FORM 10-K
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(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2018
OR
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o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission File Number 001-37622
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SQUARE, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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80-0429876
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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1455 Market Street, Suite 600
San Francisco, CA 94103
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(Address of principal executive offices, including zip code)
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(415) 375-3176
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(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of each exchange on which registered
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Class A Common Stock, $0.0000001 par value per share
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
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Page No
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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Magstripe reader: This reader enables swiped transactions of magnetic stripe cards by connecting with an iOS or Android smartphone or tablet via headphone jack or lightning connector.
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•
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Contactless and chip reader: This reader accepts EMV chip cards and NFC payments, enabling acceptance via Apple Pay, Google Pay, and other mobile wallets. The reader connects wirelessly or via USB.
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•
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Square Stand: This hardware enables an iPad to be used as a payment terminal or full point of sale solution. It features an integrated magnetic stripe reader, provides power to a connected iPad, and can connect to the contactless and chip reader wirelessly or via USB. Square Stand also connects to various peripheral devices that brick-and-mortar businesses use, such as cash drawers and receipt printers.
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•
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Square Register: This all-in-one offering combines our hardware, point-of-sale software, and payments technology. The dedicated hardware consists of two screens: a seller display and a customer display with a built-in card reader that accepts tap, dip, and swipe payments. Square Register does not require a third-party device, and it contains connections for Ethernet, Wi-Fi, and a USB hub so sellers can integrate with peripheral devices.
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•
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Square Terminal: During the fourth quarter of 2018, we launched Square Terminal, a portable, all-in-one payments device to replace traditional keypad terminals. Square Terminal accepts all major payment types, including tap, dip, and swipe, and also prints receipts. It has both Wi-Fi and Ethernet internet connectivity.
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•
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Square Point of Sale is a general purpose point-of-sale software that can be downloaded to an iOS or Android device and is pre-installed on Square Register. Sellers can automatically keep track of sales, inventory, and customers’ purchase histories, as well as send digital receipts and collect instant customer feedback to improve their service. As a cloud-based service, sellers get frequent software updates and upgrades seamlessly.
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•
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Square Appointments provides sellers in the services industry with an integrated solution from which they can create a seamless experience from booking to payment. Customers can easily schedule appointments with their preferred time, service, and staff member, and sellers can easily accept payments.
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Square for Retail provides sellers in the retail industry with a point-of-sale solution that includes barcode scanning; advanced inventory management that supports tens of thousands of items, cost of goods sold, purchase orders, vendor management; and capabilities that allow retail sellers to better understand their customers’ habits.
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•
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Square for Restaurants, launched in the second quarter of 2018, is a point-of-sale solution for full-service restaurants that enables staff to serve diners while also managing tables, orders, courses, and tickets. Square for Restaurants also provides back of the house functionality, such as revenue and cost reporting, helping managers and owners make informed decisions and run a more efficient business.
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With Square Invoices, a seller can securely collect payments by creating and sending a custom digital invoice to their customer. Square Invoices is integrated with Customer Directory and synced across Square Point of Sale and Square Dashboard, our cloud-based reporting and analytics tool, allowing the seller to easily track invoices, send payment reminders to the customer, and set recurring billing. Sellers may use Square Invoices for upcoming or previously-delivered goods and services, such as catering orders, contractor services, and retail orders.
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Virtual Terminal allows sellers to accept payments from a web browser. Virtual Terminal helps serve sellers who run their business from a computer where companion tools such as email, customer lists, and scheduling operate alongside Virtual Terminal.
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Weebly provides customers around the world with tools to easily build a professional website or online store. An online store with Weebly provides sellers with integrated shipping, inventory management, and marketing, and as part of Square's commerce offering, Weebly customers can sell in-person. Weebly has millions of customers and more than 625,000 paid subscribers.
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Square Dashboard, our cloud-based reporting and analytics tool, provides sellers with real-time data and insights about transactions, sales, items, customers, and employees. This reporting enables sellers to make informed, timely decisions about their business.
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Square Loyalty and Marketing provide CRM (customer relationship management) tools that help sellers engage with their buyers to grow their business. By linking customer data with point-of-sale and transaction data, we can offer our sellers an integrated loyalty program and targeted marketing campaigns and a closed-loop system that allows sellers to easily assess the return on investment of their marketing efforts.
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Square Payroll empowers sellers to grow and manage their business by making it easy to hire, onboard, and pay wages and associated taxes for employees. Square Payroll is available nationwide in the United States and also enables employers to offer their employees benefits.
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In-person payments: Square Reader SDK, which launched in the third quarter of 2018, enables developers to seamlessly integrate Square hardware with a seller’s custom point of sale, and allow them to build unique checkout experiences such as self-ordering kiosks.
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Online payments: With our online payments APIs, developers can integrate Square payments with an e-commerce website or online store.
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Mobile payments: In-App Payments SDK, which launched in the first quarter of 2019, enables developers to build consumer mobile apps that use Square to process payments.
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Commerce: With our commerce APIs, developers can manage orders, product catalogs, inventory, customer profiles, employees, and more in order to integrate business solutions such as accounting, CRM software, customer databases, employee management, and ERP (enterprise resource planning) software.
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•
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Customers transfer funds to their bank account via Instant Deposit
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Customers conduct purchase transactions with Cash Card
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Customers complete P2P transactions using a credit card
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Customers buy bitcoin within the app
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Businesses use Cash App to accept payments from their customers (Cash for Business)
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1.
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Once the buyer is ready to make a purchase, the seller initiates the transaction using the Square Point of Sale and presents the buyer with the amount owed.
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2.
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For in-person transactions, the buyer pays by swiping or dipping their payment card, or by tapping an NFC-enabled payment card or mobile device on a Square Reader, Square Stand, Square Register or Square Terminal, as applicable, which captures the buyer’s payment information. For card not present transactions the seller can either use the customer's
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3.
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Square initiates the transaction, acting as the PSP.
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4.
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Square passes the transaction information to the acquiring processor. Square pays a fixed per transaction fee to the acquiring processor.
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5.
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The acquiring processor routes the transaction to the relevant card network affiliated with the buyer’s card (e.g., American Express, Mastercard, or Visa). Square pays a variety of card network fees, which includes card service assessments of roughly 0.10% to 0.15% of the transaction amount.
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6.
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The card network then routes the transaction to the issuing bank, which authorizes or declines the buyer’s payment card transaction.
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7.
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The issuing bank sends a notification back through the card network to the acquiring processor and the Square Point of Sale to inform the seller that the transaction has been authorized or declined.
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8.
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If authorized, the Square Point of Sale may send a digital receipt for the transaction on behalf of the seller to the buyer. The digital receipt enables a persistent communication channel that further allows the buyer to provide feedback to the seller.
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9.
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Upon settlement, the issuing bank disburses funds to the acquiring bank through the card network for the final transaction amount. The issuing bank is reimbursed an interchange or merchant discount fee as both a percentage of the amount of the transaction and a fixed fee per transaction, which together average between 1.5% to 2.0% of the transaction amount. However, this percentage varies significantly based on the buyer's card type, the transaction type, and the transaction size.
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10.
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Square transfers funds to the seller’s bank account, less applicable fees as charged by Square. Square provides sellers with fast access to funds, typically disbursing funds within a business day after the date of the transaction. Deposits use Automated Clearing House (ACH) transfers, or leverage the same day Instant Deposit service for an additional transaction fee.
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11.
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The funds are settled from the acquiring bank to Square, typically in one to two business days after the date of the transaction.
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12.
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At the end of each monthly billing cycle, the issuing bank provides a statement to the buyer including all applicable monthly charges. The statement includes a reference to Square as the merchant of record on the billing statement as a prefix to the seller name (denoted as SQ).
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Business software providers such as those that provide inventory management, analytics, customer management and marketing, e-commerce, payroll, website building tools, invoices and appointments solutions;
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Established or new alternative lenders; and
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Food delivery service providers.
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improving and implementing existing and developing new internal administrative infrastructure, particularly our operational, financial, communications and other internal systems and procedures;
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installing enhanced management information and control systems; and
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preserving our core values, strategies, and goals and effectively communicating these to our employees worldwide.
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difficulty in attracting a sufficient number of sellers;
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failure to anticipate competitive conditions;
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conformity with applicable business customs, including translation into foreign languages and associated expenses;
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increased costs and difficulty in protecting intellectual property and sensitive data;
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changes to the way we do business as compared with our current operations or a lack of acceptance of our products and services;
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the ability to support and integrate with local third-party service providers;
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competition with service providers or other entrenched market-players that have greater experience in the local markets than we do;
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difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customs, challenges caused by distance, language, and cultural differences, and the increased travel, infrastructure, and legal and compliance costs associated with global operations;
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difficulties in recruiting and retaining qualified employees and maintaining our company culture;
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difficulty in gaining acceptance from industry self-regulatory bodies;
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compliance with multiple, potentially conflicting and changing governmental laws and regulations, including with respect to payments, data privacy, data protection, and information security;
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compliance with U.S. and foreign anti-corruption, anti-bribery, and anti-money laundering laws;
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potential tariffs, sanctions, fines, or other trade restrictions;
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exchange rate risk;
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compliance with potentially conflicting and changing laws of taxing jurisdictions where we conduct business and applicable U.S. tax laws, the complexity and adverse consequences of such tax laws and potentially adverse tax consequences due to changes in such tax laws; and
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regional economic and political instability.
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the transaction may not advance our business strategy;
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we may spend time and resources on opportunities that we are unable to consummate on terms acceptable to us;
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the transaction may not close or may be delayed;
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we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all;
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the transaction may subject us to additional regulatory burdens that affect our business in potentially unanticipated and significantly negative ways;
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we may not realize a satisfactory return or increase our revenue;
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we may experience difficulty, and may not be successful in, integrating technologies, IT systems, data processing methods and policies, accounting systems, culture, or management or other personnel of the acquired business and we may not realize the expected synergies of the transaction in a timely manner, or at all;
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we may incur significant acquisition costs and transition costs, including in connection with the assumption of ongoing expenses of the acquired business;
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the transaction may divert management’s attention and resources, which may cause disruptions in our ongoing operations;
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we may not realize the expected benefits from the transaction in the expected time period, or at all;
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we may be unable to retain key personnel;
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acquired businesses or businesses in which we invest may not have adequate controls, processes and procedures to ensure compliance with laws and regulations, and our due diligence process may not identify compliance issues or other liabilities;
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we may incur substantial liabilities associated with the activities or conduct of the acquired business, including legal and regulatory claims or disputes, violations of laws and regulations, and other liabilities, whether known or unknown;
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we may fail to identify or assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a business, which could result in additional financial, legal, or regulatory exposure, which
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we may have difficulty entering into new market segments;
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we may be unable to retain the customers, vendors, and partners of acquired businesses;
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there may be lawsuits or regulatory actions resulting from the transaction;
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there may be risks associated with undetected cyberattacks or security breaches at companies that we acquire or with which we may combine or partner;
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there may be regulatory constraints, including competition regulations that may affect the extent to which we can maximize the value of our acquisitions or investments;
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there may be local and foreign regulations applicable to the international activities of our business and the businesses we acquire;
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there may be risks associated with the complexity of entering into and effectively managing joint ventures, strategic investments, and other strategic partnerships;
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acquisitions could result in dilutive issuances of equity securities or the incurrence of debt; and
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our business, the acquired business, or the integrated business may be adversely affected by other political, business, and general economic conditions.
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price and volume fluctuations in the overall stock market from time to time;
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volatility in the market prices and trading volumes of companies in our industry or companies that investors consider comparable;
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changes in operating performance and stock market valuations of other companies generally or of those in our industry in particular;
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sales of shares of our common stock by us or our stockholders;
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issuance of shares of our Class A common stock, whether in connection with an acquisition or upon conversion of some or all of our outstanding Notes;
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failure of securities analysts to maintain coverage and/or to provide accurate consensus results of us, changes in financial estimates by securities analysts who follow us, or our failure to meet these estimates or the expectations of investors;
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the financial or other projections we may provide to the public, any changes in those projections, or our failure to meet those projections;
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announcements by us or our competitors of new products or services;
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public reaction to our press releases, other public announcements, and filings with the SEC;
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rumors and market speculation involving us or other companies in our industry;
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actual or anticipated changes in our results of operations;
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changes in the regulatory environment or the regulations applicable to our current or futures lines of business;
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actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally;
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litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors;
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announced or completed acquisitions of businesses or technologies by us or our competitors;
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new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
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changes in accounting standards, policies, guidelines, interpretations, or principles;
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actual or perceived data security incidents that we or our service providers may suffer;
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any significant change in our management; and
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general economic conditions and slow or negative growth of our markets.
