Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 29, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | ContextLogic Inc. | ||
Entity Central Index Key | 0001822250 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 174 | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity File Number | 001-39775 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 27-2930953 | ||
Entity Address, Address Line One | One Sansome Street 33rd Floor | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94104 | ||
City Area Code | 415 | ||
Local Phone Number | 432-7323 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Firm ID | 238 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | San Francisco, California | ||
Documents Incorporated by Reference | Portions of the information called for by Part III of this Annual Report on Form 10-K is hereby incorporated by reference from the definitive proxy statement for the registrant’s 2024 annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2023. | ||
Document Financial Statement Error Correction [Flag] | false | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 24,397,977 | ||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value | ||
Trading Symbol | WISH | ||
Security Exchange Name | NASDAQ | ||
Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 | ||
Preferred Stock Purchase Rights | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Preferred Stock Purchase Rights | ||
No Trading Symbol Flag | true | ||
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 238 | $ 506 |
Marketable securities | 144 | 213 |
Funds receivable | 7 | 14 |
Prepaid expenses and other current assets | 21 | 44 |
Total current assets | 410 | 777 |
Property and equipment, net | 4 | 9 |
Right-of-use assets | 5 | 9 |
Other assets | 4 | 4 |
Total assets | 423 | 799 |
Current liabilities: | ||
Accounts payable | 30 | 53 |
Merchants payable | 74 | 120 |
Refunds liability | 2 | 6 |
Accrued liabilities | 90 | 130 |
Total current liabilities | 196 | 309 |
Lease liabilities, non-current | 6 | 13 |
Other liabilities, non-current | 4 | 0 |
Total liabilities | 206 | 322 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value: 100,000 shares authorized as of December 31, 2023 and December 31, 2022; No shares issued and outstanding as of December 31, 2023 and December 31, 2022 | ||
Common stock, $0.0001 par value: 3,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 24,229 and 23,164 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively | ||
Additional paid-in capital | 3,470 | 3,411 |
Accumulated other comprehensive loss | (7) | (5) |
Accumulated deficit | (3,246) | (2,929) |
Total stockholders’ equity | 217 | 477 |
Total liabilities and stockholders’ equity | $ 423 | $ 799 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued | 24,229,000 | 23,164,000 |
Common stock, shares outstanding | 24,229,000 | 23,164,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 287 | $ 571 |
Cost of revenue | 228 | 405 |
Gross profit | 59 | 166 |
Operating expenses: | ||
Sales and marketing | 143 | 254 |
Product development | 152 | 194 |
General and administrative | 92 | 116 |
Total operating expenses | 387 | 564 |
Loss from operations | (328) | (398) |
Other income, net: | ||
Interest and other income, net | 16 | 15 |
Loss before provision for income taxes | (312) | (383) |
Provision for income taxes | 5 | 1 |
Net loss | $ (317) | $ (384) |
Net loss per share, basic | $ (13.36) | $ (17.13) |
Net loss per share, diluted | $ (13.36) | $ (17.13) |
Weighted-average shares used in computing net loss per share, basic | 23,732 | 22,415 |
Weighted-average shares used in computing net loss per share, diluted | 23,732 | 22,415 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss) | $ (317) | $ (384) |
Other comprehensive (loss) income: | ||
Unrealized holding losses on derivatives and marketable securities, net of tax | (1) | |
Foreign currency translation adjustment | (2) | (7) |
Other comprehensive loss | (2) | (8) |
Comprehensive loss | $ (319) | $ (392) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit |
Beginning balance at Dec. 31, 2021 | $ 818 | $ 3,360 | $ 3 | $ (2,545) | |
Beginning balance, Shares at Dec. 31, 2021 | 21,949 | ||||
Issuance of common stock upon exercise of options, Shares | 1,489 | ||||
Issuance of common stock upon settlement of restricted stock units, Shares | 951 | ||||
Shares withheld related to net share settlement | (22) | (22) | |||
Shares withheld related to net share settlement, Shares | (1,265) | ||||
Issuance of common stock through ESPP | 1 | 1 | |||
Issuance of common stock through ESPP, Shares | 40 | ||||
Stock-based compensation | 72 | 72 | |||
Other comprehensive loss, net | (8) | (8) | |||
Net Income (Loss) | (384) | (384) | |||
Ending balance at Dec. 31, 2022 | $ 477 | 3,411 | (5) | (2,929) | |
Ending balance, Shares at Dec. 31, 2022 | 23,164 | 23,164 | |||
Fractional shares issued due to reverse stock split, Shares | 201 | ||||
Issuance of common stock upon settlement of restricted stock units, Shares | 1,323 | ||||
Shares withheld related to net share settlement | $ (5) | (5) | |||
Shares withheld related to net share settlement, Shares | (501) | ||||
Issuance of common stock through ESPP, Shares | 42 | ||||
Stock-based compensation | 64 | 64 | |||
Other comprehensive loss, net | (2) | (2) | |||
Net Income (Loss) | (317) | (317) | |||
Ending balance at Dec. 31, 2023 | $ 217 | $ 3,470 | $ (7) | $ (3,246) | |
Ending balance, Shares at Dec. 31, 2023 | 24,229 | 24,229 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (317) | $ (384) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Noncash inventory write downs | 3 | |
Depreciation and amortization | 4 | 6 |
Noncash lease expense | 3 | 6 |
Impairment of lease assets and property and equipment | 1 | 11 |
Stock-based compensation expense | 64 | 72 |
Net (accretion) amortization of discounts and premiums on marketable securities | (7) | |
Other | 1 | |
Changes in operating assets and liabilities: | ||
Funds receivable | 6 | 3 |
Prepaid expenses, other current and noncurrent assets | 16 | (1) |
Accounts payable | (22) | (13) |
Merchants payable | (46) | (65) |
Accrued and refund liabilities | (38) | (49) |
Lease liabilities | (7) | (8) |
Other current and noncurrent liabilities | 1 | (3) |
Net cash used in operating activities | (341) | (422) |
Cash flows from investing activities: | ||
Purchases of property and equipment and development of internal-use software | (3) | (2) |
Purchases of marketable securities | (313) | (368) |
Maturities of marketable securities | 390 | 321 |
Other | 2 | |
Net cash provided by (used in) investing activities | 74 | (47) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock through employee equity incentive plans | 1 | |
Payments of taxes related to RSU settlement and cashless exercise of stock options | (5) | (23) |
Net cash used in financing activities | (5) | (22) |
Foreign currency effects on cash, cash equivalents, and restricted cash | (3) | (14) |
Net decrease in cash, cash equivalents and restricted cash | (275) | (505) |
Cash, cash equivalents and restricted cash at beginning of period | 513 | 1,018 |
Cash, cash equivalents and restricted cash at end of period | 238 | 513 |
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets: | ||
Cash and cash equivalents | 238 | 506 |
Restricted cash included within prepaid expenses and other current assets in the consolidated balance sheets | 7 | |
Cash, cash equivalents and restricted cash at end of period | 238 | 513 |
Supplemental cash flow disclosures: | ||
Cash paid for income taxes, net of refunds | $ 1 | $ 6 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (317) | $ (384) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 shares | |
Rachel Wang | |
Trading Arrangements, by Individual | |
Name | Rachel Wang |
Title | Head of Data Science |
Adoption Date | September 12, 2023 |
Rule 10b5-1 Arrangement Terminated | true |
Termination Date | November 27, 2023 |
Aggregate Available | 5,043 |
Other Director or Officer | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of Business | 1. descriptio n OF BUSINESS ContextLogic Inc. (“Wish” or the “Company”) is a mobile ecommerce company that provides a shopping experience that is mobile-first and discovery-based, which connects merchants’ products to users based on user preferences. The Company generates revenue from marketplace and logistics services provided to merchants. The Company was incorporated in the state of Delaware in June 2010 and is headquartered in San Francisco, California, with operations domestically and internationally. Reverse Stock Split On April 10, 2023, the Company filed a certificate of amendment (the “Reverse Stock Split Amendment”) to the Company’s Restated Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-30 Reverse Stock Split of the Company's Class A common stock ("common stock"), which became effective on April 11, 2023. The Reverse Stock Split Amendment did not reduce the number of authorized shares of common stock, which remains at 3.0 billion, and did not change the par value of the common stock, which remains at $ 0.0001 per share. As a result of the Reverse Stock Split, every thirty shares of the common stock were combined into one issued and outstanding share of common stock and no fractional shares were issued. Instead, to any holder who would have otherwise been entitled to receive a fractional share of common stock, the Company issued such holder an additional fractional share, such that, when combined with the fractional share otherwise issuable as a result of the Reverse Stock Split, equaled a whole share of common stock. All share and per share information has been retroactively adjusted to reflect the reverse stock split for all periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern over the next twelve months from the date of filing this report. As of December 31, 2023, the Company had approximately $ 382 million in unrestricted cash, cash equivalents, and marketable securities. The Company believes that substantial doubt about its ability to continue as a going concern does not exist as its cash on hand will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of the filing of this Form 10-K. The Company has incurred significant accumulated losses of approximately $ 3.2 billion. The Company expects to continue to incur operating losses for the foreseeable future. To the extent that the Company's current resources are insufficient to satisfy its cash requirements, the Company may need to seek additional equity or debt financing and there can be no assurance that the Company will be successful in its efforts. If the financing is not available, or if the terms of financing are less desirable than the Company expects, the Company may be forced to continue to scale back its operations, which could have an adverse impact on its business and financial prospects. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates form the basis for judgments the Company makes about the carrying values of its assets and liabilities that are not readily available from other sources. These estimates include, but are not limited to, fair value of financial instruments, useful lives and impairment of long-lived assets, fair value of derivative instruments, incremental borrowing rate applied to lease accounting, contingent liabilities, redemption probabilities associated with Wish Cash, allowances for refunds and chargebacks and uncertain tax positions. As a result, many of the Company’s estimates and assumptions required increased judgment and these estimates may change materially in future periods. Segments The Company manages its operations and allocates resources as a single operating segment. The Company’s chief operating decision-maker is its Chief Executive Officer (“CEO”) who makes operating decisions, assesses financial performance and allocates resources based on consolidated financial information. As such, the Company has determined that it operates in one reportable segment. Revenue Recognition The Company generates revenue from marketplace and logistics services provided to its customers. Revenue is recognized as the Company transfers control of promised goods or services to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company considers both the merchant and the user to be customers. The Company evaluates whether it is appropriate to recognize revenue on a gross or net basis based upon its evaluation of whether the Company obtains control of the specified goods or services by considering if it is primarily responsible for fulfillment of the promise, has inventory risk and has latitude in establishing pricing and selecting suppliers, among other factors. Based on these factors, marketplace revenue is generally recognized on a net basis and logistics revenue is generally recognized on a gross basis. Revenue excludes any amounts collected on behalf of third parties, including indirect taxes. The following table shows the disaggregated revenue for the applicable periods: Year Ended December 31, 2023 2022 (in millions) Core marketplace revenue $ 86 $ 220 ProductBoost revenue 24 46 Marketplace revenue 110 266 Logistics revenue 177 305 Revenue $ 287 $ 571 Refer to Note 11 – Geographic Information for the disaggregated revenue by geographical location. Marketplace Revenue The Company provides a mix of marketplace services to its customers. The Company provides merchants access to its marketplace where merchants display and sell their products to users. The Company also provides ProductBoost services to help merchants promote their products within the Company’s marketplace. Marketplace revenue includes commission fees collected in connection with user purchases of the merchants’ products. The commission fees vary depending on factors such as geography, product category, Wish Standards' tier, item value and dynamic pricing. The Company recognizes revenue when a user’s order is processed and the related order information has been made available to the merchant. Commission fees are recognized net of estimated refunds and chargebacks. Marketplace revenue also includes ProductBoost revenue generated by increasing exposure for a merchant’s relevant products within the Company's marketplace. The Company recognizes ProductBoost revenue based on the number of impressions delivered, or clicks by users. Logistics Revenue The Company’s logistics offering for merchants is designed for direct end-to-end single order shipment from a merchant’s location to the user. Logistics services include transportation and delivery of the merchant’s products to the user. Merchants are required to prepay for logistics services on a per order basis. The Company recognizes revenue over time as the merchant simultaneously receives and consumes the logistics services benefit as the logistics services are performed. The Company uses an output method of progress based on days in transit as it best depicts the Company’s progress toward complete satisfaction of the performance obligation. Deferred Revenue Deferred revenue consists of amounts received primarily related to unsatisfied performance obligations of logistics services and marketplace services for shipments in-transit at the end of the period where the Company is the principal. The deferred revenue balances as of December 31, 2023 and 2022 are disclosed in Note 4 – Balance Sheet Components. Due to the short-term duration of contracts, all of the performance obligations will be satisfied in the following reporting period. Refunds and Chargebacks Refunds and chargebacks are associated with marketplace revenue. Returns are not material to the Company’s business. Estimated refunds and chargebacks are recognized on the consolidated balance sheets as refunds liability. The merchant’s share of the refunds is recognized as a reduction to the amount due to merchants. The revenue recognized on transactions subject to refunds and chargebacks is reversed. The Company estimates future refunds and chargebacks using a model that incorporates historical experience, considering recent business trends, and market activity. Incentive Discount Offers The Company provides incentive discount offers to its users to encourage purchases of products through its marketplace. Such offers include current discount offers of a certain percentage off current purchases and inducement offers, such as set percentage offers off future purchases subject to a minimum current purchase. The Company generally records the related discounts taken as a reduction of revenue when the offer is redeemed. The Company also offers free products to encourage users to make purchases on its marketplace. The resulting discount is recognized as a reduction of revenue when the offer for free product is redeemed. Wish Cash Liability The Company issues Wish Cash to end-users who opt to receive it for their refundable transactions. The Company also offers Wish Cash as part of its various referral and incentive programs. The Company accrues a liability for issued Wish Cash which is reduced when Wish Cash is redeemed by its users. Based on historical experience, the Company analyzes the Wish Cash liability considering usage patterns to determine the probability of redemption. While the Company will continue to honor all Wish Cash presented for payment, management may determine the likelihood of redemption to be remote for Wish Cash balances due to, among other things, long periods of inactivity. In these circumstances, to the extent management determines there is no requirement for remitting Wish Cash balances to government agencies under unclaimed property laws, the portion of Wish Cash balances not expected to be redeemed are recognized in Core Marketplace revenue. Refer to Note 4 – Balance Sheet Components for more information on Wish Cash liability breakage. Cost of Revenue Cost of revenue includes colocation and data center charges, interchange and other fees for payment processing services, fraud and chargeback prevention service charges, costs of refunds and chargebacks made to users that the Company is not able to collect from merchants, depreciation and amortization of property and equipment, shipping charges, tracking costs, warehouse fees, and employee-related costs, including salaries, benefits, and stock-based compensation expense, for the Company’s infrastructure, merchant support and logistics personnel. Cost of revenue also includes an allocation of general IT and facilities overhead expenses. Advertising Expense Advertising expenses are included in sales and marketing expenses within the consolidated statements of operations and are expensed as incurred. Advertising expenses were $ 104 million and $ 195 million for the years ended December 31, 2023 and 2022, respectively. Software Development Costs The Company capitalizes costs to develop its mobile application and website when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed, and the software will be used as intended. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation operational stage, including maintenance, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional functionality are capitalized and expensed over the estimated useful life of the upgrades on a per project basis. Due to the iterative process by which the Company performs upgrades and the relatively short duration of its development projects, development costs meeting capitalization criteria generally are not material. If internal-use software development costs are material, they are capitalized and included in property and equipment, net within the consolidated balance sheets. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2023 and 2022, cash and cash equivalents consisted of cash deposited with banks and money market funds for which their cost approximates their fair value. The Company held 28 % and 72 % of its cash and cash equivalents in the United States as of December 31, 2023 and 2022, respectively. Restricted cash as of December 31, 2022 represents amounts held in collateral and cash accounts in a foundation entity dedicated to safeguarding funds of payment service users consisting of European Economic Area merchants, ensuring the funds remain separate from the Company’s own funds. These funds are included within prepaid expenses and other current assets in the consolidated balance sheets. As of December 31, 2023, the balance of restricted cash was zero . Marketable Securities Marketable securities consist of short-term debt securities classified as available-for-sale and have original maturities greater than 90 days. Marketable securities are carried at fair value based upon quoted market prices or pricing models for similar securities. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are recognized within other comprehensive loss. Realized gains or losses on the sale of all such securities are reported in interest and other income, net, and computed using the specific identification method. For declines in fair market value below the cost of an individual marketable security, the Company assesses whether the decline in value is other than temporary based on the length of time the fair market value has been below cost, the severity of the decline and the Company’s intent and ability to hold or sell the investment. If an investment is impaired, the Company writes it down through earnings to its recoverable value and establishes that as a new cost basis for the investment. Funds Receivable The Company uses several third-party Payment Service Providers (“PSPs”) to process user transactions on its marketplace. Transactions on the Company’s marketplace are mainly credit and debit card-based transactions that convert to cash on a regular basis and are net settled against refunds and chargebacks, with little default risk. Funds receivable represents the amounts expected to be received from PSPs for purchases on the Company’s marketplace and is recognized net of processing fees. Concentrations of Risk Credit Risk — Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, funds receivable and marketable securities. The Company’s cash and cash equivalents are held on deposit with creditworthy institutions. Although the Company’s deposits exceed federally insured limits, the Company has not experienced any losses in such accounts. The Company invests its excess cash in money market accounts, U.S. Treasury notes, U.S. Treasury bills, commercial paper, corporate bonds, and non-U.S. government securities. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and marketable securities for the amounts reflected on the consolidated balance sheets. The Company’s investment policy limits investments to certain types of debt securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company maintains certain bank accounts in China. The Company manages the counterparty risk associated with these funds through diversification with major financial institutions and monitors the concentration of this credit risk on a monthly basis. The total cash balance in these accounts represented approximately 49 % and 24 % of the Company’s total cash and cash equivalents as of December 31, 2023 and 2022, respectively. The Company's derivative financial instruments expose it to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. The Company seeks to mitigate such risk by limiting its counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on a monthly basis. The Company is not required to pledge, nor is it entitled to receive, collateral related to its foreign exchange derivative transactions. The Company is exposed to credit risk in the event of a default by its PSPs. The Company does not generate revenue from PSPs. Significant changes in the Company’s relationship with its PSPs could adversely affect users’ ability to process transactions on the Company’s marketplaces, thereby impacting the Company’s operating results. The following PSPs each represented 10% or more of the Company’s funds receivable balance: December 31, 2023 2022 PSP 1 28 % 56 % PSP 2 57 % 32 % Services Risk — The Company serves all of its users using third-party data center and hosting providers. The Company has disaster recovery protocols at the third-party service providers. Even with these procedures for disaster recovery in place, access to the Company’s service could be significantly interrupted, resulting in an adverse effect on its operating results and financial position. No significant interruptions of service were known to have occurred during the years ended December 31, 2023 and 2022. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Depreciation and amortization are computed using the straight-line method over the estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. The estimated useful lives of the Company’s property and equipment are generally as follows: Computers, equipment, software 3 years Furniture and fixtures, servers, networking equipment 5 years Leasehold improvements Shorter of the estimated useful life or remaining Impairment of Long-Lived Assets The Company reviews long-lived assets, including intangible and lease assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured first by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, an impairment loss would be recognized based on the excess of the carrying amount of the asset above the fair value of the asset. Merchants Payable Merchants payable represents the amount of funds due to merchants and is recognized net of commission fees earned by the Company for marketplace transactions and other fees due from merchants. Merchants payable is adjusted for actual and estimated refunds the Company is expected to recover from merchants. The Company remits funds to merchants on a regular basis. Operating Lease Obligations The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use (“ROU”) assets represent the Company’s right to use the underlying asset for the term of the lease and the lease liabilities represent an obligation to make lease payments arising from the lease. Certain lease agreements contain tenant improvement allowances, rent holidays and rent escalation provisions, all of which are considered in determining the ROU assets and lease liabilities. The Company begins recognizing rent expense when the lessor makes the underlying asset available for use by the Company. Lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. Lease renewal periods are considered on a lease-by-lease basis in determining the lease term. The interest rate the Company uses to determine the present value of future lease payments is the Company’s incremental borrowing rate because the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is a hypothetical rate for collateralized borrowings in economic environments where the leased asset is located based on credit rating factors. The ROU asset is determined based on the lease liability initially established and adjusted for any prepaid lease payments and any lease incentives received. The lease term to calculate the ROU asset and related lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. Certain leases contain variable costs, such as common area maintenance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations and comprehensive loss. Operating leases are included in the ROU assets, accrued liabilities, and lease liabilities, non-current on the consolidated balance sheets. The Company has no finance leases. Loss Contingencies The Company is involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. The Company records a liability for these when it believes it is probable that it has incurred a loss, and the Company can reasonably estimate the loss. If the Company determines that a material loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the notes to the consolidated financial statements. The Company regularly evaluates current information to determine whether it should adjust a recognized liability or recognize a new one. Significant judgment is required to determine both the probability and the estimated amount. Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards, including restricted stock units (“RSUs”), performance-based units (“PSUs”), stock options, and purchase rights issued to employees under its employee stock purchase plan (“ESPP”), based on the estimated fair value of the awards on the grant date. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options and ESPP purchase rights and the Monte Carlo Simulation model to estimate the fair value of a PSU. The fair value of RSUs is based on the market closing price for its common stock as reported on the Nasdaq Global Select Market on the date of grant. The fair value of service-based RSUs and stock options is recognized as an expense on a straight-line basis over the requisite service period, which ranges from one to four years . For stock-based awards granted to employees with a performance condition, the Company recognizes stock-based compensation expense under the accelerated attribution method over the requisite service period. The fair value of the ESPP purchase rights is recognized as an expense on a straight-line basis over the offering period. The Company accounts for forfeitures as they occur. Foreign Currency The functional currency of the Company’s foreign subsidiaries is the local currency for operating entities with employees and is the U.S. dollar for holding companies and pass-through entities. The assets and liabilities of its non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for its foreign subsidiaries are translated using rates that approximate those in effect during the period. Foreign currency translation adjustments are reflected in stockholders’ equity as a component of other comprehensive (loss) income. Transactions on the Company’s marketplace occur in various foreign currencies that are processed by its PSPs. These transactions are collected on a regular basis and are converted to U.S. dollars or euros within the short period of time between the recognition of revenue and cash collection on a regular basis, which limits the Company’s exposure to foreign currency risk. Merchants payable are denominated primarily in Renminbi (“RMB”) and other local currencies. As of December 31, 2023 and 2022, the merchants payable amount denominated in RMB was 58 % and 70 %, respectively. Transaction gains and losses, including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in interest and other income, net on the consolidated statements of operations. The Company recognized a net loss resulting from foreign exchange transactions of $ 1 million for the year ended December 31, 2023 and a net gain of $ 10 million for the year ended December 31, 2022. The Company recognized a $ 2 million cumulative translation loss for the year ended December 31, 2023 and a $ 7 million cumulative translation loss in the year ended December 31, 2022. Derivative Instruments The Company conducts business in certain foreign currencies throughout its worldwide operations, and various entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency. As a result, the Company is exposed to foreign exchange gains or losses which impact the Company’s operating results. As part of the Company’s foreign currency risk mitigation strategy, starting in 2020, the Company has entered into foreign exchange forward contracts with up to twelve months in duration. In accordance with the accounting standards for derivatives and hedging activities, all derivative instruments are recognized at fair value on the Company’s consolidated balance sheets and classified as either derivative assets or derivative liabilities. Derivatives in a gain position are reported as derivative assets, while derivatives in a loss position are reported as derivative liabilities. The Company’s derivatives transactions are not collateralized and do not include collateralization agreements with counterparties. Cash Flow Hedges The Company’s largest cash flow exposure is in RMB for payments made to merchants in China that use the Wish platform. The Company hedges these cash flow exposures to reduce the risk that its earnings and cash flows will be adversely affected by changes in exchange rates. The Company recognizes changes in fair value of these cash flow hedges of foreign currency denominated merchants payable in accumulated other comprehensive income in its consolidated balance sheets, until the Company settles its forecasted foreign currency denominated merchants payable. When the forecasted transaction affects earnings, the Company reclassifies the related gain or loss on the cash flow hedge to core marketplace revenue. All amounts in other comprehensive income at period end are expected to be reclassified to earnings within 12 months. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the Company reclassifies the gain or loss on the related cash flow hedge from accumulated other comprehensive income to core marketplace revenue. Non-Designated Hedges The Company’s derivatives not designated as hedging instruments consist of foreign currency forward contracts to reduce the impact of currency exchange rate movements on its monetary assets and liabilities. These foreign exchange contracts are carried at fair value with changes in fair value of these contracts recognized to other income (expense), net in the Company’ consolidated statements of operations. The Company does not use derivative financial instruments for speculative or trading purposes. Fair Value Measurement The Company applies fair value accounting for its financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Income Taxes The Company accounts for income taxes using the asset and liability method, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between consolidated financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of interest and other income, net as necessary. Comprehensive Loss Comprehensive loss is comprised of two components: net loss and other comprehensive loss. Other comprehensive loss consists of unrealized holding gains or losses related to derivative instruments, unrealized gains or losses on marketable securities, and foreign currency translation adjustments. Accounting Pronouncements The Company has reviewed recent accounting pronouncements and concluded as follows: In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires additional segment-related disclosures on an annual and interim basis, to enable investors in developing more informed and actionable analyses. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the effective tax rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. We are evaluating the impact this amended guidance may have on the footnotes to our consolidated statements. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurement | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurement | 3. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT The Company’s financial instruments consist of cash equivalents, marketable securities, funds receivable, derivative instruments, accounts payable, accrued liabilities and merchants payable. Cash equivalents’ carrying value approximates fair value at the balance sheet dates, due to the short period of time to maturity. Marketable securities and derivative instruments are recognized at fair value. Funds receivable, accounts payable, accrued liabilities and merchants payable carrying values approximate fair value due to the short time to the expected receipt or payment date. Assets and liabilities recognized at fair value on a recurring basis in the consolidated balance sheets consisting of cash equivalents, marketable securities and derivative instruments are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows: December 31, 2023 Total Level 1 Level 2 Level 3 (in millions) Financial assets: Cash equivalents: Money market funds $ — $ — $ — $ — Corporate bonds — — — — Total cash equivalents $ — $ — $ — $ — Marketable securities: U.S. Treasury bills $ 127 $ — $ 127 $ — Commercial paper — — — — Corporate bonds 17 — 17 — Non-U.S. government — — — — Total marketable securities $ 144 $ — $ 144 $ — Prepaid and other current assets: Derivative assets $ 1 $ — $ 1 $ — Total financial assets $ 145 $ — $ 145 $ — Financial liabilities: Accrued liabilities: Derivative liabilities $ 1 $ — $ 1 $ — Total financial liabilities $ 1 $ — $ 1 $ — December 31, 2022 Total Level 1 Level 2 Level 3 (in millions) Financial assets: Cash equivalents: Money market funds $ 50 $ 50 $ — $ — Corporate bonds 2 — 2 — Total cash equivalents $ 52 $ 50 $ 2 $ — Marketable securities: U.S. Treasury bills $ 173 $ — $ 173 $ — Commercial paper 7 — 7 — Corporate bonds 29 — 29 — Non-U.S. government 4 — 4 — Total marketable securities $ 213 $ — $ 213 $ — Prepaid and other current assets: Derivative assets $ 6 $ — $ 6 $ — Total financial assets $ 271 $ 50 $ 221 $ — Financial liabilities: Accrued liabilities: Derivative liabilities $ 2 $ — $ 2 $ — Total financial liabilities $ 2 $ — $ 2 $ — The Company classifies cash equivalents and marketable securities within Level 1 or Level 2 because the Company uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. The derivative asset and liability related to the Company’s foreign currency derivative contracts are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, including currency spot and forward rates. The following table summarizes the contractual maturities of the Company’s marketable securities: December 31, 2023 2022 Amortized Estimated Amortized Estimated (in millions) Due within one year $ 144 $ 144 $ 214 $ 213 Total marketable securities $ 144 $ 144 $ 214 $ 213 All of the Company’s available-for-sale marketable securities are subject to a periodic evaluation for a credit loss allowance and impairment review. The Company did not identify any of its available-for-sale marketable securities requiring an allowance for credit loss or as other-than-temporarily impaired in any of the periods presented. Additionally, the unrealized net gain and net loss on available-for-sale marketable securities as of December 31, 2023 and 2022 were immaterial. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 4. BALANCE SHEET COMPONENTS Accrued Liabilities Accrued liabilities consist of the following: December 31, 2023 2022 (in millions) Logistics costs (1) $ 25 $ 44 Deferred revenue and customer deposits (2) 12 18 Wish Cash liability (3) 11 14 Sales and indirect taxes (4) 12 15 Other 30 39 Total accrued liabilities $ 90 $ 130 (1) Logistics costs decreased by $ 19 million or 43 % primarily due to lower shipping volumes during 2023 compared to 2022. (2) Deferred revenue and customer deposits decreased by $ 6 million or 33 % primarily du e to lower logistics volumes during 2023 compared to 2022. (3) While the Company will continue to honor all Wish Cash presented for payment, it may determine the likelihood of redemption to be remote for certain Wish Cash liability balances due to, among other things, long periods of inactivity. In these circumstances, to the extent the Company determines there is no requirement for remitting Wish Cash balances to government agencies under unclaimed property laws, the portion of Wish Cash liability balances not expected to be redeemed are recognized in core marketplace revenue. Wish Cash liability breakage recognized in core marketplace revenue during the years ended December 31, 2023 and 2022 was $ 3 million and $ 4 million, respectively. (4) Sales and indirect taxes decreased by $ 3 million or 20 % primarily due to less taxes in connection with lower order volumes during 2023 compared to 2022. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 5. Derivative Financial Instruments Volume of Derivative Activity Total gross notional amounts for outstanding derivatives (recognized at fair value) as of the end of period consist of the following: December 31, December 31, (in millions) Cash flow hedges $ 29 $ 168 Non-designated hedges 44 11 Total $ 73 $ 179 Fair Value of Derivative Financial Instruments December 31, December 31, Assets (1) Liabilities (2) Assets (1) Liabilities (2) (in millions) Derivative designated as hedging instruments Cash flow hedges $ — $ — $ 2 $ — Derivative not designated as hedging instruments Foreign currency forward contracts $ 1 $ 1 $ 4 $ 2 Total derivatives $ 1 $ 1 $ 6 $ 2 (1) Derivative assets are included in prepaid and other current assets in the consolidated balance sheet. (2) Derivative liabilities are included in accrued liabilities in the consolidated balance sheet. Derivatives in Cash Flow Hedging Relationships The changes in accumulated other comprehensive income resulting from cash flow hedging were as follows: December 31, December 31, 2023 2022 (in millions) Balance at the beginning of the period $ 2 $ 2 Other comprehensive loss before reclassifications ( 4 ) ( 6 ) Amounts recognized in core marketplace revenue and reclassified out of accumulated other comprehensive income 3 6 Balance at the end of the period $ 1 $ 2 Derivatives Not Designated as Hedging Instruments The changes in fair value of the Company’s foreign exchange forward contracts not designated as hedging instruments were approximately a $ 3 million net loss and a $ 7 million net loss for the years ended December 31, 2023 and 2022, respectively, and were recognized in other income (expense), net in the consolidated statements of operations. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Operating Leases | 6. OPERATING LEASES The Company leases its facilities and data center colocations under operating leases with various expiration dates through 2027. The components of the Company’s lease costs were as follows: Year Ended 2023 2022 (in millions) Operating lease costs $ 4 $ 7 Short-term lease costs 3 2 Variable costs 1 1 Total $ 8 $ 10 As of December 31, 2023 and 2022, the Company’s consolidated balance sheet included ROU assets in the amount of $ 5 million and $ 9 million, respectively, and lease liabilities in the amount of $ 7 million and $ 7 million in accrued liabilities , respectively, and $ 6 million and $ 13 million in lease liabilities, non-current, respectively. In February 2022, the Company’s Board of Directors ("the Board") approved a restructuring plan, which included exiting various office leases. As a result, the Company ceased using certain office spaces. As the carrying value of the related right-of-use assets and leasehold improvements exceeded the estimated fair value, the Company recognized an immaterial impairment loss related to the impairment of operating ROU assets for the year ended December 31, 2023. See Note 12. Reductions in Workforce for more information about the Company’s restructuring plan. As of December 31, 2023 and 2022, the weighted-average remaining lease term was 2 and 3 years and the weighted-average discount rate used to determine the net present value of the lease liabilities was 6 % for both periods. Supplemental cash flow information for the Company’s operating leases were as follows: Year Ended 2023 2022 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 8 $ 9 Right-of-use assets obtained in exchange for new lease liabilities $ — $ 4 The maturities of the Company’s operating lease liabilities are as follows: December 31, 2023 Year ending December 31, (in millions) 2024 $ 8 2025 4 2026 1 2027 1 Total lease payments 14 Less: imputed interest ( 1 ) Present value of lease liabilities $ 13 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. COMMITMENTS AND CONTINGENCIES Revolving Credit Facility In November 2020, the Company entered into a five-year $ 280 million senior secured revolving credit facility (the “Revolving Credit Facility”). If the Company is able to secure additional lender commitments and satisfy certain other conditions, the aggregate facility commitments can be increased by up to $ 100 million through an accordion option. The Company also enters into letters of credit from time to time, which reduces its borrowing capacity under the Revolving Credit Facility. Interest on any borrowings under the Revolving Credit Facility accrues at either adjusted LIBOR plus 1.50 % or at an alternative base rate plus 0.50 %, at the Company’s election, and the Company is required to pay a commitment fee that accrues at 0.25 % per annum on the unused portion of the aggregate commitments under the Revolving Credit Facility. The Company is required to pay a fee that accrues at 1.50 % per annum on the average daily amount available to be drawn under any letters of credit outstanding under the Revolving Credit Facility. The Revolving Credit Facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict the Company’s ability (and the ability of certain of the Company’s subsidiaries) to incur indebtedness, grant liens, make certain fundamental changes and asset sales, make distributions to stockholders, make investments or engage in transactions with affiliates. It also contains a minimum liquidity financial covenant of $ 350 million, which includes unrestricted cash and any available borrowing capacity under the Revolving Credit Facility. The obligations under the Revolving Credit Facility are secured by liens on substantially all of the Company’s domestic assets and are guaranteed by any material domestic subsidiaries, subject to customary exceptions. A standby letter of credit in the amount of approximately $ 7 million has been issued under the Revolving Credit Facility in conjunction with the lease of the Company’s headquarters in San Francisco, California. As of December 31, 2023, the Company had no t made any borrowings under the Revolving Credit Facility and it was in compliance with the related financial covenants. Fees incurred under the Revolving Credit Facility were insignificant for the years ended December 31, 2023 and 2022. Purchase Obligations Effective September 1, 2022, the Company entered into an amendment to a colocation and cloud services arrangement committing the Company to make payments of $ 85 million for services over 3 years. As of December 31, 2023, the remaining commitment under this amended agreement was approximately $ 45 million and is payable within the next 1 year and 8 months. Legal Contingencies and Proceedings Beginning in May 2021, four putative class action lawsuits were filed in the U.S. District Court for the Northern District of California against the Company, its directors, certain of its officers and the underwriters named in its initial public offering (“IPO”) registration statement alleging violations of securities laws based on statements made in its registration statement on Form S-1 filed with the SEC in connection with its IPO and seeking monetary damages. One of these cases has since been dismissed by the plaintiff and the remaining three have been coordinated and consolidated. In May 2022, the Court appointed lead plaintiffs, who subsequently filed an amended consolidated class action complaint pursuant to Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act. In April 2023, the plaintiffs filed an amended complaint and assert only claims made under Sections 11 and 15 of the Securities Act. In December 2023, the Court granted Defendants’ motion to dismiss with leave to amend. The Company believes these lawsuits are without merit and intends to vigorously defend them. Based on the preliminary nature of the proceedings in these cases, the Company cannot estimate a range of potential losses at this point in time. In August 2021, a shareholder derivative action purportedly brought on behalf of the Company, Patel v. Szulczewski, was filed in the U.S. District Court for the Northern District of California alleging that the Company’s directors and officers made or caused the Company to make false and/or misleading statements about the Company’s business operations and financial prospects in various public filings. Plaintiff asserts claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, violations of Section 14(a) of the Exchange Act, and for contribution under Sections 10(b) and 21D of the Exchange Act and is seeking monetary damages. This matter is currently stayed. The Company believes this lawsuit is without merit and it intends to vigorously defend it. Based on the preliminary nature of the proceedings in these cases, the Company cannot estimate a range of potential losses at this point in time. In November 2021, France’s Directorate General for Competition, Consumer Affairs and Repression of Fraud (“DGCCRF”) issued an injunction delisting the Wish “App” from Google Play and the Apple App Store, and blocking Wish from appearing in Google, Bing and Qwant search results on the premise that unsafe products or products of poor quality are available for purchase on Wish. On March 10, 2023, the DGCCRF determined that the Company is in compliance with the injunction and applicable regulatory requirements, and lifted the injunction. As a result, the Company has been relisted and has returned to the application stores, such as Google Play and the Apple App Store, and search engines, such as Google, Bing and Qwant, in France. Although the underlying case reviewing the legal question of whether the agency has the power to delist any company remains pending, the Company no longer believes there is a reasonable possibility of a material loss. As of December 31, 2023, in the opinion of management, there were no other legal contingency matters that arose in the ordinary course of business, either individually or in aggregate, that would have a material adverse effect on the financial position, results of operations, or cash flows of the Company. Given the unpredictable nature of legal proceedings, the Company bases its estimate on the information available at the time of the assessment. As additional information becomes available, the Company will reassess the potential liability and may revise the estimate. |
Common Stock and Stock-Based Co
Common Stock and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Common Stock and Stock-Based Compensation | 8. COMMON STOCK and STOCK-based compensation Common Stock and Elimination of Dual-Class Structure Prior to August 9, 2022, the Company had two classes of authorized common stock, Class A common stock and Class B common stock. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders. Holders of Class B common stock were entitled to 20 votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock were identical. Shares of Class B common stock were voluntarily convertible into shares of Class A common stock at the option of the holder and were automatically converted into shares of Class A common stock upon a sale or transfer, subject to certain exemptions. On August 4, 2022, Piotr Szulczewski provided notice of his intention to resign as a member of the Company's Board, effective August 9, 2022. In tandem with his resignation notice, Mr. Szulczewski submitted a conversion notice to convert (the “Conversion”) all shares of Class B common stock of the Company he held into the same number of shares of Class A common stock of the Company, also effective August 9, 2022. In accordance with the Company’s Amended and Restated Certificate of Incorporation, as the remaining outstanding shares of Class B common stock represented less than five percent ( 5 %) of the aggregate number of outstanding shares of Class A common stock and Class B common stock outstanding after the Conversion, all remaining shares of Class B common stock were automatically converted into Class A common stock immediately following the Conversion on a one -to-one basis and no further Class B common stock will be issued. The Company filed a certificate with the Secretary of State of the State of Delaware effecting the retirement and cancellation of the shares of Class B Common Stock. Until the Class B conversion, Class B shares of common stock were issued in connection with the settlement or exercise of equity awards granted under the 2010 Equity Stock Plan (the “2010 Plan”) and Class A shares of common stock were issued in connection with the settlement or exercise of equity awards granted under the 2020 Equity Stock Plan (the “2020 Plan”) or shares purchased under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). Effective August 9, 2022, Class A shares of common stock are issued under all equity plans. Additionally, all shares issuable pursuant to outstanding awards under the Company’s 2010 Stock Plan will be issuable for Class A common stock. 2010 Equity Incentive Plan Under the 2010 Plan, the Company granted RSUs to employees, which generally expire 7 years from the date of grant and vest upon the achievement of both a service condition and a liquidity condition. The service condition for these awards is satisfied over four or five years . The liquidity condition was satisfied upon the occurrence of the Company’s IPO in December 2020. The 2010 Plan was terminated in December 2020 in connection with the Company’s IPO but continues to govern the terms of outstanding awards under the 2010 Plan. No further equity awards will be granted under the 2010 Plan. With the establishment of the 2020 Plan as further discussed below, upon the expiration, forfeiture or cancellation of any shares of Class A (Class B prior to the Conversion) common stock underlying outstanding stock-based awards granted under the 2010 Plan, an equal number of shares of Class A common stock will become available for grant under the 2020 Plan. 2020 Equity Incentive Plan On November 19, 2020 , the Company’s Board of Directors adopted and approved the 2020 Plan. The 2020 Plan provides for the award of options, stock appreciation rights, restricted shares, and RSUs. The number of shares reserved for issuance under the 2020 Plan will be increased automatically on the first day of each fiscal year, commencing in 2022 and ending in 2030, by a number equal to the lesser of: (a) 5 % of the shares of common stock outstanding on the last day of the prior fiscal year; or (b) the number of shares determined by the Board of Directors. As of December 31, 2023, 2 million shares under the 2020 Plan remained available for grant. 2020 Employee Stock Purchase Plan On November 19, 2020 , the Company’s Board of Directors adopted and approved the 2020 ESPP, which became effective on the IPO Date. The 2020 ESPP reserve for issuance will increase automatically on the first day of each fiscal year, commencing in 2022 and ending in 2040, by a number equal to the lesser of: (a) approximately 267 thousand shares of common stock; (b) 1 % of the shares of common stock outstanding on the last day of the prior fiscal year; or (c) the number of shares of common stock determined by the Company’s Board of Directors. As of December 31, 2023, 1 million shares under the 2020 ESPP remained available for issuance. The 2020 ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 15 % of eligible compensation, subject to caps of $ 25,000 in any calendar year and 166 shares. The 2020 ESPP provides for 24-month offering periods, generally beginning in November and May of each year, and each offering period consists of four six-month purchase periods. During the year ended December 31, 2023, approximately 42 thousand shares of common stock were purchased under the ESPP for an aggregate amount of $ 252 thousand. On each purchase date, participating employees will purchase Class A common stock at a price per share equal to 85 % of the lesser of the fair market value of the Company’s Class A common stock on (i) the first trading day of the applicable offering period and (2) the last trading day of each purchase period in the applicable offering period. If the stock price of the Company's Class A common stock on any purchase date in an offering period is lower than the stock price on the enrollment date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period (ESPP reset). During the year ended December 31, 2023, there was an ESPP reset at the end of both May and November purchase periods, resulting in an additional expense of approximately $ 2 million, which is being recognized on a straight-line basis through November 20, 2025 . 