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• | persuasive evidence of an arrangement exists; |
• | delivery of our obligations to our customer has occurred; |
• | the price is fixed or determinable; and |
• | collectability of the related receivable is reasonably assured. |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Advertising | $ | 17,079 | $ | 11,492 | $ | 6,986 | |||||
Payments and other fees | 849 | 974 | 886 | ||||||||
Total revenue | $ | 17,928 | $ | 12,466 | $ | 7,872 |
Property and Equipment | Useful Life | |
Network equipment | Three to five years | |
Buildings | Three to 30 years | |
Computer software, office equipment and other | Three to five years | |
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term |
December 31, | |||||||
2015 | 2014 | ||||||
Deferred revenue | $ | 28 | $ | 38 | |||
Deposits | 28 | 28 | |||||
Total deferred revenue and deposits | $ | 56 | $ | 66 |
|
(in millions) | Useful lives (in years) | ||||
Finite-lived intangible assets: | |||||
Acquired technology | $ | 30 | 3 | ||
Other | 5 | 3 | |||
Land acquired | 379 | ||||
Other net tangible assets acquired | 12 | ||||
Deferred tax assets, net | 17 | ||||
Net assets acquired | $ | 443 | |||
Goodwill | 45 | ||||
Total fair value consideration | $ | 488 |
|
December 31, | |||||||
2015 | 2014 | ||||||
Cash and cash equivalents: | |||||||
Cash | $ | 1,703 | $ | 2,162 | |||
Money market funds | 2,409 | 2,153 | |||||
U.S. government securities | 597 | — | |||||
U.S. government agency securities | 145 | — | |||||
Corporate debt securities | 53 | — | |||||
Total cash and cash equivalents | 4,907 | 4,315 | |||||
Marketable securities: | |||||||
U.S. government securities | 5,948 | 2,830 | |||||
U.S. government agency securities | 4,475 | 2,710 | |||||
Corporate debt securities | 3,104 | 1,344 | |||||
Total marketable securities | 13,527 | 6,884 | |||||
Total cash and cash equivalents, and marketable securities | $ | 18,434 | $ | 11,199 |
December 31, | |||||||
2015 | 2014 | ||||||
Due in one year | $ | 5,029 | $ | 3,422 | |||
Due in one to two years | 8,498 | 3,462 | |||||
Total | $ | 13,527 | $ | 6,884 |
|
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 2,409 | $ | 2,409 | $ | — | $ | — | ||||||||
U.S. government securities | 597 | 597 | — | — | ||||||||||||
U.S. government agency securities | 145 | 145 | — | — | ||||||||||||
Corporate debt securities | 53 | — | 53 | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 5,948 | 5,948 | — | — | ||||||||||||
U.S. government agency securities | 4,475 | 4,475 | — | — | ||||||||||||
Corporate debt securities | 3,104 | — | 3,104 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 16,731 | $ | 13,574 | $ | 3,157 | $ | — | ||||||||
Other liabilities: | ||||||||||||||||
Contingent consideration liability | $ | 260 | $ | — | $ | — | $ | 260 |
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2014 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3 | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 2,153 | $ | 2,153 | $ | — | $ | — | ||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 2,830 | 2,830 | — | — | ||||||||||||
U.S. government agency securities | 2,710 | 2,710 | — | — | ||||||||||||
Corporate debt securities | 1,344 | — | 1,344 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 9,037 | $ | 7,693 | $ | 1,344 | $ | — | ||||||||
Other liabilities: | ||||||||||||||||
Contingent consideration liability | $ | 191 | $ | — | $ | — | $ | 191 |
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December 31, | |||||||
2015 | 2014 | ||||||
Land | $ | 596 | $ | 153 | |||
Buildings | 2,273 | 1,420 | |||||