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Period
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Total number of
Shares purchased
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Average price paid
per share
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Total number of shares purchased as part of publicly announced plans or programs
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Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
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||||
October 1 to October 31
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3,646,581
(i)
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97.28
(ii)
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|
—
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—
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November 1 to November 30
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1,096,773
(iii)
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|
--
(ii)
|
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—
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|
—
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December 1 to December 31
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—
|
|
—
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|
—
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|
—
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Total
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4,743,354
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|
97.28
(ii)
|
|
—
|
|
—
|
|
Company/Index
|
|
11/19/2015
|
|
|
12/31/2015
|
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|
12/31/2016
|
|
|
12/31/2017
|
|
|
12/31/2018
|
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Square, Inc.
|
|
100
|
|
|
100.15
|
|
|
104.28
|
|
|
265.26
|
|
|
429.15
|
|
S&P 500
|
|
100
|
|
|
98.72
|
|
|
110.52
|
|
|
134.65
|
|
|
128.75
|
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S&P North American Technology
|
|
100
|
|
|
99.20
|
|
|
111.15
|
|
|
151.43
|
|
|
154.26
|
|
|
December 31,
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||||||||||||||||||
|
2018
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2017
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2016
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2015
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2014
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||||||||||
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(in thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
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||||||||||
Cash and cash equivalents
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$
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583,173
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$
|
696,474
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$
|
452,030
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$
|
461,329
|
|
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$
|
222,315
|
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Settlements receivable
|
364,946
|
|
|
620,523
|
|
|
321,102
|
|
|
142,727
|
|
|
115,481
|
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|||||
Working capital
|
1,093,364
|
|
|
805,467
|
|
|
423,961
|
|
|
371,361
|
|
|
218,761
|
|
|||||
Total assets
|
3,281,023
|
|
|
2,187,270
|
|
|
1,211,362
|
|
|
894,772
|
|
|
541,888
|
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|||||
Customers payable
|
749,215
|
|
|
733,736
|
|
|
431,632
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|
|
224,811
|
|
|
148,648
|
|
|||||
Long-term debt (Note 12)
|
899,695
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|
|
358,572
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|||||
Total stockholders’ equity
|
1,120,501
|
|
|
786,333
|
|
|
576,153
|
|
|
508,048
|
|
|
273,672
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
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2017
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2016
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2015
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2014
|
||||||||||
|
(
in thousands, except for GPV and per share data)
|
||||||||||||||||||
Gross Payment Volume (GPV) (in millions)
|
$
|
84,654
|
|
|
$
|
65,343
|
|
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$
|
49,683
|
|
|
$
|
35,643
|
|
|
$
|
23,780
|
|
Adjusted Revenue
|
$
|
1,587,641
|
|
|
$
|
983,963
|
|
|
$
|
686,618
|
|
|
$
|
452,168
|
|
|
$
|
276,310
|
|
Adjusted EBITDA
|
$
|
256,523
|
|
|
$
|
139,009
|
|
|
$
|
44,887
|
|
|
$
|
(41,115
|
)
|
|
$
|
(67,741
|
)
|
Adjusted Net Income (Loss) Per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.55
|
|
|
$
|
0.30
|
|
|
$
|
0.04
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.62
|
)
|
Diluted
|
$
|
0.47
|
|
|
$
|
0.27
|
|
|
$
|
0.04
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.62
|
)
|
•
|
Adjusted Revenue is net of transaction-based costs, which is our largest cost of revenue item;
|
•
|
Adjusted Revenue is net of bitcoin costs, which could be a significant cost;
|
•
|
The deferred revenue adjustment that is added back to Adjusted Revenue will never be recognized as revenue by the Company; and
|
•
|
other companies, including companies in our industry, may calculate Adjusted Revenue differently or not at all, which reduces its usefulness as a comparative measure.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Total net revenue
|
$
|
3,298,177
|
|
|
$
|
2,214,253
|
|
|
$
|
1,708,721
|
|
|
$
|
1,267,118
|
|
|
$
|
850,192
|
|
Less: Starbucks transaction-based revenue
|
—
|
|
|
—
|
|
|
78,903
|
|
|
142,283
|
|
|
123,024
|
|
|||||
Less: transaction-based costs
|
1,558,562
|
|
|
1,230,290
|
|
|
943,200
|
|
|
672,667
|
|
|
450,858
|
|
|||||
Less: bitcoin costs
|
164,827
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add: deferred revenue adjustment related to purchase accounting
|
$
|
12,853
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Adjusted Revenue
|
$
|
1,587,641
|
|
|
$
|
983,963
|
|
|
$
|
686,618
|
|
|
$
|
452,168
|
|
|
$
|
276,310
|
|
•
|
We exclude Starbucks transaction-based revenue and Starbucks transaction-based costs. As described above, Starbucks ceased using our payments solutions altogether, and we believe that providing non-GAAP financial measures that exclude the impact of Starbucks is useful to investors.
|
•
|
We believe it is useful to exclude certain non-cash charges, such as amortization of intangible assets, and share-based compensation expenses, from our non-GAAP financial measures because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.
|
•
|
In connection with the issuance of our convertible senior notes (as described in Note
12
), we are required to recognize non-cash interest expense related to amortization of debt discount and issuance costs. We believe that excluding these expenses from our non-GAAP measures is useful to investors because such incremental non-cash interest expense does not represent a current or future cash outflow for the Company and is therefore not indicative of our continuing operations or meaningful when comparing current results to past results. Additionally, for purposes of calculating diluted Adjusted EPS we add back cash interest expense on convertible senior notes, as if converted at the beginning of the period, if the impact is dilutive, since we intend to settle future conversions of our convertible senior notes entirely in shares.
|
•
|
We exclude the litigation settlement with Robert E. Morley (as described in Note 1), gain or loss on the disposal of property and equipment, gain or loss on revaluation of equity investment, gain or loss on debt extinguishment related to the conversion of senior notes and impairment of intangible assets, as applicable, from non-GAAP financial measures because we do not believe that these items are reflective of our ongoing business operations.
|
•
|
We also exclude certain costs associated with acquisitions that are not normal recurring operating expenses, including amounts paid to redeem acquirees’ unvested share-based compensation awards, and legal, accounting and due diligence costs, and we add back the impact of the acquired deferred revenue and deferred cost adjustment, which was written down to fair value in purchase accounting. Such amounts were not included in prior periods as they were immaterial or zero.
|
•
|
share-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy;
|
•
|
the intangible assets being amortized may have to be replaced in the future, and the non-GAAP financial measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments; and
|
•
|
non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Net loss
|
$
|
(38,453
|
)
|
|
$
|
(62,813
|
)
|
|
$
|
(171,590
|
)
|
|
$
|
(179,817
|
)
|
|
$
|
(154,093
|
)
|
Starbucks transaction-based revenue
|
—
|
|
|
—
|
|
|
(78,903
|
)
|
|
(142,283
|
)
|
|
(123,024
|
)
|
|||||
Starbucks transaction-based costs
|
—
|
|
|
—
|
|
|
69,761
|
|
|
165,438
|
|
|
150,955
|
|
|||||
Share-based compensation expense
|
216,881
|
|
|
155,836
|
|
|
138,786
|
|
|
82,292
|
|
|
36,100
|
|
|||||
Depreciation and amortization
|
60,961
|
|
|
37,279
|
|
|
37,745
|
|
|
27,626
|
|
|
18,586
|
|
|||||
Litigation settlement expense
|
—
|
|
|
—
|
|
|
48,000
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense (income), net
|
17,982
|
|
|
10,053
|
|
|
(533
|
)
|
|
1,163
|
|
|
1,058
|
|
|||||
Other (income) expense, net
|
(18,469
|
)
|
|
(1,595
|
)
|
|
(247
|
)
|
|
450
|
|
|
1,104
|
|
|||||
Provision for income taxes
|
2,326
|
|
|
149
|
|
|
1,917
|
|
|
3,746
|
|
|
1,440
|
|
|||||
Loss (gain) on disposal of property and equipment
|
(224
|
)
|
|
100
|
|
|
(49
|
)
|
|
270
|
|
|
133
|
|
|||||
Acquisition related costs
|
4,708
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquired deferred revenue adjustment
|
12,853
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquired deferred costs adjustment
|
(2,042
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjusted EBITDA
|
$
|
256,523
|
|
|
$
|
139,009
|
|
|
$
|
44,887
|
|
|
$
|
(41,115
|
)
|
|
$
|
(67,741
|
)
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Net loss
|
$
|
(38,453
|
)
|
|
$
|
(62,813
|
)
|
|
$
|
(171,590
|
)
|
|
$
|
(179,817
|
)
|
|
$
|
(154,093
|
)
|
Starbucks transaction-based revenue
|
—
|
|
|
—
|
|
|
(78,903
|
)
|
|
(142,283
|
)
|
|
(123,024
|
)
|
|||||
Starbucks transaction-based costs
|
—
|
|
|
—
|
|
|
69,761
|
|
|
165,438
|
|
|
150,955
|
|
|||||
Share-based compensation expense
|
216,881
|
|
|
155,836
|
|
|
138,786
|
|
|
82,292
|
|
|
36,100
|
|
|||||
Amortization of intangible assets
|
13,104
|
|
|
7,615
|
|
|
9,013
|
|
|
7,503
|
|
|
2,133
|
|
|||||
Litigation settlement expense
|
—
|
|
|
—
|
|
|
48,000
|
|
|
—
|
|
|
—
|
|
|||||
Amortization of debt discount and issuance costs
|
32,855
|
|
|
14,223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Gain on revaluation of equity investment
|
(20,342
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on extinguishment of long-term debt
|
5,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss (gain) on disposal of property and equipment
|
(224
|
)
|
|
100
|
|
|
(49
|
)
|
|
270
|
|
|
133
|
|
|||||
Acquisition related costs
|
4,708
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquired deferred revenue adjustment
|
12,853
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquired deferred cost adjustment
|
(2,042
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjusted Net Income (Loss) - basic
|
$
|
224,368
|
|
|
$
|
114,961
|
|
|
$
|
15,018
|
|
|
$
|
(66,597
|
)
|
|
$
|
(87,796
|
)
|
Cash interest expense on convertible senior notes
|
$
|
1,292
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Adjusted Net Income (Loss) - diluted
|
$
|
225,660
|
|
|
$
|
114,961
|
|
|
$
|
15,018
|
|
|
$
|
(66,597
|
)
|
|
$
|
(87,796
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average shares used to compute Adjusted Net Income (Loss) Per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
405,731
|
|
|
379,344
|
|
|
341,555
|
|
|
170,498
|
|
|
142,042
|
|
|||||
Diluted
|
478,895
|
|
|
426,519
|
|
|
370,258
|
|
|
170,498
|
|
|
142,042
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted Net Income (Loss) Per Share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.55
|
|
|
$
|
0.30
|
|
|
$
|
0.04
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.62
|
)
|
Diluted
|
$
|
0.47
|
|
|
$
|
0.27
|
|
|
$
|
0.04
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.62
|
)
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
||||||||
Transaction-based revenue
|
$
|
2,471,451
|
|
|
$
|
1,920,174
|
|
|
$
|
1,456,160
|
|
|
29
|
%
|
|
32
|
%
|
Starbucks transaction-based revenue
|
—
|
|
|
—
|
|
|
78,903
|
|
|
NM
|
|
|
(100
|
)%
|
|||
Subscription and services-based revenue
|
591,706
|
|
|
252,664
|
|
|
129,351
|
|
|
134
|
%
|
|
95
|
%
|
|||
Hardware revenue
|
68,503
|
|
|
41,415
|
|
|
44,307
|
|
|
65
|
%
|
|
(7
|
)%
|
|||
Bitcoin revenue
|
166,517
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
|||
Total net revenue
|
$
|
3,298,177
|
|
|
$
|
2,214,253
|
|
|
$
|
1,708,721
|
|
|
49
|
%
|
|
30
|
%
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
||||||||
Transaction-based costs
|
$
|
1,558,562
|
|
|
$
|
1,230,290
|
|
|
$
|
943,200
|
|
|
27
|
%
|
|
30
|
%
|
Starbucks transaction-based costs
|
—
|
|
|
—
|
|
|
69,761
|
|
|
NM
|
|
|
(100
|
)%
|
|||
Subscription and services-based costs
|
169,884
|
|
|
75,720
|
|
|
43,132
|
|
|
124
|
%
|
|
76
|
%
|
|||
Hardware costs
|
94,114
|
|
|
62,393
|
|
|
68,562
|
|
|
51
|
%
|
|
(9
|
)%
|
|||
Bitcoin costs
|
164,827
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
|||
Amortization of acquired technology
|
7,090
|
|
|
6,544
|
|
|
8,028
|
|
|
8
|
%
|
|
(18
|
)%
|
|||
Total cost of revenue
|
$
|
1,994,477
|
|
|
$
|
1,374,947
|
|
|
$
|
1,132,683
|
|
|
45
|
%
|
|
21
|
%
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
||||||||
Product development
|
$
|
497,479
|
|
|
$
|
321,888
|
|
|
$
|
268,537
|
|
|
55
|
%
|
|
20
|
%
|
Percentage of total net revenue
|
15
|
%
|
|
15
|
%
|
|
16
|
%
|
|
|
|
|
•
|
an increase of $123.9 million in personnel costs related to our engineering, data science, and design teams, as well as the acquisition of Weebly, as we continue to improve and diversify our product offerings. The increase in personnel related costs includes an increase in share-based compensation expense of
$46.3 million
;
|
•
|
an increase of $16.3 million in depreciation and amortization expense as a result of additions in property and equipment including capitalized software, data center equipment and leasehold improvements to help our business scale and as result of assets acquired through the acquisition of Weebly; and
|
•
|
an increase of $12.7 million in software and data center operating costs as a result of increased capacity needs and expansion of our cloud based services.
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
||||||||
Sales and marketing
|
$
|
411,151
|
|
|
$
|
253,170
|
|
|
$
|
173,876
|
|
|
62
|
%
|
|
46
|
%
|
Percentage of total net revenue
|
12
|
%
|
|
11
|
%
|
|
10
|
%
|
|
|
|
|
•
|
an increase of $90.6 million in costs associated with increased volume of activity with our Cash App peer-to-peer transfer service and Cash Card issuance costs in line with increased users. We offer the peer-to-peer service to our Cash App customers for free and we consider it to be a marketing tool to encourage the usage of Cash App which includes Cash Card among other features;
|
•
|
an increase of $25.4 million in sales and marketing personnel costs to enable growth initiatives. The increase in personnel related costs includes an increase in share-based compensation expense of
$5.2 million
; and
|
•
|
an increase of
$20.0 million
in advertising costs primarily from increased online and mobile marketing campaigns during the year.
|
•
|
an increase of $25.2 million in costs associated with our Cash App peer-to-peer transfer service as result of continued growth and expansion of this product;
|
•
|
an increase of $23.6 million in advertising costs primarily from increased online, direct mail, and mobile marketing campaigns during the year; and
|
•
|
an increase of $22.4 million in sales and marketing personnel costs to enable growth initiatives. The increase in personnel related costs includes an increase in share-based compensation expense of $3.4 million.
