Document and Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2018 |
Jul. 27, 2018 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | Square, Inc. | |
Entity Central Index Key | 0001512673 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 301,612,405 | |
Class B | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 108,815,689 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Class of Stock [Line Items] | ||
Preferred stock, par value (in USD per share) | $ 0.0000001 | $ 0.0000001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.0000001 | $ 0.0000001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 297,371,047 | 280,400,813 |
Common stock, shares outstanding (in shares) | 297,371,047 | 280,400,813 |
Class B | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.0000001 | $ 0.0000001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 109,580,981 | 114,793,262 |
Common stock, shares outstanding (in shares) | 109,580,981 | 114,793,262 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Revenue: | ||||
Revenue | $ 814,938 | $ 551,505 | $ 1,483,541 | $ 1,013,059 |
Cost of revenue: | ||||
Total cost of revenue | 499,122 | 344,076 | 912,555 | 632,199 |
Gross profit | 315,816 | 207,429 | 570,986 | 380,860 |
Operating expenses: | ||||
Product development | 114,800 | 78,126 | 219,895 | 146,708 |
Sales and marketing | 98,243 | 59,916 | 175,509 | 109,816 |
General and administrative | 82,772 | 62,988 | 158,273 | 119,923 |
Transaction, loan and advance losses | 21,976 | 18,401 | 40,007 | 30,292 |
Amortization of acquired customer assets | 2,816 | 1,943 | 4,691 | 4,064 |
Total operating expenses | 318,463 | 219,653 | 594,625 | 407,166 |
Operating loss | (2,647) | (12,224) | (23,639) | (26,306) |
Interest and other expense, net | 2,655 | 3,266 | 5,474 | 3,765 |
Loss before income tax | (5,302) | (15,490) | (29,113) | (30,071) |
Provision for income taxes | 604 | 472 | 779 | 981 |
Net loss | $ (5,906) | $ (15,962) | $ (29,892) | $ (31,052) |
Net loss per share: | ||||
Basic (in USD per share) | $ (0.01) | $ (0.04) | $ (0.07) | $ (0.08) |
Diluted (in USD per share) | $ (0.01) | $ (0.04) | $ (0.07) | $ (0.08) |
Weighted-average shares used to compute net loss per share | ||||
Basic (in shares) | 403,301 | 376,357 | 399,624 | 371,573 |
Diluted (in shares) | 403,301 | 376,357 | 399,624 | 371,573 |
Transaction-based revenue | ||||
Revenue: | ||||
Revenue | $ 625,228 | $ 482,065 | $ 1,148,265 | $ 885,543 |
Cost of revenue: | ||||
Cost of revenue | 395,349 | 311,092 | 723,260 | 568,870 |
Subscription and services-based revenue | ||||
Revenue: | ||||
Revenue | 134,332 | 59,151 | 231,386 | 108,211 |
Cost of revenue: | ||||
Cost of revenue | 39,784 | 17,116 | 70,152 | 32,992 |
Hardware revenue | ||||
Revenue: | ||||
Revenue | 18,362 | 10,289 | 32,779 | 19,305 |
Cost of revenue: | ||||
Cost of revenue | 25,536 | 14,173 | 45,238 | 26,835 |
Bitcoin revenue | ||||
Revenue: | ||||
Revenue | 37,016 | 0 | 71,111 | 0 |
Cost of revenue: | ||||
Cost of revenue | 36,596 | 0 | 70,468 | 0 |
Technology assets | ||||
Cost of revenue: | ||||
Amortization of acquired technology | 1,857 | 1,695 | 3,437 | 3,502 |
Customer assets | ||||
Operating expenses: | ||||
Amortization of acquired customer assets | $ 672 | $ 222 | $ 941 | $ 427 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (5,906) | $ (15,962) | $ (29,892) | $ (31,052) |
Net foreign currency translation adjustments | (2,944) | 430 | (2,395) | 1,187 |
Net unrealized gain (loss) on revaluation of intercompany loans | (458) | 432 | 207 | 403 |
Net unrealized gain (loss) on marketable securities | 240 | (139) | (950) | (120) |
Total comprehensive loss | $ (9,068) | $ (15,239) | $ (33,030) | $ (29,582) |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Square, Inc. (together with its subsidiaries, Square or the Company) creates tools that help sellers start, run, and grow their businesses. Square enables sellers to accept card payments and also provides reporting and analytics, next-day settlement, and chargeback protection. Square’s point-of-sale software and other business services help sellers manage inventory, locations, and employees; access financing; engage buyers; build a website or online store; and grow sales. The Cash App is an easy way to send, spend, and receive money, and Caviar is a food-ordering platform. Square was founded in 2009 and is headquartered in San Francisco, with offices in the United States, Canada, Japan, Australia, Ireland, and the UK. Basis of Presentation The accompanying interim condensed consolidated financial statements of the Company are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2017 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive loss, and cash flows for the interim periods. All intercompany transactions and balances have been eliminated in consolidation. The interim results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018, or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk,” and the Consolidated Financial Statements and notes thereto included in Items 7, 7A, and 8, respectively, in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets and deferred revenue, income and other taxes, and share-based compensation. Concentration of Credit Risk For the three and six months ended June 30, 2018 and 2017, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had three third-party payment processors that represented approximately 46%, 43%, and 7% of settlements receivable as of June 30, 2018. The same three parties represented approximately 46%, 42%, and 8% of settlements receivable as of December 31, 2017. All other third-party processors were insignificant. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable securities, settlements receivables, customer funds, and loans held for sale. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. The associated risk of concentration for marketable securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one or two business days to settle which mitigates the associated risk of concentration. The associated risk of concentration for loans held for sale is partially mitigated by credit evaluations that are performed prior to facilitating the offering of loans and ongoing performance monitoring of the Company’s loan customers. Accounting Policies Except for the adoption of ASC 606, Revenue from Contracts with Customers (ASC 606), described in Note 2, and the accounting policy on cryptocurrency transactions, described below, there have been no material changes to the Company’s accounting policies during the six months ended June 30, 2018, as compared to the accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Cryptocurrency transactions During the fourth quarter of 2017, the Company started offering its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company purchases bitcoin from private broker dealers or from customers. Upon purchase, the Company records the cost of bitcoin within other current assets in its consolidated balance sheets. Upon sale, the Company records the total sale amount received from customers as bitcoin revenue and the associated cost as cost of revenue. The carrying value of bitcoin held by the Company was $0.4 million and $0.3 million as of June 30, 2018 and December 31, 2017, respectively. The Company assesses the carrying value of bitcoin held by the Company at each reporting date and records an impairment charge if the cost exceeds the fair value. Losses on bitcoin for the three and six months ended June 30, 2018, were insignificant. Recent Accounting Pronouncements Recently issued accounting pronouncements not yet adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which will require, among other items, lessees to recognize a right of use asset and a related lease liability for most leases on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new standard should be applied on a modified retrospective basis. The Company does not plan to early adopt this guidance. The Company’s operating leases primarily comprise of office spaces, with the most significant leases relating to corporate headquarters in San Francisco and an office in New York. While the Company continues to evaluate the impact of adopting this guidance on its consolidated financial statements, it does expect to record material right to use assets and related lease liabilities on its consolidated balance sheets upon adoption, which will increase total assets and liabilities. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact this new guidance may have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The new guidance eliminates the requirement to calculate the implied fair value of goodwill assuming a hypothetical purchase price allocation (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, not to exceed the carrying amount of goodwill. This standard should be adopted when the Company performs its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments should be applied on a prospective basis. The Company does not expect the adoption of this guidance to have a material the impact on the consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. This standard is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The amendments in this guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact this new guidance may have on the consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. When the Tax Cuts and Jobs Act of 2017 was enacted in December 2017, there was a valuation allowance on the deferred tax assets included within the Company's accumulated other comprehensive income; therefore no tax expense resulted from the change in the federal income tax rate. This guidance allows companies to reclassify such tax effects from accumulated other comprehensive income to retained earnings. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-03, Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance clarifies that an entity that uses the measurement alternative for equity securities without readily determinable fair values can change its measurement approach to fair value. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. |