2022 Inducement Plan In January 2022, the Company’s Board adopted and approved the 2022 Inducement Plan (“2022 Plan"). The Company intends that the 2022 Plan be reserved for persons to whom the Company may issue securities without stockholder approval as an inducement of employment pursuant to Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market, LLC. The 2022 Plan provides for the award of options, stock appreciation rights, restricted shares, and RSUs of the Company’s Class A common stock to the Company’s employees. Stock-based awards under the 2022 Plan that expire or are forfeited, cancelled, or repurchased generally are returned to the pool of shares of Class A common stock available for issuance under the 2022 Plan. As of December 31, 2023, 350 thousand shares under the 2022 Plan remained available for grant. Equity Award Activity A summary of activity under the equity plans and related information is as follows: Options Outstanding RSUs Outstanding Number of Weighted- Weighted- Number of Weighted- (in thousands) (in thousands) Balances at December 31, 2022 67 $ 31.17 9.5 2,399 $ 83.88 Granted 299 $ 15.03 2,871 $ 13.56 Vested ( 1,323 ) $ 65.26 Forfeited or cancelled — ( 1,771 ) $ 49.88 Balances at December 31, 2023 366 $ 18.00 9.0 2,176 $ 30.05 The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $ 11.27 and $ 47.25 per share. Approximately 180 thousand options as of December 31, 2023 were vested. The vested options have a weighted average exercise price of $ 21.09 , a weighted-average remaining contractual term of 8.90 years, and an aggregate intrinsic value of zero. The aggregate intrinsic value of options exercised during the year ended December 31, 2022 was $ 24 million. There were no options exercised during the year ended December 31, 2023. The intrinsic value is the difference between the closing price of the Company’s common stock at the date of exercise and the exercise price for in-the-money options. The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2023, and 2022 was $ 13.56 and $ 48.97 per share, respectively. The total intrinsic value of RSUs which were vested and released during the years ended December 31, 2023 and 2022 was $ 13 million and $ 42 million, respectively. The aggregate intrinsic value of options and RSUs outstanding as of December 31, 2023 was zero and $ 13 million, respectively. The aggregate intrinsic value of options and RSUs outstanding as of December 31, 2022 was zero and $ 35 million, respectively. Performance Stock Units On January 31, 2022, Mr. Szulczewski resigned from his position as CEO of the Company. Due to his resignation prior to the second anniversary of the Company’s IPO, Mr. Szulczewski is no longer eligible to vest in his PSUs, and as such, the PSUs were canceled. Consequently, the Company reversed $ 21 million of previously recognized stock-based compensation expense related to these PSUs in the first quarter of 2022. In February 2022, Jacqueline Reses resigned from her position as Executive Chair. Upon her resignation, Ms. Reses entered into a consulting agreement with the Company and her PSU award was modified to eliminate the market condition, with only continued service until the expiration of the consulting agreement being the sole vesting condition. Consequently, the Company reversed $ 3 million of previously recognized stock-based compensation expense upon modification and recognized the modified fair value of approximately $ 2 million from the modification date to the expiration date of the consulting agreement, which was May 16, 2023. CEO transition In January 2022, the Company entered into an employment agreement with Vijay Talwar, as the Company’s new CEO, with employment commencing on February 1, 2022. As an inducement of employment, Mr. Talwar was granted, i) 154 thousand RSUs with an aggregate grant date fair value of $ 13 million and ii) options to purchase 216 thousand shares of the Company’s Class A common stock at an exercise price of $ 85.80 per share with an aggregate grant date fair value of $ 12 million. These RSUs and options were granted under the 2022 Plan and would have become vested and exercisable, respectively, in periodic installments over a 4 -year term, subject to the CEO’s continued employment with the Company. The option award had a term of 10 years. In September 2022, the Company’s Board terminated Mr. Talwar from his position as CEO of the Company. As set forth in his employment agreement with the Company, Mr. Talwar was entitled to certain benefits, which included, accelerated vesting of the unvested portion of his equity awards that would have vested within twelve months of his involuntary termination. Consequently, the Company recognized $ 6 million of stock-based compensation expense upon the acceleration of Mr. Talwar’s equity awards on his termination date. In September 2022, the Company entered into an employment agreement with Jun Yan, as the Company’s then interim CEO, with employment commencing September 27, 2022. As an inducement of employment, Mr. Yan was granted i) 65 thousand RSUs with an aggregate grant date fair value of $ 2 million and ii) options to purchase 65 thousand shares of the Company’s Class A common stock at an exercise price of $ 25.85 per share with an aggregate grant date fair value of $ 1 million. These RSUs and options were granted under the 2022 Plan and will become vested and exercisable, respectively, in periodic installments over an approximate 1 -year term, subject to the interim CEO’s continued employment with the Company. The option award has a term of 10 years. If Mr. Yan were to be terminated from his position as interim CEO within six months from his commencement of employment, 50 % of both his RSU and options would immediately vest. In February 2023, the Board appointed Jun Yan as the Company's CEO, who was then serving as the Company's interim CEO. According to the terms of his new employment agreement, Mr. Yan was granted (i) 167 thousand RSUs with an aggregate grant date fair value of $ 3 million and (ii) options to purchase 299 thousand shares of the Company's common stock at an exercise price $ 15.03 per share with an aggregate grant date fair value of $ 3 million. These RSUs and options will become vested and exercisable, respectively, in periodic installments over a 2 -year term, subject to the CEO's continued service with the Company. The option award has a term of 10 years. The vesting of Mr. Yan's equity awards granted under his previous employment agreement as interim CEO was accelerated upon Mr. Yan’s appointment to the Company’s CEO. As of December 31, 2023, those RSU and option awards are fully vested. Stock Option Valuation The fair value of options is estimated using the Black-Scholes option pricing model which takes into account inputs such as the exercise price, the value of the underlying shares as of the grant date, expected term, expected volatility, risk free interest rate, and dividend yield. The fair value of the options was determined using the methods and assumptions discussed below: • The expected term of the options was determined using the “simplified” method as prescribed in the SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. • The risk-free interest rate was based on the interest rate payable on the U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term. • The expected volatility was based on the historical volatility of the publicly traded common stock of peer group companies blended with the limited historical volatility of the Company’s own common stock weighted to reflect the short trading period of the Company’s stock since its IPO in December 2020. • The expected dividend yield was zero because the Company has not historically paid and does not expect to pay a dividend on its ordinary shares in the foreseeable future. A summary of the weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the options granted during the years ended December 31, 2023 and 2022 is as follows: Year Ended 2023 2022 Expected term (in years) 5.55 5.93 Risk free interest rate 4.15 % 2.28 % Volatility 91.51 % 75.53 % Dividend yield — — Stock-Based Compensation Expense Total stock-based compensation expense included in the consolidated statements of operations is as follows: Year Ended December 31, 2023 2022 (in millions) Cost of revenue $ 3 $ 7 Sales and marketing 4 6 Product development 36 50 General and administrative 21 9 Total stock-based compensation (1) $ 64 $ 72 (1) Total stock-based compensation expense for the year ended December 31, 2023 decreased by $ 8 million compared to the year ended December 31, 2022 primarily because stock-based compensation of outstanding equity awards during 2023 was based off a lower weighted average grant date fair value compared to that of outstanding equity awards from the 2022 and the impacts of the reductions in force during the first and third quarters of 2023, partially offset by the impacts of PSU reversals and equity modifications during the year ended December 31, 2022. The Company will recognize the remaining $ 2 million and $ 55 million of unrecognized stock-based compensation expense over a weighted-average period of approximately 1.1 years and 1.9 years related to options and RSUs, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. INCOME TAXES The components of loss before provision for income taxes are as follows: Year Ended December 31, 2023 2022 (in millions) Domestic $ 321 $ 388 Foreign ( 9 ) ( 5 ) Loss before provision for income taxes $ 312 $ 383 The provision for income taxes consisted of the following: Year Ended December 31, 2023 2022 (in millions) Current: Federal $ — $ — State — ( 1 ) Foreign 6 1 Total current 6 — Deferred: Federal — — State — — Foreign ( 1 ) 1 Total deferred ( 1 ) 1 Total provision for income taxes $ 5 $ 1 There has historically been no federal or state provision for income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets. For the years ended December 31, 2023 and 2022, the Company recognized $ 5 million and $ 1 million tax provision expense, respectively, related primarily to foreign income taxes. For the year ended December 31, 2023 there was $ 6 million of current foreign tax expense offset against $ 1 million of deferred foreign tax benefit. For the year ended December 31, 2022 there was $ 1 million of current foreign tax expense offset against $ 1 million current state tax benefit and $ 1 million of deferred foreign tax expense. The difference between income taxes computed at the statutory federal income tax rate and the provision for income taxes is attributable to the following: Year Ended December 31, 2023 2022 (in millions) Federal benefit at statutory rate $ ( 66 ) $ ( 80 ) State tax (benefit), net of federal benefit — ( 1 ) Stock-based compensation 14 16 Foreign rate differential 7 11 Other 1 ( 2 ) Change in valuation allowance 49 57 Total provision for income taxes $ 5 $ 1 The tax provision differs from the benefit that would result from applying statutory rates to losses before income taxes primarily due to the valuation allowance provided on net deferred tax assets. Deferred income taxes reflect the net tax effects of (a) temporary differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes and (b) net operating losses and tax credit carryforwards. The change in valuation allowance is related mainly to the increase in net operating loss carryforwards, partially offset by other changes in the deferred tax assets. Stock-based compensation increased the income tax provision by $ 14 million and $ 16 million in 2023 and 2022, respectively, due to the Company experiencing a tax shortfall. A tax shortfall occurs when the fair market value of stock on the vest date is lower than the stock price on the grant date, which causes book deductions to exceed deductions allowed for tax purposes. Deferred tax assets and liabilities are as follows: December 31, 2023 2022 (in millions) Deferred tax assets: Net operating loss carryforwards $ 609 $ 558 Capitalization of R&D expenses 47 30 Lease liabilities 3 4 Reserves and accruals not currently deductible 9 11 Stock-based compensation 2 5 Fixed assets including right of use assets 1 1 Total gross deferred tax assets 671 609 Less: valuation allowance ( 669 ) ( 607 ) Total deferred tax assets, net of valuation allowance 2 2 Deferred tax liabilities: Property and equipment, including right-of-use assets — — Total gross deferred tax liabilities — — Net deferred tax assets $ 2 $ 2 Beginning January 1, 2022, the United States no longer allows research and development (R&D) expenses to be deducted as current expenditures when calculating taxable income. This change is a result of the Tax Cuts and Job Act enacted in 2017. R&D expenses incurred are subject to capitalization with amortization being allowed based on the location of the incurred expense; domestic United States expenses are amortized over a 5 -year period and international expenses are amortized over a 15 -year period. The $ 47 million deferred tax asset recognized above is the net impact of capitalization and amortization expense. The deferred tax asset for reserves and accruals not currently deductible decreased by $ 2 million in 2023. This change was due in large part to certain criteria being met to allow the expense for tax purposes. Net operating losses increased by $ 51 million in 2023. The Company has not yet experienced any net operating losses expiring before use. The valuation allowance increased by $ 62 million in 2023. Most of the Company’s deferred tax assets are offset by valuation allowance as of December 31, 2023. The table below details the activity of the deferred tax asset valuation allowance: Balance at Additions Deductions Balance (in millions) Year ended December 31, 2023 Deferred tax assets valuation allowance $ 607 $ 62 $ — $ 669 Year ended December 31, 2022 Deferred tax assets valuation allowance $ 546 $ 61 $ — $ 607 Due to a history of losses, the Company believes it is not more likely than not that its domestic net deferred tax assets will be realized as of December 31, 2023 or 2022. Accordingly, the Company has established a full valuation allowance on its domestic net deferred tax assets. The Company’s valuation allowance increased $ 62 million and $ 61 million during the years ended December 31, 2023 and 2022, respectively. The Company intends to reinvest substantially all of its foreign subsidiary earnings indefinitely outside of the U.S. Due to the one-time transition tax and the imposition of the Global Intangible Low-Tax Income provisions, all previously unremitted earnings will no longer be subject to U.S. Federal income tax; however, there could be foreign withholding taxes upon distribution of such unremitted earnings. It is not practical to estimate this liability at this time. As of December 31, 2023, the Company had federal net operating loss carryforwards available to reduce future taxable income, if any, of $ 886 million that begin to expire in 2030 and continue to expire through 2037 and $ 1.9 billion that have an unlimited carryover period. As of December 31, 2023, the Company had state net operating loss carryforwards available to reduce future taxable income, if any, of $ 7.0 billion that begin to expire in 2026 and continue to expire through 2043 and $ 2.0 billion that have an unlimited carryover period. Utilization of net operating loss carryforwards may be subject to future annual limitations due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2023 2022 (in millions) Balance as of January 1 $ 9 $ 1 Additions for tax positions of current year 1 9 Additions for tax positions of prior years 2 — Decreases for tax positions of prior years ( 8 ) ( 1 ) Balance as of December 31 $ 4 $ 9 The $ 4 million of unrecognized tax benefit as of December 31, 2023 will impact the Company’s effective tax rate when it is subsequently recognized. The Company had unrecognized tax benefit as of December 31, 2022 of $ 9 million. Interest and penalties incurred during the year ended December 31, 2023 were insignificant. The Company classifies interest and penalties as part of operating expenses. No interest or penalties were incurred during the year ended December 31, 2022. The decrease from 2022 to 2023 is due to clarifying guidance issued by the Internal Revenue Service regarding certain costs that may require capitalization. The Company does not anticipate that the amount of unrecognized tax benefit will significantly change within the next twelve months. The Company files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is not currently under examination by income tax authorities in federal or other jurisdictions, with the exception of one state. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits. Certain tax years are subject to foreign income tax examinations by tax authorities until the statute of limitations expire. In recent years the United States has enacted new tax legislations (the American Rescue Act, CHIPS and Science Act, and the Inflation Reduction Act). Due to the Company’s net operating losses for both accounting and tax purposes, the new tax legislations do not have a material impact on the Company’s provision for income taxes. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 10. Net loss per share Prior to August 9, 2022, the Company computed net loss per share attributable to common stockholders using the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock were identical, except with respect to voting. As the liquidation and dividend rights were identical, the Company’s undistributed earnings or losses were allocated on a proportionate basis among the holders of both Class A and Class B common stock. As a result, the net loss per share attributed to common stockholders was, therefore, the same for both Class A and Class B common stock on an individual or combined basis. Effective August 9, 2022, all Class B common stock were converted to Class A common stock. Net loss per share for the years ended December 31, 2023 and 2022 were not affected by the conversion. The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Year Ended December 31, 2023 2022 ($ in millions, shares in thousands, except per share data) Numerator: Net loss $ ( 317 ) $ ( 384 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 23,732 22,415 Net loss per share attributable to common stockholders, basic and diluted $ ( 13.36 ) $ ( 17.13 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect: December 31, 2023 2022 (in thousands) Common stock options outstanding 366 67 Unvested restricted stock units outstanding 2,176 2,399 Employee stock purchase plan 57 109 Total 2,599 2,575 |
Geographical Information
Geographical Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Geographical Information | 11. GEOGRAPHICAL INFORMATION The Company believes it is relevant to disclose geographical revenue information on both a demand basis, determined by the ship-to address of the user, and on a supply basis, determined by the location of the merchants’ operations. Core marketplace revenue by geographic area based on the ship-to address of the user is as follows: Year Ended December 31, 2023 2022 ($ in millions) Europe $ 44 51 % $ 83 38 % North America (1) 30 35 % 105 48 % South America 4 5 % 7 3 % Other 8 9 % 25 11 % Core marketplace revenue (2) $ 86 100 % $ 220 100 % (1) United States accounted for $ 22 million and $ 83 million of core marketplace revenue for the years ended December 31, 2023 and 2022, respectively. (2) Core marketplace revenue included a net loss of $ 3 million for the year ended December 31, 2023 and a net loss of $ 6 million for the year ended December 31, 2022, from the Company’s cash flow hedging program. China accounted for substantially all of marketplace and logistics revenue in 2023 and 2022, respectively, based on the location of the merchants’ operations. Marketplace and logistics revenue from merchants based in the United States was immaterial in all years presented. The Company’s long-lived tangible assets, which consist of property and equipment, net, and operating lease right-of-use assets, net, is as follows: Year Ended December 31, 2023 2022 ($ in millions) United States $ 5 56 % $ 13 72 % China 4 44 % 4 22 % Other (1) — — 1 6 % Total property and equipment, net and right-of-use assets $ 9 100 % $ 18 100 % (1) Other long-lived tangible assets were located in Canada and the Netherlands. |
Reduction In Workforce
Reduction In Workforce | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | 12. ReDUCTIONS IN WORKFORCE In February 2022, the Company’s Board approved the February 2022 Restructuring Plan (“2022 Restructuring Plan”) to refocus the Company’s operations to support sustainable long-term growth, better align resources, and improve operational efficiencies. The 2022 Restructuring Plan included i) the reduction of the Company’s headcount by approximately 15 % (or approximately 190 positions), ii) the exit from various office leases, and iii) the reduction and realignment of vendor expenditures. In connection with the 2022 Restructuring Plan, the Company incurred charges of approximately $ 3 million in severance and other personnel reduction costs for terminated employees and $ 11 million in impairments of leased assets and property and equipment. All related severance payments were paid as of December 31, 2022. In January 2023 and August 2023, the Company announced plans to reduce its workforce by up to 150 and 255 employees, respectively, representing approximately 17 % and 34 %, respectively, of the Company’s then global workforce (“2023 RIFs”). In connection with the 2023 RIFs, the Company incurred charges of approximately $ 13 million in severance and other personnel reductions costs for terminated employees. The 2023 RIFs were intended to refocus the Company’s operations to support its ongoing business prioritization efforts, better align resources, and improve operational efficiencies. Substantially all related severance payments were paid as of December 31, 2023. The 2023 RIFs were intended to refocus the Company’s operations to support its ongoing business prioritization efforts, better align resources, and improve operational efficiencies. Total severance and other personnel reduction costs included in the consolidated statements of operations are as follows: Year Ended December 31, 2023 (in millions) Cost of revenue $ 1 Sales and marketing 2 Product development 8 General and administrative 2 Total severance and other personnel reduction costs $ 13 The following table is a summary of the changes in severance and other personnel reduction liabilities, included within accrued liabilities on the consolidated balance sheet as of December 31, 2023, in connection with each of the 2023 RIFs: January RIF August RIF (in millions) Balance at the beginning of the period $ — $ — Severance and other personnel reduction costs 3 10 Cash payments during the period ( 3 ) ( 10 ) Balance at the end of the period $ — $ — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events Asset Purchase Agreement On February 10, 2024, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Qoo10 Inc., a Delaware corporation (“Qoo10”), and, for certain specified purposes, Qoo10 Pte. Ltd., a Singapore private limited company, pursuant to which (i) the Company has agreed to sell substantially all of its assets to Qoo10, other than (A) the Company’s NOLs and certain other tax attributes, (B) the Company’s marketable securities held in a specified wealth management account and (C) the Company’s cash and cash equivalents held in that wealth management account, and (ii) Qoo10 has agreed to acquire those assets and assume substantially all of the Company’s liabilities as specified in the Asset Purchase Agreement (the “Asset Sale”). As consideration for the Asset Sale, Qoo10 has agreed to pay to the Company a purchase price equal to $ 173 million in cash, subject to certain cash adjustments as set forth in the Asset Purchase Agreement. The closing of the Asset Sale is subject to approval by holders of a majority of the outstanding shares of the Company’s Class A common stock entitled to vote thereon and other customary closing conditions. The Asset Sale is expected to close in the second quarter of 2024. Series A Junior Participating Preferred Stock and Tax Benefits Preservation Plan On February 10, 2024, the Company’s Board of Directors adopted a Tax Benefits Preservation Plan and declared a dividend of one right (a “Right”) for each outstanding share of the Company’s Class A common stock to stockholders of record at the close of business on February 22, 2024 (the “Record Date”). Each Right entitles its holder, subject to the terms of the Tax Benefits Preservation Plan, to purchase from the Company one one-thousandth of a share of Series A Preferred Stock of the Company at an exercise price of $ 20.00 per Right, subject to adjustment. The description and terms of the Rights are set forth in the Tax Benefits Preservation Plan. In connection with the adoption of the Tax Benefits Preservation Plan, on February 12, 2024, the Company filed with the Delaware Secretary of State, a Certificate of Designation designating 3,000,000 shares of Series A Junior Participating Preferred Stock, $ 0.0001 par value per share (“Series A Preferred Stock”). The Company designated the Series A Preferred Stock in connection with the Company’s Board of Director’s approval of a Tax Benefits Preservation Plan, as discussed below. The Company adopted the Tax Benefits Preservation Plan in order to protect against a possible limitation on the Company’s ability to use the Company’s NOLs and certain other tax attributes to reduce potential future U.S. federal income tax obligations. The NOLs and certain other tax attributes are valuable assets to the Company, which may inure to the benefit of the Company and its stockholders. However, if the Company experiences an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), its ability to fully utilize the NOLs and certain other tax attributes will be substantially limited and the timing of the usage of the NOLs and other tax attributes could be substantially delayed, which could significantly impair the value of those assets. Generally, an “ownership change” occurs if the percentage of the Company’s stock owned by one or more of its “5-percent shareholders” (as such term is defined in Section 382 of the Code) increases by more than 50 percentage points over the lowest percentage of stock owned by such stockholder or stockholders at any time over a three-year period. The Tax Benefits Preservation Plan is intended to prevent such an “ownership change” by deterring any person or group, together with its affiliates and associates, from acquiring beneficial ownership of 4.9 % or more of the Company’s securities. Subject to certain exceptions, the Rights become exercisable and trade separately from the Company’s Class A common stock only upon the "Distribution Time", which occurs upon the earlier of: (i) the close of business on the tenth day after the “Stock Acquisition Date” (which is (a) the first date of public announcement that any person or group has become an “Acquiring Person,” which is defined as a person or group that, together with its affiliates and associates, beneficially owns 4.9 % or more of the outstanding shares of the Company’s Class A common stock (with certain exceptions, including those described below) or (b) such other date, as determined by the Company’s Board of Directors, on which a person or group has become an Acquiring Person), or (ii) the close of business on the tenth business day (or such later date as may be determined by the Company’s Board of Directors prior to such time as any person or group becomes an Acquiring Person) after the commencement of a tender offer or exchange offer that, if consummated, would result in a person or group becoming an Acquiring Person. The Rights will expire on the earliest to occur of: (a) the close of business on February 10, 2027; (b) the time at which the Rights are redeemed or exchanged by the Company; (c) upon the closing of any merger or other acquisition transaction involving the Company pursuant to a merger or other acquisition agreement that has been approved by the Company’s Board of Directors before any person or group becomes an Acquiring Person or (d) the time at which the Company’s Board of Directors determines that the NOLs and certain other tax attributes are utilized in all material respects or that an ownership change under Section 382 of the Code would not adversely impact in any material respect the time period in which the Company could use the NOLs and other tax attributes or materially impair the amount of NOLs and other tax attributes that could be used by the Company in any particular time period, for applicable tax purposes. Other subsequent events have been evaluated through the date of filing and no other reportable items were identified. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern over the next twelve months from the date of filing this report. As of December 31, 2023, the Company had approximately $ 382 million in unrestricted cash, cash equivalents, and marketable securities. The Company believes that substantial doubt about its ability to continue as a going concern does not exist as its cash on hand will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of the filing of this Form 10-K. The Company has incurred significant accumulated losses of approximately $ 3.2 billion. The Company expects to continue to incur operating losses for the foreseeable future. To the extent that the Company's current resources are insufficient to satisfy its cash requirements, the Company may need to seek additional equity or debt financing and there can be no assurance that the Company will be successful in its efforts. If the financing is not available, or if the terms of financing are less desirable than the Company expects, the Company may be forced to continue to scale back its operations, which could have an adverse impact on its business and financial prospects. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates form the basis for judgments the Company makes about the carrying values of its assets and liabilities that are not readily available from other sources. These estimates include, but are not limited to, fair value of financial instruments, useful lives and impairment of long-lived assets, fair value of derivative instruments, incremental borrowing rate applied to lease accounting, contingent liabilities, redemption probabilities associated with Wish Cash, allowances for refunds and chargebacks and uncertain tax positions. As a result, many of the Company’s estimates and assumptions required increased judgment and these estimates may change materially in future periods. |
Segments | Segments The Company manages its operations and allocates resources as a single operating segment. The Company’s chief operating decision-maker is its Chief Executive Officer (“CEO”) who makes operating decisions, assesses financial performance and allocates resources based on consolidated financial information. As such, the Company has determined that it operates in one reportable segment. |
Revenue Recognition | Revenue Recognition The Company generates revenue from marketplace and logistics services provided to its customers. Revenue is recognized as the Company transfers control of promised goods or services to its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company considers both the merchant and the user to be customers. The Company evaluates whether it is appropriate to recognize revenue on a gross or net basis based upon its evaluation of whether the Company obtains control of the specified goods or services by considering if it is primarily responsible for fulfillment of the promise, has inventory risk and has latitude in establishing pricing and selecting suppliers, among other factors. Based on these factors, marketplace revenue is generally recognized on a net basis and logistics revenue is generally recognized on a gross basis. Revenue excludes any amounts collected on behalf of third parties, including indirect taxes. The following table shows the disaggregated revenue for the applicable periods: Year Ended December 31, 2023 2022 (in millions) Core marketplace revenue $ 86 $ 220 ProductBoost revenue 24 46 Marketplace revenue 110 266 Logistics revenue 177 305 Revenue $ 287 $ 571 Refer to Note 11 – Geographic Information for the disaggregated revenue by geographical location. Marketplace Revenue The Company provides a mix of marketplace services to its customers. The Company provides merchants access to its marketplace where merchants display and sell their products to users. The Company also provides ProductBoost services to help merchants promote their products within the Company’s marketplace. Marketplace revenue includes commission fees collected in connection with user purchases of the merchants’ products. The commission fees vary depending on factors such as geography, product category, Wish Standards' tier, item value and dynamic pricing. The Company recognizes revenue when a user’s order is processed and the related order information has been made available to the merchant. Commission fees are recognized net of estimated refunds and chargebacks. Marketplace revenue also includes ProductBoost revenue generated by increasing exposure for a merchant’s relevant products within the Company's marketplace. The Company recognizes ProductBoost revenue based on the number of impressions delivered, or clicks by users. Logistics Revenue The Company’s logistics offering for merchants is designed for direct end-to-end single order shipment from a merchant’s location to the user. Logistics services include transportation and delivery of the merchant’s products to the user. Merchants are required to prepay for logistics services on a per order basis. The Company recognizes revenue over time as the merchant simultaneously receives and consumes the logistics services benefit as the logistics services are performed. The Company uses an output method of progress based on days in transit as it best depicts the Company’s progress toward complete satisfaction of the performance obligation. Deferred Revenue Deferred revenue consists of amounts received primarily related to unsatisfied performance obligations of logistics services and marketplace services for shipments in-transit at the end of the period where the Company is the principal. The deferred revenue balances as of December 31, 2023 and 2022 are disclosed in Note 4 – Balance Sheet Components. Due to the short-term duration of contracts, all of the performance obligations will be satisfied in the following reporting period. Refunds and Chargebacks Refunds and chargebacks are associated with marketplace revenue. Returns are not material to the Company’s business. Estimated refunds and chargebacks are recognized on the consolidated balance sheets as refunds liability. The merchant’s share of the refunds is recognized as a reduction to the amount due to merchants. The revenue recognized on transactions subject to refunds and chargebacks is reversed. The Company estimates future refunds and chargebacks using a model that incorporates historical experience, considering recent business trends, and market activity. Incentive Discount Offers The Company provides incentive discount offers to its users to encourage purchases of products through its marketplace. Such offers include current discount offers of a certain percentage off current purchases and inducement offers, such as set percentage offers off future purchases subject to a minimum current purchase. The Company generally records the related discounts taken as a reduction of revenue when the offer is redeemed. The Company also offers free products to encourage users to make purchases on its marketplace. The resulting discount is recognized as a reduction of revenue when the offer for free product is redeemed. Wish Cash Liability The Company issues Wish Cash to end-users who opt to receive it for their refundable transactions. The Company also offers Wish Cash as part of its various referral and incentive programs. The Company accrues a liability for issued Wish Cash which is reduced when Wish Cash is redeemed by its users. Based on historical experience, the Company analyzes the Wish Cash liability considering usage patterns to determine the probability of redemption. While the Company will continue to honor all Wish Cash presented for payment, management may determine the likelihood of redemption to be remote for Wish Cash balances due to, among other things, long periods of inactivity. In these circumstances, to the extent management determines there is no requirement for remitting Wish Cash balances to government agencies under unclaimed property laws, the portion of Wish Cash balances not expected to be redeemed are recognized in Core Marketplace revenue. Refer to Note 4 – Balance Sheet Components for more information on Wish Cash liability breakage. |
Cost of Revenue | Cost of Revenue Cost of revenue includes colocation and data center charges, interchange and other fees for payment processing services, fraud and chargeback prevention service charges, costs of refunds and chargebacks made to users that the Company is not able to collect from merchants, depreciation and amortization of property and equipment, shipping charges, tracking costs, warehouse fees, and employee-related costs, including salaries, benefits, and stock-based compensation expense, for the Company’s infrastructure, merchant support and logistics personnel. Cost of revenue also includes an allocation of general IT and facilities overhead expenses. |
Advertising Expense | Advertising Expense Advertising expenses are included in sales and marketing expenses within the consolidated statements of operations and are expensed as incurred. Advertising expenses were $ 104 million and $ 195 million for the years ended December 31, 2023 and 2022, respectively. |
Software Development Costs | Software Development Costs The Company capitalizes costs to develop its mobile application and website when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed, and the software will be used as intended. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation operational stage, including maintenance, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional functionality are capitalized and expensed over the estimated useful life of the upgrades on a per project basis. Due to the iterative process by which the Company performs upgrades and the relatively short duration of its development projects, development costs meeting capitalization criteria generally are not material. If internal-use software development costs are material, they are capitalized and included in property and equipment, net within the consolidated balance sheets. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2023 and 2022, cash and cash equivalents consisted of cash deposited with banks and money market funds for which their cost approximates their fair value. The Company held 28 % and 72 % of its cash and cash equivalents in the United States as of December 31, 2023 and 2022, respectively. Restricted cash as of December 31, 2022 represents amounts held in collateral and cash accounts in a foundation entity dedicated to safeguarding funds of payment service users consisting of European Economic Area merchants, ensuring the funds remain separate from the Company’s own funds. These funds are included within prepaid expenses and other current assets in the consolidated balance sheets. As of December 31, 2023, the balance of restricted cash was zero . |
Marketable Securities | Marketable Securities Marketable securities consist of short-term debt securities classified as available-for-sale and have original maturities greater than 90 days. Marketable securities are carried at fair value based upon quoted market prices or pricing models for similar securities. Unrealized gains and losses on available-for-sale securities are excluded from earnings and are recognized within other comprehensive loss. Realized gains or losses on the sale of all such securities are reported in interest and other income, net, and computed using the specific identification method. For declines in fair market value below the cost of an individual marketable security, the Company assesses whether the decline in value is other than temporary based on the length of time the fair market value has been below cost, the severity of the decline and the Company’s intent and ability to hold or sell the investment. If an investment is impaired, the Company writes it down through earnings to its recoverable value and establishes that as a new cost basis for the investment. |
Funds Receivable | Funds Receivable The Company uses several third-party Payment Service Providers (“PSPs”) to process user transactions on its marketplace. Transactions on the Company’s marketplace are mainly credit and debit card-based transactions that convert to cash on a regular basis and are net settled against refunds and chargebacks, with little default risk. Funds receivable represents the amounts expected to be received from PSPs for purchases on the Company’s marketplace and is recognized net of processing fees. |