Leasehold improvements | 447 | 304 | |||||
Network equipment | 3,633 | 3,020 | |||||
Computer software, office equipment and other | 248 | 149 | |||||
Construction in progress | 622 | 738 | |||||
Total | 7,819 | 5,784 | |||||
Less: Accumulated depreciation | (2,132 | ) | (1,817 | ) | |||
Property and equipment, net | $ | 5,687 | $ | 3,967 |
|
Balance as of December 31, 2013 | $ | 839 | |
Goodwill acquired | 17,150 | ||
Effect of currency translation adjustment | (8 | ) | |
Balance as of December 31, 2014 | $ | 17,981 | |
Goodwill acquired | 45 | ||
Balance as of December 31, 2015 | $ | 18,026 |
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||
Weighted-Average Remaining Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Acquired users | 5.7 | $ | 2,056 | $ | (382 | ) | $ | 1,674 | $ | 2,056 | $ | (85 | ) | $ | 1,971 | ||||||||||
Acquired technology | 3.3 | 831 | (310 | ) | 521 | 813 | (144 | ) | 669 | ||||||||||||||||
Acquired patents | 6.5 | 785 | (333 | ) | 452 | 773 | (239 | ) | 534 | ||||||||||||||||
Trade names | 4.1 | 629 | (163 | ) | 466 | 632 | (46 | ) | 586 | ||||||||||||||||
Other | 3.5 | 162 | (89 | ) | 73 | 164 | (55 | ) | 109 | ||||||||||||||||
Total finite-lived intangible assets | 5.2 | $ | 4,463 | $ | (1,277 | ) | $ | 3,186 | $ | 4,438 | $ | (569 | ) | $ | 3,869 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
In-process research and development (IPR&D) | $ | 60 | $ | — | $ | 60 | $ | 60 | $ | — | $ | 60 | |||||||||||||
Total intangible assets | $ | 4,523 | $ | (1,277 | ) | $ | 3,246 | $ | 4,498 | $ | (569 | ) | $ | 3,929 |
2016 | $ | 701 | |
2017 | 658 | ||
2018 | 603 | ||
2019 | 520 | ||
2020 | 357 | ||
Thereafter | 347 | ||
Total | $ | 3,186 |
|
December 31, | |||||||
2015 | 2014 | ||||||
Accrued compensation and benefits | $ | 473 | $ | 322 | |||
Accrued property and equipment | 192 | 164 | |||||
Promissory note payable(1) | 201 | — | |||||
Other current liabilities | 583 | 380 | |||||
Accrued expenses and other current liabilities | $ | 1,449 | $ | 866 |
December 31, | |||||||
2015 | 2014 | ||||||
Income tax payable | $ | 2,458 | $ | 1,190 | |||
Deferred tax liabilities(1) | 163 | 769 | |||||
Contingent consideration liability | 267 | 193 | |||||
Other liabilities | 269 | 175 | |||||
Other liabilities | $ | 3,157 | $ | 2,327 |
(1) | In November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. We early adopted this standard retrospectively, and as a result of the reclassifications, certain noncurrent deferred tax liabilities were netted with noncurrent deferred tax assets. See Note 1 in these notes to the consolidated financial statements for additional information. |
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Capital Leases | Operating Leases | Financing obligation, building in progress - leased facility(1) | |||||||||
2016 | $ | 16 | $ | 209 | $ | — | |||||
2017 | 15 | 230 | — | ||||||||
2018 | 16 | 216 | — | ||||||||
2019 | 16 | 200 | 13 | ||||||||
2020 | 17 | 159 | 25 | ||||||||
Thereafter | 94 | 438 | 299 | ||||||||
Total minimum lease payments | $ | 174 | $ | 1,452 | $ | 337 | |||||
Less: amount representing interest and taxes | (60 | ) | |||||||||
Less: current portion of the present value of minimum lease payments | (7 | ) | |||||||||
Capital lease obligations, net of current portion | $ | 107 |
(1) | In 2015, we entered into an agreement to lease an entire office building in London, United Kingdom, that is currently under construction. As a result of our involvement during the construction period, we are considered to be the owner of the construction project for accounting purposes. The above financing obligation, building in progress - leased facility represents the total expected financing and lease obligation associated with this lease and will be settled through monthly lease payments to the landlord when we occupy the office space upon completion. This amount includes $62 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2015. |
