CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2020 |
Dec. 31, 2019 |
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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) | 359,142,301 | 352,386,562 |
Common stock, shares outstanding (in shares) | 359,142,301 | 352,386,562 |
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) | 79,621,335 | 80,410,158 |
Common stock, shares outstanding (in shares) | 79,621,335 | 80,410,158 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2020 |
Mar. 31, 2019 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (105,891) | $ (38,151) |
Net foreign currency translation adjustments | (8,388) | 266 |
Net unrealized gain on revaluation of intercompany loans | 0 | 75 |
Net unrealized gain on marketable debt securities | 3,327 | 2,288 |
Total comprehensive loss | $ (110,952) | $ (35,522) |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
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Mar. 31, 2020 | |
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 empower businesses, sellers and individuals to participate in the economy. Square enables sellers to accept card payments and also provides reporting and analytics, and next-day settlement. 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. Cash App is an easy way to send, spend, and store money. Square was founded in 2009 and is headquartered in San Francisco, with offices in the United States, Canada, Japan, Australia, Ireland, and the United Kingdom. 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, 2019 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 months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, 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 the Consolidated Financial Statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. 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. Generally, the Company's estimates and assumptions consider current and past experience, to the extent that historical experience is predictive of future performance. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, credit loss allowances from marketable debt securities, contingencies, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets, income and other taxes, operating and financing lease right-of-use assets and related liabilities, assessing the likelihood of adverse outcomes from claims and disputes, and share-based compensation. In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The Company operates in geographic locations that have been impacted by COVID-19 and that are subject to various mandated public health ordinances, which have negatively impacted the business operations of the Company and its customers. As a consequence of the pandemic and related public health orders, the Company’s customers are now exposed to a variety of uncertainties that could negatively impact their ability to repay outstanding amounts, or even continue in business. As of the date of issuance of the financial statements, the Company has revised or updated the carrying values of its assets or liabilities based on estimates, judgments and circumstances we are aware of, particularly, the expected impact of COVID-19. Due to the impact of the COVID-19 outbreak, the Company’s estimates of accrued transaction losses and valuation of loans held for sale were subject to greater uncertainty. The Company's estimates were based on historical experience, adjusted for market data relevant to the current economic environment. Additionally, the Company incorporated market data for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions. The Company evaluates these estimates and assumptions on an ongoing basis and will make adjustments as appropriate. In the three months ended March 31, 2020, the provision for transaction losses increased to $79.3 million, compared to $19.8 million for the three months ended March 31, 2019 — See Note 10, Other Consolidated Balance Sheet Components (Current), for further details on transaction losses. In the three months ended March 31, 2020, the charge for the excess of amortized costs over the fair value of loans increased to $22.0 million, compared to $6.7 million for the three months ended March 31, 2019 — See Note 5, Fair Value of Financial Instruments, for further details on amortized cost over fair value of the loans. These estimates may change, as new events develop and additional information is obtained. Actual results could differ from these estimates, and such differences may be material to the Company's financial statements. The extent of the impact of COVID-19 on the Company's operational and financial performance will depend on certain developments, including, but not limited to, the duration and spread of the outbreak, duration of local, state and federal issued public health orders, impact on our customers and our sales cycles, impact on our employees, and impact on regional and worldwide economies and financial markets in general, all of which are uncertain and cannot be predicted. Concentration of Credit Risk For the three months ended March 31, 2020 and March 31, 2019, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had two third-party payment processors that represented approximately 45% and 28% of settlements receivable as of March 31, 2020. As of December 31, 2019, the Company had three parties that represented approximately 48%, 29%, and 9% of settlements receivable. 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 debt 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 debt 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 or 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. Recent Accounting Pronouncements
Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses, which requires the measurement and recognition of expected credit losses for financial assets held. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available for sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The Company has concluded that the adoption of the guidance did not have a material impact on the balances reported in its consolidated financial statements and has included disclosures under the guidance. 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 for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments should be applied on a prospective basis. The Company adopted this guidance effective January 1, 2020 and will apply the guidance during its annual goodwill impairment test for the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement, which will remove, modify, and add disclosure requirements for fair value measurements to improve the overall usefulness of such disclosures. 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 for any removed or modified disclosure requirements. Transition is on a prospective basis for the new and modified disclosures, and on a retrospective basis for disclosures that have been eliminated. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively, and included additional disclosures required by the new guidance relating to significant unobservable inputs used to develop Level 3 fair value measurements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which is intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. 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 guidance provides flexibility in adoption, allowing for either retrospective adjustment or prospective adjustment for all implementation costs incurred after the date of adoption. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments clarify the scope of the credit losses standard and hedge accounting among other things. The Company adopted ASC 326 on January 1, 2020 for credit losses. With respect to hedge accounting, the amendments address partial-term fair value hedges and fair value hedge basis adjustments, among other things. 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 as long an entity has also adopted the amendments in ASU 2016-13. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. For entities which have already adopted ASU 2017-12, they are permitted to elect either retrospectively or prospectively adopt the amendments. The Company had previously adopted ASU 2017-12 on January 1, 2019 and therefore is eligible to and has prospectively adopted the amendments. In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other things, the new guidance simplifies intraperiod tax allocation and reduces the complexity in accounting for income taxes with year-to-date losses in interim periods. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption did not have a material impact on the consolidated financial statements and related disclosures.
