance and extinguishment costs | (10,468) | ||
Change in long-term deposit | 921 | (996) | 598 |
Payment of tax withholdings upon settlement of restricted stock unit awards | (1,448) | (1,232) | 0 |
Settlement of option loans | 0 | 314 | 0 |
Repurchase of common units | (91,046) | (60,644) | 0 |
Dividends paid to Class A common stockholders | (9,051) | (2,835) | (503) |
Distributions paid to noncontrolling interest | (19,370) | (11,615) | (185,265) |
Net cash provided by (used in) financing activities | 43,130 | (83,341) | 497,803 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (56,839) | (183,106) | 241,953 |
CASH AND CASH EQUIVALENTS—Beginning of year | 81,560 | 264,666 | 22,713 |
CASH AND CASH EQUIVALENTS—End of year | 24,721 | 81,560 | 264,666 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for interest, net of amounts capitalized | 26,238 | 24,841 | 23,494 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | |||
Increase (decrease) in liabilities incurred to acquire property and equipment | 24,238 | 8,807 | (53,455) |
(Decrease) increase in accounts receivable due to refund of long-term deposit | (24) | 2,543 | |
Increase in accrued construction payables incurred related to long-term deposit | 993 | 0 | |
Increase in dividends payable on unvested restricted stock units | 363 | 126 | |
Decrease in noncontrolling interest as a result of exchanges for Class A common stock | (101,450) | (53,403) | |
Recognition of liabilities under tax receivable agreement | 109,541 | 52,535 | |
Increase in deferred tax asset resulting from changes in outside basis difference on investment in Switch, Ltd. | 88,588 | 29,512 | |
Right-of-use assets obtained in exchange for new operating leases | 44 | ||
Right-of-use assets obtained in exchange for new finance leases | 39,036 | ||
Increase in distributions payable on unvested common units | 736 | 0 | |
Dividends payable settled with shares of Class A common stock | 30 | 0 | |
Settlement of liability incurred upon acquisition of capital lease asset | 0 | (1,976) | |
Distributions used for payment of option loans and related interest | $ 0 | $ 2 | 173 |
Distributions declared but not paid | $ 152 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Switch, Inc. was formed as a Nevada corporation in June 2017 for the purpose of completing an initial public offering (“IPO”) and related organizational transactions in order to carry on the business of Switch, Ltd. and its subsidiaries (collectively, “Switch,” and together with Switch, Inc., the “Company”). Switch is comprised of limited liability companies that provide colocation space and related services to global enterprises, financial companies, government agencies, and others that conduct critical business on the internet. Switch develops and operates data centers in Nevada, which are Tier IV Gold certified, and Michigan, and is developing data centers in Georgia, with the first facility opening during the first quarter of 2020, delivering redundant services with low latency and super capacity transport environments. As the manager of Switch, Ltd., Switch, Inc. operates and controls all of the business and affairs of Switch. In connection with the closing of Switch, Inc.’s IPO on October 11, 2017, Switch, Inc. and Switch, Ltd. consummated the following organizational transactions (the “Transactions”): • Switch, Ltd. adopted and approved the Fifth Amended and Restated Operating Agreement of Switch, Ltd. (the “Switch Operating Agreement”), which amended and restated Switch, Ltd.’s prior operating agreement to, among other things, convert all incentive units in Switch, Ltd. into common units of Switch, Ltd. (“Common Units”) and to appoint Switch, Inc. as the sole manager of Switch, Ltd.; • Switch, Inc. amended and restated its articles of incorporation to, among other things, provide for Class A common stock, Class B common stock, and Class C common stock; • Switch, Inc. issued shares of its Class C common stock to Rob Roy, the Founder, Chief Executive Officer and Chairman of Switch, Ltd., and an affiliated entity of Mr. Roy (collectively, the “Founder Members”) on a one-to-one basis with the number of Common Units they owned, for nominal consideration, and shares of its Class B common stock to the holders of Common Units other than Switch, Inc. and the Founder Members (the “Non-Founder Members” and, together with the Founder Members, the “Members”) on a one-to-one basis with the number of Common Units they owned, for nominal consideration; • Switch, Inc. issued and sold 35.9 million shares of its Class A common stock at a public offering price of $17.00 per share in exchange for net proceeds of $577.3 million , after deducting underwriting discounts and commissions, but before offering expenses of $4.9 million ; • Switch, Inc. used all of the net proceeds from the IPO to acquire 35.9 million newly issued Common Units from Switch, Ltd. at a purchase price per Common Unit equal to the IPO price of Class A common stock, less underwriting discounts and commissions, collectively representing 14.5% of Switch, Ltd.’s outstanding Common Units at the closing of the IPO; and • Switch, Inc. entered into (i) a Tax Receivable Agreement (“TRA”) with Switch, Ltd. and the Members and (ii) an Amended and Restated Registration Rights Agreement with the Members who, upon the completion of the IPO, owned an aggregate of 216.6 million shares of Switch, Inc.’s Class B common stock and Class C common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. All significant intercompany transactions and balances have been eliminated. As the sole manager of Switch, Ltd., Switch, Inc. operates and controls all of the business and affairs of Switch, and has the sole voting interest in, and controls the management of, Switch, and has the obligation to absorb the losses of, and receive benefits from, Switch. Accordingly, Switch, Inc. identifies itself as the primary beneficiary of Switch and began consolidating Switch as of the closing date of the IPO, resulting in a noncontrolling interest related to the Common Units held by Members on its consolidated financial statements. Switch has been determined to be the predecessor for accounting purposes and, accordingly, the consolidated financial statements for periods prior to the IPO and the Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from January 1, 2017 through October 10, 2017 presented in the consolidated financial statements and notes to consolidated financial statements herein represent the historical operations of Switch. The amounts as of December 31, 2019 and 2018, for the years ended December 31, 2019 and 2018, and for the period from October 11, 2017 through December 31, 2017 reflect the consolidated operations of the Company. For the period from June 13, 2017 to October 10, 2017, Switch, Inc. had no business transactions or activities and had no assets or liabilities with the exception of the issuance of one share at par value of $0.001 per share, which was canceled as of the closing date of the IPO. The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity (“VIE”) accounting model. A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. 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 disclosure 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. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for doubtful accounts, useful lives of property and equipment, deferred income taxes, liabilities under the TRA, equity-based compensation, deferred revenue, incremental borrowing rate, fair value of performance obligations, and probability assessments of exercising renewal options on leases. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. There were no cash equivalents as of December 31, 2019 . Cash equivalents as of December 31, 2018 were comprised of money market funds totaling $53.3 million . Investments The Company’s investments in entities where it holds at least a 20% ownership interest and has the ability to exercise significant influence over, but not control, the investee are accounted for using the equity method of accounting. The Company’s share of the investee’s results of operations is included in equity in net losses of investments and foreign currency translation adjustment, as applicable, is included in other comprehensive income with a corresponding adjustment to its investment. The Company discontinues applying the equity method of accounting when the investment is reduced to zero. If the investee subsequently reports net income or other comprehensive income, the Company resumes applying the equity method of accounting only after its share of unrecognized net income and other comprehensive income, respectively, equals the share of losses not recognized during the period the equity method of accounting was suspended. The Company gives precedence to other comprehensive income and losses when determining whether to resume applying the equity method of accounting. Investments in entities where the Company holds less than a 20% ownership interest are generally accounted for using the cost method of accounting. Concentration of Credit and Other Risks Although the Company operates primarily in Nevada, realization of its customer accounts receivable and its future operations and cash flows could be affected by adverse economic conditions, both regionally and elsewhere in the United States. During the years ended December 31, 2019 , 2018 , and 2017 , the Company’s largest customer and its affiliates comprised 13% , 11% , and 11% , respectively, of the Company’s revenue. Two customers, one of which was the Company’s largest customer and its affiliates, accounted for 10% or more of accounts receivable as of December 31, 2019 and the Company’s largest customer and its affiliates accounted for 10% or more of accounts receivable as of December 31, 2018 . Accounts Receivable Customer receivables are non-interest bearing and are initially recorded at cost. The Company generally does not request collateral from its customers; however, it usually obtains a lien or other security interest in certain customers’ equipment placed in the Company’s data center, and/or obtains a deposit. The Company maintains an allowance for doubtful accounts for estimated losses up to the full amount of invoices based on the age of the invoices. If the financial condition of the Company’s customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debt, customer concentrations, customer credit-worthiness, and changes in customer payment terms when evaluating the adequacy of the Company’s reserves. Delinquent account balances are written off after management has determined the likelihood of collection is not probable. The Company recorded a benefit for doubtful accounts of $0.1 million during the year ended December 31, 2019 and bad debt expense of $0.2 million and $0.4 million during the years ended December 31, 2018 and 2017 , respectively. Leases The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period in exchange for consideration. Control over the use of the identified assets means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. For lessee leases, the Company recognizes right-of-use (“ROU”) assets and lease liabilities for all leases other than those with a term of 12 months or less as the Company has elected to apply the short-term lease recognition exemption. ROU assets represent the Company’s right to use an underlying asset for the lease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are classified and recognized at the commencement date of a lease. Lease liabilities are measured based on the present value of fixed lease payments over the lease term. ROU assets consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company. Lease payments may vary because of changes in facts or circumstances occurring after the commencement, including changes in inflation indices. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As the Company’s lessee leases do not provide a readily determinable implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. When determining the incremental borrowing rate, the Company assesses multiple variables such as lease term, collateral, economic conditions, and credit-worthiness. The Company estimates its incremental borrowing rate using a benchmark senior unsecured yield curve for debt instruments adjusted for its credit quality, market conditions, tenor of lease contracts, and collateral. For income statement purposes, the Company recognizes rent expense on a straight-line basis for operating leases. For finance leases, the Company recognizes interest expense associated with the lease liability and depreciation expense associated with the ROU asset. For ROU assets held under finance leases and leasehold improvements, the estimated useful lives are limited to the shorter of the useful life of the asset or the term of the lease. Many of the Company’s lease arrangements include options to extend the lease, which the Company does not include in its expected lease terms unless they are reasonably certain to be exercised. The Company has lease arrangements with lease and non-lease components. The Company has elected to apply the practical expedient to combine lease and related non-lease components for all classes of underlying assets and shall account for the combined component as a lease component. Property and Equipment Property and equipment is stated at cost. Depreciation and amortization of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. Costs of repairs and maintenance are expensed as incurred. For assets used in data center operations, the related depreciation and amortization are included in cost of revenue. The Company’s estimated useful lives of its property and equipment are as follows (in years): Assets Estimated Useful Lives Land improvements 20-30 Buildings, building improvements and leasehold improvements 3-40 Substation equipment 30 Data center equipment 5-10 Vehicles 7 Core network equipment 5-7 Cloud computing equipment 5 Fiber facilities 20, 25 Computer equipment, furniture and fixtures 3-5 The Company capitalizes certain costs incurred in connection with developing or obtaining internal use software. Capitalized software costs placed into service are included in computer equipment, furniture and fixtures and are amortized on a straight-line basis over a three -year period. Software costs that do not meet capitalization criteria are expensed immediately. The Company capitalized internal use software costs of $2.3 million , $1.4 million , and $1.8 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively. In addition, the Company capitalizes interest costs during the construction phase of data centers. Once a data center or expansion project becomes operational, these costs are allocated to certain property and equipment categories and are depreciated over the estimated useful life of the underlying assets. Impairment of Long‑Lived Assets The Company’s long‑lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Portfolio Energy Credits The Company records portfolio energy credits (“PECs”) at their cost when purchased as an intangible asset, subject to impairment testing, within other assets on the consolidated balance sheets. PECs are not considered outputs by the Company. Amortization of PECs is recorded within cost of revenue on the consolidated statements of comprehensive income (loss) when PECs are utilized in operations. A summary of the Company’s PECs as of the end of each period presented is as follows: December 31, 2019 2018 (in thousands) PECs, gross $ 5,352 $ 3,649 Accumulated amortization (5,352 ) (3,508 ) PECs, net $ — $ 141 Commitments and Contingencies The Company accrues for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. Debt Issuance Costs Costs incurred in obtaining certain debt financing are deferred and amortized over the terms of the related debt instruments using the straight line-method for both term debt, which approximates the interest method, and revolving debt . As of December 31, 2019 and 2018 , unamortized debt issuance costs totaled $5.7 million and $7.3 million , respectively, of which $2.1 million and $2.9 million , respectively, were included within other assets on the consolidated balance sheets. Foreign Currency Translation SUPERNAP International, S.A. (“SUPERNAP International”), an equity method investment of the Company, has investments in foreign subsidiaries. The Company’s share of gains or losses from translation of SUPERNAP International’s foreign operations where the local currency is the functional currency is included in other comprehensive income. Revenue Recognition During each of the years ended December 31, 2019 , 2018 , and 2017 , the Company derived more than 95% of its revenue from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing and leasing of cabinet space and power and (2) connectivity services, which includes cross-connects, broadband services, and external connectivity. The remainder of the Company’s revenue is from non-recurring revenue, which primarily includes installation services related to a customer’s initial deployment. The majority of the Company’s revenue contracts are classified as licenses and accounted for in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), with the exception of certain contracts that contain lease components and are accounted for in accordance with ASC 842, Leases (“ASC 842”). The Company recognizes revenue when control of these goods and services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods and services. Revenue from recurring revenue streams is generally billed monthly and recognized using a time-based measurement of progress as customers receive service benefits evenly throughout the term of the contract, which is generally three to five years. Non-recurring installation fees, although generally paid in a lump sum upon installation, are deferred and recognized ratably over the contract term, determined using a portfolio approach. Non-recurring installation fees are not assessed as performance obligations as they are determined to be immaterial in the context of the contract with the customer. Revenue is generally recognized on a gross basis as a principal versus on a net basis as an agent, largely because the Company is primarily responsible for fulfilling the contract, takes title to services, bears credit risk, and has discretion in establishing the price when selling to the customer. For contracts with customers that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price of a contract is allocated to each distinct performance obligation on a relative standalone selling price basis. The standalone selling price is determined by maximizing observable inputs such as overall pricing objectives, customer credit history, and other factors. Other judgments include determining if any variable consideration should be included in the total contract value of the arrangement, such as price increases. Any variable consideration included in the total contract value of the arrangement is allocated to each distinct obligation, or series of distinct obligations, in an amount that depicts the consideration to which the Company expects to be entitled in exchange for transferring the underlying goods or services to the customer. The Company has also made the accounting policy election to exclude taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer from its measurement of the transaction price. Occasionally, the Company enters into contracts with customers for data center space and office space, which contain lease components. The Company’s leases with customers are generally classified as operating leases and lease payments are recognized on a straight-line basis over the lease term. Lease revenue related to data center space is included within colocation revenue, while lease revenue related to office space is included within other revenue. The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these standard service levels are not achieved, the Company would reduce revenue for any credits given to the customer as a result. There were no service level credits issued during the years ended December 31, 2019 , 2018 , and 2017 . Contract Balances The Company generally invoices customers in monthly installments payable in advance. The difference between the timing of revenue recognition, and the timing of billings and cash collections results in the recognition of accounts receivable, contract assets, and deferred revenue (contract liabilities) on the consolidated balance sheets. Receivables are recorded at invoice amounts, net of allowance for doubtful accounts, and are recognized in the period when the Company has transferred goods or provided services to its customers, and when its right to consideration for that transfer is unconditional. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 15 to 30 days of the invoice date. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the creditworthiness of the customer. A contract asset exists when the Company has transferred products or provided services to its customers, but customer payment is contingent upon future satisfaction of a performance obligation. Certain contracts include terms related to price arrangements and allocations of consideration to multiple performance obligations recognized over differing periods of time. The Company generally recognizes revenue ratably over the contract term, which could potentially give rise to contract assets during certain periods of the contract term. Deferred revenue represents amounts that are recognized when the Company has an unconditional right to a payment, which has been either billed to, or collected from, customers prior to transferring control of the underlying good or service to the customer. The opening and closing balances of the Company’s contract assets and deferred revenue are as follows: Contract assets, current portion (1) Contract assets (2) Deferred revenue, current portion Deferred revenue (in thousands) January 1, 2019 $ 145 $ 2,845 $ 12,322 $ 18,084 December 31, 2019 496 3,216 14,991 27,852 Increase $ 351 $ 371 $ 2,669 $ 9,768 ________________________________________ (1) Contract assets, current portion are included within other current assets of the Company’s consolidated balance sheet as of December 31, 2019 . (2) Contract assets are included within other assets of the Company’s consolidated balance sheet as of December 31, 2019 . The differences between the opening and closing balances of the Company’s deferred revenue primarily result from timing differences between the Company’s satisfaction of performance obligations and associated customer payments. Revenue recognized during the year ended December 31, 2019 from the opening balance of deferred revenue was $12.5 million . For the year ended December 31, 2019 , no impairment losses related to contract balances were recognized on the consolidated statement of comprehensive income (loss). Contract Costs Contract costs include the Company’s incremental direct costs of either obtaining or fulfilling a contract, which primarily consist of sales commissions and bonuses. Contract costs are deferred and amortized on a straight-line basis over the estimated period of benefit. The Company elected to apply the practical expedient to expense contract costs when incurred if the amortization period is one year or less. As of December 31, 2019 , there were deferred contract costs of $1.5 million included in other assets on the Company’s consolidated balance sheet. For the year ended December 31, 2019 , $0.4 million of deferred contract costs were amortized to selling, general and administrative expense on the Company’s consolidated statement of comprehensive income (loss). Remaining Performance Obligations Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized in future periods. These amounts as of December 31, 2019 were $783.7 million , 34% , 40% , and 15% of which is expected to be recognized over the next year , one to three years , and three to five years , respectively, with the remainder recognized thereafter. The remaining performance obligations do not include estimates of variable consideration related to unsatisfied performance obligations, such as the usage of metered power, or any contracts that could be terminated without significant penalties. The Company elected to apply the practical expedient that allows the Company not to disclose variable consideration allocated to remaining performance obligations that are either entirely or partially unsatisfied and form part of a single obligation. Income Taxes Switch, Inc. is taxed as a corporation and incurs U.S. federal, state, and local income taxes on its allocable share of taxable income or loss of Switch, Ltd. Switch, Ltd. operates as a partnership for federal, state, and local tax reporting. Members are liable for any income taxes resulting from their allocable portion of taxable income or loss of Switch, Ltd. as a pass-through entity. For tax years beginning on or after January 1, 2018, Switch, Ltd. is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”). Under the Centralized Partnership Audit Regime, any audit of Switch, Ltd. by the Internal Revenue Service (“IRS”) would be conducted at the partnership level, and if the IRS determines an adjustment, the default rule is that the partnership would pay an “imputed underpayment” including interest and penalties, if applicable. Switch, Ltd. may instead elect to make a “push-out” election, in which case the partners for the year that is under audit would be required to take into account the adjustments on their own personal income tax returns. The Switch Operating Agreement does not stipulate how Switch, Ltd. will address imputed underpayments. If Switch, Ltd. receives an imputed underpayment, a determination will be made based on the relevant facts and circumstances that exist at that time. The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities based on temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense (benefit) in the period of enactment. Deferred tax assets represent future tax deductions or credits. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period. Each reporting period, the Company assesses the weight of all positive and negative evidence available and reduces the carrying amounts of deferred tax assets by a valuation allowance if it is more likely than not that such assets will not be realized. A comprehensive assessment of all forms of positive and negative evidence is performed on an annual basis and such assessment is updated during each interim period for significant changes. The Company utilizes a two-step process to record uncertain income tax positions in which (1) the Company determines if the weight of available evidence indicates it is more likely than not that the tax position for recognition will be sustained on the basis of its technical merits and (2) for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely of being realized upon ultimate settlement with the related tax authority. The Company includes interest and penalties related to income taxes within the provision for income taxes. See Note 10 “Income Taxes” for additional information. Tax Receivable Agreement In connection with the IPO, the Company entered into a TRA with Switch, Ltd. and the Members. In the event that such parties exchange any or all of their Common Units for Class A common stock, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized, or in some cases deemed to be realized, by the Company by such exchange as a result of (i) increases in the Company’s tax basis of its ownership interest in the net assets of Switch, Ltd. resulting from any redemptions or exchanges of noncontrolling interest, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the “TRA Payments”). The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in Switch, Ltd. or the Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes a significant assumption related to the fair market value of property and equipment. The payment obligations under the TRA are obligations of Switch, Inc. and not of Switch, Ltd. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 100 basis points from the due date (without extensions) of such tax return. Any late payments that may be made under the TRA will continue to accrue interest at LIBOR plus 500 basis points until such payments are subsequently made. See Note 10 “Income Taxes” for additional information. Advertising Costs Advertising costs are expensed when incurred and are included in selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss). Advertising expense was $1.5 million , $1.1 million , and $1.8 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively. Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is attributed on a straight-line basis for awards with service conditions and on an accelerated attribution basis for awards with performance conditions over the requisite service period, which is generally the vesting period. The Company used the Black-Scholes option-pricing model to determine the fair value of Switch, Ltd.’s incentive unit awards. The determination of the fair value of the incentive unit awards was affected by assumptions regarding a number of complex and subjective variables including the fair value of Switch, Ltd.’s member equity units, the expected price volatility of the member equity units over the term of the awards and actual and projected employee purchase behaviors. Switch, Ltd.’s member equity units’ fair value per unit was estimated using a weighted average approach of a combination of the following three methods: (1) publicly traded data center company multiples; (2) data center precedent transaction multiples; and (3) the discounted cash flow method based on Switch, Ltd.’s five-year forecast. The weighting of these three methods varied over time. Switch, Ltd. estimated the expected volatility by analyzing the volatility of companies in the same industry and selecting volatility within the range. The risk-free interest rate was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the incentive unit awards. The expected dividend rate was determined at the grant date for each incentive unit award. The expected term of the incentive unit award was calculated by analyzing historical exercise data and obtaining the weighted average of the holding period for the incentive unit awards. Common Unit awards were measured based on the fair market value of the underlying unit on the date of grant. The Company uses the Black-Scholes option-pricing model to determine the fair value of Switch, Inc.’s stock option awards. Switch, Inc. estimates the expected volatility by using a weighted average of the historical volatility of its common stock and the historical volatilities of a peer group comprised of publicly-traded companies in the same industry. The risk-free interest rate is based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the stock option awards. The expected dividend rate is based on the Company’s estimate of annual dividends expected to be paid at the time of grant. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consists of the following: December 31, 2019 2018 (in thousands) Land and land improvements $ 223,877 $ 194,711 Buildings, building improvements, and leasehold improvements 435,214 412,089 Substation equipment 19,780 4,247 Data center equipment 1,021,056 904,722 Vehicles 1,732 1,685 Core network equipment 36,572 34,901 Cloud computing equipment 71 5,192 Fiber facilities 13,180 9,912 Computer equipment, furniture and fixtures 38,986 34,975 Finance lease ROU assets 72,569 33,730 Construction in progress 254,750 124,431 Property and equipment, gross 2,117,787 1,760,595 Less: accumulated depreciation and amortization (566,670 ) (457,825 ) Property and equipment, net $ 1,551,117 $ 1,302,770 Accumulated amortization for finance lease ROU assets totaled $11.7 million and $9.9 million as of December 31, 2019 and 2018 , respectively. During the years ended December 31, 2019 , 2018 , and 2017 , capitalized interest was $5.8 million , $4.9 million , and $2.9 million , respectively. Total depreciation and amortization of property and equipment recognized on the consolidated statements of comprehensive income (loss) was as follows: Years Ended 2019 2018 2017 (in thousands) Cost of revenue $ 116,274 $ 104,095 $ 87,255 Selling, general and administrative expense 3,671 2,571 1,869 Total depreciation and amortization of property and equipment $ 119,945 $ 106,666 $ 89,124 |