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
||||||||
General and administrative
|
$
|
339,245
|
|
|
$
|
250,553
|
|
|
$
|
251,993
|
|
|
35
|
%
|
|
(1
|
)%
|
Percentage of total net revenue
|
10
|
%
|
|
11
|
%
|
|
15
|
%
|
|
|
|
|
•
|
an increase of $61.7 million in general and administrative personnel costs, mainly as a result of additions to our support, finance, and legal personnel as we continue to add resources and skills as our business scales to support long-term growth. The increase in personnel related costs includes an increase in share-based compensation expense of
$9.5 million
;
|
•
|
we also incurred
$4.7 million
in acquisition related costs that are not normal recurring operating expenses, including amounts paid to redeem acquirees’ unvested share-based compensation awards, and legal, accounting, and due diligence costs. There was no similar activity in the prior year; and
|
•
|
an increase of $4.0 million in various tax and licensing expenses as we continue to expand our business and product offerings.
|
•
|
an increase of $24.8 million in general and administrative personnel costs, mainly as a result of additions to our finance, legal, compliance, customer success, Square Capital operations, Caviar operations and internal business systems personnel as we continue to add resources and skills as our business scales and drive long-term growth. The increase in personnel related costs includes an increase in share-based compensation expense of $6.6 million; and
|
•
|
the remaining increase is primarily due to increased third-party legal, finance, consulting, and corporate level expenses such as facilities expansion as our business and personnel continue to scale and diversify.
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
||||||||
Transaction, loan and advance losses
|
$
|
88,077
|
|
|
$
|
67,018
|
|
|
$
|
51,235
|
|
|
31
|
%
|
|
31
|
%
|
•
|
growth in GPV. Transaction losses increased by 27%, which is to a lesser extent than GPV growth due to ongoing investment in data science and improvements in our risk operations to mitigate exposure to transaction losses; and
|
•
|
a
$13.2 million
charge recorded to loan losses in the
year ended December 31, 2018
, compared to
$8.0 million
for the year ended
December 31, 2017
, as a result of the growth and aging of our Square Capital loan portfolio.
|
•
|
an $8.0 million charge recorded to loan losses in the year ended December 31, 2017, with no similar charges during the prior year, as a result of the growth and increasing maturity of our Square Capital loan portfolio, and continued refinement of inputs to our loan loss estimation methodology. We record loan losses when the amortized cost of a loan exceeds the estimated fair value of the loan, as determined at the individual loan level;
|
•
|
an out of period adjustment of $5.5 million recorded in the year ended December 31, 2016, as a result of a correction to the calculation of our reserve for transaction losses, with no similar charges during the year ended December 31, 2017.
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
||||||||
Amortization of acquired customer assets
|
$
|
4,362
|
|
|
$
|
883
|
|
|
$
|
850
|
|
|
394
|
%
|
|
4
|
%
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
|||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
|||||||
Interest expense, net
|
$
|
17,982
|
|
|
$
|
10,053
|
|
|
$
|
(533
|
)
|
|
79
|
%
|
|
NM
|
Other income, net
|
$
|
(18,469
|
)
|
|
$
|
(1,595
|
)
|
|
$
|
(247
|
)
|
|
NM
|
|
|
NM
|
|
Year Ended December 31,
|
|
2017 to 2018
|
|
2016 to 2017
|
|||||||||||
|
2018
|
|
2017
|
|
2016
|
|
% Change
|
|
% Change
|
|||||||
Provision for income taxes
|
$
|
2,326
|
|
|
$
|
149
|
|
|
$
|
1,917
|
|
|
NM
|
|
(92
|
)%
|
Effective tax rate
|
(6.4
|
)%
|
|
(0.2
|
)%
|
|
(1.1
|
)%
|
|
|
|
|
|
Three Months Ended,
|
||||||||||||||||||||||||||||||
|
Dec. 31,
2018 |
|
Sep. 30,
2018 |
|
Jun. 30,
2018 |
|
Mar. 31,
2018 |
|
Dec. 31,
2017 |
|
Sep. 30,
2017 |
|
Jun. 30,
2017 |
|
Mar. 31,
2017 |
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
|
(unaudited)
|
||||||||||||||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Transaction-based revenue
|
$
|
667,802
|
|
|
$
|
655,384
|
|
|
$
|
625,228
|
|
|
$
|
523,037
|
|
|
$
|
524,612
|
|
|
$
|
510,019
|
|
|
$
|
482,065
|
|
|
$
|
403,478
|
|
Subscription and services-based revenue
|
194,117
|
|
|
166,203
|
|
|
134,332
|
|
|
97,054
|
|
|
79,402
|
|
|
65,051
|
|
|
59,151
|
|
|
49,060
|
|
||||||||
Hardware revenue
|
18,166
|
|
|
17,558
|
|
|
18,362
|
|
|
14,417
|
|
|
12,021
|
|
|
10,089
|
|
|
10,289
|
|
|
9,016
|
|
||||||||
Bitcoin revenue
|
52,443
|
|
|
42,963
|
|
|
37,016
|
|
|
34,095
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total net revenue
|
932,528
|
|
|
882,108
|
|
|
814,938
|
|
|
668,603
|
|
|
616,035
|
|
|
585,159
|
|
|
551,505
|
|
|
461,554
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Transaction-based costs
|
420,846
|
|
|
414,456
|
|
|
395,349
|
|
|
327,911
|
|
|
333,377
|
|
|
328,043
|
|
|
311,092
|
|
|
257,778
|
|
||||||||
Subscription and services-based costs
|
52,654
|
|
|
47,078
|
|
|
39,784
|
|
|
30,368
|
|
|
24,559
|
|
|
18,169
|
|
|
17,116
|
|
|
15,876
|
|
||||||||
Hardware costs
|
25,647
|
|
|
23,229
|
|
|
25,536
|
|
|
19,702
|
|
|
16,783
|
|
|
18,775
|
|
|
14,173
|
|
|
12,662
|
|
||||||||
Bitcoin costs
|
51,951
|
|
|
42,408
|
|
|
36,596
|
|
|
33,872
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Amortization of acquired technology
|
1,376
|
|
|
2,277
|
|
|
1,857
|
|
|
1,580
|
|
|
1,486
|
|
|
1,556
|
|
|
1,695
|
|
|
1,807
|
|
||||||||
Total cost of revenue
|
552,474
|
|
|
529,448
|
|
|
499,122
|
|
|
413,433
|
|
|
376,205
|
|
|
366,543
|
|
|
344,076
|
|
|
288,123
|
|
||||||||
Gross profit
|
380,054
|
|
|
352,660
|
|
|
315,816
|
|
|
255,170
|
|
|
239,830
|
|
|
218,616
|
|
|
207,429
|
|
|
173,431
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Product development
|
141,811
|
|
|
135,773
|
|
|
114,800
|
|
|
105,095
|
|
|
92,633
|
|
|
82,547
|
|
|
78,126
|
|
|
68,582
|
|
||||||||
Sales and marketing
|
119,305
|
|
|
116,337
|
|
|
98,243
|
|
|
77,266
|
|
|
76,821
|
|
|
66,533
|
|
|
59,916
|
|
|
49,900
|
|
||||||||
General and administrative
|
95,445
|
|
|
85,527
|
|
|
82,772
|
|
|
75,501
|
|
|
66,318
|
|
|
64,312
|
|
|
62,988
|
|
|
56,935
|
|
||||||||
Transaction, loan and advance losses
|
24,474
|
|
|
23,596
|
|
|
21,976
|
|
|
18,031
|
|
|
16,833
|
|
|
19,893
|
|
|
18,401
|
|
|
11,891
|
|
||||||||
Amortization of acquired customer assets
|
2,127
|
|
|
1,294
|
|
|
672
|
|
|
269
|
|
|
234
|
|
|
222
|
|
|
222
|
|
|
205
|
|
||||||||
Total operating expenses
|
383,162
|
|
|
362,527
|
|
|
318,463
|
|
|
276,162
|
|
|
252,839
|
|
|
233,507
|
|
|
219,653
|
|
|
187,513
|
|
||||||||
Operating loss
|
(3,108
|
)
|
|
(9,867
|
)
|
|
(2,647
|
)
|
|
(20,992
|
)
|
|
(13,009
|
)
|
|
(14,891
|
)
|
|
(12,224
|
)
|
|
(14,082
|
)
|
||||||||
Interest expense, net
|
5,176
|
|
|
7,224
|
|
|
3,470
|
|
|
2,112
|
|
|
2,483
|
|
|
3,080
|
|
|
3,494
|
|
|
996
|
|
||||||||
Other expense (income), net
|
19,439
|
|
|
(37,800
|
)
|
|
(815
|
)
|
|
707
|
|
|
356
|
|
|
(1,226
|
)
|
|
(228
|
)
|
|
(497
|
)
|
||||||||
Loss before income tax
|
(27,723
|
)
|
|
20,709
|
|
|
(5,302
|
)
|
|
(23,811
|
)
|
|
(15,848
|
)
|
|
(16,745
|
)
|
|
(15,490
|
)
|
|
(14,581
|
)
|
||||||||
Provision (benefit) for income taxes
|
481
|
|
|
1,066
|
|
|
604
|
|
|
175
|
|
|
(185
|
)
|
|
(647
|
)
|
|
472
|
|
|
509
|
|
||||||||
Net income (loss)
|
(28,204
|
)
|
|
19,643
|
|
|
(5,906
|
)
|
|
(23,986
|
)
|
|
(15,663
|
)
|
|
(16,098
|
)
|
|
(15,962
|
)
|
|
(15,090
|
)
|
||||||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
(0.07
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
$
|
(0.07
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.04
|
)
|
Weighted-average shares used to compute net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
413,984
|
|
|
409,690
|
|
|
403,301
|
|
|
395,948
|
|
|
390,030
|
|
|
383,951
|
|
|
376,357
|
|
|
366,737
|
|
||||||||
Diluted
|
413,984
|
|
|
474,915
|
|
|
403,301
|
|
|
395,948
|
|
|
390,030
|
|
|
383,951
|
|
|
376,357
|
|
|
366,737
|
|
|
Three Months Ended,
|
||||||||||||||||||||||||||||||
|
Dec. 31,
2018 |
|
Sep. 30,
2018 |
|
Jun. 30,
2018 |
|
Mar. 31,
2018 |
|
Dec. 31,
2017 |
|
Sep. 30,
2017 |
|
Jun. 30,
2017 |
|
Mar. 31,
2017 |
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Share-Based Compensation
|
(unaudited)
|
||||||||||||||||||||||||||||||
Cost of revenue
|
$
|
18
|
|
|
$
|
18
|
|
|
$
|
30
|
|
|
$
|
31
|
|
|
$
|
30
|
|
|
$
|
29
|
|
|
$
|
18
|
|
|
$
|
—
|
|
Product development
|
40,788
|
|
|
39,525
|
|
|
33,806
|
|
|
30,482
|
|
|
28,564
|
|
|
25,254
|
|
|
25,136
|
|
|
19,356
|
|
||||||||
Sales and marketing
|
6,094
|
|
|
6,108
|
|
|
5,634
|
|
|
4,961
|
|
|
4,699
|
|
|
4,579
|
|
|
4,355
|
|
|
3,935
|
|
||||||||
General and administrative
|
12,125
|
|
|
13,262
|
|
|
12,649
|
|
|
11,350
|
|
|
11,232
|
|
|
10,186
|
|
|
10,084
|
|
|
8,379
|
|
||||||||
Total share-based compensation
|
$
|
59,025
|
|
|
$
|
58,913
|
|
|
$
|
52,119
|
|
|
$
|
46,824
|
|
|
$
|
44,525
|
|
|
$
|
40,048
|
|
|
$
|
39,593
|
|
|
$
|
31,670
|
|
|
Three Months Ended,
|
||||||||||||||||||||||||||||||
|
Dec. 31,
2018 |
|
Sep. 30,
2018 |
|
Jun. 30,
2018 |
|
Mar. 31,
2018 |
|
Dec. 31,
2017 |
|
Sep. 30,
2017 |
|
Jun. 30,
2017 |
|
Mar. 31,
2017 |
||||||||||||||||
|
(in thousands, except for GPV and per share data)
|
||||||||||||||||||||||||||||||
Key Operating Metrics and non-GAAP Financial Measures
|
(unaudited)
|
||||||||||||||||||||||||||||||
Gross Payment Volume (GPV) (in millions)
|
$
|
22,958
|
|
|
$
|
22,498
|
|
|
$
|
21,372
|
|
|
$
|
17,827
|
|
|
$
|
17,888
|
|
|
$
|
17,386
|
|
|
$
|
16,421
|
|
|
$
|
13,647
|
|
Adjusted Revenue
|
$
|
464,252
|
|
|
$
|
431,136
|
|
|
$
|
385,433
|
|
|
$
|
306,820
|
|
|
$
|
282,658
|
|
|
$
|
257,116
|
|
|
$
|
240,413
|
|
|
$
|
203,776
|
|
Adjusted EBITDA
|
$
|
81,310
|
|
|
$
|
70,997
|
|
|
$
|
68,322
|
|
|
$
|
35,894
|
|
|
$
|
41,184
|
|
|
$
|
34,304
|
|
|
$
|
36,496
|
|
|
$
|
27,025
|
|
Adjusted Net Income Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.15
|
|
|
$
|
0.07
|
|
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.05
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
Three Months Ended,
|
||||||||||||||||||||||||||||||
|
Dec. 31,
2018 |
|
Sep. 30,
2018 |
|
Jun. 30,
2018 |
|
Mar. 31,
2018 |
|
Dec. 31,
2017 |
|
Sep. 30,
2017 |
|
Jun. 30,
2017 |
|
Mar. 31,
2017 |
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Adjusted Revenue Reconciliation
|
(unaudited)
|
||||||||||||||||||||||||||||||
Total net revenue
|
$
|
932,528
|
|
|
$
|
882,108
|
|
|
$
|
814,938
|
|
|
$
|
668,603
|
|
|
$
|
616,035
|
|
|
$
|
585,159
|
|
|
$
|
551,505
|
|
|
$
|
461,554
|
|
Less: transaction-based costs
|
420,846
|
|
|
414,456
|
|
|
395,349
|
|
|
327,911
|
|
|
333,377
|
|
|
328,043
|
|
|
311,092
|
|
|
257,778
|
|
||||||||
Less: bitcoin costs
|
51,951
|
|
|
42,408
|
|
|
36,596
|
|
|
33,872
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Add: deferred revenue adjustment related to purchase accounting
|
4,521
|
|
|