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REVENUE |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE The following table presents the Company's revenue disaggregated by revenue source (in thousands):
The deferred revenue balances were as follows (in thousands):
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INVESTMENTS IN DEBT SECURITIES |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS IN DEBT SECURITIES | INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of March 31, 2020 are as follows (in thousands):
The Company's short-term and long-term investments as of December 31, 2019 are as follows (in thousands):
The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
The unrealized losses above were as a consequence of interest rate changes. The U.S. government and U.S. agency securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. The corporate bonds are issued by highly rated entities. The non-US government securities are issued by highly rated international entities. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's short-term and long-term investments as of March 31, 2020 are as follows (in thousands):
The following table presents the assets underlying customer funds (in thousands):
The Company's investments within customer funds as of March 31, 2020 are as follows (in thousands):
The Company's investments within customer funds as of December 31, 2019 are as follows (in thousands):
The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
The unrealized losses above were caused by interest rate changes. The U.S. government securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's investments within customer funds as of March 31, 2020 are as follows (in thousands):
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CUSTOMER FUNDS |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CUSTOMER FUNDS | INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of March 31, 2020 are as follows (in thousands):
The Company's short-term and long-term investments as of December 31, 2019 are as follows (in thousands):
The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
The unrealized losses above were as a consequence of interest rate changes. The U.S. government and U.S. agency securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. The corporate bonds are issued by highly rated entities. The non-US government securities are issued by highly rated international entities. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's short-term and long-term investments as of March 31, 2020 are as follows (in thousands):
The following table presents the assets underlying customer funds (in thousands):
The Company's investments within customer funds as of March 31, 2020 are as follows (in thousands):
The Company's investments within customer funds as of December 31, 2019 are as follows (in thousands):
The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
The unrealized losses above were caused by interest rate changes. The U.S. government securities are either explicitly or implicitly guaranteed by the U.S. government and are highly rated by major rating agencies. 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 their amortized cost bases, which may be at maturity. The Company determines any realized gains or losses on the sale of marketable debt securities on a specific identification method, and records such gains and losses as a component of other expense, net. The Company does not have any available for sale debt securities for which the Company has recorded credit related losses. The contractual maturities of the Company's investments within customer funds as of March 31, 2020 are as follows (in thousands):
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FAIR VALUE OF FINANCIAL INSTRUMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its cash equivalents, customer funds, short-term and long-term marketable debt securities, and marketable equity investments at fair value. The Company classifies these 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 settlements receivable, accounts payable, customers payable, accrued expenses 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):
The estimated fair value and carrying value of loans held for sale is as follows (in thousands):
For the three months ended March 31, 2020 and 2019, the Company recorded a charge for the excess of amortized cost over fair value of the loans of $22.0 million and $6.7 million, respectively. To determine the fair value of the loans held for sale, the Company utilizes industry-standard valuation modeling, such as discounted cash flow models, taking into account the estimated timing and amounts of periodic repayments. In estimating the expected timing and amounts of the future periodic repayments for the loans outstanding as of March 31, 2020, the Company considered other relevant market data in developing such estimates and assumptions, including the impact of the COVID-19 outbreak, as well as the conditions and uncertainty experienced during similar historical periods of recessionary economic conditions. 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 months ended March 31, 2020 and 2019, the Company did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities.
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PROPERTY AND EQUIPMENT, NET |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 $15.9 million and $15.5 million for the three months ended March 31, 2020 and 2019, respectively.
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ACQUISITIONS |
3 Months Ended |
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Mar. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONSIn the quarter ended March 31, 2020, the Company acquired 100% of the outstanding shares of a technology company for $36.6 million comprised of $21.6 million in cash and $15.0 million in common stock. Of the total purchase consideration, $22.2 million was allocated to goodwill which was primarily attributable to the value of expected synergies created by incorporating the acquired technology into the Company's technology platform and the value of the assembled workforce, while $17.0 million was allocated to intangible assets. None of the goodwill generated from the acquisition or the acquired intangible assets are expected to be deductible for tax purposes. |
GOODWILL |
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Mar. 31, 2020 | |||||||||||||||||||||||||
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 an annual goodwill impairment test on December 31 and more frequently if events and circumstances indicate that the asset might be impaired. As a result of the COVID-19 pandemic, the Company performed a goodwill impairment assessment as of March 31, 2020 and concluded that no impairment charges were required. The Company recorded no impairment charges for the periods presented.
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ACQUIRED INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUIRED INTANGIBLE ASSETS | ACQUIRED INTANGIBLE ASSETS The following table presents the detail of acquired intangible assets as of the periods presented (in thousands):
All intangible assets are amortized over their estimated useful lives. As a result of the COVID-19 pandemic, the Company performed an impairment assessment of its intangible assets as of March 31, 2020, and concluded that no impairment charges were required. The changes to the carrying value of intangible assets were as follows (in thousands):
The estimated future amortization expense of intangible assets in future periods as of March 31, 2020 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):
Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses and other current liabilities (in thousands):
(i) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. In estimating the accrued transaction losses as of March 31, 2020, the Company has revised its estimates to reflect expected increased chargebacks from non-delivery of goods and services as well as increased failure rates of its sellers due to the COVID-19 outbreak. Additionally, the Company has also incorporated market related data to credit losses for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions. Given that substantially all the chargebacks are reported within a short time period after the transaction is processed, a reversion method was not considered to be necessary. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands):
(ii) 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) The non-current lease prepayments as of December 31, 2019, have been reclassified to the operating lease right-of-use assets upon lease commencement during the quarter ended March 31, 2020. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands):
(i) 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.
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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):
Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses and other current liabilities (in thousands):
(i) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. In estimating the accrued transaction losses as of March 31, 2020, the Company has revised its estimates to reflect expected increased chargebacks from non-delivery of goods and services as well as increased failure rates of its sellers due to the COVID-19 outbreak. Additionally, the Company has also incorporated market related data to credit losses for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions. Given that substantially all the chargebacks are reported within a short time period after the transaction is processed, a reversion method was not considered to be necessary. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands):
(ii) 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) The non-current lease prepayments as of December 31, 2019, have been reclassified to the operating lease right-of-use assets upon lease commencement during the quarter ended March 31, 2020. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands):
(i) 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.