Long-Term Deposit
Long-Term Deposit | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Long-Term Deposit In February 2019, the Company and a number of other entities (collectively, the “Parties”) entered into a reimbursement agreement with Storey County, Nevada (the “County”); whereby, the Parties would fund the construction of a water project (the “Project”) on behalf of the County and would then be reimbursed the cost of the Project by the County from various taxes collected. The reimbursement agreement shall expire on the earlier of June 30, 2039 or when all costs have been reimbursed. As of December 31, 2019 , the Company had incurred $2.2 million in costs related to the Project that have been classified as long-term deposits on the consolidated balance sheet. In March 2015, Nevada Power Company dba NV Energy (“NV Energy”) and Switch, Ltd. entered into a Substation Agreement and related land purchase agreement for land owned by a wholly-owned subsidiary of Switch, Ltd. Pursuant to the Substation Agreement, NV Energy designed, constructed, maintains, and owns a substation and related feeders in connection with service to Switch’s development of certain of its data center facilities in Las Vegas. Switch has paid the associated costs and associated tax gross-up related to the development of the substation and related feeders as defined in the Substation Agreement. These costs are subject to reimbursement based upon Switch’s future power usage. Costs incurred as of December 31, 2019 and 2018 totaled $1.1 million and $3.2 million , respectively, and are classified as long-term deposits on the consolidated balance sheets. |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The Company currently holds two investments accounted for under the equity method of accounting, SUPERNAP International and Planet3, Inc. (“Planet3”), in which the Company holds a 50% ownership interest and a 45% ownership interest, respectively. As of December 31, 2019 and 2018 , the Company determined that it continued to have a variable interest in both SUPERNAP International and Planet3, as the entities do not have sufficient equity at risk. However, the Company concluded that it is not the primary beneficiary of SUPERNAP International or of Planet3 as it does not have deemed control of either entity. As a result, it does not consolidate either entity into its consolidated financial statements. As of December 31, 2019 and 2018 , the Company had invested $1.3 million in SUPERNAP International. As of March 31, 2018, the Company’s carrying value of its investment in SUPERNAP International was reduced to zero as a result of recording its share of the investee’s losses. Accordingly, as the Company does not have any guaranteed obligations and is not otherwise committed to provide further financial support to SUPERNAP International, the Company discontinued the equity method of accounting for its investment in SUPERNAP International as of March 31, 2018 and will not provide for additional losses until its share of future net income or comprehensive income, if any, equals the share of net losses or comprehensive losses not recognized during the period the equity method was suspended. The Company’s share of net loss recorded during the years ended December 31, 2018 and 2017 amounted to $0.3 million and $1.1 million , respectively. As of December 31, 2019 and 2018 , the Company recorded amounts consisting primarily of royalty fees and reimbursable expenses due from SUPERNAP International of $0.3 million and $0.4 million , respectively, within accounts receivable on the consolidated balance sheets. As of December 31, 2019 and 2018 , the Company had invested $10.0 million in Planet3. As the Company did not have any guaranteed obligations and was not otherwise committed to provide further financial support to Planet3, the Company discontinued the equity method of accounting for its investment in Planet3 as of December 31, 2016 and will not provide for additional losses until its share of future net income, if any, equals the share of net losses not recognized during the period the equity method was suspended. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 6. Long-Term Debt Long-term debt consists of the following as of: December 31, 2019 2018 (in thousands) 2017 Term Loan Facility $ 585,000 $ 591,000 Less: unamortized debt issuance costs (3,628 ) (4,434 ) 581,372 586,566 2017 Revolving Credit Facility 170,000 — 751,372 586,566 Less: long-term debt, current (6,000 ) (6,000 ) Long-term debt, net $ 745,372 $ 580,566 2015 Credit Agreement In May 2015, Switch, Ltd. entered into a credit agreement (“2015 Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and certain other lenders. The 2015 Credit Agreement consisted of a $200.0 million term loan facility and a $400.0 million revolving credit facility (the “2015 Facilities”), each with a term of five years. Interest on the 2015 Facilities was calculated based on a base rate plus the applicable margin or a LIBOR rate plus the applicable margin, at Switch, Ltd.’s election. Interest calculations were based on 365/366 days for a base rate loan and 360 days for a LIBOR loan. Base rate interest payments were due and payable in arrears on the last day of each calendar quarter. LIBOR rate interest payments were due and payable on the last day of each selected interest period (not to extend beyond three-month intervals). 2017 Credit Agreement In June 2017, Switch, Ltd. entered into an amended and restated credit agreement (“2017 Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and certain other lenders, consisting of a $600.0 million term loan facility (the “2017 Term Loan Facility”) and a $500.0 million revolving credit facility (the “2017 Revolving Credit Facility,” and, together with the 2017 Term Loan Facility, the “2017 Facilities”), the proceeds of which were used to repay the outstanding balance of the 2015 Facilities. As a result, the Company recorded a $3.6 million loss on extinguishment of debt during the year ended December 31, 2017 . In December 2017, Switch, Ltd. amended the 2017 Credit Agreement to reduce the interest rate margin applicable to borrowings under the 2017 Facilities. The 2017 Term Loan Facility matures in June 2024, and is subject to quarterly amortization payments of $1.5 million , which began on September 30, 2017, followed by a final payment of $559.5 million in June 2024. The 2017 Revolving Credit Facility has no interim amortization payments and matures in June 2022. The 2017 Credit Agreement permits the issuance of letters of credit upon Switch, Ltd.’s request of up to $30.0 million . Upon satisfying certain conditions, the 2017 Credit Agreement provides that Switch, Ltd. can increase the amount available for borrowing under the 2017 Facilities no more than five times (up to an additional $75.0 million in total, plus an additional amount subject to certain leverage restrictions) during the term of the 2017 Credit Agreement. As of December 31, 2019 , the Company had $330.0 million of available borrowing capacity under the 2017 Revolving Credit Facility, net of outstanding letters of credit. The 2017 Facilities are collateralized by substantially all of Switch’s tangible and intangible personal property and are guaranteed by certain of Switch, Ltd.’s wholly-owned subsidiaries. Interest on the 2017 Facilities is calculated based on the base rate plus the applicable margin or a LIBOR rate plus the applicable margin, at Switch, Ltd.’s election. Interest calculations are based on 365/366 days for a base rate loan and 360 days for a LIBOR loan. Beginning on September 30, 2017, base rate interest payments are due and payable in arrears on the last day of each calendar quarter. LIBOR rate interest payments are due and payable on the last day of each selected interest period (not to extend beyond three-month intervals). As of December 31, 2019 and 2018 , amounts under the 2017 Term Loan Facility had an underlying interest rate of 4.05% and 4.77% , respectively. As of December 31, 2019 , amounts under the 2017 Revolving Credit Facility had an underlying interest rate of 3.51% . In addition, beginning on September 30, 2017, the 2017 Revolving Credit Facility incurs a fee on unused lender commitments based on the applicable margin and payments are due and payable in arrears on the last day of each calendar quarter. The 2017 Credit Agreement contains affirmative and negative covenants customary for such financings, including, but not limited to, limitations on incurring additional debt, incurring additional liens, encumbrances or contingent liabilities, and paying distributions or making certain other restricted payments (with certain exceptions and baskets, including a restricted payment basket of $15.0 million per fiscal year). The 2017 Credit Agreement also requires Switch, Ltd. to maintain compliance with the consolidated total leverage ratio (as defined in the 2017 Credit Agreement) starting with the fiscal quarter ended June 30, 2017. As of December 31, 2019 , the maximum consolidated total leverage ratio was 4.50 to 1.00 . The maximum consolidated total leverage ratio decreases over time to, and remains at, 4.00 to 1.00 for the quarters ending September 30, 2020 and thereafter through maturity. Switch, Ltd. was in compliance with this covenant as of December 31, 2019 . Fair Value of Long-Term Debt The estimated fair value of the Company’s long-term debt as of December 31, 2019 and 2018 , was approximately $755.0 million and $573.3 million , respectively, compared to its carrying value, excluding debt issuance costs, of $755.0 million and $591.0 million , respectively. The estimated fair value of the Company’s long-term debt was based on Level 2 inputs. As of December 31, 2019 , long-term debt maturities are as follows (in thousands): 2020 $ 6,000 2021 6,000 2022 176,000 2023 6,000 2024 561,000 755,000 Less: unamortized debt issuance costs (3,628 ) $ 751,372 |
Leases (Notes)
Leases (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Finance Leases The Company leases land and a building for one of its data centers from an entity in which a member of its Board of Directors has a beneficial ownership interest. The building lease expires in 2033 with two subsequent 10 -year and one five -year renewal option periods and the land lease expires in 2069. As of December 31, 2019 , the finance lease ROU assets, net of accumulated amortization, related to the land and building were $37.6 million and $10.7 million , respectively. As of December 31, 2018 , the capital lease asset related to the building, net of accumulated amortization, was $11.4 million . In February 2016, a wholly-owned subsidiary of Switch, Ltd. acquired rights and interests to manage, construct and use the Nevada Broadband Telemedicine Initiative (“NBTI”) fiber network. The right to use the NBTI fiber network is accounted for as a finance lease. As of December 31, 2019 , finance lease ROU assets related to the NBTI fiber network, net of accumulated amortization, were $10.5 million . As of December 31, 2018 , capital lease assets related to the NBTI fiber network, net of accumulated amortization, were $12.3 million . There are no future minimum payment obligations related to this finance lease. The finance lease expires in 2042 with a 25 -year renewal option. The Company is the sole consumer of output from feeders related to substations owned by NV Energy. The Company accounts for these arrangements as finance leases. As of December 31, 2019 , finance lease ROU assets related to the feeders, net of accumulated amortization, were $1.0 million . As of December 31, 2018 , capital lease assets related to the feeders were $0.1 million . There are no future minimum payment obligations related to these finance leases. The finance leases expire in 2049 through 2058. In December 2018, the Company purchased a taxable industrial development revenue bond (the “Bond”) issued by a local government agency (the “Agency”) in order to reduce certain tax expenditures for data center facilities under construction. The Bond matures in December 2031. Pursuant to the terms of the Bond, the Company transferred title to certain of its property and equipment with total costs of $133.1 million and $6.1 million as of December 31, 2019 and 2018 , respectively, to the Agency. The Company leases the property and equipment from the Agency subject to an option to purchase for nominal consideration, which the Company may exercise at any time, upon tendering the Bond to the Agency. The title to these assets will revert to the Company upon retirement or cancellation of the Bond. As the Company is both the bondholder and the lessee for the property and equipment, the Company exercised its right to offset the amounts invested in and the obligations for this Bond on the consolidated balance sheets. The underlying assets remain in property and equipment, net on the consolidated balance sheets as all risks and rewards remain with the Company. The Company has entered into lease agreements for indefeasible rights of use in fibers with non-cancellable terms expiring in 2039. The rights to use these fibers are accounted for as finance leases. As of December 31, 2019 , finance lease ROU assets related to these fiber agreements, net of accumulated amortization, were $1.1 million . The Company includes its finance lease ROU assets within property and equipment, net on its consolidated balance sheets. Operating Leases The Company leases land, warehouse storage space, and data center buildings under operating leases that have non-cancellable terms expiring in 2021 through 2066 with entities in which a member of its Board of Directors has a beneficial ownership interest. In addition, the Company leases an aircraft, warehouse storage space, and storage yards for fiber, construction materials, and equipment under operating leases that have non-cancellable terms expiring in 2021 through 2055. Operating lease ROU assets of $30.6 million were included within other assets on the Company’s consolidated balance sheet as of December 31, 2019 . Lease Expense The components of lease expense are as follows: Year Ended (in thousands) Finance lease cost Amortization of ROU assets $ 1,993 Interest on lease liabilities 3,255 Operating lease cost (1) 7,136 Short-term lease cost 17 Variable lease cost 625 Sublease income (13 ) Total lease cost $ 13,013 ________________________________________ (1) Related party rent included in operating lease cost was $4.7 million . Other Information Other supplemental information related to leases is as follows: Year Ended (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 3,484 Operating cash flows from operating leases $ 7,167 Financing cash flows from finance leases $ 876 December 31, 2019 Weighted average remaining lease term (in years) Finance leases 37 Operating leases 25 Weighted average discount rate Finance leases 6.9 % Operating leases 7.2 % Maturity of Lease Liabilities Maturities of lease liabilities as of December 31, 2019 are as follows: Finance Leases Operating Leases Related Parties Other Total Related Parties Other Total (in thousands) 2020 $ 4,430 $ 29 $ 4,459 $ 4,348 $ 2,459 $ 6,807 2021 4,780 21 4,801 4,216 635 4,851 2022 4,843 21 4,864 2,863 207 3,070 2023 4,969 22 4,991 2,051 30 2,081 2024 5,036 22 5,058 2,051 26 2,077 Thereafter 139,307 407 139,714 52,552 603 53,155 Total undiscounted future cash flows 163,365 522 163,887 68,081 3,960 72,041 Less: amount representing interest (106,038 ) (223 ) (106,261 ) (40,511 ) (583 ) (41,094 ) Present value of undiscounted future cash flows $ 57,327 $ 299 $ 57,626 $ 27,570 $ 3,377 $ 30,947 Leases Not Yet Commenced A wholly-owned subsidiary of Switch, Ltd. entered into three power purchase and sale agreements for electricity over a term of 25 years and two battery energy storage system agreements for battery capacity over a term of 20 years . While the Company determined these agreements contain leases under ASC 842, these agreements have not yet commenced as of December 31, 2019 . These agreements result in an aggregate lease commitment of $848.0 million during the respective lease terms to commence on the earlier of October 1, 2022, or upon delivery of the battery energy storage system. Disclosures Related to Periods Prior to Adoption of ASC 842 As of December 31, 2018 , minimum payment obligations for capital leases are as follows (in thousands): 2019 $ 2,064 2020 2,124 2021 2,243 2022 2,306 2023 2,432 Thereafter 28,898 40,067 Less: amount representing interest (20,601 ) Present value of minimum capital lease payments (1) $ 19,466 ________________________________________ (1) Until 2023, capital lease payments are applied only to accrued interest; thus, there is no current portion. As of December 31, 2018 , future minimum lease payments for all operating leases with remaining terms in excess of one year are as follows (in thousands): Related Parties Other Total 2019 $ 4,824 $ 2,482 $ 7,306 2020 4,872 2,487 7,359 2021 4,260 625 4,885 2022 2,863 197 3,060 2023 2,051 20 2,071 Thereafter 54,603 623 55,226 $ 73,473 $ 6,434 $ 79,907 During the years ended December 31, 2018 and 2017 , rent expense related to operating leases was $7.7 million and $7.4 million , respectively. Related party rent included in these amounts was $5.0 million and $4.8 million during the years ended December 31, 2018 and 2017 , respectively. |
Leases | Leases Finance Leases The Company leases land and a building for one of its data centers from an entity in which a member of its Board of Directors has a beneficial ownership interest. The building lease expires in 2033 with two subsequent 10 -year and one five -year renewal option periods and the land lease expires in 2069. As of December 31, 2019 , the finance lease ROU assets, net of accumulated amortization, related to the land and building were $37.6 million and $10.7 million , respectively. As of December 31, 2018 , the capital lease asset related to the building, net of accumulated amortization, was $11.4 million . In February 2016, a wholly-owned subsidiary of Switch, Ltd. acquired rights and interests to manage, construct and use the Nevada Broadband Telemedicine Initiative (“NBTI”) fiber network. The right to use the NBTI fiber network is accounted for as a finance lease. As of December 31, 2019 , finance lease ROU assets related to the NBTI fiber network, net of accumulated amortization, were $10.5 million . As of December 31, 2018 , capital lease assets related to the NBTI fiber network, net of accumulated amortization, were $12.3 million . There are no future minimum payment obligations related to this finance lease. The finance lease expires in 2042 with a 25 -year renewal option. The Company is the sole consumer of output from feeders related to substations owned by NV Energy. The Company accounts for these arrangements as finance leases. As of December 31, 2019 , finance lease ROU assets related to the feeders, net of accumulated amortization, were $1.0 million . As of December 31, 2018 , capital lease assets related to the feeders were $0.1 million . There are no future minimum payment obligations related to these finance leases. The finance leases expire in 2049 through 2058. In December 2018, the Company purchased a taxable industrial development revenue bond (the “Bond”) issued by a local government agency (the “Agency”) in order to reduce certain tax expenditures for data center facilities under construction. The Bond matures in December 2031. Pursuant to the terms of the Bond, the Company transferred title to certain of its property and equipment with total costs of $133.1 million and $6.1 million as of December 31, 2019 and 2018 , respectively, to the Agency. The Company leases the property and equipment from the Agency subject to an option to purchase for nominal consideration, which the Company may exercise at any time, upon tendering the Bond to the Agency. The title to these assets will revert to the Company upon retirement or cancellation of the Bond. As the Company is both the bondholder and the lessee for the property and equipment, the Company exercised its right to offset the amounts invested in and the obligations for this Bond on the consolidated balance sheets. The underlying assets remain in property and equipment, net on the consolidated balance sheets as all risks and rewards remain with the Company. The Company has entered into lease agreements for indefeasible rights of use in fibers with non-cancellable terms expiring in 2039. The rights to use these fibers are accounted for as finance leases. As of December 31, 2019 , finance lease ROU assets related to these fiber agreements, net of accumulated amortization, were $1.1 million . The Company includes its finance lease ROU assets within property and equipment, net on its consolidated balance sheets. Operating Leases The Company leases land, warehouse storage space, and data center buildings under operating leases that have non-cancellable terms expiring in 2021 through 2066 with entities in which a member of its Board of Directors has a beneficial ownership interest. In addition, the Company leases an aircraft, warehouse storage space, and storage yards for fiber, construction materials, and equipment under operating leases that have non-cancellable terms expiring in 2021 through 2055. Operating lease ROU assets of $30.6 million were included within other assets on the Company’s consolidated balance sheet as of December 31, 2019 . Lease Expense The components of lease expense are as follows: Year Ended (in thousands) Finance lease cost Amortization of ROU assets $ 1,993 Interest on lease liabilities 3,255 Operating lease cost (1) 7,136 Short-term lease cost 17 Variable lease cost 625 Sublease income (13 ) Total lease cost $ 13,013 ________________________________________ (1) Related party rent included in operating lease cost was $4.7 million . Other Information Other supplemental information related to leases is as follows: Year Ended (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 3,484 Operating cash flows from operating leases $ 7,167 Financing cash flows from finance leases $ 876 December 31, 2019 Weighted average remaining lease term (in years) Finance leases 37 Operating leases 25 Weighted average discount rate Finance leases 6.9 % Operating leases 7.2 % Maturity of Lease Liabilities Maturities of lease liabilities as of December 31, 2019 are as follows: Finance Leases Operating Leases Related Parties Other Total Related Parties Other Total (in thousands) 2020 $ 4,430 $ 29 $ 4,459 $ 4,348 $ 2,459 $ 6,807 2021 4,780 21 4,801 4,216 635 4,851 2022 4,843 21 4,864 2,863 207 3,070 2023 4,969 22 4,991 2,051 30 2,081 2024 5,036 22 5,058 2,051 26 2,077 Thereafter 139,307 407 139,714 52,552 603 53,155 Total undiscounted future cash flows 163,365 522 163,887 68,081 3,960 72,041 Less: amount representing interest (106,038 ) (223 ) (106,261 ) (40,511 ) (583 ) (41,094 ) Present value of undiscounted future cash flows $ 57,327 $ 299 $ 57,626 $ 27,570 $ 3,377 $ 30,947 Leases Not Yet Commenced A wholly-owned subsidiary of Switch, Ltd. entered into three power purchase and sale agreements for electricity over a term of 25 years and two battery energy storage system agreements for battery capacity over a term of 20 years . While the Company determined these agreements contain leases under ASC 842, these agreements have not yet commenced as of December 31, 2019 . These agreements result in an aggregate lease commitment of $848.0 million during the respective lease terms to commence on the earlier of October 1, 2022, or upon delivery of the battery energy storage system. Disclosures Related to Periods Prior to Adoption of ASC 842 As of December 31, 2018 , minimum payment obligations for capital leases are as follows (in thousands): 2019 $ 2,064 2020 2,124 2021 2,243 2022 2,306 2023 2,432 Thereafter 28,898 40,067 Less: amount representing interest (20,601 ) Present value of minimum capital lease payments (1) $ 19,466 ________________________________________ (1) Until 2023, capital lease payments are applied only to accrued interest; thus, there is no current portion. As of December 31, 2018 , future minimum lease payments for all operating leases with remaining terms in excess of one year are as follows (in thousands): Related Parties Other Total 2019 $ 4,824 $ 2,482 $ 7,306 2020 4,872 2,487 7,359 2021 4,260 625 4,885 2022 2,863 197 3,060 2023 2,051 20 2,071 Thereafter 54,603 623 55,226 $ 73,473 $ 6,434 $ 79,907 During the years ended December 31, 2018 and 2017 , rent expense related to operating leases was $7.7 million and $7.4 million , respectively. Related party rent included in these amounts was $5.0 million and $4.8 million during the years ended December 31, 2018 and 2017 , respectively. |
Retirement Benefit Plans