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Shares Subject to Options Outstanding | ||||||||||||
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value(1) | |||||||||
(in thousands) | (in years) | (in millions) | ||||||||||
Balance as of December 31, 2014 | 12,984 | $ | 4.78 | |||||||||
Stock options exercised | (4,541 | ) | 0.48 | |||||||||
Balance as of December 31, 2015 | 8,443 | $ | 7.10 | 3.7 | $ | 824 | ||||||
Stock options vested and expected to vest as of December 31, 2015 | 8,441 | $ | 7.10 | 3.7 | $ | 824 | ||||||
Stock options exercisable as of December 31, 2015 | 6,250 | $ | 5.19 | 3.3 | $ | 622 |
(1) | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock, as reported on the NASDAQ Global Select Market, of $104.66 on December 31, 2015. |
Options Outstanding | Options Exercisable | ||||||||||||||
Exercise Price (Range) | Number of Shares | Weighted Average Remaining Contractual Term | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||
$0.10 - 0.18 | 446 | 0.6 | $ | 0.11 | 446 | $ | 0.11 | ||||||||
0.29 - 0.33 | 1,182 | 1.5 | 0.32 | 1,182 | 0.32 | ||||||||||
1.85 | 968 | 3.0 | 1.85 | 968 | 1.85 | ||||||||||
2.95 | 1,147 | 3.6 | 2.95 | 1,147 | 2.95 | ||||||||||
10.39 | 3,500 | 4.6 | 10.39 | 2,334 | 10.39 | ||||||||||
15.00 | 1,200 | 4.8 | 15.00 | 173 | 15.00 | ||||||||||
8,443 | 3.7 | $ | 7.10 | 6,250 | $ | 5.19 |
Unvested RSUs(1) | ||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||
(in thousands) | ||||||
Unvested at December 31, 2014 | 138,055 | $ | 55.89 | |||
Granted | 31,507 | 82.15 | ||||
Vested | (46,434 | ) | 49.19 | |||
Forfeited | (6,719 | ) | 51.19 | |||
Unvested at December 31, 2015 | 116,409 | $ | 65.95 |
(1) | Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements. |
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Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Interest expense | $ | (23 | ) | $ | (23 | ) | $ | (56 | ) | ||
Interest income | 52 | 27 | 19 | ||||||||
Foreign currency exchange losses, net | (66 | ) | (87 | ) | (14 | ) | |||||
Other | 6 | (1 | ) | 1 | |||||||
Interest and other income/(expense), net | $ | (31 | ) | $ | (84 | ) | $ | (50 | ) |
|
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Domestic | $ | 2,802 | $ | 4,918 | $ | 3,197 | |||||
Foreign | 3,392 | (8 | ) | (443 | ) | ||||||
Income before provision for income taxes | $ | 6,194 | $ | 4,910 | $ | 2,754 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | 3,012 | $ | 1,999 | $ | 1,154 | |||||
State | 183 | 130 | 69 | ||||||||
Foreign | 123 | 96 | 68 | ||||||||
Total current tax expense | 3,318 | 2,225 | 1,291 | ||||||||
Deferred: | |||||||||||
Federal | (800 | ) | (240 | ) | (28 | ) | |||||
State | (17 | ) | (14 | ) | (7 | ) | |||||
Foreign | 5 | (1 | ) | (2 | ) | ||||||
Total deferred tax benefit | (812 | ) | (255 | ) | (37 | ) | |||||
Provision for income taxes | $ | 2,506 | $ | 1,970 | $ | 1,254 |
Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 2.0 | 1.4 | 1.6 | |||||
Research tax credits | (1.4 | ) | (1.1 | ) | (4.7 | ) | ||
Share-based compensation | 2.2 | 6.5 | 5.2 | |||||
Effect of non-U.S. operations | (0.9 | ) | (3.6 | ) | 6.8 | |||
Other | 3.5 | 1.9 | 1.6 | |||||
Effective tax rate | 40.4 | % | 40.1 | % | 45.5 | % |
December 31, | |||||||
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Net operating loss carryforward | $ | 476 | $ | 130 | |||
