10-Q
--12-31falseQ300018222502010-06-301http://fasb.org/us-gaap/2023#PrepaidExpenseAndOtherAssetsCurrenthttp://fasb.org/us-gaap/2023#PrepaidExpenseAndOtherAssetsCurrenthttp://fasb.org/us-gaap/2023#PrepaidExpenseAndOtherAssetsCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#PrepaidExpenseAndOtherAssetsCurrenthttp://fasb.org/us-gaap/2023#PrepaidExpenseAndOtherAssetsCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrent0001822250us-gaap:RetainedEarningsMember2023-01-012023-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMembersrt:EuropeMember2023-07-012023-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembersrt:SouthAmericaMemberwish:CoreMarketplaceMember2022-07-012022-09-300001822250us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250us-gaap:RetainedEarningsMember2023-07-012023-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembersrt:SouthAmericaMemberwish:CoreMarketplaceMember2022-01-012022-09-300001822250wish:CoreMarketplaceMember2022-07-012022-09-300001822250us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-3000018222502023-07-012023-09-300001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001822250wish:CoreMarketplaceMember2022-01-012022-09-300001822250us-gaap:RestrictedStockUnitsRSUMember2023-09-300001822250us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2023-09-300001822250us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001822250us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001822250us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-3000018222502023-08-310001822250us-gaap:CommonStockMember2022-07-012022-09-3000018222502022-09-300001822250us-gaap:CommonStockMember2023-09-300001822250us-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2022-07-012022-09-300001822250wish:CostOfRevenueMember2022-07-012022-09-300001822250wish:ColocationAndCloudServicesArrangementMember2023-09-300001822250us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001822250us-gaap:AdditionalPaidInCapitalMember2021-12-310001822250wish:MarketplaceMember2022-07-012022-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembersrt:SouthAmericaMemberwish:CoreMarketplaceMember2023-01-012023-09-300001822250wish:OtherCountriesMember2022-12-310001822250wish:MrJunYanMemberwish:TwoThousandTwentyEmployeeStockPurchasePlanMember2023-02-012023-02-280001822250us-gaap:EmployeeStockMember2023-01-012023-09-300001822250us-gaap:RetainedEarningsMember2022-07-012022-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2023-01-012023-09-300001822250us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2022-12-310001822250country:CN2023-09-300001822250us-gaap:RetainedEarningsMember2022-01-012022-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:OtherCountriesMemberwish:CoreMarketplaceMember2023-07-012023-09-3000018222502023-09-300001822250us-gaap:RestrictedStockUnitsRSUMember2022-12-310001822250us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001822250us-gaap:CommonStockMember2022-01-012022-09-3000018222502022-01-012022-12-310001822250us-gaap:CommonStockMember2022-12-310001822250us-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250wish:ProductBoostMember2022-01-012022-09-300001822250wish:CoreMarketplaceMembersrt:EuropeMember2022-07-012022-09-300001822250us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-3000018222502022-10-012022-12-310001822250us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250us-gaap:CommonStockMember2021-12-310001822250us-gaap:CommonStockMember2023-01-012023-09-300001822250wish:CoreMarketplaceMembersrt:EuropeMember2023-01-012023-09-300001822250us-gaap:SellingAndMarketingExpenseMember2023-01-012023-09-300001822250us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001822250wish:MarketplaceMember2023-07-012023-09-300001822250wish:LogisticsMember2023-07-012023-09-300001822250wish:PaymentServiceProvidersTwoMemberus-gaap:CreditConcentrationRiskMemberwish:FundsReceivableMember2022-01-012022-12-310001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembersrt:SouthAmericaMemberwish:CoreMarketplaceMember2023-07-012023-09-300001822250us-gaap:RetainedEarningsMember2023-09-300001822250srt:NorthAmericaMemberwish:CoreMarketplaceMember2023-07-012023-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