Stock Based Awards and Other Equity Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Amount of Stock-Based Compensation Expense Related to Stock-Based Awards

The following table presents the amount of stock-based compensation expense related to stock-based awards on our unaudited condensed consolidated statements of operations during the periods presented:

	Three months ended						Six months ended
	June 30,						June 30,
	2021			2020			2021			2020
	(in millions)						(in millions)
Cost of revenue	$	—		$	—		$	1		$	1
Selling and marketing		4			4			8			7
Technology and content		13			9			24			20
General and administrative		15			12			28			23
Total stock-based compensation expense		32			25			61			51
Income tax benefit from stock-based compensation		(6	)		(5	)		(11	)		(12	)
Total stock-based compensation expense, net of tax	$	26		$	20		$	50		$	39

Summary of Stock Option Activity

A summary of stock option activity, consisting primarily of service-based non-qualified stock options during the six months ended June 30, 2021, 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 at December 31, 2020		5,615		$	46.31
Granted		716			46.00
Exercised (1)		(672	)		34.40
Cancelled or expired		(152	)		42.57
Options outstanding at June 30, 2021		5,507		$	47.83		5.4	$	19
Exercisable as of June 30, 2021		3,341		$	54.65		3.6	$	6
Vested and expected to vest after June 30, 2021 (2)		5,507		$	47.83		5.4	$	19

(1) Inclusive of approximately 371,000 stock options 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 were withheld in connection with exercised stock options due to net share settlement to satisfy required employee tax withholding requirements and payment of the aggregate exercise price 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 unaudited condensed consolidated statements of cash flows.

(2) 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 Options

The fair value of stock options 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:

	Six months ended
	June 30,
	2021			2020
Risk free interest rate		0.66	%		1.18	%
Expected term (in years)		5.33			5.30
Expected volatility		49.69	%		43.13	%
Expected dividend yield	—  %			—  %
Weighted-average grant date fair value	$	20.39		$	10.11

Summary of RSU Activity

A summary of restricted stock units (“RSUs”) activity, consisting primarily of service-based vesting terms, during the six months ended June 30, 2021 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, 2020		8,111		$	32.29
Granted		2,277			45.77
Vested and released (1)		(2,963	)		33.15
Cancelled		(666	)		34.90
Unvested RSUs outstanding as of June 30, 2021		6,759		$	36.19	$	273

(1) Inclusive of approximately 663,000 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which were withheld in connection with settlement of RSUs to satisfy required employee tax withholding requirements 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 unaudited condensed consolidated statements of cash flows.

Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining

A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at June 30, 2021 related to non-vested equity awards is presented below (in millions, except in years information):

	Stock
	Options		RSUs/MSUs
Unrecognized compensation expense	$	24	$	181
Weighted average period remaining (in years)		2.5		2.4

MSUs

Summary of RSU Activity

A summary of activity for market-based RSUs (“MSUs”) during the six months ended June 30, 2021 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, 2020		174	$	37.29
Granted		―		―
Vested and released		―		―
Cancelled		―		―
Unvested MSUs outstanding as of June 30, 2021		174	$	37.29	$	7