|
|
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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36-4791999
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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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|
|
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4 Copley Place, 7
th
Floor, Boston, MA
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02116
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Class
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Outstanding at April 30, 2017
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Class A Common Stock, $0.001 par value per share
|
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51,717,925
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Class B Common Stock, $0.001 par value per share
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34,909,163
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Page
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March 31,
2017 |
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December 31,
2016 |
||||
Assets
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
212,408
|
|
|
$
|
279,840
|
|
Short-term investments
|
|
64,277
|
|
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68,743
|
|
||
Accounts receivable, net of allowance of $2,857 and $3,115 at March 31, 2017 and December 31, 2016, respectively
|
|
21,770
|
|
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19,113
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|
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Inventories
|
|
14,457
|
|
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18,550
|
|
||
Prepaid expenses and other current assets
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119,450
|
|
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90,845
|
|
||
Total current assets
|
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432,362
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|
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477,091
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|
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Property and equipment, net
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263,315
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|
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239,354
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|
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Goodwill and intangible assets, net
|
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3,949
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|
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4,230
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|
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Long-term investments
|
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33,242
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|
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30,967
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|
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Other noncurrent assets
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9,255
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|
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10,041
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|
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Total assets
|
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$
|
742,123
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$
|
761,683
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Liabilities and Stockholders' Equity
|
|
|
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|
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|
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Current liabilities
|
|
|
|
|
|
|
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Accounts payable
|
|
$
|
362,719
|
|
|
$
|
379,493
|
|
Accrued expenses
|
|
70,629
|
|
|
67,807
|
|
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Deferred revenue
|
|
88,325
|
|
|
65,892
|
|
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Other current liabilities
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44,911
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|
|
44,028
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|
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Total current liabilities
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566,584
|
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557,220
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Lease financing obligation
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41,542
|
|
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28,900
|
|
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Other liabilities
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97,535
|
|
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96,179