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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 provided for a $375.0 million revolving credit facility maturing in November 2020 (the "2015 Credit Facility"). In May 2020, the Company entered into a new revolving credit agreement with certain lenders, which extinguished the 2015 Credit Facility and provides a $500.0 million senior unsecured revolving credit facility (the "2020 Credit Facility") maturing in May 2023. To date, no funds have been drawn and no letters of credit have been issued under the 2020 Credit Facility. Loans under the 2015 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 net leverage ratio, as defined in the agreement, 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 2015 Credit Facility. The Company incurred $0.1 million in unused commitment fees for both the three months ended March 31, 2020 and March 31, 2019, respectively. As of March 31, 2020, the Company was in compliance with all financial covenants associated with the 2015 Credit Facility. Loans under the 2020 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 the adjusted LIBOR rate plus 1.00%, in each case, plus a margin ranging from 0.25% to 0.75% or (ii) an adjusted LIBOR rate plus a margin ranging from 1.25% to 1.75%. The margin is determined based on the Company’s total net leverage ratio, as defined in the agreement. The Company is obligated to pay other customary fees for a credit facility of this size and type including an unused commitment fee of 0.15%. Convertible Senior Notes due in 2025 On March 5, 2020, the Company issued an aggregate principal amount of $1.0 billion of convertible senior notes (2025 Notes). The 2025 Notes mature on March 1, 2025, unless earlier converted or repurchased, and bear interest at a rate of 0.1250% payable semi-annually on March 1 and September 1 of each year. The 2025 Notes are convertible at an initial conversion rate of 8.2641 shares of the Company's Class A common stock per $1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $121.01 per share of Class A common stock. Holders may convert their 2025 Notes at any time prior to the close of business on the business day immediately preceding December 1, 2024 only under the following circumstances: (1) during any calendar quarter, commencing after the calendar quarter ending on June 30, 2020 (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 2025 Notes) per $1,000 principal amount of 2025 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; (3) if the Company calls any or all of the 2025 Notes for redemption, such 2025 Notes called for redemption may be converted at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2025 Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets. In addition, upon occurrence of the specified corporate events prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert their notes in connection with such an event in certain circumstances. On or after December 1, 2024, 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 2025 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. The circumstances required to allow the holders to convert their 2025 Notes were not met during the three months ended March 31, 2020. The Company may redeem for cash all or any part of the 2025 notes, at its option, on or after March 5, 2023, if the last reported sale price of the Company's Class A common stock has been at least 130% of the conversion price for the 2025 notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. In accounting for the issuance of the 2025 Notes, the Company separated the 2025 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 $154.6 million and was determined by deducting the fair value of the liability component from the par value of the 2025 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 2025 Notes at an effective interest rate of 3.81% over the contractual terms of the 2025 Notes. Debt issuance costs related to the 2025 Notes were comprised of discounts and commissions payable to the initial purchasers of $14.3 million and third party offering costs of $0.9 million. The Company allocated the total amount incurred to the liability and equity components of the 2025 Notes based on their relative values. Issuance costs attributable to the liability component were $12.8 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. As of March 31, 2020, the if-converted value of the 2025 Notes did not exceed the outstanding principal amount. Convertible Senior Notes due in 2023 On May 25, 2018, the Company issued an aggregate principal amount of $862.5 million of convertible senior notes (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 (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. In addition, following specified corporate events that occur prior to the maturity date, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert their notes in connection with such an event. 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. The Company's current policy is to settle conversions entirely in shares of the Company's Class A common stock. The Company will reevaluate this policy from time to time as conversion notices are received from holders of the 2023 Notes. The circumstances required to allow the holders to convert their 2023 Notes were not met during the three months ended March 31, 2020. 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 2023 Notes. Debt issuance costs related to the 2023 Notes were comprised of discounts and commissions payable to the initial purchasers of $6.0 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 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. As of March 31, 2020, the if-converted value of the 2023 Notes did not exceed the outstanding principal amount. Convertible Senior Notes due in 2022 On March 6, 2017, the Company issued an aggregate principal amount of $440.0 million of convertible senior notes (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. In addition, upon occurrence of the specified corporate events prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert their notes in connection with such an event in certain circumstances. 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. The circumstances required to allow the holders to convert their 2022 Notes were met starting January 1, 2018 and continued to be met through March 31, 2020. As of March 31, 2020, certain holders of the 2022 Notes have converted an aggregate principal amount of $253.7 million of their Notes, of which $25.5 million was converted during the quarter ended March 31, 2020. The Company has settled the conversions through a combination of $219.4 million in cash and issuance of 8.4 million shares of the Company's Class A common stock. The conversions during the quarter ended March 31, 2020 were settled entirely in shares of the Company's Class A common stock. The Company currently expects to settle future conversions entirely in shares of the Company's Class A common stock. The Company will reevaluate this policy from time to time as conversion notices are received from holders of the 2022 Notes. 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 2022 Notes. Debt issuance costs related to the 2022 Notes were 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 debt component associated with the 2022 Notes that were converted was accounted for as an extinguishment of debt, with the Company recording loss on extinguishment of $6.0 million, of which $1.0 million was recorded during the three months ended March 31, 2020, as the difference between the estimated fair value and the carrying value of such 2022 Notes. The equity component associated with the 2022 Notes that were converted was accounted for as a reacquisition of equity upon the conversion of such 2022 Notes. As of March 31, 2020, the if-converted value of the 2022 Notes exceeded the outstanding principal amount by $238.9 million. 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 3.81%, 4.69%, and 5.34% for the 2025 Notes, 2023 Notes, and 2022 Notes, respectively. Convertible Note Hedge and Warrant Transactions In connection with the offering of the 2025 Notes, the Company entered into convertible note hedge transactions (2025 convertible note hedges) with certain financial institution counterparties (2020 Counterparties) whereby the Company has the option to purchase a total of approximately 8.26 million shares of its Class A common stock at a price of approximately $121.01 per share. The total cost of the 2025 convertible note hedge transactions was $149.2 million. In addition, the Company sold warrants (2025 warrants) to the 2020 Counterparties whereby the 2020 Counterparties have the option to purchase a total of 8.26 million shares of the Company’s Class A common stock at a price of approximately $161.34 per share. The Company received $99.5 million in cash proceeds from the sale of the 2025 warrants. Taken together, the purchase of the 2025 convertible note hedges and sale of the 2025 warrants are intended to reduce dilution from the conversion of the 2025 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2025 Notes, as the case may be, and to effectively increase the overall conversion price from approximately $121.01 per share to approximately $161.34 per share. As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2025 convertible note hedges and 2025 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 2025 convertible note hedge and 2025 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 2023 Notes, the Company entered into convertible note hedge transactions (2023 convertible note hedges) with certain financial institution counterparties (2018 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 2018 Counterparties whereby the 2018 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 (2017 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 2017 Counterparties whereby the 2017 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. The Company exercised a pro-rata portion of the 2022 convertible note hedges to offset the shares of the Company's Class A common stock issued to settle the conversion of the 2022 Notes discussed above. The 2022 convertible note hedges were net share settled, and the Company received 7.2 million shares of the Company's Class A common stock from the 2017 Counterparties as of March 31, 2020.