REVENUE |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Adoption of ASC 606, Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic revenue recognition methodology under ASC 605, Revenue Recognition. The Company recorded a net reduction to retained earnings of $4.6 million as of January 1, 2018, due to the cumulative impact of adopting ASC 606, primarily related to the effect on revenue and associated cost of revenue from hardware sold through the retail distribution channels and hardware installment sales. The impact to revenue for the three and six months ended June 30, 2018 was an increase of $2.4 million and $3.7 million, respectively, as a result of applying ASC 606. For the three months ended June 30, 2018, the revenue recognized from contracts with customers was $792.3 million and revenue from other sources was $22.7 million. For the six months ended June 30, 2018, the revenue recognized from contracts with customers was $1,441.0 million and revenue from other sources was $42.5 million. Impairment losses arising from contracts with customers were $0.9 million and $1.8 million for the three and six months ended June 30, 2018, respectively. The impact of adoption of ASC 606 on the Company's condensed consolidated statement of operations was as follows (in thousands):
The impact of adoption of ASC 606 on the Company's condensed consolidated balance sheets was as follows (in thousands):
Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company's contracts with customers generally do not include multiple performance obligations, except for domain name registration offered with website hosting services sold after May 31, 2018 following the acquisition of Weebly (see Note 7 , Acquisitions). The following table presents the Company's revenue from contracts with customers disaggregated by revenue source (in thousands):
Transaction-based revenue The Company charges its sellers a transaction fee for managed payments solutions that is generally calculated as a percentage of the total transaction amount processed. The Company selectively offers custom pricing for certain sellers. The Company collects the transaction amount from the seller's customer's bank, net of acquiring interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. The Company retains its fees and remits the net amount to the sellers. The Company acts as the merchant of record for its sellers and works directly with payment card networks and banks so that its sellers do not need to manage the complex systems, rules, and requirements of the payments industry. The Company satisfies its performance obligations and therefore recognizes the transaction fees as revenue upon authorization of a transaction by the seller's customer's bank. Revenue is recognized net of refunds, which arise from reversals of transactions initiated by sellers. The transaction fees collected from sellers are recognized as revenue on a gross basis as the Company is the principal in the delivery of the managed payments solutions to the sellers. The Company has concluded it is the principal because it controls the services before delivery to the seller, it is primarily responsible for the delivery of the services, and it has discretion in setting prices charged to sellers. As the merchant of record, Square is liable for settlement of the transactions the Company processes for its sellers, which is recorded as cost of revenue. Subscription and services-based revenue Subscription and services-based revenue is primarily comprised of revenue the Company generates from Instant Deposit and Cash Card, Caviar, website hosting and domain name registration services, and various other software as a service (SaaS) products. Instant Deposit is a functionality within the Cash App and the Company's managed payments solution that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. The Company charges a per transaction fee which is recognized as revenue when customers instantly deposit funds to their bank account. The Company also offers Cash App customers the ability to use funds stored in the Cash App via a Visa prepaid card, for which the Company charges a per transaction fee that is recorded as revenue. Caviar is a food ordering platform that facilitates food delivery services for restaurants. The Company's performance obligation is the delivery of food orders from restaurants to customers. The Company charges fees to restaurants, as sellers, and also charges delivery and service fees to individual and corporate customers. All fees are billed upon delivery of food orders, when the Company considers that it has satisfied its performance obligations. Revenue is also recognized upon delivery of the food orders, net of refunds. Refunds are estimated based on historical experience. Following the acquisition of Weebly, the Company offers customers website hosting services for a fee that is generally billed at inception. The Company also acts as a reseller of domain names registration services for a registrar for a fee, which is also generally billed at inception. The Company considers that it satisfies its performance obligations over time and as such recognizes revenue ratably over the term of the relevant arrangements, which vary from one month to twenty four months for website hosting, and one year to ten years for domain name registration. SaaS represents software products and solutions that provide customers with access to various technologies for a fee which is recognized ratably as the service is provided. The Company's contracts with customers are generally for a term of one month and renew automatically each month. The Company invoices its customers monthly. The Company considers that it satisfies its performance obligations over time each month as it provides the SaaS services to customers and hence recognizes revenue ratably over the month. Hardware revenue The Company generates revenue through the sale of hardware through e-commerce and through its retail distribution channels. The Company satisfies its performance obligation upon delivery of hardware to its customers who include end user customers, distributors, and retailers. The Company may at times offer concessions to customers and also allow for customer returns, which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized. The Company invoices end user customers upon delivery of the products to customers, and payments from such customers are due upon invoicing. Distributors and retailers have payment terms that range from 30 to 90 days after delivery. The Company offers hardware installment sales to customers with terms ranging from three to twenty four months. The Company allocates a portion of the consideration received from these arrangements to a financing component when it determines that a significant financing component exists. The financing component is subsequently recognized as financing revenue over the terms of the arrangement with the customer. Bitcoin revenue During the fourth quarter of 2017, the Company started offering its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company satisfies its performance obligation and records revenue when bitcoin is transferred to the customer's account. Arrangements with Multiple Performance Obligations The Company also offers its customers the option to buy website hosting bundled with domain name registration, and infrequently the Company has offered its hardware customers free managed payments solutions with the purchase of its hardware as part of a marketing promotion. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers since the Company's products and services are normally sold on a stand alone basis. Deferred Revenue Deferred revenue is comprised of unearned revenue related to managed payments services offered in conjunction with hardware sales for which the cash payments from customers are received and due upon the sale of the hardware. Deferred revenue also includes payments for website hosting and domain name registration received from customers at inception of the arrangements prior to the services being rendered. The deferred revenue balances were as follows (in thousands):
Practical Expedients The Company does not recognize a financing component for hardware installment sales that have a term of one year or less. |
RESTRICTED CASH |
6 Months Ended |
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Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | RESTRICTED CASH As of June 30, 2018 and December 31, 2017, restricted cash of $27.5 million and $28.8 million, respectively, is related to pledged cash deposited into savings accounts at the financial institutions that process the Company's sellers' payment transactions and as collateral pursuant to an agreement with the originating bank for the Company's loan product. The Company uses the restricted cash to secure letters of credit with the financial institution to provide collateral for cash flow timing differences in the processing of these payments. The Company has recorded this amount as a current asset on the consolidated balance sheets due to the short-term nature of these cash flow timing differences and that there is no minimum time frame during which the cash must remain restricted. Additionally, this balance includes certain amounts held as collateral pursuant to multi-year lease agreements, discussed in the paragraph below, which we expect to become unrestricted within the next year. As of June 30, 2018 and December 31, 2017, the remaining restricted cash of $12.9 million and $9.8 million, respectively, is primarily related to cash deposited into money market funds that is used as collateral pursuant to multi-year lease agreements (Note 17). This includes $3.1 million arising from the acquisition of Weebly (Note 7). The Company has recorded this amount as a non-current asset on the consolidated balance sheets as the terms of the related leases extend beyond one year. |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its cash equivalents and short-term and long-term investments at fair value. The Company classifies its cash equivalents and short-term and long-term investments within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands):
The carrying amounts of certain financial instruments, including cash equivalents, settlements receivable, customer funds, accounts payable, customers payable, and settlements payable, approximate their fair values due to their short-term nature. The Company estimates the fair value of its convertible senior notes based on their last actively traded prices (Level 1) or market observable inputs (Level 2). The estimated fair value and carrying value of the convertible senior notes were as follows (in thousands):
Loans held for sale are recorded at the lower of amortized cost or fair value determined on an individual loan basis. To determine the fair value the Company utilizes industry-standard valuation modeling, such as discounted cash flow models, taking into account the estimated timing and amounts of periodic repayments. A summary of loans disclosed at fair value on a recurring basis is as follows (in thousands):