|
|
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Total liabilities
|
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705,661
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|
|
682,299
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|
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Commitments and contingencies (Note 6)
|
|
|
|
|
|
|
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Convertible preferred stock, $0.001 par value per share: 10,000,000 shares authorized and none issued at March 31, 2017 and December 31, 2016
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|
—
|
|
|
—
|
|
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Stockholders’ equity:
|
|
|
|
|
|
|
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Class A common stock, par value $0.001 per share, 500,000,000 shares authorized, 50,971,401 and 49,945,202 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively
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51
|
|
|
50
|
|
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Class B common stock, par value $0.001 per share, 164,000,000 shares authorized, 35,475,888 and 35,885,692 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively
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35
|
|
|
36
|
|
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Additional paid-in capital
|
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431,812
|
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|
409,225
|
|
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Accumulated deficit
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(395,191
|
)
|
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(329,940
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)
|
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Accumulated other comprehensive (loss) gain
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(245
|
)
|
|
13
|
|
||
Total stockholders’ equity
|
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36,462
|
|
|
79,384
|
|
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Total liabilities and stockholders’ equity
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|
$
|
742,123
|
|
|
$
|
761,683
|
|
|
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Three months ended March 31,
|
||||||
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2017
|
|
2016
|
||||
Net revenue
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$
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960,825
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|
|
$
|
747,348
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Cost of goods sold
|
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723,942
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|
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568,292
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|
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Gross profit
|
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236,883
|
|
|
179,056
|
|
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Operating expenses:
|
|
|
|
|
|
|
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Customer service and merchant fees
|
|
35,058
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|
|
27,350
|
|
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Advertising
|
|
118,265
|
|
|
97,677
|
|
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Merchandising, marketing and sales
|
|
50,794
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|
|
37,856
|
|
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Operations, technology, general and administrative
|
|
88,972
|
|
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58,282
|
|
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Total operating expenses
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293,089
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|
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221,165
|
|
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Loss from operations
|
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(56,206
|
)
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(42,109
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)
|
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Interest (expense) income, net
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(299
|
)
|
|
552
|
|
||
Other income, net
|
|
176
|
|
|
669
|
|
||
Loss before income taxes
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(56,329
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)
|
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(40,888
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)
|
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Provision for income taxes
|
|
210
|
|
|
317
|
|
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Net loss
|
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$
