\n| \n Revenue<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 255,481<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 437,700<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nRevenue increased by $182.2 million year-over-year from $255.5 million in third quarter 2019 to $437.7 million in third quarter 2020, representing growth of 71.3%. The increase was driven by 68.1% growth in Digital Platform Services Revenue to $263.0 million, plus the impact of the acquisition of New Guards during third quarter 2019. In-Store Revenue increased by 25.8% to $11.4 million, primarily driven by the acquisition of New Guards retail stores in August 2019, as well as the opening of new stores throughout the year, partially offset by reduced foot traffic across our retail store network as a result of COVID-19 restrictions.\n<\/p>\n \nThe increase in Digital Platform Services Revenue of 68.1% was driven by 60.4% overall growth in Digital Platform GMV. Digital Platform Services first-party GMV, which is composed of our sales of owned-inventory including First-Party Original, is included in Digital Platform Services Revenue at 100% of the GMV. Digital Platform Services first-party GMV increased 113.9% year-over-year to $105.9 million, primarily driven by the integration of New Guards to the Farfetch Marketplace during fourth quarter 2019, as well as growth in Browns, primarily driven by a higher sell-through of full-price products.\n<\/p>\n \nDigital Platform Fulfilment Revenue represents the pass-through of delivery and duties charges incurred by our global logistics solutions, net of any Farfetch-funded consumer promotions and incentives. Whilst Digital Platform Fulfilment Revenue would be expected to grow in line with the cost of delivery and duties, which increase as Digital Platform GMV and order volumes grow, variations in the level of Farfetch-funded promotions and incentives will impact Digital Platform Fulfilment Revenue. In third quarter 2020, Digital Platform Fulfilment Revenue increased 86.8% year-over-year, a higher rate as compared to Digital Platform Services Revenue growth, due to a reduced number of Farfetch-funded promotions year-over-year.\n<\/p>\n \nCost of Revenue (in thousands):<\/i><\/p>\n\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n Three months ended September 30,<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2019<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDigital Platform Services third-party cost of revenue\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n36,314\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n52,691\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDigital Platform Services first-party cost of revenue\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n36,871\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n67,026\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDigital Platform Services cost of revenue\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n73,185\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n119,717\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDigital Platform Fulfilment cost of revenue\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n27,254\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n50,922\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nBrand Platform cost of revenue\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n35,207\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n53,589\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nIn-Store cost of goods sold\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n4,696\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n4,443\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Cost of revenue<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 140,342<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 228,671<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nCost of revenue increased by $88.4 million, or 63.0% year-over-year from $140.3 million in third quarter 2019 to $228.7 million in third quarter 2020. This was primarily driven by the increased volume of transactions driving up costs associated with delivery and duties, the addition of Brand Platform cost of revenue related to New Guards since its acquisition in August 2019, and the cost of goods associated with the growth in first-party GMV.\n<\/p>\n \nWe are reliant on third-parties to provide shipping and delivery services, and potential changes in their operations due to the ongoing impacts of COVID-19 could result in future impacts to our service levels or cost of revenue, however there were no such material adverse impacts to our service levels or cost of revenue in third quarter 2020.\n<\/p>\n Gross profit (in thousands):<\/i><\/p>\n\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n Three months ended September 30,<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2019<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDigital Platform third-party gross profit\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n70,669\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n104,483\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDigital Platform first-party gross profit\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n12,625\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n38,835\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDigital Platform Gross Profit\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n83,294\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n143,318\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nBrand Platform Gross Profit\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n27,464\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n58,738\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nIn-Store Gross Profit\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n4,381\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n6,973\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Gross profit<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 115,139<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 209,029<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nGross profit increased by $93.9 million, or 81.6% year-over-year, from $115.1 million in third quarter 2019 to $209.0 million in third quarter 2020, primarily due to growth in our Digital Platform Services Revenue and the addition of New Guards gross profit starting from August 2019. Gross profit margin increased from 45.1% to 47.8% year-over-year, primarily driven by a higher Digital Platform Gross Profit Margin as well as a higher Brand Platform Gross Profit Margin. Digital Platform Gross Profit Margin increased from 53.2% to 54.5% year-over-year driven by increases in both third-party and first-party gross profit margins, partially due to fewer Farfetch-funded consumer promotions during the period. The increase in first-party gross profit margin also reflects an increased mix of full-price sales, and higher margin first-party revenues from sales of New Guards brands\u2019 owned-products sold direct-to-consumers through our platform.