Retirement Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | 8. Retirement Benefit Plans The Company has a defined contribution retirement plan that covers its eligible employees (the “Plan”). The Plan is qualified in accordance with Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). Eligible employees can participate in the Company’s pre-tax 401(k) plan or after-tax Roth 401(k) plan. The Company makes matching contributions equal to 100% of the first 3% of compensation deferred by a participant. Beginning in January 2019, the Company also makes matching contributions equal to 50% of the next 2% of compensation deferred by a participant. The Company may make an additional discretionary matching contribution. The Company recognized expense related to its contributions to the Plan of $2.0 million , $1.5 million , and $1.3 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments The Company has entered into 20 -year renewable energy agreements with NV Energy to purchase all PECs realized from Switch Station 1, a 100 megawatt photovoltaic solar generation facility, not to exceed the Company’s total electric load from its data center facilities, and Switch Station 2, a 79 megawatt photovoltaic solar generation facility. As of December 31, 2019 , future minimum PEC purchase commitments are $1.7 million for each of 2020, 2021, 2022, 2023, and 2024 and $22.5 million thereafter. The Company has entered into a license agreement comprised of an aggregate purchase commitment of $7.7 million over a term of 15 years . As of December 31, 2019 , future minimum purchase commitments are $0.2 million for 2020, $0.5 million for each of 2021, 2022, 2023, and 2024, and $5.2 million thereafter. Impact Fee Expense The Company paid an impact fee of $27.0 million in a lump sum on May 31, 2017 to NV Energy, the Company’s energy provider in Nevada through May 31, 2017, and became an unbundled purchaser of energy in Nevada on June 1, 2017. For the year ended December 31, 2017 , the Company also incurred an additional impact fee expense of $0.6 million related to deferred energy adjustments representing the difference between actual costs and amounts collected by NV Energy for fuel and purchased power. As no future economic benefit is realized by the Company from the deferred energy adjustments, it was recognized as an expense during the year ended December 31, 2017 on the consolidated statements of comprehensive income (loss). Self-Insurance Reserves Effective January 1, 2017, the Company is self-insured for various levels of employee health coverage. Insurance reserves include accruals for estimated settlements for known claims, as well as accruals for estimates of incurred but not reported claims. As of December 31, 2019 and 2018 , the estimated liabilities for unpaid and incurred but not reported claims totaled $0.8 million and $0.5 million , respectively, which are included within accrued salaries and benefits on the consolidated balance sheets. Legal Proceedings On September 7, 2017, Switch, Ltd. and Switch, Inc. were named in a lawsuit filed in the U.S. District Court for the District of Nevada by V5 Technologies formerly d/b/a Cobalt Data Centers. The lawsuit alleges, among other things, that Switch, Ltd. and Switch, Inc. monopolized the Las Vegas Metropolitan area of Southern Nevada’s data center colocation market and engaged in unfair business practices leading to the failure of Cobalt Data Centers in 2015 and seeks monetary damages in an amount yet to be disclosed. Discovery closed in February 2020. The parties are currently engaged in dispositive motion practice. Switch, Ltd. and Switch, Inc. are vigorously defending the case. On September 12, 2017, Switch, Ltd. filed a complaint in the Eighth Judicial District of Nevada against the consultant, Stephen Fairfax, and his business, MTechnology Inc. Among other claims, Switch raised allegations of breach of contract and misappropriation of trade secrets. The complaint also alleged that Aligned Data Centers LLC hired Mr. Fairfax and MTechnology to design their data centers; that this consultant had toured Switch under a non-disclosure agreement; and that this consultant breached his confidentiality agreements with Switch by using Switch’s designs to design the Aligned data centers. Switch, Ltd. is seeking an injunction to prevent the defendants in the lawsuit from infringing Switch, Ltd.’s patents, as well as other remedies. The parties are currently engaged in discovery. Four substantially similar putative class action complaints, captioned Martz v. Switch, Inc. et al. (filed April 20, 2018); Palkon v. Switch, Inc. et al. (filed April 30, 2018); Chun v. Switch, Inc. et al. (filed May 11, 2018); and Silverberg v. Switch, Inc. et al. (filed June 6, 2018), were filed in the Eighth Judicial District of Nevada, and subsequently consolidated into a single case (the “State Court Securities Action”). Additionally, on June 11, 2018, one putative class action complaint captioned Cai v. Switch, Inc. et al. was filed in the United States District Court for the District of New Jersey (the “Federal Court Securities Action,” and collectively with the State Court Securities Action, the “Securities Actions”) and subsequently transferred to the Eighth Judicial District of Nevada in August 2018 and the federal court appointed Oscar Farach lead plaintiff. These lawsuits were filed against Switch, Inc., certain current and former officers and directors and certain underwriters of Switch, Inc.’s IPO alleging federal securities law violations in connection with the IPO. These lawsuits were brought by purported stockholders of Switch, Inc. seeking to represent a class of stockholders who purchased Class A common stock in or traceable to the IPO, and seek unspecified damages and other relief. In October 2018, the state court granted the defendants’ motion to stay the State Court Securities Action in favor of the Federal Court Securities Action, which stay was affirmed by the Nevada Supreme Court in September 2019. In October 2018, the lead plaintiff of the Federal Court Securities Action filed an amended complaint. In November 2018, Switch, Inc. and other defendants filed a motion to dismiss for failure to state a claim and a motion to strike. In July 2019, the federal court granted Switch, Inc.’s motion to dismiss in part, which narrowed the scope of the plaintiff’s case. In December 2019, Switch, Inc. filed a motion for judgment on the pleadings and the parties are waiting for the federal court to rule on the motion. The parties are currently engaged in discovery in the Federal Court Securities Action. Switch, Inc. believes that these lawsuits are without merit and intends to continue to vigorously defend against them. On September 10, 2018, two purported stockholders of Switch, Inc. filed substantially similar shareholder derivative complaints, respectively captioned Liu v. Roy et al., and Zhao v. Roy et al., in the Eighth Judicial District of Nevada, which were subsequently consolidated into a single case (the “Derivative Shareholder Action”). These lawsuits allege breaches of fiduciary duty, unjust enrichment, waste of corporate assets, abuse of control, and gross mismanagement against certain current and former officers and directors of Switch, Inc. The plaintiffs also named Switch, Inc. as a nominal defendant. The complaints arise generally from the same allegations described in the State Court Securities Action and Federal Court Securities Action. The plaintiffs seek unspecified damages on Switch, Inc.’s behalf from the officer and director defendants, certain corporate governance actions, compensatory awards, and other relief. In December 2019, the court granted the parties’ stipulation to stay the Derivative Shareholder Action until the earlier of any of the following events: the Securities Actions are resolved with prejudice as to each defendant or a motion for summary judgment is resolved in the Federal Court Securities Action. The outcomes of the legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to the Company’s financial condition, results of operations, and cash flows for a particular period. Where the Company is a defendant, it will vigorously defend against the claims pleaded against it. These actions are each in preliminary stages and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of these actions or the range of reasonably possible loss, if any. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income (loss) before income taxes for domestic and foreign operations is as follows: Years Ended 2019 2018 2017 (in thousands) Domestic $ 34,161 $ 31,379 $ (8,386 ) Foreign 94 (118 ) (1,175 ) Total income (loss) before income taxes $ 34,255 $ 31,261 $ (9,561 ) Components of income tax expense (benefit) consist of the following: Years Ended 2019 2018 2017 (in thousands) Current Federal $ — $ — $ — State and local — — — Total current income tax expense (benefit) $ — $ — $ — Deferred Federal $ 2,693 $ 1,939 $ (978 ) State and local 20 4 (3 ) Total deferred income tax expense (benefit) $ 2,713 $ 1,943 $ (981 ) Total income tax expense (benefit) $ 2,713 $ 1,943 $ (981 ) The Company’s operations are primarily conducted in the state of Nevada, which does not have a corporate level income tax. A reconciliation of the U.S. statutory tax rate to the effective income tax rate is presented below: Years Ended 2019 2018 2017 U.S. statutory tax rate 21.0 % 21.0 % 35.0 % Rate effect from pass-through entity (13.9 ) (17.0 ) (34.8 ) Partnership outside basis difference — — 26.2 Rate change impact due to tax reform — — (7.0 ) Other 0.8 2.2 (9.2 ) Effective income tax rate 7.9 % 6.2 % 10.2 % During the years ended December 31, 2019 and 2018 , the Company’s effective income tax rate differs from the U.S. statutory tax rate primarily because it does not record income taxes on the income before income taxes attributable to noncontrolling interest holders. In addition, the Tax Cuts and Jobs Act (“TCJA”) enacted in December 2017 reduced the U.S. federal corporate rate from a top marginal rate of 35% to a flat rate of 21%, limited the net operating loss (“NOL”) carryforward deduction to 80% of current year taxable income, and eliminated NOL carrybacks, among other provisions. The Company calculated its best estimate of the impact of the TCJA based on current interpretations and understanding of the TCJA and recorded a provisional tax benefit of $0.7 million for the year ended December 31, 2017 in accordance with Staff Accounting Bulletin No. 118. During the fourth quarter of 2018, the Company finalized its calculations related to the impacts of the TCJA with no adjustment to its previously recorded provisional tax benefit. As Switch, Inc.’s IPO closed on October 11, 2017, and Switch, Inc. had no business transactions or activities prior to the IPO, with the exception of the issuance of one share at par value of $0.001 per share, which was canceled as of the closing date of the IPO, no amounts related to the provision for income taxes were incurred for the period from January 1, 2017 to October 10, 2017. Significant components of Switch, Inc.’s deferred tax assets and liabilities were as follows as of: December 31, 2019 2018 (in thousands) Deferred tax assets: Investment in partnership $ 93,089 $ 22,601 Net operating loss carryforwards 21,283 5,949 114,372 28,550 Less: valuation allowance — — $ 114,372 $ 28,550 Deferred tax liabilities: Other $ — $ — $ — $ — Net deferred tax assets $ 114,372 $ 28,550 As of December 31, 2019 , Switch had a U.S. federal income tax NOL carryforward of $100.5 million available to offset future taxable income, of which $1.9 million will expire in 2037 and $98.6 million will be carried forward indefinitely under the TCJA. Switch also has state and local NOL carryforwards of $5.3 million , of which $0.2 million will expire in 2028 and $5.1 million will expire in 2029. Management believes on a more likely than not basis that Switch will be able to realize the tax benefit of its NOL carryforwards. As a result of the increase in Switch, Inc.’s ownership of Switch, Ltd. following the exchanges of noncontrolling interest for Class A common stock during the years ended December 31, 2019 and 2018 described in Note 13 “Noncontrolling Interest,” the Company recorded a deferred tax asset related to the increase in the tax basis of Switch, Inc.’s ownership interest in Switch, Ltd. of $93.1 million and $22.6 million as of December 31, 2019 and 2018 , respectively. As of December 31, 2019 , the Company concluded, based on the weight of all available positive and negative evidence, that all of its deferred tax assets are more likely than not to be realized. The Company did not record any penalties or interest related to income taxes or uncertain tax positions, as management has concluded that no such positions exist, on the consolidated balance sheets as of December 31, 2019 and 2018 . In addition, the Company did not record any penalties or interest related to income taxes on the consolidated statements of comprehensive income (loss) during the years ended December 31, 2019 , 2018 , and 2017 . The Company is subject to examination for tax years beginning with the year ended December 31, 2017. The Company is not currently subject to income tax audits in any U.S. or state jurisdictions for any tax year. Tax Receivable Agreement Pursuant to the Company’s election under Section 754 of the Code, the Company expects to obtain an increase in the tax basis of its ownership interest in the net assets of Switch, Ltd. following the redemption or exchange of noncontrolling interest for Class A common stock and other qualifying transactions. The Company intends to treat any redemptions and exchanges of noncontrolling interest as direct purchases of noncontrolling interest for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The Company has recorded a liability under the TRA of $162.1 million and $52.5 million as of December 31, 2019 and 2018 , respectively, which provides for the payment of 85% of the amount of the tax benefits, if any, that Switch, Inc. is deemed to realize as a result of increases in the tax basis of its ownership in Switch, Ltd. related to exchanges of noncontrolling interest for Class A common stock. See Note 13 “Noncontrolling Interest” for additional information. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity As of December 31, 2019 , under Switch, Inc.’s amended and restated articles of incorporation dated October 5, 2017 (the “Amended and Restated Articles of Incorporation”), Switch, Inc. was authorized to issue: (i) 750 million shares of Class A common stock, par value $0.001 per share, (ii) 300 million shares of Class B common stock, par value $0.001 per share (of which 65.6 million shares have been retired and may not be reissued), (iii) 75 million shares of Class C common stock, par value $0.001 per share (of which 42.9 million shares have been retired and may not be reissued), and (iv) 10 million shares of blank check preferred stock, par value $0.001 per share. Holders of shares of Class A common stock, Class B common stock, and Class C common stock are entitled to one vote, one vote, and 10 votes, respectively, on all matters to be voted upon by the stockholders. In November 2019, at the request of Switch, Inc.’s Board of Directors, the holders of Class C common stock converted each share of Class C common stock held by them into one share of Class B common stock pursuant to the Amended and Restated Articles of Incorporation. Dividends Holders of shares of Class A common stock are entitled to receive cash dividends as may be declared from time to time at the sole discretion of Switch, Inc.’s Board of Directors. Holders of shares of Class B common stock and Class C common stock are not entitled to participate in any such dividends declared by Switch, Inc.’s Board of Directors. During the year ended December 31, 2019 , Switch, Inc. paid cash dividends of $0.118 per share of Class A common stock and recorded a total of $9.4 million as a reduction of retained earnings from cash dividends declared by its Board of Directors. During the year ended December 31, 2018 , Switch, Inc. paid cash dividends of $0.059 per share of Class A common stock and recorded a total of $3.0 million as a reduction of retained earnings from cash dividends declared by its Board of Directors. During the year ended December 31, 2017, Switch, Inc. paid cash dividends of $0.014 per share of Class A common stock and recorded a total of $0.5 million as a reduction of retained earnings from cash dividends declared by its Board of Directors. The declaration, amount, and payment of any future dividends on shares of Class A common stock will be at the discretion of Switch, Inc.’s Board of Directors and will depend upon many factors, including Switch, Inc.’s results of operations, financial condition, capital requirements, restrictions in the 2017 Credit Agreement, and other factors that Switch, Inc.’s Board of Directors deems relevant. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation 2005 Common Membership Unit Plan In 2005, Switch, Ltd. established the 2005 Common Membership Unit Plan (the “Unit Option Plan”) for the purpose of attracting and retaining the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants of Switch, and to promote the success of its business. All options granted under the Unit Option Plan were intended to be treated as non-statutory unit options under the Code. The term of each option was the term stated in the option agreement, which was no more than 10 years from the date of grant. Options exercised under the Unit Option Plan provided the purchaser with full rights equivalent to those of existing members and holders as of the date of exercise. There were no unit options outstanding during the year ended December 31, 2019 and there were no unit options granted or vested during the years ended December 31, 2019, 2018, and 2017. Total aggregate intrinsic value of unit options exercised was $1.2 million and $0.9 million during the years ended December 31, 2018 and 2017, respectively. Common Unit Awards In 2012, Switch, Ltd. began issuing common unit awards (“Incentive Units”) containing a hurdle amount (similar to an exercise price) where employees benefited from any appreciation in the value of their awards above the hurdle amount under Switch, Ltd.’s then-current operating agreement. In connection with the effectiveness of the Switch Operating Agreement and closing of Switch, Inc.’s IPO, all outstanding Incentive Units, other than the unvested Common Unit awards discussed below, accelerated in full and were converted into Common Units after net settling the hurdle amount. In September 2017, Switch, Ltd. granted 7.5 million Incentive Units to its Chief Executive Officer (the “CEO Award”) and 1.5 million Incentive Units to its President with a hurdle amount of $11.69 per Incentive Unit (the “President Award”). The CEO Award contained a provision that caused the Incentive Units underlying the CEO Award to convert into Common Units on a one-to-one basis in connection with the closing of Switch, Inc.’s IPO. In connection with the effectiveness of the Switch Operating Agreement and closing of Switch, Inc.’s IPO, the CEO Award converted into 7.5 million Common Units and the President Award converted into 472,000 Common Units after net settling the hurdle amount. If a forfeiture of unvested Common Units under the CEO Award and the President Award occurs, the associated shares of Class B common stock are also forfeited. The summary of Common Unit activity under the Switch Operating Agreement for the year ended December 31, 2019 is presented below: Number of Units (in thousands) Weighted Average Grant Date Fair Value per Unit Unvested Common Units—January 1, 2019 3,986 $ 11.11 Vested (798 ) $ 11.11 Unvested Common Units—December 31, 2019 3,188 $ 11.11 The following additional disclosures are provided for awards under Switch, Ltd.’s then-current operating agreement for the periods prior to Switch, Inc.’s IPO and awards under the Switch Operating Agreement for the periods after Switch, Inc.’s IPO: Years Ended 2019 2018 2017 Weighted average grant date fair value of Common Units $ — $ — $ 7.39 Total fair value of Common Units vested (in thousands) $ 9,423 $ 10,659 $ 1,115 Weighted average grant date fair value of Incentive Units $ — $ — $ 10.06 Total aggregate intrinsic value of Incentive Units converted into Common Units (in thousands) $ — $ — $ 318,033 The weighted average assumptions used in estimating the grant date fair value of Incentive Unit awards, exclusive of the CEO Award, are listed in the table below: Year Ended Expected volatility 29.3 % Risk-free interest rate 1.4 % Expected term (in years) 2.0 Dividend rate 0.6 % As the CEO Award contained a provision that caused the Incentive Units underlying the CEO Award to convert into Common Units on a one-to-one basis in connection with the closing of Switch, Inc.’s IPO, the grant date fair value of the underlying units was $11.69 per unit. As of December 31, 2019 , total equity-based compensation cost related to all unvested Common Units was $9.6 million , which is expected to be recognized over a weighted average period of 1.78 years. 2017 Incentive Award Plan In September 2017, Switch, Inc.’s Board of Directors adopted the 2017 Incentive Award Plan (the “2017 Plan”). The 2017 Plan, effective as of its adoption date, provides that the initial aggregate number of shares reserved and available for issuance is 25.0 million shares of Class A common stock plus an increase each January 1, beginning on January 1, 2018 and ending on and including January 1, 2027, equal to the lesser of (A) 17.0 million shares of Class A common stock, (B) 5% of the aggregate number of shares of Switch, Inc.’s Class A common stock, Class B common stock, and Class C common stock outstanding on the final day of the immediately preceding calendar year and (C) such smaller number of shares of Class A common stock as is determined by the Board of Directors. Effective January 1, 2019 and 2018, Switch, Inc.’s Board of Directors approved increases of 3.2 million shares and 7.9 million shares, respectively, in the aggregate number of shares of Class A common stock reserved and available for issuance under the 2017 Plan. These increases, and each annual increase thereafter, are subject to adjustment in the event of a stock split, stock dividend or other defined changes in Switch, Inc.’s capitalization. The 2017 Plan allows for the grant of (i) stock options, including incentive stock options, (ii) stock appreciation rights, (iii) non-statutory stock options under the Code, (iv) restricted stock awards (“RSAs”), (v) restricted stock units (“RSUs”), or (vi) other stock or cash based awards as may be determined by the plan’s administrator from time to time. The term of each option award shall be no more than 10 years from the date of grant. Options exercised under the 2017 Plan provide the purchaser with full rights equivalent to those of existing Class A common stock holders and holders as of the date of exercise. The Company’s policy for issuing shares upon stock option exercise is to issue new shares of Class A common stock. Additionally, the Switch Operating Agreement states that Switch, Ltd. will maintain at all times a one-to-one ratio between the number of Common Units owned by Switch, Inc. and the number of outstanding shares of Class A common stock, including those issued as a result of stock option exercises and vesting of RSU awards. The 2017 Plan also provides for dividend equivalent units (“DEUs”) based on the value of the dividends per share paid on the Company’s Class A common stock, which are accumulated on RSUs during the vesting period. The DEUs vest and will be settled with shares of the Company’s Class A common stock concurrently with the vesting of the associated RSUs based on the closing share price on the vesting date. The summary of stock option activity under the 2017 Plan for the year ended December 31, 2019 is presented below: Number of Stock Options (in thousands) Weighted Average Exercise Price per Stock Option Weighted Average Remaining Contractual Life (Years) Aggregate (in thousands) Outstanding—January 1, 2019 7,352 $ 14.16 Granted 1,217 $ 10.66 Forfeited (66 ) $ 17.00 Expired (161 ) $ 17.00 Outstanding—December 31, 2019 8,342 $ 13.57 8.08 $ 21,430 Fully vested and expected to vest—December 31, 2019 8,342 $ 13.57 8.08 $ 21,430 Exercisable—December 31, 2019 5,561 $ 16.06 7.58 $ 4,092 The following additional disclosures are provided for stock options under the 2017 Plan: Years Ended 2019 2018 2017 Weighted average grant date fair value $ 3.15 $ 1.84 $ 5.00 Total fair value of stock options vested (in thousands) $ 959 $ 176 $ 28,073 The weighted average assumptions used in estimating the grant date fair value of stock options are listed in the table below: Years Ended 2019 2018 2017 Expected volatility 29.3 % 28.2 % 31.8 % Risk-free interest rate 2.5 % 2.8 % 1.9 % Expected term (in years) 6.3 5.9 5.0 Dividend rate 1.1 % 1.7 % 0.6 % As of December 31, 2019 , total equity-based compensation cost related to all unvested stock options was $5.2 million , which is expected to be recognized over a weighted average period of 2.79 years. The summary of RSU activity, inclusive of DEU settlements, under the 2017 Plan for the year ended December 31, 2019 is presented below: Number of Units (in thousands) Weighted Average Grant Date Fair Value per Unit Unvested RSUs—January 1, 2019 2,789 $ 14.93 Granted 1,555 $ 9.12 Vested (677 ) $ 14.87 Forfeited (359 ) $ 12.01 Unvested RSUs—December 31, 2019 3,308 $ 12.53 The following additional disclosures are provided for RSU awards under the 2017 Plan: Years Ended 2019 2018 2017 Weighted average grant date fair value $ 9.12 $ 15.03 $ 18.01 Total fair value of shares vested (in thousands) $ 5,114 $ 2,925 $ 365 As of December 31, 2019 , total equity-based compensation cost related to all unvested RSU awards was $29.9 million , which is expected to be recognized over a weighted average period of 2.48 years. The summary of RSA activity under the 2017 Plan for the year ended December 31, 2019 is presented below: Number of Awards (in thousands) Weighted Average Grant Date Fair Value per Award Unvested RSAs—January 1, 2019 61 $ 13.08 Granted 80 $ 12.55 Vested (61 ) $ 13.08 Unvested RSAs—December 31, 2019 80 $ 12.55 The following additional disclosures are provided for RSAs under the 2017 Plan: Years Ended 2019 2018 Weighted average grant date fair value $ 12.55 $ 13.08 Total fair value of shares vested (in thousands) $ 768 $ — As of December 31, 2019 , total equity-based compensation cost related to all unvested RSAs was $0.4 million , which is expected to be recognized over a weighted average period of 0.44 years. Total equity-based compensation recognized on the consolidated statements of comprehensive income (loss) was as follows: Years Ended 2019 2018 2017 (in thousands) Cost of revenue $ 1,491 $ 1,468 $ 1,289 Selling, general and administrative expense 28,033 34,265 83,501 Total equity-based compensation $ 29,524 $ 35,733 $ 84,790 Total income tax benefit related to equity-based compensation recognized on the consolidated statements of comprehensive income (loss) was $1.9 million , $1.5 million , and $0.4 million for the years ended December 31, 2019 , 2018 , and 2017 , respectively. |
Non-controlling Interest
Non-controlling Interest | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Non-controlling Interest | Noncontrolling Interest Ownership Switch, Inc. owns an indirect minority economic interest in Switch, Ltd., where “economic interests” means the right to receive any distributions, whether cash, property or securities of Switch, Ltd., in connection with Common Units. Switch, Inc. presents interest held by noncontrolling interest holders within noncontrolling interest in the consolidated financial statements. During the years ended December 31, 2019 and 2018 , Switch, Inc. issued an aggregate of 34.0 million shares and 19.1 million shares of Class A common stock, respectively, to members of Switch, Ltd. in connection with such members’ redemptions of an equivalent number of Common Units and corresponding cancellation and retirement of an equivalent number of Switch, Inc.’s Class B common stock. The redemptions occurred pursuant to the terms of the Switch Operating Agreement. In August 2018, Switch, Inc.’s Board of Directors authorized a program by which Switch, Ltd. may repurchase up to $150.0 million of its outstanding Common Units for cash and Switch, Inc. will cancel a corresponding amount of its shares of Class B common stock. In November 2019, Switch, Inc.’s Board of Directors increased the repurchase authority by $5.0 million , with any unused amount from this increase expiring on December 31, 2019. The program was effective immediately upon authorization. The authorization may have been suspended or discontinued at any time without notice. Repurchases under the Common Unit repurchase program were funded from Switch’s existing cash and cash equivalents. During the years ended December 31, 2019 and 2018 , Switch, Ltd. elected to repurchase an aggregate of 6.4 million and 6.1 million , respectively, of its outstanding Common Units for $91.0 million , of which $2.7 million was from Founder Members and $12.8 million was from an entity in which a member of the Company’s Board of Directors has a beneficial ownership interest, and $60.6 million , respectively, upon the exercise by certain members of their respective redemption right. Pursuant to these repurchases, Switch, Inc. canceled and retired an equivalent amount of its shares of Class B common stock, and such shares may not be reissued. As of December 31, 2019, the Company had no repurchase authority remaining. The ownership of the Common Units is summarized as follows: December 31, 2019 December 31, 2018 Units Ownership % Units Ownership % (units in thousands) Switch, Inc.’s ownership of Common Units (1) 89,688 37.8 % 55,157 22.7 % Noncontrolling interest holders’ ownership of Common Units (2) 147,859 62.2 % 187,440 77.3 % Total Common Units 237,547 100.0 % 242,597 100.0 % ________________________________________ (1) Common Units held by Switch, Inc. as of December 31, 2019 exclude 80,000 Common Units underlying unvested restricted stock awards. Common Units held by Switch, Inc. as of December 31, 2018 exclude 61,000 Common Units underlying unvested restricted stock awards. (2) Common Units held by noncontrolling interest holders as of December 31, 2019 exclude 3.2 million unvested Common Unit awards. Common Units held by noncontrolling interest holders as of December 31, 2018 exclude 4.0 million unvested Common Unit awards. The Company uses the weighted average ownership percentages during the period to calculate the income before income taxes attributable to Switch, Inc. and the noncontrolling interest holders of Switch, Ltd. Distributions Prior to the payment of Switch, Inc.’s Class A common stock dividends during the year ended December 31, 2019, Switch, Ltd. made cash distributions to holders of Common Units, excluding Switch, Inc., of $0.118 per Common Unit for a total distribution of $20.1 million . During the year ended December 31, 2018, Switch, Ltd. made cash distributions to holders of Common Units, excluding Switch, Inc., of $0.059 per Common Unit for a total distribution of $11.6 million . During the year ended December 31, 2017, Switch, Ltd.’s Board of Managers for the period prior to the IPO and Switch, Inc.’s Board of Directors for the period subsequent to the IPO approved distributions of $185.4 million , comprised of $112.0 million to Switch, Ltd.’s members in accordance with their percentage interests (inclusive of $8.2 million distributed to members upon the accelerated vesting of Incentive Units in connection with the closing of the IPO) and $73.4 million to certain of Switch, Ltd.’s members with unreturned capital contributions in accordance with Switch, Ltd.’s then-current operating agreement. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income (Loss) Per Share The following table sets forth the calculation of basic and diluted net income (loss) per share: Years Ended 2019 2018 2017 (in thousands, except per share data) Net income (loss) per share: Numerator—basic: Net income (loss) attributable to Switch, Inc.—basic $ 8,917 $ 4,052 $ (15,208 ) Numerator—diluted: Net income (loss) attributable to Switch, Inc.—basic $ 8,917 $ 4,052 $ (15,208 ) Effect of dilutive securities: Shares of Class B and Class C common stock 17,339 — — Net income (loss) attributable to Switch, Inc.—diluted $ 26,256 $ 4,052 $ (15,208 ) Denominator—basic: Weighted average shares outstanding—basic 76,501 45,682 8,074 Net income (loss) per share—basic $ 0.12 $ 0.09 $ (1.88 ) Denominator—diluted: Weighted average shares outstanding—basic 76,501 45,682 8,074 Weighted average effect of dilutive securities: Stock options 712 50 — RSUs 805 6 — DEUs 24 8 — RSAs 35 7 — Shares of Class B and Class C common stock 168,252 — — Weighted average shares outstanding—diluted 246,329 45,753 8,074 Net income (loss) per share—diluted $ 0.11 $ 0.09 $ (1.88 ) Shares of Class B and Class C common stock do not share in the earnings or losses of Switch, Inc. and are therefore not participating securities. As such, separate calculations of basic and diluted net income (loss) per share for each of Class B and Class C common stock under the two-class method have not been presented. The following table presents potentially dilutive securities excluded from the computation of diluted net income (loss) per share for the periods presented because their effect would have been anti-dilutive. Years Ended 2019 2018 2017 (in thousands) Stock options (1) 5,040 7,352 5,725 RSUs (1) — 2,228 31 Shares of Class B and Class C common stock (2) — 191,426 216,569 ________________________________________ (1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net income (loss) per share. (2) Shares of Class B and Class C common stock at the end of the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company’s chief operating decision maker is its Chief Executive Officer. The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. All of the Company’s assets are maintained in the United States, although the Company holds an equity method investment in SUPERNAP International, which has deployed facilities in Italy and Thailand. The Company derives almost all of its revenue from sales to customers in the United States, based upon the billing address of the customer. Revenue derived from customers outside the United States, based upon the billing address of the customer, was less than 2% of revenue for each of the years ended December 31, 2019 , 2018 , and 2017 . The Company’s revenue is comprised of the following: Years Ended 2019 2018 2017 (in thousands) Colocation $ 370,682 $ 324,209 $ 304,720 Connectivity 85,009 74,006 67,690 Other 6,619 7,645 5,865 Total revenue $ 462,310 $ 405,860 $ 378,275 |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) Quarterly financial information is presented below: Year Ended December 31, 2019 First Quarter (1) Second Quarter (1) Third Quarter (1) Fourth Quarter Total (amounts in thousands, except per share data) Revenue $ 107,442 $ 111,970 $ 122,353 $ 120,545 $ 462,310 Gross profit $ 49,917 $ 53,853 $ 58,849 $ 57,012 $ 219,631 Net income $ 3,846 $ 4,672 $ 10,080 $ 12,944 $ 31,542 Net income attributable to Switch, Inc. $ 733 $ 1,189 $ 2,947 $ 4,048 $ 8,917 Basic net income per share (2) $ 0.01 $ 0.02 $ 0.04 $ 0.05 $ 0.12 Diluted net income per share (2) $ 0.01 $ 0.02 $ 0.03 $ 0.04 $ 0.11 ________________________________________ (1) The amounts presented differ from previously reported amounts as a result of the adoption of ASC 606 and ASC 842 for the annual period ended December 31, 2019. (2) Because net income per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total net income per share amounts for the year. Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total (amounts in thousands, except per share data) Revenue $ 97,717 $ 102,161 $ 102,768 $ 103,214 $ 405,860 Gross profit $ 42,861 $ 46,967 $ 43,618 $ 48,001 $ 181,447 Net income $ 3,950 $ 9,539 $ 4,663 $ 11,166 $ 29,318 Net income attributable to Switch, Inc. $ 671 $ 821 $ 6 $ 2,554 $ 4,052 Basic net income per share $ 0.02 $ 0.02 $ 0.00 $ 0.05 $ 0.09 Diluted net income per share $ 0.02 $ 0.02 $ 0.00 $ 0.05 $ 0.09 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In January 2020, a wholly-owned subsidiary of Switch, Ltd. entered into a power purchase and sale agreement for electricity to purchase a firm commitment of 60 megawatts per energy hour for a term of one year starting on July 1, 2020, or a purchase commitment of $20.0 million , inclusive of scheduling services. In January 2020, Switch, Inc. issued an aggregate of 4.6 million shares of Class A common stock to members of Switch, Ltd. in connection with such members’ redemptions of an equivalent number of Common Units and corresponding cancellation and retirement of an equivalent number of shares of Class B common stock. Such retired shares of Class B common stock may not be reissued. The redemptions occurred pursuant to the terms of the Switch Operating Agreement. In January 2020, the Company borrowed $20.0 million under its 2017 Revolving Credit Facility. In February 2020, Switch, Inc.’s Board of Directors authorized the repurchase by Switch, Ltd. of up to $20.0 million of its outstanding Common Units held by Founder Members, with any unused amount from this authorization expiring on March 17, 2020. In February 2020, Switch, Inc.’s Board of Directors declared a dividend of $0.0294 per share of Class A common stock, for a total estimated to be $2.8 million , to be paid on March 24, 2020 to holders of record as of March 12, 2020. Prior to the payment of this dividend, Switch, Ltd. will make a cash distribution to all holders of record of Common Units, including Switch, Inc., of $0.0294 per Common Unit, for a total estimated to be $7.1 million . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. All significant intercompany transactions and balances have been eliminated. |
Principles of Consolidation | As the sole manager of Switch, Ltd., Switch, Inc. operates and controls all of the business and affairs of Switch, and has the sole voting interest in, and controls the management of, Switch, and has the obligation to absorb the losses of, and receive benefits from, Switch. Accordingly, Switch, Inc. identifies itself as the primary beneficiary of Switch and began consolidating Switch as of the closing date of the IPO, resulting in a noncontrolling interest related to the Common Units held by Members on its consolidated financial statements. Switch has been determined to be the predecessor for accounting purposes and, accordingly, the consolidated financial statements for periods prior to the IPO and the Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from January 1, 2017 through October 10, 2017 presented in the consolidated financial statements and notes to consolidated financial statements herein represent the historical operations of Switch. The amounts as of December 31, 2019 and 2018, for the years ended December 31, 2019 and 2018, and for the period from October 11, 2017 through December 31, 2017 reflect the consolidated operations of the Company. For the period from June 13, 2017 to October 10, 2017, Switch, Inc. had no business transactions or activities and had no assets or liabilities with the exception of the issuance of one share at par value of $0.001 per share, which was canceled as of the closing date of the IPO. The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity (“VIE”) accounting model. A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. |
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 disclosure 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. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for doubtful accounts, useful lives of property and equipment, deferred income taxes, liabilities under the TRA, equity-based compensation, deferred revenue, incremental borrowing rate, fair value of performance obligations, and probability assessments of exercising renewal options on leases. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. There were no cash equivalents as of December 31, 2019 . Cash equivalents as of December 31, 2018 were comprised of money market funds totaling $53.3 million . |
Investments | Investments The Company’s investments in entities where it holds at least a 20% ownership interest and has the ability to exercise significant influence over, but not control, the investee are accounted for using the equity method of accounting. The Company’s share of the investee’s results of operations is included in equity in net losses of investments and foreign currency translation adjustment, as applicable, is included in other comprehensive income with a corresponding adjustment to its investment. The Company discontinues applying the equity method of accounting when the investment is reduced to zero. If the investee subsequently reports net income or other comprehensive income, the Company resumes applying the equity method of accounting only after its share of unrecognized net income and other comprehensive income, respectively, equals the share of losses not recognized during the period the equity method of accounting was suspended. The Company gives precedence to other comprehensive income and losses when determining whether to resume applying the equity method of accounting. Investments in entities where the Company holds less than a 20% ownership interest are generally accounted for using the cost method of accounting. |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs Advertising costs are expensed when incurred and are included in selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss). Advertising expense was $1.5 million , $1.1 million , and $1.8 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively. |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. All significant intercompany transactions and balances have been eliminated. As the sole manager of Switch, Ltd., Switch, Inc. operates and controls all of the business and affairs of Switch, and has the sole voting interest in, and controls the management of, Switch, and has the obligation to absorb the losses of, and receive benefits from, Switch. Accordingly, Switch, Inc. identifies itself as the primary beneficiary of Switch and began consolidating Switch as of the closing date of the IPO, resulting in a noncontrolling interest related to the Common Units held by Members on its consolidated financial statements. Switch has been determined to be the predecessor for accounting purposes and, accordingly, the consolidated financial statements for periods prior to the IPO and the Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from January 1, 2017 through October 10, 2017 presented in the consolidated financial statements and notes to consolidated financial statements herein represent the historical operations of Switch. The amounts as of December 31, 2019 and 2018, for the years ended December 31, 2019 and 2018, and for the period from October 11, 2017 through December 31, 2017 reflect the consolidated operations of the Company. For the period from June 13, 2017 to October 10, 2017, Switch, Inc. had no business transactions or activities and had no assets or liabilities with the exception of the issuance of one share at par value of $0.001 per share, which was canceled as of the closing date of the IPO. The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity (“VIE”) accounting model. A VIE is an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. 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 disclosure 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. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to the allowance for doubtful accounts, useful lives of property and equipment, deferred income taxes, liabilities under the TRA, equity-based compensation, deferred revenue, incremental borrowing rate, fair value of performance obligations, and probability assessments of exercising renewal options on leases. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. There were no cash equivalents as of December 31, 2019 . Cash equivalents as of December 31, 2018 were comprised of money market funds totaling $53.3 million . Investments The Company’s investments in entities where it holds at least a 20% ownership interest and has the ability to exercise significant influence over, but not control, the investee are accounted for using the equity method of accounting. The Company’s share of the investee’s results of operations is included in equity in net losses of investments and foreign currency translation adjustment, as applicable, is included in other comprehensive income with a corresponding adjustment to its investment. The Company discontinues applying the equity method of accounting when the investment is reduced to zero. If the investee subsequently reports net income or other comprehensive income, the Company resumes applying the equity method of accounting only after its share of unrecognized net income and other comprehensive income, respectively, equals the share of losses not recognized during the period the equity method of accounting was suspended. The Company gives precedence to other comprehensive income and losses when determining whether to resume applying the equity method of accounting. Investments in entities where the Company holds less than a 20% ownership interest are generally accounted for using the cost method of accounting. Concentration of Credit and Other Risks Although the Company operates primarily in Nevada, realization of its customer accounts receivable and its future operations and cash flows could be affected by adverse economic conditions, both regionally and elsewhere in the United States. During the years ended December 31, 2019 , 2018 , and 2017 , the Company’s largest customer and its affiliates comprised 13% , 11% , and 11% , respectively, of the Company’s revenue. Two customers, one of which was the Company’s largest customer and its affiliates, accounted for 10% or more of accounts receivable as of December 31, 2019 and the Company’s largest customer and its affiliates accounted for 10% or more of accounts receivable as of December 31, 2018 . Accounts Receivable Customer receivables are non-interest bearing and are initially recorded at cost. The Company generally does not request collateral from its customers; however, it usually obtains a lien or other security interest in certain customers’ equipment placed in the Company’s data center, and/or obtains a deposit. The Company maintains an allowance for doubtful accounts for estimated losses up to the full amount of invoices based on the age of the invoices. If the financial condition of the Company’s customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debt, customer concentrations, customer credit-worthiness, and changes in customer payment terms when evaluating the adequacy of the Company’s reserves. Delinquent account balances are written off after management has determined the likelihood of collection is not probable. The Company recorded a benefit for doubtful accounts of $0.1 million during the year ended December 31, 2019 and bad debt expense of $0.2 million and $0.4 million during the years ended December 31, 2018 and 2017 , respectively. Leases The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period in exchange for consideration. Control over the use of the identified assets means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. For lessee leases, the Company recognizes right-of-use (“ROU”) assets and lease liabilities for all leases other than those with a term of 12 months or less as the Company has elected to apply the short-term lease recognition exemption. ROU assets represent the Company’s right to use an underlying asset for the lease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are classified and recognized at the commencement date of a lease. Lease liabilities are measured based on the present value of fixed lease payments over the lease term. ROU assets consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company. Lease payments may vary because of changes in facts or circumstances occurring after the commencement, including changes in inflation indices. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As the Company’s lessee leases do not provide a readily determinable implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. When determining the incremental borrowing rate, the Company assesses multiple variables such as lease term, collateral, economic conditions, and credit-worthiness. The Company estimates its incremental borrowing rate using a benchmark senior unsecured yield curve for debt instruments adjusted for its credit quality, market conditions, tenor of lease contracts, and collateral. For income statement purposes, the Company recognizes rent expense on a straight-line basis for operating leases. For finance leases, the Company recognizes interest expense associated with the lease liability and depreciation expense associated with the ROU asset. For ROU assets held under finance leases and leasehold improvements, the estimated useful lives are limited to the shorter of the useful life of the asset or the term of the lease. Many of the Company’s lease arrangements include options to extend the lease, which the Company does not include in its expected lease terms unless they are reasonably certain to be exercised. The Company has lease arrangements with lease and non-lease components. The Company has elected to apply the practical expedient to combine lease and related non-lease components for all classes of underlying assets and shall account for the combined component as a lease component. Property and Equipment Property and equipment is stated at cost. Depreciation and amortization of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. Costs of repairs and maintenance are expensed as incurred. For assets used in data center operations, the related depreciation and amortization are included in cost of revenue. The Company’s estimated useful lives of its property and equipment are as follows (in years): Assets Estimated Useful Lives Land improvements 20-30 Buildings, building improvements and leasehold improvements 3-40 Substation equipment 30 Data center equipment 5-10 Vehicles 7 Core network equipment 5-7 Cloud computing equipment 5 Fiber facilities 20, 25 Computer equipment, furniture and fixtures 3-5 The Company capitalizes certain costs incurred in connection with developing or obtaining internal use software. Capitalized software costs placed into service are included in computer equipment, furniture and fixtures and are amortized on a straight-line basis over a three -year period. Software costs that do not meet capitalization criteria are expensed immediately. The Company capitalized internal use software costs of $2.3 million , $1.4 million , and $1.8 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively. In addition, the Company capitalizes interest costs during the construction phase of data centers. Once a data center or expansion project becomes operational, these costs are allocated to certain property and equipment categories and are depreciated over the estimated useful life of the underlying assets. Impairment of Long‑Lived Assets The Company’s long‑lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. Portfolio Energy Credits The Company records portfolio energy credits (“PECs”) at their cost when purchased as an intangible asset, subject to impairment testing, within other assets on the consolidated balance sheets. PECs are not considered outputs by the Company. Amortization of PECs is recorded within cost of revenue on the consolidated statements of comprehensive income (loss) when PECs are utilized in operations. A summary of the Company’s PECs as of the end of each period presented is as follows: December 31, 2019 2018 (in thousands) PECs, gross $ 5,352 $ 3,649 Accumulated amortization (5,352 ) (3,508 ) PECs, net $ — $ 141 Commitments and Contingencies The Company accrues for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. Debt Issuance Costs Costs incurred in obtaining certain debt financing are deferred and amortized over the terms of the related debt instruments using the straight line-method for both term debt, which approximates the interest method, and revolving debt . As of December 31, 2019 and 2018 , unamortized debt issuance costs totaled $5.7 million and $7.3 million , respectively, of which $2.1 million and $2.9 million , respectively, were included within other assets on the consolidated balance sheets. Foreign Currency Translation SUPERNAP International, S.A. (“SUPERNAP International”), an equity method investment of the Company, has investments in foreign subsidiaries. The Company’s share of gains or losses from translation of SUPERNAP International’s foreign operations where the local currency is the functional currency is included in other comprehensive income. Revenue Recognition During each of the years ended December 31, 2019 , 2018 , and 2017 , the Company derived more than 95% of its revenue from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing and leasing of cabinet space and power and (2) connectivity services, which includes cross-connects, broadband services, and external connectivity. The remainder of the Company’s revenue is from non-recurring revenue, which primarily includes installation services related to a customer’s initial deployment. The majority of the Company’s revenue contracts are classified as licenses and accounted for in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), with the exception of certain contracts that contain lease components and are accounted for in accordance with ASC 842, Leases (“ASC 842”). The Company recognizes revenue when control of these goods and services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods and services. Revenue from recurring revenue streams is generally billed monthly and recognized using a time-based measurement of progress as customers receive service benefits evenly throughout the term of the contract, which is generally three to five years. Non-recurring installation fees, although generally paid in a lump sum upon installation, are deferred and recognized ratably over the contract term, determined using a portfolio approach. Non-recurring installation fees are not assessed as performance obligations as they are determined to be immaterial in the context of the contract with the customer. Revenue is generally recognized on a gross basis as a principal versus on a net basis as an agent, largely because the Company is primarily responsible for fulfilling the contract, takes title to services, bears credit risk, and has discretion in establishing the price when selling to the customer. For contracts with customers that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price of a contract is allocated to each distinct performance obligation on a relative standalone selling price basis. The standalone selling price is determined by maximizing observable inputs such as overall pricing objectives, customer credit history, and other factors. Other judgments include determining if any variable consideration should be included in the total contract value of the arrangement, such as price increases. Any variable consideration included in the total contract value of the arrangement is allocated to each distinct obligation, or series of distinct obligations, in an amount that depicts the consideration to which the Company expects to be entitled in exchange for transferring the underlying goods or services to the customer. The Company has also made the accounting policy election to exclude taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer from its measurement of the transaction price. Occasionally, the Company enters into contracts with customers for data center space and office space, which contain lease components. The Company’s leases with customers are generally classified as operating leases and lease payments are recognized on a straight-line basis over the lease term. Lease revenue related to data center space is included within colocation revenue, while lease revenue related to office space is included within other revenue. The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these standard service levels are not achieved, the Company would reduce revenue for any credits given to the customer as a result. There were no service level credits issued during the years ended December 31, 2019 , 2018 , and 2017 . Contract Balances The Company generally invoices customers in monthly installments payable in advance. The difference between the timing of revenue recognition, and the timing of billings and cash collections results in the recognition of accounts receivable, contract assets, and deferred revenue (contract liabilities) on the consolidated balance sheets. Receivables are recorded at invoice amounts, net of allowance for doubtful accounts, and are recognized in the period when the Company has transferred goods or provided services to its customers, and when its right to consideration for that transfer is unconditional. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 15 to 30 days of the invoice date. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the creditworthiness of the customer. A contract asset exists when the Company has transferred products or provided services to its customers, but customer payment is contingent upon future satisfaction of a performance obligation. Certain contracts include terms related to price arrangements and allocations of consideration to multiple performance obligations recognized over differing periods of time. The Company generally recognizes revenue ratably over the contract term, which could potentially give rise to contract assets during certain periods of the contract term. Deferred revenue represents amounts that are recognized when the Company has an unconditional right to a payment, which has been either billed to, or collected from, customers prior to transferring control of the underlying good or service to the customer. The opening and closing balances of the Company’s contract assets and deferred revenue are as follows: Contract assets, current portion (1) Contract assets (2) Deferred revenue, current portion Deferred revenue (in thousands) January 1, 2019 $ 145 $ 2,845 $ 12,322 $ 18,084 December 31, 2019 496 3,216 14,991 27,852 Increase $ 351 $ 371 $ 2,669 $ 9,768 ________________________________________ (1) Contract assets, current portion are included within other current assets of the Company’s consolidated balance sheet as of December 31, 2019 . (2) Contract assets are included within other assets of the Company’s consolidated balance sheet as of December 31, 2019 . The differences between the opening and closing balances of the Company’s deferred revenue primarily result from timing differences between the Company’s satisfaction of performance obligations and associated customer payments. Revenue recognized during the year ended December 31, 2019 from the opening balance of deferred revenue was $12.5 million . For the year ended December 31, 2019 , no impairment losses related to contract balances were recognized on the consolidated statement of comprehensive income (loss). Contract Costs Contract costs include the Company’s incremental direct costs of either obtaining or fulfilling a contract, which primarily consist of sales commissions and bonuses. Contract costs are deferred and amortized on a straight-line basis over the estimated period of benefit. The Company elected to apply the practical expedient to expense contract costs when incurred if the amortization period is one year or less. As of December 31, 2019 , there were deferred contract costs of $1.5 million included in other assets on the Company’s consolidated balance sheet. For the year ended December 31, 2019 , $0.4 million of deferred contract costs were amortized to selling, general and administrative expense on the Company’s consolidated statement of comprehensive income (loss). Remaining Performance Obligations Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized in future periods. These amounts as of December 31, 2019 were $783.7 million , 34% , 40% , and 15% of which is expected to be recognized over the next year , one to three years , and three to five years , respectively, with the remainder recognized thereafter. The remaining performance obligations do not include estimates of variable consideration related to unsatisfied performance obligations, such as the usage of metered power, or any contracts that could be terminated without significant penalties. The Company elected to apply the practical expedient that allows the Company not to disclose variable consideration allocated to remaining performance obligations that are either entirely or partially unsatisfied and form part of a single obligation. Income Taxes Switch, Inc. is taxed as a corporation and incurs U.S. federal, state, and local income taxes on its allocable share of taxable income or loss of Switch, Ltd. Switch, Ltd. operates as a partnership for federal, state, and local tax reporting. Members are liable for any income taxes resulting from their allocable portion of taxable income or loss of Switch, Ltd. as a pass-through entity. For tax years beginning on or after January 1, 2018, Switch, Ltd. is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”). Under the Centralized Partnership Audit Regime, any audit of Switch, Ltd. by the Internal Revenue Service (“IRS”) would be conducted at the partnership level, and if the IRS determines an adjustment, the default rule is that the partnership would pay an “imputed underpayment” including interest and penalties, if applicable. Switch, Ltd. may instead elect to make a “push-out” election, in which case the partners for the year that is under audit would be required to take into account the adjustments on their own personal income tax returns. The Switch Operating Agreement does not stipulate how Switch, Ltd. will address imputed underpayments. If Switch, Ltd. receives an imputed underpayment, a determination will be made based on the relevant facts and circumstances that exist at that time. The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities based on temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense (benefit) in the period of enactment. Deferred tax assets represent future tax deductions or credits. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period. Each reporting period, the Company assesses the weight of all positive and negative evidence available and reduces the carrying amounts of deferred tax assets by a valuation allowance if it is more likely than not that such assets will not be realized. A comprehensive assessment of all forms of positive and negative evidence is performed on an annual basis and such assessment is updated during each interim period for significant changes. The Company utilizes a two-step process to record uncertain income tax positions in which (1) the Company determines if the weight of available evidence indicates it is more likely than not that the tax position for recognition will be sustained on the basis of its technical merits and (2) for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely of being realized upon ultimate settlement with the related tax authority. The Company includes interest and penalties related to income taxes within the provision for income taxes. See Note 10 “Income Taxes” for additional information. Tax Receivable Agreement In connection with the IPO, the Company entered into a TRA with Switch, Ltd. and the Members. In the event that such parties exchange any or all of their Common Units for Class A common stock, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized, or in some cases deemed to be realized, by the Company by such exchange as a result of (i) increases in the Company’s tax basis of its ownership interest in the net assets of Switch, Ltd. resulting from any redemptions or exchanges of noncontrolling interest, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the “TRA Payments”). The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in Switch, Ltd. or the Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes a significant assumption related to the fair market value of property and equipment. The payment obligations under the TRA are obligations of Switch, Inc. and not of Switch, Ltd. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 100 basis points from the due date (without extensions) of such tax return. Any late payments that may be made under the TRA will continue to accrue interest at LIBOR plus 500 basis points until such payments are subsequently made. See Note 10 “Income Taxes” for additional information. Advertising Costs Advertising costs are expensed when incurred and are included in selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss). Advertising expense was $1.5 million , $1.1 million , and $1.8 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively. Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is attributed on a straight-line basis for awards with service conditions and on an accelerated attribution basis for awards with performance conditions over the requisite service period, which is generally the vesting period. The Company used the Black-Scholes option-pricing model to determine the fair value of Switch, Ltd.’s incentive unit awards. The determination of the fair value of the incentive unit awards was affected by assumptions regarding a number of complex and subjective variables including the fair value of Switch, Ltd.’s member equity units, the expected price volatility of the member equity units over the term of the awards and actual and projected employee purchase behaviors. Switch, Ltd.’s member equity units’ fair value per unit was estimated using a weighted average approach of a combination of the following three methods: (1) publicly traded data center company multiples; (2) data center precedent transaction multiples; and (3) the discounted cash flow method based on Switch, Ltd.’s five-year forecast. The weighting of these three methods varied over time. Switch, Ltd. estimated the expected volatility by analyzing the volatility of companies in the same industry and selecting volatility within the range. The risk-free interest rate was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the incentive unit awards. The expected dividend rate was determined at the grant date for each incentive unit award. The expected term of the incentive unit award was calculated by analyzing historical exercise data and obtaining the weighted average of the holding period for the incentive unit awards. Common Unit awards were measured based on the fair market value of the underlying unit on the date of grant. The Company uses the Black-Scholes option-pricing model to determine the fair value of Switch, Inc.’s stock option awards. Switch, Inc. estimates the expected volatility by using a weighted average of the historical volatility of its common stock and the historical volatilities of a peer group comprised of publicly-traded companies in the same industry. The risk-free interest rate is based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the stock option awards. The expected dividend rate is based on the Company’s estimate of annual dividends expected to be paid at the time of grant. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards made to employees based on the fair value of the awards and is attributed on a straight-line basis for awards with service conditions and on an accelerated attribution basis for awards with performance conditions over the requisite service period, which is generally the vesting period. The Company used the Black-Scholes option-pricing model to determine the fair value of Switch, Ltd.’s incentive unit awards. The determination of the fair value of the incentive unit awards was affected by assumptions regarding a number of complex and subjective variables including the fair value of Switch, Ltd.’s member equity units, the expected price volatility of the member equity units over the term of the awards and actual and projected employee purchase behaviors. Switch, Ltd.’s member equity units’ fair value per unit was estimated using a weighted average approach of a combination of the following three methods: (1) publicly traded data center company multiples; (2) data center precedent transaction multiples; and (3) the discounted cash flow method based on Switch, Ltd.’s five-year forecast. The weighting of these three methods varied over time. Switch, Ltd. estimated the expected volatility by analyzing the volatility of companies in the same industry and selecting volatility within the range. The risk-free interest rate was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the incentive unit awards. The expected dividend rate was determined at the grant date for each incentive unit award. The expected term of the incentive unit award was calculated by analyzing historical exercise data and obtaining the weighted average of the holding period for the incentive unit awards. Common Unit awards were measured based on the fair market value of the underlying unit on the date of grant. The Company uses the Black-Scholes option-pricing model to determine the fair value of Switch, Inc.’s stock option awards. Switch, Inc. estimates the expected volatility by using a weighted average of the historical volatility of its common stock and the historical volatilities of a peer group comprised of publicly-traded companies in the same industry. The risk-free interest rate is based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the stock option awards. The expected dividend rate is based on the Company’s estimate of annual dividends expected to be paid at the time of grant. The expected term for stock options granted is estimated using the “simplified” method; whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option due to Switch, Inc.’s lack of sufficient historical data. Switch, Inc.’s restricted stock and restricted stock unit awards are measured based on the fair market value of the underlying common stock on the date of grant. |
Earnings Per Share, Policy [Policy Text Block] | Net Income (Loss) per Share Basic net income (loss) per share is computed by dividing net income (loss) attributable to Switch, Inc. by the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is computed giving effect to all potential weighted average dilutive shares, including stock options, restricted stock units, dividend equivalent units, restricted stock awards, and Common Units convertible into shares of Class A common stock during the period. The dilutive effect of outstanding awards, if any, is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable. Refer to Note 14 for further information on net income (loss) per share. |
Income Tax, Policy [Policy Text Block] | Income Taxes Switch, Inc. is taxed as a corporation and incurs U.S. federal, state, and local income taxes on its allocable share of taxable income or loss of Switch, Ltd. Switch, Ltd. operates as a partnership for federal, state, and local tax reporting. Members are liable for any income taxes resulting from their allocable portion of taxable income or loss of Switch, Ltd. as a pass-through entity. For tax years beginning on or after January 1, 2018, Switch, Ltd. is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”). Under the Centralized Partnership Audit Regime, any audit of Switch, Ltd. by the Internal Revenue Service (“IRS”) would be conducted at the partnership level, and if the IRS determines an adjustment, the default rule is that the partnership would pay an “imputed underpayment” including interest and penalties, if applicable. Switch, Ltd. may instead elect to make a “push-out” election, in which case the partners for the year that is under audit would be required to take into account the adjustments on their own personal income tax returns. The Switch Operating Agreement does not stipulate how Switch, Ltd. will address imputed underpayments. If Switch, Ltd. receives an imputed underpayment, a determination will be made based on the relevant facts and circumstances that exist at that time. The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities based on temporary differences between the carrying amounts and tax bases of assets and liabilities using enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense (benefit) in the period of enactment. Deferred tax assets represent future tax deductions or credits. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character in either the carryback or carryforward period. Each reporting period, the Company assesses the weight of all positive and negative evidence available and reduces the carrying amounts of deferred tax assets by a valuation allowance if it is more likely than not that such assets will not be realized. A comprehensive assessment of all forms of positive and negative evidence is performed on an annual basis and such assessment is updated during each interim period for significant changes. The Company utilizes a two-step process to record uncertain income tax positions in which (1) the Company determines if the weight of available evidence indicates it is more likely than not that the tax position for recognition will be sustained on the basis of its technical merits and (2) for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely of being realized upon ultimate settlement with the related tax authority. The Company includes interest and penalties related to income taxes within the provision for income taxes. See Note 10 “Income Taxes” for additional information. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation SUPERNAP International, S.A. (“SUPERNAP International”), an equity method investment of the Company, has investments in foreign subsidiaries. The Company’s share of gains or losses from translation of SUPERNAP International’s foreign operations where the local currency is the functional currency is included in other comprehensive income. |
Commitments and Contingencies, Policy [Policy Text Block] | Commitments and Contingencies The Company accrues for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. |
Property, Plant and Equipment, Impairment [Policy Text Block] | Impairment of Long‑Lived Assets The Company’s long‑lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset group exceeds the fair value of the asset group. |
Lessee, Leases [Policy Text Block] | Leases The Company determines if an arrangement is or contains a lease at inception or modification of the arrangement. An arrangement is or contains a lease if there are identified assets and the right to control the use of an identified asset is conveyed for a period in exchange for consideration. Control over the use of the identified assets means the lessee has both the right to obtain substantially all of the economic benefits from the use of the asset and the right to direct the use of the asset. For lessee leases, the Company recognizes right-of-use (“ROU”) assets and lease liabilities for all leases other than those with a term of 12 months or less as the Company has elected to apply the short-term lease recognition exemption. ROU assets represent the Company’s right to use an underlying asset for the lease term. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are classified and recognized at the commencement date of a lease. Lease liabilities are measured based on the present value of fixed lease payments over the lease term. ROU assets consist of (i) initial measurement of the lease liability; (ii) lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) initial direct costs incurred by the Company. Lease payments may vary because of changes in facts or circumstances occurring after the commencement, including changes in inflation indices. Variable lease payments are excluded from the measurement of ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As the Company’s lessee leases do not provide a readily determinable implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments. When determining the incremental borrowing rate, the Company assesses multiple variables such as lease term, collateral, economic conditions, and credit-worthiness. The Company estimates its incremental borrowing rate using a benchmark senior unsecured yield curve for debt instruments adjusted for its credit quality, market conditions, tenor of lease contracts, and collateral. For income statement purposes, the Company recognizes rent expense on a straight-line basis for operating leases. For finance leases, the Company recognizes interest expense associated with the lease liability and depreciation expense associated with the ROU asset. For ROU assets held under finance leases and leasehold improvements, the estimated useful lives are limited to the shorter of the useful life of the asset or the term of the lease. Many of the Company’s lease arrangements include options to extend the lease, which the Company does not include in its expected lease terms unless they are reasonably certain to be exercised. The Company has lease arrangements with lease and non-lease components. The Company has elected to apply the practical expedient to combine lease and related non-lease components for all classes of underlying assets and shall account for the combined component as a lease component. |
Receivables, Policy [Policy Text Block] | Accounts Receivable Customer receivables are non-interest bearing and are initially recorded at cost. The Company generally does not request collateral from its customers; however, it usually obtains a lien or other security interest in certain customers’ equipment placed in the Company’s data center, and/or obtains a deposit. The Company maintains an allowance for doubtful accounts for estimated losses up to the full amount of invoices based on the age of the invoices. If the financial condition of the Company’s customers were to deteriorate or if they became insolvent, resulting in an impairment of their ability to make payments, greater allowances for doubtful accounts may be required. Management specifically analyzes accounts receivable and current economic news and trends, historical bad debt, customer concentrations, customer credit-worthiness, and changes in customer payment terms when evaluating the adequacy of the Company’s reserves. Delinquent account balances are written off after management has determined the likelihood of collection is not probable. The Company recorded a benefit for doubtful accounts of $0.1 million during the year ended December 31, 2019 and bad debt expense of $0.2 million and $0.4 million during the years ended December 31, 2018 and 2017 , respectively. |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Although the Company operates primarily in Nevada, realization of its customer accounts receivable and its future operations and cash flows could be affected by adverse economic conditions, both regionally and elsewhere in the United States. During the years ended December 31, 2019 , 2018 , and 2017 , the Company’s largest customer and its affiliates comprised 13% , 11% , and 11% , respectively, of the Company’s revenue. Two customers, one of which was the Company’s largest customer and its affiliates, accounted for 10% or more of accounts receivable as of December 31, 2019 and the Company’s largest customer and its affiliates accounted for 10% or more of accounts receivable as of December 31, 2018 . |
Derivative Financial Instruments | Derivative Financial Instruments A derivative is a financial instrument whose value changes in response to an underlying variable, requires little or no initial net investment, and is settled at a future date. Derivatives are initially recognized on the consolidated balance sheets at fair value on the date on which the derivatives are entered into and subsequently re-measured at fair value. Derivatives are separated into their current and long-term components based on the timing of the estimated cash flows as of the end of each reporting period. Embedded derivatives included in hybrid instruments are treated and disclosed as separate derivatives when their economic characteristics and risks are not closely related to those of the host contract, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is not measured at fair value through earnings. The financial host contracts are accounted for and measured using the applicable GAAP of the relevant financial instrument category. The method of recognizing fair value gains and losses depends on whether the derivatives are designated as hedging instruments, and if so, the nature of the hedge relationship. All gains and losses from changes in the fair values of derivatives that do not qualify for hedge accounting are recognized immediately in earnings. Cash flows from derivatives not designated as hedging instruments are classified in accordance with the nature of the derivative instrument and how it is used in the context of the Company’s business. The Company enters into interest rate swap agreements to manage its interest rate risk associated with variable-rate borrowings. In January and February 2019, Switch, Ltd. entered into four interest rate swap agreements; whereby, Switch, Ltd. will pay a weighted average fixed interest rate (excluding the applicable interest margin) of 2.48% on notional amounts corresponding to borrowings of $400.0 million in exchange for receipts on the same notional amount at a variable interest rate based on the applicable LIBOR at the time of payment. The interest rate swap agreements mature in June 2024 and are not designated as hedging instruments. Losses from derivatives not designated as hedging instruments, inclusive of periodic net settlement amounts, were recorded in loss on interest rate swaps on the consolidated statements of comprehensive income (loss) and totaled $14.9 million for the year ended December 31, 2019 . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ASU 2014-09–Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), and since that date has issued several additional ASUs intended to clarify certain aspects of ASU 2014-09 and to provide for certain practical expedients entities may elect upon adoption. The standard supersedes much of existing revenue recognition guidance and provides a comprehensive five-step model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the standard is to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and changes in judgments. The Company adopted ASC 606 for the annual reporting period ending December 31, 2019 using the modified retrospective approach applied to contracts not completed as of January 1, 2019 , and recognized a cumulative net increase to opening retained earnings of $0.2 million , net of income tax impacts. Results for reporting periods beginning after January 1, 2019 are presented under the new standard, while the comparative information has not been restated and continues to be reported under accounting standards in effect for those periods. The cumulative effect of the changes made to the Company’s consolidated balance sheet as of January 1, 2019 from the adoption of ASC 606 was as follows: December 31, 2018 Adjustment Due to Adoption of ASC 606 January 1, 2019 (in thousands) Assets: Other current assets $ 2,332 $ 940 $ 3,272 Other assets $ 17,050 $ (2,377 ) $ 14,673 Deferred income taxes $ 28,550 $ (53 ) $ 28,497 Liabilities: Deferred revenue, current portion $ 10,800 $ 1,522 $ 12,322 Deferred revenue $ 22,260 $ (4,176 ) $ 18,084 Equity: Retained earnings $ 2,693 $ 224 $ 2,917 Noncontrolling interest $ 565,142 $ 940 $ 566,082 The most significant impact to the Company from the adoption of ASC 606 relates to installation revenue and the associated costs of installation. Under the new standard, the Company recognizes installation revenue and the associated costs of installation over the contract term rather than over the expected life of the installation. The below tables summarize the effects of adopting ASC 606 on the following consolidated financial statement line items: Balance Sheets As Reported December 31, 2019 Adjustment Due to As If Presented Under Prior Standard (in thousands) Other current assets $ 3,817 $ (887 ) $ 2,930 Total current assets $ 59,040 $ (887 ) $ 58,153 Deferred income taxes $ 114,372 $ 97 $ 114,469 Other assets $ 45,785 $ 3,390 $ 49,175 Total assets $ 1,773,743 $ 2,600 $ 1,776,343 Deferred revenue, current portion $ 14,991 $ (1,545 ) $ 13,446 Total current liabilities $ 113,930 $ (1,545 ) $ 112,385 Deferred revenue $ 27,852 $ 6,097 $ 33,949 Total liabilities $ 1,146,098 $ 4,552 $ 1,150,650 Retained earnings $ 2,420 $ (451 ) $ 1,969 Total Switch, Inc. stockholders’ equity $ 207,451 $ (451 ) $ 207,000 Noncontrolling interest $ 420,194 $ (1,501 ) $ 418,693 Total stockholders’ equity $ 627,645 $ (1,952 ) $ 625,693 Total liabilities and stockholders’ equity $ 1,773,743 $ 2,600 $ 1,776,343 Statements of Comprehensive Income (Loss) As Reported Year Ended December 31, 2019 Adjustment Due to As If Presented Under Prior Standard (in thousands, except per share data) Revenue $ 462,310 $ (1,898 ) $ 460,412 Cost of revenue $ 242,679 $ (1,066 ) $ 241,613 Gross profit $ 219,631 $ (832 ) $ 218,799 Income from operations $ 76,927 $ (832 ) $ 76,095 Income before income taxes $ 34,255 $ (832 ) $ 33,423 Income tax expense $ 2,713 $ (44 ) $ 2,669 Net income $ 31,542 $ (788 ) $ 30,754 Net income attributable to noncontrolling interest $ 22,625 $ (561 ) $ 22,064 Net income attributable to Switch, Inc. $ 8,917 $ (227 ) $ 8,690 Basic net income per share $ 0.12 $ 0.00 $ 0.12 Diluted net income per share $ 0.11 $ 0.00 $ 0.11 Statements of Cash Flows As Reported Year Ended December 31, 2019 Adjustment Due to As If Presented Under Prior Standard (in thousands) Cash flows from operating activities: Net income $ 31,542 $ (788 ) $ 30,754 Deferred income taxes $ 2,713 $ (44 ) $ 2,669 Other current assets $ (545 ) $ (53 ) $ (598 ) Other assets $ 3,447 $ (1,013 ) $ 2,434 Deferred revenue $ 12,437 $ 1,898 $ 14,335 Net cash provided by operating activities $ 209,413 $ — $ 209,413 ASU 2016-02–Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), and since that date has issued subsequent amendments to the initial guidance intended to clarify certain aspects of the guidance and to provide certain practical expedients entities can elect upon adoption. ASC 842 introduces new requirements to increase transparency and comparability among organizations for leasing transactions for both lessees and lessors. The principle of ASC 842 is that a lessee should recognize assets and liabilities that arise from leases. Lessees need to recognize a right-of-use asset and a lease liability for all leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of lease payments. The asset is based on the liability. For income statement purposes, ASC 842 requires leases to be classified as either operating or finance. Operating leases result in a straight-line expense pattern while finance leases result in a front-loaded expense pattern. Lessor accounting remains largely unchanged, other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with the updated revenue recognition guidance. The Company adopted ASC 842 effective January 1, 2019 using the modified retrospective approach and elected to apply the new guidance at the adoption date without adjusting comparative periods presented. Comparative information has not been restated and will continue to be reported under accounting standards in effect for those periods. In adopting the new guidance, the Company elected to apply the package of transition practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts contain leases under the new definition of a lease; (2) lease classification for any expired or existing leases; and (3) whether previously capitalized initial direct costs would qualify for capitalization under ASC 842. The Company also elected to apply the land easements practical expedient, which permits the Company not to assess at transition whether any expired or existing land easements are, or contain, leases if they were not previously accounted for as leases under the prior leasing standard. In transition, the Company did not elect to apply the hindsight practical expedient, which permits entities to use hindsight in determining the lease term and assessing impairment of right-of-use assets. The Company elected to apply the short-term lease recognition exemption, and as such, shall not recognize right-of-use assets or lease liabilities for leases with a term of 12 months or less. The Company also elected to apply the practical expedient to combine lease and related non-lease components for all classes of underlying assets, and shall account for the combined component as a lease component under ASC 842, from both a lessee and lessor perspective. Occasionally, as a lessor, the Company enters into contracts with customers for data center and office space accounted for under ASC 842. As these contracts may contain both lease and non-lease components, generally, lease and non-lease components which share the same pattern of transfer will be combined and accounted for as a single component, while non-lease components that do not have similar patterns of transfer, such as professional services, are excluded from combination. In addition, under ASC 842, certain exceptions under the previous standard for real estate no longer are applicable in the evaluation of the lease classification as an operating, sales-type, or direct financing lease. In the event that a real estate lease is classified as sales-type lease, subject to certain conditions, a gain or loss is recognized based on the present value of the lease payments and residual value. The cumulative effect of the changes to the Company’s consolidated balance sheet as of January 1, 2019 from the adoption of ASC 842 was as follows: December 31, 2018 Adjustment Due to Adoption of ASC 842 January 1, (in thousands) Assets: Operating lease ROU assets (1) $ — $ 35,486 $ 35,486 Prepaid expenses $ 6,781 $ (419 ) $ 6,362 Liabilities: Accrued expenses $ 9,778 $ (722 ) $ 9,056 Operating lease liability, current portion $ — $ 4,455 $ 4,455 Operating lease liability $ — $ 31,334 $ 31,334 ________________________________________ (1) Operating lease ROU assets are included within other assets on the Company’s consolidated balance sheet as of December 31, 2019 . ASU 2016-13–Financial Instruments–Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). Under this guidance, a company will be required to use a new forward-looking “expected loss” model for trade and other receivables that generally will result in the earlier recognition of allowances for losses. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and requires a modified retrospective approach to adoption. In April 2019, the FASB issued ASU 2019-04, which, among other amendments, allows for certain policy elections and practical expedients related to accrued interest on financial instruments. In May 2019, the FASB issued ASU 2019-05, which granted targeted transition relief by allowing entities to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost. In November 2019, the FASB also issued ASU 2019-10 and ASU 2019-11, which addressed certain aspects of the guidance related to effective dates, expected recoveries, troubled debt restructurings, accrued interest receivables, and financial assets secured by collateral. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. ASU 2016-15–Statement of Cash Flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The areas affected by ASU 2016-15 are debt prepayment and debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies), distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. Specifically, under this guidance, cash payments for debt prepayment or debt extinguishment costs will be classified as cash outflows for financing activities. The Company has adopted this guidance for the annual reporting period ending December 31, 2019 retrospectively for all periods presented. Upon adoption of ASU 2016-15, for the year ended December 31, 2017 , cash flows from operating activities increased by $1.5 million and cash flows provided by financing activities decreased by $1.5 million . The adoption of this guidance had no impact to the years ended December 31, 2019 and 2018 . ASU 2018-13–Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, Disclosure Framework–Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The amendments in this update modify the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The amendments in ASU 2018-13 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. In addition, in November 2018, the FASB issued ASU 2018-19, which provides clarifications and improvements on sections of ASU 2018-13. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. ASU 2019-12–Income Taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The amendments in ASU 2019-12 provide certain clarifications and simplify accounting for income taxes by removing certain exceptions to the general principles in the current guidance. The amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted in periods for which financial statements have not yet been issued. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements. The Company has not decided if early adoption will be considered. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment is stated at cost. Depreciation and amortization of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. The cost and accumulated depreciation of property and equipment retired or otherwise disposed of are eliminated from the respective accounts and any resulting gain or loss is included in operations. Costs of repairs and maintenance are expensed as incurred. For assets used in data center operations, the related depreciation and amortization are included in cost of revenue. The Company’s estimated useful lives of its property and equipment are as follows (in years): Assets Estimated Useful Lives Land improvements 20-30 Buildings, building improvements and leasehold improvements 3-40 Substation equipment 30 Data center equipment 5-10 Vehicles 7 Core network equipment 5-7 Cloud computing equipment 5 Fiber facilities 20, 25 Computer equipment, furniture and fixtures 3-5 The Company capitalizes certain costs incurred in connection with developing or obtaining internal use software. Capitalized software costs placed into service are included in computer equipment, furniture and fixtures and are amortized on a straight-line basis over a three -year period. Software costs that do not meet capitalization criteria are expensed immediately. The Company capitalized internal use software costs of $2.3 million , $1.4 million , and $1.8 million during the years ended December 31, 2019 , 2018 , and 2017 , respectively. In addition, the Company capitalizes interest costs during the construction phase of data centers. Once a data center or expansion project becomes operational, these costs are allocated to certain property and equipment categories and are depreciated over the estimated useful life of the underlying assets. |
