|
|
|
|
|
|
|
|
• | persuasive evidence of an arrangement exists; |
• | delivery of our obligations to our customer has occurred; |
• | the price is fixed or determinable; and |
• | collectability of the related receivable is reasonably assured. |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Advertising | $ | 39,942 | $ | 26,885 | $ | 17,079 | |||||
Payments and other fees | 711 | 753 | 849 | ||||||||
Total revenue | $ | 40,653 | $ | 27,638 | $ | 17,928 |
Property and Equipment | Useful Life | |
Network equipment | Three to 20 years | |
Buildings | Three to 30 years | |
Computer software, office equipment and other | Two to five years | |
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term |
December 31, | |||||||
2017 | 2016 | ||||||
Deferred revenue | $ | 68 | $ | 62 | |||
Deposits | 30 | 28 | |||||
Total deferred revenue and deposits | $ | 98 | $ | 90 |
|
December 31, | |||||||
2017 | 2016 | ||||||
Cash and cash equivalents: | |||||||
Cash | $ | 2,212 | $ | 1,364 | |||
Money market funds | 5,268 | 5,409 | |||||
U.S. government securities | 66 | 1,463 | |||||
U.S. government agency securities | 25 | 667 | |||||
Certificate of deposits and time deposits | 440 | — | |||||
Corporate debt securities | 68 | — | |||||
Total cash and cash equivalents | 8,079 | 8,903 | |||||
Marketable securities: | |||||||
U.S. government securities | 12,766 | 7,130 | |||||
U.S. government agency securities | 10,944 | 7,411 | |||||
Corporate debt securities | 9,922 | 6,005 | |||||
Total marketable securities | 33,632 | 20,546 | |||||
Total cash and cash equivalents, and marketable securities | $ | 41,711 | $ | 29,449 |
December 31, | |||||||
2017 | 2016 | ||||||
Due in one year | $ | 7,976 | $ | 4,966 | |||
Due in one to five years | 25,656 | 15,580 | |||||
Total | $ | 33,632 | $ | 20,546 |
|
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 5,268 | $ | 5,268 | $ | — | $ | — | ||||||||
U.S. government securities | 66 | 66 | — | — | ||||||||||||
U.S. government agency securities | 25 | 25 | — | — | ||||||||||||
Certificate of deposits and time deposits | 440 | — | 440 | — | ||||||||||||
Corporate debt securities | 68 | — | 68 | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 12,766 | 12,766 | — | — | ||||||||||||
U.S. government agency securities | 10,944 | 10,944 | — | — | ||||||||||||
Corporate debt securities | 9,922 | — | 9,922 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 39,499 | $ | 29,069 | $ | 10,430 | $ | — |
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3 | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 5,409 | $ | 5,409 | $ | — | $ | — | ||||||||
U.S. government securities | 1,463 | 1,463 | — | — | ||||||||||||
U.S. government agency securities | 667 | 667 | — | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 7,130 | 7,130 | — | — | ||||||||||||
U.S. government agency securities | 7,411 | 7,411 | — | — | ||||||||||||
Corporate debt securities | 6,005 | — | 6,005 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 28,085 | $ | 22,080 | $ | 6,005 | $ | — | ||||||||
Accrued expenses and other current liabilities: | ||||||||||||||||
Contingent consideration liability | $ | 242 | $ | — | 242 | $ | — |
|
December 31, | |||||||
2017 | 2016 | ||||||
Land | $ | 798 | $ | 696 | |||
Buildings | 4,909 | 3,109 | |||||
Leasehold improvements | 959 | 531 | |||||
Network equipment | 7,998 | 5,179 | |||||
Computer software, office equipment and other | 681 | 398 | |||||
Construction in progress | 2,992 | 1,890 | |||||
Total | 18,337 | 11,803 | |||||