\n<\/p>\n Selling, general and administrative expenses by type (in thousands):<\/i><\/p>\n\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n Three months ended September 30,<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2019<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDemand generation expense\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n34,321\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n46,185\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nTechnology expense\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n22,322\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n29,809\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nShare based payments\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n31,760\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n81,840\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nDepreciation and amortization\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n35,097\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n54,007\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nGeneral and administrative\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n94,134\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n143,349\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nOther items\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n10,061\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n860\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Selling, general and administrative expense<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 227,695<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 356,050<\/b><\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nThird quarter 2020 demand generation expense increased 34.6% year-over-year to $46.2 million, driven by the increase in GMV. However, in third quarter 2020, demand generation expense as a percentage of Digital Platform GMV improved from 8.2% to 6.9% year-over-year, as we saw the benefit of our focus on mobile app installations help drive a lower paid digital marketing mix compared to third quarter 2019. In addition, we saw lower paid digital marketing costs as a percentage of Digital Platform GMV year-over-year, with a less competitive digital advertising environment due to COVID-19 leading to efficiencies in our paid channels, alongside other incremental demand generation efficiencies.\n<\/p>\n \nTechnology expense, which primarily relates to development and operations of our platform features and services, and also includes software, hosting and infrastructure expenses, increased by $7.5 million, or 33.5%, year-over-year in third quarter 2020, mainly driven by an increase in technology staff headcount. We continue to operate three globally distributed data centers, which support the processing of our growing base of transactions, including one in Shanghai dedicated to serving our Chinese customers. Third quarter 2020 technology expense as a percentage of Adjusted Revenue decreased from 9.8% to 7.7% year-over-year as Adjusted Revenue growth outpaced growth of our underlying technology costs.\n<\/p>\n \nShare based payments increased by $50.1 million, or 157.7%, year-over-year in third quarter 2020. The increase was mainly due to an increase in our share price during third quarter 2020 as compared to a decrease in our share price during third quarter 2019. Employment related taxes and the cost of cash-settled awards increased by $33.8 million and $18.9 million, respectively, primarily as a result of the change in share price and quarterly revaluation. Grants of additional equity-settled awards also contributed to the year-over-year increase.\n<\/p>\n \nDepreciation and amortization expense increased by $18.9 million, or 53.8%, year-over-year from $35.1 million in third quarter 2019 to $54.0 million in third quarter 2020. Amortization expense increased primarily due to $31.4 million of amortization recognized on intangible assets acquired in recent acquisitions. Amortization expense also increased as a result of the historical investment into technology, where qualifying technology development costs are capitalized and amortized over a three-year period. Depreciation expense primarily increased as a result of new leases entered into across the group during the last 12 months and, to a lesser extent, due to depreciation on property, plant and equipment from recent acquisitions.\n<\/p>\n \nGeneral and administrative expense increased by $49.2 million, or 52.3%, year-over-year in third quarter 2020, primarily due to additional performance-based employee compensation accrued in third quarter 2020, the addition of New Guards starting in August 2019, marketing spend related to our brand campaign launch in September 2020, and an increase in non-technology headcount across a number of areas to support the expansion of our business. General and administrative expense decreased as a percentage of Adjusted Revenue to 37.1% compared to 41.2% in third quarter 2019 primarily due to Adjusted Revenue growing more than the general and administrative expense as a percentage of Adjusted Revenue.\n<\/p>\n \nOther items of $0.9 million in third quarter 2020 primarily reflects transaction-related legal and advisory expenses.