The Company recognizes a charge within transaction, loan and advance losses on the consolidated statement of operations whenever the amortized cost of a loan exceeds its fair value, with such charges being reversed for subsequent increases in fair value, but only to the extent that such reversals do not result in the amortized cost of a loan exceeding its fair value. For the three and six months ended June 30, 2018, the Company recorded a charge for the excess of amortized cost over fair value of the loans of $3.2 million and $5.7 million, respectively. For both the three and six months ended June 30, 2017, the Company recorded a charge for the excess of amortized cost over fair value of the loans of $2.7 million. If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three and six months ended June 30, 2018 and 2017, the Company did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. |
INVESTMENTS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | INVESTMENTS The Company determines the appropriate classification of its investments in marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified and accounted for its marketable securities as available-for-sale. The Company's short-term and long-term investments as of June 30, 2018 are as follows (in thousands):
The Company's short-term and long-term investments as of December 31, 2017 are as follows (in thousands):
For the periods presented, gains or losses realized on the sale of investments were not material. Investments are reviewed periodically to identify possible other-than-temporary impairments. As the Company has the ability and intent to hold these investments with unrealized losses for a reasonable period of time sufficient for the recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired for any of the periods presented. The contractual maturities of the Company's short-term and long-term investments as of June 30, 2018 are as follows (in thousands):
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PROPERTY AND EQUIPMENT, NET |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET The following is a summary of property and equipment, less accumulated depreciation and amortization (in thousands):
Depreciation and amortization expense on property and equipment was $9.3 million and $17.5 million for the three and six months ended June 30, 2018, respectively. Depreciation and amortization expense on property and equipment was $7.2 million and $14.5 million for the three and six months ended June 30, 2017, respectively. |
ACQUISITIONS |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS Weebly, Inc. On May 31, 2018, the Company acquired 100% of the outstanding shares of Weebly, a technology company that offers customers website hosting and domain name registration solutions. The acquisition of Weebly will enable the Company to combine Weebly’s web presence tools with the Company's in-person and online offerings to create a cohesive solution for sellers to start or grow an omnichannel business. The acquisition will also expand the Company’s customer base globally and add a new recurring revenue stream. The purchase consideration was comprised of $131.9 million in cash and 2,406,071 shares of the Company’s Class A common stock with an aggregate fair value of $139.4 million based on the closing price of the Company’s Class A common stock on the acquisition date. As part of the acquisition, the Company paid an aggregate of $17.7 million in cash and shares to settle outstanding vested and unvested employee options, of which $2.6 million was accounted for as post-combination compensation expense and is excluded from the purchase consideration. Third-party acquisition-related costs of $1.2 million were recognized in general and administrative expense for both the three and six months ended June 30, 2018. The results of Weebly's operations have been included in the consolidated financial statements since the closing date. The acquisition was accounted for as a business combination. This method requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date and that the difference between the fair value of the consideration paid for the acquired entity and the fair value of the net assets acquired be recorded as goodwill, which is not amortized but is tested at least annually for impairment. The table below summarizes the consideration paid for Weebly and the preliminary assessment of the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). The Company is in the process of completing the valuation of the acquired intangible assets and deferred revenue and is evaluating contingencies and tax effects related to the acquisition. Accordingly, the preliminary values reflected in the table are subject to change.
As of June 30, 2018, $19.9 million of cash and 372,578 shares of the total consideration were withheld as security for indemnification obligations related to general representations and warranties, in addition to certain potential tax exposures. . Goodwill from the Weebly acquisition is primarily attributable to the value of expected synergies created by incorporating Weebly solutions into the Company's technology platform and the value of the assembled workforce. None of the goodwill generated from the Weebly acquisition or the acquired intangible assets are expected to be deductible for tax purposes. Additionally the acquisition would have resulted in recognition of deferred tax assets arising mainly from the net of deferred tax assets from acquired net operating losses (NOLs) and research and development credits, and deferred tax liabilities associated with intangible assets and deferred revenue. However, the realization of such deferred tax assets depends primarily on the Company's post-acquisition ability to generate taxable income in future periods. Accordingly, a valuation allowance was recorded against the net acquired deferred tax asset in accounting for the acquisition. The results of operations from the Weebly acquisition have been consolidated with those of the Company beginning as of the acquisition date. The acquisition of Weebly did not have a material impact on the Company's reported revenue or net loss amounts for any period presented. Accordingly, pro forma financial information has not been presented. Other acquisitions The Company also spent an aggregate of $9.9 million, net of cash acquired, in connection with other immaterial acquisitions during the six months ended June 30, 2018, which resulted in the recognition of additional intangible assets and goodwill. Pro forma financial information has not been presented for any of our acquisitions as the impact to our consolidated financial statements was not material. |
GOODWILL |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
GOODWILL | GOODWILL Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets acquired. The change in carrying value of goodwill in the period was as follows (in thousands):
The Company performs a goodwill impairment test annually on December 31 and more frequently if events and circumstances indicate that the asset might be impaired. For the periods presented, the Company had recorded no impairment charges. |
ACQUIRED INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS The Company entered into two transactions accounted for as business combinations during the quarter ended June 30, 2018, that involved the acquisition of intangible assets. Refer to Note 7 for further details. The following table presents the detail of acquired intangible assets as of the periods presented (in thousands):
The weighted average amortization periods for acquired patents, acquired technology, customer intangible assets, and acquired trade name are approximately 13 years, 5 years, 11 years and 4 years, respectively. All intangible assets are amortized over their estimated useful lives. The changes to the carrying value of intangible assets were as follows (in thousands):
The total estimated future amortization expense of these intangible assets as of June 30, 2018 is as follows (in thousands):
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OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands):
(i) The deferred hardware costs represented costs associated with hardware sold through the retail distribution channels. The adoption of ASC 606 on January 1, 2018, has resulted in the recognition of such costs upon delivery of the hardware to the distribution channel. (ii) The Company capitalizes the cost of its magstripe readers, including packaging and shipping costs, held on-hand by the Company as of each consolidated balance sheet date. Once the readers are shipped to a third-party distributor or an end-customer, they are recorded as marketing expense on the consolidated statements of operations. (iii) Prepaid compensation relates to cash transferred by the Company to an escrow agent in connection with a business combination that will be paid to officers of the acquiree over time as they provide services to the Company. Accrued Expenses The following table presents the detail of accrued expenses (in thousands):
Other Current Liabilities The following table presents the detail of other current liabilities (in thousands):
(iv) Square Capital payable represents unpaid amounts arising from the purchase of loans or loan repayments collected on behalf of third parties. (v) Square Payroll payable represents amounts received from Square Payroll product customers that will be utilized to settle the customers employee payroll and related obligations. OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) Other Non-Current Assets The following table presents the detail of other non-current assets (in thousands):
(i) Prepaid compensation relates to cash transferred by the Company to an escrow agent in connection with a business combination that will be paid to officers of the acquiree over time as they provide services to the Company. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands):
(ii) Statutory liabilities represent loss contingencies that may arise from the Company's interpretation and application of certain guidelines and rules issued by various federal, state, local, and foreign regulatory authorities. |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) | OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands):
(i) The deferred hardware costs represented costs associated with hardware sold through the retail distribution channels. The adoption of ASC 606 on January 1, 2018, has resulted in the recognition of such costs upon delivery of the hardware to the distribution channel. (ii) The Company capitalizes the cost of its magstripe readers, including packaging and shipping costs, held on-hand by the Company as of each consolidated balance sheet date. Once the readers are shipped to a third-party distributor or an end-customer, they are recorded as marketing expense on the consolidated statements of operations. (iii) Prepaid compensation relates to cash transferred by the Company to an escrow agent in connection with a business combination that will be paid to officers of the acquiree over time as they provide services to the Company. Accrued Expenses The following table presents the detail of accrued expenses (in thousands):
