Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Total stock-based compensation expense related to options, restricted stock awards, employee stock purchases, restricted stock units and stock purchase rights granted were allocated as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Cost of revenue	$	784	$	301	$	1,420	$	512
Research and development	6,379		3,527		11,307		5,994
Sales and marketing	2,865		1,931		5,274		3,359
General and administrative	1,180		946		2,046		1,622
Total stock-based compensation	$	11,208	$	6,705	$	20,047	$	11,487

Stock Option Activities

The following table summarizes the option and RSA (Restricted Stock Award) activity under our equity stock plans and related information:



			Options and RSAs Outstanding
	Shares Available for Grant (in thousands)		Number of Shares Underlying Outstanding Options and RSAs (in thousands)		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (Years) of Stock Options	Aggregate Intrinsic Value of Stock Options Outstanding (in thousands)
Outstanding—December 31, 2014	11,612		13,654		$	17.63	8.3	$	598,775
Options granted	(1,035	)	1,035		66.80
Options exercised	—		(1,654	)	7.28
Options canceled	704		(704	)	19.50
Early exercised shares repurchased	13		—		3.98
Outstanding—June 30, 2015	11,294		12,331		$	23.03	8.1	$	697,621
Vested and exercisable—June 30, 2015			3,170		$	7.21	7.0	$	236,274
Vested and expected to vest—June 30, 2015			10,941		$	21.62	8.0	$	657,910

The weighted-average grant-date fair value of options granted during the six months ended June 30, 2015 was $29.01 per share. The aggregate intrinsic value of options exercised for the six months ended June 30, 2015 was $105.9 million.

As of June 30, 2015, the total unrecognized stock-based compensation expense related to unvested stock options, net of expected forfeitures, was $119.4 million, which is expected to be recognized over a weighted-average period of 4.2 years. The total fair value of options vested for the six months ended June 30, 2015 was $11.9 million.

Early Exercise of Stock Options

For the six months ended June 30, 2015, we repurchased 13,136 shares of common stock at the original exercise price due to the termination of the holders of the unvested shares. As of June 30, 2015, shares held by employees and directors that were subject to repurchase were approximately 1.0 million with an aggregate price of $3.3 million.

Restricted Stock Unit (RSU) Activities

A summary of the RSU activity under our stock plans during the reporting period and a summary of information related to RSUs expected to vest are presented below (in thousands, except per share and year amounts):



	Number of Shares		Weighted- Average Grant Date Fair Value Per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Unvested balance—December 31, 2014	108		$	75.56	2.0	$	6,557
RSUs granted	500		69.34
RSUs vested	(1	)	67.48
RSUs forfeited/canceled	(9	)	68.34
Unvested balance—June 30, 2015	598		$	70.47	2.0	$	48,906
RSUs expected to vest—June 30, 2015	522				2.0	$	42,675

As of June 30, 2015, there was $34.6 million of unrecognized stock-based compensation cost related to unvested RSUs, net of estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 3.9 years.

Employee Stock Purchase Plan Activities

During the six months ended June 30, 2015, we issued 132,862 shares at a price of $36.55 under the 2014 Employee Stock Purchase Plan, or ESPP. On February 17, 2015, the board authorized an increase to shares available for future issuance under the ESPP. Per the ESPP, the increase is determined based on the lesser of 1% of total shares outstanding as of the first day of each fiscal year, or January 1, 2015, 2,500,000 shares or such amount as determined by our board of directors. The approved increase amounted to 655,139 shares. As of June 30, 2015 there remain 1,173,277 shares available for issuance under the ESPP.

As of June 30, 2015, the total unrecognized stock-based compensation expense related to unvested ESPP options, net of expected forfeitures, was $2.1 million, which is expected to be recognized over a weighted-average period of 1.3 years.