Debt Issuance Costs [Policy Text Block] | Debt Issuance Costs Costs incurred in obtaining certain debt financing are deferred and amortized over the terms of the related debt instruments using the straight line-method for both term debt, which approximates the interest method, and revolving debt . As of December 31, 2019 and 2018 , unamortized debt issuance costs totaled $5.7 million and $7.3 million , respectively, of which $2.1 million and $2.9 million , respectively, were included within other assets on the consolidated balance sheets. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition During each of the years ended December 31, 2019 , 2018 , and 2017 , the Company derived more than 95% of its revenue from recurring revenue streams, consisting primarily of (1) colocation, which includes the licensing and leasing of cabinet space and power and (2) connectivity services, which includes cross-connects, broadband services, and external connectivity. The remainder of the Company’s revenue is from non-recurring revenue, which primarily includes installation services related to a customer’s initial deployment. The majority of the Company’s revenue contracts are classified as licenses and accounted for in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), with the exception of certain contracts that contain lease components and are accounted for in accordance with ASC 842, Leases (“ASC 842”). The Company recognizes revenue when control of these goods and services is transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods and services. Revenue from recurring revenue streams is generally billed monthly and recognized using a time-based measurement of progress as customers receive service benefits evenly throughout the term of the contract, which is generally three to five years. Non-recurring installation fees, although generally paid in a lump sum upon installation, are deferred and recognized ratably over the contract term, determined using a portfolio approach. Non-recurring installation fees are not assessed as performance obligations as they are determined to be immaterial in the context of the contract with the customer. Revenue is generally recognized on a gross basis as a principal versus on a net basis as an agent, largely because the Company is primarily responsible for fulfilling the contract, takes title to services, bears credit risk, and has discretion in establishing the price when selling to the customer. For contracts with customers that contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price of a contract is allocated to each distinct performance obligation on a relative standalone selling price basis. The standalone selling price is determined by maximizing observable inputs such as overall pricing objectives, customer credit history, and other factors. Other judgments include determining if any variable consideration should be included in the total contract value of the arrangement, such as price increases. Any variable consideration included in the total contract value of the arrangement is allocated to each distinct obligation, or series of distinct obligations, in an amount that depicts the consideration to which the Company expects to be entitled in exchange for transferring the underlying goods or services to the customer. The Company has also made the accounting policy election to exclude taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer from its measurement of the transaction price. Occasionally, the Company enters into contracts with customers for data center space and office space, which contain lease components. The Company’s leases with customers are generally classified as operating leases and lease payments are recognized on a straight-line basis over the lease term. Lease revenue related to data center space is included within colocation revenue, while lease revenue related to office space is included within other revenue. The Company guarantees certain service levels, such as uptime, as outlined in individual customer contracts. If these standard service levels are not achieved, the Company would reduce revenue for any credits given to the customer as a result. There were no service level credits issued during the years ended December 31, 2019 , 2018 , and 2017 . Contract Balances The Company generally invoices customers in monthly installments payable in advance. The difference between the timing of revenue recognition, and the timing of billings and cash collections results in the recognition of accounts receivable, contract assets, and deferred revenue (contract liabilities) on the consolidated balance sheets. Receivables are recorded at invoice amounts, net of allowance for doubtful accounts, and are recognized in the period when the Company has transferred goods or provided services to its customers, and when its right to consideration for that transfer is unconditional. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 15 to 30 days of the invoice date. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that its contracts generally do not include a significant financing component. The Company assesses collectability based on a number of factors, including past transaction history with the customer and the creditworthiness of the customer. A contract asset exists when the Company has transferred products or provided services to its customers, but customer payment is contingent upon future satisfaction of a performance obligation. Certain contracts include terms related to price arrangements and allocations of consideration to multiple performance obligations recognized over differing periods of time. The Company generally recognizes revenue ratably over the contract term, which could potentially give rise to contract assets during certain periods of the contract term. Deferred revenue represents amounts that are recognized when the Company has an unconditional right to a payment, which has been either billed to, or collected from, customers prior to transferring control of the underlying good or service to the customer. The opening and closing balances of the Company’s contract assets and deferred revenue are as follows: Contract assets, current portion (1) Contract assets (2) Deferred revenue, current portion Deferred revenue (in thousands) January 1, 2019 $ 145 $ 2,845 $ 12,322 $ 18,084 December 31, 2019 496 3,216 14,991 27,852 Increase $ 351 $ 371 $ 2,669 $ 9,768 ________________________________________ (1) Contract assets, current portion are included within other current assets of the Company’s consolidated balance sheet as of December 31, 2019 . (2) Contract assets are included within other assets of the Company’s consolidated balance sheet as of December 31, 2019 . The differences between the opening and closing balances of the Company’s deferred revenue primarily result from timing differences between the Company’s satisfaction of performance obligations and associated customer payments. Revenue recognized during the year ended December 31, 2019 from the opening balance of deferred revenue was $12.5 million . For the year ended December 31, 2019 , no impairment losses related to contract balances were recognized on the consolidated statement of comprehensive income (loss). Contract Costs Contract costs include the Company’s incremental direct costs of either obtaining or fulfilling a contract, which primarily consist of sales commissions and bonuses. Contract costs are deferred and amortized on a straight-line basis over the estimated period of benefit. The Company elected to apply the practical expedient to expense contract costs when incurred if the amortization period is one year or less. As of December 31, 2019 , there were deferred contract costs of $1.5 million included in other assets on the Company’s consolidated balance sheet. For the year ended December 31, 2019 , $0.4 million of deferred contract costs were amortized to selling, general and administrative expense on the Company’s consolidated statement of comprehensive income (loss). Remaining Performance Obligations Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized in future periods. These amounts as of December 31, 2019 were $783.7 million , 34% , 40% , and 15% of which is expected to be recognized over the next year , one to three years , and three to five years , respectively, with the remainder recognized thereafter. The remaining performance obligations do not include estimates of variable consideration related to unsatisfied performance obligations, such as the usage of metered power, or any contracts that could be terminated without significant penalties. The Company elected to apply the practical expedient that allows the Company not to disclose variable consideration allocated to remaining performance obligations that are either entirely or partially unsatisfied and form part of a single obligation. |
Tax Receivable Agreement, Policy [Policy Text Block] | Tax Receivable Agreement In connection with the IPO, the Company entered into a TRA with Switch, Ltd. and the Members. In the event that such parties exchange any or all of their Common Units for Class A common stock, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized, or in some cases deemed to be realized, by the Company by such exchange as a result of (i) increases in the Company’s tax basis of its ownership interest in the net assets of Switch, Ltd. resulting from any redemptions or exchanges of noncontrolling interest, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the “TRA Payments”). The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in Switch, Ltd. or the Company. The rights of each noncontrolling interest holder under the TRA are assignable to transferees of its interest. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes a significant assumption related to the fair market value of property and equipment. The payment obligations under the TRA are obligations of Switch, Inc. and not of Switch, Ltd. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 100 basis points from the due date (without extensions) of such tax return. Any late payments that may be made under the TRA will continue to accrue interest at LIBOR plus 500 basis points until such payments are subsequently made. See Note 10 “Income Taxes” for additional information. |
Portfolio Energy Credits [Policy Text Block] | Portfolio Energy Credits The Company records portfolio energy credits (“PECs”) at their cost when purchased as an intangible asset, subject to impairment testing, within other assets on the consolidated balance sheets. PECs are not considered outputs by the Company. Amortization of PECs is recorded within cost of revenue on the consolidated statements of comprehensive income (loss) when PECs are utilized in operations. A summary of the Company’s PECs as of the end of each period presented is as follows: December 31, 2019 2018 (in thousands) PECs, gross $ 5,352 $ 3,649 Accumulated amortization (5,352 ) (3,508 ) PECs, net $ — $ 141 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Fair Value Measurements | Information about the Company’s financial assets and liabilities measured at fair value on a recurring basis is presented below: December 31, 2019 Balance Sheet Classification Carrying Value Level 1 Level 2 Level 3 (in thousands) Liabilities: Interest rate swaps Accrued expenses $ 3,464 $ — $ 3,464 $ — Interest rate swaps Other long-term liabilities $ 10,550 $ — $ 10,550 $ — December 31, 2018 Balance Sheet Classification Carrying Value Level 1 Level 2 Level 3 (in thousands) Assets: Cash equivalents Cash and cash equivalents $ 53,293 $ 53,293 $ — $ — |
Opening and Closing Balances of the Company's Contract Assets and Deferred Revenue | The opening and closing balances of the Company’s contract assets and deferred revenue are as follows: Contract assets, current portion (1) Contract assets (2) Deferred revenue, current portion Deferred revenue (in thousands) January 1, 2019 $ 145 $ 2,845 $ 12,322 $ 18,084 December 31, 2019 496 3,216 14,991 27,852 Increase $ 351 $ 371 $ 2,669 $ 9,768 ________________________________________ (1) Contract assets, current portion are included within other current assets of the Company’s consolidated balance sheet as of December 31, 2019 . (2) Contract assets are included within other assets of the Company’s consolidated balance sheet as of December 31, 2019 . |
Portfolio Energy Credits | Amortization of PECs is recorded within cost of revenue on the consolidated statements of comprehensive income (loss) when PECs are utilized in operations. A summary of the Company’s PECs as of the end of each period presented is as follows: December 31, 2019 2018 (in thousands) PECs, gross $ 5,352 $ 3,649 Accumulated amortization (5,352 ) (3,508 ) PECs, net $ — $ 141 |
Cumulative Effect of the Changes Made to Company's Balance Sheet and Summary of the Effects of the Adoptions on the Consolidated Financial Statements | The below tables summarize the effects of adopting ASC 606 on the following consolidated financial statement line items: Balance Sheets As Reported December 31, 2019 Adjustment Due to As If Presented Under Prior Standard (in thousands) Other current assets $ 3,817 $ (887 ) $ 2,930 Total current assets $ 59,040 $ (887 ) $ 58,153 Deferred income taxes $ 114,372 $ 97 $ 114,469 Other assets $ 45,785 $ 3,390 $ 49,175 Total assets $ 1,773,743 $ 2,600 $ 1,776,343 Deferred revenue, current portion $ 14,991 $ (1,545 ) $ 13,446 Total current liabilities $ 113,930 $ (1,545 ) $ 112,385 Deferred revenue $ 27,852 $ 6,097 $ 33,949 Total liabilities $ 1,146,098 $ 4,552 $ 1,150,650 Retained earnings $ 2,420 $ (451 ) $ 1,969 Total Switch, Inc. stockholders’ equity $ 207,451 $ (451 ) $ 207,000 Noncontrolling interest $ 420,194 $ (1,501 ) $ 418,693 Total stockholders’ equity $ 627,645 $ (1,952 ) $ 625,693 Total liabilities and stockholders’ equity $ 1,773,743 $ 2,600 $ 1,776,343 Statements of Comprehensive Income (Loss) As Reported Year Ended December 31, 2019 Adjustment Due to As If Presented Under Prior Standard (in thousands, except per share data) Revenue $ 462,310 $ (1,898 ) $ 460,412 Cost of revenue $ 242,679 $ (1,066 ) $ 241,613 Gross profit $ 219,631 $ (832 ) $ 218,799 Income from operations $ 76,927 $ (832 ) $ 76,095 Income before income taxes $ 34,255 $ (832 ) $ 33,423 Income tax expense $ 2,713 $ (44 ) $ 2,669 Net income $ 31,542 $ (788 ) $ 30,754 Net income attributable to noncontrolling interest $ 22,625 $ (561 ) $ 22,064 Net income attributable to Switch, Inc. $ 8,917 $ (227 ) $ 8,690 Basic net income per share $ 0.12 $ 0.00 $ 0.12 Diluted net income per share $ 0.11 $ 0.00 $ 0.11 Statements of Cash Flows As Reported Year Ended December 31, 2019 Adjustment Due to As If Presented Under Prior Standard (in thousands) Cash flows from operating activities: Net income $ 31,542 $ (788 ) $ 30,754 Deferred income taxes $ 2,713 $ (44 ) $ 2,669 Other current assets $ (545 ) $ (53 ) $ (598 ) Other assets $ 3,447 $ (1,013 ) $ 2,434 Deferred revenue $ 12,437 $ 1,898 $ 14,335 Net cash provided by operating activities $ 209,413 $ — $ 209,413 The cumulative effect of the changes to the Company’s consolidated balance sheet as of January 1, 2019 from the adoption of ASC 842 was as follows: December 31, 2018 Adjustment Due to Adoption of ASC 842 January 1, (in thousands) Assets: Operating lease ROU assets (1) $ — $ 35,486 $ 35,486 Prepaid expenses $ 6,781 $ (419 ) $ 6,362 Liabilities: Accrued expenses $ 9,778 $ (722 ) $ 9,056 Operating lease liability, current portion $ — $ 4,455 $ 4,455 Operating lease liability $ — $ 31,334 $ 31,334 ________________________________________ (1) Operating lease ROU assets are included within other assets on the Company’s consolidated balance sheet as of December 31, 2019 The cumulative effect of the changes made to the Company’s consolidated balance sheet as of January 1, 2019 from the adoption of ASC 606 was as follows: December 31, 2018 Adjustment Due to Adoption of ASC 606 January 1, 2019 (in thousands) Assets: Other current assets $ 2,332 $ 940 $ 3,272 Other assets $ 17,050 $ (2,377 ) $ 14,673 Deferred income taxes $ 28,550 $ (53 ) $ 28,497 Liabilities: Deferred revenue, current portion $ 10,800 $ 1,522 $ 12,322 Deferred revenue $ 22,260 $ (4,176 ) $ 18,084 Equity: Retained earnings $ 2,693 $ 224 $ 2,917 Noncontrolling interest $ 565,142 $ 940 $ 566,082 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment, net consists of the following: December 31, 2019 2018 (in thousands) Land and land improvements $ 223,877 $ 194,711 Buildings, building improvements, and leasehold improvements 435,214 412,089 Substation equipment 19,780 4,247 Data center equipment 1,021,056 904,722 Vehicles 1,732 1,685 Core network equipment 36,572 34,901 Cloud computing equipment 71 5,192 Fiber facilities 13,180 9,912 Computer equipment, furniture and fixtures 38,986 34,975 Finance lease ROU assets 72,569 33,730 Construction in progress 254,750 124,431 Property and equipment, gross 2,117,787 1,760,595 Less: accumulated depreciation and amortization (566,670 ) (457,825 ) Property and equipment, net $ 1,551,117 $ 1,302,770 |
Depreciation and Amortization of Property and Equipment | Total depreciation and amortization of property and equipment recognized on the consolidated statements of comprehensive income (loss) was as follows: Years Ended 2019 2018 2017 (in thousands) Cost of revenue $ 116,274 $ 104,095 $ 87,255 Selling, general and administrative expense 3,671 2,571 1,869 Total depreciation and amortization of property and equipment $ 119,945 $ 106,666 $ 89,124 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Composition of Long-Term Debt | Long-term debt consists of the following as of: December 31, 2019 2018 (in thousands) 2017 Term Loan Facility $ 585,000 $ 591,000 Less: unamortized debt issuance costs (3,628 ) (4,434 ) 581,372 586,566 2017 Revolving Credit Facility 170,000 — 751,372 586,566 Less: long-term debt, current (6,000 ) (6,000 ) Long-term debt, net $ 745,372 $ 580,566 |
Maturities of Long-Term Debt | As of December 31, 2019 , long-term debt maturities are as follows (in thousands): 2020 $ 6,000 2021 6,000 2022 176,000 2023 6,000 2024 561,000 755,000 Less: unamortized debt issuance costs (3,628 ) $ 751,372 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Maturities of Finance Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 are as follows: Finance Leases Operating Leases Related Parties Other Total Related Parties Other Total (in thousands) 2020 $ 4,430 $ 29 $ 4,459 $ 4,348 $ 2,459 $ 6,807 2021 4,780 21 4,801 4,216 635 4,851 2022 4,843 21 4,864 2,863 207 3,070 2023 4,969 22 4,991 2,051 30 2,081 2024 5,036 22 5,058 2,051 26 2,077 Thereafter 139,307 407 139,714 52,552 603 53,155 Total undiscounted future cash flows 163,365 522 163,887 68,081 3,960 72,041 Less: amount representing interest (106,038 ) (223 ) (106,261 ) (40,511 ) (583 ) (41,094 ) Present value of undiscounted future cash flows $ 57,327 $ 299 $ 57,626 $ 27,570 $ 3,377 $ 30,947 |
Maturities of Operating Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 are as follows: Finance Leases Operating Leases Related Parties Other Total Related Parties Other Total (in thousands) 2020 $ 4,430 $ 29 $ 4,459 $ 4,348 $ 2,459 $ 6,807 2021 4,780 21 4,801 4,216 635 4,851 2022 4,843 21 4,864 2,863 207 3,070 2023 4,969 22 4,991 2,051 30 2,081 2024 5,036 22 5,058 2,051 26 2,077 Thereafter 139,307 407 139,714 52,552 603 53,155 Total undiscounted future cash flows 163,365 522 163,887 68,081 3,960 72,041 Less: amount representing interest (106,038 ) (223 ) (106,261 ) (40,511 ) (583 ) (41,094 ) Present value of undiscounted future cash flows $ 57,327 $ 299 $ 57,626 $ 27,570 $ 3,377 $ 30,947 |
Minimum Payment Obligations for Capital Leases Prior to the Adoption of ASC 842 | As of December 31, 2018 , minimum payment obligations for capital leases are as follows (in thousands): 2019 $ 2,064 2020 2,124 2021 2,243 2022 2,306 2023 2,432 Thereafter 28,898 40,067 Less: amount representing interest (20,601 ) Present value of minimum capital lease payments (1) $ 19,466 ________________________________________ (1) Until 2023, capital lease payments are applied only to accrued interest; thus, there is no current portion. |
Future Minimum Lease Payments for Operating Leases Prior to the Adoption of ASC 842 | As of December 31, 2018 , future minimum lease payments for all operating leases with remaining terms in excess of one year are as follows (in thousands): Related Parties Other Total 2019 $ 4,824 $ 2,482 $ 7,306 2020 4,872 2,487 7,359 2021 4,260 625 4,885 2022 2,863 197 3,060 2023 2,051 20 2,071 Thereafter 54,603 623 55,226 $ 73,473 $ 6,434 $ 79,907 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income (Loss) before Income Taxes for Domestic and Foreign Operations | Income (loss) before income taxes for domestic and foreign operations is as follows: Years Ended 2019 2018 2017 (in thousands) Domestic $ 34,161 $ 31,379 $ (8,386 ) Foreign 94 (118 ) (1,175 ) Total income (loss) before income taxes $ 34,255 $ 31,261 $ (9,561 ) |
Components of Income Tax Expense (Benefit) | Components of income tax expense (benefit) consist of the following: Years Ended 2019 2018 2017 (in thousands) Current Federal $ — $ — $ — State and local — — — Total current income tax expense (benefit) $ — $ — $ — Deferred Federal $ 2,693 $ 1,939 $ (978 ) State and local 20 4 (3 ) Total deferred income tax expense (benefit) $ 2,713 $ 1,943 $ (981 ) Total income tax expense (benefit) $ 2,713 $ 1,943 $ (981 ) |
Reconciliation of the U.S. Statutory Tax Rate to the Effective Income Tax Rate | A reconciliation of the U.S. statutory tax rate to the effective income tax rate is presented below: Years Ended 2019 2018 2017 U.S. statutory tax rate 21.0 % 21.0 % 35.0 % Rate effect from pass-through entity (13.9 ) (17.0 ) (34.8 ) Partnership outside basis difference — — 26.2 Rate change impact due to tax reform — — (7.0 ) Other 0.8 2.2 (9.2 ) Effective income tax rate 7.9 % 6.2 % 10.2 % |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of Switch, Inc.’s deferred tax assets and liabilities were as follows as of: December 31, 2019 2018 (in thousands) Deferred tax assets: Investment in partnership $ 93,089 $ 22,601 Net operating loss carryforwards 21,283 5,949 114,372 28,550 Less: valuation allowance — — $ 114,372 $ 28,550 Deferred tax liabilities: Other $ — $ — $ — $ — Net deferred tax assets $ 114,372 $ 28,550 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Common Unit Activity | The summary of Common Unit activity under the Switch Operating Agreement for the year ended December 31, 2019 is presented below: Number of Units (in thousands) Weighted Average Grant Date Fair Value per Unit Unvested Common Units—January 1, 2019 3,986 $ 11.11 Vested (798 ) $ 11.11 Unvested Common Units—December 31, 2019 3,188 $ 11.11 |
Additional Disclosures for Unit Awards | The following additional disclosures are provided for awards under Switch, Ltd.’s then-current operating agreement for the periods prior to Switch, Inc.’s IPO and awards under the Switch Operating Agreement for the periods after Switch, Inc.’s IPO: Years Ended 2019 2018 2017 Weighted average grant date fair value of Common Units $ — $ — $ 7.39 Total fair value of Common Units vested (in thousands) $ 9,423 $ 10,659 $ 1,115 Weighted average grant date fair value of Incentive Units $ — $ — $ 10.06 Total aggregate intrinsic value of Incentive Units converted into Common Units (in thousands) $ — $ — $ 318,033 |
Weighted-Average Assumptions Used in Estimating the Grant Date Fair Value of Incentive Unit Awards | The weighted average assumptions used in estimating the grant date fair value of Incentive Unit awards, exclusive of the CEO Award, are listed in the table below: Year Ended Expected volatility 29.3 % Risk-free interest rate 1.4 % Expected term (in years) 2.0 Dividend rate 0.6 % |
Summary of Stock Option Activity | The summary of stock option activity under the 2017 Plan for the year ended December 31, 2019 is presented below: Number of Stock Options (in thousands) Weighted Average Exercise Price per Stock Option Weighted Average Remaining Contractual Life (Years) Aggregate (in thousands) Outstanding—January 1, 2019 7,352 $ 14.16 Granted 1,217 $ 10.66 Forfeited (66 ) $ 17.00 Expired (161 ) $ 17.00 Outstanding—December 31, 2019 8,342 $ 13.57 8.08 $ 21,430 Fully vested and expected to vest—December 31, 2019 8,342 $ 13.57 8.08 $ 21,430 Exercisable—December 31, 2019 5,561 $ 16.06 7.58 $ 4,092 |
Additional Disclosures Provided for Stock Options | The following additional disclosures are provided for stock options under the 2017 Plan: Years Ended 2019 2018 2017 Weighted average grant date fair value $ 3.15 $ 1.84 $ 5.00 Total fair value of stock options vested (in thousands) $ 959 $ 176 $ 28,073 |
Weighted-Average Assumptions Used in Estimating the Grant Date Fair Value of Awards | The weighted average assumptions used in estimating the grant date fair value of stock options are listed in the table below: Years Ended 2019 2018 2017 Expected volatility 29.3 % 28.2 % 31.8 % Risk-free interest rate 2.5 % 2.8 % 1.9 % Expected term (in years) 6.3 5.9 5.0 Dividend rate 1.1 % 1.7 % 0.6 % |
Summary of RSU Activity | The summary of RSU activity, inclusive of DEU settlements, under the 2017 Plan for the year ended December 31, 2019 is presented below: Number of Units (in thousands) Weighted Average Grant Date Fair Value per Unit Unvested RSUs—January 1, 2019 2,789 $ 14.93 Granted 1,555 $ 9.12 Vested (677 ) $ 14.87 Forfeited (359 ) $ 12.01 Unvested RSUs—December 31, 2019 3,308 $ 12.53 |
Summary of RSA Activity | The summary of RSA activity under the 2017 Plan for the year ended December 31, 2019 is presented below: Number of Awards (in thousands) Weighted Average Grant Date Fair Value per Award Unvested RSAs—January 1, 2019 61 $ 13.08 Granted 80 $ 12.55 Vested (61 ) $ 13.08 Unvested RSAs—December 31, 2019 80 $ 12.55 |
Additional Disclosures Provided for RSUs and RSAs | The following additional disclosures are provided for RSAs under the 2017 Plan: Years Ended 2019 2018 Weighted average grant date fair value $ 12.55 $ 13.08 Total fair value of shares vested (in thousands) $ 768 $ — |