Concentration of Risk | Concentrations of Risk Credit Risk — Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, funds receivable and marketable securities. The Company’s cash and cash equivalents are held on deposit with creditworthy institutions. Although the Company’s deposits exceed federally insured limits, the Company has not experienced any losses in such accounts. The Company invests its excess cash in money market accounts, U.S. Treasury notes, U.S. Treasury bills, commercial paper, corporate bonds, and non-U.S. government securities. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and marketable securities for the amounts reflected on the consolidated balance sheets. The Company’s investment policy limits investments to certain types of debt securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company maintains certain bank accounts in China. The Company manages the counterparty risk associated with these funds through diversification with major financial institutions and monitors the concentration of this credit risk on a monthly basis. The total cash balance in these accounts represented approximately 49 % and 24 % of the Company’s total cash and cash equivalents as of December 31, 2023 and 2022, respectively. The Company's derivative financial instruments expose it to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. The Company seeks to mitigate such risk by limiting its counterparties to, and by spreading the risk across, major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on a monthly basis. The Company is not required to pledge, nor is it entitled to receive, collateral related to its foreign exchange derivative transactions. The Company is exposed to credit risk in the event of a default by its PSPs. The Company does not generate revenue from PSPs. Significant changes in the Company’s relationship with its PSPs could adversely affect users’ ability to process transactions on the Company’s marketplaces, thereby impacting the Company’s operating results. The following PSPs each represented 10% or more of the Company’s funds receivable balance: December 31, 2023 2022 PSP 1 28 % 56 % PSP 2 57 % 32 % Services Risk — The Company serves all of its users using third-party data center and hosting providers. The Company has disaster recovery protocols at the third-party service providers. Even with these procedures for disaster recovery in place, access to the Company’s service could be significantly interrupted, resulting in an adverse effect on its operating results and financial position. No significant interruptions of service were known to have occurred during the years ended December 31, 2023 and 2022. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Depreciation and amortization are computed using the straight-line method over the estimated useful lives. Expenditures for repairs and maintenance are charged to expense as incurred. The estimated useful lives of the Company’s property and equipment are generally as follows: Computers, equipment, software 3 years Furniture and fixtures, servers, networking equipment 5 years Leasehold improvements Shorter of the estimated useful life or remaining |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets, including intangible and lease assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured first by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, an impairment loss would be recognized based on the excess of the carrying amount of the asset above the fair value of the asset. |
Merchants Payable | Merchants Payable Merchants payable represents the amount of funds due to merchants and is recognized net of commission fees earned by the Company for marketplace transactions and other fees due from merchants. Merchants payable is adjusted for actual and estimated refunds the Company is expected to recover from merchants. The Company remits funds to merchants on a regular basis. |
Operating Lease Obligations | Operating Lease Obligations The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use (“ROU”) assets represent the Company’s right to use the underlying asset for the term of the lease and the lease liabilities represent an obligation to make lease payments arising from the lease. Certain lease agreements contain tenant improvement allowances, rent holidays and rent escalation provisions, all of which are considered in determining the ROU assets and lease liabilities. The Company begins recognizing rent expense when the lessor makes the underlying asset available for use by the Company. Lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. Lease renewal periods are considered on a lease-by-lease basis in determining the lease term. The interest rate the Company uses to determine the present value of future lease payments is the Company’s incremental borrowing rate because the rate implicit in the Company’s leases is not readily determinable. The incremental borrowing rate is a hypothetical rate for collateralized borrowings in economic environments where the leased asset is located based on credit rating factors. The ROU asset is determined based on the lease liability initially established and adjusted for any prepaid lease payments and any lease incentives received. The lease term to calculate the ROU asset and related lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. Certain leases contain variable costs, such as common area maintenance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations and comprehensive loss. Operating leases are included in the ROU assets, accrued liabilities, and lease liabilities, non-current on the consolidated balance sheets. The Company has no finance leases. |
Loss Contingencies | Loss Contingencies The Company is involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. The Company records a liability for these when it believes it is probable that it has incurred a loss, and the Company can reasonably estimate the loss. If the Company determines that a material loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the notes to the consolidated financial statements. The Company regularly evaluates current information to determine whether it should adjust a recognized liability or recognize a new one. Significant judgment is required to determine both the probability and the estimated amount. |
Stock-Based Compensation | Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards, including restricted stock units (“RSUs”), performance-based units (“PSUs”), stock options, and purchase rights issued to employees under its employee stock purchase plan (“ESPP”), based on the estimated fair value of the awards on the grant date. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options and ESPP purchase rights and the Monte Carlo Simulation model to estimate the fair value of a PSU. The fair value of RSUs is based on the market closing price for its common stock as reported on the Nasdaq Global Select Market on the date of grant. The fair value of service-based RSUs and stock options is recognized as an expense on a straight-line basis over the requisite service period, which ranges from one to four years . For stock-based awards granted to employees with a performance condition, the Company recognizes stock-based compensation expense under the accelerated attribution method over the requisite service period. The fair value of the ESPP purchase rights is recognized as an expense on a straight-line basis over the offering period. The Company accounts for forfeitures as they occur. |
Foreign Currency | Foreign Currency The functional currency of the Company’s foreign subsidiaries is the local currency for operating entities with employees and is the U.S. dollar for holding companies and pass-through entities. The assets and liabilities of its non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using exchange rates in effect at the end of each period. Revenue and expenses for its foreign subsidiaries are translated using rates that approximate those in effect during the period. Foreign currency translation adjustments are reflected in stockholders’ equity as a component of other comprehensive (loss) income. Transactions on the Company’s marketplace occur in various foreign currencies that are processed by its PSPs. These transactions are collected on a regular basis and are converted to U.S. dollars or euros within the short period of time between the recognition of revenue and cash collection on a regular basis, which limits the Company’s exposure to foreign currency risk. Merchants payable are denominated primarily in Renminbi (“RMB”) and other local currencies. As of December 31, 2023 and 2022, the merchants payable amount denominated in RMB was 58 % and 70 %, respectively. Transaction gains and losses, including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in interest and other income, net on the consolidated statements of operations. The Company recognized a net loss resulting from foreign exchange transactions of $ 1 million for the year ended December 31, 2023 and a net gain of $ 10 million for the year ended December 31, 2022. The Company recognized a $ 2 million cumulative translation loss for the year ended December 31, 2023 and a $ 7 million cumulative translation loss in the year ended December 31, 2022. |
Derivative Instruments | Derivative Instruments The Company conducts business in certain foreign currencies throughout its worldwide operations, and various entities hold monetary assets or liabilities, earn revenues, or incur costs in currencies other than the entity’s functional currency. As a result, the Company is exposed to foreign exchange gains or losses which impact the Company’s operating results. As part of the Company’s foreign currency risk mitigation strategy, starting in 2020, the Company has entered into foreign exchange forward contracts with up to twelve months in duration. In accordance with the accounting standards for derivatives and hedging activities, all derivative instruments are recognized at fair value on the Company’s consolidated balance sheets and classified as either derivative assets or derivative liabilities. Derivatives in a gain position are reported as derivative assets, while derivatives in a loss position are reported as derivative liabilities. The Company’s derivatives transactions are not collateralized and do not include collateralization agreements with counterparties. Cash Flow Hedges The Company’s largest cash flow exposure is in RMB for payments made to merchants in China that use the Wish platform. The Company hedges these cash flow exposures to reduce the risk that its earnings and cash flows will be adversely affected by changes in exchange rates. The Company recognizes changes in fair value of these cash flow hedges of foreign currency denominated merchants payable in accumulated other comprehensive income in its consolidated balance sheets, until the Company settles its forecasted foreign currency denominated merchants payable. When the forecasted transaction affects earnings, the Company reclassifies the related gain or loss on the cash flow hedge to core marketplace revenue. All amounts in other comprehensive income at period end are expected to be reclassified to earnings within 12 months. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the Company reclassifies the gain or loss on the related cash flow hedge from accumulated other comprehensive income to core marketplace revenue. Non-Designated Hedges The Company’s derivatives not designated as hedging instruments consist of foreign currency forward contracts to reduce the impact of currency exchange rate movements on its monetary assets and liabilities. These foreign exchange contracts are carried at fair value with changes in fair value of these contracts recognized to other income (expense), net in the Company’ consolidated statements of operations. The Company does not use derivative financial instruments for speculative or trading purposes. |
Fair Value Measurement | Fair Value Measurement The Company applies fair value accounting for its financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between consolidated financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of interest and other income, net as necessary. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of two components: net loss and other comprehensive loss. Other comprehensive loss consists of unrealized holding gains or losses related to derivative instruments, unrealized gains or losses on marketable securities, and foreign currency translation adjustments. |
Accounting Pronouncements | Accounting Pronouncements The Company has reviewed recent accounting pronouncements and concluded as follows: In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires additional segment-related disclosures on an annual and interim basis, to enable investors in developing more informed and actionable analyses. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the effective tax rate reconciliation, and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. We are evaluating the impact this amended guidance may have on the footnotes to our consolidated statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Disaggregated Revenue | The following table shows the disaggregated revenue for the applicable periods: Year Ended December 31, 2023 2022 (in millions) Core marketplace revenue $ 86 $ 220 ProductBoost revenue 24 46 Marketplace revenue 110 266 Logistics revenue 177 305 Revenue $ 287 $ 571 |
Schedule of PSPs Each Represented 10% or More of Funds Receivable Balance | The following PSPs each represented 10% or more of the Company’s funds receivable balance: December 31, 2023 2022 PSP 1 28 % 56 % PSP 2 57 % 32 % |
Estimated Useful Lives of Property and Equipment | The estimated useful lives of the Company’s property and equipment are generally as follows: Computers, equipment, software 3 years Furniture and fixtures, servers, networking equipment 5 years Leasehold improvements Shorter of the estimated useful life or remaining |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Subject to Fair Value Measurements on Recurring Basis | Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows: December 31, 2023 Total Level 1 Level 2 Level 3 (in millions) Financial assets: Cash equivalents: Money market funds $ — $ — $ — $ — Corporate bonds — — — — Total cash equivalents $ — $ — $ — $ — Marketable securities: U.S. Treasury bills $ 127 $ — $ 127 $ — Commercial paper — — — — Corporate bonds 17 — 17 — Non-U.S. government — — — — Total marketable securities $ 144 $ — $ 144 $ — Prepaid and other current assets: Derivative assets $ 1 $ — $ 1 $ — Total financial assets $ 145 $ — $ 145 $ — Financial liabilities: Accrued liabilities: Derivative liabilities $ 1 $ — $ 1 $ — Total financial liabilities $ 1 $ — $ 1 $ — December 31, 2022 Total Level 1 Level 2 Level 3 (in millions) Financial assets: Cash equivalents: Money market funds $ 50 $ 50 $ — $ — Corporate bonds 2 — 2 — Total cash equivalents $ 52 $ 50 $ 2 $ — Marketable securities: U.S. Treasury bills $ 173 $ — $ 173 $ — Commercial paper 7 — 7 — Corporate bonds 29 — 29 — Non-U.S. government 4 — 4 — Total marketable securities $ 213 $ — $ 213 $ — Prepaid and other current assets: Derivative assets $ 6 $ — $ 6 $ — Total financial assets $ 271 $ 50 $ 221 $ — Financial liabilities: Accrued liabilities: Derivative liabilities $ 2 $ — $ 2 $ — Total financial liabilities $ 2 $ — $ 2 $ — |
Schedule of Contractual Maturities of Marketable Securities | The following table summarizes the contractual maturities of the Company’s marketable securities: December 31, 2023 2022 Amortized Estimated Amortized Estimated (in millions) Due within one year $ 144 $ 144 $ 214 $ 213 Total marketable securities $ 144 $ 144 $ 214 $ 213 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: December 31, 2023 2022 (in millions) Logistics costs (1) $ 25 $ 44 Deferred revenue and customer deposits (2) 12 18 Wish Cash liability (3) 11 14 Sales and indirect taxes (4) 12 15 Other 30 39 Total accrued liabilities $ 90 $ 130 (1) Logistics costs decreased by $ 19 million or 43 % primarily due to lower shipping volumes during 2023 compared to 2022. (2) Deferred revenue and customer deposits decreased by $ 6 million or 33 % primarily du e to lower logistics volumes during 2023 compared to 2022. (3) While the Company will continue to honor all Wish Cash presented for payment, it may determine the likelihood of redemption to be remote for certain Wish Cash liability balances due to, among other things, long periods of inactivity. In these circumstances, to the extent the Company determines there is no requirement for remitting Wish Cash balances to government agencies under unclaimed property laws, the portion of Wish Cash liability balances not expected to be redeemed are recognized in core marketplace revenue. Wish Cash liability breakage recognized in core marketplace revenue during the years ended December 31, 2023 and 2022 was $ 3 million and $ 4 million, respectively. (4) Sales and indirect taxes decreased by $ 3 million or 20 % primarily due to less taxes in connection with lower order volumes during 2023 compared to 2022. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Total Gross Notional Amounts of Outstanding Derivatives | Total gross notional amounts for outstanding derivatives (recognized at fair value) as of the end of period consist of the following: December 31, December 31, (in millions) Cash flow hedges $ 29 $ 168 Non-designated hedges 44 11 Total $ 73 $ 179 |
Schedule of Fair Value of Derivative Financial Instruments | Fair Value of Derivative Financial Instruments December 31, December 31, Assets (1) Liabilities (2) Assets (1) Liabilities (2) (in millions) Derivative designated as hedging instruments Cash flow hedges $ — $ — $ 2 $ — Derivative not designated as hedging instruments Foreign currency forward contracts $ 1 $ 1 $ 4 $ 2 Total derivatives $ 1 $ 1 $ 6 $ 2 (1) Derivative assets are included in prepaid and other current assets in the consolidated balance sheet. (2) Derivative liabilities are included in accrued liabilities in the consolidated balance sheet. |
Schedule of Changes in Accumulated Other Comprehensive Income | The changes in accumulated other comprehensive income resulting from cash flow hedging were as follows: December 31, December 31, 2023 2022 (in millions) Balance at the beginning of the period $ 2 $ 2 Other comprehensive loss before reclassifications ( 4 ) ( 6 ) Amounts recognized in core marketplace revenue and reclassified out of accumulated other comprehensive income 3 6 Balance at the end of the period $ 1 $ 2 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Components of Lease Costs | The components of the Company’s lease costs were as follows: Year Ended 2023 2022 (in millions) Operating lease costs $ 4 $ 7 Short-term lease costs 3 2 Variable costs 1 1 Total $ 8 $ 10 |
Supplemental Cash Flow Information for Operating Leases | Supplemental cash flow information for the Company’s operating leases were as follows: Year Ended 2023 2022 (in millions) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 8 $ 9 Right-of-use assets obtained in exchange for new lease liabilities $ — $ 4 |
Maturities of Operating Lease Liabilities | The maturities of the Company’s operating lease liabilities are as follows: December 31, 2023 Year ending December 31, (in millions) 2024 $ 8 2025 4 2026 1 2027 1 Total lease payments 14 Less: imputed interest ( 1 ) Present value of lease liabilities $ 13 |
Common Stock and Stock-Based _2