:OtherCountriesMemberwish:CoreMarketplaceMember2022-01-012022-09-300001822250us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-3100018222502023-08-012023-08-310001822250srt:NorthAmericaMemberwish:CoreMarketplaceMember2022-07-012022-09-300001822250us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001822250us-gaap:AdditionalPaidInCapitalMember2023-06-300001822250us-gaap:AdditionalPaidInCapitalMember2022-06-3000018222502022-06-300001822250us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250us-gaap:CommonStockMember2022-06-300001822250us-gaap:RetainedEarningsMember2022-06-300001822250us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001822250wish:SeniorSecuredDebtMemberwish:LiborMemberus-gaap:RevolvingCreditFacilityMember2020-11-012020-11-3000018222502022-12-310001822250us-gaap:CommonStockMember2022-09-300001822250us-gaap:RetainedEarningsMember2022-12-310001822250wish:CostOfRevenueMember2022-01-012022-09-300001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001822250wish:SeniorSecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2020-11-300001822250us-gaap:AdditionalPaidInCapitalMember2023-09-300001822250us-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250wish:LogisticsMember2023-01-012023-09-300001822250us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-3000018222502021-12-310001822250us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250srt:SouthAmericaMemberwish:CoreMarketplaceMember2022-01-012022-09-300001822250wish:OtherCountriesMemberwish:CoreMarketplaceMember2023-07-012023-09-300001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001822250us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001822250wish:CoreMarketplaceMembersrt:EuropeMember2022-01-012022-09-300001822250wish:ProductBoostMember2023-07-012023-09-300001822250us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300001822250us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250country:CN2022-12-310001822250us-gaap:CommonStockMember2023-06-300001822250srt:SouthAmericaMemberwish:CoreMarketplaceMember2023-07-012023-09-300001822250wish:OtherCountriesMemberwish:CoreMarketplaceMember2022-01-012022-09-300001822250wish:CoreMarketplaceMember2023-01-012023-09-300001822250wish:CoreMarketplaceMembercountry:US2022-07-012022-09-300001822250us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250srt:SouthAmericaMemberwish:CoreMarketplaceMember2022-07-012022-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:OtherCountriesMemberwish:CoreMarketplaceMember2023-01-012023-09-300001822250us-gaap:RevolvingCreditFacilityMember2023-01-012023-09-300001822250us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-3100018222502023-04-112023-04-110001822250us-gaap:RetainedEarningsMember2022-09-300001822250wish:LogisticsMember2022-07-012022-09-300001822250us-gaap:CommonStockMember2023-07-012023-09-300001822250wish:OtherCountriesMember2023-09-300001822250us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001822250us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001822250wish:CoreMarketplaceMembercountry:US2022-01-012022-09-300001822250wish:ProductBoostMember2023-01-012023-09-3000018222502023-01-012023-09-300001822250us-gaap:AdditionalPaidInCapitalMember2022-09-300001822250us-gaap:RestrictedStockUnitsRSUMemberwish:MrJunYanMemberwish:TwoThousandTwentyEmployeeStockPurchasePlanMember2023-02-012023-02-280001822250wish:ColocationAndCloudServicesArrangementMember2022-09-012022-09-300001822250us-gaap:CreditConcentrationRiskMemberwish:PaymentServiceProvidersOneMemberwish:FundsReceivableMember2023-01-012023-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMembersrt:EuropeMember2023-01-012023-09-300001822250us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001822250wish:ProductBoostMember2022-07-012022-09-300001822250us-gaap:RevolvingCreditFacilityMember2023-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2022-07-012022-09-300001822250us-gaap:EmployeeStockOptionMember2023-09-300001822250us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-3000018222502023-04-110001822250wish:SeniorSecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2020-11-012020-11-300001822250wish:EmployeeStockPurchasePlanMemberus-gaap:CommonStockMember2023-01-012023-09-300001822250us-gaap:EmployeeStockMember2022-01-012022-09-300001822250us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2023-01-012023-09-300001822250us-gaap:RetainedEarningsMember2021-12-310001822250wish:EmployeeStockPurchasePlanMember2023-01-012023-09-300001822250wish:OtherCountriesMemberwish:CoreMarketplaceMember2023-01-012023-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMembersrt:EuropeMember2022-07-012022-09-300001822250country:US2022-12-310001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-3000018222502023-06-300001822250wish:CoreMarketplaceMembersrt:EuropeMember2023-07-012023-09-300001822250srt:NorthAmericaMemberwish:CoreMarketplaceMember2022-01-012022-09-300001822250us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250wish:CostOfRevenueMember2023-01-012023-09-300001822250us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001822250wish:MarketplaceMember2023-01-012023-09-300001822250wish:OtherCountriesMemberwish:CoreMarketplaceMember2022-07-012022-09-300001822250us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2023-07-012023-09-300001822250wish:CoreMarketplaceMembercountry:US2023-07-012023-09-300001822250us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001822250wish:EmployeeStockPurchasePlanMembersrt:MaximumMember2023-01-012023-09-300001822250us-gaap:GeographicConcentrationRiskMembersrt:NorthAmericaMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2022-01-012022-09-300001822250srt:NorthAmericaMemberwish:CoreMarketplaceMember2023-01-012023-09-300001822250wish:CostOfRevenueMember2023-07-012023-09-300001822250us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250wish:LogisticsMember2022-01-012022-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2022-01-012022-09-3000018222502023-01-012023-01-310001822250us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-3000018222502023-10-310001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMembersrt:EuropeMember2022-01-012022-09-300001822250us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001822250wish:MarketplaceMember2022-01-012022-09-300001822250us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001822250wish:CoreMarketplaceMembercountry:US2023-01-012023-09-300001822250wish:PaymentServiceProvidersTwoMemberus-gaap:CreditConcentrationRiskMemberwish:FundsReceivableMember2023-01-012023-09-300001822250us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-3000018222502022-07-012022-09-300001822250wish:EmployeeStockPurchasePlanMemberus-gaap:CommonStockMember2023-09-300001822250us-gaap:NondesignatedMember2022-12-310001822250country:US2023-09-300001822250srt:SouthAmericaMemberwish:CoreMarketplaceMember2023-01-012023-09-300001822250us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-3000018222502022-01-012022-09-300001822250us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-12-310001822250us-gaap:RetainedEarningsMember2023-06-300001822250us-gaap:SellingAndMarketingExpenseMember2023-07-012023-09-300001822250us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001822250wish:SeniorSecuredDebtMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2020-11-012020-11-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:OtherCountriesMemberwish:CoreMarketplaceMember2022-07-012022-09-300001822250us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberwish:CoreMarketplaceMember2023-07-012023-09-300001822250wish:CoreMarketplaceMember2023-07-012023-09-300001822250us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2023-09-300001822250us-gaap:CreditConcentrationRiskMemberwish:PaymentServiceProvidersOneMemberwish:FundsReceivableMember2022-01-012022-12-310001822250wish:MrJunYanMemberus-gaap:CommonClassAMemberwish:TwoThousandTwentyEmployeeStockPurchasePlanMember2023-02-012023-02-280001822250wish:SeniorSecuredDebtMemberus-gaap:RevolvingCreditFacilityMembersrt:MaximumMember2020-11-300001822250us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001822250us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001822250us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001822250us-gaap:AdditionalPaidInCapitalMember2022-12-31wish:Segmentxbrli:pureiso4217:USDxbrli:sharesxbrli:shareswish:Casewish:Employeeiso4217:USD