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INCOME TAXES |
3 Months Ended |
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Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded an income tax expense of $0.5 million for the three months ended March 31, 2020 compared to an income tax expense of $0.1 million for the three months ended March 31, 2019. The income tax expense recorded for the three months ended March 31, 2020 is primarily due to income taxes from profitable foreign jurisdictions. The Company’s effective tax rate is (0.5)% for the three months ended March 31, 2020 compared to an effective tax rate of (0.3)% for the three months ended March 31, 2019. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended March 31, 2020 and March 31, 2019 primarily relates to changes in the valuation allowance for tax losses in the U.S. and certain foreign jurisdictions for which no benefit can be taken. 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 March 31, 2020, 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 months ended March 31, 2020 and March 31, 2019, is calculated on a jurisdictional basis. The Company estimated the foreign income tax provision using the effective income tax rate expected to be applicable for the full year. The Company also considered recent tax law changes in response to the COVID-19 pandemic, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was enacted in the U.S. on March 27, 2020. The tax benefits and other changes provided under the CARES Act do not materially impact the Company’s income tax provision, and does not change the Company’s evaluation of the need for a valuation allowance against deferred tax assets in the U.S. or expectations on the permanent reinvestment of undistributed earnings for certain foreign subsidiaries.
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STOCKHOLDERS' EQUITY |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Common Stock The Company has authorized the issuance of Class A common stock and Class B common stock. Holders of shares of Class A common stock are entitled to one vote per share, while holders of shares of Class B common stock are entitled to ten votes per share. Shares of the Company's Class B common stock are convertible into an equivalent number of shares of its Class A common stock and generally convert into shares of its Class A common stock upon transfer. The holders of Class A common stock and Class B common stock have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares. 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 March 31, 2020, 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 March 31, 2020, there were 359,142,301 shares of Class A common stock and 79,621,335 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. Warrants In conjunction with the 2025 Notes offering, the Company sold the 2025 warrants whereby the 2020 Counterparties have the option to purchase a total of approximately 8.26 million shares of the Company’s Class A common stock at a price of $161.34 per share. None of the 2025 warrants were exercised as of March 31, 2020 and expire on June 1, 2025. In conjunction with the 2023 Notes offering, the Company sold the 2023 warrants whereby the 2018 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. None of the 2023 warrants were exercised as of March 31, 2020 and expire on August 15, 2023. In conjunction with the 2022 Notes offering, the Company sold the 2022 warrants whereby the 2017 Counterparties have the option to purchase a total of approximately 19.2 million shares of the Company’s Class A common stock at a price of $31.18 per share. None of the 2022 warrants were exercised as of March 31, 2020 and expire on June 1, 2022. Conversion of 2022 Notes In connection with the conversion of certain of the 2022 Notes, the Company issued 1.1 million shares of Class A common stock in the three months ended March 31, 2020. 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 granted in the future 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 (ISOs and NSOs, respectively), 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 administrator of the Plan. The administrator consists of the Board of Directors who then assigns the responsibilities to the Compensation Committee. As of March 31, 2020, the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2015 Plan was 17,632,872, and 105,944,646 shares were available for future issuance. As of March 31, 2020, the total number of shares subject to stock options, RSAs and RSUs outstanding under the 2009 Plan was 15,171,723. A summary of stock option activity for the three months ended March 31, 2020 is as follows (in thousands, except share and per share data):
Restricted Stock Activity Activity related to RSAs and RSUs during the three months ended March 31, 2020 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 following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands):
The Company recorded $4.7 million and $4.3 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the three months ended March 31, 2020 and 2019, respectively, which are included in the table above. The Company capitalized $2.3 million and $1.7 million of share-based compensation expense related to capitalized software costs during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, there was $657.3 million of total unrecognized compensation cost related to outstanding stock options and restricted stock awards that are expected to be recognized over a weighted-average period of 2.7 years.
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NET LOSS PER SHARE |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NET 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 net loss per share is the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
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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RELATED PARTY TRANSACTIONS |
3 Months Ended |
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Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSIn July 2019, the Company entered into a lease agreement to lease certain office space located in St. Louis, Missouri, from an affiliate of one of the Company’s co-founders and current member of its board and directors, Mr. Jim McKelvey, under an operating lease agreement as discussed in Note 17, Commitments and Contingencies. The lease commencement date is expected to be in July 2020. The term of the agreement is 15.5 years with total future minimum lease payments over the term of approximately $42.7 million. The Company has not yet recognized a right-of-use asset and lease obligation under this agreement as of March 31, 2020. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating and Finance Leases The Company’s operating leases are primarily comprised of office facilities, with the most significant leases relating to corporate headquarters in San Francisco, and offices in Oakland and New York. The Company's leases have remaining lease terms of 1 to 12 years, some of which include options to extend for 5 year terms, or include options to terminate the leases within 1 year. None of the options to extend the leases have been included in the measurement of the right-of-use asset or the associated lease liability. The Company elected to apply the short-term lease measurement and recognition exemption to its leases where applicable. Generally, operating lease right-of-use assets and operating lease liabilities are recognized at the present value of the future lease payments, generally for the base non-cancellable lease term on the lease commencement date of each lease. The interest rate used to determine the present value of the future lease payments is the Company's incremental borrowing rate because the interest rate implicit in most of the Company's leases is not readily determinable. The Company's incremental borrowing rate is estimated to approximate the interest rate that the Company would pay to borrow on a collateralized basis with similar terms and payments as the lease, and in economic environments where the leased asset is located. Operating lease right-of-use assets also include any prepaid lease payments and lease incentives. The Company's lease agreements generally contain lease and non-lease components. Non-lease components, which primarily include payments for maintenance and utilities, are combined with lease payments and accounted for as a single lease component. The Company includes the fixed non-lease components in the determination of the right-of-use assets and operating lease liabilities. The Company records the amortization of the right-of-use asset and the accretion of lease liability as a component of rent expense in the consolidated statement of operations. In December 2018, the Company entered into a lease arrangement for 355,762 square feet of office space in Oakland, California for a term of 12 years with options to extend the lease term for two 5 year terms. The lease commencement date was January 15, 2020. In July 2019, the Company entered into a lease arrangement for 226,158 square feet of office space in St Louis, Missouri, with an affiliate of one of the Company’s co-founders, Mr. Jim McKelvey, who is also a Company stockholder and a member of its board of directors, for a term of 15.5 years with options to extend the lease term for two 5 year terms. The Company also has an option to terminate the lease for up to 50% of the leased space any time between January 1, 2024 and December 31, 2026, as well as an option to terminate the lease for the entire property on January 1, 2034. Termination penalties specified in the lease agreement will apply if the Company exercises any of the options to terminate the lease. The lease commencement date is expected to be in July 2020 with total future minimum lease payments over the term of approximately $42.7 million. Additionally, the Company has finance leases for data center equipment, with remaining lease terms of approximately 0.8 years. The components of lease expense for the periods presented are follows (in thousands):