5,892
|
|
|
2,440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Adjusted Revenue
|
$
|
464,252
|
|
|
$
|
431,136
|
|
|
$
|
385,433
|
|
|
$
|
306,820
|
|
|
$
|
282,658
|
|
|
$
|
257,116
|
|
|
$
|
240,413
|
|
|
$
|
203,776
|
|
|
Three Months Ended,
|
||||||||||||||||||||||||||||||
|
Dec. 31,
2018 |
|
Sep. 30,
2018 |
|
Jun. 30,
2018 |
|
Mar. 31,
2018 |
|
Dec. 31,
2017 |
|
Sep. 30,
2017 |
|
Jun. 30,
2017 |
|
Mar. 31,
2017 |
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Adjusted EBITDA Reconciliation
|
(unaudited)
|
||||||||||||||||||||||||||||||
Net loss
|
$
|
(28,204
|
)
|
|
$
|
19,643
|
|
|
$
|
(5,906
|
)
|
|
$
|
(23,986
|
)
|
|
$
|
(15,663
|
)
|
|
$
|
(16,098
|
)
|
|
$
|
(15,962
|
)
|
|
$
|
(15,090
|
)
|
Share-based compensation expense
|
59,025
|
|
|
58,913
|
|
|
52,119
|
|
|
46,824
|
|
|
44,525
|
|
|
40,048
|
|
|
39,593
|
|
|
31,670
|
|
||||||||
Depreciation and amortization
|
22,638
|
|
|
15,835
|
|
|
12,328
|
|
|
10,160
|
|
|
9,632
|
|
|
9,085
|
|
|
9,125
|
|
|
9,437
|
|
||||||||
Interest expense, net
|
5,176
|
|
|
7,224
|
|
|
3,470
|
|
|
2,112
|
|
|
2,483
|
|
|
3,080
|
|
|
3,494
|
|
|
996
|
|
||||||||
Other expense (income), net
|
19,439
|
|
|
(37,800
|
)
|
|
(815
|
)
|
|
707
|
|
|
356
|
|
|
(1,226
|
)
|
|
(228
|
)
|
|
(497
|
)
|
||||||||
Provision (benefit) for income taxes
|
481
|
|
|
1,066
|
|
|
604
|
|
|
175
|
|
|
(185
|
)
|
|
(647
|
)
|
|
472
|
|
|
509
|
|
||||||||
Loss (gain) on disposal of property and equipment
|
(1,005
|
)
|
|
806
|
|
|
73
|
|
|
(98
|
)
|
|
36
|
|
|
62
|
|
|
2
|
|
|
—
|
|
||||||||
Acquisition related costs
|
—
|
|
|
345
|
|
|
4,363
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Acquired deferred revenue adjustment
|
4,521
|
|
|
5,892
|
|
|
2,440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Acquired deferred costs adjustment
|
(761
|
)
|
|
(927
|
)
|
|
(354
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Adjusted EBITDA
|
$
|
81,310
|
|
|
$
|
70,997
|
|
|
$
|
68,322
|
|
|
$
|
35,894
|
|
|
$
|
41,184
|
|
|
$
|
34,304
|
|
|
$
|
36,496
|
|
|
$
|
27,025
|
|
|
Three Months Ended,
|
||||||||||||||||||||||||||||||
|
Dec. 31,
2018 |
|
Sep. 30,
2018 |
|
Jun. 30,
2018 |
|
Mar. 31,
2018 |
|
Dec. 31,
2017 |
|
Sep. 30,
2017 |
|
Jun. 30,
2017 |
|
Mar. 31,
2017 |
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Adjusted Net Income (Loss) Per Share:
|
(unaudited)
|
||||||||||||||||||||||||||||||
Net loss
|
$
|
(28,204
|
)
|
|
$
|
19,643
|
|
|
$
|
(5,906
|
)
|
|
$
|
(23,986
|
)
|
|
$
|
(15,663
|
)
|
|
$
|
(16,098
|
)
|
|
$
|
(15,962
|
)
|
|
$
|
(15,090
|
)
|
Share-based compensation expense
|
59,025
|
|
|
58,913
|
|
|
52,119
|
|
|
46,824
|
|
|
44,525
|
|
|
40,048
|
|
|
39,593
|
|
|
31,670
|
|
||||||||
Amortization of intangible assets
|
4,029
|
|
|
4,384
|
|
|
2,816
|
|
|
1,875
|
|
|
1,747
|
|
|
1,804
|
|
|
1,943
|
|
|
2,121
|
|
||||||||
Amortization of debt discount and issuance costs
|
10,005
|
|
|
11,627
|
|
|
6,830
|
|
|
4,393
|
|
|
4,335
|
|
|
4,277
|
|
|
4,221
|
|
|
1,390
|
|
||||||||
Loss (gain) on revaluation of equity investment
|
16,566
|
|
|
(36,908
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss on extinguishment of long-term debt
|
3,403
|
|
|
1,625
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss (gain) on disposal of property and equipment
|
(1,005
|
)
|
|
806
|
|
|
73
|
|
|
(98
|
)
|
|
36
|
|
|
62
|
|
|
2
|
|
|
—
|
|
||||||||
Acquisition related costs
|
—
|
|
|
345
|
|
|
4,363
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Acquired deferred revenue adjustment
|
4,521
|
|
|
5,892
|
|
|
2,440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Acquired deferred cost adjustment
|
(761
|
)
|
|
(927
|
)
|
|
(354
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Adjusted Net Income - basic
|
$
|
67,579
|
|
|
$
|
65,400
|
|
|
$
|
62,381
|
|
|
$
|
29,008
|
|
|
$
|
34,980
|
|
|
$
|
30,093
|
|
|
$
|
29,797
|
|
|
$
|
20,091
|
|
Cash interest expense on convertible senior notes
|
1,292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Adjusted Net Income - diluted
|
$
|
68,871
|
|
|
$
|
65,400
|
|
|
$
|
62,381
|
|
|
$
|
29,008
|
|
|
$
|
34,980
|
|
|
$
|
30,093
|
|
|
$
|
29,797
|
|
|
$
|
20,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted-average shares used to compute Adjusted Net Income (Loss) Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
413,984
|
|
|
409,690
|
|
|
403,301
|
|
|
395,948
|
|
|
390,030
|
|
|
383,951
|
|
|
376,357
|
|
|
366,737
|
|
||||||||
Diluted
|
488,177
|
|
|
495,621
|
|
|
470,022
|
|
|
461,761
|
|
|
450,703
|
|
|
432,284
|
|
|
418,468
|
|
|
404,319
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Adjusted Net Income Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.15
|
|
|
$
|
0.07
|
|
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
0.05
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash and cash equivalents
|
$
|
583,173
|
|
|
$
|
696,474
|
|
|
$
|
452,030
|
|
Short-term restricted cash
|
33,838
|
|
|
28,805
|
|
|
22,131
|
|
|||
Long-term restricted cash
|
15,836
|
|
|
9,802
|
|
|
14,584
|
|
|||
Cash, cash equivalents, and restricted cash
|
632,847
|
|
|
735,081
|
|
|
488,745
|
|
|||
Short-term investments
|
540,991
|
|
|
169,576
|
|
|
59,901
|
|
|||
Long-term investments
|
464,680
|
|
|
203,667
|
|
|
27,366
|
|
|||
Cash, cash equivalents, restricted cash and investments in marketable debt securities
|
1,638,518
|
|
|
1,108,324
|
|
|
576,012
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
$
|
295,080
|
|
|
$
|
127,711
|
|
|
$
|
23,131
|
|
Net cash used in investing activities:
|
(905,848
|
)
|
|
(340,611
|
)
|
|
(114,241
|
)
|
|||
Net cash provided by financing activities
|
515,755
|
|
|
454,933
|
|
|
90,741
|
|
|||
Effect of foreign exchange rate on cash and cash equivalents
|
(7,221
|
)
|
|
4,303
|
|
|
(438
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(102,234
|
)
|
|
$
|
246,336
|
|
|
$
|
(807
|
)
|
•
|
Timing of period end.
For periods that end on a weekend or a bank holiday, our cash and cash equivalents, settlements receivable, and customers payable amounts typically will be more than for periods ending on a weekday, as we settle to our sellers for payment processing activity on business days; and
|
•
|
Fluctuations in daily GPV.
When daily GPV increases, our cash and cash equivalents, settlements receivable, and customers payable amounts increase. Typically our settlements receivable, and customers payable balances at period end represent one to four days of receivables and disbursements to be made in the subsequent period. Customers payable and settlements receivable balances typically move in tandem, as pay-out and pay-in largely occur on the same business day. However, customers payable balances will be greater in amount than settlements receivable balances due to the fact that a subset of funds are held due to unlinked bank accounts, risk holds, and chargebacks. Also customer funds obligations, which are included in customers payable, may cause customers payable to trend differently than settlements receivable. Holidays and day-of-week may also cause significant volatility in daily GPV amounts.
|
•
|
Net loss of
$38.5 million
, less non-cash gain on revaluation of equity investment of
$20.3 million
, offset by add back of non-cash expenses consisting primarily of share-based compensation of
$216.9 million
, transaction, loan and advance losses of
$88.1 million
, depreciation and amortization of
$61.0 million
, and non-cash interest and other expenses of
$31.3 million
. The gain on revaluation of the equity investment is as result of the initial public offering of Eventbrite and subsequent mark to market valuation of this investment, while the other items are largely driven by growth and expansion of our business activities.
|
•
|
Additional cash provided from changes in operating assets and liabilities, including decreases in settlements receivable of
$245.8 million
, increases in other current liabilities of
$35.3 million
, increases in customers payable of
$15.6 million
, and increases in other non-current liabilities of
$13.9 million
. Settlements receivable decreased significantly compared to
December 31, 2017
, due to the period ending on a weekday this year compared to a weekend in the prior year, as we settle processing payment activity on business days. Settlements receivable balances are generally offset by customers payable which moves in tandem, however, increases in customer funds obligations, which are included in customers payable, mitigated the impact. Other current liabilities increased primarily due to general increases in accounts payable balances. Other non-current liabilities increased primarily due to increased statutory liabilities and deferred tax liabilities.
|
•
|
These were offset in part by cash used from changes in operating assets and liabilities, including increases in customer funds of
$131.0 million
as a result of increasing customer base and stored funds on the Cash App, increases in other current assets of
$77.4 million
, decreases in settlements payable of
$60.7 million
, increase in charge-offs to accrued transaction losses of
$58.2 million
arising as a result in growth in GPV, and due to the net loan activity related to loans held for sale of
$29.8 million
arising from increased loan purchases.
|
•
|
Net loss of
$62.8 million
, offset by non-cash items consisting primarily of share-based compensation of
$155.8 million
, transaction, loan and advance losses of
$67.0 million
, and depreciation and amortization of
$37.3 million
. These items are largely driven by growth and expansion of our business activities.
|
•
|
Additional cash provided from changes in operating assets and liabilities, including increases in customers payable of
$301.8 million
, and increases in settlements payable of
$63.6 million
. Customers payable and settlements payable balances increased significantly as the year ended on a Sunday and transactions over a weekend will not settle until the following week. These balances are largely offset by settlements receivable, described below, which moves in tandem.
|
•
|
These were offset in part by cash used from changes in operating assets and liabilities, including increases in settlements receivable of
$305.8 million
for reasons aforementioned, increases in customer funds of
$59.5 million
as result of an increasing customer base with stored funds on the Cash App, charge-offs to accrued transaction losses of
$46.1 million
arising as a result of growth in GPV, and due to the net activity related to loans held for sale of
$39.3 million
arising from increased loan purchases.
|
•
|
Net loss of
$171.6 million
, offset by non-cash items consisting primarily of share-based compensation of
$138.8 million
, transaction, loan and advance losses of
$51.2 million
, and depreciation and amortization of
$37.7 million
.
|
•
|
Additional cash provided from changes in operating assets and liabilities, including increases in customers payable of
$206.6 million
, increases in settlements payable of
$38.0 million
and decreases in other current assets of
$16.1 million
.