Common Stock and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Activity Under Equity Plans and Related Information | A summary of activity under the equity plans and related information is as follows: Options Outstanding RSUs Outstanding Number of Weighted- Weighted- Number of Weighted- (in thousands) (in thousands) Balances at December 31, 2022 67 $ 31.17 9.5 2,399 $ 83.88 Granted 299 $ 15.03 2,871 $ 13.56 Vested ( 1,323 ) $ 65.26 Forfeited or cancelled — ( 1,771 ) $ 49.88 Balances at December 31, 2023 366 $ 18.00 9.0 2,176 $ 30.05 The weighted-average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $ 11.27 and $ 47.25 per share. Approximately 180 thousand options as of December 31, 2023 were vested. The vested options have a weighted average exercise price of $ 21.09 , a weighted-average remaining contractual term of 8.90 years, and an aggregate intrinsic value of zero. The aggregate intrinsic value of options exercised during the year ended December 31, 2022 was $ 24 million. There were no options exercised during the year ended December 31, 2023. The intrinsic value is the difference between the closing price of the Company’s common stock at the date of exercise and the exercise price for in-the-money options. |
Summary of Assumptions Used in Black-Scholes Option Pricing Model | Year Ended 2023 2022 Expected term (in years) 5.55 5.93 Risk free interest rate 4.15 % 2.28 % Volatility 91.51 % 75.53 % Dividend yield — — |
Summary of Stock-Based Compensation Expense | Total stock-based compensation expense included in the consolidated statements of operations is as follows: Year Ended December 31, 2023 2022 (in millions) Cost of revenue $ 3 $ 7 Sales and marketing 4 6 Product development 36 50 General and administrative 21 9 Total stock-based compensation (1) $ 64 $ 72 (1) Total stock-based compensation expense for the year ended December 31, 2023 decreased by $ 8 million compared to the year ended December 31, 2022 primarily because stock-based compensation of outstanding equity awards during 2023 was based off a lower weighted average grant date fair value compared to that of outstanding equity awards from the 2022 and the impacts of the reductions in force during the first and third quarters of 2023, partially offset by the impacts of PSU reversals and equity modifications during the year ended December 31, 2022. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Components of Loss Before Provision for Income Taxes | The components of loss before provision for income taxes are as follows: Year Ended December 31, 2023 2022 (in millions) Domestic $ 321 $ 388 Foreign ( 9 ) ( 5 ) Loss before provision for income taxes $ 312 $ 383 |
Schedule of Provision for Income Taxes | The provision for income taxes consisted of the following: Year Ended December 31, 2023 2022 (in millions) Current: Federal $ — $ — State — ( 1 ) Foreign 6 1 Total current 6 — Deferred: Federal — — State — — Foreign ( 1 ) 1 Total deferred ( 1 ) 1 Total provision for income taxes $ 5 $ 1 |
Reconciliation of Income Taxes Computed at Statutory Federal Income Tax Rate and Provision for Income Taxes | The difference between income taxes computed at the statutory federal income tax rate and the provision for income taxes is attributable to the following: Year Ended December 31, 2023 2022 (in millions) Federal benefit at statutory rate $ ( 66 ) $ ( 80 ) State tax (benefit), net of federal benefit — ( 1 ) Stock-based compensation 14 16 Foreign rate differential 7 11 Other 1 ( 2 ) Change in valuation allowance 49 57 Total provision for income taxes $ 5 $ 1 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities are as follows: December 31, 2023 2022 (in millions) Deferred tax assets: Net operating loss carryforwards $ 609 $ 558 Capitalization of R&D expenses 47 30 Lease liabilities 3 4 Reserves and accruals not currently deductible 9 11 Stock-based compensation 2 5 Fixed assets including right of use assets 1 1 Total gross deferred tax assets 671 609 Less: valuation allowance ( 669 ) ( 607 ) Total deferred tax assets, net of valuation allowance 2 2 Deferred tax liabilities: Property and equipment, including right-of-use assets — — Total gross deferred tax liabilities — — Net deferred tax assets $ 2 $ 2 |
Summary of Deferred Tax Asset Valuation Allowance | The table below details the activity of the deferred tax asset valuation allowance: Balance at Additions Deductions Balance (in millions) Year ended December 31, 2023 Deferred tax assets valuation allowance $ 607 $ 62 $ — $ 669 Year ended December 31, 2022 Deferred tax assets valuation allowance $ 546 $ 61 $ — $ 607 |
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended December 31, 2023 2022 (in millions) Balance as of January 1 $ 9 $ 1 Additions for tax positions of current year 1 9 Additions for tax positions of prior years 2 — Decreases for tax positions of prior years ( 8 ) ( 1 ) Balance as of December 31 $ 4 $ 9 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Year Ended December 31, 2023 2022 ($ in millions, shares in thousands, except per share data) Numerator: Net loss $ ( 317 ) $ ( 384 ) Denominator: Weighted-average shares used in computing net loss per share, basic and diluted 23,732 22,415 Net loss per share attributable to common stockholders, basic and diluted $ ( 13.36 ) $ ( 17.13 ) |
Summary of Outstanding Shares of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share | The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect: December 31, 2023 2022 (in thousands) Common stock options outstanding 366 67 Unvested restricted stock units outstanding 2,176 2,399 Employee stock purchase plan 57 109 Total 2,599 2,575 |
Geographical Information (Table
Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Geographic Area | Core marketplace revenue by geographic area based on the ship-to address of the user is as follows: Year Ended December 31, 2023 2022 ($ in millions) Europe $ 44 51 % $ 83 38 % North America (1) 30 35 % 105 48 % South America 4 5 % 7 3 % Other 8 9 % 25 11 % Core marketplace revenue (2) $ 86 100 % $ 220 100 % (1) United States accounted for $ 22 million and $ 83 million of core marketplace revenue for the years ended December 31, 2023 and 2022, respectively. (2) Core marketplace revenue included a net loss of $ 3 million for the year ended December 31, 2023 and a net loss of $ 6 million for the year ended December 31, 2022, from the Company’s cash flow hedging program. |
Summary of Property and Equipment, Net and Operating Lease Right-of-Use Assets, Net | The Company’s long-lived tangible assets, which consist of property and equipment, net, and operating lease right-of-use assets, net, is as follows: Year Ended December 31, 2023 2022 ($ in millions) United States $ 5 56 % $ 13 72 % China 4 44 % 4 22 % Other (1) — — 1 6 % Total property and equipment, net and right-of-use assets $ 9 100 % $ 18 100 % (1) Other long-lived tangible assets were located in Canada and the Netherlands. |
Reduction In Workforce (Tables)
Reduction In Workforce (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Total Severance and Other Personnel Reduction Costs | The 2023 RIFs were intended to refocus the Company’s operations to support its ongoing business prioritization efforts, better align resources, and improve operational efficiencies. Total severance and other personnel reduction costs included in the consolidated statements of operations are as follows: Year Ended December 31, 2023 (in millions) Cost of revenue $ 1 Sales and marketing 2 Product development 8 General and administrative 2 Total severance and other personnel reduction costs $ 13 |
Summary of Changes in Severance and Other Personnel Reduction Liabilities Included Accrued Liabilities | The following table is a summary of the changes in severance and other personnel reduction liabilities, included within accrued liabilities on the consolidated balance sheet as of December 31, 2023, in connection with each of the 2023 RIFs: January RIF August RIF (in millions) Balance at the beginning of the period $ — $ — Severance and other personnel reduction costs 3 10 Cash payments during the period ( 3 ) ( 10 ) Balance at the end of the period $ — $ — |
Description of Business - Addit
Description of Business - Additional Information (Details) - $ / shares | 12 Months Ended | ||
Apr. 11, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Class Of Stock [Line Items] | |||
Entity Incorporation, State or Country Code | DE | ||
Entity incorporation, date | Jun. 30, 2010 | ||
Common stock, shares authorized | 3,000,000,000 | 3,000,000,000 | 3,000,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Reverse stock split | 1-for-30 | Reverse Stock Split, every thirty shares of the common stock were combined into one issued and outstanding share of common stock and no fractional shares were issued. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) Segment Lease | Dec. 31, 2022 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||
Number of operating segment | Segment | 1 | |
Number of reportable segment | Segment | 1 | |
Advertising expense | $ 104 | $ 195 |
Restricted cash | $ 0 | |
Percentage of concentrations of risk, cash and cash equivalents | 49% | 24% |
Number of finance leases outstanding | Lease | 0 | |
Unrestricted cash, cash equivalents, and marketable securities | $ 382 | |
Accumulated loss | $ (3,246) | $ (2,929) |
Percentage of merchants payable amount denominated in RMB | 58% | 70% |
Net gain (losses) resulting from foreign exchange transactions | $ (1) | $ 10 |
Cumulative translation gain (loss) | $ (2) | $ (7) |
Foreign Exchange Forward Contracts | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Derivative contract term | 12 months | |
Minimum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Original maturities of marketable securities | 90 days | |
Minimum | Restricted Stock Units (RSUs) and Stock Options | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Award requisite service period | 1 year | |
Maximum | Restricted Stock Units (RSUs) and Stock Options | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Award requisite service period | 4 years | |
United States | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Percentage of cash and cash equivalents | 28% | 72% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Disaggregated Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Disaggregation Of Revenue [Line Items] | |||
Revenue | $ 287 | $ 571 | |
Core Marketplace Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue | [1] | 86 | 220 |
ProductBoost Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue | 24 | 46 | |
Marketplace Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue | 110 | 266 | |
Logistics Revenue | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue | $ 177 | $ 305 | |
[1] Core marketplace revenue included a net loss of $ 3 million for the year ended December 31, 2023 and a net loss of $ 6 million for the year ended December 31, 2022, from the Company’s cash flow hedging program. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of PSPs Each Represented 10% or More of Funds Receivable Balance (Details) - Funds Receivable - Credit Concentration Risk | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
PSP 1 | ||
Concentration Risk [Line Items] | ||
Percentage of funds receivable balance | 28% | 56% |
PSP 2 | ||
Concentration Risk [Line Items] | ||
Percentage of funds receivable balance | 57% | 32% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Details) | Dec. 31, 2023 |
Computers, Equipment, Software | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 3 years |
Furniture and Fixtures, Servers, Networking Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 5 years |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurement - Schedule of Financial Assets and Liabilities Subject to Fair Value Measurements on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Financial assets: | ||
Derivative assets | $ 1 | $ 6 |
Financial liabilities: | ||
Derivative liabilities | 1 | 2 |
Recurring | ||
Financial assets: | ||
Cash equivalents | 52 | |
Marketable securities | 144 | 213 |
Derivative assets | 1 | 6 |
Total financial assets | 145 | 271 |
Financial liabilities: | ||
Derivative liabilities | 1 | 2 |
Total financial liabilities | 1 | 2 |
Recurring | Level 1 | ||
Financial assets: | ||
Cash equivalents | 50 | |
Total financial assets | 50 | |
Recurring | Level 2 | ||
Financial assets: | ||
Cash equivalents | 2 | |
Marketable securities | 144 | 213 |
Derivative assets | 1 | 6 |
Total financial assets | 145 | 221 |
Financial liabilities: | ||
Derivative liabilities | 1 | 2 |
Total financial liabilities | 1 | 2 |
Recurring | Money Market Funds | ||
Financial assets: | ||
Cash equivalents | 50 | |
Recurring | Money Market Funds | Level 1 | ||
Financial assets: | ||
Cash equivalents | 50 | |
Recurring | U.S. Treasury Bills | ||
Financial assets: | ||
Marketable securities | 127 | 173 |
Recurring | U.S. Treasury Bills | Level 2 | ||
Financial assets: | ||
Marketable securities | 127 | 173 |
Recurring | Commercial Paper | ||
Financial assets: | ||
Marketable securities | 7 | |
Recurring | Commercial Paper | Level 2 | ||
Financial assets: | ||
Marketable securities | 7 | |
Recurring | Non-U.S. government | ||
Financial assets: | ||
Marketable securities | 4 | |
Recurring | Non-U.S. government | Level 2 | ||
Financial assets: | ||
Marketable securities | 4 | |
Recurring | Corporate Bonds | ||
Financial assets: | ||
Cash equivalents | 2 | |
Marketable securities | 17 | 29 |
Recurring | Corporate Bonds | Level 2 | ||
Financial assets: | ||
Cash equivalents | 2 | |
Marketable securities | $ 17 | $ 29 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurement - Schedule of Contractual Maturities of Marketable Securities (Details) - Recurring - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due within one year | $ 144 | $ 214 |
Total marketable securities | 144 | 214 |
Estimated Fair Value | ||
Due within one year | 144 | 213 |
Total marketable securities | $ 144 | $ 213 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities, Current [Abstract] | ||
Logistics costs | $ 25 | $ 44 |
Deferred revenue and customer deposits | 12 | 18 |
Wish Cash liability | 11 | 14 |
Sales and indirect taxes | 12 | 15 |
Other | 30 | 39 |
Total accrued liabilities | $ 90 | $ 130 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Accrued Liabilities (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accrued Liabilities, Current [Abstract] | ||
Percentage of decrease in vendor services due to significantly reduce digital advertising expenditures and lower logistics costs | 43% | |
Decrease in logistics costs | $ 19 | |
Decrease in deferred revenue and customer deposits | $ (6) | |
Percentage of decrease in deferred revenue and customer deposits due to lower logistics volumes | 33% | |
Unredeemable wish cash balances in core marketplace revenue | $ 3 | $ 4 |
Decrease in sales and indirect taxes | $ 3 | |
Percentage of decrease in sales and indirect taxes due to less taxes collected in connection with lower order volumes | 20% |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Net gains or losses on change in fair value of foreign exchange forward contracts | $ 3 | $ 7 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Summary of Total Gross Notional Amounts of Outstanding Derivatives (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Derivatives Fair Value [Line Items] | ||
Total gross notional amounts of outstanding derivatives | $ 73,000,000 | $ 179,000,000 |
Designated Hedges | Cash Flow Hedges | ||
Derivatives Fair Value [Line Items] | ||
Total gross notional amounts of outstanding derivatives | 29,000,000 | 168,000,000 |
Non-designated Hedges | ||
Derivatives Fair Value [Line Items] | ||
Total gross notional amounts of outstanding derivatives | $ 44,000,000 | $ 11,000,000 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Fair Value of Derivative Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Derivatives Fair Value [Line Items] | ||
Derivative assets | $ 1 | $ 6 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current |
Derivative liabilities | $ 1 | $ 2 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Designated Hedges | Cash Flow Hedges | ||
Derivatives Fair Value [Line Items] | ||
Derivative assets | $ 2 | |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current |
Non-designated Hedges | Foreign Exchange Forward Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative assets | $ 1 | $ 4 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Prepaid Expense and Other Assets, Current | Prepaid Expense and Other Assets, Current |
Derivative liabilities | $ 1 | $ 2 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Derivative Financial Instrume_6
Derivative Financial Instruments - Schedule of Changes in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Balance at the beginning of the period | $ 2 | $ 2 |
Other comprehensive loss before reclassifications | (4) | (6) |
Amounts recognized in core marketplace revenue and reclassified out of accumulated other comprehensive income | 3 | 6 |
Balance at the end of the period | $ 1 | $ 2 |
Operating Leases - Components o
Operating Leases - Components of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease costs | $ 4 | $ 7 |
Short-term lease costs | 3 | 2 |
Variable costs | 1 | 1 |
Total | $ 8 | $ 10 |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Lessee Lease Description [Line Items] | ||
ROU assets | $ 5 | $ 9 |
Operating lease, liabilities current | $ 7 | $ 7 |
Operating lease, liability current, Statement of financial position [Extensible List] | Accrued liabilities | Accrued liabilities |
Lease liabilities, non-current | $ 6 | $ 13 |
Weighted-average remaining lease term | 2 years | 3 years |
Weighted-average discount rate | 6% | 6% |
Operating Leases - Supplemental
Operating Leases - Supplemental Cash Flow Information for Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 8 | $ 9 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 4 |
Operating Leases - Maturities o
Operating Leases - Maturities of Operating Lease Liabilities (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 8 |
2025 | 4 |
2026 | 1 |
2027 | 1 |
Total lease payments | 14 |
Less: imputed interest | (1) |
Present value of lease liabilities | $ 13 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) | Nov. 30, 2020 USD ($) | Dec. 31, 2023 USD ($) Case | Sep. 30, 2023 USD ($) | |
Commitments And Contingencies Disclosure [Line Items] | ||||
Number of putative class action lawsuits | Case | 4 | |||
Number of cases dismissed by plaintiff | Case | 1 | |||
Number of cases coordinated and consolidated | Case | 3 | |||
Colocation and Cloud Services Arrangement | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Purchase commitment amount | $ 85,000,000 | |||
Purchase commitment, period | 3 years | |||
Purchase obligations, remaining commitment | $ 45,000,000 | |||
Revolving Credit Facility | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Minimum liquidity financial covenant | $ 350,000,000 | |||
Standby letter of credit | 7,000,000 | |||
Borrowings under credit facility | $ 0 | |||
Senior Secured Debt | Revolving Credit Facility | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Senior secured revolving credit facility, term | 5 years | |||
Senior secured revolving credit facility | $ 280,000,000 | |||
Commitment fee percentage on unused portion of aggregate commitments | 0.25% | |||
Commitment fee percentage | 1.50% | |||
Senior Secured Debt | Revolving Credit Facility | Maximum | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Aggregate commitments | $ 100,000,000 | |||
Senior Secured Debt | Revolving Credit Facility | LIBOR | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Revolving credit facility, variable interest rate | 1.50% | |||
Senior Secured Debt | Revolving Credit Facility | Alternative Base Rate | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Revolving credit facility, variable interest rate | 0.50% |