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ______

Commission File Number: 001-39775

 

ContextLogic Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

27-2930953

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

One Sansome Street 33rd Floor

San Francisco, CA

94104

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (415) 432-7323

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value

 

WISH

 

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of October 31, 2023, the number of shares of the registrant’s Class A common stock outstanding was 24,009 thousand.

 

 


 

Table of Contents

 

Page

 

Special Note Regarding Forward-Looking Statements

ii

PART I.

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations

2

Condensed Consolidated Statements of Comprehensive Loss

3

 

Condensed Consolidated Statements of Stockholders’ Equity

4

Condensed Consolidated Statements of Cash Flows

6

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

31

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

34

Item 1A.

Risk Factors

34

Item 6.

Exhibits

35

Signatures

36

 

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), which statements involve substantial risks and uncertainties. Forward-looking statements include all statements that are not historical facts such as information concerning our evaluation and pursuit of strategic alternatives, our possible or assumed future results of operations and expenses, new or planned features or services, management strategies and plans, competitive position, business environment and potential growth strategies and opportunities. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “foresees,” “forecasts,” “intends,” “goals,” “may,” “might,” “outlook,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Those risks include those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q, if any, as well as in our condensed consolidated financial statements, related notes, and the other information appearing elsewhere in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K for the year ended December 31, 2022 and our other filings with the Securities and Exchange Commission (“SEC”). The inclusion of forward-looking information should not be regarded as a representation by us, our management or any other person that the future plans, estimates, or expectations contemplated by us will be achieved. Given these uncertainties, you should not place undue reliance on any forward-looking statements in this Quarterly Report on Form 10-Q.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject, including, but not limited to, statements regarding future financial performance; implementation and execution of business strategies, including turnaround efforts, restructuring plans, and reductions in force; implementation and execution of marketing and promotional strategies, including promotional events and rebrand efforts; the extent and impact of our announced share repurchase program; our future liquidity and operating expenditures; the impact of the 1-to-30 reverse stock split; compliance with Nasdaq continued listing requirements; financial condition and results of operations; our future market position, technological advances, and competitive changes in the marketplace; expected consumer behavior; the outcome of ongoing litigation; our expected tax rate; the effect of changes in or the application of new or revised tax laws; the effect of new accounting pronouncements; and other characterizations of future events or circumstances. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the SEC as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

 

ii


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

CONTEXTLOGIC INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

($ in millions, shares in thousands, except par value)

(Unaudited)

 

 

 

As of September 30,

 

 

As of December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

303

 

 

$

506

 

Marketable securities

 

 

142

 

 

 

213

 

Funds receivable

 

 

6

 

 

 

14

 

Prepaid expenses and other current assets

 

 

27

 

 

 

44

 

Total current assets

 

 

478

 

 

 

777

 

Property and equipment, net

 

 

4

 

 

 

9

 

Right-of-use assets

 

 

6

 

 

 

9

 

Other assets

 

 

4

 

 

 

4

 

Total assets

 

$

492

 

 

$

799

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

35

 

 

$

53

 

Merchants payable

 

 

77

 

 

 

120

 

Refunds liability

 

 

2

 

 

 

6

 

Accrued liabilities

 

 

95

 

 

 

130

 

Total current liabilities

 

 

209

 

 

 

309

 

Lease liabilities, non-current

 

 

7

 

 

 

13

 

Other liabilities

 

 

4

 

 

 

 

Total liabilities

 

 

220

 

 

 

322

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value: 100,000 shares authorized as of September 30, 2023 and December 31, 2022; No shares issued and outstanding as of September 30, 2023 and December 31, 2022

 

 

 

 

 

 

Common stock, $0.0001 par value: 3,000,000 shares authorized as of September 30, 2023 and December 31, 2022; 24,007 and 23,164 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

3,460

 

 

 

3,411

 

Accumulated other comprehensive loss

 

 

(10

)

 

 

(5

)

Accumulated deficit

 

 

(3,178

)

 

 

(2,929

)

Total stockholders’ equity

 

 

272

 

 

 

477

 

Total liabilities and stockholders’ equity

 

$

492

 

 

$

799

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

CONTEXTLOGIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in millions, shares in thousands, except per share data)

(Unaudited)

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

60

 

 

$

125

 

 

$

234

 

 

$

448

 

Cost of revenue

 

 

46

 

 