Less: Accumulated depreciation | (4,616 | ) | (3,212 | ) | |||
Property and equipment, net | $ | 13,721 | $ | 8,591 |
|
Balance as of December 31, 2015 | $ | 18,026 | |
Goodwill acquired | 95 | ||
Effect of currency translation adjustment | 1 | ||
Balance as of December 31, 2016 | $ | 18,122 | |
Goodwill acquired | 90 | ||
Effect of currency translation adjustment | 9 | ||
Balance as of December 31, 2017 | $ | 18,221 |
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||
Weighted-Average Remaining Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Acquired users | 3.8 | $ | 2,056 | $ | (971 | ) | $ | 1,085 | $ | 2,056 | $ | (678 | ) | $ | 1,378 | ||||||||||
Acquired technology | 1.8 | 972 | (711 | ) | 261 | 931 | (518 | ) | 413 | ||||||||||||||||
Acquired patents | 5.7 | 785 | (499 | ) | 286 | 785 | (420 | ) | 365 | ||||||||||||||||
Trade names | 2.2 | 629 | (406 | ) | 223 | 629 | (293 | ) | 336 | ||||||||||||||||
Other | 2.7 | 162 | (133 | ) | 29 | 162 | (119 | ) | 43 | ||||||||||||||||
Total intangible assets | 3.6 | $ | 4,604 | $ | (2,720 | ) | $ | 1,884 | $ | 4,563 | $ | (2,028 | ) | $ | 2,535 |
2018 | $ | 633 | |
2019 | 540 | ||
2020 | 365 | ||
2021 | 265 | ||
2022 | 29 | ||
Thereafter | 52 | ||
Total | $ | 1,884 |
|
December 31, | |||||||
2017 | 2016 | ||||||
Accrued compensation and benefits | $ | 776 | $ | 636 | |||
Accrued property and equipment | 685 | 331 | |||||
Accrued taxes payable | 230 | 155 | |||||
Contingent consideration liability | — | 242 | |||||
Other current liabilities | 1,201 | 839 | |||||
Accrued expenses and other current liabilities | $ | 2,892 | $ | 2,203 |
December 31, | |||||||
2017 | 2016 | ||||||
Income tax payable | $ | 5,372 | $ | 2,431 | |||
Other liabilities | 1,045 | 461 | |||||
Other liabilities | $ | 6,417 | $ | 2,892 |
|
|
Operating Leases | Financing obligation, building in progress - leased facilities(1) | ||||||
2018 | $ | 409 | $ | — | |||
2019 | 464 | 2 | |||||
2020 | 470 | 14 | |||||
2021 | 448 | 15 | |||||
2022 | 430 | 15 | |||||
Thereafter | 2,423 | 149 | |||||
Total minimum lease payments | $ | 4,644 | $ | 195 |
(1) | We entered into agreements to lease office buildings that are under construction. As a result of our involvement during these construction periods, we are considered for accounting purposes to be the owner of the construction projects. Financing obligation, building in progress - leased facilities represent the total expected financing and lease obligations associated with these leases and will be settled through monthly lease payments to the landlords when we occupy the office spaces upon completion. This amount includes $72 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2017. |
|
Shares Subject to Options Outstanding | ||||||||||||
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value(1) | |||||||||
(in thousands) | (in years) | (in millions) | ||||||||||
Balance as of December 31, 2016 | 5,687 | $ | 7.78 | |||||||||
Stock options exercised | (2,609 | ) | 5.10 | |||||||||
Balance as of December 31, 2017 | 3,078 | $ | 10.06 | 2.4 | $ | 512 | ||||||
Stock options exercisable as of December 31, 2017 | 2,765 | $ | 9.50 | 2.3 | $ | 462 |
(1) | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock of $176.46, as reported on the Nasdaq Global Select Market on December 31, 2017. |
Options Outstanding | Options Exercisable | ||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Contractual Term | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||
$1.85 | 27 | 1.0 | $ | 1.85 | 27 | $ | 1.85 | ||||||||
$2.95 | 851 | 1.6 | 2.95 | 851 | 2.95 | ||||||||||