Total Equity-Based Compensation Recognized in the Consolidated Statements of Comprehensive Income | Total equity-based compensation recognized on the consolidated statements of comprehensive income (loss) was as follows: Years Ended 2019 2018 2017 (in thousands) Cost of revenue $ 1,491 $ 1,468 $ 1,289 Selling, general and administrative expense 28,033 34,265 83,501 Total equity-based compensation $ 29,524 $ 35,733 $ 84,790 |
Non-controlling Interest (Table
Non-controlling Interest (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Ownership of Common Units | The ownership of the Common Units is summarized as follows: December 31, 2019 December 31, 2018 Units Ownership % Units Ownership % (units in thousands) Switch, Inc.’s ownership of Common Units (1) 89,688 37.8 % 55,157 22.7 % Noncontrolling interest holders’ ownership of Common Units (2) 147,859 62.2 % 187,440 77.3 % Total Common Units 237,547 100.0 % 242,597 100.0 % ________________________________________ (1) Common Units held by Switch, Inc. as of December 31, 2019 exclude 80,000 Common Units underlying unvested restricted stock awards. Common Units held by Switch, Inc. as of December 31, 2018 exclude 61,000 Common Units underlying unvested restricted stock awards. (2) Common Units held by noncontrolling interest holders as of December 31, 2019 exclude 3.2 million unvested Common Unit awards. Common Units held by noncontrolling interest holders as of December 31, 2018 exclude 4.0 million unvested Common Unit awards. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Net Income Per Share | The following table sets forth the calculation of basic and diluted net income (loss) per share: Years Ended 2019 2018 2017 (in thousands, except per share data) Net income (loss) per share: Numerator—basic: Net income (loss) attributable to Switch, Inc.—basic $ 8,917 $ 4,052 $ (15,208 ) Numerator—diluted: Net income (loss) attributable to Switch, Inc.—basic $ 8,917 $ 4,052 $ (15,208 ) Effect of dilutive securities: Shares of Class B and Class C common stock 17,339 — — Net income (loss) attributable to Switch, Inc.—diluted $ 26,256 $ 4,052 $ (15,208 ) Denominator—basic: Weighted average shares outstanding—basic 76,501 45,682 8,074 Net income (loss) per share—basic $ 0.12 $ 0.09 $ (1.88 ) Denominator—diluted: Weighted average shares outstanding—basic 76,501 45,682 8,074 Weighted average effect of dilutive securities: Stock options 712 50 — RSUs 805 6 — DEUs 24 8 — RSAs 35 7 — Shares of Class B and Class C common stock 168,252 — — Weighted average shares outstanding—diluted 246,329 45,753 8,074 Net income (loss) per share—diluted $ 0.11 $ 0.09 $ (1.88 ) |
Potentially Dilutive Securities Excluded from the Computation of Diluted Net Income Per Share | The following table presents potentially dilutive securities excluded from the computation of diluted net income (loss) per share for the periods presented because their effect would have been anti-dilutive. Years Ended 2019 2018 2017 (in thousands) Stock options (1) 5,040 7,352 5,725 RSUs (1) — 2,228 31 Shares of Class B and Class C common stock (2) — 191,426 216,569 ________________________________________ (1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net income (loss) per share. (2) Shares of Class B and Class C common stock at the end of the period are considered potentially dilutive shares of Class A common stock under application of the if-converted method. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Composition of Revenue | The Company’s revenue is comprised of the following: Years Ended 2019 2018 2017 (in thousands) Colocation $ 370,682 $ 324,209 $ 304,720 Connectivity 85,009 74,006 67,690 Other 6,619 7,645 5,865 Total revenue $ 462,310 $ 405,860 $ 378,275 |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Quarterly financial information is presented below: Year Ended December 31, 2019 First Quarter (1) Second Quarter (1) Third Quarter (1) Fourth Quarter Total (amounts in thousands, except per share data) Revenue $ 107,442 $ 111,970 $ 122,353 $ 120,545 $ 462,310 Gross profit $ 49,917 $ 53,853 $ 58,849 $ 57,012 $ 219,631 Net income $ 3,846 $ 4,672 $ 10,080 $ 12,944 $ 31,542 Net income attributable to Switch, Inc. $ 733 $ 1,189 $ 2,947 $ 4,048 $ 8,917 Basic net income per share (2) $ 0.01 $ 0.02 $ 0.04 $ 0.05 $ 0.12 Diluted net income per share (2) $ 0.01 $ 0.02 $ 0.03 $ 0.04 $ 0.11 ________________________________________ (1) The amounts presented differ from previously reported amounts as a result of the adoption of ASC 606 and ASC 842 for the annual period ended December 31, 2019. (2) Because net income per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total net income per share amounts for the year. Year Ended December 31, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Total (amounts in thousands, except per share data) Revenue $ 97,717 $ 102,161 $ 102,768 $ 103,214 $ 405,860 Gross profit $ 42,861 $ 46,967 $ 43,618 $ 48,001 $ 181,447 Net income $ 3,950 $ 9,539 $ 4,663 $ 11,166 $ 29,318 Net income attributable to Switch, Inc. $ 671 $ 821 $ 6 $ 2,554 $ 4,052 Basic net income per share $ 0.02 $ 0.02 $ 0.00 $ 0.05 $ 0.09 Diluted net income per share $ 0.02 $ 0.02 $ 0.00 $ 0.05 $ 0.09 |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Oct. 11, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Organization [Line Items] | ||||
Payment of stock issuance costs | $ 4.9 | |||
IPO | ||||
Organization [Line Items] | ||||
Net proceeds from sale of stock | $ 577.3 | |||
Class A | ||||
Organization [Line Items] | ||||
Common stock, shares outstanding (in shares) | 89,768 | 55,218 | ||
Class A | IPO | ||||
Organization [Line Items] | ||||
Shares of common stock issued and sold (in shares) | 35,900 | |||
Price per share (in dollars per share) | $ 17 | |||
Shares of Class B and Class C common stock | Continuing Members | ||||
Organization [Line Items] | ||||
Common stock, shares outstanding (in shares) | 216,600 | |||
Switch, Ltd. | ||||
Organization [Line Items] | ||||
Ownership percentage | 37.80% | 22.70% | 10.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Basis of Presentation and Principles of Consolidation (Details) | Oct. 10, 2017$ / sharesshares |
Accounting Policies [Abstract] | |
Common stock, shares issued (in shares) | shares | 1 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Cash equivalents | $ 0 | $ 53.3 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Concentrations of Credit and Other Risks (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Colocation and Connectivity Services | Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.00% | 11.00% | 11.00% |
Two Customers | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
One Customer | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
(Benefit) provision for doubtful accounts | $ (73) | $ 207 | $ 423 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment, Useful Life [Line Items] | |||
Internal use software costs capitalized | $ 2.3 | $ 1.4 | $ 1.8 |
Land improvements | Minimum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 20 years | ||
Land improvements | Maximum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 30 years | ||
Buildings, building improvements, and leasehold improvements | Minimum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 3 years | ||
Buildings, building improvements, and leasehold improvements | Maximum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 40 years | ||
Substation equipment | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 30 years | ||
Data center equipment | Minimum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 5 years | ||
Data center equipment | Maximum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 10 years | ||
Vehicles | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 7 years | ||
Core network equipment | Minimum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 5 years | ||
Core network equipment | Maximum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 7 years | ||
Cloud computing equipment | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 5 years | ||
Fiber facilities | Minimum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 20 years | ||
Fiber facilities | Maximum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 25 years | ||
Computer equipment, furniture and fixtures | Minimum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 3 years | ||
Computer equipment, furniture and fixtures | Maximum | |||
Property, Plant and Equipment, Useful Life [Line Items] | |||
Estimated useful life of property and equipment | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Portfolio Energy Credits (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
PECs, gross | $ 5,352 | $ 3,649 |
Accumulated amortization | (5,352) | (3,508) |
PECs, net | $ 0 | $ 141 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Debt Issuance Costs (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 5.7 | $ 7.3 |
Line of Credit | 2017 Revolving Credit Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 2.1 | $ 2.9 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition Contract Terms [Line Items] | |||
Revenue recognized | $ 12,500,000 | ||
Impairment losses related to contract balances | 0 | ||
Deferred contract costs | 1,500,000 | ||
Amortization of deferred contract costs | $ 400,000 | ||
Maximum | |||
Revenue Recognition Contract Terms [Line Items] | |||
Contract term | 5 years | ||
Minimum | |||
Revenue Recognition Contract Terms [Line Items] | |||
Contract term | 3 years | ||
Revenue | Colocation and Connectivity Services | Product | |||
Revenue Recognition Contract Terms [Line Items] | |||
Concentration risk percentage | 95.00% | 95.00% | 95.00% |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Opening and Closing Balances of the Company's Contract Assets and Deferred Revenue (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Contract assets, current portion | |
Beginning balance | $ 145 |
Ending balance | 496 |
Increase | 351 |
Contract assets | |
Beginning balance | 2,845 |
Ending balance | 3,216 |
Increase | 371 |
Deferred revenue, current portion | |
Beginning balance | 12,322 |
Ending balance | 14,991 |
Increase | 2,669 |
Deferred revenue | |
Beginning balance | 18,084 |
Ending balance | 27,852 |
Increase | $ 9,768 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Remaining Performance Obligations (Details) $ in Millions | Dec. 31, 2019USD ($) |
Accounting Policies [Abstract] | |
Remaining performance obligation | $ 783.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percent of remaining performance obligation expected to be recognized | 34.00% |
Period over which the remaining performance obligation is expected to be recognized | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percent of remaining performance obligation expected to be recognized | 40.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percent of remaining performance obligation expected to be recognized | 15.00% |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Period over which the remaining performance obligation is expected to be recognized | 1 year |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Period over which the remaining performance obligation is expected to be recognized | 3 years |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Period over which the remaining performance obligation is expected to be recognized | 3 years |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Period over which the remaining performance obligation is expected to be recognized | 5 years |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Tax Receivable Agreement (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2019 | |
Tax Receivable Agreement Payments [Line Items] | ||
Percent of tax benefits realized that the company must make payments to holders for | 85.00% | |
Percent of remaining tax benefits the Company expects to benefit from | 15.00% | |
LIBOR | ||
Tax Receivable Agreement Payments [Line Items] | ||
Accrued interest rate on late payments | 100.00% | |
Accrued interest rate on late payments | 500.00% |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 1.5 | $ 1.1 | $ 1.8 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, carrying value | $ 53,293 | |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents, fair value | $ 53,293 | |
Interest Rate Swap Agreements | Accrued expenses | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swaps | $ 3,464 | |
Interest Rate Swap Agreements | Accrued expenses | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swaps | 3,464 | |
Interest Rate Swap Agreements | Other long-term liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swaps | 10,550 | |
Interest Rate Swap Agreements | Other long-term liabilities | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swaps | $ 10,550 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Derivative Financial Instruments (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Feb. 28, 2019USD ($)derivative | |
Derivative [Line Items] | ||||
Loss on interest rate swaps | $ 14,917,000 | $ 0 | $ 0 | |
Interest Rate Swap Agreements | ||||
Derivative [Line Items] | ||||
Number of derivative agreements | derivative | 4 | |||
Weighted average fixed interest rate on notional amounts | 2.48% | |||
Notional amount | $ 400,000,000 | |||
Loss on interest rate swaps | $ 14,900,000 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative adjustment due to the adoption of new accounting standards | $ 1,164 | |||
Cash flows from operating activities | 209,413 | $ 178,330 | $ 146,601 | |
Cash flows from financing activities | 43,130 | $ (83,341) | 497,803 | |
ASU 2016-15 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash flows from operating activities | 1,500 | |||
Cash flows from financing activities | $ (1,500) | |||
Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative adjustment due to the adoption of new accounting standards | $ 224 | |||
Retained Earnings | ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative adjustment due to the adoption of new accounting standards | $ 200 |
Summary of Significant Accou_19
Summary of Significant Accounting Policies - Cumulative Effect of the Changes Made to the Company's Balance Sheet upon Adopting ASC 606 (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets: | |||
Other current assets | $ 3,817 | $ 3,272 | $ 2,332 |
Other assets | 45,785 | 14,673 | 17,050 |
Deferred income taxes | 114,372 | 28,497 | 28,550 |
Liabilities: | |||
Deferred revenue, current portion | 12,322 | 10,800 | |
Deferred revenue | 27,852 | 18,084 | 22,260 |
Equity: | |||
Retained earnings | 2,420 | 2,917 | 2,693 |
Noncontrolling interest | $ 420,194 | 566,082 | $ 565,142 |
ASU 2014-09 | |||
Assets: | |||
Other current assets | 940 | ||
Other assets | (2,377) | ||
Deferred income taxes | (53) | ||
Liabilities: | |||
Deferred revenue, current portion | 1,522 | ||
Deferred revenue | (4,176) | ||
Equity: | |||
Retained earnings | 224 | ||
Noncontrolling interest | $ 940 |
Summary of Significant Accou_20
Summary of Significant Accounting Policies - Summary of the Effects of Adopting ASC 606 on the Consolidated Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Oct. 10, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Balance Sheets | ||||||||||||||
Other current assets | $ 3,817 | $ 2,332 | $ 3,817 | $ 2,332 | $ 3,272 | |||||||||
Total current assets | 59,040 | 108,327 | 59,040 | 108,327 | ||||||||||
Deferred income taxes | 114,372 | 28,550 | 114,372 | 28,550 | 28,497 | |||||||||
Other assets | 45,785 | 17,050 | 45,785 | 17,050 | 14,673 | |||||||||
Total assets | 1,773,743 | 1,460,030 | 1,773,743 | 1,460,030 | ||||||||||
Deferred revenue, current portion | 14,991 | 12,322 | 14,991 | 12,322 | ||||||||||
Deferred revenue, current portion | 10,800 | 10,800 | 12,322 | |||||||||||
Total current liabilities | 113,930 | 75,028 | 113,930 | 75,028 | ||||||||||
Deferred revenue | 27,852 | 22,260 | 27,852 | 22,260 | 18,084 | |||||||||
Total liabilities | 1,146,098 | 751,678 | 1,146,098 | 751,678 | ||||||||||
Retained earnings | 2,420 | 2,693 | 2,420 | 2,693 | 2,917 | |||||||||
Balance Sheets | 207,451 | 143,210 | 207,451 | 143,210 | ||||||||||
Noncontrolling interest | 420,194 | 565,142 | 420,194 | 565,142 | 566,082 | |||||||||
Total stockholders’ equity | 627,645 | 708,352 | $ 742,133 | 627,645 | 708,352 | $ 742,133 | ||||||||
Total liabilities and stockholders’ equity | 1,773,743 | 1,460,030 | 1,773,743 | 1,460,030 | ||||||||||
Statements of Comprehensive Income (Loss) | ||||||||||||||
Revenue | 120,545 | $ 122,353 | $ 111,970 | $ 107,442 | 103,214 | $ 102,768 | $ 102,161 | $ 97,717 | 462,310 | 405,860 | 378,275 | |||
Cost of revenue | 242,679 | 224,413 | 198,230 | |||||||||||
Gross profit | 57,012 | 58,849 | 53,853 | 49,917 | 48,001 | 43,618 | 46,967 | 42,861 | 219,631 | 181,447 | 180,045 | |||
Income from operations | 76,927 | 54,679 | 18,827 | |||||||||||
Income before income taxes | 34,255 | 31,261 | (9,561) | |||||||||||
Deferred income taxes | 2,713 | 1,943 | (981) | |||||||||||
Net income | 12,944 | 10,080 | 4,672 | 3,846 | 11,166 | 4,663 | 9,539 | 3,950 | 8,733 | $ (17,313) | 31,542 | 29,318 | (8,580) | |
Less: net income attributable to noncontrolling interest | 22,625 | 25,266 | 6,628 | |||||||||||
Net income (loss) attributable to Switch, Inc.—basic | $ 4,048 | $ 2,947 | $ 1,189 | $ 733 | $ 2,554 | $ 6 | $ 821 | $ 671 | $ 8,917 | $ 4,052 | $ (15,208) | |||
Basic net income per share (in dollars per share) | $ 0.05 | $ 0.04 | $ 0.02 | $ 0.01 | $ 0.05 | $ 0 | $ 0.02 | $ 0.02 | $ 0.12 | $ 0.09 | $ (1.88) | |||
Diluted net income per share (in dollars per share) | $ 0.04 | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.05 | $ 0 | $ 0.02 | $ 0.02 | $ 0.11 | $ 0.09 | $ (1.88) | |||
Statements of Cash Flows | ||||||||||||||
Net income (loss) | $ 12,944 | $ 10,080 | $ 4,672 | $ 3,846 | $ 11,166 | $ 4,663 | $ 9,539 | $ 3,950 | $ 8,733 | $ (17,313) | $ 31,542 | $ 29,318 | $ (8,580) | |
Deferred income taxes | 2,713 | 1,943 | (981) | |||||||||||
Other current assets | (545) | (231) | (261) | |||||||||||
Other assets | 3,447 | (5,353) | (1,221) | |||||||||||
Deferred revenue | 12,437 | 2,196 | 6,006 | |||||||||||
Net cash provided by operating activities | 209,413 | $ 178,330 | $ 146,601 | |||||||||||
ASU 2014-09 | ||||||||||||||
Balance Sheets | ||||||||||||||
Other current assets | 940 | |||||||||||||
Deferred income taxes | (53) | |||||||||||||
Other assets | (2,377) | |||||||||||||
Deferred revenue, current portion | 1,522 | |||||||||||||
Deferred revenue | (4,176) | |||||||||||||
Retained earnings | 224 | |||||||||||||
Noncontrolling interest | $ 940 | |||||||||||||
Adjustment Due to Adoption of ASC 606 | ASU 2014-09 | ||||||||||||||
Balance Sheets | ||||||||||||||
Other current assets | (887) | (887) | ||||||||||||
Total current assets | (887) | (887) | ||||||||||||
Deferred income taxes | 97 | 97 | ||||||||||||
Other assets | 3,390 | 3,390 | ||||||||||||
Total assets | 2,600 | 2,600 | ||||||||||||
Deferred revenue, current portion | (1,545) | (1,545) | ||||||||||||
Total current liabilities | (1,545) | (1,545) | ||||||||||||
Deferred revenue | 6,097 | 6,097 | ||||||||||||
Total liabilities | 4,552 | 4,552 | ||||||||||||
Retained earnings | (451) | (451) | ||||||||||||
Balance Sheets | (451) | (451) | ||||||||||||
Noncontrolling interest | (1,501) | (1,501) | ||||||||||||
Total stockholders’ equity | (1,952) | (1,952) | ||||||||||||
Total liabilities and stockholders’ equity | 2,600 | 2,600 | ||||||||||||
Statements of Comprehensive Income (Loss) | ||||||||||||||
Revenue | (1,898) | |||||||||||||
Cost of revenue | (1,066) | |||||||||||||
Gross profit | (832) | |||||||||||||
Income from operations | (832) | |||||||||||||
Income before income taxes | (832) | |||||||||||||
Deferred income taxes | (44) | |||||||||||||
Net income | (788) | |||||||||||||
Less: net income attributable to noncontrolling interest | (561) | |||||||||||||
Net income (loss) attributable to Switch, Inc.—basic | $ (227) | |||||||||||||
Basic net income per share (in dollars per share) | $ 0 | |||||||||||||
Diluted net income per share (in dollars per share) | $ 0 | |||||||||||||
Statements of Cash Flows | ||||||||||||||
Net income (loss) | $ (788) | |||||||||||||
Deferred income taxes | (44) | |||||||||||||
Other current assets | (53) | |||||||||||||
Other assets | (1,013) | |||||||||||||
Deferred revenue | 1,898 | |||||||||||||
Net cash provided by operating activities | 0 | |||||||||||||
As If Presented Under Prior Standard | ||||||||||||||
Balance Sheets | ||||||||||||||
Other current assets | 2,930 | 2,930 | ||||||||||||
Total current assets | 58,153 | 58,153 | ||||||||||||
Deferred income taxes | 114,469 | 114,469 | ||||||||||||
Other assets | 49,175 | 49,175 | ||||||||||||
Total assets | 1,776,343 | 1,776,343 | ||||||||||||
Deferred revenue, current portion | 13,446 | 13,446 | ||||||||||||
Total current liabilities | 112,385 | 112,385 | ||||||||||||
Deferred revenue | 33,949 | 33,949 | ||||||||||||
Total liabilities | 1,150,650 | 1,150,650 | ||||||||||||
Retained earnings | 1,969 | 1,969 | ||||||||||||
Balance Sheets | 207,000 | 207,000 | ||||||||||||
Noncontrolling interest | 418,693 | 418,693 | ||||||||||||
Total stockholders’ equity | 625,693 | 625,693 | ||||||||||||
Total liabilities and stockholders’ equity | $ 1,776,343 | 1,776,343 | ||||||||||||
Statements of Comprehensive Income (Loss) | ||||||||||||||
Revenue | 460,412 | |||||||||||||
Cost of revenue | 241,613 | |||||||||||||
Gross profit | 218,799 | |||||||||||||
Income from operations | 76,095 | |||||||||||||
Income before income taxes | 33,423 | |||||||||||||
Deferred income taxes | 2,669 | |||||||||||||
Net income | 30,754 | |||||||||||||
Less: net income attributable to noncontrolling interest | 22,064 | |||||||||||||
Net income (loss) attributable to Switch, Inc.—basic | $ 8,690 | |||||||||||||
Basic net income per share (in dollars per share) | $ 0.12 | |||||||||||||
Diluted net income per share (in dollars per share) | $ 0.11 | |||||||||||||
Statements of Cash Flows | ||||||||||||||
Net income (loss) | $ 30,754 | |||||||||||||
Deferred income taxes | 2,669 | |||||||||||||
Other current assets | (598) | |||||||||||||
Other assets | 2,434 | |||||||||||||
Deferred revenue | 14,335 | |||||||||||||
Net cash provided by operating activities | $ 209,413 |
Summary of Significant Accou_21
Summary of Significant Accounting Policies - Cumulative Effect of the Changes Made to the Company's Balance Sheet upon Adopting ASC 842 (Details) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
ASSETS | |||
Operating lease ROU assets | $ 30,600 | $ 35,486 | |
Prepaid expenses | 7,137 | 6,362 | $ 6,781 |
Liabilities: | |||
Accrued expenses | 14,718 | 9,056 | $ 9,778 |
Operating lease liability, current portion | 4,805 | 4,455 | |
Operating lease liability | $ 30,947 | 31,334 | |
ASU 2016-02 | |||
ASSETS | |||
Operating lease ROU assets | 35,486 | ||
Prepaid expenses | (419) | ||
Liabilities: | |||
Accrued expenses | (722) | ||
Operating lease liability, current portion | 4,455 | ||
Operating lease liability | $ 31,334 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,117,787 | $ 1,760,595 |
Less: accumulated depreciation and amortization | (566,670) | (457,825) |
Property and equipment, net | 1,551,117 | 1,302,770 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 223,877 | 194,711 |
Buildings, building improvements, and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 435,214 | 412,089 |
Substation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 19,780 | 4,247 |
Data center equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,021,056 | 904,722 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,732 | 1,685 |
Core network equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 36,572 | 34,901 |
Cloud computing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 71 | 5,192 |
Fiber facilities | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 13,180 | 9,912 |
Computer equipment, furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 38,986 | 34,975 |
Finance lease ROU assets | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 72,569 | 33,730 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 254,750 | $ 124,431 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Accumulated amortization for capitalized leased assets | $ 11.7 | $ 9.9 | |
Capitalized interest | 5.8 | 4.9 | $ 2.9 |
Internal use software costs capitalized | $ 2.3 | $ 1.4 | $ 1.8 |
Property and Equipment, Net - D
Property and Equipment, Net - Depreciation and Amortization of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization of property and equipment | $ 119,945 | $ 106,666 | $ 89,124 |
Cost of revenue | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization of property and equipment | 116,274 | 104,095 | 87,255 |
Selling, general and administrative expense | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization of property and equipment | $ 3,671 | $ 2,571 | $ 1,869 |
Long-Term Deposit (Details)
Long-Term Deposit (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Storey County [Member] | ||
Costs Incurred, Development of Property, Plant And Equipment, In Long-Term Deposits [Line Items] | ||
Costs subject to reimbursement | $ 2.2 | |
NV Energy [Member] | ||
Costs Incurred, Development of Property, Plant And Equipment, In Long-Term Deposits [Line Items] | ||
Costs subject to reimbursement | $ 1.1 | $ 3.2 |
Equity Method Investments (Deta
Equity Method Investments (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)investment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Number of investments accounted for under the equity method | investment | 2 | ||
Equity in net losses of investments | $ 0 | $ 331,000 | $ 1,077,000 |
SUPERNAP International | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest in equity method investments | 50.00% | ||
Equity method investment | $ 1,300,000 | ||
Carrying value of equity method investments | 0 | ||
Equity in net losses of investments | 300,000 | $ 1,100,000 | |
SUPERNAP International | Equity Method Investee | |||
Schedule of Equity Method Investments [Line Items] | |||
Reimbursable expenses due from related parties included in accounts receivable | $ 300,000 | $ 400,000 | |
Planet3 | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest in equity method investments | 45.00% | ||
Equity method investment | $ 10,000,000 |
Long-Term Debt - Composition of
Long-Term Debt - Composition of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 755,000 | $ 591,000 | |
Less: unamortized debt issuance costs | (3,628) | $ (4,434) | |
Long-term debt, net of unamortized debt issuance costs | 751,372 | 586,566 | |
Less: long-term debt, current | (6,000) | (6,000) | |
Long-term debt, net | 745,372 | 580,566 | |
2017 Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | 585,000 | 591,000 | |
Long-term debt, net of unamortized debt issuance costs | 581,372 | $ 586,566 | |
2017 Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 170,000 | $ 0 |
Long-Term Debt - 2015 Credit Ag
Long-Term Debt - 2015 Credit Agreement (Details) - Loans Payable - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | May 05, 2015 | |
2015 Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Face amount of debt | $ 200,000,000 | |
Term of debt | 5 years | |
Revolving Credit Facility | 2015 Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Face amount of debt | $ 400,000,000 |
Long-Term Debt - 2017 Credit Ag
Long-Term Debt - 2017 Credit Agreement (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018 | Jun. 27, 2017USD ($) | |
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 3,565,000 | ||||
Maximum borrowing capacity | $ 30,000,000 | ||||
Restricted payment basket | $ 15,000,000 | ||||
Leverage ratio, maximum | 4.50 | ||||
Leverage ratio, maximum at maturity | 4 | ||||
Leverage ratio, minimum | 1 | ||||
2017 Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Quarterly amortization payments | $ 1,500,000 | ||||
Final payment amount | $ 559,500,000 | $ 559,500,000 | |||
Interest rate | 4.05% | 4.77% | |||
2017 Facilities | |||||
Debt Instrument [Line Items] | |||||
Number of times the available borrowing capacity may be increased | 5 | ||||
Increase limit | $ 75,000,000 | ||||
2017 Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.51% | ||||
Loans Payable | 2017 Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | 600,000,000 | ||||
Revolving Credit Facility | 2017 Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Available borrowing capacity | $ 330,000,000 | ||||
Revolving Credit Facility | Loans Payable | 2017 Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | $ 500,000,000 |
Long-Term Debt - Fair Value of
Long-Term Debt - Fair Value of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt | $ 755,000 | |
Carrying value of long-term debt, excluding debt issuance costs | $ 755,000 | $ 591,000 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt | $ 573,300 |
Long-Term Debt - Maturities of
Long-Term Debt - Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | |||
2020 | $ 6,000 | ||
2021 | 6,000 | ||
2022 | 176,000 | ||
2023 | 6,000 | ||
2024 | 561,000 | ||
Long-term debt, gross | 755,000 | $ 591,000 | |
Less: unamortized debt issuance costs | (3,628) | $ (4,434) | |
Long-term debt, net of unamortized debt issuance costs | $ 751,372 | $ 586,566 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Related Parties | ||
2020 | $ 4,430 | |
2021 | 4,780 | |
2022 | 4,843 | |
2023 | 4,969 | |
2024 | 5,036 | |
Thereafter | 139,307 | |
Total undiscounted future cash flows | 163,365 | |
Less: amount representing interest | (106,038) | |
Present value of undiscounted future cash flows | 57,327 | |
Other | ||
2020 | 29 | |
2021 | 21 | |
