Very truly yours,

/s/ Ajmere Dale

Ajmere Dale

Chief Accounting Officer

Highlights

We continued to drive strong revenue growth at scale: In the fourth quarter of 2018, total net revenue grew 51% year over year.

 

We launched Square Card to provide a new way for sellers to spend and manage their funds.		We launched In-App Payments SDK to allow developers and sellers to build consumer apps that use Square to process mobile payments.		We launched a mobile app and introduced employee benefits for Square Payroll, a full-service solution for small businesses, which are underserved by traditional payroll providers.

 

In August 2017, we invested $25 million for preferred shares of Eventbrite, which converted into common stock in connection with Eventbrite’s IPO in September 2018. We revalued this investment, which resulted in a gain of $37 million in the third quarter of 2018 and a loss of $17 million in the fourth quarter of 2018, affecting net income (loss) in each quarter. We will continue to carry it at fair market value, with changes in fair market value being recorded in other income or expense. A reconciliation of non-GAAP financial measures used in this letter to their nearest GAAP equivalents is provided at the end of this letter.

 

 

 

ON THE COVER

AND RIGHT

Quest Skinner is a mixed-

media artist, teacher,

and community activist

based in Washington, D.C.

She uses Square Card

to quickly reinvest funds

from her sales back into

her business.

February 27, 2019

 

15M+

CASH APP

MONTHLY ACTIVES

A monthly active Cash App customer has at least one cash inflow or outflow during a given month.

 

To Our Shareholders
We continued to drive strong revenue growth at scale. In the fourth quarter of 2018, total net revenue grew 51% year over year and 47% year over year excluding the acquisitions of Weebly and Zesty, which were acquired in the second quarter of 2018. Net loss was $28 million, compared to a net loss of $16 million in the fourth quarter of 2017. Excluding the loss of $17 million as a result of the mark-to-market valuation of our Eventbrite investment, net loss was $12 million. Adjusted EBITDA was $81 million in the fourth quarter of 2018, up 97% year over year, with margins improving compared to the fourth quarter of 2017. Net Billings grew 63% year over year in the fourth quarter of 2018 and and 53% year over year excluding the acquisitions of Weebly and Zesty.
We are driving innovation and adoption of new services by reinvesting in our ecosystem: In the fourth quarter of 2018, revenue from products launched in the last five years was 37% of total net revenue, up from 22% in the prior year period. Our investment activity is guided by our three ongoing focus areas: strengthening omnichannel commerce, expanding financial services, and growing current international markets. As we reinvest for growth, we are seeing strong momentum in our ecosystem: Notably, Cash App had more than 15 million monthly active customers in December 2018, which is more than double year over year. These three strategic areas represent long-term opportunities for Square to create meaningful value for our customers.
		Products launched since 2014 as a percentage of total net revenue includes revenue from acquisitions, excludes hardware revenue.

 

 

 

1. Based on a survey of 140 Square Card beta sellers conducted in January 2019.

 

We launched Square Card to provide a new way for sellers to spend and manage their funds.

Square Card is a free business debit card that enables sellers to spend their funds as soon as they make a sale. When a seller takes a payment, the proceeds immediately go into their Square stored balance, which can then be spent or withdrawn from an ATM. Square earns interchange fees when sellers make purchases with Square Card. By providing sellers with an accessible spending tool for their business, Square Card helps sellers separate business and personal expenses, making it easier to assess their business’s health and track expenses for tax purposes.

All businesses need to be nimble, and Square Card is designed to provide sellers with the ability to easily invest in the growth of their business. Access to funds is crucial, and Square Card does not charge a fee to the cardholder. And as part of the Square ecosystem, Square Card provides sellers with a consolidated view of their sales, operating expenses, and cash flow to better manage their business.

Square Card aligns with our focus on expanding access to financial services: Approximately 40% of Square Card beta sellers did not previously have a business debit card.¹ Square Card also encourages commerce within the Square community by offering the cardholder a 2.75% instant discount on purchases from other Square sellers. We were able to quickly build Square Card by using the technology and infrastructure behind Cash Card—our prepaid debit card for Cash App customers—demonstrating how our scale and growing ecosystem enable rapid innovation.