\n<\/p>\n \n\u00a0\n<\/p>\n Gains\/(losses) on items held at fair value and remeasurements (in thousands):<\/i><\/p>\n\n\n| \n \n\u00a0\n<\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n | \n Three months ended September\u00a030,<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \u00a0<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n | \n 2019<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n | \n 2020<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n<\/tr>\n\n| \n \nRemeasurement gains\/(losses) on put and call option liabilities\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n53,812\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n$\n<\/p>\n<\/td>\n | \n \n(77,800\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nFair value losses on embedded derivative liabilities\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n–\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(295,279\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n \nChange in fair value of acquisition related consideration\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n(21,526\n<\/p>\n<\/td>\n | \n \n)\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n | \n \n–\n<\/p>\n<\/td>\n | \n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n | \n| \n Gains\/(losses) on items held at fair value and remeasurements<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n 32,286<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n | \n \u00a0<\/b><\/p>\n<\/td>\n | \n $<\/b><\/p>\n<\/td>\n | \n (373,079<\/b><\/p>\n<\/td>\n | \n )<\/b><\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nIn third quarter 2020, we recorded a $77.8 million present value remeasurement loss related to Chalhoub Group\u2019s put option over their non-controlling interest in Farfetch International Limited, compared to a $53.8 million present value remeasurement gain related to the put option in third quarter 2019. The $295.3 million fair value losses on embedded derivative liabilities comprised $138.2 million fair value revaluation loss related to $250 million 5.00% convertible senior notes due 2025, and $157.1 million fair value revaluation loss related to $400 million 3.75% convertible senior notes due 2027. There were no fair value losses on embedded derivatives in third quarter 2019 and no change in the fair value of acquisition related consideration in third quarter 2020.\n<\/p>\n Adjusted EBITDA and Adjusted EBITDA Margin<\/i><\/p>\n \nAdjusted EBITDA improved by $25.3 million, to $(10.3) million in third quarter 2020, for the reasons described above. Adjusted EBITDA Margin improved from (15.6)% to (2.7)% over the same prior year period, primarily reflecting higher gross profit, lower general and administrative expenses, lower demand generation expense and technology expenses as percentages of Adjusted Revenue.\n<\/p>\n Loss After Tax<\/i><\/p>\n \nLoss after tax increased by $446.5 million to $537.0 million in third quarter 2020. The increase was primarily driven by losses on items held at fair value and remeasurements, which increased $405.4 million year-over-year, as well as increases in share-based payments, general and administrative expenses, and depreciation and amortization expense, partially offset by an increase in gross profit, as explained above.\n<\/p>\n Liquidity<\/i><\/p>\n \nAt September 30, 2020 cash and cash equivalents were $756.7 million, an increase of $434.3 million compared to $322.4 million at December 31, 2019. The increase in cash and cash equivalents is primarily due to the private placement of convertible senior notes in first half 2020, partially offset by a net cash outflow from operating activities, mainly due to the funding of our operations in the nine months to September 2020, as well as New Guards\u2019 investments into its brand portfolio.\n<\/p>\n Events After the Reporting Period<\/i><\/p>\n \nAs part of the November 5, 2020 agreement between Farfetch Limited (the \u201cCompany\u201d), Alibaba Group (\u201cAlibaba\u201d) and Cie Financiere Richemont SA (\u201cRichemont\u201d), Alibaba and Richemont have each agreed to purchase $300 million of 0% convertible senior notes due 2030 (the \u201cNotes\u201d) issued by Farfetch Limited for total gross proceeds of $600 million. The additional capital will support Farfetch\u2019s long-term strategy of delivering a global technology platform for the luxury fashion industry and facilitate the Company\u2019s continued focus on executing its growth plans and driving towards operational profitability. Additionally, Artemis has agreed to purchase 1,889,338 of our Class A ordinary shares for total gross proceeds of approximately $50 million. The sale of the Notes to Alibaba and Richemont, and the issuance of shares to Artemis, is expected to settle on or about November 17, 2020, subject to customary closing conditions.\n<\/p>\n \nAlibaba and Richemont will also invest in Farfetch China, taking a combined 25% stake in the new joint venture that will include Farfetch’s marketplace operations in the China region for $500 million ($250 million each). The investments by Alibaba and Richemont in Farfetch China and the establishment of the joint venture are expected to be completed during the first half of calendar year 2021, subject to the satisfaction of closing conditions.\n<\/p>\n \nIn conjunction with the above strategic developments, Farfetch has agreed to close its consumer-facing channels on JD.com, Inc.\u2019s (\u201cJD.com\u201d) platform. The Level 1 access button, acquired in 2019 as part of the acquisition of Toplife, provides direct access to Farfetch\u2019s direct consumer-facing channels on JD.com. As at September 30, 2020, the carrying value of the Level 1 access button was $6.0 million. As a result of our agreement to terminate this channel, management impaired the full value of the Level 1 access button from the execution date of the binding agreement, in line with the requirements of IAS 36 Impairment of Assets. An impairment loss on intangible assets of $5.8 million, which is outside of the normal scope of our ordinary activities, will be recognized in our fourth quarter 2020 results on the consolidated statement of operations.\n<\/p>\n Outlook<\/b><\/p>\n \nThe following forward-looking statements reflect Farfetch\u2019s expectations as of November 12, 2020.\n<\/p>\n \nFor the Fourth Quarter 2020:\n<\/p>\n | | | | | | |