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(56,539
|
)
|
|
$
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(41,205
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)
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Net loss per share, basic and diluted
|
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$
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(0.66
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)
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$
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(0.49
|
)
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Weighted average number of common stock outstanding used in computing per share amounts, basic and diluted
|
|
86,036
|
|
|
84,445
|
|
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|
Three months ended March 31,
|
||||||
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2017
|
|
2016
|
||||
Net loss
|
|
$
|
(56,539
|
)
|
|
$
|
(41,205
|
)
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Other comprehensive loss:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
(281
|
)
|
|
(333
|
)
|
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Net unrealized gain on available-for-sale investments
|
|
23
|
|
|
497
|
|
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Comprehensive loss
|
|
$
|
(56,797
|
)
|
|
$
|
(41,041
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)
|
|
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Three months ended March 31,
|
||||||
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2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
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Net loss
|
|
$
|
(56,539
|
)
|
|
$
|
(41,205
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
|
||||
Depreciation and amortization
|
|
20,352
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|
|
10,487
|
|
||
Equity based compensation
|
|
13,629
|
|
|
9,715
|
|
||
Other non-cash adjustments
|
|
(246
|
)
|
|
(156
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(2,651
|
)
|
|
(1,941
|
)
|
||
Inventories
|
|
4,094
|
|
|
2,142
|
|
||
Prepaid expenses and other current assets
|
|
(28,200
|
)
|
|
(8,643
|
)
|
||
Accounts payable and accrued expenses
|
|
(22,412
|
)
|
|
(29,097
|
)
|
||
Deferred revenue and other liabilities
|
|
25,930
|
|
|
7,926
|
|
||
Other assets
|
|
(55
|
)
|
|
(432
|
)
|
||
Net cash used in operating activities
|
|
(46,098
|
)
|
|
(51,204
|
)
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|||
Purchase of short-term and long-term investments
|
|
(16,225
|
)
|
|
(28,489
|
)
|
||
Sale and maturities of short-term investments
|
|
18,275
|
|
|
29,620
|
|
||
Purchase of property and equipment
|
|
(11,952
|
)
|
|
(23,927
|
)
|
||
Site and software development costs
|
|
(10,920
|
)
|
|
(5,451
|
)
|
||
Net cash used in investing activities
|
|
(20,822
|
)
|
|
(28,247
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|||
Taxes paid related to net share settlement of equity awards
|
|
(592
|
)
|
|
(6,621
|
)
|
||
Net proceeds from exercise of stock options
|
|
54
|
|
|
51
|
|
||
Net cash used in financing activities
|
|
(538
|
)
|
|
(6,570
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
26
|
|
|
643
|
|
||
Net decrease in cash and cash equivalents
|
|
(67,432
|
)
|
|
(85,378
|
)
|
||
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
|
|
|
|
||
Beginning of period
|
|
279,840
|
|
|
334,176
|
|
||
End of period
|
|
$
|
212,408
|
|
|
$
|
248,798
|
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing activities
|
|
|
|
|
|
|
||
Purchase of property and equipment included in accounts payable and accrued expenses and in other liabilities
|
|
$
|
11,524
|
|
|
$
|
19,186
|
|
Construction costs capitalized under finance lease obligation and other leases
|
|
$
|
8,389
|
|
|
$
|
13,077
|
|
|
|
March 31, 2017
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Short-term:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities
|
|
$
|
61,044
|
|
|
$
|
8
|
|
|
$
|
(16
|
)
|
|
$
|
61,036
|
|
Commercial paper
|
|
3,241
|
|
|
1
|
|
|
(1
|
)
|
|
3,241
|
|
||||
Long-term:
|
|
|
|
|
|
|
|
|
|
|||||||
Investment securities
|
|
33,262
|
|
|
18
|
|
|
(38
|
)
|
|
33,242
|
|
||||
Total
|
|
$
|
97,547
|
|
|
$
|
27
|
|
|
$
|
(55
|
)
|
|
$
|
97,519
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair Value
|
||||||||
Short-term:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities
|
|
$
|
63,135
|
|
|
$
|
7
|
|
|
$
|
(39
|
)
|
|
$
|
63,103
|
|
Commercial paper
|
|
5,641
|
|
|
1
|
|
|
(2
|
)
|
|
5,640
|
|
||||
Long-term:
|
|
|
|
|
|
|
|
|
||||||||
Investment securities
|
|
30,985
|
|
|
16
|
|
|
(34
|
)
|
|
30,967
|
|
||||
Total
|
|
$
|
99,761
|
|
|
$
|
24
|
|
|
$
|
(75
|
)
|
|
$
|
99,710
|
|
▪
|
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities
|
▪
|
Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable or can be corroborated by observable market data for substantially the full-term of the asset or liability