C.C. Nedrow, owner of Payton’s Photography, has used Square since its earliest days. As a sole proprietor, C.C. is responsible for all purchasing decisions and uses Square Card to buy supplies as soon as she needs them. She can keep her personal expenses separate and easily view her business purchases and sales in the same place. C.C. also uses Square Invoices, Square Marketing, and Square Capital to grow her business.

Square Card is a contactless (NFC-enabled) and chip card that sellers can use anywhere Mastercard^® is accepted. Because the card is a business prepaid debit card, Square earns interchange fees when sellers make purchases.

SELLER HIGHLIGHT

 

With Square Card, the money I make from a photo session is at my fingertips so I can purchase the supplies I need to run my business—whether that’s coffee at a client meeting, props, or a last-minute replacement lens. Tools available to sole proprietors like myself don’t always offer a simple way to separate business and personal expenses, so being able to do this all in one place with Square is amazing.”

C.C. Nedrow

Payton’s Photography

Montgomery, Illinois

 

 

1. Euromonitor, “How to survive in an omnichannel world: Best practices for omnichannel retailing,” October 2016.

In-App Payments SDK is Payment Card Industry Data Security Standard (PCI DSS) compliant.

An SDK is a software development kit. Developers use SDKs to create applications with advanced functionalities.

Larger Sellers Processing Payments with Square Through Multiple Channels

 

A larger seller generates more than $125,000 in annualized GPV.

 

 

We launched In-App Payments SDK to allow developers and sellers to build consumer apps that use Square to process mobile payments.

Mobile apps are an increasingly important channel for sellers: Nearly half of all internet retailing is expected to be transacted via mobile by 2020.¹ With just a few lines of code, developers can easily integrate a secure, elegant, and PCI-compliant checkout flow into their Android or iOS apps. With In-App Payments SDK, developers leave the complexity of payments to Square, so they can focus on building an engaging, easy-to-use app. For sellers, the SDK allows them to offer their buyers the ability to pay with credit and debit cards and digital wallets (such as Google Pay and Apple Pay), and to save their card information for future purchases.

The SDK further establishes our omnichannel payments capabilities, as Square now offers first-party products across in-person, web, and mobile app transactions. Providing sellers and developers with one platform to manage payments across channels minimizes the complexity of this critical task. Sellers receive a single, unified report of sales across all channels, providing a holistic view of their buyers’ behavior for better customer service and loyalty management.

Brushfire is a fast-growing provider of online ticketing and registration for churches and ministries worldwide. For a recent event, Brushfire integrated In-App Payments SDK into its client’s mobile app to create a new channel (in addition to in-person ticket booths) for customers to buy tickets for future events. After adding mobile ticketing capabilities, Brushfire increased ticket sales by more than 20% year over year.

Omnichannel commerce—the ability for sellers to serve buyers wherever they are—remains a top focus area for us as 30% of our larger sellers serve their customers via more than one channel on Square. In addition to SDKs, we have other solutions that enable sellers to engage their buyers: Three of our online payment products—Invoices, Virtual Terminal, and eCommerce API—contributed more than 10% of Square’s GPV in the fourth quarter. By helping sellers always make a sale, these products can help drive growth for both sellers and Square.

 

 

IN PERSON Square Reader SDK enables in-person payments with a Square Reader and a point-of-sale app on the seller’s device.		VS.		MOBILE In-App Payments SDK enables mobile payments with Square in an app on the consumer’s device.

 

Brushfire

After adding mobile ticketing capabilities,

Brushfire increased ticket sales by more

than 20% year over year.

SELLER HIGHLIGHT

 

Square’s In-App Payments SDK was painless and easy to use. We loved it from a technical standpoint: It allowed us to do something that was literally impossible for us to do before, and we were able to do it easier than ever. That’s all that matters to developers.”