$10.39 | 1,000 | 2.6 | 10.39 | 1,000 | 10.39 | ||||||||||
$15.00 | 1,200 | 2.8 | 15.00 | 887 | 15.00 | ||||||||||
3,078 | 2.4 | $ | 10.06 | 2,765 | $ | 9.50 |
Unvested RSUs(1) | ||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||
(in thousands) | ||||||
Unvested at December 31, 2016 | 98,586 | $ | 82.99 | |||
Granted | 36,741 | 147.28 | ||||
Vested | (43,176 | ) | 83.74 | |||
Forfeited | (10,937 | ) | 91.76 | |||
Unvested at December 31, 2017 | 81,214 | $ | 110.49 |
(1) | Unvested shares include inducement awards issued in connection with the WhatsApp acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements. |
|
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Interest income | $ | 398 | $ | 176 | $ | 52 | |||||
Interest expense | (6 | ) | (10 | ) | (23 | ) | |||||
Foreign currency exchange losses, net | (6 | ) | (76 | ) | (66 | ) | |||||
Other | 5 | 1 | 6 | ||||||||
Interest and other income (expense), net | $ | 391 | $ | 91 | $ | (31 | ) |
|
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Domestic | $ | 7,079 | $ | 6,368 | $ | 2,802 | |||||
Foreign | 13,515 | 6,150 | 3,392 | ||||||||
Income before provision for income taxes | $ | 20,594 | $ | 12,518 | $ | 6,194 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Current: | |||||||||||
Federal | $ | 4,455 | $ | 2,384 | $ | 3,012 | |||||
State | 190 | 179 | 183 | ||||||||
Foreign | 389 | 195 | 123 | ||||||||
Total current tax expense | 5,034 | 2,758 | 3,318 | ||||||||
Deferred: | |||||||||||
Federal | (296 | ) | (414 | ) | (800 | ) | |||||
State | (33 | ) | (18 | ) | (17 | ) | |||||
Foreign | (45 | ) | (25 | ) | 5 | ||||||
Total deferred tax benefit | (374 | ) | (457 | ) | (812 | ) | |||||
Provision for income taxes | $ | 4,660 | $ | 2,301 | $ | 2,506 |
Year Ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 0.6 | 1.0 | 2.0 | |||||
Research tax credits | (0.9 | ) | (0.7 | ) | (1.4 | ) | ||
Share-based compensation | 0.4 | 1.0 | 2.2 | |||||
Excess tax benefits related to share-based compensation(1) | (5.8 | ) | (7.0 | ) | — | |||
Effect of non-U.S. operations | (18.6 | ) | (12.8 | ) | (0.9 | ) | ||
Effect of U.S. tax law change (2) | 11.0 | — | — | |||||
Other | 0.9 | 1.9 | 3.5 | |||||
Effective tax rate | 22.6 | % | 18.4 | % | 40.4 | % |
(1) | Starting in 2016, excess tax benefits from share-based award activity are reflected as a reduction of the provision for income taxes, whereas they were previously recognized in equity. |
(2) | Due to the Tax Act which was enacted in December 2017, provisional mandatory transition tax on accumulated foreign earnings was accrued as of December 31, 2017. In addition, deferred taxes were derecognized for previous estimated tax liabilities that would arise upon repatriation of a portion of these earnings in the foreign jurisdictions. Our U.S. deferred tax assets and liabilities as of December 31, 2017 were re-measured from 35% to 21%.The provisional effects of the Tax Act are $2.53 billion of current income tax expense and $257 million of deferred income tax benefit for the year ended December 31, 2017. |
December 31, | |||||||
2017 | 2016 | ||||||
Deferred tax assets: | |||||||
Net operating loss carryforward | $ | 1,300 | $ | 1,252 | |||
Tax credit carryforward | 509 | 268 | |||||
Share-based compensation | 385 | 684 | |||||
Accrued expenses and other liabilities | 381 | 339 | |||||
Other | 131 | 149 | |||||
Total deferred tax assets | 2,706 | 2,692 | |||||
Less: valuation allowance | (438 | ) | (240 | ) | |||
Deferred tax assets, net of valuation allowance | 2,268 | 2,452 | |||||