 

91

 

 

 

184

 

 

 

308

 

Gross profit

 

 

14

 

 

 

34

 

 

 

50

 

 

 

140

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

35

 

 

 

80

 

 

 

111

 

 

 

181

 

Product development

 

 

38

 

 

 

42

 

 

 

127

 

 

 

154

 

General and administrative

 

 

21

 

 

 

40

 

 

 

68

 

 

 

86

 

Total operating expenses

 

 

94

 

 

 

162

 

 

 

306

 

 

 

421

 

Loss from operations

 

 

(80

)

 

 

(128

)

 

 

(256

)

 

 

(281

)

Other income, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

3

 

 

 

6

 

 

 

13

 

 

 

10

 

Loss before provision for income taxes

 

 

(77

)

 

 

(122

)

 

 

(243

)

 

 

(271

)

Provision for income taxes

 

 

3

 

 

 

2

 

 

 

6

 

 

 

3

 

Net loss

 

 

(80

)

 

 

(124

)

 

 

(249

)

 

 

(274

)

Net loss per share, basic and diluted

 

$

(3.35

)

 

$

(5.53

)

 

$

(10.55

)

 

$

(12.32

)

Weighted-average shares used in computing net loss per share, basic and diluted

 

 

23,897

 

 

 

22,435

 

 

 

23,601

 

 

 

22,243

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

CONTEXTLOGIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in millions)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net loss

 

$

(80

)

 

$

(124

)

 

$

(249

)

 

$

(274

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) on derivatives and marketable securities, net of tax

 

 

3

 

 

 

 

 

 

(1

)

 

 

(5

)

Foreign currency translation adjustment

 

 

 

 

 

(5

)

 

 

(4

)

 

 

(9

)

Comprehensive loss

 

$

(77

)

 

$

(129

)

 

$

(254

)

 

$

(288

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


 

CONTEXTLOGIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

($ in millions, shares in thousands)

(Unaudited)

 

 

Three Months Ended September 30, 2023

 

 

Common Stock

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Other
Comprehensive
Loss

 

 

Accumulated Deficit

 

 

Total Stockholders' Equity

 

Balances as of June 30, 2023

 

23,781

 

 

$

 

 

$

3,448

 

 

$

(13

)

 

$

(3,098

)

 

$

337

 

Fractional shares issued due to reverse stock split

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon settlement of restricted stock units

 

362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld related to net share settlement

 

(136

)

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

(1

)

Issuance of common stock through ESPP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

13

 

 

 

 

 

 

 

 

 

13

 

Other comprehensive loss, net

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(80

)

 

 

(80

)

Balances as of September 30, 2023

 

24,007

 

 

$

 

 

$

3,460

 

 

$

(10

)

 

$

(3,178

)

 

$

272

 

 

 

Nine Months Ended September 30, 2023

 

 

Common Stock

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Other
Comprehensive
Loss

 

 

Accumulated Deficit

 

 

Total Stockholders' Equity

 

Balances as of December 31, 2022

 

23,164

 

 

$

 

 

$

3,411

 

 

$

(5

)

 

$

(2,929

)

 

$

477

 

Fractional shares issued due to reverse stock split

 

201

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon settlement of restricted stock units

 

993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld related to net share settlement

 

(380

)

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

(5

)

Issuance of common stock through ESPP

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

54

 

 

 

 

 

 

 

 

 

54

 

Other comprehensive loss, net

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(249

)

 

 

(249

)

Balances as of September 30, 2023

 

24,007

 

 

$

 

 

$

3,460

 

 

$

(10

)

 

$

(3,178

)

 

$

272

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

CONTEXTLOGIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

($ in millions, shares in thousands)

(Unaudited)

 

 

Three Months Ended September 30, 2022

 

 

Common Stock

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Other
Comprehensive
Loss

 

 

Accumulated Deficit

 

 

Total Stockholders' Equity

 

Balances as of June 30, 2022

 

22,336

 

 