|
▪
|
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability
|
|
|
March 31, 2017
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
|
$
|
113,588
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
113,588
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|||||||
Investment securities
|
|
—
|
|
|
61,036
|
|
|
—
|
|
|
61,036
|
|
||||
Commercial paper
|
|
—
|
|
|
3,241
|
|
|
—
|
|
|
3,241
|
|
||||
Restricted cash:
|
|
|
|
|
|
|
|
|
||||||||
Certificate of deposit
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
||||
Long-term:
|
|
|
|
|
|
|
|
|
|
|||||||
Investment securities
|
|
—
|
|
|
33,242
|
|
|
—
|
|
|
33,242
|
|
||||
Total
|
|
$
|
118,588
|
|
|
$
|
97,519
|
|
|
$
|
—
|
|
|
$
|
216,107
|
|
|
|
December 31, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
|
|
$
|
200,867
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
200,867
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities
|
|
—
|
|
|
63,103
|
|
|
—
|
|
|
63,103
|
|
||||
Commercial paper
|
|
—
|
|
|
5,640
|
|
|
—
|
|
|
5,640
|
|
||||
Restricted cash:
|
|
|
|
|
|
|
|
|
||||||||
Certificate of deposit
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
||||
Long-term:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment securities
|
|
—
|
|
|
30,967
|
|
|
—
|
|
|
30,967
|
|
||||
Total
|
|
$
|
205,867
|
|
|
$
|
99,710
|
|
|
$
|
—
|
|
|
$
|
305,577
|
|
|
|
Weighted - Average Amortization
Period (Years)
|
|
March 31, 2017
|
||||||||||
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book Value
|
|||||||
Trademarks
|
|
5
|
|
$
|
1,900
|
|
|
$
|
(1,393
|
)
|
|
$
|
507
|
|
Technology
|
|
3
|
|
1,453
|
|
|
(282
|
)
|
|
1,171
|
|
|||
Customer relationships
|
|
5
|
|
1,300
|
|
|
(953
|
)
|
|
347
|
|
|||
Total
|
|
|
|
$
|
4,653
|
|
|
$
|
(2,628
|
)
|
|
$
|
2,025
|
|
|
|
Weighted - Average Amortization
Period (Years)
|
|
December 31, 2016
|
||||||||||
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Book Value
|
|||||||
Trademarks
|
|
5
|
|
$
|
1,900
|
|
|
$
|
(1,298
|
)
|
|
$
|
602
|
|
Technology
|
|
3
|
|
1,453
|
|
|
(161
|
)
|
|
1,292
|
|
|||
Customer relationship
|
|
5
|
|
1,300
|
|
|
(888
|
)
|
|
412
|
|
|||
Total
|
|
|
|
$
|
4,653
|
|
|
$
|
(2,347
|
)
|
|
$
|
2,306
|
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Furniture and computer equipment
|
|
$
|
149,258
|
|
|
$
|
133,297
|
|
Site and software development costs
|
|
87,139
|
|
|
77,429
|
|
||
Leasehold improvements
|
|
65,652
|
|
|
62,090
|
|
||
Construction in progress
|
|
46,808
|
|
|
47,013
|
|
||
Buildings (leased - Note 6)
|
|
42,498
|
|
|
29,856
|
|
||
|
|
391,355
|
|
|
349,685
|
|
||
Less accumulated depreciation and amortization
|
|
(128,040
|
)
|
|
(110,331
|
)
|
||
Property and equipment, net
|
|
$
|
263,315
|
|
|
$
|
239,354
|
|
|
|
Shares
|
|
Weighted-
Average Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term (Years)
|
|||
Outstanding at December 31, 2016
|
|
209,759
|
|
|
$
|
2.98
|
|
|
4.5
|
Options exercised
|
|
(17,981
|
)
|
|
$
|
2.90
|
|
|
|
Outstanding and exercisable at March 31, 2017
|
|
191,778
|
|
|
$
|
2.99
|
|
|
4.2
|
|
|
Shares
|
|
Weighted-
Average Grant
Date Fair Value
|
|||
Outstanding at December 31, 2016
|
|
60,000
|
|
|
$
|
35.05
|
|
Unvested and expected to vest at March 31, 2017
|
|
60,000
|
|
|
$
|
40.49
|
|
|
|
Shares
|
|
Weighted-
Average Grant
Date Fair Value
|
|||
Outstanding at December 31, 2016
|
|
6,986,776
|
|
|
$
|
34.21
|
|
RSUs granted
|
|
720,706
|
|
|
$
|
41.10
|
|
RSUs vested
|
|
(610,079
|
)
|
|
$
|
31.26
|
|
RSUs forfeited/canceled
|
|
(169,726
|
)
|
|
$
|
36.57
|
|
Outstanding and expected to vest at March 31, 2017
|
|
6,927,677
|
|
|
$
|
35.13
|
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
U.S. Direct Retail
|
|
$
|
837,556
|
|
|
$
|
672,700
|
|
U.S. Other
|
|
20,473
|
|
|
33,221
|
|
||
U.S. segment net revenue
|
|
858,029
|
|
|
705,921
|
|
||
International Direct Retail
|
|
102,796
|
|
|
39,146
|
|
||
International Other
|
|
—
|
|
|
2,281
|
|
||
International segment net revenue
|
|
102,796
|
|
|
41,427
|
|
||
Total net revenue
|
|
$
|
960,825
|
|
|
$
|
747,348
|
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Adjusted EBITDA
|
|
|
|
|
||||
U.S.
|
|
$
|
3,728
|
|
|
$
|
(1,039
|
)
|
International
|
|
(24,624
|
)
|
|
(19,921
|
)
|
||
Total reportable segments Adjusted EBITDA
|
|
(20,896
|
)
|
|
(20,960
|
)
|
||
Less: reconciling items (1)
|
|
(35,643
|
)
|
|
(20,245
|
)
|
||
Net loss
|
|
$
|
(56,539
|
)
|
|
$
|
(41,205
|
)
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Depreciation and amortization
|
|
$
|
20,352
|
|
|
$
|
10,487
|
|
Equity based compensation and related taxes
|
|
14,958
|
|
|
10,662
|
|
||
Interest expense (income), net
|
|
299
|
|
|
(552
|
)
|
||
Other (income), net
|
|
(176
|
)
|
|
(669
|
)
|
||
Provision for income taxes
|
|
210
|
|
|
317
|
|
||
Total reconciling items
|
|
$
|
35,643
|
|
|
$
|
20,245
|
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Geographic long-lived assets
|
|
|
|
|
|
|
||
U.S.