Deferred tax liabilities: | |||||||
Depreciation and amortization | (622 | ) | (535 | ) | |||
Purchased intangible assets | (309 | ) | (706 | ) | |||
Deferred taxes on foreign income | (88 | ) | (357 | ) | |||
Total deferred tax liabilities | (1,019 | ) | (1,598 | ) | |||
Net deferred tax assets | $ | 1,249 | $ | 854 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Gross unrecognized tax benefits-beginning of period | $ | 3,309 | $ | 3,017 | $ | 1,682 | |||||
Increases related to prior year tax positions | 72 | 32 | 322 | ||||||||
Decreases related to prior year tax positions | (34 | ) | (36 | ) | (52 | ) | |||||
Increases related to current year tax positions | 536 | 307 | 1,066 | ||||||||
Decreases related to settlements of prior year tax positions | (13 | ) | (11 | ) | (1 | ) | |||||
Gross unrecognized tax benefits-end of period | $ | 3,870 | $ | 3,309 | $ | 3,017 |
|
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenue: | |||||||||||
United States | $ | 17,734 | $ | 12,579 | $ | 8,513 | |||||
Rest of the world(1) | 22,919 | 15,059 | 9,415 | ||||||||
Total revenue | $ | 40,653 | $ | 27,638 | $ | 17,928 |
(1) | No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented. |
December 31, | |||||||
2017 | 2016 | ||||||
Property and equipment, net: | |||||||
United States | $ | 10,406 | $ | 6,793 | |||
Rest of the world(1) | 3,315 | 1,798 | |||||
Total property and equipment, net | $ | 13,721 | $ | 8,591 |
(1) | No individual country, other than disclosed above, exceeded 10% of our total property and equipment, net for any period presented. |
|
• | persuasive evidence of an arrangement exists; |
• | delivery of our obligations to our customer has occurred; |
• | the price is fixed or determinable; and |
• | collectability of the related receivable is reasonably assured. |
Property and Equipment | Useful Life | |
Network equipment | Three to 20 years | |
Buildings | Three to 30 years | |
Computer software, office equipment and other | Two to five years | |
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term |
|
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Advertising | $ | 39,942 | $ | 26,885 | $ | 17,079 | |||||
Payments and other fees | 711 | 753 | 849 | ||||||||
Total revenue | $ | 40,653 | $ | 27,638 | $ | 17,928 |
Property and Equipment | Useful Life | |
Network equipment | Three to 20 years | |
Buildings | Three to 30 years | |
Computer software, office equipment and other | Two to five years | |
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term |
December 31, | |||||||
2017 | 2016 | ||||||
Deferred revenue | $ | 68 | $ | 62 | |||
Deposits | 30 | 28 | |||||
Total deferred revenue and deposits | $ | 98 | $ | 90 |
|
December 31, | |||||||
2017 | 2016 | ||||||
Cash and cash equivalents: | |||||||
Cash | $ | 2,212 | $ | 1,364 | |||
Money market funds | 5,268 | 5,409 | |||||
U.S. government securities | 66 | 1,463 | |||||
U.S. government agency securities | 25 | 667 | |||||
Certificate of deposits and time deposits | 440 | — | |||||
Corporate debt securities | 68 | — | |||||
Total cash and cash equivalents | 8,079 | 8,903 | |||||
Marketable securities: | |||||||
U.S. government securities | 12,766 | 7,130 | |||||
U.S. government agency securities | 10,944 | 7,411 | |||||
Corporate debt securities | 9,922 | 6,005 | |||||
Total marketable securities | 33,632 | 20,546 | |||||
Total cash and cash equivalents, and marketable securities | $ | 41,711 | $ | 29,449 |
December 31, | |||||||
2017 | 2016 | ||||||
Due in one year | $ | 7,976 | $ | 4,966 | |||
Due in one to five years | 25,656 | 15,580 | |||||