|
•
|
These were offset in part by cash used from changes in operating assets and liabilities, including increases in settlements receivable of
$177.7 million
, charge-offs to accrued transaction losses of
$47.9 million
, the net activity related to loans held for sale of
$41.3 million
and increases in customer funds of
$34.1 million
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than 5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Convertible senior notes, including interest
|
$
|
1,095,799
|
|
|
$
|
5,110
|
|
|
$
|
10,219
|
|
|
$
|
1,080,470
|
|
|
$
|
—
|
|
Operating leases
|
429,466
|
|
|
28,405
|
|
|
90,450
|
|
|
100,652
|
|
|
209,959
|
|
|||||
Capital leases
|
7,475
|
|
|
5,029
|
|
|
2,446
|
|
|
—
|
|
|
—
|
|
|||||
Purchase commitments
|
21,077
|
|
|
21,077
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,553,817
|
|
|
$
|
59,621
|
|
|
$
|
103,115
|
|
|
$
|
1,181,122
|
|
|
$
|
209,959
|
|
Page No
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
583,173
|
|
|
$
|
696,474
|
|
Short-term investments
|
540,991
|
|
|
169,576
|
|
||
Restricted cash
|
33,838
|
|
|
28,805
|
|
||
Settlements receivable
|
364,946
|
|
|
620,523
|
|
||
Customer funds
|
334,017
|
|
|
103,042
|
|
||
Loans held for sale
|
89,974
|
|
|
73,420
|
|
||
Other current assets
|
164,966
|
|
|
86,454
|
|
||
Total current assets
|
2,111,905
|
|
|
1,778,294
|
|
||
Property and equipment, net
|
142,402
|
|
|
91,496
|
|
||
Goodwill
|
261,705
|
|
|
58,327
|
|
||
Acquired intangible assets, net
|
77,102
|
|
|
14,334
|
|
||
Long-term investments
|
464,680
|
|
|
203,667
|
|
||
Restricted cash
|
15,836
|
|
|
9,802
|
|
||
Build-to-suit lease asset
|
149,000
|
|
|
—
|
|
||
Other non-current assets
|
58,393
|
|
|
31,350
|
|
||
Total assets
|
$
|
3,281,023
|
|
|
$
|
2,187,270
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Customers payable
|
749,215
|
|
|
733,736
|
|
||
Settlements payable
|
54,137
|
|
|
114,788
|
|
||
Accrued transaction losses
|
33,682
|
|
|
26,893
|
|
||
Accrued expenses
|
82,354
|
|
|
52,280
|
|
||
Other current liabilities
|
99,153
|
|
|
45,130
|
|
||
Total current liabilities
|
1,018,541
|
|
|
972,827
|
|
||
Long-term debt (Note 12)
|
899,695
|
|
|
358,572
|
|
||
Build-to-suit lease liability
|
149,000
|
|
|
—
|
|
||
Other non-current liabilities
|
93,286
|
|
|
69,538
|
|
||
Total liabilities
|
2,160,522
|
|
|
1,400,937
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at December 31, 2018 and December 31, 2017. None issued and outstanding at December 31, 2018 and December 31, 2017.
|
—
|
|
|
—
|
|
||
Class A common stock, $0.0000001 par value: 1,000,000,000 shares authorized at December 31, 2018 and December 31, 2017; 323,546,864 and 280,400,813 issued and outstanding at December 31, 2018 and December 31, 2017, respectively.
|
—
|
|
|
—
|
|
||
Class B common stock, $0.0000001 par value: 500,000,000 shares authorized at December 31, 2018 and December 31, 2017; 93,501,142 and 114,793,262 issued and outstanding at December 31, 2018 and December 31, 2017, respectively.
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
2,012,328
|
|
|
1,630,386
|
|
||
Accumulated other comprehensive loss
|
(6,053
|
)
|
|
(1,318
|
)
|
||
Accumulated deficit
|
(885,774
|
)
|
|
(842,735
|
)
|
||
Total stockholders’ equity
|
1,120,501
|
|
|
786,333
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,281,023
|
|
|
$
|
2,187,270
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Transaction-based revenue
|
$
|
2,471,451
|
|
|
$
|
1,920,174
|
|
|
$
|
1,456,160
|
|
Starbucks transaction-based revenue
|
—
|
|
|
—
|
|
|
78,903
|
|
|||
Subscription and services-based revenue
|
591,706
|
|
|
252,664
|
|
|
129,351
|
|
|||
Hardware revenue
|
68,503
|
|
|
41,415
|
|
|
44,307
|
|
|||
Bitcoin revenue
|
166,517
|
|
|
—
|
|
|
—
|
|
|||
Total net revenue
|
3,298,177
|
|
|
2,214,253
|
|
|
1,708,721
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Transaction-based costs
|
1,558,562
|
|
|
1,230,290
|
|
|
943,200
|
|
|||
Starbucks transaction-based costs
|
—
|
|
|
—
|
|
|
69,761
|
|
|||
Subscription and services-based costs
|
169,884
|
|
|
75,720
|
|
|
43,132
|
|
|||
Hardware costs
|
94,114
|
|
|
62,393
|
|
|
68,562
|
|
|||
Bitcoin costs
|
164,827
|
|
|
—
|
|
|
—
|
|
|||
Amortization of acquired technology
|
7,090
|
|
|
6,544
|
|
|
8,028
|
|
|||
Total cost of revenue
|
1,994,477
|
|
|
1,374,947
|
|
|
1,132,683
|
|
|||
Gross profit
|
1,303,700
|
|
|
839,306
|
|
|
576,038
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Product development
|
497,479
|
|
|
321,888
|
|
|
268,537
|
|
|||
Sales and marketing
|
411,151
|
|
|
253,170
|
|
|
173,876
|
|
|||
General and administrative
|
339,245
|
|
|
250,553
|
|
|
251,993
|
|
|||
Transaction, loan and advance losses
|
88,077
|
|
|
67,018
|
|
|
51,235
|
|
|||
Amortization of acquired customer assets
|
4,362
|
|
|
883
|
|
|
850
|
|
|||
Total operating expenses
|
1,340,314
|
|
|
893,512
|
|
|
746,491
|
|
|||
Operating loss
|
(36,614
|
)
|
|
(54,206
|
)
|
|
(170,453
|
)
|
|||
Interest expense, net
|
17,982
|
|
|
10,053
|
|
|
(533
|
)
|
|||
Other income, net
|
(18,469
|
)
|
|
(1,595
|
)
|
|
(247
|
)
|
|||
Loss before income tax
|
(36,127
|
)
|
|
(62,664
|
)
|
|
(169,673
|
)
|
|||
Provision for income taxes
|
2,326
|
|
|
149
|
|
|
1,917
|
|
|||
Net loss
|
$
|
(38,453
|
)
|
|
$
|
(62,813
|
)
|
|
$
|
(171,590
|
)
|
Net loss per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.09
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.50
|
)
|
Diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.50
|
)
|
Weighted-average shares used to compute net loss per share:
|
|
|
|
|
|
||||||
Basic
|
405,731
|
|
|
379,344
|
|
|
341,555
|
|
|||
Diluted
|
405,731
|
|
|
379,344
|
|
|
341,555
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss
|
$
|
(38,453
|
)
|
|
$
|
(62,813
|
)
|
|
$
|
(171,590
|
)
|
Net foreign currency translation adjustments
|
(4,496
|
)
|
|
1,900
|
|
|
(716
|
)
|
|||
Net unrealized gain (loss) on revaluation of intercompany loans
|
303
|
|
|
385
|
|
|
(11
|
)
|
|||
Net unrealized loss on marketable debt securities
|
(542
|
)
|
|
(1,614
|
)
|
|
(77
|
)
|
|||
Total comprehensive loss
|
$
|
(43,188
|
)
|
|
$
|
(62,142
|
)
|
|
$
|
(172,394
|
)
|
|
|
Convertible preferred stock
|
|
Class A and B common stock
|
|
Additional paid-in
|
|
Accumulated other comprehensive
|
|
Accumulated
|
|
Total stockholders’
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
capital
|
|
loss
|
|
deficit
|
|
equity
|
||||||||||||||
Balance at December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
334,949,445
|
|
|
$
|
—
|
|
|
$
|
1,116,882
|
|
|
$
|
(1,185
|
)
|
|
$
|
(607,649
|
)
|
|
$
|
508,048
|
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(171,590
|
)
|
|
(171,590
|
)
|
||||||
Shares issued in connection with:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Exercise of stock options and warrants
|
—
|
|
|
—
|
|
|
24,413,821
|
|
|
—
|
|
|
82,438
|
|
|
—
|
|
|
—
|
|
|
82,438
|
|
||||||
|
Purchases under employee stock purchase plan
|
—
|
|
|
—
|
|
|
1,852,900
|
|
|
—
|
|
|
14,201
|
|
|
—
|
|
|
—
|
|
|
14,201
|
|
||||||
|
Vesting of restricted stock units
|
—
|
|
|
—
|
|
|
3,392,726
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of early exercised stock options and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,313
|
|
|
—
|
|
|
—
|
|
|
2,313
|
|
|||||||
Cancellation of shares related to business combinations
|
—
|
|
|
—
|
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(61,288
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Change in other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(804
|
)
|
|
—
|
|
|
(804
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141,547
|
|
|
—
|
|
|
—
|
|
|
141,547
|
|
|||||||
Balance at December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
364,547,376
|
|
|
$
|
—
|
|
|
$
|
1,357,381
|
|
|
$
|
(1,989
|
)
|
|
$
|
(779,239
|
)
|
|
$
|
576,153
|
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,813
|
)
|
|
(62,813
|
)
|
||||||
Shares issued in connection with:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Exercise of stock options
|
—
|
|
|
—
|
|
|
24,510,745
|
|
|
—
|
|
|
144,774
|
|
|
—
|
|
|
—
|
|
|
144,774
|
|
||||||
|
Purchases under employee stock purchase plan
|
—
|
|
|
—
|
|
|
1,670,045
|
|
|
—
|
|
|
17,859
|
|
|
—
|
|
|
—
|
|
|
17,859
|
|
||||||
|
Vesting of restricted stock units
|
—
|
|
|
—
|
|
|
5,964,153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of early exercised stock options and other
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
661
|
|
|
—
|
|
|
—
|
|
|
661
|
|
||||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(24,209
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Change in other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
671
|
|
|
—
|
|
|
671
|
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
159,509
|
|
|
—
|
|
|
—
|
|
|
159,509
|
|
|||||||
Tax withholding related to vesting of restricted stock units
|
—
|
|
|
—
|
|
|
(1,474,035
|
)
|
|
—
|
|
|
(44,682
|
)
|
|
—
|
|
|
—
|
|
|
(44,682
|
)
|
|||||||
Conversion feature of convertible senior notes, due 2022, net of allocated debt issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,901
|
|
|
—
|
|
|
—
|
|
|
83,901
|
|
|||||||
Purchase of bond hedges in conjunction with issuance of convertible senior notes, due 2022
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92,136
|
)
|
|
—
|
|
|
—
|
|
|
(92,136
|
)
|
|||||||
Sale of warrants in conjunction with issuance of convertible senior notes, due 2022
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,244
|
|
|
—
|
|
|
—
|
|
|
57,244
|
|
|||||||
Payment for termination of Starbucks warrant
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,808
|
)
|
|
—
|
|
|
—
|
|
|
(54,808
|
)
|
|||||||
Cumulative adjustment due to adoption of new standard (Note 12)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
683
|
|
|
—
|
|
|
(683
|
)
|
|
—
|
|
|||||||
Balance at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
395,194,075
|
|
|
$
|
—
|
|
|
$
|
1,630,386
|
|
|
$
|
(1,318
|
)
|
|
$
|
(842,735
|
)
|
|
$
|
786,333
|
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,453
|
)
|
|
(38,453
|
)
|
||||||
Shares issued in connection with:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Exercise of stock options
|
—
|
|
|
—
|
|
|
13,402,680
|
|
|
—
|
|
|
106,962
|
|
|
—
|
|
|
—
|
|
|
106,962
|
|
|
|
Convertible preferred stock
|
|
Class A and B common stock
|
|
Additional paid-in
|
|
Accumulated other comprehensive
|
|
Accumulated
|
|
Total stockholders’
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
capital
|
|
loss
|
|
deficit
|
|
equity
|
||||||||||||||
|
Vesting of early exercised stock options and other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
177
|
|
||||||
|
Purchases under employee stock purchase plan
|
—
|
|
|
—
|
|
|
826,356
|
|
|
—
|
|
|
26,888
|
|
|
—
|
|
|
—
|
|
|
26,888
|
|
||||||
|
Vesting of restricted stock units
|
—
|
|
|
—
|
|
|
8,046,640
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock in connection with business combination
|
—
|
|
|
—
|
|
|
2,649,590
|
|
|
—
|
|
|
140,107
|
|
|
—
|
|
|
—
|
|
|
140,107
|
|
|||||||
Replacement stock awards issued in connection with acquisition
|
—
|
|
|
—
|
|
|
24,613
|
|
|
—
|
|
|
899
|
|
|
—
|
|
|
—
|
|
|
899
|
|