Other Current Liabilities The following table presents the detail of other current liabilities (in thousands):
(iv) Square Capital payable represents unpaid amounts arising from the purchase of loans or loan repayments collected on behalf of third parties. (v) Square Payroll payable represents amounts received from Square Payroll product customers that will be utilized to settle the customers employee payroll and related obligations. OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) Other Non-Current Assets The following table presents the detail of other non-current assets (in thousands):
(i) Prepaid compensation relates to cash transferred by the Company to an escrow agent in connection with a business combination that will be paid to officers of the acquiree over time as they provide services to the Company. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands):
(ii) Statutory liabilities represent loss contingencies that may arise from the Company's interpretation and application of certain guidelines and rules issued by various federal, state, local, and foreign regulatory authorities. |
INDEBTEDNESS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEBTEDNESS | INDEBTEDNESS Revolving Credit Facility In November 2015, the Company entered into a revolving credit agreement with certain lenders, which extinguished the prior revolving credit agreement and provided for a $375.0 million revolving secured credit facility maturing in November 2020. This revolving credit agreement is secured by certain tangible and intangible assets. Loans under the credit facility bear interest at the Company’s option of (i) a base rate based on the highest of the prime rate, the federal funds rate plus 0.50%, and an adjusted LIBOR rate for a one-month interest period, in each case plus a margin ranging from 0.00% to 1.00%, or (ii) an adjusted LIBOR rate plus a margin ranging from 1.00% to 2.00%. This margin is determined based on the Company’s total leverage ratio for the preceding four fiscal quarters. The Company is obligated to pay other customary fees for a credit facility of this size and type including an annual administrative agent fee of $0.1 million and an unused commitment fee of 0.15%. To date no funds have been drawn under the credit facility, with $375.0 million remaining available. The Company paid $0.1 million and $0.3 million in unused commitment fees during both the three and six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, the Company was in compliance with all financial covenants associated with this credit facility. Convertible Senior Notes due in 2023 On May 25, 2018, the Company issued an aggregate principal amount of $750.0 million of convertible senior notes and an additional 15% or $112.5 million pursuant to the exercise in full of the option to the initial purchaser to cover over-allotments (2023 Notes). The 2023 Notes mature on May 15, 2023, unless earlier converted or repurchased, and bear interest at a rate of 0.50% payable semi-annually on May 15 and November 15 of each year. The 2023 Notes are convertible at an initial conversion rate of 12.8456 shares of the Company's Class A common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $77.85 per share of Class A common stock. Holders may convert their 2023 Notes at any time prior to the close of business on the business day immediately preceding February 15, 2023 only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2023 Notes) per $1,000 principal amount of 2023 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2023 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. On or after February 15, 2023, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2023 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. It is the Company’s current intent and policy to settle conversions through combination settlement with a specified dollar amount of $1,000 per $1,000 principal amount of 2023 Notes. In accounting for the issuance of the 2023 Notes, the Company separated the 2023 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $155.3 million and was determined by deducting the fair value of the liability component from the par value of the 2023 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the 2023 Notes at an effective interest rate of 4.69% over the contractual terms of the Notes. Debt issuance costs related to the 2023 Notes comprising of discounts and commissions payable to the initial purchasers of $6.0 million and third party offering costs amounted to $0.8 million. The Company allocated the total amount incurred to the liability and equity components of the 2023 Notes based on their relative values. Issuance costs attributable to the liability component were $5.6 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Convertible Senior Notes due in 2022 On March 6, 2017, the Company issued an aggregate principal amount of $400.0 million of convertible senior notes and an additional 10% or $40.0 million pursuant to the exercise in full of the option to the initial purchasers to cover over-allotments (2022 Notes). The 2022 Notes mature on March 1, 2022, unless earlier converted or repurchased, and bear interest at a rate of 0.375% payable semi-annually on March 1 and September 1 of each year. The 2022 Notes are convertible at an initial conversion rate of 43.5749 shares of the Company's Class A common stock per $1,000 principal amount of 2022 Notes, which is equivalent to an initial conversion price of approximately $22.95 per share of Class A common stock. Holders may convert their 2022 Notes at any time prior to the close of business on the business day immediately preceding December 1, 2021 only under the following circumstances: (1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the indenture governing the 2022 Notes) per $1,000 principal amount of 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2022 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. On or after December 1, 2021, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2022 Notes regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election. It is the Company’s current intent and policy to settle conversions through combination settlement with a specified dollar amount of $1,000 per $1,000 principal amount of 2022 Notes. The circumstances required to allow the holders to convert their 2022 Notes were met for the quarters commencing January 1, 2018, April 1, 2018 and July 1, 2018 respectively. In late July 2018, certain holders of the 2022 Notes informed the Company of their intention to convert $45 million in principal amount. In accounting for the issuance of the 2022 Notes, the Company separated the 2022 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was $86.2 million and was determined by deducting the fair value of the liability component from the par value of the 2022 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The debt discount is amortized to interest expense over the term of the 2022 Notes at an effective interest rate of 5.34% over the contractual terms of the Notes. Debt issuance costs related to the 2022 Notes comprised of discounts and commissions payable to the initial purchasers of $11.0 million and third party offering costs of $0.8 million. The Company allocated the total amount incurred to the liability and equity components of the 2022 Notes based on their relative values. Issuance costs attributable to the liability component were $9.4 million and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. The net carrying amount of the Notes were as follows (in thousands):
The net carrying amount of the equity component of the Notes were as follows (in thousands):
The Company recognized interest expense on the Notes as follows (in thousands, except for percentages):
The effective interest rate of the liability component is 4.69% and 5.34% for the 2023 Notes and 2022 Notes, respectively. Convertible Note Hedge and Warrant Transactions In connection with the offering of the 2023 Notes, the Company entered into convertible note hedge transactions (2023 convertible note hedges) with certain financial institution counterparties whereby the Company has the option to purchase a total of approximately 11.1 million shares of its Class A common stock at a price of approximately $77.85 per share. The total cost of the 2023 convertible note hedge transactions was $172.6 million. In addition, the Company sold warrants (2023 warrants) to the counterparties whereby the counterparties have the option to purchase a total of 11.1 million shares of the Company’s Class A common stock at a price of approximately $109.26 per share. The Company received $112.1 million in cash proceeds from the sale of the 2023 warrants. Taken together, the purchase of the 2023 convertible note hedges and sale of the 2023 warrants are intended to reduce dilution from the conversion of the 2023 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2023 Notes, as the case may be, and to effectively increase the overall conversion price from approximately $77.85 per share to approximately $109.26 per share. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2023 convertible note hedges and 2023 warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the 2023 convertible note hedge and 2023 warrant transactions were recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. In connection with the offering of the 2022 Notes, the Company entered into convertible note hedge transactions (2022 convertible note hedges) with certain financial institution counterparties whereby the Company has the option to purchase a total of approximately 19.2 million shares of its Class A common stock at a price of approximately $22.95 per share. The total cost of the 2022 convertible note hedge transactions was $92.1 million. In addition, the Company sold warrants (2022 warrants) to the counterparties whereby the counterparties have the option to purchase a total of 19.2 million shares of the Company’s Class A common stock at a price of approximately $31.18 per share. The Company received $57.2 million in cash proceeds from the sale of the 2022 warrants. Taken together, the purchase of the 2022 convertible note hedges and sale of the 2022 warrants are intended to reduce dilution from the conversion of the 2022 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2022 Notes, as the case may be, and to effectively increase the overall conversion price from approximately $22.95 per share to approximately $31.18 per share. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2022 convertible note hedges and 2022 warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the 2022 convertible note hedge and 2022 warrant transactions were recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. |