2022 | 21 | |
2023 | 22 | |
2024 | 22 | |
Thereafter | 407 | |
Total undiscounted future cash flows | 522 | |
Less: amount representing interest | (223) | |
Present value of undiscounted future cash flows | 299 | |
Total | ||
2020 | 4,459 | |
2021 | 4,801 | |
2022 | 4,864 | |
2023 | 4,991 | |
2024 | 5,058 | |
Thereafter | 139,714 | |
Total undiscounted future cash flows | 163,887 | |
Less: amount representing interest | (106,261) | |
Present value of undiscounted future cash flows | 57,626 | |
Related Parties | ||
2020 | 4,348 | |
2021 | 4,216 | |
2022 | 2,863 | |
2023 | 2,051 | |
2024 | 2,051 | |
Thereafter | 52,552 | |
Total undiscounted future cash flows | 68,081 | |
Less: amount representing interest | (40,511) | |
Present value of undiscounted future cash flows | 27,570 | |
Other | ||
2020 | 2,459 | |
2021 | 635 | |
2022 | 207 | |
2023 | 30 | |
2024 | 26 | |
Thereafter | 603 | |
Total undiscounted future cash flows | 3,960 | |
Less: amount representing interest | (583) | |
Present value of undiscounted future cash flows | 3,377 | |
Total | ||
2020 | 6,807 | |
2021 | 4,851 | |
2022 | 3,070 | |
2023 | 2,081 | |
2024 | 2,077 | |
Thereafter | 53,155 | |
Total undiscounted future cash flows | 72,041 | |
Less: amount representing interest | (41,094) | |
Present value of undiscounted future cash flows | $ 30,947 | $ 31,334 |
Leases - Minimum Payment Obliga
Leases - Minimum Payment Obligations for Capital Leases Prior to the Adoption of ASC 842 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 2,064 |
2020 | 2,124 |
2021 | 2,243 |
2022 | 2,306 |
2023 | 2,432 |
Thereafter | 28,898 |
Total | 40,067 |
Less: amount representing interest | (20,601) |
Present value of minimum capital lease payments | $ 19,466 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments for Operating Leases Prior to the Adoption of ASC 842 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Related Parties | |
2019 | $ 4,824 |
2020 | 4,872 |
2021 | 4,260 |
2022 | 2,863 |
2023 | 2,051 |
Thereafter | 54,603 |
Total | 73,473 |
Other | |
2019 | 2,482 |
2020 | 2,487 |
2021 | 625 |
2022 | 197 |
2023 | 20 |
Thereafter | 623 |
Total | 6,434 |
Total | |
2019 | 7,306 |
2020 | 7,359 |
2021 | 4,885 |
2022 | 3,060 |
2023 | 2,071 |
Thereafter | 55,226 |
Total | $ 79,907 |
Leases - Finance Leases (Detail
Leases - Finance Leases (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($)renewal_option | Dec. 31, 2018USD ($) | |
Capital Leased Assets [Line Items] | ||
Number of lease renewal periods | renewal_option | 2 | |
Renewal option term | 10 years | |
Renewal option term | 5 years | |
Land | ||
Capital Leased Assets [Line Items] | ||
Finance lease ROU assets | $ 37.6 | |
Building | ||
Capital Leased Assets [Line Items] | ||
Finance lease ROU assets | 10.7 | |
Capital lease asset, net of accumulated amortization | $ 11.4 | |
Fiber Facilities | ||
Capital Leased Assets [Line Items] | ||
Finance lease ROU assets | 1.1 | |
Capital lease asset, gross | 12.3 | |
Substation equipment | ||
Capital Leased Assets [Line Items] | ||
Finance lease ROU assets | 1 | |
Capital lease asset, gross | 0.1 | |
Industrial Development Revenue Bond | ||
Capital Leased Assets [Line Items] | ||
Capital lease asset, gross | $ 133.1 | $ 6.1 |
Nevada Broadband Telemedicine Initiative | Fiber Facilities | ||
Capital Leased Assets [Line Items] | ||
Renewal option term | 25 years | |
Finance lease ROU assets | $ 10.5 |
Leases - Operating Leases (Deta
Leases - Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Operating lease ROU assets | $ 30,600 | $ 35,486 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Finance lease cost | |
Amortization of ROU assets | $ 1,993 |
Interest on lease liabilities | 3,255 |
Operating lease cost | 7,136 |
Short-term lease cost | 17 |
Variable lease cost | 625 |
Sublease income | (13) |
Total lease cost | 13,013 |
Related party rent included in operating lease cost | $ 4,700 |
Leases - Other Information (Det
Leases - Other Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from finance leases | $ 3,484 |
Operating cash flows from operating leases | 7,167 |
Financing cash flows from finance leases | $ 876 |
Weighted average remaining lease term (in years) | |
Finance leases | 37 years |
Operating leases | 25 years |
Weighted average discount rate | |
Finance leases | 10.00% |
Operating leases | 10.00% |
Leases - Leases Not Yet Commenc
Leases - Leases Not Yet Commenced (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases Not Yet Commenced [Line Items] | |
Aggregate commitment amount of leases not yet commenced | $ 848 |
Long-term Contract for Purchase of Electric Power [Domain] | |
Leases Not Yet Commenced [Line Items] | |
Number of leases not yet commenced | 3 |
Battery Capacity | |
Leases Not Yet Commenced [Line Items] | |
Number of leases not yet commenced | 2 |
Term of leases not yet commenced | 25 years |
Purchased Electricity | |
Leases Not Yet Commenced [Line Items] | |
Term of leases not yet commenced | 20 years |
Leases - Operating Leases Prior
Leases - Operating Leases Prior to Adoption of ASC 842 (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Leases [Line Items] | ||
Rent expense related to operating leases | $ 7.7 | $ 7.4 |
Non-cancellable Leases Expiring Through 2066 with Related Parties | ||
Operating Leases [Line Items] | ||
Rent expense related to operating leases | $ 5 | $ 4.8 |
Retirement Benefit Plans (Detai
Retirement Benefit Plans (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2019 | Feb. 29, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||||
Employer matching contribution percentage | 50.00% | 100.00% | |||
Percent of employees' gross pay matched | 2.00% | 3.00% | |||
Expense related to contributions | $ 2 | $ 1.5 | $ 1.3 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Impact fee expense | $ 649 | $ 27,000 | ||
Self Insurance Reserve | $ 800 | $ 500 | ||
Portfolio Energy Credits | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Purchase commitment due in next twelve months | 1,700 | |||
Purchase commitment due in two years | 1,700 | |||
Purchase commitment due in three years | 1,700 | |||
Purchase commitment due in four years | 1,700 | |||
Purchase commitment due thereafter | 22,500 | |||
Future purchase commitments for the remainder of 2020 | 1,700 | |||
Licensing Agreements | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Purchase commitment due in next twelve months | 200 | |||
Purchase commitment due thereafter | 5,200 | |||
Purchase commitment | 7,700 | |||
Future purchase commitments for the remainder of 2020 | 500 | |||
Licensing Agreements | ||||
Unrecorded Unconditional Purchase Obligation [Line Items] | ||||
Purchase commitment due in two years | 500 | |||
Purchase commitment due in three years | 500 | |||
Purchase commitment due in four years | $ 500 | |||
Term of purchase commitment | 15 years | |||
Future purchase commitments for the remainder of 2020 | $ 500 |
Commitments and Contingencies_2
Commitments and Contingencies - Legal Proceedings (Details) | Sep. 10, 2018plaintiff | Jun. 11, 2018case | Jun. 08, 2018case |
Martz v. Switch, Inc. et al. | |||
Loss Contingencies [Line Items] | |||
Number of complaints filed | 4 | ||
Cai v. Switch, Inc. et al. | |||
Loss Contingencies [Line Items] | |||
Number of complaints filed | 1 | ||
Liu v. Roy et al., and Zhao v. Roy et al. | |||
Loss Contingencies [Line Items] | |||
Number of plaintiffs | plaintiff | 2 |
Income Taxes - Income (Loss) be
Income Taxes - Income (Loss) before Income Taxes for Domestic and Foreign Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 34,161 | $ 31,379 | $ (8,386) |
Foreign | 94 | (118) | (1,175) |
Income (loss) before income taxes | $ 34,255 | $ 31,261 | $ (9,561) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the U.S. Statutory Tax Rate to the Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
U.S. statutory tax rate | 21.00% | 21.00% | 35.00% |
Rate effect from pass-through entity | (13.90%) | (17.00%) | (34.80%) |
Partnership outside basis difference | 0.00% | 0.00% | 26.20% |
Rate change impact due to tax reform | 0.00% | 0.00% | (7.00%) |
Other | 0.80% | 2.20% | (9.20%) |
Effective income tax rate | 7.90% | 6.20% | 10.20% |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current | |||
Federal | $ 0 | $ 0 | $ 0 |
State and local | 0 | 0 | 0 |
Total current income tax expense (benefit) | 0 | 0 | 0 |
Deferred | |||
Federal | 2,693 | 1,939 | (978) |
State and local | 20 | 4 | (3) |
Total deferred income tax expense (benefit) | 2,713 | 1,943 | (981) |
Total income tax expense (benefit) | $ 2,713 | $ 1,943 | $ (981) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 | Oct. 10, 2017 | |
Operating Loss Carryforwards [Line Items] | ||||
Provisional tax benefit | $ 700 | |||
Common stock, shares issued (in shares) | 1 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Deferred tax asset, investment in partnership | $ 22,601 | $ 93,089 | ||
Liabilities under tax receivable agreement | $ 162,076 | $ 52,535 | ||
Percent of tax benefits realized that the company must make payments to holders for | 85.00% | |||
Domestic Tax Authority | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 100,500 | |||
Operating loss carryforwards expiring in 2037 | 1,900 | |||
Operating loss carryforwards expiring in 2038 | 98,600 | |||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 5,300 | |||
Operating loss carryforwards expiring in 2028 | 200 | |||
Operating loss carryforwards expiring in 2029 | $ 5,100 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Investment in partnership | $ 93,089 | $ 22,601 |
Net operating loss carryforwards | 21,283 | 5,949 |
Deferred tax assets | 114,372 | 28,550 |
Less: valuation allowance | 0 | 0 |
Deferred tax assets, net of valuation allowance | 114,372 | 28,550 |
Deferred tax liabilities: | ||
Other | 0 | 0 |
Deferred tax liabilities | 0 | 0 |
Net deferred tax assets | $ 114,372 | $ 28,550 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017USD ($) | Dec. 31, 2019USD ($)vote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / shares | Oct. 10, 2017$ / shares | |
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||
Preferred stock, shares authorized (in shares) | shares | 10,000,000 | 10,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Dividends declared | $ | $ 503 | $ 9,414 | $ 2,961 | ||
Retained Earnings | |||||
Class of Stock [Line Items] | |||||
Dividends declared | $ | $ 503 | $ 9,414 | $ 2,961 | $ 500 | |
Class A | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | shares | 750,000,000 | 750,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Votes per share | vote | 1 | ||||
Dividends paid (in dollars per share) | $ / shares | $ 0.1176 | $ 0.059 | $ 0.014 | ||
Class B | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Treasury Stock, Shares, Retired | shares | 65,600,000 | ||||
Votes per share | vote | 1 | ||||
Class C | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | shares | 75,000,000 | 75,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Treasury Stock, Shares, Retired | shares | 42,900,000 | ||||
Votes per share | vote | 10 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Common Unit Activity (Details) - Common Units shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of Units | |
Unvested (in shares) | 3,986 |
Vested (in shares) | (798) |
Unvested (in shares) | 3,188 |
Weighted Average Grant Date Fair Value per Unit | |
Vested (in dollars per share) | $ / shares | $ 11.11 |
Unvested (in dollars per share) | $ / shares | $ 11.11 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Disclosures for Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value (in dollars per share) | $ 3.15 | $ 1.84 | $ 5 |
Total aggregate intrinsic value of units converted | $ 0 | $ 0 | $ 318,033 |
2017 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of stock options vested (in thousands) | $ 959 | $ 176 | $ 28,073 |
Common Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value (in dollars per share) | $ 0 | $ 0 | $ 7.39 |
Total fair value of units vested | $ 9,423 | $ 10,659 | $ 1,115 |
Incentive Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value (in dollars per share) | $ 0 | $ 0 | $ 10.06 |
RSUs | 2017 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value (in dollars per share) | $ 9.12 | $ 15.03 | $ 18.01 |
Total fair value of units vested | $ 5,114 | $ 2,925 | $ 365 |
RSAs | 2017 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value (in dollars per share) | $ 12.55 | $ 13.08 | |
Total fair value of units vested | $ 768 | $ 0 |
Equity-Based Compensation Equit
Equity-Based Compensation Equity-Based Compensation - Weighted-Average Assumptions Used in Estimating the Grant Date Fair Value of Awards (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.40% | ||
Expected term | 2 years | ||
Dividend rate | 0.60% | ||
Incentive Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 29.30% | ||
2017 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.50% | 2.80% | 1.90% |
Expected term | 6 years 3 months | 5 years 10 months 21 days | 5 years |
Dividend rate | 1.10% | 1.70% | 0.60% |
2017 Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 29.30% | 28.20% | 31.80% |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Stock Option Activity (Details) - 2017 Plan $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Number of Stock Options | |
Outstanding (in shares) | shares | 7,352 |
Granted (in shares) | shares | 1,217 |
Forfeited (in shares) | shares | (66) |
Expired (in shares) | shares | (161) |
Outstanding (in shares) | shares | 8,342 |
Fully vested and expected to vest (in shares) | shares | 8,342 |
Exercisable (in shares) | shares | 5,561 |
Weighted Average Exercise Price per Stock Option | |
Outstanding (in dollars per share) | $ / shares | $ 14.16 |
Granted (in dollars per share) | $ / shares | 10.66 |
Forfeited (in dollars per share) | $ / shares | 17 |
Expired (in dollars per share) | $ / shares | 17 |
Outstanding (in dollars per share) | $ / shares | 13.57 |
Fully vested and expected to vest (in dollars per share) | $ / shares | 16.06 |
Exercisable (in dollars per share) | $ / shares | $ 13.57 |
Weighted Average Remaining Contractual Life | |
Outstanding | 8 years 29 days |
Fully vested and expected to vest | 8 years 29 days |
Exercisable | 7 years 6 months 29 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 21,430 |
Exercisable | $ | $ 4,092 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 01, 2018 | Sep. 22, 2017 | Jan. 31, 2019 | Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 10 years | ||||||
Common Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation cost | $ 9.6 | ||||||
Weighted average recognition period | 1 year 9 months 11 days | ||||||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average recognition period | 2 years 9 months 15 days | ||||||
Weighted-average recognition period | $ 5.2 | ||||||
Chief Executive Officer | Common Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 7,500,000 | ||||||
Conversion of units (in shares) | 7,500,000 | ||||||
President | Common Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 1,500,000 | ||||||
Hurdle amount (in dollars per share) | $ 11.69 | $ 11.69 | |||||
Conversion of units (in shares) | 472,000 | ||||||
2005 Common Membership Unit Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 10 years | ||||||
Intrinsic value of units exercised | $ 1.2 | $ 0.9 | |||||
2017 Plan | RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 1,555,000 | ||||||
Weighted average recognition period | 2 years 5 months 23 days | ||||||
Equity-based compensation cost | $ 29.9 | ||||||
2017 Plan | Class A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized (in shares) | 25,000,000 | ||||||
Potential increase in authorized shares (in shares) | 17,000,000 | ||||||
Potential percentage increase in authorized shares | 5.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 7,900,000 | 3,200,000 | |||||
Director Compensation Program | RSAs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average recognition period | 5 months 9 days | ||||||
Equity-based compensation cost | $ 0.4 |
Equity-Based Compensation - S_3
Equity-Based Compensation - Summary of RSU and RSA Activity (Details) - 2017 Plan - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RSUs | |||
Number of Units | |||
Unvested (in shares) | 2,789 | ||
Granted (in shares) | 1,555 | ||
Vested (in shares) | (677) | ||
Forfeited (in shares) | (359) | ||
Unvested (in shares) | 3,308 | 2,789 | |
Weighted Average Grant Date Fair Value per Unit | |||
Granted (in dollars per share) | $ 9.12 | $ 15.03 | $ 18.01 |
Vested (in dollars per share) | 14.87 | ||
Forfeited (in dollars per share) | 12.01 | ||
Unvested (in dollars per share) | $ 12.53 | $ 14.93 | |
RSAs | |||
Number of Units | |||
Unvested (in shares) | 61 | ||
Granted (in shares) | 80 | ||
Vested (in shares) | (61) | ||
Unvested (in shares) | 80 | 61 | |
Weighted Average Grant Date Fair Value per Unit | |||
Granted (in dollars per share) | $ 12.55 | $ 13.08 | |
Vested (in dollars per share) | 13.08 | ||
Unvested (in dollars per share) | $ 12.55 | $ 13.08 |
Equity-Based Compensation - Tot
Equity-Based Compensation - Total Equity-Based Compensation Recognized in the Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Equity-based compensation expense | $ 29,524 | $ 35,733 | $ 84,790 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Equity-based compensation expense | 1,491 | 1,468 | 1,289 |
Selling, general and administrative expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Equity-based compensation expense | $ 28,033 | $ 34,265 | $ 83,501 |
Equity-Based Compensation Equ_2
Equity-Based Compensation Equity-Based Compensation - Income Tax Benefit (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Tax benefit from compensation expense | $ 1.9 | $ 1.5 | $ 0.4 |
Non-controlling Interest - Narr
Non-controlling Interest - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Nov. 30, 2019 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2018 | |
Noncontrolling Interest [Line Items] | ||||||
Issuance of common stock (in shares) | 572,432 | |||||
Authorized repurchases of outstanding common units | $ 150,000,000 | |||||
Increase in authorized amount under stock repurchase program | $ 5,000,000 | |||||
Repurchase of common units (in shares) | 6,400 | 6,100 | ||||
Payments for repurchase of common units | $ 91,046,000 | $ 60,644,000 | $ 0 | |||
Cash distributions (in dollars per share) | $ 0.118 | $ 0.059 | ||||
Switch, Ltd. | ||||||
Noncontrolling Interest [Line Items] | ||||||
Distributions | $ 20,100,000 | $ 11,600,000 | 185,400,000 | |||
Distributions to members in accordance with percentage interests | 112,000,000 | |||||
Distributions to members upon the accelerated vesting of Incentive Units in connection with the closing of the IPO | 8,200,000 | |||||
Return to Capital Distribution | Switch, Ltd. | ||||||
Noncontrolling Interest [Line Items] | ||||||
Distributions to members with unreturned capital contributions | $ 73,400,000 | |||||
Class A | ||||||
Noncontrolling Interest [Line Items] | ||||||
Issuance of common stock (in shares) | 34,000 | 19,100 | ||||
Class A | Common Stock | ||||||
Noncontrolling Interest [Line Items] | ||||||
Issuance of common stock (in shares) | 35,938 | 484 | 131 | |||
Entity in which a Board Member has a Beneficial Ownership Interest | ||||||
Noncontrolling Interest [Line Items] | ||||||
Payments for repurchase of common units | $ 12,800,000 | |||||
Founder Members | ||||||
Noncontrolling Interest [Line Items] | ||||||
Payments for repurchase of common units | $ 2,700,000 |
Non-controlling Interest - Owne
Non-controlling Interest - Ownership of Common Units (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
RSAs | Director Compensation Program | |||
Noncontrolling Interest [Line Items] | |||
Unvested awards (in shares) | 80,000 | 61,000 | |
Common Units | |||
Noncontrolling Interest [Line Items] | |||
Unvested awards (in shares) | 3,188,000 | 3,986,000 | |
Switch, Ltd. | |||
Noncontrolling Interest [Line Items] | |||
Switch, Inc.'s ownership of Common Units (in shares) | 89,688,000 | 55,157,000 | |
Ownership percentage | 37.80% | 22.70% | 10.00% |
Noncontrolling interest holders’ ownership of Common Units (in shares) | 147,859,000 | 187,440,000 | |
Noncontrolling interest holders’ ownership of Common Units | 62.20% | 77.30% | |
Total Common Units (in shares) | 237,547,000 | 242,597,000 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Calculation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator—basic: | |||||||||||
Net income (loss) attributable to Switch, Inc.—basic | $ 4,048 | $ 2,947 | $ 1,189 | $ 733 | $ 2,554 | $ 6 | $ 821 | $ 671 | $ 8,917 | $ 4,052 | $ (15,208) |
Numerator—diluted: | |||||||||||
Shares of Class B and Class C common stock | 17,339 | 0 | 0 | ||||||||
Net income (loss) attributable to Switch, Inc.—diluted | $ 26,256 | $ 4,052 | $ (15,208) | ||||||||
Denominator—basic: | |||||||||||
Weighted average shares outstanding—basic (in shares) | 76,501 | 45,682 | 8,074 | ||||||||
Basic net income per share (in dollars per share) | $ 0.05 | $ 0.04 | $ 0.02 | $ 0.01 | $ 0.05 | $ 0 | $ 0.02 | $ 0.02 | $ 0.12 | $ 0.09 | $ (1.88) |
Denominator—diluted: | |||||||||||
Weighted average shares outstanding—basic (in shares) | 76,501 | 45,682 | 8,074 | ||||||||
Weighted average effect of dilutive securities: | |||||||||||
Shares of Class B common stock and Class C common stock (in shares) | 168,252 | 0 | 0 | ||||||||
Weighted average shares/units outstanding-diluted (in shares) | 246,329 | 45,753 | 8,074 | ||||||||
Diluted net income per share (in dollars per share) | $ 0.04 | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.05 | $ 0 | $ 0.02 | $ 0.02 | $ 0.11 | $ 0.09 | $ (1.88) |
Stock options | |||||||||||
Weighted average effect of dilutive securities: | |||||||||||
Weighted average effect of dilutive securities (in shares) | 712 | 50 | 0 | ||||||||
RSUs | |||||||||||
Weighted average effect of dilutive securities: | |||||||||||
Weighted average effect of dilutive securities (in shares) | 805 | 6 | 0 | ||||||||
DEUs | |||||||||||
Weighted average effect of dilutive securities: | |||||||||||
Weighted average effect of dilutive securities (in shares) | 24 | 8 | 0 | ||||||||
RSAs | |||||||||||
Weighted average effect of dilutive securities: | |||||||||||
Weighted average effect of dilutive securities (in shares) | 35 | 7 | 0 |
Net Income (Loss) Per Share - P
Net Income (Loss) Per Share - Potentially Dilutive Securities Excluded from the Computation of Diluted Net Income Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted net income per unit (in shares) | 5,040 | 7,352 | 5,725 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted net income per unit (in shares) | 0 | 2,228 | 31 |
Shares of Class B and Class C common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of diluted net income per unit (in shares) | 0 | 191,426 | 216,569 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) - segment | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Major Customer [Line Items] | |||
Number of operating segments | 1 | 1 | 1 |
Outside of the United States | Revenue | Geographic Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 2.00% | 2.00% | 2.00% |
Segment Reporting - Composition
Segment Reporting - Composition of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 120,545 | $ 122,353 | $ 111,970 | $ 107,442 | $ 103,214 | $ 102,768 | $ 102,161 | $ 97,717 | $ 462,310 | $ 405,860 | $ 378,275 |
Colocation | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 370,682 | 324,209 | 304,720 | ||||||||
Connectivity | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 85,009 | 74,006 | 67,690 | ||||||||
Other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 6,619 | $ 7,645 | $ 5,865 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Oct. 10, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Revenue | $ 120,545 | $ 122,353 | $ 111,970 | $ 107,442 | $ 103,214 | $ 102,768 | $ 102,161 | $ 97,717 | $ 462,310 | $ 405,860 | $ 378,275 | ||
Gross profit | 57,012 | 58,849 | 53,853 | 49,917 | 48,001 | 43,618 | 46,967 | 42,861 | 219,631 | 181,447 | 180,045 | ||
Net income (loss) | 12,944 | 10,080 | 4,672 | 3,846 | 11,166 | 4,663 | 9,539 | 3,950 | $ 8,733 | $ (17,313) | 31,542 | 29,318 | (8,580) |
Net income (loss) attributable to Switch, Inc.—basic | $ 4,048 | $ 2,947 | $ 1,189 | $ 733 | $ 2,554 | $ 6 | $ 821 | $ 671 | $ 8,917 | $ 4,052 | $ (15,208) | ||
Basic net income per share (in dollars per share) | $ 0.05 | $ 0.04 | $ 0.02 | $ 0.01 | $ 0.05 | $ 0 | $ 0.02 | $ 0.02 | $ 0.12 | $ 0.09 | $ (1.88) | ||
Diluted net income per share (in dollars per share) | $ 0.04 | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.05 | $ 0 | $ 0.02 | $ 0.02 | $ 0.11 | $ 0.09 | $ (1.88) |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Feb. 29, 2020USD ($)$ / shares | Jan. 31, 2020USD ($)MWhshares | Nov. 30, 2019USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017$ / shares | |
Subsequent Event [Line Items] | |||||||
Issuance of common stock (in shares) | shares | 572,432 | ||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.1176 | $ 0.0588 | $ 0.0147 | ||||
Dividends declared | $ 503,000 | $ 9,414,000 | $ 2,961,000 | ||||
Increase in authorized amount under stock repurchase program | $ 5,000,000 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from borrowings under credit facility | $ 20,000,000 | ||||||
Dividends declared | $ 2,800,000 | ||||||
Increase in authorized amount under stock repurchase program | $ 20,000,000 | ||||||
Switch, Ltd. | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Cash distributions to common unit holders (in dollars per share) | $ / shares | $ 0.0294 | ||||||
Cash distributions declared | $ 7,100,000 | ||||||
Class A | |||||||
Subsequent Event [Line Items] | |||||||
Issuance of common stock (in shares) | shares | 34,000 | 19,100 | |||||
Class A | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Issuance of common stock (in shares) | shares | 4,600 | ||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.0294 | ||||||
Power Purchase and Sale Agreement - January 1, 2020 | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Purchase commitment | $ 20,000,000 | ||||||
Five-Month Power Purchase and Sale Agreement - January 1, 2020 | Energy | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Quantity required under purchase commitment (in megawatts per hour) | MWh | 60 | ||||||
Term of purchase commitment | 1 year |
Uncategorized Items - swch-2019
Label | Element | Value |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | $ 75,110,000 |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 8,565,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | us-gaap_OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationGainLossArisingDuringPeriodNetOfTax | 786,000 |
Stock Issued During Period, Value, Stock Options Exercised | us-gaap_StockIssuedDuringPeriodValueStockOptionsExercised | 161,000 |
Net Settlement, Issuance of Membership Units | swch_NetSettlementIssuanceofMembershipUnits | 174,235,000 |
Cash and Cash Equivalents, at Carrying Value | us-gaap_CashAndCashEquivalentsAtCarryingValue | 81,560,000 |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | 11,203,000 |
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 1,115,000 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Effect of Reorganization | swch_StockholdersEquityEffectofReorganization | (163,894,000) |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 442,000 |
Initial Public Offering, Allocation of Equity To Noncontrolling Interest | swch_InitialPublicOfferingAllocationofEquityToNoncontrollingInterest | (629,507,000) |
Member Units [Member] | ||
Stockholders' Equity, Effect of Reorganization | swch_StockholdersEquityEffectofReorganization | 163,894,000 |
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 75,110,000 |
Stock Issued During Period, Value, Stock Options Exercised | us-gaap_StockIssuedDuringPeriodValueStockOptionsExercised | 161,000 |
Net Settlement, Issuance of Membership Units | swch_NetSettlementIssuanceofMembershipUnits | 174,235,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (17,313,000) |
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 1,115,000 |
AOCI Attributable to Parent [Member] | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | us-gaap_OtherComprehensiveIncomeForeignCurrencyTransactionAndTranslationGainLossArisingDuringPeriodNetOfTax | 786,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax | 18,000 |
Initial Public Offering, Allocation of Equity To Noncontrolling Interest | swch_InitialPublicOfferingAllocationofEquityToNoncontrollingInterest | (80,000) |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 2,105,000 |
Noncontrolling Interest [Member] | ||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 8,123,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | 6,628,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax | 104,000 |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | 11,203,000 |
Initial Public Offering, Allocation of Equity To Noncontrolling Interest | swch_InitialPublicOfferingAllocationofEquityToNoncontrollingInterest | $ 629,587,000 |
Common Class A [Member] | Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 572,396,000 |
Common Class A [Member] | Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 36,000 |
Common Class B [Member] | Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | (174,000) |
Common Class B [Member] | Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 174,000 |
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 173,624,000 |
Common Class C [Member] | Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ (43,000) |
Common Class C [Member] | Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 43,000 |
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 42,945,000 |