|||||||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Change in other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,735
|
)
|
|
—
|
|
|
(4,735
|
)
|
|||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
226,182
|
|
|
—
|
|
|
—
|
|
|
226,182
|
|
|||||||
Tax withholding related to vesting of restricted stock units
|
—
|
|
|
—
|
|
|
(3,013,394
|
)
|
|
—
|
|
|
(189,124
|
)
|
|
—
|
|
|
—
|
|
|
(189,124
|
)
|
|||||||
Conversion feature of convertible senior notes, due 2023, net of allocated costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154,019
|
|
|
—
|
|
|
—
|
|
|
154,019
|
|
|||||||
Purchase of bond hedges in conjunction with issuance of convertible senior notes, due 2023
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(172,586
|
)
|
|
—
|
|
|
—
|
|
|
(172,586
|
)
|
|||||||
Sale of warrants in conjunction with issuance of convertible senior notes, due 2023
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112,125
|
|
|
—
|
|
|
—
|
|
|
112,125
|
|
|||||||
Issuance of common stock in conjunction with the conversion of senior notes, due 2022
|
—
|
|
|
—
|
|
|
7,288,907
|
|
|
—
|
|
|
(20,962
|
)
|
|
—
|
|
|
—
|
|
|
(20,962
|
)
|
|||||||
Exercise of bond hedges in conjunction with the conversion of senior notes, due 2022
|
—
|
|
|
—
|
|
|
(6,901,567
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cumulative adjustment due to adoption of ASC 606
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,586
|
)
|
|
(4,586
|
)
|
|||||||
Recovery of common stock in connection with indemnification settlement agreement
|
—
|
|
|
—
|
|
|
(469,894
|
)
|
|
—
|
|
|
(2,745
|
)
|
|
—
|
|
|
—
|
|
|
(2,745
|
)
|
|||||||
Balance at December 31, 2018
|
—
|
|
|
—
|
|
|
417,048,006
|
|
|
—
|
|
|
2,012,328
|
|
|
(6,053
|
)
|
|
(885,774
|
)
|
|
1,120,501
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(38,453
|
)
|
|
$
|
(62,813
|
)
|
|
$
|
(171,590
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
60,961
|
|
|
37,279
|
|
|
37,745
|
|
|||
Non-cash interest and other expense
|
31,257
|
|
|
14,421
|
|
|
(49
|
)
|
|||
Loss on extinguishment of long-term debt
|
5,047
|
|
|
—
|
|
|
—
|
|
|||
Share-based compensation
|
216,881
|
|
|
155,836
|
|
|
138,786
|
|
|||
Replacement stock awards issued in connection with acquisition
|
899
|
|
|
—
|
|
|
—
|
|
|||
Gain on revaluation of equity investment
|
(20,342
|
)
|
|
—
|
|
|
—
|
|
|||
Recovery of common stock in connection with indemnification settlement agreement
|
(2,745
|
)
|
|
—
|
|
|
—
|
|
|||
Transaction, loan and advance losses
|
88,077
|
|
|
67,018
|
|
|
51,235
|
|
|||
Change in deferred income taxes
|
(646
|
)
|
|
(1,385
|
)
|
|
58
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Settlements receivable
|
245,795
|
|
|
(305,831
|
)
|
|
(177,662
|
)
|
|||
Customer funds
|
(131,004
|
)
|
|
(59,468
|
)
|
|
(34,128
|
)
|
|||
Purchase of loans held for sale
|
(1,609,611
|
)
|
|
(1,184,630
|
)
|
|
(668,976
|
)
|
|||
Sales and principal payments of loans held for sale
|
1,579,834
|
|
|
1,145,314
|
|
|
627,627
|
|
|||
Other current assets
|
(77,405
|
)
|
|
(26,119
|
)
|
|
16,116
|
|
|||
Other non-current assets
|
(6,641
|
)
|
|
(3,274
|
)
|
|
631
|
|
|||
Customers payable
|
15,597
|
|
|
301,778
|
|
|
206,574
|
|
|||
Settlements payable
|
(60,651
|
)
|
|
63,637
|
|
|
38,046
|
|
|||
Charge-offs to accrued transaction losses
|
(58,192
|
)
|
|
(46,148
|
)
|
|
(47,931
|
)
|
|||
Accrued expenses
|
7,190
|
|
|
12,207
|
|
|
(409
|
)
|
|||
Other current liabilities
|
35,294
|
|
|
8,198
|
|
|
3,909
|
|
|||
Other non-current liabilities
|
13,938
|
|
|
11,691
|
|
|
3,149
|
|
|||
Net cash provided by operating activities
|
295,080
|
|
|
127,711
|
|
|
23,131
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchase of marketable debt securities
|
(1,000,346
|
)
|
|
(544,910
|
)
|
|
(164,766
|
)
|
|||
Proceeds from maturities of marketable debt securities
|
197,454
|
|
|
168,224
|
|
|
43,200
|
|
|||
Proceeds from sale of marketable debt securities
|
171,992
|
|
|
89,087
|
|
|
34,222
|
|
|||
Purchase of marketable debt securities from customer funds
|
(148,096
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of marketable debt securities from customer funds
|
48,334
|
|
|
—
|
|
|
—
|
|
|||
Purchase of property and equipment
|
(61,203
|
)
|
|
(26,097
|
)
|
|
(25,433
|
)
|
|||
Proceeds from sale of property and equipment
|
—
|
|
|
—
|
|
|
296
|
|
|||
Purchase of equity investment
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|||
Purchase of intangible assets
|
(1,584
|
)
|
|
—
|
|
|
(400
|
)
|
|||
Business combinations, net of cash acquired
|
(112,399
|
)
|
|
(1,915
|
)
|
|
(1,360
|
)
|
|||
Net cash used in investing activities:
|
(905,848
|
)
|
|
(340,611
|
)
|
|
(114,241
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of convertible senior notes, net
|
855,663
|
|
|
428,250
|
|
|
—
|
|
|||
Purchase of convertible senior note hedges
|
(172,586
|
)
|
|
(92,136
|
)
|
|
—
|
|
|||
Proceeds from issuance of warrants
|
112,125
|
|
|
57,244
|
|
|
—
|
|
|||
Principal payment on conversion of senior notes
|
(219,384
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of deferred purchase consideration
|
(848
|
)
|
|
—
|
|
|
—
|
|
|||
Payment for termination of Starbucks warrant
|
—
|
|
|
(54,808
|
)
|
|
—
|
|
|||
Payments of offering costs related to initial public offering
|
—
|
|
|
—
|
|
|
(5,530
|
)
|
|||
Principal payments on capital lease obligation
|
(3,941
|
)
|
|
(1,439
|
)
|
|
(168
|
)
|
|||
Proceeds from the exercise of stock options and purchases under the employee stock purchase plan, net
|
133,850
|
|
|
162,504
|
|
|
96,439
|
|
|||
Payments for tax withholding related to vesting of restricted stock units
|
(189,124
|
)
|
|
(44,682
|
)
|
|
—
|
|
Net cash provided by financing activities
|
515,755
|
|
|
454,933
|
|
|
90,741
|
|
|||
Effect of foreign exchange rate on cash and cash equivalents
|
(7,221
|
)
|
|
4,303
|
|
|
(438
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(102,234
|
)
|
|
246,336
|
|
|
(807
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of the year
|
735,081
|
|
|
488,745
|
|
|
489,552
|
|
|||
Cash, cash equivalents and restricted cash, end of the year
|
$
|
632,847
|
|
|
$
|
735,081
|
|
|
$
|
488,745
|
|
•
|
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
•
|
Level 2 Inputs: Other than quoted prices included in Level 1 Inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
•
|
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
Property and Equipment
|
|
Useful Life
|
Capitalized software
|
|
18 months
|
Computer and data center equipment
|
|
Two to three years
|
Furniture and fixtures
|
|
Seven years
|
Leasehold improvements
|
|
Lesser of ten years or remaining lease term
|
|
Year Ended December 31, 2018
|
||||||||||
|
As reported
|
|
Balances without adoption
of Topic 606 |
|
Effect of change
|
||||||
Impact on the Consolidated Statement of Operations:
|
|
|
|
|
|
||||||
Subscription and services-based revenue
|
$
|
591,706
|
|
|
$
|
591,220
|
|
|
$
|
486
|
|
Hardware revenue
|
68,503
|
|
|
62,572
|
|
|
5,931
|
|
|||
Subscription and services-based costs
|
169,884
|
|
|
169,884
|
|
|
—
|
|
|||
Hardware costs
|
$
|
94,114
|
|
|
$
|
88,625
|
|
|
$
|
5,489
|
|
|
December 31, 2018
|
||||||||||
|
As reported
|
|
Balances without adoption
of Topic 606 |
|
Effect of change
|
||||||
Impact on the Consolidated Balance Sheets:
|
|
|
|
|
|
||||||
Other current assets
|
$
|
164,966
|
|
|
$
|
178,101
|
|
|
$
|
(13,135
|
)
|
Other current liabilities
|
99,153
|
|
|
108,334
|
|
|
(9,181
|
)
|
|||
Other non-current assets
|
58,393
|
|
|
59,768
|
|
|
(1,375
|
)
|
|||
Other non-current liabilities
|
$
|
93,286
|
|
|
$
|
94,717
|
|
|
$
|
(1,431
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue from Contracts with Customers:
|
|
|
|
|
|
||||||
Transaction-based revenue
|
$
|
2,471,451
|
|
|
$
|
1,920,174
|
|
|
$
|
1,456,160
|
|
Starbucks transaction-based revenue
|
—
|
|
|
—
|
|
|
78,903
|
|
|||
Subscription and services-based revenue
|
499,010
|
|
|
185,485
|
|
|
79,507
|
|
|||
Hardware revenue
|
68,503
|
|
|
41,415
|
|
|
44,307
|
|
|||
Bitcoin revenue
|
$
|
166,517
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred revenue, beginning of the period
|
$
|
5,893
|
|
|
$
|
5,407
|
|
Less: accumulative adjustment for adoption of ASC 606
|
(4,303
|
)
|
|
—
|
|
||
Deferred revenue, beginning of the period, as adjusted
|
1,590
|
|
|
5,407
|
|
||
Deferred revenue, end of the period
|
36,451
|
|
|
5,893
|
|
||
Deferred revenue arising from business combination
|
22,800
|
|
|
—
|
|
||
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period
|
$
|
1,590
|
|
|
$
|
5,257
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Short-term securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
$
|
80,160
|
|
|
$
|
32
|
|
|
$
|
(70
|
)
|
|
$
|
80,122
|
|
Corporate bonds
|
109,807
|
|
|
80
|
|
|
(368
|
)
|
|
109,519
|
|
||||
Municipal securities
|
27,839
|
|
|
52
|
|
|
(59
|
)
|
|
27,832
|
|
||||
U.S. government securities
|
292,615
|
|
|
161
|
|
|
(509
|
)
|
|
292,267
|
|
||||
Non-U.S. government securities
|
31,263
|
|
|
4
|
|
|
(16
|
)
|
|
31,251
|
|
||||
Total
|
$
|
541,684
|
|
|
$
|
329
|
|
|
$
|
(1,022
|
)
|
|
$
|
540,991
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
$
|
114,444
|
|
|
$
|
194
|
|
|
$
|
(78
|
)
|
|
$
|
114,560
|
|
Corporate bonds
|
159,783
|
|
|
419
|
|
|
(950
|
)
|
|
159,252
|
|
||||
Municipal securities
|
28,453
|
|
|
167
|
|
|
(26
|
)
|
|
28,594
|
|
||||
U.S. government securities
|
153,743
|
|
|
553
|
|
|
(172
|
)
|
|
154,124
|
|
||||
Non-U.S. government securities
|
8,122
|
|
|
28
|
|
|
—
|
|
|
8,150
|
|
||||
Total
|
$
|
464,545
|
|
|
$
|
1,361
|
|
|
$
|
(1,226
|
)
|
|
$
|
464,680
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Short-term securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
$
|
15,122
|
|
|
$
|
—
|
|
|
$
|
(39
|
)
|
|
$
|
15,083
|
|
Corporate bonds
|
57,855
|
|
|
22
|
|
|
(79
|
)
|
|
57,798
|
|
||||
Commercial paper
|
17,428
|
|
|
—
|
|
|
—
|
|
|
17,428
|
|
||||
Municipal securities
|
23,743
|
|
|
8
|
|
|
(51
|
)
|
|
23,700
|
|
||||
U.S. government securities
|
55,729
|
|
|
1
|
|
|
(163
|
)
|
|
55,567
|
|
||||
Total
|
$
|
169,877
|
|
|
$
|
31
|
|
|
$
|
(332
|
)
|
|
$
|
169,576
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
$
|
20,288
|
|
|
$
|
2
|
|
|
$
|
(121
|
)
|
|
$
|
20,169
|
|
Corporate bonds
|
91,959
|
|
|
25
|
|
|
(571
|
)
|
|
91,413
|
|
||||
Municipal securities
|
26,371
|
|
|
13
|
|
|
(160
|
)
|
|
26,224
|
|
||||
U.S. government securities
|
66,362
|
|
|
19
|
|
|
(520
|
)
|
|
65,861
|
|
||||
Total
|
$
|
204,980
|
|
|
$
|
59
|
|
|
$
|
(1,372
|
)
|
|
$
|
203,667
|
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
541,684
|
|
|
$
|
540,991
|
|
Due in one to five years
|
464,545
|
|
|
464,680
|
|
||
Total
|
$
|
1,006,229
|
|
|
$
|
1,005,671
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Cash
|
$
|
158,697
|
|
|
$
|
103,042
|
|
Cash Equivalents:
|
|
|
|
||||
Money market funds
|
18
|
|
|
—
|
|
||
U.S. agency securities
|
39,991
|
|
|
—
|
|
||
U.S. government securities
|
35,349
|
|
|
—
|
|
||
Short-term debt securities:
|
|
|
|
||||
U.S. agency securities
|
27,291
|
|
|
—
|
|
||
U.S. government securities
|
72,671
|
|
|
—
|
|
||
Total
|
$
|
334,017
|
|
|
$
|
103,042
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Short-term debt securities:
|
|
|
|
|
|
|
|
||||||||