Tax credit carryforward | 297 | 190 | |||||
Share-based compensation | 529 | 225 | |||||
Accrued expenses and other liabilities | 239 | 136 | |||||
Other | 34 | 21 | |||||
Total deferred tax assets | 1,575 | 702 | |||||
Less: valuation allowance | (205 | ) | (101 | ) | |||
Deferred tax assets, net of valuation allowance | 1,370 | 601 | |||||
Deferred tax liabilities: | |||||||
Depreciation and amortization | (270 | ) | (101 | ) | |||
Purchased intangible assets | (934 | ) | (1,190 | ) | |||
Deferred foreign taxes | (15 | ) | — | ||||
Total deferred tax liabilities | (1,219 | ) | (1,291 | ) | |||
Net deferred tax assets (liabilities) | $ | 151 | $ | (690 | ) |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Gross unrecognized tax benefits-beginning of period | $ | 1,682 | $ | 1,316 | $ | 164 | |||||
Increases related to prior year tax positions | 322 | 24 | 425 | ||||||||
Decreases related to prior year tax positions | (52 | ) | — | (13 | ) | ||||||
Increases related to current year tax positions | 1,066 | 346 | 740 | ||||||||
Decreases related to settlements of prior year tax positions | (1 | ) | (4 | ) | — | ||||||
Gross unrecognized tax benefits-end of period | $ | 3,017 | $ | 1,682 | $ | 1,316 |
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Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Revenue: | |||||||||||
United States | $ | 8,513 | $ | 5,649 | $ | 3,613 | |||||
Rest of the world(1) | 9,415 | 6,817 | 4,259 | ||||||||
Total revenue | $ | 17,928 | $ | 12,466 | $ | 7,872 |
(1) | No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented |
December 31, | |||||||
2015 | 2014 | ||||||
Property and equipment, net: | |||||||
United States | $ | 4,498 | $ | 3,256 | |||
Sweden | 713 | 514 | |||||
Rest of the world | 476 | 197 | |||||
Total property and equipment, net | $ | 5,687 | $ | 3,967 |
|
• | persuasive evidence of an arrangement exists; |
• | delivery of our obligations to our customer has occurred; |
• | the price is fixed or determinable; and |
• | collectability of the related receivable is reasonably assured. |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Advertising | $ | 17,079 | $ | 11,492 | $ | 6,986 | |||||
Payments and other fees | 849 | 974 | 886 | ||||||||
Total revenue | $ | 17,928 | $ | 12,466 | $ | 7,872 |
Property and Equipment | Useful Life | |
Network equipment | Three to five years | |
Buildings | Three to 30 years | |
Computer software, office equipment and other | Three to five years | |
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term |
December 31, | |||||||
2015 | 2014 | ||||||
Deferred revenue | $ | 28 | $ | 38 | |||
Deposits | 28 | 28 | |||||
Total deferred revenue and deposits | $ | 56 | $ | 66 |
|
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Advertising | $ | 17,079 | $ | 11,492 | $ | 6,986 | |||||
Payments and other fees | 849 | 974 | 886 | ||||||||
Total revenue | $ | 17,928 | $ | 12,466 | $ | 7,872 |
Property and Equipment | Useful Life | |
Network equipment | Three to five years | |
Buildings | Three to 30 years | |
Computer software, office equipment and other | Three to five years | |
Leased equipment and leasehold improvements | Lesser of estimated useful life or remaining lease term |
December 31, | |||||||
2015 | 2014 | ||||||
Deferred revenue | $ | 28 | $ | 38 | |||
Deposits | 28 | 28 | |||||
Total deferred revenue and deposits | $ | 56 | $ | 66 |
|
(in millions) | Useful lives (in years) | ||||
Finite-lived intangible assets: | |||||
Acquired technology | $ | 30 | 3 | ||
Other | 5 | 3 | |||
Land acquired | 379 | ||||
Other net tangible assets acquired | 12 | ||||
Deferred tax assets, net | 17 | ||||
