In May 2021, the board of directors of the Company (the “Board”) adopted, and the stockholders approved, the 2021 Equity Incentive Plan (the “2021 Plan”) with the purpose of granting stock-based awards, including stock options, stock appreciation rights, RSAs, RSUs, PSUs, and other forms of awards, to employees, directors, and consultants. As of December 31, 2022, a total of 37,664,961 shares of common stock were authorized for issuance under the 2021 Plan. The number of shares of the Company’s common stock reserved for issuance under the 2021 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2022 through January 1, 2031, in an amount equal to (i) 5% of the total number of shares of the Company’s common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (ii) a lesser number of shares determined by the Board prior to the applicable January 1. Accordingly, on January 1, 2023, the number of shares of common stock that may be issued under the 2021 Plan increased by an additional 6,957,976 shares. As a result, as of December 31, 2023, a total of 44,622,937 shares of common stock are authorized for issuance under the 2021 Plan. As of December 31, 2023, a total of 30,314,052 shares of common stock were available for issuance under the 2021 Plan. No stock options have been issued under the 2021 Plan.


	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2022	5,723,772	$	12.65	5.2	$	197,620
Exercised	(1,371,834)	12.85
Canceled/Forfeited	(11,886)	22.08
Outstanding at December 31, 2023	4,340,052	12.57		4.1	245,884
Exercisable at December 31, 2023	4,340,052	$	12.57	4.1	$	245,884

The intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021 was $66.7 million, $75.1 million, and $262.4 million, respectively. As of December 31, 2023, there is no unrecognized stock-based compensation cost for stock options previously granted by the Company.

In 2018, the Company began issuing RSUs to certain employees, officers, directors, and consultants. The awards granted prior to the Company’s IPO vested upon the satisfaction of both a service and a performance condition, if both conditions are met before the award’s expiration date. For certain awards, the performance condition was satisfied solely on the effective date of a registration statement for the Company’s IPO, and for other awards, the performance condition was satisfied on the earlier of either the effective date of a registration statement for the Company’s IPO or a change in control. Awards granted with service vesting conditions generally vest over four years on either a quarterly or annual vesting schedule.

Prior to its IPO, given the Company’s common stock was not publicly traded, the grant date fair value of RSUs was determined based upon the fair value of the Company’s common stock. The Board exercised significant judgment in determining the fair value of the Company’s common stock with input from management, based on several objective and subjective factors. Factors considered by the Board included the price paid by investors for the Company’s common and preferred stock, actual and forecasted operating and financial performance, market conditions, performance of comparable publicly traded companies and transactions of comparable companies, developments and milestones within the Company, the rights, preferences, and privileges of its common and preferred stock, the likelihood of achieving a liquidating event, and the results of contemporaneous third-party valuations. The fair value was determined in accordance with applicable elements of the practice aid issued by the American Institute of Certified Public Accountants, Valuation of Privately Held Company Equity Securities Issued as Compensation.

Subsequent to the completion of the Company’s IPO in May 2021, the fair value of RSUs was determined based on the trading price of its publicly traded common stock. The grant date fair value of RSUs granted during 2023, 2022, and 2021 was $238.8 million, $323.0 million, and $350.6 million, respectively.

Prior to the effective date of the registration statement for the Company’s IPO, achievement of the performance conditions was not probable. Upon the effective date of the registration statement for the Company’s IPO, the performance vesting condition for all RSUs granted was satisfied and the Company recognized on a graded vesting basis a cumulative catch-up stock-based compensation adjustment of $115.3 million in its consolidated statement of operations and comprehensive loss for the portion of the service period satisfied from the grant date through the effective date of the registration statement. Substantially all of the

RSUs granted subsequent to the Company’s IPO vest based solely on continued service, which is generally over four years. The intrinsic value of RSUs vested during the years ended December 31, 2023, 2022, and 2021 was $221.9 million, $156.4 million, and $187.7 million, respectively.

During 2022 and 2023, the Company granted PSUs to certain non-executive employees, which vest based on the achievement of certain operating performance targets. Such PSUs are valued based on the trading price of its publicly traded common stock and require the employee's continued service through the date the related shares vest. The Company recognizes compensation expense for such awards on a graded vesting basis through the expected vest date, beginning in the period in which it becomes probable that the performance target will be achieved. Management reassesses the probability of achievement for PSUs each reporting period.

As of December 31, 2023, the Company has granted 98,572 PSUs to certain non-executive employees at a weighted-average grant date fair value of $54.58 per share. During the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $0.9 million and $0.9 million, respectively, relating to these shares.

In November 2021, the Company issued 199,670 RSAs to certain key employees in connection with the acquisition of Levelset that vest based on their continued service over a two-year period. The fair value of the RSAs issued was $95.05 per share, which was the closing trading stock price of the Company’s common stock on the acquisition date. These shares are released from restriction quarterly over a two-year period assuming the continued service of the employees. As of December 31, 2023, all shares have vested. As of December 31, 2022, 99,833 shares had vested. During the years ended December 31, 2023, 2022, and 2021, the Company recognized stock-based compensation expense of $7.8 million, $9.5 million, and $1.6 million, respectively, relating to these shares.