|
|
$
|
256,807
|
|
|
$
|
233,099
|
|
International
|
|
6,508
|
|
|
6,255
|
|
||
Total
|
|
$
|
263,315
|
|
|
$
|
239,354
|
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net loss
|
|
$
|
(56,539
|
)
|
|
$
|
(41,205
|
)
|
Weighted average common shares used for basic and diluted net loss per share computation
|
|
86,036
|
|
|
84,445
|
|
||
Net loss per share:
|
|
|
|
|
||||
Basic and Diluted
|
|
$
|
(0.66
|
)
|
|
$
|
(0.49
|
)
|
|
|
Three months ended March 31,
|
||||
|
|
2017
|
|
2016
|
||
Stock options
|
|
191,778
|
|
|
262,819
|
|
Restricted stock
|
|
60,000
|
|
|
—
|
|
Restricted stock units
|
|
6,927,677
|
|
|
6,170,820
|
|
Total
|
|
7,179,455
|
|
|
6,433,639
|
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
U.S. Direct Retail
|
|
$
|
837,556
|
|
|
$
|
672,700
|
|
U.S. Other
|
|
20,473
|
|
|
33,221
|
|
||
U.S. segment net revenue
|
|
858,029
|
|
|
705,921
|
|
||
International Direct Retail
|
|
102,796
|
|
|
39,146
|
|
||
International Other
|
|
—
|
|
|
2,281
|
|
||
International segment net revenue
|
|
102,796
|
|
|
41,427
|
|
||
Total net revenue
|
|
$
|
960,825
|
|
|
$
|
747,348
|
|
|
|
Three months ended March 31,
|
|
|
|||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
Consolidated Financial Metrics
|
|
|
|
|
|
|
|
|
|
||
Net Revenue
|
|
$
|
960,825
|
|
|
$
|
747,348
|
|
|
28.6
|
%
|
Adjusted EBITDA
|
|
$
|
(20,896
|
)
|
|
$
|
(20,960
|
)
|
|
|
|
Free cash flow
|
|
$
|
(68,970
|
)
|
|
$
|
(80,582
|
)
|
|
|
|
Direct Retail Financial and Operating Metrics
|
|
|
|
|
|
|
|
||||
Direct Retail Net Revenue
|
|
$
|
940,352
|
|
|
$
|
711,846
|
|
|
32.1
|
%
|
Active Customers
|
|
8,855
|
|
|
6,074
|
|
|
45.8
|
%
|
||
LTM Net Revenue per Active Customer
|
|
$
|
394
|
|
|
$
|
392
|
|
|
0.5
|
%
|
Orders Delivered
|
|
4,213
|
|
|
2,996
|
|
|
40.6
|
%
|
||
Average Order Value
|
|
$
|
223
|
|
|
$
|
238
|
|
|
(6.3
|
)%
|
▪
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
|
▪
|
Adjusted EBITDA does not reflect equity based compensation and related taxes;
|
▪
|
Adjusted EBITDA does not reflect changes in our working capital;
|
▪
|
Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;
|
▪
|
Adjusted EBITDA does not reflect depreciation and interest expenses associated with the lease financing obligations; and
|
▪
|
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Reconciliation of Adjusted EBITDA
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(56,539
|
)
|
|
$
|
(41,205
|
)
|
Depreciation and amortization
|
|
20,352
|
|
|
10,487
|
|
||
Equity based compensation and related taxes
|
|
14,958
|
|
|
10,662
|
|
||
Interest expense (income), net
|
|
299
|
|
|
(552
|
)
|
||
Other (income), net
|
|
(176
|
)
|
|
(669
|
)
|
||
Provision for income taxes
|
|
210
|
|
|
317
|
|
||
Adjusted EBITDA
|
|
$
|
(20,896
|
)
|
|
$
|
(20,960
|
)
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net cash used in operating activities
|
|
$
|
(46,098
|
)
|
|
$
|
(51,204
|
)
|
Purchase of property and equipment
|
|
(11,952
|
)
|
|
(23,927
|
)
|
||
Site and software development costs
|
|
(10,920
|
)
|
|
(5,451
|
)
|
||
Free cash flow
|
|
$
|
(68,970
|
)
|
|
$
|
