Stock Based Awards and Other Equity Instruments (Tables)

12 Months Ended

Dec. 31, 2022

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and RSUs

The following table presents the amount of stock-based compensation expense related to stock-based awards, primarily stock options and RSUs, on our consolidated statements of operations during the periods presented:

	Year ended December 31,
	2022			2021			2020
	(in millions)
Cost of revenue	$	1		$	1		$	1
Selling and marketing		12			16			16
Technology and content		36			46			44
General and administrative		39			57			48
Total stock-based compensation expense		88			120			109
Income tax benefit from stock-based compensation expense		(18	)		(23	)		(23	)
Total stock-based compensation expense, net of tax effect	$	70		$	97		$	86

Summary of Stock Option Activity

A summary of our stock option activity, consisting of service-based non-qualified stock options, is presented below:

				Weighted		Weighted
				Average		Average
				Exercise		Remaining		Aggregate
	Options			Price Per		Contractual		Intrinsic
	Outstanding			Share		Life		Value
	(in thousands)					(in years)		(in millions)
Options outstanding as of December 31, 2021		5,671		$	47.03
Granted (1)		841			20.00
Exercised (2)		(13	)		24.94
Cancelled or expired		(1,037	)		44.06
Options outstanding as of December 31, 2022		5,462		$	43.48		5.1	$	—
Exercisable as of December 31, 2022		3,931		$	49.19		3.6	$	—
Vested and expected to vest after December 31, 2022 (3)		5,316		$	43.93		5.0	$	—

(1)Inclusive of approximately 516,000 stock options awarded to Matt Goldberg, our CEO, during July 2022. The estimated grant-date fair value per option, using a Black-Scholes option pricing model was $9.23. These stock options shall vest over four years, with 25% vesting on July 1, 2023 and 6.25% of the remaining award vesting in equal quarterly installments commencing thereafter, subject to the CEO’s continuous employment with the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through July 1, 2026.

(2)Inclusive of approximately 10,000 stock options for the year ended December 31, 2022, which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares which had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.

(3)The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.

Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants

The fair value of stock option grants has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented:

	December 31,
	2022			2021			2020
Risk free interest rate		3.07	%		0.83	%		1.15	%
Expected term (in years)		5.42			5.45			5.30
Expected volatility		51.63	%		49.61	%		43.39	%
Expected dividend yield	—  %			—  %			—  %
Weighted-average grant date fair value	$	9.93		$	18.40		$	10.08

Summary of RSU Activity

A summary of our restricted stock units (“RSUs”) activity, consisting primarily of service-based vesting terms, is presented below:

				Weighted
				Average
				Grant-		Aggregate
	RSUs			Date Fair		Intrinsic
	Outstanding			Value Per Share		Value
	(in thousands)					(in millions)
Unvested RSUs outstanding as of December 31, 2021		5,786		$	36.82
Granted (1)		7,059			25.42
Vested and released (2)		(3,086	)		35.60
Cancelled		(1,187	)		32.96
Unvested RSUs outstanding as of December 31, 2022 (3)		8,572		$	28.41	$	154

(1)Inclusive of approximately 258,000 RSUs awarded to our CEO during July 2022. The estimated grant-date fair value per RSU, based on the quoted price of our common stock on the date of grant, was $18.47. This service-based RSU award shall vest over four years, with 25% vesting on July 1, 2023 and 6.25% of the remaining award vesting in equal quarterly installments commencing thereafter, subject to the CEO’s continuous employment with the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through July 1, 2026.

(2)Inclusive of approximately 820,000 RSUs for the year ended December 31, 2022, withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.

(3)The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.

Summary of Unrecognized Compensation Expense and Weighted Average Period Remaining

A summary of our remaining unrecognized compensation expense and the weighted average remaining amortization period at December 31, 2022 related to our non-vested equity awards is presented below (in millions, except in years information):

	Stock
	Options		RSUs/MSUs
Unrecognized compensation expense	$	14	$	197
Weighted average period remaining (in years)		2.8		2.8

MSUs

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of RSU Activity

A summary of our market-based RSUs (“MSUs”) activity is presented below:

				Weighted
				Average
				Grant-		Aggregate
	MSUs			Date Fair		Intrinsic
	Outstanding			Value Per Share		Value
	(in thousands)					(in millions)
Unvested MSUs outstanding as of December 31, 2021		120		$	28.15
Granted (1)		592			10.00
Cancelled (2)		(120	)		28.15
Unvested MSUs outstanding as of December 31, 2022		592		$	10.00	$	12

(1)Inclusive of approximately 378,000 MSUs awarded to our CEO during July 2022. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices was used to calculate the grant-date fair value of our MSU awards. These MSUs shall vest on July 1, 2025, with 25% vesting if our stock price is equal to or greater than $35.00 but less than $45.00, 50% if our stock price is equal to or greater than $45.00 but less than $55.00 and 100% if our stock price is equal to or greater than $55.00, subject to the CEO’s continuous employment with, or performance of services for, the Company. The estimated grant-date fair value of this award will be amortized on a straight-line basis over the requisite service period through July 1, 2026. All other MSU grants during the year, to various employees, contained similar vesting and performance conditions.

MSU cancellations primarily reflect performance targets not being attained by the end of the performance period.