Net assets acquired | $ | 443 | |||
Goodwill | 45 | ||||
Total fair value consideration | $ | 488 |
|
December 31, | |||||||
2015 | 2014 | ||||||
Cash and cash equivalents: | |||||||
Cash | $ | 1,703 | $ | 2,162 | |||
Money market funds | 2,409 | 2,153 | |||||
U.S. government securities | 597 | — | |||||
U.S. government agency securities | 145 | — | |||||
Corporate debt securities | 53 | — | |||||
Total cash and cash equivalents | 4,907 | 4,315 | |||||
Marketable securities: | |||||||
U.S. government securities | 5,948 | 2,830 | |||||
U.S. government agency securities | 4,475 | 2,710 | |||||
Corporate debt securities | 3,104 | 1,344 | |||||
Total marketable securities | 13,527 | 6,884 | |||||
Total cash and cash equivalents, and marketable securities | $ | 18,434 | $ | 11,199 |
December 31, | |||||||
2015 | 2014 | ||||||
Due in one year | $ | 5,029 | $ | 3,422 | |||
Due in one to two years | 8,498 | 3,462 | |||||
Total | $ | 13,527 | $ | 6,884 |
|
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 2,409 | $ | 2,409 | $ | — | $ | — | ||||||||
U.S. government securities | 597 | 597 | — | — | ||||||||||||
U.S. government agency securities | 145 | 145 | — | — | ||||||||||||
Corporate debt securities | 53 | — | 53 | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 5,948 | 5,948 | — | — | ||||||||||||
U.S. government agency securities | 4,475 | 4,475 | — | — | ||||||||||||
Corporate debt securities | 3,104 | — | 3,104 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 16,731 | $ | 13,574 | $ | 3,157 | $ | — | ||||||||
Other liabilities: | ||||||||||||||||
Contingent consideration liability | $ | 260 | $ | — | $ | — | $ | 260 |
Fair Value Measurement at Reporting Date Using | ||||||||||||||||
Description | December 31, 2014 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3 | ||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 2,153 | $ | 2,153 | $ | — | $ | — | ||||||||
Marketable securities: | ||||||||||||||||
U.S. government securities | 2,830 | 2,830 | — | — | ||||||||||||
U.S. government agency securities | 2,710 | 2,710 | — | — | ||||||||||||
Corporate debt securities | 1,344 | — | 1,344 | — | ||||||||||||
Total cash equivalents and marketable securities | $ | 9,037 | $ | 7,693 | $ | 1,344 | $ | — | ||||||||
Other liabilities: | ||||||||||||||||
Contingent consideration liability | $ | 191 | $ | — | $ | — | $ | 191 |
|
December 31, | |||||||
2015 | 2014 | ||||||
Land | $ | 596 | $ | 153 | |||
Buildings | 2,273 | 1,420 | |||||
Leasehold improvements | 447 | 304 | |||||
Network equipment | 3,633 | 3,020 | |||||
Computer software, office equipment and other | 248 | 149 | |||||
Construction in progress | 622 | 738 | |||||
Total | 7,819 | 5,784 | |||||
Less: Accumulated depreciation | (2,132 | ) | (1,817 | ) | |||
Property and equipment, net | $ | 5,687 | $ | 3,967 |
|
Balance as of December 31, 2013 | $ | 839 | |
Goodwill acquired | 17,150 | ||
Effect of currency translation adjustment | (8 | ) | |
Balance as of December 31, 2014 | $ | 17,981 | |
Goodwill acquired | 45 | ||
Balance as of December 31, 2015 | $ | 18,026 |
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||
Weighted-Average Remaining Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Acquired users | 5.7 | $ | 2,056 | $ | (382 | ) | $ | 1,674 | $ | 2,056 | $ | (85 | ) | $ | 1,971 | ||||||||||
Acquired technology | 3.3 | 831 | (310 | ) | 521 | 813 | (144 | ) | 669 | ||||||||||||||||
Acquired patents | 6.5 | 785 | (333 | ) | 452 | 773 | (239 | ) | 534 | ||||||||||||||||
Trade names | 4.1 | 629 | (163 | ) | 466 | 632 | (46 | ) | 586 | ||||||||||||||||
Other | 3.5 | 162 | (89 | ) | 73 | 164 | (55 | ) | 109 | ||||||||||||||||