Total | $ | 33,632 | $ | 20,546 |
|
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 5,268 | $ | 5,268 | $ | — | $ | — | ||||||||
U.S. government securities | 66 | 66 | — | — | ||||||||||||
U.S. government agency securities | 25 | 25 | — | — | ||||||||||||
Certificate of deposits and time deposits | 440 | — | 440 | — | ||||||||||||
Corporate debt securities | 68 | — | 68 | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 12,766 | 12,766 | — | — | ||||||||||||
U.S. government agency securities | 10,944 | 10,944 | — | — | ||||||||||||
Corporate debt securities | 9,922 | — | 9,922 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 39,499 | $ | 29,069 | $ | 10,430 | $ | — |
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3 | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 5,409 | $ | 5,409 | $ | — | $ | — | ||||||||
U.S. government securities | 1,463 | 1,463 | — | — | ||||||||||||
U.S. government agency securities | 667 | 667 | — | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 7,130 | 7,130 | — | — | ||||||||||||
U.S. government agency securities | 7,411 | 7,411 | — | — | ||||||||||||
Corporate debt securities | 6,005 | — | 6,005 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 28,085 | $ | 22,080 | $ | 6,005 | $ | — | ||||||||
Accrued expenses and other current liabilities: | ||||||||||||||||
Contingent consideration liability | $ | 242 | $ | — | 242 | $ | — |
|
December 31, | |||||||
2017 | 2016 | ||||||
Land | $ | 798 | $ | 696 | |||
Buildings | 4,909 | 3,109 | |||||
Leasehold improvements | 959 | 531 | |||||
Network equipment | 7,998 | 5,179 | |||||
Computer software, office equipment and other | 681 | 398 | |||||
Construction in progress | 2,992 | 1,890 | |||||
Total | 18,337 | 11,803 | |||||
Less: Accumulated depreciation | (4,616 | ) | (3,212 | ) | |||
Property and equipment, net | $ | 13,721 | $ | 8,591 |
|
Balance as of December 31, 2015 | $ | 18,026 | |
Goodwill acquired | 95 | ||
Effect of currency translation adjustment | 1 | ||
Balance as of December 31, 2016 | $ | 18,122 | |
Goodwill acquired | 90 | ||
Effect of currency translation adjustment | 9 | ||
Balance as of December 31, 2017 | $ | 18,221 |
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||
Weighted-Average Remaining Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Acquired users | 3.8 | $ | 2,056 | $ | (971 | ) | $ | 1,085 | $ | 2,056 | $ | (678 | ) | $ | 1,378 | ||||||||||
Acquired technology | 1.8 | 972 | (711 | ) | 261 | 931 | (518 | ) | 413 | ||||||||||||||||
Acquired patents | 5.7 | 785 | (499 | ) | 286 | 785 | (420 | ) | 365 | ||||||||||||||||
Trade names | 2.2 | 629 | (406 | ) | 223 | 629 | (293 | ) | 336 | ||||||||||||||||
Other | 2.7 | 162 | (133 | ) | 29 | 162 | (119 | ) | 43 | ||||||||||||||||
Total intangible assets | 3.6 | $ | 4,604 | $ | (2,720 | ) | $ | 1,884 | $ | 4,563 | $ | (2,028 | ) | $ | 2,535 |
2018 | $ | 633 | |
2019 | 540 | ||
2020 | 365 | ||
2021 | 265 | ||
2022 | 29 | ||
Thereafter | 52 | ||
Total | $ | 1,884 |
|
December 31, | |||||||
2017 | 2016 | ||||||
Accrued compensation and benefits | $ | 776 | $ | 636 | |||
Accrued property and equipment | 685 | 331 | |||||
Accrued taxes payable | 230 | 155 | |||||
Contingent consideration liability | — | 242 | |||||
Other current liabilities | 1,201 | 839 | |||||
Accrued expenses and other current liabilities | $ | 2,892 | $ | 2,203 |
December 31, | |||||||
2017 | 2016 | ||||||
Income tax payable | $ | 5,372 | $ | 2,431 | |||
Other liabilities | 1,045 | 461 | |||||
Other liabilities | $ | 6,417 | $ | 2,892 |