(80,582
|
)
|
|
|
Three months ended March 31,
|
|
|
|||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
Cost of goods sold
|
|
$
|
723,942
|
|
|
$
|
568,292
|
|
|
27.4
|
%
|
As a percentage of net revenue
|
|
75.3
|
%
|
|
76.0
|
%
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|||||||
|
|
2017
|
|
2016
|
|
% Change
|
|||||
Customer service and merchant fees (1)
|
|
$
|
35,058
|
|
|
$
|
27,350
|
|
|
28.2
|
%
|
Advertising
|
|
118,265
|
|
|
97,677
|
|
|
21.1
|
%
|
||
Merchandising, marketing and sales (1)
|
|
50,794
|
|
|
37,856
|
|
|
34.2
|
%
|
||
Operations, technology, general and administrative (1)
|
|
88,972
|
|
|
58,282
|
|
|
52.7
|
%
|
||
Total operating expenses
|
|
$
|
293,089
|
|
|
$
|
221,165
|
|
|
32.5
|
%
|
As a percentage of net revenue
|
|
|
|
|
|
|
|
|
|
||
Customer service and merchant fees (1)
|
|
3.6
|
%
|
|
3.7
|
%
|
|
|
|
||
Advertising
|
|
12.3
|
%
|
|
13.1
|
%
|
|
|
|
||
Merchandising, marketing and sales (1)
|
|
5.3
|
%
|
|
5.1
|
%
|
|
|
|
||
Operations, technology, general and administrative (1)
|
|
9.3
|
%
|
|
7.8
|
%
|
|
|
|
||
|
|
30.5
|
%
|
|
29.7
|
%
|
|
|
|
|
|
Three months ended March 31,
|
|
|
||||||
|
|
2017
|
|
2016
|
|
|
||||
Customer service and merchant fees
|
|
$
|
644
|
|
|
$
|
333
|
|
|
|
Merchandising, marketing and sales
|
|
$
|
7,160
|
|
|
$
|
5,101
|
|
|
|
Operations, technology, general and administrative
|
|
$
|
7,009
|
|
|
$
|
5,170
|
|
|
|
|
|
Three months ended March 31,
|
|
|
||||
|
|
2017
|
|
2016
|
|
|
||
As a percentage of net revenue
|
|
|
|
|
|
|
|
|
Customer service and merchant fees
|
|
3.6
|
%
|
|
3.6
|
%
|
|
|
Merchandising, marketing and sales
|
|
4.5
|
%
|
|
4.4
|
%
|
|
|
Operations, technology, general and administrative
|
|
8.5
|
%
|
|
7.1
|
%
|
|
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
(in thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
212,408
|
|
|
$
|
279,840
|
|
Short-term investments
|
|
$
|
64,277
|
|
|
$
|
68,743
|
|
Accounts receivable, net
|
|
$
|
21,770
|
|
|
$
|
19,113
|
|
Long-term investments
|
|
$
|
33,242
|
|
|
$
|
30,967
|
|
Working capital
|
|
$
|
(134,222
|
)
|
|
$
|
(80,129
|
)
|
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
Net loss
|
|
$
|
(56,539
|
)
|
|
$
|
(41,205
|
)
|
Net cash used in operating activities
|
|
$
|
(46,098
|
)
|
|
$
|
(51,204
|
)
|
Net cash used in investing activities
|
|
$
|
(20,822
|
)
|
|
$
|
(28,247
|
)
|
Net cash used in financing activities
|
|
$
|
(538
|
)
|
|
$
|
(6,570
|
)
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|||
Number
|
|
Exhibit Description
|
Filed Herewith
|
Form
|
File No.
|
Filing Date
|
Exhibit Number
|
10.1
|
|
Credit Agreement dated February 22, 2017 among Wayfair LLC, Wayfair Inc., each Lender from time to time party thereto and Citibank, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer.
|
|
10-K
|
001-36666
|
2/28/2017
|
10.18
|
|
|
|
|
|
|
|
|
10.2
|
|
Sixth Amendment to Office Lease between Copley Place Associates, LLC and Wayfair LLC (such lease, as amended to date, the "Copley Lease"), dated as of February 22, 2017, by and between Copley Place Associates, LLC and Wayfair LLC.