Jorin Slaybaugh

Brushfire

Texas

 

 

 

 

1. U.S. Census Bureau, “Annual Survey of Entrepreneurs,” 2016.

2. U.S. Bureau of Labor Statistics, “Characteristics of minimum wage workers,” 2017.

Square Payroll as an Acquisition Channel

 

3. Based on a survey of 345 Square Payroll customers in October 2018.

4. According to the Employee Benefit Research Institute 2017 Health and Workplace Benefits Survey, 83% of employees said that health insurance was very important or extremely important when deciding to choose or stay at a job, and 73% said the same about retirement benefits.

 

We launched a mobile app and introduced employee benefits for Square Payroll, a full-service solution for small businesses, which are underserved by traditional payroll providers.

Traditional payroll tools can be expensive and cumbersome, and are designed for enterprise businesses with salaried employees, neglecting the needs of a majority of U.S. businesses: Approximately 90% of businesses have 20 or fewer employees,¹ and three out of five employees are hourly workers.² As a result, small business owners often manage payroll manually, which can be error-prone and time consuming.

Square Payroll makes it easy for employers to pay their teams by handling tasks from overtime calculations to tax payments and filings. Integration with the Square ecosystem enables seamless importing of timecards and tips. With the new Square Payroll mobile app, sellers can manage their business from anywhere. And with the new Square Team app, employees can view their pay stubs, clock in and out of shifts, and manage their preferences, such as whether they’d like to be paid via Cash App. Additionally, Square Payroll has been a valuable acquisition channel: Approximately one-third of Square Payroll sellers that joined in 2018 were new to Square.

When Mimi Washington opened Seya CrossFit & Wellness, she quickly recognized the need for an easy way to pay her fitness instructors. Square Payroll was the ideal solution, allowing her to add and pay her 20 contractors in minutes. Within a year, she expanded the gym into a wellness center with a yoga studio and juice bar, and is now using Square Register and Square Point of Sale to serve her growing fitness community.

In the fourth quarter we added employee benefits, which was the most requested feature in a recent survey of businesses using Square Payroll.³ Benefit offerings typically aren’t accessible to small businesses, making this feature a key employee retention tool that helps Square Payroll sellers compete with larger employers for talented employees.⁴ With Square Payroll, employers can select the specific benefits that fit their business and their budget, including health insurance, retirement savings, pre-tax spending, and workers’ compensation.

 

 

 

SELLER HIGHLIGHT

 

I go in, click a button, and they get paid. It’s the quickest way I’ve done payroll in my life. If only everything was this easy. I can’t find enough good things to say about Square Payroll. I love it!”

Mimi Washington

Seya CrossFit & Wellness

Baltimore, MD

 

 

 

1. Acquisitions were completed in the second quarter of 2018 and thus did not contribute revenue in 2017.

Excluding $52 million of bitcoin revenue, total net revenue in the fourth quarter was $880 million, up 43% year over year. Excluding $167 million of bitcoin revenue, total net revenue for the full year of 2018 was $3.1 billion, up 41% year over year.

Transaction-based profit is calculated by subtracting transaction-based costs from transaction-based revenue.

2. We add back the impact of the write-down to acquired deferred revenue related to purchase accounting to total net subscription and services-based revenue. We add back this deferred revenue that was written down since we believe it is correlated with ordinary and ongoing operations of the acquired company and facilitates analysis of revenue growth and business trends.

Financial Discussion

 

 

 

 

 

 

 

3. Apple Top U.S. Apps of 2018.

4. Represents growth in dollars of originations during the quarter.

 

 

 

A cohort represents the new sellers onboarded to Square during a given period.

 

 

1. The acquisition of Weebly was completed in the second quarter of 2018 and thus did not contribute expenses in 2017.

 

 

 

On May 25, 2018, we completed an offering of $862.5 million in convertible senior notes. The convertible senior notes mature in 2023 with a coupon of 0.50%.

On March 6, 2017, we completed an offering of $440 million in convertible senior notes. The convertible senior notes mature in 2022 with a coupon of 0.375%.

 

 

Given the significant market opportunity ahead of us, we will continue to be purposeful as we reinvest in our business to drive long-term growth. Our guidance for the full year of 2019 reflects both investment and growing profitability.