Total finite-lived intangible assets | 5.2 | $ | 4,463 | $ | (1,277 | ) | $ | 3,186 | $ | 4,438 | $ | (569 | ) | $ | 3,869 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
In-process research and development (IPR&D) | $ | 60 | $ | — | $ | 60 | $ | 60 | $ | — | $ | 60 | |||||||||||||
Total intangible assets | $ | 4,523 | $ | (1,277 | ) | $ | 3,246 | $ | 4,498 | $ | (569 | ) | $ | 3,929 |
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||||||
Weighted-Average Remaining Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Acquired users | 5.7 | $ | 2,056 | $ | (382 | ) | $ | 1,674 | $ | 2,056 | $ | (85 | ) | $ | 1,971 | ||||||||||
Acquired technology | 3.3 | 831 | (310 | ) | 521 | 813 | (144 | ) | 669 | ||||||||||||||||
Acquired patents | 6.5 | 785 | (333 | ) | 452 | 773 | (239 | ) | 534 | ||||||||||||||||
Trade names | 4.1 | 629 | (163 | ) | 466 | 632 | (46 | ) | 586 | ||||||||||||||||
Other | 3.5 | 162 | (89 | ) | 73 | 164 | (55 | ) | 109 | ||||||||||||||||
Total finite-lived intangible assets | 5.2 | $ | 4,463 | $ | (1,277 | ) | $ | 3,186 | $ | 4,438 | $ | (569 | ) | $ | 3,869 | ||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
In-process research and development (IPR&D) | $ | 60 | $ | — | $ | 60 | $ | 60 | $ | — | $ | 60 | |||||||||||||
Total intangible assets | $ | 4,523 | $ | (1,277 | ) | $ | 3,246 | $ | 4,498 | $ | (569 | ) | $ | 3,929 |
2016 | $ | 701 | |
2017 | 658 | ||
2018 | 603 | ||
2019 | 520 | ||
2020 | 357 | ||
Thereafter | 347 | ||
Total | $ | 3,186 |
|
December 31, | |||||||
2015 | 2014 | ||||||
Accrued compensation and benefits | $ | 473 | $ | 322 | |||
Accrued property and equipment | 192 | 164 | |||||
Promissory note payable(1) | 201 | — | |||||
Other current liabilities | 583 | 380 | |||||
Accrued expenses and other current liabilities | $ | 1,449 | $ | 866 |
December 31, | |||||||
2015 | 2014 | ||||||
Income tax payable | $ | 2,458 | $ | 1,190 | |||
Deferred tax liabilities(1) | 163 | 769 | |||||
Contingent consideration liability | 267 | 193 | |||||
Other liabilities | 269 | 175 | |||||
Other liabilities | $ | 3,157 | $ | 2,327 |
(1) | In November 2015, the FASB issued ASU 2015-17, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. We early adopted this standard retrospectively, and as a result of the reclassifications, certain noncurrent deferred tax liabilities were netted with noncurrent deferred tax assets. See Note 1 in these notes to the consolidated financial statements for additional information. |
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Capital Leases | Operating Leases | Financing obligation, building in progress - leased facility(1) | |||||||||
2016 | $ | 16 | $ | 209 | $ | — | |||||
2017 | 15 | 230 | — | ||||||||
2018 | 16 | 216 | — | ||||||||
2019 | 16 | 200 | 13 | ||||||||
2020 | 17 | 159 | 25 | ||||||||
Thereafter | 94 | 438 | 299 | ||||||||
Total minimum lease payments | $ | 174 | $ | 1,452 | $ | 337 | |||||
Less: amount representing interest and taxes | (60 | ) | |||||||||
Less: current portion of the present value of minimum lease payments | (7 | ) | |||||||||
Capital lease obligations, net of current portion | $ | 107 |
(1) | In 2015, we entered into an agreement to lease an entire office building in London, United Kingdom, that is currently under construction. As a result of our involvement during the construction period, we are considered to be the owner of the construction project for accounting purposes. The above financing obligation, building in progress - leased facility represents the total expected financing and lease obligation associated with this lease and will be settled through monthly lease payments to the landlord when we occupy the office space upon completion. This amount includes $62 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2015. |