U.S. agency securities
|
$
|
27,293
|
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
|
$
|
27,291
|
|
U.S. government securities
|
72,662
|
|
|
12
|
|
|
(3
|
)
|
|
72,671
|
|
||||
Total
|
$
|
99,955
|
|
|
$
|
14
|
|
|
$
|
(7
|
)
|
|
$
|
99,962
|
|
|
Amortized Cost
|
|
Fair Value
|
||||
Due in one year or less
|
$
|
99,955
|
|
|
$
|
99,962
|
|
Due in one to five years
|
—
|
|
|
—
|
|
||
Total
|
$
|
99,955
|
|
|
$
|
99,962
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
218,109
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
387,698
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. agency securities
|
—
|
|
|
46,423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Commercial paper
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,695
|
|
|
—
|
|
||||||
U.S. government securities
|
86,239
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Non-U.S. government securities
|
—
|
|
|
23,981
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Customer Funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
U.S. agency securities
|
—
|
|
|
67,282
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
U.S. government securities
|
108,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Short-term securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency securities
|
—
|
|
|
80,122
|
|
|
—
|
|
|
—
|
|
|
15,083
|
|
|
—
|
|
||||||
Corporate bonds
|
—
|
|
|
109,519
|
|
|
—
|
|
|
—
|
|
|
57,798
|
|
|
—
|
|
||||||
Commercial paper
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,428
|
|
|
—
|
|
||||||
Municipal securities
|
—
|
|
|
27,832
|
|
|
—
|
|
|
—
|
|
|
23,700
|
|
|
—
|
|
||||||
U.S. government securities
|
292,267
|
|
|
—
|
|
|
—
|
|
|
55,567
|
|
|
—
|
|
|
—
|
|
||||||
Non-U.S. government securities
|
—
|
|
|
31,251
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Long-term securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency securities
|
—
|
|
|
114,560
|
|
|
—
|
|
|
—
|
|
|
20,169
|
|
|
—
|
|
||||||
Corporate bonds
|
—
|
|
|
159,252
|
|
|
—
|
|
|
—
|
|
|
91,413
|
|
|
—
|
|
||||||
Municipal securities
|
—
|
|
|
28,594
|
|
|
—
|
|
|
—
|
|
|
26,224
|
|
|
—
|
|
||||||
U.S. government securities
|
154,124
|
|
|
—
|
|
|
—
|
|
|
65,861
|
|
|
—
|
|
|
—
|
|
||||||
Non-U.S. government securities
|
—
|
|
|
8,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity investment
|
45,342
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
904,119
|
|
|
$
|
696,966
|
|
|
$
|
—
|
|
|
$
|
509,126
|
|
|
$
|
276,510
|
|
|
$
|
—
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying Value
|
|
Fair Value (Level 2)
|
|
Carrying Value
|
|
Fair Value (Level 2)
|
||||||||
2023 Notes
|
$
|
718,522
|
|
|
$
|
901,468
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2022 Notes
|
181,173
|
|
|
515,693
|
|
|
358,572
|
|
|
719,356
|
|
||||
Total
|
$
|
899,695
|
|
|
$
|
1,417,161
|
|
|
$
|
358,572
|
|
|
$
|
719,356
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying Value
|
|
Fair Value (Level 3)
|
|
Carrying Value
|
|
Fair Value (Level 3)
|
||||||||
Loans held for sale
|
$
|
89,974
|
|
|
$
|
93,064
|
|
|
$
|
73,420
|
|
|
$
|
76,070
|
|
Total
|
$
|
89,974
|
|
|
$
|
93,064
|
|
|
$
|
73,420
|
|
|
$
|
76,070
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Leasehold improvements
|
$
|
107,611
|
|
|
$
|
77,073
|
|
Computer equipment
|
80,093
|
|
|
66,186
|
|
||
Capitalized software
|
58,908
|
|
|
35,063
|
|
||
Office furniture and equipment
|
20,699
|
|
|
14,490
|
|
||
Total
|
267,311
|
|
|
192,812
|
|
||
Less: Accumulated depreciation and amortization
|
(124,909
|
)
|
|
(101,316
|
)
|
||
Property and equipment, net
|
$
|
142,402
|
|
|
$
|
91,496
|
|
Consideration:
|
|
||
Cash
|
$
|
132,432
|
|
Stock (2,418,271 shares of Class A common stock)
|
140,107
|
|
|
|
$
|
272,539
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
|
||
Current assets (inclusive of cash acquired of $25,758)
|
$
|
44,685
|
|
Intangible customer assets
|
42,700
|
|
|
Intangible technology assets
|
14,900
|
|
|
Intangible trade name
|
11,300
|
|
|
Intangible other assets
|
961
|
|
|
Total liabilities assumed (including deferred revenue of $22,800)
|
(37,592
|
)
|
|
Total identifiable net assets acquired
|
76,954
|
|
|
Goodwill
|
195,585
|
|
|
Total
|
$
|
272,539
|
|
Balance at December 31, 2016
|
$
|
57,173
|
|
Acquisitions completed during the year ended December 31, 2017
|
1,154
|
|
|
Balance at December 31, 2017
|
58,327
|
|
|
Acquisitions completed during the year ended December 31, 2018
|
203,378
|
|
|
Balance at December 31, 2018
|
$
|
261,705
|
|
|
Balance at December 31, 2018
|
||||||||||
Cost
|
|
Accumulated Amortization
|
|
Net
|
|||||||
Patents
|
$
|
1,285
|
|
|
$
|
(664
|
)
|
|
$
|
621
|
|
Technology Assets
|
45,978
|
|
|
(28,420
|
)
|
|
17,558
|
|
|||
Customer Assets
|
57,109
|
|
|
(8,068
|
)
|
|
49,041
|
|
|||
Trade Name
|
11,300
|
|
|
(1,648
|
)
|
|
9,652
|
|
|||
Other
|
961
|
|
|
(731
|
)
|
|
230
|
|
|||
Total
|
$
|
116,633
|
|
|
$
|
(39,531
|
)
|
|
$
|
77,102
|
|
|
Balance at December 31, 2017
|
||||||||||
Cost
|
|
Accumulated Amortization
|
|
Net
|
|||||||
Patents
|
$
|
1,285
|
|
|
$
|
(559
|
)
|
|
$
|
726
|
|
Technology Assets
|
29,158
|
|
|
(21,329
|
)
|
|
7,829
|
|
|||
Customer Assets
|
10,319
|
|
|
(4,540
|
)
|
|
5,779
|
|
|||
Total
|
$
|
40,762
|
|
|
$
|
(26,428
|
)
|
|
$
|
14,334
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Acquired intangible assets, net, beginning of the period
|
$
|
14,334
|
|
|
$
|
19,292
|
|
|
$
|
26,776
|
|
Acquisitions
|
75,871
|
|
|
2,657
|
|
|
1,529
|
|
|||
Amortization expense
|
13,104
|
|
|
7,615
|
|
|
9,013
|
|
|||
Acquired intangible assets, net, end of the period
|
$
|
77,102
|
|
|
$
|
14,334
|
|
|
$
|
19,292
|
|
2019
|
$
|
13,744
|
|
2020
|
11,496
|
|
|
2021
|
10,299
|
|
|
2022
|
8,369
|
|
|
2023
|
6,839
|
|
|
Thereafter
|
26,355
|
|
|
Total
|
$
|
77,102
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Inventory, net
|
$
|
28,627
|
|
|
$
|
16,777
|
|
Processing costs receivable
|
46,102
|
|
|
21,083
|
|
||
Prepaid expenses
|
21,782
|
|
|
14,473
|
|
||
Accounts receivable, net
|
22,393
|
|
|
8,606
|
|
||
Deferred hardware costs
(i)
|
—
|
|
|
7,931
|
|
||
Deferred magstripe reader costs
(ii)
|
9,361
|
|
|
2,469
|
|
||
Prepaid compensation, current
(iii)
|
4,995
|
|
|
—
|
|
||
Other
|
31,706
|
|
|
15,115
|
|
||
Total
|
$
|
164,966
|
|
|
$
|
86,454
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Accrued facilities expenses
|
$
|
13,040
|
|
|
$
|
568
|
|
Accrued payroll
|
9,612
|
|
|
9,103
|
|
||
Accrued professional fees
|
5,232
|
|
|
5,638
|
|
||
Accrued advertising and other marketing
|
12,201
|
|
|
6,723
|
|
||
Processing costs payable
|
12,683
|
|
|
10,145
|
|
||
Accrued non income tax liabilities
|
9,503
|
|
|
6,155
|
|
||
Accrued hardware costs
|
5,125
|
|
|
2,496
|
|
||
Other accrued liabilities
|
14,958
|
|
|
11,452
|
|
||
Total
|
$
|
82,354
|
|
|
$
|
52,280
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Accounts payable
|
$
|
36,416
|
|
|
$
|
16,763
|
|
Square Capital payable
(iv)
|
6,092
|
|
|
7,671
|
|
||
Square Payroll payable
(v)
|
7,534
|
|
|
2,850
|
|
||
Deferred revenue, current
|
31,474
|
|
|
5,893
|
|
||
Deferred rent, current
|
3,842
|
|
|
3,311
|
|
||
Accrued redemptions
|
1,305
|
|
|
1,036
|
|
||
Other
|
12,490
|
|
|
7,606
|
|
||
Total
|
$
|
99,153
|
|
|
$
|
45,130
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Equity investment
(i)
|
$
|
45,342
|
|
|
$
|
25,000
|
|
Prepaid compensation, non-current
(ii)
|
5,915
|
|
|
—
|
|
||
Deposits
|
2,747
|
|
|
2,738
|
|
||
Other
|
4,389
|
|
|
3,612
|
|
||
Total
|
$
|
58,393
|
|
|
$
|
31,350
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Statutory liabilities
(iii)
|
$
|
54,748
|
|
|
$
|
40,768
|
|
Deferred rent, non-current
|
23,003
|
|
|
20,349
|
|
||
Deferred purchase consideration
|
3,900
|
|
|
—
|
|
||
Deferred revenue, non-current
|
4,977
|
|
|
432
|
|
||
Other
|
6,658
|
|
|
7,989
|
|
||
Total
|
$
|
93,286
|
|
|
$
|
69,538
|
|
|
Principal outstanding
|
|
Unamortized debt discount
|
|
Unamortized debt issuance costs
|
|
Net carrying value
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
2023 Notes
|
$
|
862,500
|
|
|
$
|
(138,924
|
)
|
|
$
|
(5,054
|
)
|
|
$
|
718,522
|
|
2022 Notes
|
211,728
|
|
|
(27,569
|
)
|
|
(2,986
|
)
|
|
181,173
|
|
||||
Total
|
1,074,228
|
|
|
(166,493
|
)
|
|
(8,040
|
)
|
|
899,695
|
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
2022 Notes
|
$
|
440,000
|
|
|
$
|
(73,384
|
)
|
|
$
|
(8,044
|
)
|
|
$
|
358,572
|
|
|
Amount allocated to conversion option
|
|
Less: allocated issuance costs
|
|
Equity component, net
|
||||||
December 31, 2018
|
|
|
|
|
|
||||||
2023 Notes
|
$
|
155,250
|
|
|
$
|
(1,231
|
)
|
|
$
|
154,019
|
|
2022 Notes
|
41,481
|
|
|
(1,108
|
)
|
|
40,373
|
|
|||
Total
|
196,731
|
|
|
(2,339
|
)
|
|
194,392
|
|
|||
|
|
|
|
|
|
||||||
December 31, 2017
|
|
|
|
|
|
||||||
2022 Notes
|
$
|
86,203
|
|
|
$
|
(2,302
|
)
|
|
$
|
83,901
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Contractual interest expense
|
$
|
4,023
|
|
|
$
|
1,351
|
|
Amortization of debt discount and issuance costs
|
32,855
|
|
|
14,223
|
|
||
Total
|
$
|
36,878
|
|
|
$
|
15,574
|
|
|
Year Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accrued transaction losses, beginning of the year
|
$
|
26,893
|
|
|
$
|
20,064
|
|
Provision for transaction losses
|
64,981
|
|
|
52,977
|
|
||
Charge-offs to accrued transaction losses
|
(58,192
|
)
|
|
(46,148
|
)
|
||
Accrued transaction losses, end of the year
|
$
|
33,682
|
|
|
$
|
26,893
|
|
|
Year Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
Domestic
|
$
|
44,538
|
|
|
$
|
(10,900
|
)
|
|
$
|
(145,499
|
)
|
Foreign
|
(80,665
|
)
|
|
(51,764
|
)
|
|
(24,174
|
)
|
|||
Loss before income taxes
|
$
|
(36,127
|
)
|
|
$
|
(62,664
|
)
|
|
$
|
(169,673
|
)
|
|
Year Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(4
|
)
|
|
$
|
(1,192
|
)
|
|
$
|
63
|
|
State
|
752
|
|
|
739
|
|
|
527
|
|
|||
Foreign
|
2,224
|
|
|
1,987
|
|
|
1,269
|
|
|||
Total current provision for income taxes
|
2,972
|
|
|
1,534
|
|
|
1,859
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(404
|
)
|
|
(1,169
|
)
|
|
173
|
|
|||
State
|
35
|
|
|
57
|
|
|
18
|
|
|||
Foreign
|
(277
|
)
|
|
(273
|
)
|
|
(133
|
)
|
|||
Total deferred provision for income taxes
|
(646
|
)
|
|
(1,385
|
)
|
|
58
|
|
|||
Total provision for income taxes
|
$
|
2,326
|
|
|
$
|
149
|
|
|
$
|
1,917
|
|
|
Balance at December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Capitalized costs
|
$
|
30,131
|
|
|
$
|
35,608
|
|
|
$
|
61,897
|
|
Accrued expenses
|
31,494
|
|
|
23,553
|
|
|
29,421
|
|
|||
Net operating loss carryforwards
|
485,562
|
|
|
244,197
|
|
|
65,507
|
|
|||
Tax credit carryforwards
|
133,275
|
|
|
60,567
|
|
|
38,927
|
|
|||
Property, equipment and intangible assets
|
—
|
|
|
7,390
|
|
|
5,721
|
|
|||
Share-based compensation
|
38,265
|
|
|
35,728
|
|
|
52,091
|
|
|||
Deferred Interest
|
8,290
|
|
|
—
|
|
|
—
|
|
|||
Other
|
105
|
|
|
2,519
|
|
|
1,640
|
|
|||
Total deferred tax assets
|
727,122
|
|
|
409,562
|
|
|
255,204
|
|
|||
Valuation allowance
|
(719,040
|
)
|
|
(409,043
|
)
|
|
(254,898
|
)
|
|||
Total deferred tax assets, net of valuation allowance
|
8,082
|
|
|
519
|
|
|
306
|
|
|||
Deferred tax liabilities:
|
|
|
|
|
|
||||||
Property, equipment and intangible assets
|
(7,361
|
)
|
|
—
|
|
|