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1#
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2#
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Labels Linkbase Document
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
X
|
|
|
|
|
+
|
|
Indicates a management contract or compensatory plan
|
|
|
|
#
|
|
This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.
|
|
|
WAYFAIR INC.
|
|
|
|
|
|
|
Date: May 9, 2017
|
By:
|
/s/ NIRAJ SHAH
|
|
|
Niraj Shah
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Date: May 9, 2017
|
By:
|
/s/ MICHAEL FLEISHER
|
|
|
Michael Fleisher
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
A.
|
Base Rent for the Amendment 6 Expansion Spaces, and the date as of which Base Rent for the Amendment 6 Expansion Spaces commences, shall be as set forth on
Exhibit C
attached hereto and made a part hereof.
|
A.
|
Section 1.12 of the Lease is amended to read in its entirety:
|
1.12 Operating Expense
Base Year: |
As to the Premises other than the Fifth Expansion Spaces, the Calendar Year 2014.
As to the Fifth Expansion Spaces, the Calendar Year 2016.
As to Amendment 5 Expansion Spaces and the Amendment 6 Expansion Spaces, the Calendar Year 2018
|
B.
|
Section 1.14 of the Lease is amended to read in its entirety:
|
1.14 Tax Base Year:
|
As to the Premises other than the Fifth Expansion Spaces, the Calendar Year 2014.
As to the Fifth Expansion Spaces, the tax fiscal year July 1, 2016 to June 30, 2017.
As to Amendment 5 Expansion Spaces, the tax fiscal year July 1, 2017 to June 30, 2018.
As to Amendment 6 Expansion Spaces, the tax fiscal year July 1, 2018 to June 30, 2019.
|
C.
|
Section 1.16 of the Lease is amended to read in its entirety:
|
1.16 Tenant’s Proportionate
Tax Share: |
33.25 % for the Premises (computed on the basis of 95% occupancy) consisting of 278,534 rentable square feet, exclusive of the Fifth Expansion Spaces.
11.22% for the Fifth Expansion Spaces (computed on the basis of 95% occupancy).
19.52% for the Amendment 5 Expansion Spaces (computed on the basis of 95% occupancy).
13.22% for the Amendment 6 Expansion Spaces (computed on the basis of 95% occupancy).
|
D.
|
Section 1.17 of the Lease is amended to read in its entirety:
|
1.17 Tenant’s Proportionate
Expense Share: |
33.25% for the Premises (computed on the basis of 95% occupancy) consisting of 278,534 rentable square feet, exclusive of the Fifth Expansion Spaces.
11.22% for the Fifth Expansion Spaces Premises (computed on the basis of 95% occupancy).
19.52% for the Amendment 5 Expansion Spaces (computed on the basis of 95% occupancy).
13.22% for the Amendment 6 Expansion Spaces (computed on the basis of 95% occupancy).
|
A.
|
The Amendment 6 Expansion Spaces shall be delivered to Tenant as of the applicable Add to Premises Date in as-is, where-is condition, except that Landlord shall deliver the Amendment 6 Expansion Spaces broom-clean and free of all occupants, furniture, debris and other personal property. Subject to the foregoing, without limitation, Landlord shall have no responsibility for any condition or construction within the Amendment 6 Expansion Spaces or for any condition above the finished ceilings except with regard to utilities and conduits serving premises other than the Premises, except that the foregoing shall not relieve Landlord from its obligations to deliver the Premises with all base Building systems operational at the Premises and to repair and maintain the Building components described in Section 8.02 of the Original Lease (as the same may be amended from time to time) in accordance with and subject to said Section 8.02 of the Original Lease (as the same may be amended from
|
B.
|
Solely for the purpose of determining Tenant’s obligations with respect to restoration of the Premises at the end of the Term, all Alterations made by Tenant to initially prepare the Amendment 6 Expansion Spaces shall be deemed “Initial Alterations”; accordingly, Tenant shall not be required to remove or restore any of such Alterations (or Alterations that were comparable replacements thereof) whether or not the same are Specialty Alterations. Tenant shall not be required to pay Landlord for the use of elevators and hoists during the making of initial Alterations to the Amendment 6 Expansion Spaces.
|
A.