As a reminder, the first quarter is typically our slowest in terms of sequential revenue growth due to seasonality. Additionally, our operating expense base will increase in the first quarter as we invest in growth opportunities.

Please note that our guidance for net income (loss) per share for the full year and first quarter of 2019 reflects a share price of approximately $28 for Eventbrite based on its closing price on December 31, 2018. Therefore, this guidance assumes no change in the mark-to-market valuation of our investment in Eventbrite. In a given quarter, a change in Eventbrite’s share price of $3 results in a change to our net income (loss) per share of approximately $0.01.

We have not reconciled Adjusted EBITDA and Adjusted EPS guidance to their GAAP equivalents as a result of the uncertainty regarding, and the potential variability of, reconciling items such as share-based compensation expense and weighted-average fully diluted shares outstanding. Accordingly, a reconciliation of these non-GAAP guidance metrics to their corresponding GAAP equivalents is not available without unreasonable effort. However, it is important to note that material changes to these reconciling items could have a significant effect on our Adjusted EBITDA and Adjusted EPS guidance and future GAAP results. We have provided a reconciliation of other GAAP to non-GAAP metrics in tables at the end of this letter.

 

MEDIA CONTACT

press@squareup.com

INVESTOR RELATIONS CONTACT

ir@squareup.com

Earnings

Webcast

Square (NYSE:SQ) will host a conference call and earnings webcast at 2:00 p.m. Pacific time/5:00 p.m. Eastern time today, February 27, 2019, to discuss these financial results. The domestic dial-in for the call is (833) 235-2654. The Conference ID is 5298445. To listen to a live audio webcast, please visit Square’s Investor Relations website at square.com/investors. A replay will be available on the same website following the call.

We will release financial results for the first quarter of 2019 on May 1, 2019, after the market closes, and will also host a conference call and earnings webcast at 2:00 p.m. Pacific time/5:00 p.m. Eastern time on the same day to discuss those financial results.

 

Jack Dorsey		Amrita Ahuja
CEO		CFO

 

Consolidated Statements

of Operations

UNAUDITED

In thousands, except per share data

 

		THREE MONTHS ENDED								YEAR ENDED
		Dec 31, 2018				Dec 31, 2017				Dec 31, 2018				Dec 31, 2017
Revenue:
Transaction-based revenue		$	667,802			$	524,612			$	2,471,451			$	1,920,174
Subscription and services-based revenue			194,117				79,402				591,706				252,664
Hardware revenue			18,166				12,021				68,503				41,415
Bitcoin revenue			52,443				—				166,517				—
Total net revenue			932,528				616,035				3,298,177				2,214,253
Cost of revenue:
Transaction-based costs			420,846				333,377				1,558,562				1,230,290
Subscription and services-based costs			52,654				24,559				169,884				75,720
Hardware costs			25,647				16,783				94,114				62,393
Bitcoin costs			51,951				—				164,827				—
Amortization of acquired technology			1,376				1,486				7,090				6,544
Total cost of revenue			552,474				376,205				1,994,477				1,374,947
Gross profit			380,054				239,830				1,303,700				839,306
Operating expenses:
Product development			141,811				92,633				497,479				321,888
Sales and marketing			119,305				76,821				411,151				253,170
General and administrative			95,445				66,318				339,245				250,553
Transaction, loan and advance losses			24,474				16,833				88,077				67,018
Amortization of acquired customer assets			2,127				234				4,362				883
Total operating expenses			383,162				252,839				1,340,314				893,512
Operating loss			(3,108)				(13,009)				(36,614)				(54,206)
Interest expense, net			5,176				2,483				17,982				10,053
Other income, net			19,439				356				(18,469)				(1,595)
Loss before income tax			(27,723)				(15,848)				(36,127)				(62,664)
Provision (benefit) for income taxes			481				(185)				2,326				149
Net loss		$	(28,204)			$	(15,663)			$	(38,453)			$	(62,813)
Net loss per share:
Basic		$	(0.07)			$	(0.04)			$	(0.09)			$	(0.17)
Diluted		$	(0.07)			$	(0.04)			$	(0.09)			$	(0.17)
Weighted-average shares used to compute net loss per share
Basic			413,984				390,030				405,731				379,344
Diluted			413,984				390,030				405,731				379,344