ACCRUED TRANSACTION LOSSES |
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Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED TRANSACTION LOSSES | ACCRUED TRANSACTION LOSSES The Company is exposed to transaction losses due to chargebacks as a result of fraud or uncollectibility. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands):
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded an income tax expense of $0.6 million and $0.8 million for the three and six months ended June 30, 2018, respectively, compared to income tax expense of $0.5 million and $1.0 million for the three and six months ended June 30, 2017, respectively. The income tax expense recorded for the three and six months ended June 30, 2018 was primarily due to state and foreign income tax expense offset by a release in the U.S. valuation allowance. The Company’s effective tax rate was (11.4)% and (2.7)% for the three and six months ended June 30, 2018, respectively, compared to an effective tax rate of (3.0)% and (3.3)% for the three and six months ended June 30, 2017, respectively. The difference between the effective tax rate and the federal statutory tax rate for the three and six months ended June 30, 2018 and June 30, 2017 primarily relates to the valuation allowance on the Company’s deferred tax assets. The Company’s effective tax rate may be subject to fluctuation during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which the Company operates, valuation allowances against deferred tax assets, the recognition and de-recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. As of June 30, 2018, the Company retains a full valuation allowance on its deferred tax assets in the U.S. and certain foreign jurisdictions. The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods. The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income. The tax provision for the three and six months ended June 30, 2018 and June 30, 2017, was calculated on a jurisdiction basis. The Company estimated the foreign income tax provision using the effective income tax rate expected to be applicable for the full year. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act of 2017. The Company's accounting for all items is expected to be complete when the Company files its 2017 U.S. corporate income tax return 2018. Any differences between what was previously recorded and the final tax return amounts or estimates done for subsequent quarters are not expected to be material. |
STOCKHOLDERS' EQUITY |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY The changes in total stockholders’ equity were as follows (in thousands):
Common Stock The Company has authorized the issuance of Class A common stock and Class B common stock. Class A common stock and Class B common stock are referred to as "common stock" throughout these Notes to the Condensed Consolidated Financial Statements, unless otherwise noted. As of June 30, 2018, the Company was authorized to issue 1,000,000,000 shares of Class A common stock and 500,000,000 shares of Class B common stock, each with a par value of $0.0000001 per share. As of June 30, 2018, there were 297,371,047 shares of Class A common stock and 109,580,981 shares of Class B common stock outstanding. Options and awards granted following the Company's initial public offering are related to underlying Class A common stock. Additionally, holders of Class B common stock are able to convert such shares into Class A common stock. Warrants In conjunction with the 2023 Notes offering, the Company sold the 2023 warrants whereby the counterparties have the option to purchase a total of approximately 11.1 million shares of the Company’s Class A common stock at a price of $109.26 per share. The Company received $112.1 million in cash proceeds from the sale of the 2023 warrants. See Note 12, Indebtedness, for more details on this transaction. Release of Caviar Shares Held Back In 2014, in conjunction with the Company's acquisition of Caviar, Inc. (Caviar), 1,291,979 shares of the purchase consideration issuable were withheld for indemnification purposes. In April 2018, the Company reached an agreement with the former owners of Caviar whereby 822,085 of the shares held back were released to the former owners and 469,894 shares were forfeited back to the Company as indemnification against liabilities related to Caviar preacquisition matters. Upon reaching the agreement, the Company recorded an indemnification asset of $2.8 million and a corresponding credit to expense to compensate for the costs previously incurred in connection with Caviar preacquisition claims. The remaining value of the forfeited shares was treated as an equity repurchase. Stock Plans The Company maintains two share-based employee compensation plans: the 2009 Stock Plan (2009 Plan) and the 2015 Equity Incentive Plan (2015 Plan). The 2015 Plan serves as the successor to the 2009 Plan. The 2015 Plan became effective as of November 17, 2015. Outstanding awards under the 2009 Plan continue to be subject to the terms and conditions of the 2009 Plan. Since November 17, 2015, no additional awards have been nor will be in the future granted under the 2009 Plan. Under the 2015 Plan, shares of the Company's Class A common stock are reserved for the issuance of incentive and nonstatutory stock options, restricted stock awards (RSAs), restricted stock units (RSUs), performance shares, and stock bonuses to qualified employees, directors, and consultants. The awards must be granted at a price per share not less than the fair market value at the date of grant. Initially, 30,000,000 shares were reserved under the 2015 Plan, and any shares subject to options or other similar awards granted under the 2009 Plan that expire, are forfeited, are repurchased by the Company, or otherwise terminate unexercised, will become available under the 2015 Plan. The number of shares available for issuance under the 2015 Plan will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 40,000,000 shares, (ii) 5% of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Company’s board of directors or a committee thereof. As of June 30, 2018, the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2015 Plan was 26,273,466, and 63,326,561 shares were available for future issuance. As of June 30, 2018, the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2009 Plan was 34,740,852. A summary of stock option activity for the six months ended June 30, 2018 is as follows (in thousands, except share and per share data):
Restricted Stock Activity Activity related to RSAs and RSUs during the six months ended June 30, 2018 is set forth below:
Share-Based Compensation The fair value of stock options and employee stock purchase plan rights are estimated on the date of grant using the Black-Scholes-Merton option valuation model. The fair value of RSAs and RSUs is determined by the closing price of the Company’s common stock on each grant date. The fair value of stock options granted was estimated using the following weighted-average assumptions:
The following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands):
The Company recorded $2.0 million and $4.2 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the three and six months ended June 30, 2018, respectively, compared to $1.2 million and $3.0 million for the three and six months ended June 30, 2017, respectively, which are included in the table above. The Company capitalized $2.7 million and $4.3 million of share-based compensation expense related to capitalized software costs during the three and six months ended June 30, 2018, respectively, compared to $0.7 million and $1.2 million for the three and six months ended June 30, 2017, respectively. As of June 30, 2018, there was $531.5 million of total unrecognized compensation cost related to outstanding awards that are expected to be recognized over a weighted-average period of 2.87 years. |
LOSS PER SHARE |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOSS PER SHARE | LOSS PER SHARE Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
Additionally, since the Company expects to settle the principal amount of its outstanding 2022 Notes and 2023 Notes in cash, the Company uses the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable. The conversion spread will have a dilutive impact on diluted net income per share of common stock when the average market price of the Company’s common stock for a given period exceeds the conversion price of $22.95 per share, for the 2022 Notes, or $77.85, for the 2023 Notes. Because the Company has reported a net loss for all periods presented, diluted loss per share is the same as basic loss per share for those periods. The following potential common shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands):
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating and Capital Leases The Company has entered into various non-cancelable operating leases for certain offices with contractual lease periods expiring between 2018 and 2025. The Company recognized total rental expenses under operating leases of $5.3 million and $9.8 million for the three and six months ended June 30, 2018, respectively, compared to $3.1 million and $5.9 million for the three and six months ended June 30, 2017, respectively. Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum capital lease payments as of June 30, 2018 are as follows (in thousands):