Capital Leases | Operating Leases | Financing obligation, building in progress - leased facility(1) | |||||||||
2016 | $ | 16 | $ | 209 | $ | — | |||||
2017 | 15 | 230 | — | ||||||||
2018 | 16 | 216 | — | ||||||||
2019 | 16 | 200 | 13 | ||||||||
2020 | 17 | 159 | 25 | ||||||||
Thereafter | 94 | 438 | 299 | ||||||||
Total minimum lease payments | $ | 174 | $ | 1,452 | $ | 337 | |||||
Less: amount representing interest and taxes | (60 | ) | |||||||||
Less: current portion of the present value of minimum lease payments | (7 | ) | |||||||||
Capital lease obligations, net of current portion | $ | 107 |
(1) | In 2015, we entered into an agreement to lease an entire office building in London, United Kingdom, that is currently under construction. As a result of our involvement during the construction period, we are considered to be the owner of the construction project for accounting purposes. The above financing obligation, building in progress - leased facility represents the total expected financing and lease obligation associated with this lease and will be settled through monthly lease payments to the landlord when we occupy the office space upon completion. This amount includes $62 million that is included in property and equipment, net and other liabilities on our consolidated balance sheets as of December 31, 2015. |
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Shares Subject to Options Outstanding | ||||||||||||
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value(1) | |||||||||
(in thousands) | (in years) | (in millions) | ||||||||||
Balance as of December 31, 2014 | 12,984 | $ | 4.78 | |||||||||
Stock options exercised | (4,541 | ) | 0.48 | |||||||||
Balance as of December 31, 2015 | 8,443 | $ | 7.10 | 3.7 | $ | 824 | ||||||
Stock options vested and expected to vest as of December 31, 2015 | 8,441 | $ | 7.10 | 3.7 | $ | 824 | ||||||
Stock options exercisable as of December 31, 2015 | 6,250 | $ | 5.19 | 3.3 | $ | 622 |
(1) | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the official closing price of our Class A common stock, as reported on the NASDAQ Global Select Market, of $104.66 on December 31, 2015. |
Options Outstanding | Options Exercisable | ||||||||||||||
Exercise Price (Range) | Number of Shares | Weighted Average Remaining Contractual Term | Weighted Average Exercise Price | Number of Shares | Weighted Average Exercise Price | ||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||
$0.10 - 0.18 | 446 | 0.6 | $ | 0.11 | 446 | $ | 0.11 | ||||||||
0.29 - 0.33 | 1,182 | 1.5 | 0.32 | 1,182 | 0.32 | ||||||||||
1.85 | 968 | 3.0 | 1.85 | 968 | 1.85 | ||||||||||
2.95 | 1,147 | 3.6 | 2.95 | 1,147 | 2.95 | ||||||||||
10.39 | 3,500 | 4.6 | 10.39 | 2,334 | 10.39 | ||||||||||
15.00 | 1,200 | 4.8 | 15.00 | 173 | 15.00 | ||||||||||
8,443 | 3.7 | $ | 7.10 | 6,250 | $ | 5.19 |
Unvested RSUs(1) | ||||||
Number of Shares | Weighted Average Grant Date Fair Value | |||||
(in thousands) | ||||||
Unvested at December 31, 2014 | 138,055 | $ | 55.89 | |||
Granted | 31,507 | 82.15 | ||||
Vested | (46,434 | ) | 49.19 | |||
Forfeited | (6,719 | ) | 51.19 | |||
Unvested at December 31, 2015 | 116,409 | $ | 65.95 |
(1) | Unvested shares include inducement awards issued in connection with an acquisition in 2014 and are subject to the terms, restrictions, and conditions of separate non-plan RSU award agreements. |
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Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Interest expense | $ | (23 | ) | $ | (23 | ) | $ | (56 | ) | ||