Other information related to leases was as follows:
Cash flows related to leases were as follows (in thousands):
Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2020 are as follows (in thousands):
The current portion of the finance lease liability is included within other current liabilities while the non-current portion is included within other non-current liabilities on the condensed consolidated balance sheets. The associated finance lease assets are included in property and equipment, net on the condensed consolidated balance sheets. Litigation The Company is currently subject to, and may in the future be involved in, various litigation matters, legal claims, and investigations. The Treasurer & Tax Collector of the City and County of San Francisco (Tax Collector) has issued decisions for fiscal years 2014, 2015, 2016, and 2017 that the Tax Collector believes the Company’s primary business activity is financial services rather than information, 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 is required to pay tax assessments prior to contesting any such assessments. This requirement is commonly referred to as “pay-to-play.” In connection with the tax audits, the Company paid an additional $1.3 million for fiscal years 2014 and 2015 in the first quarter of 2018, and an additional $8.4 million for fiscal years 2016 and 2017 in the fourth quarter of 2019, as assessed by the Tax Collector, even though the Company strongly disagrees with the Tax Collector’s assessment of the Company’s primary business activity. On September 6, 2019, the Company filed a lawsuit against the Tax Collector and the City and County of San Francisco in the San Francisco County Superior Court for a refund of the $1.3 million paid for the fiscal years of 2014 and 2015. On November 14, 2019, the Company also filed a petition for redetermination with the Tax Collector for fiscal years 2016 and 2017. The Company has been in discussions with the City and County of San Francisco to resolve the matter and on May 4, 2020, entered into a settlement agreement that is subject to approval by the Mayor, Controller, and the Board of Supervisors of the City and County of San Francisco. Should the agreement not be approved or should the Company not prevail in its legal challenge against the application of San Francisco’s Gross Receipts Tax to its business, the Company estimates that it could incur additional losses associated with taxes, interest, and penalties in the range of approximately $0 to $66 million in the aggregate for the fiscal years 2016, 2017, 2018, 2019, and for the three months ended on March 31, 2020, over and above the taxes the Company has already paid under the information classification. Additional taxes, interest, and penalties for future periods could be material as well. The Company regularly assesses the likelihood of adverse outcomes resulting from tax disputes such as this and examinations for all open years to determine the necessity and adequacy of any tax reserves. The eventual outcome could differ materially from the estimates we have made in the financial statements. From time to time, the Company is also subject to various legal 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. Although occasional adverse decisions or settlements may occur, the Company does not believe that the final disposition of any of these matters will have a material adverse effect on its 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.
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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. The Company anticipates changing its operating and reportable segments from one segment to two segments in subsequent quarters of 2020. These two segments will represent the Seller and Cash App businesses and will reflect the way the Company anticipates evaluating its business performance and managing its operations. 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 months ended March 31, 2020 and March 31, 2019. 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 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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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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, 2019 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 months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020, 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 the Consolidated Financial Statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.
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Use of Estimates | 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. Generally, the Company's estimates and assumptions consider current and past experience, to the extent that historical experience is predictive of future performance. Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to revenue recognition, accrued transaction losses, credit loss allowances from marketable debt securities, contingencies, valuation of the debt component of convertible senior notes, valuation of loans held for sale, goodwill, acquired intangible assets, income and other taxes, operating and financing lease right-of-use assets and related liabilities, assessing the likelihood of adverse outcomes from claims and disputes, and share-based compensation.
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Concentration of Credit Risk | Concentration of Credit Risk For the three months ended March 31, 2020 and March 31, 2019, the Company had no customer that accounted for greater than 10% of total net revenue. The Company had two third-party payment processors that represented approximately 45% and 28% of settlements receivable as of March 31, 2020. As of December 31, 2019, the Company had three parties that represented approximately 48%, 29%, and 9% of settlements receivable. 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 debt 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 debt 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 or 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.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements
Recently adopted accounting pronouncements In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses, which requires the measurement and recognition of expected credit losses for financial assets held. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available for sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The Company has concluded that the adoption of the guidance did not have a material impact on the balances reported in its consolidated financial statements and has included disclosures under the guidance. 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 for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments should be applied on a prospective basis. The Company adopted this guidance effective January 1, 2020 and will apply the guidance during its annual goodwill impairment test for the year ending December 31, 2020. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement, which will remove, modify, and add disclosure requirements for fair value measurements to improve the overall usefulness of such disclosures. 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 for any removed or modified disclosure requirements. Transition is on a prospective basis for the new and modified disclosures, and on a retrospective basis for disclosures that have been eliminated. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively, and included additional disclosures required by the new guidance relating to significant unobservable inputs used to develop Level 3 fair value measurements. In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which is intended to align the requirements for capitalization of implementation costs incurred in a cloud computing arrangement that is a service contract with the existing guidance for internal-use software. 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 guidance provides flexibility in adoption, allowing for either retrospective adjustment or prospective adjustment for all implementation costs incurred after the date of adoption. The Company adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments clarify the scope of the credit losses standard and hedge accounting among other things. The Company adopted ASC 326 on January 1, 2020 for credit losses. With respect to hedge accounting, the amendments address partial-term fair value hedges and fair value hedge basis adjustments, among other things. 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 as long an entity has also adopted the amendments in ASU 2016-13. The adoption of this guidance did not have a material impact on the consolidated financial statements and related disclosures. For entities which have already adopted ASU 2017-12, they are permitted to elect either retrospectively or prospectively adopt the amendments. The Company had previously adopted ASU 2017-12 on January 1, 2019 and therefore is eligible to and has prospectively adopted the amendments. In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other things, the new guidance simplifies intraperiod tax allocation and reduces the complexity in accounting for income taxes with year-to-date losses in interim periods. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted this guidance effective January 1, 2020 and has applied the guidance prospectively. The adoption did not have a material impact on the consolidated financial statements and related disclosures.