Litigation The Company is currently a party to, and may in the future be involved in, various litigation matters (including intellectual property litigation), legal claims, and government investigations. The Treasurer & Tax Collector of the City and County of San Francisco (Tax Collector) has issued a decision for fiscal years 2014 and 2015, that the Tax Collector believes the Company’s primary business activity is financial services rather than information services, and accordingly, the Company would be liable for the Gross Receipts Tax and Payroll Expense Tax under the rules for financial services business activities. The Company paid the liability for fiscal years 2014 and 2015 in the first quarter of 2018, as assessed by the Tax Collector. The Company intends to vigorously defend its position, which it believes has merit. Should the Company not prevail, the Company could be obligated to pay additional taxes together with any associated penalties and interest for subsequent years that together, in aggregate, could be material. The Company is currently unable to estimate the range of possible loss given the uncertainties associated with this matter, including uncertainties about the Tax Collector’s rationale for its position and about the amounts that may ultimately be subject to such taxes. In addition, from time to time, the Company is involved in various other litigation matters and disputes arising in the ordinary course of business. The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability with respect to these other matters. While the Company does not believe, at this time, that any ultimate liability resulting from any of these other matters will have a material adverse effect on the Company's results of operations, financial position, or liquidity, the Company cannot give any assurance regarding the ultimate outcome of these other matters, and their resolution could be material to the Company's operating results for any particular period. |
SEGMENT AND GEOGRAPHICAL INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATION Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) for purposes of allocating resources and evaluating financial performance. The Company’s CODM is the chief executive officer who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company’s operations constitute a single operating segment and one reportable segment. Revenue Revenue by geography is based on the billing addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands):
No individual country from the international markets contributed in excess of 10% of total revenue for the three and six months ended June 30, 2018 and 2017. Long-Lived Assets The following table sets forth long-lived assets by geographic area (in thousands):
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SUPPLEMENTAL CASH FLOW INFORMATION |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The supplemental disclosures of cash flow information consist of the following (in thousands):
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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying interim condensed consolidated financial statements of the Company are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2017 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive loss, and cash flows for the interim periods. All intercompany transactions and balances have been eliminated in consolidation. The interim results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018, or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures About Market Risk,” and the Consolidated Financial Statements and notes thereto included in Items 7, 7A, and 8, respectively, in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. |
Use of Estimates | The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets and deferred revenue, income and other taxes, and share-based compensation. |
Concentration of Credit Risk | For the three and six months ended June 30, 2018 and 2017, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had three third-party payment processors that represented approximately 46%, 43%, and 7% of settlements receivable as of June 30, 2018. The same three parties represented approximately 46%, 42%, and 8% of settlements receivable as of December 31, 2017. All other third-party processors were insignificant. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable securities, settlements receivables, customer funds, and loans held for sale. The associated risk of concentration for cash and cash equivalents and restricted cash is mitigated by banking with creditworthy institutions. At certain times, amounts on deposit exceed federal deposit insurance limits. The associated risk of concentration for marketable securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one or two business days to settle which mitigates the associated risk of concentration. The associated risk of concentration for loans held for sale is partially mitigated by credit evaluations that are performed prior to facilitating the offering of loans and ongoing performance monitoring of the Company’s loan customers. |
Cryptocurrency transactions | During the fourth quarter of 2017, the Company started offering its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company. The Company purchases bitcoin from private broker dealers or from customers. Upon purchase, the Company records the cost of bitcoin within other current assets in its consolidated balance sheets. Upon sale, the Company records the total sale amount received from customers as bitcoin revenue and the associated cost as cost of revenue. The carrying value of bitcoin held by the Company was $0.4 million and $0.3 million as of June 30, 2018 and December 31, 2017, respectively. The Company assesses the carrying value of bitcoin held by the Company at each reporting date and records an impairment charge if the cost exceeds the fair value. Losses on bitcoin for the three and six months ended June 30, 2018, were insignificant. |
Recent Accounting Pronouncements | Recently issued accounting pronouncements not yet adopted In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which will require, among other items, lessees to recognize a right of use asset and a related lease liability for most leases on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new standard should be applied on a modified retrospective basis. The Company does not plan to early adopt this guidance. The Company’s operating leases primarily comprise of office spaces, with the most significant leases relating to corporate headquarters in San Francisco and an office in New York. While the Company continues to evaluate the impact of adopting this guidance on its consolidated financial statements, it does expect to record material right to use assets and related lease liabilities on its consolidated balance sheets upon adoption, which will increase total assets and liabilities. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact this new guidance may have on the consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The new guidance eliminates the requirement to calculate the implied fair value of goodwill assuming a hypothetical purchase price allocation (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value, not to exceed the carrying amount of goodwill. This standard should be adopted when the Company performs its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted. The amendments should be applied on a prospective basis. The Company does not expect the adoption of this guidance to have a material the impact on the consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU No. 2017-08, Premium Amortization on Purchased Callable Debt Securities, which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. This standard is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The amendments in this guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact this new guidance may have on the consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. When the Tax Cuts and Jobs Act of 2017 was enacted in December 2017, there was a valuation allowance on the deferred tax assets included within the Company's accumulated other comprehensive income; therefore no tax expense resulted from the change in the federal income tax rate. This guidance allows companies to reclassify such tax effects from accumulated other comprehensive income to retained earnings. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-03, Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance clarifies that an entity that uses the measurement alternative for equity securities without readily determinable fair values can change its measurement approach to fair value. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements and related disclosures. |
REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of Adoption of ASC 606 | The impact of adoption of ASC 606 on the Company's condensed consolidated statement of operations was as follows (in thousands):
The impact of adoption of ASC 606 on the Company's condensed consolidated balance sheets was as follows (in thousands):
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Schedule of Disaggregation of Revenue | The following table presents the Company's revenue from contracts with customers disaggregated by revenue source (in thousands):
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Schedule of Deferred Revenue | The deferred revenue balances were as follows (in thousands):
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The estimated fair value and carrying value of the convertible senior notes were as follows (in thousands):
The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands):
A summary of loans disclosed at fair value on a recurring basis is as follows (in thousands):
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INVESTMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term and Long-term Investments | The Company's short-term and long-term investments as of June 30, 2018 are as follows (in thousands):
The Company's short-term and long-term investments as of December 31, 2017 are as follows (in thousands):
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Investments Classified by Contractual Maturity Date | The contractual maturities of the Company's short-term and long-term investments as of June 30, 2018 are as follows (in thousands):
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PROPERTY AND EQUIPMENT, NET (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | The following is a summary of property and equipment, less accumulated depreciation and amortization (in thousands):
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ACQUISITIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed | The table below summarizes the consideration paid for Weebly and the preliminary assessment of the fair value of the assets acquired and liabilities assumed at the closing date (in thousands, except share data). The Company is in the process of completing the valuation of the acquired intangible assets and deferred revenue and is evaluating contingencies and tax effects related to the acquisition. Accordingly, the preliminary values reflected in the table are subject to change.
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GOODWILL (Tables) |
6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
Schedule of Goodwill | The change in carrying value of goodwill in the period was as follows (in thousands):
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ACQUIRED INTANGIBLE ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite Lived Intangible Assets | The changes to the carrying value of intangible assets were as follows (in thousands):