|
This Sixth Amendment sets forth the entire agreement between the parties with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. Under no circumstances shall Tenant be entitled to any Rent abatement, improvement allowance, leasehold improvements, or other work to the Premises, or any similar economic incentives that may have been provided Tenant in connection with entering into the Lease, unless specifically set forth in this Sixth Amendment or the Lease as amended hereby. Exhibits attached hereto are incorporated herein by reference.
|
B.
|
Landlord and Tenant hereby agree to execute, acknowledge and deliver, in recordable form, an amended notice of the Lease to reflect all of the Premises leased by Tenant under the Lease, consistent with the provisions of Massachusetts General Laws, Chapter 183, Section 4. Landlord
|
C.
|
Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect.
|
D.
|
In the case of any inconsistency between the provisions of the Lease and this Sixth Amendment, the provisions of this Sixth Amendment shall govern and control.
|
E.
|
Submission of this Sixth Amendment by Landlord is not an offer to enter into this Sixth Amendment, but rather is a solicitation for such an offer by Tenant. Neither party shall be bound by this Sixth Amendment until such party has executed and delivered the same to the other party.
|
By:
|
SPG COPLEY ASSOCIATES, LLC, a Delaware limited liability company,
managing member |
TOWER
|
FLOOR
|
RENTABLE SQUARE FOOTAGE
|
ADD TO PREMISES DATE
|
Three
|
2
|
12,537
|
October 1, 2017
|
Three
|
3
|
25,343
|
October 1, 2017
|
One
|
2
|
39,414
|
January 1, 2018
|
One
|
6
|
3,887
|
January 1, 2018
|
Two
|
2
|
29,573
|
January 1, 2018
|
Period |
Annual Base Rent
Per Rentable Square Foot |
Annual
Base Rent |
Monthly
Installment of Annual Base Rent (proportionately for any partial month |
October 1, 2017 through December 31, 2017 (based on 37,880 rsf)
|
$0.00
|
$0.00
|
$.00
|
January 1, 2018 through September 30, 2018 (based on 110,754 rsf)
|
$0.00
|
$0.00
|
$.00
|
October 1, 2018 through June 30, 2019 (based on 110,754 rsf)
|
$38.25
|
$4,236,340.50
|
$353,028.38
|
July 1, 2019 through June 30, 2020 (based on 110,754 rsf)
|
$39.25
|
$4,347,094.50
|
$362,257.88
|
July 1, 2020 through June 30, 2021 (based on 110,754 rsf)
|
$40.25
|
$4,457,848.50
|
$371,487.38
|
July 1, 2021 through June 30, 2022 (based on 110,754 rsf)
|
$41.25
|
$4,568,602.50
|
$380,716.88
|
July 1, 2022 through June 30, 2023 (based on 110,754 rsf)
|
$42.25
|
$4,679,356.50
|
$389,946.38
|
July 1, 2023 through June 30, 2024 (based on 110,754 rsf)
|
$43.25
|
$4,790,110.50
|
$399,175.88
|
July 1, 2024 through June 30, 2025 (based on 110,754 rsf)
|
$44.25
|
$4,900,864.50
|
$408,405.38
|
July 1, 2025 through June 30, 2026 (based on 110,754 rsf)
|
$45.25
|
$5,011,618.50
|
$417,634.88
|
July 1, 2026 through June 30, 2027 (based on 110,754 rsf)
|
$46.25
|
$5,122,372.50
|
$426,864.38
|
July 1, 2027 through December 31, 2027 (based on 110,754 rsf)
|
$47.25
|
$5,233,126.50
|
$436,093.88
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Wayfair Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 9, 2017
|
|
/s/ NIRAJ SHAH
|
|
|
Niraj Shah
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Wayfair Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 9, 2017
|
|
/s/ MICHAEL FLEISHER
|
|
|
Michael Fleisher
|
|
|
Chief Financial Officer
|
1)
|
the Report which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 9, 2017
|
|
/s/ NIRAJ SHAH
|
|
|
Niraj Shah
|
|
|
President and Chief Executive Officer
|
1)
|
the Report which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 9, 2017
|
|
/s/ MICHAEL FLEISHER
|
|
|
Michael Fleisher
|
|
|
Chief Financial Officer
|