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REVENUE (Tables) |
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Schedule of Disaggregation of Revenue | The following table presents the Company's revenue disaggregated by revenue source (in thousands):
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Schedule of Deferred Revenue | The deferred revenue balances were as follows (in thousands):
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INVESTMENTS IN DEBT SECURITIES (Tables) |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term and Long-term Investments | The Company's short-term and long-term investments as of March 31, 2020 are as follows (in thousands):
The Company's short-term and long-term investments as of December 31, 2019 are as follows (in thousands):
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Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value | The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
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Contractual Maturities of Short-Term and Long-Term Investments | The contractual maturities of the Company's short-term and long-term investments as of March 31, 2020 are as follows (in thousands):
The contractual maturities of the Company's investments within customer funds as of March 31, 2020 are as follows (in thousands):
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CUSTOMER FUNDS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Underlying Customer Funds | The following table presents the assets underlying customer funds (in thousands):
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Investments within Customer Funds | The Company's investments within customer funds as of March 31, 2020 are as follows (in thousands):
The Company's investments within customer funds as of December 31, 2019 are as follows (in thousands):
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Debt Securities, Available-for-sale, Unrealized Loss Position, Fair Value | The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
The gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2020 and December 31, 2019, aggregated by investment category and the length of time that individual securities have been in a continuous loss position are as follows (in thousands):
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Contractual Maturities of Investments within Customer Funds | The contractual maturities of the Company's short-term and long-term investments as of March 31, 2020 are as follows (in thousands):
The contractual maturities of the Company's investments within customer funds as of March 31, 2020 are as follows (in thousands):
|
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are classified as follows (in thousands):
The estimated fair value and carrying value of loans held for sale is as follows (in thousands):
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PROPERTY AND EQUIPMENT, NET (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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GOODWILL (Tables) |
3 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of Change in Carrying Value 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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite Lived Intangible Assets | The following table presents the detail of acquired intangible assets as of the periods presented (in thousands):
The changes to the carrying value of intangible assets were as follows (in thousands):
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Schedule of Future Amortization Expense of Intangible Assets | The estimated future amortization expense of intangible assets in future periods as of March 31, 2020 is as follows (in thousands):
|
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Schedule of Accrued Expenses and Other Current Liabilities | The following table presents the detail of accrued expenses and other current liabilities (in thousands):
(i) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. In estimating the accrued transaction losses as of March 31, 2020, the Company has revised its estimates to reflect expected increased chargebacks from non-delivery of goods and services as well as increased failure rates of its sellers due to the COVID-19 outbreak. Additionally, the Company has also incorporated market related data to credit losses for similar historical periods of recessionary economic conditions and uncertainty in developing such estimates and assumptions. Given that substantially all the chargebacks are reported within a short time period after the transaction is processed, a reversion method was not considered to be necessary. The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands):
(ii) Square Payroll payable represents amounts received from Square Payroll product customers that will be utilized to settle the customers' employee payroll and related obligations.
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Schedule of Reserve for Transaction Losses | The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands):
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OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Schedule of Other Non-Current Liabilities | The following table presents the detail of other non-current liabilities (in thousands):
(i) 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.
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INDEBTEDNESS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Carrying Amount of 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):
|
STOCKHOLDERS' EQUITY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock option activity for the three months ended March 31, 2020 is as follows (in thousands, except share and per share data):
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Schedule of Restricted Stock Awards and Restricted Stock Units Activity | Activity related to RSAs and RSUs during the three months ended March 31, 2020 is set forth below:
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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):
|
NET LOSS PER SHARE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
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Schedule of Antidilutive Securities Excluded from Calculation of Diluted Net Income (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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Expense Components and Other Information Related to Leases | The components of lease expense for the periods presented are follows (in thousands):
Other information related to leases was as follows:
Cash flows related to leases were as follows (in thousands):
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Future Minimum Lease Payments under Non-Cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2020 are as follows (in thousands):
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Future Minimum Finance Lease Payments | Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) and future minimum finance lease payments as of March 31, 2020 are as follows (in thousands):
|
SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Geographic Area | 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 Area | The following table sets forth long-lived assets by geographic area (in thousands):
|
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The supplemental disclosures of cash flow information consist of the following (in thousands):
|
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Restrictions on Cash and Cash Equivalents | The supplemental disclosures of cash flow information consist of the following (in thousands):
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Schedule of Cash Flow, Supplemental Disclosures |
|
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Transaction-based revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 758,101 | $ 656,762 |
Subscription and services-based revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 255,883 | 190,307 |
Revenues from other sources | 40,352 | 28,550 |