The following table presents the detail of acquired intangible assets as of the periods presented (in thousands):
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Schedule of Annual Future Amortization Expense of Intangible Assets | The total estimated future amortization expense of these intangible assets as of June 30, 2018 is as follows (in thousands):
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OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets | The following table presents the detail of other current assets (in thousands):
(i) The deferred hardware costs represented costs associated with hardware sold through the retail distribution channels. The adoption of ASC 606 on January 1, 2018, has resulted in the recognition of such costs upon delivery of the hardware to the distribution channel. (ii) The Company capitalizes the cost of its magstripe readers, including packaging and shipping costs, held on-hand by the Company as of each consolidated balance sheet date. Once the readers are shipped to a third-party distributor or an end-customer, they are recorded as marketing expense on the consolidated statements of operations. (iii) Prepaid compensation relates to cash transferred by the Company to an escrow agent in connection with a business combination that will be paid to officers of the acquiree over time as they provide services to the Company. |
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Schedule of Accrued Expenses | The following table presents the detail of accrued expenses (in thousands):
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Schedule of Other Current Liabilities | The following table presents the detail of other current liabilities (in thousands):
(iv) Square Capital payable represents unpaid amounts arising from the purchase of loans or loan repayments collected on behalf of third parties. (v) Square Payroll payable represents amounts received from Square Payroll product customers that will be utilized to settle the customers employee payroll and related obligations. |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Non-Current Assets | The following table presents the detail of other non-current assets (in thousands):
(i) Prepaid compensation relates to cash transferred by the Company to an escrow agent in connection with a business combination that will be paid to officers of the acquiree over time as they provide services to the Company. |
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Schedule of Other Non-Current Liabilities | The following table presents the detail of other non-current liabilities (in thousands):
(ii) Statutory liabilities represent loss contingencies that may arise from the Company's interpretation and application of certain guidelines and rules issued by various federal, state, local, and foreign regulatory authorities. |
INDEBTEDNESS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Notes | The net carrying amount of the Notes were as follows (in thousands):
The net carrying amount of the equity component of the Notes were as follows (in thousands):
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Interest Expense on Convertible Notes | The Company recognized interest expense on the Notes as follows (in thousands, except for percentages):
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ACCRUED TRANSACTION LOSSES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reserve for Transaction Losses | The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands):
|
STOCKHOLDERS' EQUITY (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Stockholder's Equity | The changes in total stockholders’ equity were as follows (in thousands):
|
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Summary of Stock Option Activity | A summary of stock option activity for the six months ended June 30, 2018 is as follows (in thousands, except share and per share data):
|
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Schedule of RSU Activity | Activity related to RSAs and RSUs during the six months ended June 30, 2018 is set forth below:
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Schedule of Fair Value Assumptions for Options | The fair value of stock options granted was estimated using the following weighted-average assumptions:
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Summary of the Effect of Share-Based Compensation on the Condensed Consolidated Statements of Operations | The following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands):
|
LOSS PER SHARE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Loss Per Share | The following potential common shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands):
|
COMMITMENTS AND CONTINGENCIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Payments Under Operating and Capital Leases | Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum capital lease payments as of June 30, 2018 are as follows (in thousands):
|
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Geographic Areas | Revenue by geography is based on the billing addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands):
|
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Long-lived Assets by Geographic Areas | The following table sets forth long-lived assets by geographic area (in thousands):
|
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow, Supplemental Disclosures | The supplemental disclosures of cash flow information consist of the following (in thousands):
|
REVENUE - Adoption of ASC 606 on the Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Other current assets | $ 120,250 | $ 86,454 |
Other current liabilities | 60,635 | 28,367 |
Other non-current assets | 40,995 | 31,350 |
Other non-current liabilities | 85,851 | $ 69,538 |
Balances without adoption of ASC 606 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Other current assets | 131,464 | |
Other current liabilities | 67,486 | |
Other non-current assets | 42,570 | |
Other non-current liabilities | 87,282 | |
ASU 2014-09 | Effect of change | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Other current assets | (11,214) | |
Other current liabilities | (6,851) | |
Other non-current assets | (1,575) | |
Other non-current liabilities | $ (1,431) |
REVENUE - Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenue, contracts from customers | $ 792,300 | $ 1,441,000 | ||
Transaction-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, contracts from customers | 625,228 | $ 482,065 | 1,148,265 | $ 885,543 |
Subscription and services-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, contracts from customers | 111,670 | 59,151 | 188,885 | 108,211 |
Hardware revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, contracts from customers | 18,362 | 10,289 | 32,779 | 19,305 |
Bitcoin revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue, contracts from customers | $ 37,016 | $ 0 | $ 71,111 | $ 0 |
REVENUE - Deferred Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred revenue, end of the period | $ 27,155 | $ 4,523 | $ 27,155 | $ 4,523 |
Deferred revenue arising from business combination | 22,800 | 0 | 22,800 | 0 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | 1,975 | 925 | 1,095 | 5,257 |
Balances without adoption of ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deferred revenue, beginning of the period | $ 3,353 | $ 2,965 | $ 5,893 | $ 5,407 |
RESTRICTED CASH (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Pledged cash | $ 27,487 | $ 28,805 |
Collateral | 12,908 | $ 9,802 |
Weebly, Inc. | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Collateral | $ 3,100 |
FAIR VALUE OF FINANCIAL INSTRUMENTS - Loans Disclosed at Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Carrying Value | Level 3 | Fair Value, Measurements, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held for sale, fair value | $ 85,040 | $ 85,040 | $ 73,420 | ||
Fair Value (Level 3) | Level 3 | Fair Value, Measurements, Recurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held for sale, fair value | 88,645 | 88,645 | $ 76,070 | ||
Loans Receivable Held-For-Sale | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Excess amortized cost over fair value of loans charge | $ 3,200 | $ (2,700) | $ 5,700 | $ (2,700) |
INVESTMENTS - Maturity of Available for Sale Securities (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Amortized Cost | |
Due in one year or less | $ 233,490 |
Due in one to five years | 168,019 |
Total | 401,509 |
Fair Value | |
Due in one year or less | 233,599 |
Due in one to five years | 168,150 |
Total | $ 401,749 |
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 240,162 | $ 240,162 | $ 192,812 | ||
Less: Accumulated depreciation and amortization | (118,454) | (118,454) | (101,316) | ||
Property and equipment, net | 121,708 | 121,708 | 91,496 | ||
Depreciation | 9,300 | $ 7,200 | 17,500 | $ 14,500 | |
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 94,241 | 94,241 | 77,073 | ||
Computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 81,763 | 81,763 | 66,186 | ||
Capitalized software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 45,927 | 45,927 | 35,063 | ||
Office furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 18,231 | $ 18,231 | $ 14,490 |
ACQUISITIONS - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
May 31, 2018 |
Jun. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Business Acquisition [Line Items] | ||||
Payment for acquisitions, net of cash acquired | $ 111,828 | $ 1,600 | ||
Weebly, Inc. | ||||
Business Acquisition [Line Items] | ||||
Percent of outstanding shares acquired | 100.00% | |||
Cash consideration | $ 131,860 | |||
Equity consideration (in shares) | 2,406,071 | |||
Equity consideration fair value | $ 139,396 | |||
Payment to settle outstanding vested and unvested employee options | 17,700 | |||
Post-combination compensation expense | $ 2,600 | |||
Acquisition-related costs | $ 1,200 | 1,200 | ||
Cash withheld for indemnification | $ 19,900 | $ 19,900 | ||
Shares withheld for indemnification (in shares) | 372,578 | 372,578 | ||
Immaterial acquisitions | ||||
Business Acquisition [Line Items] | ||||
Payment for acquisitions, net of cash acquired | $ 9,900 |
GOODWILL (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | $ 58,327,000 | |||
Acquisitions completed during the six months ended June 30, 2018 | 197,329,000 | |||
Goodwill, ending balance | $ 255,656,000 | 255,656,000 | ||
Goodwill, impairment charges | $ 0 | $ 0 | $ 0 | $ 0 |
ACQUIRED INTANGIBLE ASSETS - Narrative (Details) - business |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