 

Consolidated Balance Sheets

UNAUDITED

In thousands, except share and per share data

 

		Dec 31, 2018				Dec 31, 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, net of current portion			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
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 deficit			(885,774)				(842,735)
Accumulated other comprehensive loss			(6,053)				(1,318)
Total stockholders’ equity			1,120,501				786,333
Total liabilities and stockholders’ equity		$	3,281,023			$	2,187,270

 

Consolidated Statements of Cash Flows

UNAUDITED

In thousands

 

		YEAR ENDED
Cash Flows from Operating Activities		Dec 31, 2018				Dec 31, 2017
Net loss		$	(38,453)			$	(62,813)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			60,961				37,279
Non-cash interest and other expense			31,257				14,421
Loss on extinguishment of long-term debt			5,047				—
Share-based compensation			216,881				155,836
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
Change in deferred income taxes			(646)				(1,385)
Changes in operating assets and liabilities:
Settlements receivable			245,795				(305,831)
Customer funds			(131,004)				(59,468)
Purchase of loans held for sale			(1,609,611)				(1,184,630)
Sales and principal payments of loans held for sale			1,579,834				1,145,314
Other current assets			(77,405)				(26,119)
Other non-current assets			(6,641)				(3,274)
Customers payable			15,597				301,778
Settlements payable			(60,651)				63,637
Charge-offs to accrued transaction losses			(58,192)				(46,148)
Accrued expenses			7,190				12,207
Other current liabilities			35,294				8,198
Other non-current liabilities			13,938				11,691
Net cash provided by operating activities			295,080				127,711
Cash Flows from Investing Activities
Purchase of marketable debt securities			(1,000,346)				(544,910)
Proceeds from maturities of marketable debt securities			197,454				168,224
Proceeds from sale of marketable debt securities			171,992				89,087
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)
Purchase of equity investment			—				(25,000)
Purchase of intangible assets			(1,584)				—
Business combinations, net of cash acquired			(112,399)				(1,915)
Net cash used in investing activities:			(905,848)				(340,611)
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)				—
Settlement of deferred purchase consideration			(848)				—
Payment for termination of Starbucks warrant			—				(54,808)
Principal payments on capital lease obligation			(3,941)				(1,439)
Proceeds from the exercise of stock options and purchases under the employee stock purchase plan, net			133,850				162,504
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
Effect of foreign exchange rate on cash and cash equivalents			(7,221)				4,303
Net increase (decrease) in cash, cash equivalents and restricted cash			(102,234)				246,336
Cash, cash equivalents and restricted cash, beginning of period			735,081				488,745
Cash, cash equivalents and restricted cash, end of period		$	632,847			$	735,081

 

 

Adjusted EBITDA

UNAUDITED

In thousands

 