Hardware revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | 20,675 | 18,212 |
Bitcoin revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contracts with customers | $ 306,098 | $ 65,528 |
REVENUE - Deferred Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Movement in Deferred Revenue [Roll Forward] | ||
Deferred revenue, beginning of the period | $ 44,331 | $ 36,451 |
Deferred revenue, end of the period | 47,046 | 42,160 |
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period | $ 15,570 | $ 12,306 |
INVESTMENTS IN DEBT SECURITIES - Contractual Maturities of Short-Term and Long-Term Investments (Details) $ in Thousands |
Mar. 31, 2020
USD ($)
|
---|---|
Amortized Cost | |
Due in one year or less | $ 520,017 |
Due in one to five years | 528,798 |
Amortized Cost | 1,048,815 |
Fair Value | |
Due in one year or less | 521,840 |
Due in one to five years | 529,460 |
Fair Value | $ 1,051,300 |
CUSTOMER FUNDS - Assets Underlying Customer Funds (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 944,811 | $ 676,292 |
U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 118,835 | 0 |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 177,516 | 238,031 |
Cash | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 132,908 | 422,459 |
Cash Equivalents | Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 505,553 | 233 |
Cash Equivalents | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | 9,999 | 8,585 |
Cash Equivalents | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Customer funds | $ 0 | $ 6,984 |
CUSTOMER FUNDS - Investments within Customer Funds (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 1,048,815 | |
Fair Value | 1,051,300 | |
Customer funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 295,500 | $ 237,909 |
Gross Unrealized Gains | 921 | 144 |
Gross Unrealized Losses | (70) | (22) |
Fair Value | 296,351 | 238,031 |
Customer funds | U.S. agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 118,750 | |
Gross Unrealized Gains | 100 | |
Gross Unrealized Losses | (15) | |
Fair Value | 118,835 | |
Customer funds | U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 176,750 | 237,909 |
Gross Unrealized Gains | 821 | 144 |
Gross Unrealized Losses | (55) | (22) |
Fair Value | $ 177,516 | $ 238,031 |
CUSTOMER FUNDS - Contractual Maturities of Investments within Customer Funds (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Amortized Cost | ||
Due in one year or less | $ 520,017 | |
Due in one to five years | 528,798 | |
Amortized Cost | 1,048,815 | |
Fair Value | ||
Due in one year or less | 521,840 | |
Due in one to five years | 529,460 | |
Fair Value | 1,051,300 | |
Customer funds | ||
Amortized Cost | ||
Due in one year or less | 295,500 | |
Due in one to five years | 0 | |
Amortized Cost | 295,500 | $ 237,909 |
Fair Value | ||
Due in one year or less | 296,351 | |
Due in one to five years | 0 | |
Fair Value | $ 296,351 | $ 238,031 |
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value of Loans Held for Sale (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
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 | $ 160,709 | $ 164,834 | |
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 | 165,572 | $ 173,360 | |
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 | $ 22,000 | $ 6,700 |
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 344,481 | $ 327,723 | |
Less: Accumulated depreciation and amortization | (193,822) | (178,529) | |
Property and equipment, net | 150,659 | 149,194 | |
Depreciation and amortization expense | 15,900 | $ 15,500 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 116,407 | 111,942 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 111,010 | 106,469 | |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 89,218 | 81,984 | |
Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 27,846 | $ 27,328 |
ACQUISITIONS - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Business Acquisition [Line Items] | ||
Goodwill | $ 288,533,000 | $ 266,345,000 |
Technology Company | ||
Business Acquisition [Line Items] | ||
Percent of outstanding shares acquired | 100.00% | |
Fair value of consideration transferred | $ 36,600,000 | |
Cash consideration | 21,600,000 | |
Equity consideration | 15,000,000.0 | |
Goodwill | 22,200,000 | |
Intangible assets, other than goodwill | 17,000,000.0 | |
Goodwill amount expected to be tax deductible | 0 | |
Intangible assets (excluding goodwill) amount expected to be tax deductible | $ 0 |
GOODWILL (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 266,345,000 | |
Acquisitions | 22,188,000 | |
Goodwill, ending balance | 288,533,000 | $ 266,345,000 |
Goodwill, impairment charges | $ 0 | $ 0 |
ACQUIRED INTANGIBLE ASSETS - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 131,508 | $ 114,499 | ||
Accumulated Amortization | (49,572) | (45,420) | ||
Net | 81,936 | 69,079 | $ 79,697 | $ 77,102 |
Technology assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 70,081 | 53,900 | ||
Accumulated Amortization | (34,193) | (31,873) | ||
Net | $ 35,888 | $ 22,027 | ||
Amortization period | 5 years | 5 years | ||
Customer assets | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 44,000 | $ 44,000 | ||
Accumulated Amortization | (7,824) | (6,934) | ||
Net | $ 36,176 | $ 37,066 | ||
Amortization period | 12 years | 12 years | ||
Trade name | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 12,128 | $ 11,300 | ||
Accumulated Amortization | (5,248) | (4,473) | ||
Net | $ 6,880 | $ 6,827 | ||
Amortization period | 4 years | 4 years | ||
Other | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 5,299 | $ 5,299 | ||
Accumulated Amortization | (2,307) | (2,140) | ||
Net | $ 2,992 | $ 3,159 |
ACQUIRED INTANGIBLE ASSETS - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2020
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets impairment | $ 0 |
ACQUIRED INTANGIBLE ASSETS - Change in Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Finite-lived Intangible Assets [Roll Forward] | ||
Acquired intangible assets, net, beginning of the period | $ 69,079 | $ 77,102 |
Acquisitions | 17,009 | 6,082 |
Amortization expense | (4,152) | (3,487) |
Acquired intangible assets, net, end of the period | $ 81,936 | $ 79,697 |
ACQUIRED INTANGIBLE ASSETS - Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Remainder of 2020 | $ 11,994 | |||
2021 | 15,479 | |||
2022 | 13,405 | |||
2023 | 12,153 | |||
2024 | 9,176 | |||
Thereafter | 19,729 | |||
Net | $ 81,936 | $ 69,079 | $ 79,697 | $ 77,102 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Other Current Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Inventory, net | $ 54,719 | $ 47,683 | |
Restricted cash | 34,315 | 38,873 | $ 33,220 |
Processing costs receivable | 84,045 | 67,281 | |
Prepaid expenses | 31,433 | 22,758 | |
Accounts receivable, net | 31,515 | 33,863 | |
Other | 42,643 | 39,951 | |
Total | $ 278,670 | $ 250,409 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued expenses | $ 126,911 | $ 128,387 |
Accrued transaction losses | 96,661 | 34,771 |
Accounts payable | 29,831 | 42,116 |
Deferred revenue, current | 40,392 | 38,104 |
Square Payroll payable | 29,618 | 27,969 |
Other | 69,321 | 26,494 |
Total | $ 392,734 | $ 297,841 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) - Schedule of Reserve for Transaction Losses (Details) - Transaction Losses - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Loss Contingency Accrual [Roll Forward] | ||
Accrued transaction losses, beginning of the period | $ 34,771 | $ 33,682 |
Provision for transaction losses | 79,303 | 19,808 |
Charge-offs to accrued transaction losses | (17,413) | (17,443) |
Accrued transaction losses, end of the period | $ 96,661 | $ 36,047 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Investment in non-marketable equity securities | $ 110,000 | $ 110,000 | |
Non-current lease prepayments | 0 | 45,738 | |
Restricted cash | 13,286 | 12,715 | $ 14,433 |
Other | 26,566 | 27,935 | |
Total | $ 149,852 | $ 196,388 |
OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Statutory liabilities | $ 56,371 | $ 54,762 |