May 31, 2018 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Number of businesses acquired involving intangible assets | 2 | ||
Weebly, Inc. | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Percent of outstanding shares acquired | 100.00% | ||
Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 13 years | ||
Technology assets | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 5 years | ||
Customer assets | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 11 years | ||
Trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 4 years |
ACQUIRED INTANGIBLE ASSETS - Change in Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Finite-lived Intangible Assets [Roll Forward] | ||||
Acquired intangible assets, net, beginning of the period | $ 14,138 | $ 18,395 | $ 14,334 | $ 19,292 |
Acquisitions | 74,192 | 0 | 75,871 | 1,224 |
Amortization expense | 2,816 | 1,943 | 4,691 | 4,064 |
Acquired intangible assets, net, end of the period | $ 85,514 | $ 16,452 | $ 85,514 | $ 16,452 |
ACQUIRED INTANGIBLE ASSETS - Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
2018 (remaining 6 months) | $ 7,863 | |||||
2019 | 13,843 | |||||
2020 | 11,638 | |||||
2021 | 10,440 | |||||
2022 | 8,511 | |||||
Thereafter | 33,219 | |||||
Net | $ 85,514 | $ 14,138 | $ 14,334 | $ 16,452 | $ 18,395 | $ 19,292 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Inventory, net | $ 22,041 | $ 16,777 |
Processing costs receivable | 33,861 | 21,083 |
Prepaid expenses | 16,663 | 14,473 |
Accounts receivable, net | 17,895 | 8,606 |
Deferred hardware costs | 0 | 7,931 |
Deferred magstripe reader costs | 3,034 | 2,469 |
Prepaid compensation, current | 5,940 | 0 |
Other | 20,816 | 15,115 |
Total | $ 120,250 | $ 86,454 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued payroll | $ 10,229 | $ 9,103 |
Accrued professional fees | 9,168 | 5,638 |
Accrued advertising and other marketing | 11,961 | 6,723 |
Processing costs payable | 11,205 | 10,145 |
Accrued non income tax liabilities | 7,504 | 6,155 |
Accrued hardware costs | 1,806 | 2,496 |
Other accrued liabilities | 22,943 | 12,020 |
Total | $ 74,816 | $ 52,280 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Square Capital payable | $ 10,301 | $ 7,671 |
Square Payroll payable | 6,494 | 2,850 |
Deferred revenue, current | 24,062 | 5,893 |
Deferred rent, current | 3,691 | 3,311 |
Accrued redemptions | 1,110 | 1,036 |
Other | 14,977 | 7,606 |
Total | $ 60,635 | $ 28,367 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Investment in privately held entity | $ 25,000 | $ 25,000 |
Prepaid compensation, non-current | 7,927 | 0 |
Deposits | 2,646 | 2,738 |
Debt issuance costs | 650 | 788 |
Deferred tax assets | 680 | 519 |
Other | 4,092 | 2,305 |
Total | $ 40,995 | $ 31,350 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Statutory liabilities | $ 47,423 | $ 40,768 |
Deferred rent, non-current | 21,479 | 20,349 |
Deferred purchase consideration | 3,900 | 0 |
Deferred revenue, non-current | 3,093 | 432 |
Deferred tax liabilities | 148 | 644 |
Other | 9,808 | 7,345 |
Total | $ 85,851 | $ 69,538 |
INDEBTEDNESS - Revolving Credit Facility, Narrative (Details) - Revolving Credit Facility - Line of Credit - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Nov. 30, 2015 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 375,000,000 | ||||
Administrative agent fee | $ 100,000 | ||||
Unused commitment fee percentage | 0.15% | ||||
Remaining borrowing capacity | $ 375,000,000 | $ 375,000,000 | |||
Unused commitment fees | $ 100,000 | $ 100,000 | $ 300,000 | $ 300,000 | |
Federal Funds Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
One Month LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.00% | ||||
One Month LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.00% |
INDEBTEDNESS - Components of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands |
Jun. 30, 2018 |
May 25, 2018 |
Dec. 31, 2017 |
Mar. 06, 2017 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Principal outstanding | $ 1,302,500 | |||
Unamortized debt discount | (218,369) | |||
Unamortized debt issuance costs | (12,694) | |||
Net carrying value | 1,071,437 | |||
Convertible Senior Notes due in 2023 | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 862,500 | |||
Unamortized debt discount | (152,955) | |||
Unamortized debt issuance costs | (5,524) | $ (5,600) | ||
Net carrying value | 704,021 | |||
Convertible Senior Notes due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding | 440,000 | $ 440,000 | ||
Unamortized debt discount | (65,414) | (73,384) | ||
Unamortized debt issuance costs | (7,170) | (8,044) | $ (9,400) | |
Net carrying value | $ 367,416 | $ 358,572 |
INDEBTEDNESS - Carrying Amount of Equity Component of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands |
Jun. 30, 2018 |
May 25, 2018 |
Dec. 31, 2017 |
Mar. 06, 2017 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Amount allocated to conversion option | $ 241,453 | |||
Less: allocated issuance costs | (3,533) | |||
Equity component, net | 237,920 | |||
Convertible Senior Notes due in 2023 | ||||
Debt Instrument [Line Items] | ||||
Amount allocated to conversion option | 155,250 | |||
Less: allocated issuance costs | (1,231) | |||
Equity component, net | 154,019 | $ 155,300 | ||
Convertible Senior Notes due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Amount allocated to conversion option | 86,203 | $ 86,203 | ||
Less: allocated issuance costs | (2,302) | (2,302) | ||
Equity component, net | $ 83,901 | $ 83,901 | $ 86,200 |
INDEBTEDNESS - Interest Expense (Details) - Convertible Debt - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 850 | $ 413 | $ 1,263 | $ 526 |
Amortization of debt discount and issuance costs | 6,830 | 4,221 | 11,223 | 5,611 |
Total | $ 7,680 | $ 4,634 | $ 12,486 | $ 6,137 |
Convertible Senior Notes due in 2023 | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate of the liability component | 4.69% | 4.69% | ||
Convertible Senior Notes due in 2022 | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate of the liability component | 5.34% | 5.34% |
ACCRUED TRANSACTION LOSSES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Loss Contingency Accrual | ||||
Accrued transaction losses, beginning of the period | $ 26,893 | |||
Provision for transaction losses | 40,007 | $ 30,292 | ||
Accrued transaction losses, end of the period | $ 29,207 | 29,207 | ||
Transaction Losses | ||||
Loss Contingency Accrual | ||||
Accrued transaction losses, beginning of the period | 28,309 | $ 20,444 | 26,893 | 20,064 |
Provision for transaction losses | 14,087 | 13,076 | 28,345 | 24,634 |
Charge-offs to accrued transaction losses | (13,189) | (11,065) | (26,031) | (22,243) |
Accrued transaction losses, end of the period | $ 29,207 | $ 22,455 | $ 29,207 | $ 22,455 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 604 | $ 472 | $ 779 | $ 981 |
Effective tax rate | (11.40%) | (3.00%) | (2.70%) | (3.30%) |
STOCKHOLDERS' EQUITY - RSU Activity (Details) - RSAs and RSUs |
6 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
shares
| |
Number of shares | |
Beginning balance (in shares) | shares | 21,317,525 |
Granted (in shares) | shares | 4,439,906 |
Vested (in shares) | shares | (3,736,968) |
Forfeited (in shares) | shares | (1,145,249) |
Ending balance (in shares) | shares | 20,875,214 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 17.84 |
Granted (in USD per share) | $ / shares | 45.62 |
Vested (in USD per share) | $ / shares | 16.52 |
Forfeited (in USD per share) | $ / shares | 17.00 |
Ending balance (in USD per share) | $ / shares | $ 24.03 |
STOCKHOLDERS' EQUITY - Stock Option Fair Value Assumptions (Details) - Stock options |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 2.92% | 1.88% | 2.92% | 1.88% |
Expected volatility | 30.87% | 32.22% | 30.87% | 32.22% |
Expected term (years) | 6 years 2 months 10 days | 6 years 7 days | 6 years 2 months 10 days | 6 years 7 days |
LOSS PER SHARE - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net loss | $ (5,906) | $ (15,962) | $ (29,892) | $ (31,052) |
Basic shares: | ||||
Weighted-average common shares outstanding (in shares) | 403,390 | 377,959 | 400,318 | 373,291 |
Weighted-average unvested shares (in shares) | (89) | (1,602) | (694) | (1,718) |
Weighted-average shares used to compute basic net loss per share (in shares) | 403,301 | 376,357 | 399,624 | 371,573 |
Diluted shares: | ||||
Weighted-average shares used to compute diluted loss per share (in shares) | 403,301 | 376,357 | 399,624 | 371,573 |
Net loss per share: | ||||
Basic (in USD per share) | $ (0.01) | $ (0.04) | $ (0.07) | $ (0.08) |
Diluted (in USD per share) | $ (0.01) | $ (0.04) | $ (0.07) | $ (0.08) |
COMMITMENTS AND CONTINGENCIES - Operating and Capital Leases- Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating leases, rent expense | $ 5.3 | $ 3.1 | $ 9.8 | $ 5.9 |
COMMITMENTS AND CONTINGENCIES - Schedule of Future Payments Under Operating and Capital Leases (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Capital | |
2018 (remaining 6 months) | $ 2,599 |
2019 | 5,089 |
2020 | 2,501 |
2021 | 46 |
2022 | 2 |
Thereafter | 0 |
Total | 10,237 |
Less amount representing interest | (14) |
Present value of capital lease obligations | 10,223 |
Less current portion of capital lease obligation | (5,190) |
Non-current portion of capital lease obligation | 5,033 |
Operating | |
2018 (remaining 6 months) | 13,852 |
2019 | 32,823 |
2020 | 34,437 |
2021 | 34,473 |
2022 | 35,038 |
Thereafter | 34,037 |
Total | $ 184,660 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue by Geography (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 814,938 | $ 551,505 | $ 1,483,541 | $ 1,013,059 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 777,335 | 530,008 | 1,417,508 | 974,907 |
International | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 37,603 | $ 21,497 | $ 66,033 | $ 38,152 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Long-lived Assets by Geography (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 462,916 | $ 164,157 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 456,159 | 158,820 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 6,757 | $ 5,337 |
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Supplemental Cash Flow Data: | ||
Cash paid for interest | $ 1,108 | $ 284 |
Cash paid for income taxes | 854 | 850 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Change in purchases of property and equipment in accounts payable and accrued expenses | 9,708 | 1,454 |
Unpaid business acquisition purchase price | 3,995 | 644 |
Fair value of common stock issued related to business combination | (139,396) | 0 |
Recovery of common stock in connection with indemnification settlement agreement | $ 2,745 | $ 0 |