—
|
|
|||
Indefinite-lived intangibles
|
(275
|
)
|
|
(644
|
)
|
|
(476
|
)
|
|||
Total deferred tax liabilities
|
(7,636
|
)
|
|
(644
|
)
|
|
(476
|
)
|
|||
Net deferred tax assets (liabilities)
|
$
|
446
|
|
|
$
|
(125
|
)
|
|
$
|
(170
|
)
|
|
Year Ended December 31,
|
||||||||||
2018
|
|
2017
|
|
2016
|
|||||||
Balance at the beginning of the year
|
$
|
70,799
|
|
|
$
|
92,134
|
|
|
$
|
90,372
|
|
Gross increases and decreases related to prior period tax positions
|
513
|
|
|
—
|
|
|
5,190
|
|
|||
Gross increases and decreases related to current period tax positions
|
119,261
|
|
|
4,193
|
|
|
(3,428
|
)
|
|||
Reductions related to lapse of statute of limitations
|
(142
|
)
|
|
(91
|
)
|
|
—
|
|
|||
Gross increases and decreases related to U.S. tax reform
|
—
|
|
|
(25,437
|
)
|
|
—
|
|
|||
Gross increases and decreases related to acquisition
|
8,109
|
|
|
—
|
|
|
—
|
|
|||
Balance at the end of the year
|
$
|
198,540
|
|
|
$
|
70,799
|
|
|
$
|
92,134
|
|
|
Number of options outstanding
|
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term (in years) |
|
Aggregate
Intrinsic Value |
|||||
Balance at December 31, 2017
|
47,270,091
|
|
|
$
|
8.67
|
|
|
6.52
|
|
$
|
1,229,103
|
|
Granted
|
783,625
|
|
|
44.75
|
|
|
|
|
|
|||
Exercised
|
(13,402,680
|
)
|
|
7.98
|
|
|
|
|
|
|||
Forfeited and canceled
|
(1,498,155
|
)
|
|
14.75
|
|
|
|
|
|
|||
Balance at December 31, 2018
|
33,152,881
|
|
|
$
|
9.52
|
|
|
5.45
|
|
$
|
1,543,793
|
|
Options vested and expected to vest at
|
|
|
|
|
|
|
|
|||||
December 31, 2018
|
33,152,881
|
|
|
$
|
9.52
|
|
|
5.45
|
|
$
|
1,543,793
|
|
Options exercisable at
|
|
|
|
|
|
|
|
|||||
December 31, 2018
|
31,066,578
|
|
|
$
|
8.63
|
|
|
5.27
|
|
$
|
1,474,339
|
|
|
Number of
shares |
|
Weighted
Average Grant Date Fair Value |
|||
Unvested at December 31, 2017
|
21,317,525
|
|
|
$
|
17.84
|
|
Granted
|
7,147,541
|
|
|
54.43
|
|
|
Vested
|
(7,786,561
|
)
|
|
19.62
|
|
|
Forfeited
|
(2,743,777
|
)
|
|
19.88
|
|
|
Unvested at December 31, 2018
|
17,934,728
|
|
|
$
|
31.34
|
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Risk-free interest rate
|
2.92
|
%
|
|
1.88
|
%
|
|
1.54
|
%
|
Expected volatility
|
30.87
|
%
|
|
32.22
|
%
|
|
42.74
|
%
|
Expected term (years)
|
6.19
|
|
|
6.02
|
|
|
6.08
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of revenue
|
$
|
97
|
|
|
$
|
77
|
|
|
$
|
—
|
|
Product development
|
144,601
|
|
|
98,310
|
|
|
91,404
|
|
|||
Sales and marketing
|
22,797
|
|
|
17,568
|
|
|
14,122
|
|
|||
General and administrative
|
49,386
|
|
|
39,881
|
|
|
33,260
|
|
|||
Total
|
$
|
216,881
|
|
|
$
|
155,836
|
|
|
$
|
138,786
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss
|
$
|
(38,453
|
)
|
|
$
|
(62,813
|
)
|
|
$
|
(171,590
|
)
|
Basic shares:
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
|
406,313
|
|
|
380,921
|
|
|
344,393
|
|
|||
Weighted-average unvested shares
|
(582
|
)
|
|
(1,577
|
)
|
|
(2,838
|
)
|
|||
Weighted-average shares used to compute basic net loss per share
|
405,731
|
|
|
379,344
|
|
|
341,555
|
|
|||
Diluted shares:
|
|
|
|
|
|
||||||
Weighted-average shares used to compute diluted net loss per share
|
405,731
|
|
|
379,344
|
|
|
341,555
|
|
|||
|
|
|
|
|
|
||||||
Loss per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.09
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.50
|
)
|
Diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.50
|
)
|
|
Year Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Stock options and restricted stock units
|
60,589
|
|
|
68,588
|
|
|
88,705
|
|
Common stock warrants
|
25,798
|
|
|
19,173
|
|
|
9,457
|
|
Convertible senior notes
|
23,820
|
|
|
—
|
|
|
—
|
|
Unvested shares
|
582
|
|
|
1,300
|
|
|
1,892
|
|
Employee stock purchase plan
|
140
|
|
|
157
|
|
|
216
|
|
Total anti-dilutive securities
|
110,929
|
|
|
89,218
|
|
|
100,270
|
|
|
Capital
|
|
Operating
|
||||
Year:
|
|
|
|
||||
2019
|
$
|
5,029
|
|
|
$
|
28,405
|
|
2020
|
2,446
|
|
|
38,131
|
|
||
2021
|
—
|
|
|
52,319
|
|
||
2022
|
—
|
|
|
53,430
|
|
||
2023
|
—
|
|
|
47,222
|
|
||
Thereafter
|
—
|
|
|
209,959
|
|
||
Total
|
$
|
7,475
|
|
|
$
|
429,466
|
|
Less amount representing interest
|
—
|
|
|
|
|||
Present value of capital lease obligations
|
7,475
|
|
|
|
|||
Less current portion of capital lease obligation
|
(5,029
|
)
|
|
|
|||
Non-current portion of capital lease obligation
|
$
|
2,446
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
|
|
|
|
|
||||||
United States
|
$
|
3,138,859
|
|
|
$
|
2,120,088
|
|
|
$
|
1,643,852
|
|
International
|
159,318
|
|
|
94,165
|
|
|
64,869
|
|
|||
Total net revenue
|
$
|
3,298,177
|
|
|
$
|
2,214,253
|
|
|
$
|
1,708,721
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Long-lived assets
|
|
|
|
||||
United States
|
$
|
471,970
|
|
|
$
|
158,820
|
|
International
|
9,239
|
|
|
5,337
|
|
||
Total long-lived assets
|
$
|
481,209
|
|
|
$
|
164,157
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental Cash Flow Data:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
4,125
|
|
|
$
|
1,374
|
|
|
$
|
570
|
|
Cash paid for income taxes
|
1,622
|
|
|
1,254
|
|
|
395
|
|
|||
Supplemental disclosures of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Change in purchases of property and equipment in accounts payable and accrued expenses
|
15,067
|
|
|
143
|
|
|
2,554
|
|
|||
Unpaid business acquisition purchase price
|
3,995
|
|
|
2,115
|
|
|
240
|
|
|||
Fair value of shares issued related to business combination
|
140,107
|
|
|
—
|
|
|
—
|
|
|||
Recovery of common stock in connection with indemnification settlement agreement
|
2,745
|
|
|
—
|
|
|
—
|
|
|||
Fair value of common stock issued to settle the conversion of senior notes, due 2022
|
(571,408
|
)
|
|
—
|
|
|
—
|
|
|||
Fair value of shares received to settle senior note hedges, due 2022
|
$
|
544,276
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit Number
|
|
Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
|
8-K
|
001-37622
|
2.1
|
April 26, 2018
|
||
|
8-K
|
001-37622
|
3.1
|
November 24, 2015
|
||
|
8-K
|
001-37622
|
3.1
|
November 3, 2017
|
||
|
S-1/A
|
333-207411
|
4.1
|
November 6, 2015
|
||
|
S-1
|
333-207411
|
4.2
|
October 14, 2015
|
||
|
8-K
|
001-37622
|
4.1
|
March 6, 2017
|
||
|
8-K
|
001-37622
|
4.2
|
March 6, 2017
|
||
|
8-K
|
001-37622
|
4.1
|
May 25, 2018
|
||
|
8-K
|
001-37622
|
4.2
|
May 25, 2018
|
||
|
S-1/A
|
333-207411
|
10.1
|
November 6, 2015
|
||
|
10-Q
|
001-37622
|
10.1
|
August 2, 2017
|
||
|
10-K
|
001-37622
|
10.3
|
March 10, 2016
|
||
|
S-1
|
333-207411
|
10.4
|
October 14, 2015
|
||
|
S-1
|
333-207411
|
10.5
|
October 14, 2015
|
||
|
|
|
|
|
||
|
S-1
|
333-207411
|
10.7
|
October 14, 2015
|
||
|
10-K
|
001-37622
|
10.8
|
March 10, 2016
|
|
S-1/A
|
333-207411
|
10.12
|
November 6, 2015
|
||
|
10-Q
|
001-37622
|
10.6
|
May 4, 2017
|
||
|
8-K
|
001-37622
|
10.1
|
January 4, 2019
|
||
|
10-Q
|
001-37622
|
10.7
|
May 4, 2017
|
||
|
10-K
|
001-37622
|
10.15
|
February 27, 2018
|
||
|
10-Q
|
001-37622
|
10.5
|
August 1, 2018
|
||
|
10-Q
|
001-37622
|
10.6
|
August 1, 2018
|
||
|
S-1/A
|
333-207411
|
10.14
|
November 6, 2015
|
||
|
S-1/A
|
333-207411
|
10.14A
|
November 16, 2015
|
||
|
8-K
|
001-37622
|
10.1
|
February 27, 2017
|
||
|
8-K
|
001-37622
|
10.1
|
May 21, 2018
|
||
|
S-1
|
333-207411
|
10.15
|
October 14, 2015
|
||
|
S-1
|
333-207411
|
10.16
|
October 14, 2015
|
||
|
S-1
|
333-207411
|
10.17
|
October 14, 2015
|
||
|
|
|
|
|
||
|
8-K
|
001-37622
|
10.1
|
February 24, 2017
|
||
|
8-K
|
001-37622
|
10.1
|
March 6, 2017
|
||
|
8-K
|
001-37622
|
10.2
|
March 6, 2017
|
||
|
8-K
|
001-37622
|
10.3
|
March 6, 2017
|
||
|
8-K
|
001-37622
|
10.1
|
May 25, 2018
|
||
|
8-K
|
001-37622
|
10.2
|
May 25, 2018
|
||
|
8-K
|
001-37622
|
10.3
|
May 25, 2018
|
||
|
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
+
|
Indicates management contract or compensatory plan.
|
#
|
The Registrant has omitted portions of the relevant exhibit and filed such exhibit separately with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended.
|
†
|
The certifications attached as Exhibit 32.1 that accompany this Annual Report on Form 10-K are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K, irrespective of any general incorporation language contained in such filing.
|
Signature
|
Title
|
Date
|
/s/ Jack Dorsey
|
President, Chief Executive Officer, and Chairman (Principal Executive Officer)
|
February 27, 2019
|
Jack Dorsey
|
||
/s/ Amrita Ahuja
|
Chief Financial Officer (Principal Financial Officer)
|
February 27, 2019
|
Amrita Ahuja
|
||
/s/ Ajmere Dale
|
Chief Accounting Officer (Principal Accounting Officer)
|
February 27, 2019
|
Ajmere Dale
|
||
/s/ Roelof Botha
|
Director
|
February 27, 2019
|
Roelof Botha
|
||
/s/ Paul Deighton
|
Director
|
February 27, 2019
|
Paul Deighton
|
||
/s/ Randy Garutti
|
Director
|
February 27, 2019
|
Randy Garutti
|
||
/s/ Jim McKelvey
|
Director
|
February 27, 2019
|
Jim McKelvey
|
||
/s/ Mary Meeker
|
Director
|
February 27, 2019
|
Mary Meeker
|
||
/s/ Anna Patterson
|
Director
|
February 27, 2019
|
Anna Patterson
|
||
/s/ Naveen Rao
|
Director
|
February 27, 2019
|
Naveen Rao
|
||
/s/ Ruth Simmons
|
Director
|
February 27, 2019
|
Ruth Simmons
|
||
/s/ Lawrence Summers
|
Director
|
February 27, 2019
|
Lawrence Summers
|
||
/s/ David Viniar
|
Director
|
February 27, 2019
|
David Viniar
|
|
Chairperson of Audit and Risk Committee:
|
|
$
|
20,000
|
|
|
|
|
|
||
|
Chairperson of Compensation Committee:
|
|
$
|
15,000
|
|
|
|
|
|
||
|
Chairperson of Nominating and Corporate Governance Committee:
|
|
$
|
10,000
|
|
|
|
|
|
||
|
Chairperson of Capital Compliance and Governance Committee:
|
|
$
|
15,000
|
|
|
|
|
|
||
|
Member of Audit and Risk Committee:
|
|
$
|
10,000
|
|
|
|
|
|
||
|
Member of Compensation Committee:
|
|
$
|
5,000
|
|
|
|
|
|
||
|
Member of Nominating and Corporate Governance Committee:
|
|
$
|
2,500
|
|
|
|
|
|
||
|
Member of Capital Compliance and Governance Committee:
|
|
$
|
5,000
|
|
By: /s/ Jesse Dorogusker
|
|
By: /s/ Ruth Franklin
|
Name:
Jesse Dorogusker
|
|
Name: Ruth Franklin
|
Title: VP Hardware
|
|
Title: Senior Director
|
Date: 1.8.19
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Date: 15 Jan 19
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ON SEMICONDUCTOR TRADING SARL
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By: /s/ Irena Turkova
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Name: Irena Turkova
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Title: Director
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Name: Jan 15, 2019
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Subsidiary name
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Jurisdiction of incorporation
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Square Capital, LLC
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Delaware, U.S.
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Squareup International Limited
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Ireland
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Squareup Pte. Ltd.
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Singapore
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Square AU Pty. Ltd.
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Australia
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