		THREE MONTHS ENDED								YEAR ENDED
		Dec 31, 2018				Dec 31, 2017				Dec 31, 2018				Dec 31, 2017
Net loss		$	(28,204)			$	(15,663)			$	(38,453)			$	(62,813)
Share-based compensation expense			59,025				44,525				216,881				155,836
Depreciation and amortization			22,638				9,632				60,961				37,279
Interest expense, net			5,176				2,483				17,982				10,053
Other (income) expense, net			19,439				356				(18,469)				(1,595)
Provision (benefit) for income taxes			481				(185)				2,326				149
Loss (gain) on disposal of property and equipment			(1,005)				36				(224)				100
Acquisition-related costs			—				—				4,708				—
Acquired deferred revenue adjustment			4,521				—				12,853				—
Acquired deferred costs adjustment			(761)				—				(2,042)				—
Adjusted EBITDA		$	81,310			$	41,184			$	256,523			$	139,009
Adjusted Net Income and Adjusted EPS UNAUDITED In thousands, except per share data
		THREE MONTHS ENDED								YEAR ENDED
		Dec 31, 2018				Dec 31, 2017				Dec 31, 2018				Dec 31, 2017
Net loss		$	(28,204)			$	(15,663)			$	(38,453)			$	(62,813)
Share-based compensation expense			59,025				44,525				216,881				155,836
Amortization of intangible assets			4,029				1,747				13,104				7,615
Amortization of debt discount and issuance costs			10,005				4,335				32,855				14,223
Loss (gain) on revaluation of equity investment			16,566				—				(20,342)				—
Loss on extinguishment of long-term debt			3,403				—				5,028				—
Loss (gain) on disposal of property and equipment			(1,005)				36				(224)				100
Acquisition-related costs			—				—				4,708				—
Acquired deferred revenue adjustment			4,521				—				12,853				—
Acquired deferred costs adjustment			(761)				—				(2,042)				—
Adjusted Net Income		$	67,579			$	34,980			$	224,368			$	114,961
Cash interest expense on convertible senior notes			1,292				—				1,292				—
Adjusted Net Income - diluted		$	68,871				34,980				225,660				114,961
Adjusted Net Income Per Share:
Basic		$	0.16			$	0.09			$	0.55			$	0.30
Diluted		$	0.14			$	0.08			$	0.47			$	0.27
Weighted-average shares used to compute
Adjusted Net Income Per Share:
Basic			413,984				390,030				405,731				379,344
Diluted			488,177				450,703				478,895				426,519

 

    

Non-GAAP Operating Expenses

UNAUDITED

In thousands

 

		THREE MONTHS ENDED								YEAR ENDED
		Dec 31, 2018				Dec 31, 2017				Dec 31, 2018				Dec 31, 2017
Operating expenses		$	(383,162)			$	(252,839)			$	(1,340,314)			$	(893,512)
Share-based compensation			59,007				44,495				216,784				155,759
Depreciation and amortization			20,754				8,115				52,791				30,544
Loss (gain) on disposal of property and equipment			(1,005)				36				(224)				100
Acquisition-related costs			—				—				4,708				—
Non-GAAP operating expenses		$	(304,406)			$	(200,193)			$	(1,066,255)			$	(707,109)
Product development		$	(141,811)			$	(92,633)			$	(497,479)			$	(321,888)
Share-based compensation			40,788				28,564				144,601				98,310
Depreciation and amortization			14,029				5,221				33,307				16,955
Gain on disposal of property and equipment			(986)				—				(274)				—
Non-GAAP product development		$	(87,980)			$	(58,848)			$	(319,845)			$	(206,623)
Sales and marketing		$	(119,305)			$	(76,821)			$	(411,151)			$	(253,170)
Share-based compensation			6,094				4,699				22,797				17,568
Depreciation and amortization			1,238				590				4,407				1,415
Loss on disposal of property and equipment			68				36				239				158
Non-GAAP sales and marketing		$	(111,905)			$	(71,496)			$	(383,708)			$	(234,029)
General and administrative		$	(95,445)			$	(66,318)			$	(339,245)			$	(250,553)
Share-based compensation			12,125				11,232				49,386				39,881
Depreciation and amortization			3,360				2,070				10,715				11,291
Gain on disposal of property and equipment			(87)				—				(189)				(58)
Acquisition-related costs			—				—				4,708				—
Non-GAAP general and administrative		$	(80,047)			$	(53,016)			$	(274,625)			$	(199,439)
Depreciation and Amortization by Function UNAUDITED In thousands
		THREE MONTHS ENDED								YEAR ENDED
		Dec 31, 2018				Dec 31, 2017				Dec 31, 2018				Dec 31, 2017
Cost of revenue		$	1,884			$	1,517			$	8,170			$	6,735
Product Development			14,029				5,221				33,307				16,955
Sales and Marketing			1,238				590				4,407				1,415
General and Administrative			3,360				2,070				10,715				11,291
Amortization of acquired customer assets			2,127				234				4,362				883
Total depreciation and amortization		$	22,638			$	9,632			$	60,961			$	37,279