|
Operating Leases | Financing obligation, building in progress - leased facilities(1) | ||||||
2018 | $ | 409 | $ | — | |||
2019 | 464 | 2 | |||||
2020 | 470 | 14 | |||||
2021 | 448 | 15 | |||||
2022 | 430 | 15 | |||||
Thereafter | 2,423 | 149 | |||||
Total minimum lease payments | $ | 4,644 | $ | 195 |
(1) | We entered into agreements to lease office buildings that are under construction. As a result of our involvement during these construction periods, we are considered for accounting purposes to be the owner of the construction projects. Financing obligation, building in progress - leased facilities represent the total expected financing and lease obligations associated with these leases and will be settled through monthly lease payments to the landlords when we occupy the office spaces upon completion. This amount includes $72 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2017. |
|
Shares Subject to Options Outstanding | ||||||||||||
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value(1) | |||||||||
(in thousands) | (in years) | (in millions) | ||||||||||
Balance as of December 31, 2016 | 5,687 | $ | 7.78 | |||||||||
Stock options exercised | (2,609 | ) | 5.10 | |||||||||
Balance as of December 31, 2017 | 3,078 | $ | 10.06 | 2.4 | $ | 512 | ||||||
Stock options exercisable as of December 31, 2017 | 2,765 | $ | 9.50 | 2.3 | $ | 462 |
(1) | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock of $176.46, as reported on the Nasdaq Global Select Market on December 31, 2017. |
Options Outstanding | Options Exercisable | ||||||||||||||
Exercise Price | Number of Shares | Weighted Average Remaining Contractual Term | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||
$1.85 | 27 | 1.0 | $ | 1.85 | 27 | $ | 1.85 | ||||||||
$2.95 | 851 | 1.6 | 2.95 | 851 | 2.95 | ||||||||||
$10.39 | 1,000 | 2.6 | 10.39 | 1,000 | 10.39 | ||||||||||
$15.00 | 1,200 | 2.8 | 15.00 | 887 | 15.00 | ||||||||||
3,078 | 2.4 | $ | 10.06 | 2,765 | $ | 9.50 |
Unvested RSUs(1) | ||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||
(in thousands) | ||||||
Unvested at December 31, 2016 | 98,586 | $ | 82.99 | |||
Granted | 36,741 | 147.28 | ||||
Vested | (43,176 | ) | 83.74 | |||
Forfeited | (10,937 | ) | 91.76 | |||
Unvested at December 31, 2017 | 81,214 | $ | 110.49 |
(1) | Unvested shares include inducement awards issued in connection with the WhatsApp acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements. |
|
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Interest income | $ | 398 | $ | 176 | $ | 52 | |||||
Interest expense | (6 | ) | (10 | ) | (23 | ) | |||||
Foreign currency exchange losses, net | (6 | ) | (76 | ) | (66 | ) | |||||
Other | 5 | 1 | 6 | ||||||||
Interest and other income (expense), net | $ | 391 | $ | 91 | $ | (31 | ) |
|
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Domestic | $ | 7,079 | $ | 6,368 | $ | 2,802 | |||||
Foreign | 13,515 | 6,150 | 3,392 | ||||||||
Income before provision for income taxes | $ | 20,594 | $ | 12,518 | $ | 6,194 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Current: | |||||||||||
Federal | $ | 4,455 | $ | 2,384 | $ | 3,012 | |||||
State | 190 | 179 | 183 | ||||||||
Foreign | 389 | 195 | 123 | ||||||||
Total current tax expense | 5,034 | 2,758 | 3,318 | ||||||||
Deferred: | |||||||||||
Federal | (296 | ) | (414 | ) | (800 | ) | |||||
State | (33 | ) | (18 | ) | (17 | ) | |||||
Foreign | (45 | ) | (25 | ) | 5 | ||||||
Total deferred tax benefit | (374 | ) | (457 | ) | (812 | ) | |||||
Provision for income taxes | $ | 4,660 | $ | 2,301 | $ | 2,506 |