Common Stock and Stock-Based _3
Common Stock and Stock-Based Compensation - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||
Feb. 28, 2023 USD ($) $ / shares shares | Jan. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Feb. 28, 2022 USD ($) $ / shares | Jan. 31, 2022 USD ($) shares | Dec. 31, 2023 USD ($) Vote $ / shares shares | Dec. 31, 2022 USD ($) $ / shares | Nov. 19, 2020 shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Common stock shares purchased | shares | 42,000 | |||||||
Share based compensation expense | $ 252,000 | |||||||
Aggregate intrinsic value of options exercised | $ 24,000,000 | |||||||
Aggregate intrinsic value of options outstanding | $ 0 | $ 0 | ||||||
Number of Options, Granted | shares | 299,000,000 | |||||||
Aggregate fair value of options vested | $ 180,000 | |||||||
Exercise price | $ / shares | $ 11.27 | $ 47.25 | ||||||
Weighted average exercise price | $ / shares | $ 21.09 | |||||||
Weighted-average remaining contractual term | 8 years 10 months 24 days | |||||||
Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of votes | Vote | 1 | |||||||
Class B Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of votes | Vote | 20 | |||||||
Conversion of stock, shares converted | shares | 1 | |||||||
Class B Common Stock | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Percentage of remaining outstanding shares | 5% | |||||||
2020 Equity Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Incentive plan approval date | Nov. 19, 2020 | |||||||
Common stock shares outstanding percentage | 5% | |||||||
Number of shares available for grant | shares | 2,000,000 | |||||||
2020 Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Incentive plan approval date | Nov. 19, 2020 | |||||||
Common stock shares outstanding percentage | 1% | |||||||
Shares reserve for issuance | shares | 1,000,000 | 267,000 | ||||||
2020 Employee Stock Purchase Plan | Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Share based compensation purchase plan description | The 2020 ESPP provides for 24-month offering periods, generally beginning in November and May of each year, and each offering period consists of four six-month purchase periods. | |||||||
Percentage of eligible compensation to purchase shares at discount | 15% | |||||||
Maximum eligible compensation to purchase shares at discount | $ 25,000 | |||||||
Maximum number of shares eligible to purchase by an employee on purchase date | shares | 166 | |||||||
Share based compensation purchase plan offering period | 24 months | |||||||
2022 Inducement Plan | Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares available for grant | shares | 350,000 | |||||||
Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Additional stock based compensation expense | $ 2,000,000 | |||||||
Compensation expense recognition date | Nov. 20, 2025 | |||||||
Employee Stock Purchase Plan | Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Percentage of price per share | 85% | |||||||
Mr. Vijay Talwar | Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Options, Grant date Fair Value | $ 12,000,000 | |||||||
Mr. Vijay Talwar | 2022 Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
Term of option award | 10 years | |||||||
Share based compensation expense | $ 6,000,000 | |||||||
Mr. Vijay Talwar | 2022 Employee Stock Purchase Plan | Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of Options, Granted | shares | 216,000 | |||||||
Exercise price | $ / shares | $ 85.8 | |||||||
Mr. Jun Yan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 2 years | |||||||
Term of option award | 10 years | |||||||
Percentage of RSU vest upon termination of interim CEO within six months from commencement of employment | 50% | |||||||
Percentage of Option vest upon termination of interim CEO within six months from commencement of employment | 50% | |||||||
Mr. Jun Yan | 2020 Employee Stock Purchase Plan | Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Options, Grant date Fair Value | $ 3,000,000 | |||||||
Number of Options, Granted | shares | 299,000 | |||||||
Exercise price | $ / shares | $ 15.03 | |||||||
Mr. Jun Yan | 2022 Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 1 year | |||||||
Term of option award | 10 years | |||||||
Mr. Jun Yan | 2022 Employee Stock Purchase Plan | Class A Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Options, Grant date Fair Value | $ 1,000,000 | |||||||
Number of Options, Granted | shares | 65,000 | |||||||
Exercise price | $ / shares | $ 25.85 | |||||||
Restricted Stock Units ("RSUs") | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Weighted average grant date fair value, granted | $ / shares | $ 13.56 | $ 48.97 | ||||||
Aggregate intrinsic value vested | $ 13,000,000 | $ 42,000,000 | ||||||
Aggregate intrinsic value of options outstanding | 13,000,000 | $ 35,000,000 | ||||||
Unrecognized compensation expenses | $ 55,000,000 | |||||||
Unrecognized compensation expenses, recognition period | 1 year 10 months 24 days | |||||||
Restricted Stock Units ("RSUs") | 2010 Equity Incentive Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Term of option award | 7 years | |||||||
Restricted Stock Units ("RSUs") | 2010 Equity Incentive Plan | Minimum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 4 years | |||||||
Restricted Stock Units ("RSUs") | 2010 Equity Incentive Plan | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Vesting period | 5 years | |||||||
Restricted Stock Units ("RSUs") | Mr. Vijay Talwar | 2022 Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Restricted stock units, granted date fair value | $ 13,000,000 | |||||||
Number of Options, Granted | shares | 154,000 | |||||||
Restricted Stock Units ("RSUs") | Mr. Jun Yan | 2020 Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Restricted stock units, granted date fair value | $ 3,000,000 | |||||||
Number of Options, Granted | shares | 167,000 | |||||||
Restricted Stock Units ("RSUs") | Mr. Jun Yan | 2022 Employee Stock Purchase Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Restricted stock units, granted date fair value | $ 2,000,000 | |||||||
Number of Options, Granted | shares | 65,000,000 | |||||||
Performance-Based Units ("PSUs") | Executive Chair | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock-based compensation expense reversal amount | $ 3,000,000 | |||||||
Performance stock units, modified fair value | $ 2,000,000 | |||||||
Performance-Based Units ("PSUs") | Chief Executive Officer | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Stock-based compensation expense reversal amount | $ 21,000,000 | |||||||
Employee Stock Option | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Unrecognized compensation expenses | $ 2,000,000 | |||||||
Unrecognized compensation expenses, recognition period | 1 year 1 month 6 days |
Common Stock and Stock-Based _4
Common Stock and Stock-Based Compensation - Summary of Activity Under Equity Plans and Related Information (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Options, Beginning balance | 67,000 | |
Number of Options, Granted | 299,000 | |
Number of Options, Ending balance | 366,000 | 67,000 |
Weighted-Average Exercise Price, Beginning balance | $ 31.17 | |
Weighted-Average Exercise Price, Granted | 15.03 | |
Weighted-Average Exercise Price, Ending balance | $ 18 | $ 31.17 |
Weighted-Average Remaining Contractual Term | 9 years | 9 years 6 months |
Restricted Stock Units ("RSUs") | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Restricted Stock Units, Beginning balance | 2,399 | |
Number of Restricted Stock Units, Granted | 2,871 | |
Number of Restricted Stock Units, Vested | (1,323) | |
Number of Restricted Stock Units, Forfeited or cancelled | (1,771) | |
Number of Restricted Stock Units, Ending balance | 2,176 | 2,399 |
Weighted-Average Grant Date Fair Value, Beginning balance | $ 83.88 | |
Weighted-Average Grant Date Fair Value, Granted | 13.56 | $ 48.97 |
Weighted-Average Grant Date Fair Value, Vested | 65.26 | |
Weighted-Average Grant Date Fair Value, Forfeited or cancelled | 49.88 | |
Weighted-Average Grant Date Fair Value, Ending balance | $ 30.05 | $ 83.88 |
Common Stock and Stock-Based _5
Common Stock and Stock-Based Compensation - Summary of Assumptions Used in Black-Scholes Option Pricing Model (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Expected term (in years) | 5 years 6 months 18 days | 5 years 11 months 4 days |
Risk-free rate | 4.15% | 2.28% |
Volatility | 91.51% | 75.53% |
Common Stock and Stock-Based _6
Common Stock and Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 64 | $ 72 |
Cost of Revenue | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 3 | 7 |
Sales and Marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 4 | 6 |
Product Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | 36 | 50 |
General and Administrative Expenses | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock-based compensation | $ 21 | $ 9 |
Common Stock and Stock-Based _7
Common Stock and Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Parenthetical) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Share-Based Payment Arrangement [Abstract] | |
Decrease in stock-based compensation expense | $ (8) |
Income Taxes - Components of Lo
Income Taxes - Components of Loss Before Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ 321 | $ 388 |
Foreign | (9) | (5) |
Loss before provision for income taxes | $ 312 | $ 383 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
State | $ (1) | |
Foreign | $ 6 | 1 |
Total current | 6 | |
Deferred: | ||
Foreign | (1) | 1 |
Total deferred | (1) | 1 |
Total provision for income taxes | $ 5 | $ 1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes [Line Items] | |||
Provision for income taxes expense | $ 5,000,000 | $ 1,000,000 | |
Current foreign tax expense | 6,000,000 | 1,000,000 | |
Current state tax benefit | 1,000,000 | ||
Deferred foreign tax expense (benefit) | (1,000,000) | 1,000,000 | |
Increase of valuation allowance | 62,000,000 | 61,000,000 | |
Deferred tax assets net operating losses increased | 51,000,000 | ||
Unrecognized tax benefit | 4,000,000 | 9,000,000 | $ 1,000,000 |
Unrecognized tax benefits interest or penalties | 0 | ||
Stock-based compensation increase (decrease) in Income tax provision | 14,000,000 | 16,000,000 | |
Deferred tax asset for reserves and accruals not currently deductible decreased | 2,000,000 | ||
Deferred tax asset recognized net impact of capitalization and amortization expense | $ 47,000,000 | $ 30,000,000 | |
Federal | |||
Income Taxes [Line Items] | |||
Research and development expenses carryforward amortization period | 5 years | ||
Foreign | |||
Income Taxes [Line Items] | |||
Research and development expenses carryforward amortization period | 15 years | ||
Tax Period begin to expire in 2030 through 2037 | Federal | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 886,000,000 | ||
Unlimited Carryover Period | Federal | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | 1,900,000,000 | ||
Unlimited Carryover Period | State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | 2,000,000,000 | ||
Tax Period begin to expire in 2026 through 2043 | State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 7,000,000,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes Computed at Statutory Federal Income Tax Rate and Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal benefit at statutory rate | $ (66) | $ (80) |
State tax (benefit), net of federal benefit | (1) | |
Stock-based compensation | 14 | 16 |
Foreign rate differential | 7 | 11 |
Other | 1 | (2) |
Change in valuation allowance | 49 | 57 |
Total provision for income taxes | $ 5 | $ 1 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 609 | $ 558 |
Capitalization of R&D expenses | 47 | 30 |
Lease liabilities | 3 | 4 |
Reserves and accruals not currently deductible | 9 | 11 |
Stock-based compensation | 2 | 5 |
Fixed assets including right of use assets | 1 | 1 |
Total gross deferred tax assets | 671 | 609 |
Less: valuation allowance | (669) | (607) |
Total deferred tax assets, net of valuation allowance | 2 | 2 |
Deferred tax liabilities: | ||
Net deferred tax assets | $ 2 | $ 2 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Asset Valuation Allowance (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Valuation And Qualifying Accounts Disclosure [Line Items] | ||
Balance at Beginning of Period | $ 607 | $ 546 |
Additions | 62 | 61 |
Balance at End of Period | $ 669 | $ 607 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Balance at January 1 | $ 9 | $ 1 |
Additions for tax positions of current year | 1 | 9 |
Additions for tax positions of prior years | 2 | |
Decreases for tax positions of prior years | (8) | (1) |
Balance at December 31 | $ 4 | $ 9 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net Income (Loss) | $ (317) | $ (384) |
Denominator: | ||
Weighted-average shares used in computing net loss per share, basic | 23,732 | 22,415 |
Weighted-average shares used in computing net loss per share, diluted | 23,732 | 22,415 |
Net loss per share, basic | $ (13.36) | $ (17.13) |
Net loss per share, diluted | $ (13.36) | $ (17.13) |
Net Loss Per Share - Summary of
Net Loss Per Share - Summary of Outstanding Shares of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 2,599 | 2,575 |
Common Stock Options Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 366 | 67 |
Unvested Restricted Stock Units Outstanding | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 2,176 | 2,399 |
Employee Stock Purchase Plan | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share | 57 | 109 |
Geographical Information - Summ
Geographical Information - Summary of Revenue by Geographic Area (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 287 | $ 571 | |
Core Marketplace Revenue | |||
Revenue, Major Customer [Line Items] | |||
Revenue | [1] | $ 86 | $ 220 |
Core Marketplace Revenue | Revenue | Geographic Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenue percentage | [1] | 100% | 100% |
Core Marketplace Revenue | Europe | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 44 | $ 83 | |
Core Marketplace Revenue | Europe | Revenue | Geographic Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenue percentage | 51% | 38% | |
Core Marketplace Revenue | North America | |||
Revenue, Major Customer [Line Items] | |||
Revenue | [2] | $ 30 | $ 105 |
Core Marketplace Revenue | North America | Revenue | Geographic Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenue percentage | [2] | 35% | 48% |
Core Marketplace Revenue | South America | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 4 | $ 7 | |
Core Marketplace Revenue | South America | Revenue | Geographic Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenue percentage | 5% | 3% | |
Core Marketplace Revenue | Other | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 8 | $ 25 | |
Core Marketplace Revenue | Other | Revenue | Geographic Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Revenue percentage | 9% | 11% | |
[1] Core marketplace revenue included a net loss of $ 3 million for the year ended December 31, 2023 and a net loss of $ 6 million for the year ended December 31, 2022, from the Company’s cash flow hedging program. United States accounted for $ 22 million and $ 83 million of core marketplace revenue for the years ended December 31, 2023 and 2022, respectively. |
Geographical Information - Su_2
Geographical Information - Summary of Revenue by Geographic Area (Parenthetical) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 287 | $ 571 | |
Core Marketplace Revenue | |||
Revenue, Major Customer [Line Items] | |||
Revenue | [1] | 86 | 220 |
Net gains (loss) from cash flow hedging program | (3) | (6) | |
Core Marketplace Revenue | United States | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 22 | $ 83 | |
[1] Core marketplace revenue included a net loss of $ 3 million for the year ended December 31, 2023 and a net loss of $ 6 million for the year ended December 31, 2022, from the Company’s cash flow hedging program. |
Geographical Information - Su_3
Geographical Information - Summary of Property and Equipment, Net and Operating Lease Right-of-Use Assets, Net (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue, Major Customer [Line Items] | |||
Property and equipment, net and right-of-use assets | $ 9 | $ 18 | |
Property and equipment, net and right-of-use assets percentage | 100% | 100% | |
United States | |||
Revenue, Major Customer [Line Items] | |||
Property and equipment, net and right-of-use assets | $ 5 | $ 13 | |
Property and equipment, net and right-of-use assets percentage | 56% | 72% | |
China | |||
Revenue, Major Customer [Line Items] | |||
Property and equipment, net and right-of-use assets | $ 4 | $ 4 | |
Property and equipment, net and right-of-use assets percentage | 44% | 22% | |
Other | |||
Revenue, Major Customer [Line Items] | |||
Property and equipment, net and right-of-use assets | [1] | $ 1 | |
Property and equipment, net and right-of-use assets percentage | [1] | 6% | |
[1] Other long-lived tangible assets were located in Canada and the Netherlands. |
Reduction In Workforce - Additi
Reduction In Workforce - Additional Information (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2023 USD ($) Employee | Jan. 31, 2023 USD ($) Employee | Feb. 28, 2022 Employee | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Reduction In workforce, number of positions reduced, percentage | 34% | 17% | 15% | ||
Reduction in workforce, number of positions reduced | Employee | 255 | 150 | 190 | ||
Severance and other personnel reduction costs | $ 10 | $ 3 | $ 13 | $ 3 | |
Impairments of lease assets and property and equipment | $ 11 |
Reduction In Workforce - Schedu
Reduction In Workforce - Schedule of Total Severance and Other Personnel Reduction Costs (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2023 | Jan. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total severance and other personnel reduction costs | $ 10 | $ 3 | $ 13 | $ 3 |
Cost of Revenue | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total severance and other personnel reduction costs | 1 | |||
Sales and Marketing | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total severance and other personnel reduction costs | 2 | |||
Product Development | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total severance and other personnel reduction costs | 8 | |||
General and Administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total severance and other personnel reduction costs | $ 2 |
Reduction In Workforce - Summar
Reduction In Workforce - Summary of Changes in Severance and Other Personnel Reduction Liabilities Included Accrued Liabilities (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2023 | Jan. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | ||||
Severance and other personnel reduction costs | $ 10 | $ 3 | $ 13 | $ 3 |
Cash payments during the period | $ (10) | $ (3) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 10, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | |||
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Asset purchase price consideration | $ 173 | ||
Subsequent Event | Series A Preferred Stock | Tax Benefits Preservation Plan | |||
Subsequent Event [Line Items] | |||
Exercise price per share | $ 20 | ||
Preferred stock, shares issued | 3,000,000 | ||
Preferred stock, par value | $ 0.0001 | ||
Preferred stock dividend shares issuable | 0.001 | ||
Dividend record date | Feb. 22, 2024 | ||
Percentage of acquiring Beneficial ownership. | 4.90% |