In July 2019, the Company issued 205,464 restricted Series H-1 redeemable convertible preferred stock awards (“Series H-1 RSAs”) to certain employees at a grant date fair value of $26.75 in connection with the acquisition of Honest Buildings, Inc. These shares were released from restriction 50% on the first anniversary and 50% on the second anniversary of the acquisition date based on the continued service of the employees. Upon the closing of the Company’s IPO, the Series H-1 RSAs automatically converted into shares of restricted common stock on a one-for-one basis. As of December 31, 2021, all of the Series H-1 RSAs were fully vested. During the year ended December 31, 2021, the Company recognized stock-based compensation expense of $1.6 million for these shares.

In May 2021, the Board adopted, and the stockholders approved, the ESPP, which became effective immediately prior to the effective date of the Company’s IPO. As of December 31, 2022, a total of 3,940,469 shares of common stock had been reserved for issuance under the ESPP. The number of shares of the Company’s common stock reserved for issuance under the ESPP automatically increases on January 1 of each year for a period of ten years, beginning on January 1, 2022 and continuing through January 1, 2031, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 3,900,000 shares, except before the date of any such increase, the Board may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Accordingly, on January 1, 2023, the number of shares of common stock reserved under the ESPP increased by an additional 1,391,595 shares.

The offering periods are scheduled to start in May and November of each year. The first offering period commenced on the Company’s first day of trading on May 20, 2021 and comprised three purchase periods of approximately six months in length. The ESPP provides for consecutive offering periods that will typically have a duration of 12 months in length and comprise two purchase periods of six months in length, subject to reset and rollover provisions.

The ESPP provides eligible employees with an opportunity to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their eligible compensation, subject to a maximum of $25,000 of stock per calendar year. A participant may purchase a maximum of 2,500 shares of common stock during a purchase period. Amounts deducted and accumulated by the participant are used to purchase shares of common stock at the end of each six-month purchase period. The purchase price of the shares shall be 85% of the lower of the fair market value of the common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the related offering period. However, in the event the fair value of the common stock on the purchase date is lower than the fair value on the first trading day of the offering period, the offering period is terminated immediately following the purchase and a new offering period begins the following day. Participants may end their participation at any time prior to the last 15 days of a purchase period and will be repaid their accrued contributions that have not yet been used to purchase shares of common stock. Participation ends automatically upon termination of employment.

December 31,

2023

2022

2021

Risk-free interest rate

4.68% to 5.33%

1.47% to 4.55%

0.03% to 0.18%

Expected term (in years)

0.5 to 1.0

0.5 to 1.5

Estimated dividend yield

0.00%

Estimated weighted-average volatility

46.29% to 64.76%

61.14% to 72.69%

44.81% to 69.39%

The term for the ESPP purchase rights is the offering period. Beginning in the fourth quarter of 2023, the Company estimates volatility for ESPP purchase rights based on the historical volatility of its own common stock price. Prior to that, given the Company’s limited trading history, the Company estimated volatility using the historical volatilities of a group of public companies in a similar industry and stage of life cycle, selected by management, in addition to considering the Company’s own historical volatility, for a period commensurate with the term of the ESPP purchase rights. The interest rate is derived from government bonds with a similar term to the ESPP purchase right granted. The Company has not declared, nor does it expect to declare, dividends in the foreseeable future. Consequently, an expected dividend yield of zero was utilized. The fair value of the Company’s common stock used to value ESPP purchase rights is based on the trading price of its publicly traded common stock.

Employee payroll contributions accrued in connection with the ESPP were $5.0 million and $4.7 million as of December 31, 2023 and 2022, respectively, and are included within accrued expenses in the accompanying consolidated balance sheets. Employee payroll contributions ultimately used to purchase shares will be reclassified to stockholders’ equity on the purchase date. Stock-based compensation expense related to the ESPP is recognized on a straight-line basis over the offering period. During the years ended December 31, 2023, 2022, and 2021, the Company recognized stock-based compensation of $10.7 million, $15.0 million, and $8.5 million, respectively, in connection with the ESPP. During the years ended December 31, 2023, 2022, and 2021, 575,928, 551,753, and 166,370 shares of the Company’s common stock were purchased under the ESPP, respectively.

During the year ended December 31, 2021, certain of the Company’s investors acquired outstanding common stock from the Company’s employees. For the shares acquired at a price in excess of the estimated fair value of the Company’s common stock, the Company recorded stock-based compensation expense of $5.5 million for the period from January 1, 2021 through the Company’s IPO on May 20, 2021 for the difference between the price paid by the investors and the estimated fair value on the date of the transactions.


	Year Ended December 31,
	2023		2022		2021
Cost of revenue	$	7,388	$	7,253	$	8,094
Sales and marketing	54,901		53,397		68,755
Research and development	68,265		63,262		85,040
General and administrative	44,281		38,974		65,272
Total stock-based compensation expense	$	174,835	$	162,886	$	227,161
Stock-based compensation capitalized for software development and cloud-computing arrangement implementation costs	9,717		8,818		5,247
Total stock-based compensation cost	$	184,552	$	171,704	$	232,408

There were no net tax benefits recognized in the accompanying consolidated statements of operations and comprehensive loss for stock-based compensation arrangements for the years ended December 31, 2023, 2022, and 2021 due to the Company having a full valuation allowance against its deferred tax assets.