Stock-based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation Expense

We recorded stock-based compensation expense in the following categories in the accompanying unaudited condensed consolidated statements of operations and balance sheets (in thousands):


	Three Months Ended March 31,
		2024		2023
Cost of revenue		$	1,593	$	874
Sales and marketing		1,579		1,532
Technology and development		5,703		4,320
General and administrative		5,981		9,741
Total stock-based compensation expense		14,856		16,467
Amount capitalized to internal-use software		1,417		911
Total stock-based compensation		$	16,273	$	17,378

Restricted and Performance Stock Units

During the three months ended March 31, 2024, we granted 5.2 million restricted stock units, or RSUs, with a total grant date fair value of $69.2 million to various employees. RSUs are measured based on the fair market value of the underlying stock on the date of grant and recognized as expense over the requisite service period.

During the three months ended March 31, 2024, we also granted 1.5 million RSUs with performance conditions, or PSUs, to members of our senior leadership team. Vesting of the PSUs is contingent upon the recipient’s continuous employment over the requisite service period and is subject to fulfillment by the Company of a predefined profitability target during the performance period. The number of PSUs subject to vesting is determined at the end of the performance period and may equal zero percent (0%) to two hundred percent (200%) of the target award. If the performance criteria are achieved, one third of the PSUs will vest on the date the compensation committee of the board of directors certifies achievement of the performance criteria, and the remaining awards will vest quarterly thereafter through February 2027. These PSU awards also include a modifier to the total number of shares earned based on the Company’s total shareholder return, or TSR, compared to the TSR of the Nasdaq Composite Index during the performance period. The total number of shares issued pursuant to the PSU award may be increased, decreased, or remain unchanged based on the TSR modifier. The TSR modifier applicable to the PSUs is considered a market condition and therefore is reflected in the grant date fair value of the award. A Monte Carlo simulation has been used to account for this market condition in the grant date fair value of the award. Expense related to the PSUs is recognized over the employee’s requisite service period using graded vesting attribution method to the extent it is probable that

the performance conditions will be achieved. We recognized $0.5 million in stock-based compensation expense during three months ended March 31, 2024 related to these awards.

The assumptions that were used to calculate the grant-date fair value of our PSU grants using a Monte Carlo simulation model were as follows:


	Three Months Ended March 31,
	2024
Expected life (years)	0.8
Risk-free interest rate	5.2	%
Expected volatility	47.4	%
Expected dividend yield	—