Deferred revenue, non-current | 6,654 | 6,227 |
Other | 17,836 | 33,472 |
Total | $ 80,861 | $ 94,461 |
INDEBTEDNESS - Net Carrying Amount of Equity Component of Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands |
Mar. 31, 2020 |
Mar. 05, 2020 |
Dec. 31, 2019 |
May 25, 2018 |
Mar. 06, 2017 |
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Amount allocated to conversion option | $ 346,340 | $ 196,731 | |||
Less: allocated issuance costs | (4,547) | (2,339) | |||
Equity component, net | 341,793 | 194,392 | |||
2025 Notes | |||||
Debt Instrument [Line Items] | |||||
Amount allocated to conversion option | 154,600 | ||||
Less: allocated issuance costs | (2,342) | ||||
Equity component, net | 152,258 | $ 154,600 | |||
2023 Notes | |||||
Debt Instrument [Line Items] | |||||
Amount allocated to conversion option | 155,250 | 155,250 | |||
Less: allocated issuance costs | (1,231) | (1,231) | |||
Equity component, net | 154,019 | 154,019 | $ 155,300 | ||
2022 Notes | |||||
Debt Instrument [Line Items] | |||||
Amount allocated to conversion option | 36,490 | 41,481 | |||
Less: allocated issuance costs | (974) | (1,108) | |||
Equity component, net | $ 35,516 | $ 40,373 | $ 86,200 |
INDEBTEDNESS - Interest Expense on Convertible Notes (Details) - Convertible Debt - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 1,373 | $ 1,277 |
Amortization of debt discount and issuance costs | 12,528 | 9,608 |
Total | $ 13,901 | $ 10,885 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 535 | $ 129 |
Effective tax rate | (0.50%) | (0.30%) |
STOCKHOLDERS' EQUITY - Restricted Stock Awards and Restricted Stock Units Activity (Details) - RSAs and RSUs |
3 Months Ended |
---|---|
Mar. 31, 2020
$ / shares
shares
| |
Number of shares | |
Beginning balance (in shares) | shares | 13,917,461 |
Granted (in shares) | shares | 863,415 |
Vested (in shares) | shares | (1,829,201) |
Forfeited (in shares) | shares | (350,181) |
Ending balance (in shares) | shares | 12,601,494 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in USD per share) | $ / shares | $ 49.90 |
Granted (in USD per share) | $ / shares | 69.78 |
Vested (in USD per share) | $ / shares | 35.56 |
Forfeited (in USD per share) | $ / shares | 46.05 |
Ending balance (in USD per share) | $ / shares | $ 53.43 |
STOCKHOLDERS' EQUITY - Effects of Share-Based Compensation on Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 77,303 | $ 61,088 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 76 | 21 |
Product development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 57,400 | 42,649 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 6,407 | 6,202 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 13,420 | $ 12,216 |
NET 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 | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Numerator: | ||
Net loss | $ (105,891) | $ (38,151) |
Denominator: | ||
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 434,940 | 419,289 |
Net loss per share: | ||
Basic (in USD per share) | $ (0.24) | $ (0.09) |
Diluted (in USD per share) | $ (0.24) | $ (0.09) |
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Jul. 31, 2019 |
---|---|---|
Related Party Transaction [Line Items] | ||
Lease executed but not yet commenced, term | 15 years 6 months | |
Lease executed but not yet commenced | $ 82,692 | $ 42,700 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Lease executed but not yet commenced, term | 15 years 6 months | |
Lease executed but not yet commenced | $ 42,700 |
COMMITMENTS AND CONTINGENCIES - Schedule of Lease Expense Components (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Fixed operating lease costs | $ 15,125 | $ 6,690 |
Variable operating lease costs | 5,724 | 637 |
Short term lease costs | 1,856 | 441 |
Sublease income | (1,437) | 0 |
Finance lease costs | ||
Amortization of finance right-of-use assets | 1,054 | 1,293 |
Interest on finance lease liabilities | 0 | 0 |
Total lease costs | $ 22,322 | $ 9,061 |
COMMITMENTS AND CONTINGENCIES - Other Information Related to Leases (Details) |
Mar. 31, 2020 |
---|---|
Weighted Average Remaining Lease Term: | |
Operating leases | 8 years 9 months 18 days |
Finance leases | 6 months |
Weighted Average Discount Rate: | |
Operating leases | 4.00% |
Finance leases | 0.00% |
COMMITMENTS AND CONTINGENCIES - Cash Flows Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Cash flows from operating activities: | ||
Payments for operating lease liabilities | $ (9,570) | $ (9,293) |
Cash flows from financing activities: | ||
Principal payments on finance lease obligation | (1,054) | (1,284) |
Supplemental Cash Flow Data: | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 255,553 | $ 19,918 |
COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Leases and Finance Leases (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Jul. 31, 2019 |
---|---|---|
Finance | ||
Remainder of 2020 | $ 1,391 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | 0 | |
Total | 1,391 | |
Less: amount representing interest | 0 | |
Less: leases executed but not yet commenced | 0 | |
Less: lease incentives | 0 | |
Total | 1,391 | |
Operating | ||
Remainder of 2020 | 39,616 | |
2021 | 67,683 | |
2022 | 70,409 | |
2023 | 65,056 | |
2024 | 45,520 | |
Thereafter | 269,229 | |
Total | 557,513 | |
Less: amount representing interest | 78,640 | |
Less: leases executed but not yet commenced | 82,692 | $ 42,700 |
Less: lease incentives | 9,284 | |
Total | $ 386,897 |
COMMITMENTS AND CONTINGENCIES - Litigation (Details) - USD ($) |
Sep. 06, 2019 |
Dec. 31, 2019 |
Mar. 31, 2018 |
---|---|---|---|
Income Tax Examination [Line Items] | |||
Gross receipts tax and payroll expense tax paid | $ 8,400,000 | $ 1,300,000 | |
Minimum | |||
Income Tax Examination [Line Items] | |||
Estimate of possible liability for additional taxes, interest and penalties | $ 0 | ||
Maximum | |||
Income Tax Examination [Line Items] | |||
Estimate of possible liability for additional taxes, interest and penalties | $ 66,000,000 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Narrative (Details) - segment |
3 Months Ended | 9 Months Ended |
---|---|---|
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Subsequent Event [Line Items] | ||
Number of reportable segments | 1 | |
Number of operating segments | 1 | |
Forecast [Member] | ||
Subsequent Event [Line Items] | ||
Number of reportable segments | 2 | |
Number of operating segments | 2 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue by Geographic Area (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 1,381,109 | $ 959,359 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 1,313,586 | 914,656 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 67,523 | $ 44,703 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 934,586 | $ 597,766 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 918,351 | 586,702 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 16,235 | $ 11,064 |
SUPPLEMENTAL CASH FLOW INFORMATION - Analysis of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 1,962,316 | $ 1,047,118 | $ 521,676 | |
Short-term restricted cash | 34,315 | 38,873 | 33,220 | |
Long-term restricted cash | 13,286 | 12,715 | 14,433 | |
Cash, cash equivalents, and restricted cash | $ 2,009,917 | $ 1,098,706 | $ 569,329 | $ 632,847 |
SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Cash Flow Data (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Supplemental Cash Flow Data: | ||
Cash paid for interest | $ 397 | $ 538 |
Cash paid for income taxes | 2,599 | 1,342 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for operating lease obligations | 255,553 | 19,918 |
Change in purchases of property and equipment in accounts payable and accrued expenses | 10,354 | 13,114 |
Unpaid business combination purchase price | 7,338 | 6,447 |
Fair value of common stock issued related to business combination | (14,999) | 0 |
Recovery of common stock in connection with indemnification settlement agreement | 0 | 789 |
Fair value of common stock issued to settle the conversion of senior notes, due 2022 | $ (77,614) | $ 0 |