Stockholders’ Equity and Stock Option Plans

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Stockholders’ Equity and Stock Option Plans

Stockholders’ Equity and Stock Option Plans

Equity Incentive Plans

The Company maintains the 2020 Equity Incentive Plan (“2020 Plan”), pursuant to which the Company may grant stock options, restricted stock awards, stock appreciation rights, restricted stock units (“RSUs”), deferred stock units (“DSUs”) performance awards, and stock bonus awards. As of March 31, 2022, the Company has reserved 7,515,001 shares of Class A common stock for the issuance of awards under the 2020 Plan. These available shares will increase automatically on January 1 for each of the first ten calendar years during the term of the 2020 Plan by the number of shares equal to the lesser of five percent (5%) of the aggregate number of outstanding shares of all classes of the Company’s common stock outstanding as of the immediately preceding December 31, or a number as may be determined by the Company’s board of directors or compensation committee. To the extent outstanding awards under the 2017 Plan and the 2006 Plan are forfeited, lapse unexercised, or would otherwise have been

returned to the share reserve under the Prior Plans, the shares of Class B common stock subject to such awards instead will be available for future issuance as Class A common stock under the 2020 Plan. No new awards were issued under the 2006 Plan or 2017 Plan after the effective date of the 2020 Plan.

Stock Options

A summary of stock option activity under the Company’s equity incentive plan and related information is as follows:

	Stock Options
	Number of Shares Underlying Outstanding Options	Weighted-Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding — December 31, 2021	6,542,351	$	6.08	6.95	$	184,727
Options granted	417,016	26.64
Options exercised	(130,958)	3.68
Options canceled/expired	(4,169)	5.74
Outstanding — March 31, 2022	6,824,240	$	7.39	6.91	$	135,005
Vested and exercisable — March 31, 2022	4,513,131	$	3.94	6.06	$	102,130

As of March 31, 2022, unrecognized stock-based compensation of $20.9 million related to unvested stock options will be recognized on a straight-line basis over a weighted average period of 2.78 years.

Restricted Stock Units

A summary of RSU activity under the Company’s equity incentive plan and related information is as follows:

	RSUs
	Number of Shares	Weighted-Average Grant Date Fair Value per Share
Unvested — December 31, 2021	483,302	$	35.23
Granted	1,060,425	28.43
Vested	(25,033)	37.29
Canceled/Forfeited	(8,838)	33.53
Unvested — March 31, 2022	1,509,856	$	30.43

As of March 31, 2022, unrecognized stock-based compensation of $42.9 million related to unvested RSUs will be recognized on a straight-line basis over a weighted average period of 3.58 years.

2020 Employee Stock Purchase Plan

In November 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective in connection with the IPO. A total of 500,000 shares of the Company’s Class A common stock were initially reserved for issuance under the ESPP.

The aggregate number of shares reserved for issuance under the ESPP will increase automatically on January 1st of each of the first ten calendar years during the term of the ESPP by the number of shares equal to the lesser of (a) 1% of the total outstanding shares of all classes of the Company’s common stock as of the immediately preceding December 31 and (b) such number of shares of common stock as determined by the Company’s board of directors. The aggregate number of shares issued over the term of the ESPP may not exceed 7,500,000 shares of Class A common stock. As of March 31, 2022, the Company has reserved 713,475 shares of its common stock for issuance under the ESPP.

Under the ESPP, Class A common stock will be purchased for the accounts of employees participating in the ESPP on each purchase date at a price per share equal to 85% of the lesser of: (a) the fair market value on the offering date or (b) the fair market value on the purchase date. The ESPP provides for, at maximum, 27 month offering periods and each offering period may consist of one or more six-month purchase periods, beginning December 9, 2020 through May 31, 2022 with the purchase date on the last day of each purchase period. As of March 31, 2022, $2.0 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions and is included in accrued and other current liabilities. For the three months ended March 31, 2022, there were no shares of our Class A common stock purchased under the ESPP.

As of March 31, 2022, unrecognized stock-based compensation expense related to the ESPP was $0.5 million, which is expected to be recognized over a weighted-average period of 0.17 years.

Stock-Based Compensation

The total stock-based compensation recognized in the condensed consolidated statements of operations and comprehensive income is as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Cost of revenue	$	278	$	168
Technology and development	877		481
Sales and marketing	1,907		1,161
General and administrative	2,074		1,355
Total stock-based compensation	5,136		3,165
Tax benefit from stock-based compensation	(831)		(251)
Total stock-based compensation, net of tax effect	$	4,305	$	2,914