$

 

 

$

3,383

 

 

$

(6

)

 

$

(2,695

)

 

$

682

 

Issuance of common stock upon settlement of restricted stock units

 

253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld related to net share settlement

 

(103

)

 

 

 

 

 

(5

)

 

 

 

 

 

 

 

 

(5

)

Option exercises, net

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

26

 

 

 

 

 

 

 

 

 

26

 

Other comprehensive loss, net

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

 

 

 

(5

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(124

)

 

 

(124

)

Balances as of September 30, 2022

 

22,491

 

 

$

 

 

$

3,404

 

 

$

(11

)

 

$

(2,819

)

 

$

574

 

 

 

Nine Months Ended September 30, 2022

 

 

Common Stock

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Other
Comprehensive
Income (Loss)

 

 

Accumulated Deficit

 

 

Total Stockholders' Equity

 

Balances as of December 31, 2021

 

21,949

 

 

$

 

 

$

3,360

 

 

$

3

 

 

$

(2,545

)

 

$

818

 

Issuance of common stock upon exercise of options for cash

 

43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon settlement of restricted stock units

 

683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld related to net share settlement

 

(207

)

 

 

 

 

 

(10

)

 

 

 

 

 

 

 

 

(10

)

Issuance of common stock through ESPP

 

23

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

Stock-based compensation

 

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

 

53

 

Other comprehensive loss, net

 

 

 

 

 

 

 

 

 

 

(14

)

 

 

 

 

 

(14

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(274

)

 

 

(274

)

Balances as of September 30, 2022

 

22,491

 

 

$

 

 

$

3,404

 

 

$

(11

)

 

$

(2,819

)

 

$

574

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

CONTEXTLOGIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)

 

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(249

)

 

$

(274

)

Adjustments to reconcile net loss to net cash provided by used in operating
activities:

 

 

 

 

 

 

Noncash inventory write downs

 

 

 

 

 

3

 

Depreciation and amortization

 

 

3

 

 

 

5

 

Noncash lease expense

 

 

3

 

 

 

5

 

Impairment of lease assets and property and equipment

 

 

1

 

 

 

11

 

Stock-based compensation

 

 

54

 

 

 

53

 

Net (accretion) amortization of discounts and premiums on marketable securities

 

 

(6

)

 

 

 

Other

 

 

1

 

 

 

(3

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Funds receivable

 

 

8

 

 

 

4

 

Prepaid expenses, other current and noncurrent assets

 

 

16

 

 

 

2

 

Accounts payable

 

 

(17

)

 

 

(10

)

Merchants payable

 

 

(43

)

 

 

(64

)

Accrued and refund liabilities

 

 

(32

)

 

 

(36

)

Lease liabilities

 

 

(5

)

 

 

(6

)

Other current and noncurrent liabilities

 

 

 

 

 

(3

)

Net cash used in operating activities

 

 

(266

)

 

 

(313

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment and development of internal use software

 

 

(3

)

 

 

(2

)

Purchases of marketable securities

 

 

(239

)

 

 

(303

)

Maturities of marketable securities

 

 

317

 

 

 

218

 

Other

 

 

 

 

 

2

 

Net cash provided by (used) in investing activities

 

 

75

 

 

 

(85

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock through employee equity incentive plans

 

 

 

 

 

1

 

Payment of taxes related to RSU settlement

 

 

(5

)

 

 

(10

)

Net cash used in financing activities

 

 

(5

)

 

 

(9

)

Foreign currency effects on cash, cash equivalents and restricted cash

 

 

(7

)

 

 

(17

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(203

)

 

 

(424

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

513

 

 

 

1,018

 

Cash, cash equivalents and restricted cash at end of period

 

$

310

 

 

$

594

 

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

303

 

 

$

587

 

Restricted cash included in prepaid and other current assets in the condensed consolidated balance sheets

 

 

7

 

 

 

7

 

Total cash, cash equivalents and restricted cash

 

$