Interest income | 52 | 27 | 19 | ||||||||
Foreign currency exchange losses, net | (66 | ) | (87 | ) | (14 | ) | |||||
Other | 6 | (1 | ) | 1 | |||||||
Interest and other income/(expense), net | $ | (31 | ) | $ | (84 | ) | $ | (50 | ) |
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Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Domestic | $ | 2,802 | $ | 4,918 | $ | 3,197 | |||||
Foreign | 3,392 | (8 | ) | (443 | ) | ||||||
Income before provision for income taxes | $ | 6,194 | $ | 4,910 | $ | 2,754 |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | 3,012 | $ | 1,999 | $ | 1,154 | |||||
State | 183 | 130 | 69 | ||||||||
Foreign | 123 | 96 | 68 | ||||||||
Total current tax expense | 3,318 | 2,225 | 1,291 | ||||||||
Deferred: | |||||||||||
Federal | (800 | ) | (240 | ) | (28 | ) | |||||
State | (17 | ) | (14 | ) | (7 | ) | |||||
Foreign | 5 | (1 | ) | (2 | ) | ||||||
Total deferred tax benefit | (812 | ) | (255 | ) | (37 | ) | |||||
Provision for income taxes | $ | 2,506 | $ | 1,970 | $ | 1,254 |
Year Ended December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
U.S. federal statutory income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of federal benefit | 2.0 | 1.4 | 1.6 | |||||
Research tax credits | (1.4 | ) | (1.1 | ) | (4.7 | ) | ||
Share-based compensation | 2.2 | 6.5 | 5.2 | |||||
Effect of non-U.S. operations | (0.9 | ) | (3.6 | ) | 6.8 | |||
Other | 3.5 | 1.9 | 1.6 | |||||
Effective tax rate | 40.4 | % | 40.1 | % | 45.5 | % |
December 31, | |||||||
2015 | 2014 | ||||||
Deferred tax assets: | |||||||
Net operating loss carryforward | $ | 476 | $ | 130 | |||
Tax credit carryforward | 297 | 190 | |||||
Share-based compensation | 529 | 225 | |||||
Accrued expenses and other liabilities | 239 | 136 | |||||
Other | 34 | 21 | |||||
Total deferred tax assets | 1,575 | 702 | |||||
Less: valuation allowance | (205 | ) | (101 | ) | |||
Deferred tax assets, net of valuation allowance | 1,370 | 601 | |||||
Deferred tax liabilities: | |||||||
Depreciation and amortization | (270 | ) | (101 | ) | |||
Purchased intangible assets | (934 | ) | (1,190 | ) | |||
Deferred foreign taxes | (15 | ) | — | ||||
Total deferred tax liabilities | (1,219 | ) | (1,291 | ) | |||
Net deferred tax assets (liabilities) | $ | 151 | $ | (690 | ) |
Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Gross unrecognized tax benefits-beginning of period | $ | 1,682 | $ | 1,316 | $ | 164 | |||||
Increases related to prior year tax positions | 322 | 24 | 425 | ||||||||
Decreases related to prior year tax positions | (52 | ) | — | (13 | ) | ||||||
Increases related to current year tax positions | 1,066 | 346 | 740 | ||||||||
Decreases related to settlements of prior year tax positions | (1 | ) | (4 | ) | — | ||||||
Gross unrecognized tax benefits-end of period | $ | 3,017 | $ | 1,682 | $ | 1,316 |
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Year Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Revenue: | |||||||||||
United States | $ | 8,513 | $ | 5,649 | $ | 3,613 | |||||
Rest of the world(1) | 9,415 | 6,817 | 4,259 | ||||||||
Total revenue | $ | 17,928 | $ | 12,466 | $ | 7,872 |
(1) | No individual country, other than disclosed above, exceeded 10% of our total revenue for any period presented |
December 31, | |||||||
2015 | 2014 | ||||||
Property and equipment, net: | |||||||
United States | $ | 4,498 | $ | 3,256 | |||
Sweden | 713 | 514 | |||||
Rest of the world | 476 | 197 | |||||
Total property and equipment, net | $ | 5,687 | $ | 3,967 |
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