Year Ended December 31, | ||||||||
2017 | 2016 | 2015 | ||||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 0.6 | 1.0 | 2.0 | |||||
Research tax credits | (0.9 | ) | (0.7 | ) | (1.4 | ) | ||
Share-based compensation | 0.4 | 1.0 | 2.2 | |||||
Excess tax benefits related to share-based compensation(1) | (5.8 | ) | (7.0 | ) | — | |||
Effect of non-U.S. operations | (18.6 | ) | (12.8 | ) | (0.9 | ) | ||
Effect of U.S. tax law change (2) | 11.0 | — | — | |||||
Other | 0.9 | 1.9 | 3.5 | |||||
Effective tax rate | 22.6 | % | 18.4 | % | 40.4 | % |
(1) | Starting in 2016, excess tax benefits from share-based award activity are reflected as a reduction of the provision for income taxes, whereas they were previously recognized in equity. |
(2) | Due to the Tax Act which was enacted in December 2017, provisional mandatory transition tax on accumulated foreign earnings was accrued as of December 31, 2017. In addition, deferred taxes were derecognized for previous estimated tax liabilities that would arise upon repatriation of a portion of these earnings in the foreign jurisdictions. Our U.S. deferred tax assets and liabilities as of December 31, 2017 were re-measured from 35% to 21%.The provisional effects of the Tax Act are $2.53 billion of current income tax expense and $257 million of deferred income tax benefit for the year ended December 31, 2017. |
December 31, | |||||||
2017 | 2016 | ||||||
Deferred tax assets: | |||||||
Net operating loss carryforward | $ | 1,300 | $ | 1,252 | |||
Tax credit carryforward | 509 | 268 | |||||
Share-based compensation | 385 | 684 | |||||
Accrued expenses and other liabilities | 381 | 339 | |||||
Other | 131 | 149 | |||||
Total deferred tax assets | 2,706 | 2,692 | |||||
Less: valuation allowance | (438 | ) | (240 | ) | |||
Deferred tax assets, net of valuation allowance | 2,268 | 2,452 | |||||
Deferred tax liabilities: | |||||||
Depreciation and amortization | (622 | ) | (535 | ) | |||
Purchased intangible assets | (309 | ) | (706 | ) | |||
Deferred taxes on foreign income | (88 | ) | (357 | ) | |||
Total deferred tax liabilities | (1,019 | ) | (1,598 | ) | |||
Net deferred tax assets | $ | 1,249 | $ | 854 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Gross unrecognized tax benefits-beginning of period | $ | 3,309 | $ | 3,017 | $ | 1,682 | |||||
Increases related to prior year tax positions | 72 | 32 | 322 | ||||||||
Decreases related to prior year tax positions | (34 | ) | (36 | ) | (52 | ) | |||||
Increases related to current year tax positions | 536 | 307 | 1,066 | ||||||||
Decreases related to settlements of prior year tax positions | (13 | ) | (11 | ) | (1 | ) | |||||
Gross unrecognized tax benefits-end of period | $ | 3,870 | $ | 3,309 | $ | 3,017 |
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Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenue: | |||||||||||
United States | $ | 17,734 | $ | 12,579 | $ | 8,513 | |||||
Rest of the world(1) | 22,919 | 15,059 | 9,415 | ||||||||
Total revenue | $ | 40,653 | $ | 27,638 | $ | 17,928 |
(1) | No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented. |
December 31, | |||||||
2017 | 2016 | ||||||
Property and equipment, net: | |||||||
United States | $ | 10,406 | $ | 6,793 | |||
Rest of the world(1) | 3,315 | 1,798 | |||||
Total property and equipment, net | $ | 13,721 | $ | 8,591 |
(1) | No individual country, other than disclosed above, exceeded 10% of our total property and equipment, net for any period presented. |
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