As of December 31, 2018, there were warrants to purchase 150,071 shares of Series E redeemable convertible preferred stock and 922,655 shares of Series G redeemable convertible preferred stock outstanding. During the three months ended March 31, 2019, the warrant to purchase Series G redeemable convertible preferred stock was exercised in full and the fair value of the warrant was reclassified to redeemable convertible preferred stock. Refer to Note 3 - Fair Value Measurement for further information.

The Company has granted restricted common stock to certain continuing employees, primarily in connection with acquisitions. Vesting of this stock may be dependent on a combination of service and performance conditions that become satisfied upon the occurrence of a qualifying event. The Company has the right to repurchase shares for which the vesting conditions are not satisfied.

The following table summarizes the activity related to the Company’s restricted common stock for the three months ended March 31, 2019. For purposes of this table, vested restricted common stock represents the shares for which the service condition had been fulfilled as of the three months ended March 31, 2019 (in thousands, except per share amounts):



	Number of Shares		Weighted-average Grant-Date Fair Value per Share
Unvested restricted common stock as of December 31, 2018	898		$	30.33
Granted	—		$	—
Vested	(209	)	$	34.82
Canceled	(32	)	$	34.86
Unvested restricted common stock as of March 31, 2019	657		$	28.68

The Company maintains two equity incentive plans: the 2013 Equity Incentive Plan (“2013 Plan”) and the 2010 Stock Plan (“2010 Plan” and collectively, “Plans”). The 2013 Plan serves as the successor to the 2010 Plan and provides for the issuance of incentive and nonqualified stock options, SARs, restricted stock and restricted stock units (“RSUs”) to employees, consultants and advisors of the Company.

In January 2019, the Company’s board of directors approved an amendment to the 2013 Plan to increase the number of shares of common stock reserved for issuance by 85 million shares, for a total of 293 million shares reserved.

In March 2019, the Company’s board of directors adopted the 2019 Equity Incentive Plan (“2019 Plan”). The 2019 Plan was approved in April 2019. The 2019 Plan became effective on May 9, 2019, the date of the underwriting agreement between the Company and the underwriters for the IPO. The 2019 Plan is the successor to the 2013 Plan. There are 130 million shares of common stock reserved for future issuance under the 2019 Plan.

The Company’s 2019 Plan provides for the grant of ISOs, NSOs, SARs, restricted stock awards, RSUs, performance-based awards, and other awards (that are based in whole or in part by reference to the Company’s common stock) (collectively, “awards”). ISOs may be granted only to the Company’s employees, including the Company’s officers, and the employees of any parent or subsidiary. All other awards may be granted to the Company’s employees, including the Company’s officers, the Company’s non-employee directors and consultants, and the employees and consultants of the Company’s affiliates. Participants must be natural persons who render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction.

A summary of stock option and SAR activity for the three months ended March 31, 2019 is as follows (in millions, except share amounts which are reflected in thousands, per share amounts, and years):



	SARs Outstanding Number of SARs		Options Outstanding Number of Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
As of December 31, 2018	758		42,936		$	9.22	5.74	$	1,456
Awards granted	53		250		$	42.52
Awards exercised	—		(677	)	$	3.01
Awards forfeited	(8	)	(43	)	$	32.10
As of March 31, 2019	803		42,466		$	9.51	5.51	$	1,808
Vested and expected to vest as of March 31, 2019	621		35,337		$	4.19	5.14	$	1,694
Exercisable as of March 31, 2019	621		36,245		$	4.95	5.22	$	1,709

The total intrinsic value of stock options exercised during the three months ended March 31, 2018 and 2019, was $240 million and $27 million, respectively.

The following table summarizes the activity related to the Company’s RSUs for the three months ended March 31, 2019. For purposes of this table, vested RSUs represent the shares for which the service condition had been fulfilled as of March 31, 2019 (in thousands, except per share amounts):



	Number of Shares		Weighted-Average Grant-Date Fair Value per Share
Unvested and outstanding as of December 31, 2018	75,835		$	37.20
Granted	31,476		$	42.52
Vested	(8,694	)	$	34.35
Canceled	(1,713	)	$	23.84
Unvested and outstanding as of March 31, 2019	96,904		$	39.42
Vested and outstanding as of March 31, 2019	71,307		$	28.93

Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. The following table summarizes total stock-based compensation expense by function for the three months ended March 31, 2018 and 2019 (in millions):



	Three Months Ended March 31,
	2018		2019
Operations and support	$	5	$	1
Sales and marketing	4		1
Research and development	6		3
General and administrative	48		6
Total	$	63	$	11

As of March 31, 2019, there was $65 million of unamortized compensation costs related to all unvested awards for which vesting is not contingent on a qualifying event. The unamortized compensation costs are expected to be recognized over a weighted-average period of approximately 2.4 years.

The tax benefits recognized for stock-based compensation arrangements were not material during the three months ended March 31, 2018 and 2019, respectively.

The weighted-average grant-date fair values of stock options and SARs granted to employees for the three months ended March 31, 2018 and 2019 were $12.38 and $21.93 per share, respectively. The fair value of stock options and SARs granted was determined using the Black-Scholes option pricing model with the following weighted-average assumptions:



	Three Months Ended March 31,
	2018		2019
Expected term (in years)	5.7		5.9
Risk-free interest rate	2.7	%	2.3	%
Expected volatility	32.6	%	34.9	%
Expected dividend yield	—	%	—	%

The weighted-average grant-date fair values of Performance Awards with market-based targets for the three months ended March 31, 2018 and 2019 were $15.68 and $18.20 per share, respectively. The weighted-average derived service periods for Performance Awards with market-based targets for the three months ended March 31, 2018 and 2019 were 3.83 and 2.12 years, respectively. The fair value of Performance Awards with market-based targets granted was determined using a Monte Carlo model with the following weighted-average assumptions:

The Company has granted RSAs, RSUs, SARs, and stock options that vest only upon the satisfaction of both time-based service and performance-based conditions. As of March 31, 2019, no stock-based compensation expense had been recognized for such awards with a performance condition based on the occurrence of a qualifying event (such as an IPO), as such qualifying event was not probable. The total unrecognized stock-based compensation expense relating to these awards as of March 31, 2019 was $6.2 billion. Of this amount, $3.4 billion relates to awards for which the time-based vesting condition had been satisfied or partially satisfied on that date, calculated using the accelerated attribution method and the grant date fair value of the awards.

The remaining $2.8 billion relates to awards for which the time-based vesting condition had not yet been satisfied as of March 31, 2019. This includes $62 million of unrecognized stock-based compensation expense for awards with specified performance metrics to be satisfied in addition to a qualifying event. The unrecognized stock-based compensation expense of $2.8 billion would be recognized over the remaining service period after the occurrence of a qualifying event.

In March 2019, the Company’s board of directors adopted the Company’s Employee Stock Purchase Plan (“ESPP”), and in April 2019, the Company’s stockholders approved its ESPP. The ESPP became effective on May 9, 2019, the date of the underwriting agreement between the Company and the underwriters for the IPO. There are 25 million shares of common stock reserved for issuance under the ESPP.