In 2018, our Board of Directors adopted, and our stockholders approved, our 2018 Equity Incentive Plan ("2018 Plan"). Under the evergreen provision in the 2018 Plan, in January 2020 we reserved an additional 4,929,361 shares of our common stock. At December 31, 2020, there were 17,766,262 shares available for grant.


	Year Ended December 31,
(in thousands)	2020		2019		2018
Cost of revenue	$	3,158	$	2,817	$	1,707
Sales and marketing	19,842		16,032		6,911
Research and development	14,794		8,911		5,804
General and administrative	21,779		15,683		8,453
Total stock-based compensation expense	$	59,573	$	43,443	$	22,875

At December 31, 2020, the unrecognized stock-based compensation expense related to unvested RSUs was $107.5 million, which is expected to be recognized over an estimated weighted average remaining period of 2.8 years.

At December 31, 2020, the unrecognized stock-based compensation expense related to outstanding stock options was $10.4 million, which is expected to be recognized over an estimated remaining weighted average period of 1.3 years.


	Restricted Stock			RSUs
(in thousands, except for per share data)	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2017	1,583	$	4.25	—	$	—
Granted	—	—		1,200	18.75
Vested	(693)	4.25		—	—
Forfeited	—	—		(71)	16.27
Unvested balance at December 31, 2018	890	4.25		1,129	18.90
Granted	—	—		2,715	27.81
Vested	(395)	4.25		(479)	18.28
Forfeited	—	—		(471)	25.21
Unvested balance at December 31, 2019	495	4.25		2,894	26.34
Granted	—	—		3,570	28.23
Vested	(396)	4.25		(1,504)	25.37
Forfeited	—	—		(470)	26.68
Unvested balance at December 31, 2020	99	4.25		4,490	28.13

RSUs granted under our stock incentive plans generally vest over a period of two to four years. RSUs granted before July 30, 2018 vest upon the satisfaction of both service-based and performance-based vesting conditions. The performance-based condition was satisfied upon the completion of our IPO. RSUs granted after July 30, 2018 vest upon the satisfaction of a service-based vesting condition.


(in thousands, except for per share data and years)	Number of Shares	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2017	14,573	$	4.38	8.2	$	77,020
Granted	6,108	15.17
Exercised	(740)	2.26			9,902
Forfeited/canceled	(722)	7.23
Outstanding at December 31, 2018	19,219	7.78		8.0	277,114
Granted	—	—
Exercised	(4,205)	4.53			98,378
Forfeited/canceled	(2,075)	10.63
Outstanding at December 31, 2019	12,939	8.38		7.1	201,608
Granted	—	—
Exercised	(2,956)	7.34			73,277
Forfeited/canceled	(542)	10.80
Outstanding at December 31, 2020	9,441	8.56		6.4	412,547
Exercisable at December 31, 2020	6,189	6.53		6.1	283,024

Stock options granted under our stock incentive plans have a maximum term of ten years, generally vest over a period of three to four years, and the exercise price cannot be less than the fair market value on the date of grant. In 2018, we granted stock options to employees that had a per share weighted average grant date fair value of $6.84. Estimating the fair value of stock options using the Black-Scholes option-pricing model requires assumptions as to the estimated term of the option, the risk-free interest rate, the expected volatility of the price of our common stock, the expected dividend yield, and the fair value of our underlying common stock prior to our IPO.

Fair Value of Common Stock. Following our IPO, we use the market price of our common stock at the date of grant. Prior to our IPO, the lack of an active public market for our common stock required an estimate of the fair value of the common stock for granting stock options and restricted shares, and for determining stock-based compensation expense. Contemporaneous third-party valuations were obtained to assist in determining the fair value of our common stock. The contemporaneous valuations were performed in accordance with applicable methodologies, approaches and assumptions of the technical practice-aid issued by the American Institute of Certified Public Accountants Practice Aid entitled Valuation of Privately-Held Company Equity Securities Issued as Compensation.

Expected Term. This is the period of time that the options granted are expected to remain unexercised. We employ the simplified method to calculate the average expected term.

Expected Volatility. Volatility is a measure of the amount by which a financial variable, such as a share price, has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. We have identified several public entities of similar size, complexity, and stage of development and estimate our volatility based on the volatility of the common stock of these companies.


			Year Ended December 31, 2018
Expected term (in years)			6.3
Expected volatility			41.3% — 43.3%
Risk-free interest rate			2.7% — 2.9%
Expected dividend yield			—
Expected forfeiture rate			—

In 2018, our board of directors adopted, and our stockholders approved, our 2018 ESPP. Under the evergreen provision, in January 2020 we reserved an additional 1,478,808 shares of our common stock for issuance. At December 31, 2020, there were 5,431,176 shares reserved for issuance under the 2018 ESPP.

Under our 2018 ESPP, employees may set aside up to 15% of their gross earnings, on an after-tax basis, to purchase our common stock at a discounted price, which is calculated at 85% of the lower of the fair market value of our common stock on the first day of an offering or on the date of purchase. The 2018 ESPP permits offerings up to 27 months in duration, with one or more purchase periods in each offering. Additionally, in cases where the fair market value of a share of our common stock on the first day of a new purchase period within an offering is less than or equal to the fair market value of a share of our common stock at the beginning of the offering, that offering will be terminated and participants will be automatically enrolled in a new offering with a new 24-month duration with purchase periods every six months.

At December 31, 2020 and 2019 there was $6.5 million and $5.4 million, respectively, of employee contributions to the 2018 ESPP included in accrued compensation. At December 31, 2020, the unrecognized stock-based compensation expense related to our 2018 ESPP was $4.1 million, which is expected to be recognized over the remaining weighted average period of 0.6 years.

The fair value of the 2018 ESPP purchase rights was estimated on the offering or modification dates using a Black-Scholes option-pricing model and the following assumptions:


	Year Ended December 31,
	2020	2019	2018
Expected term (in years)	0.5 — 2.0	0.5 — 2.0	0.6 — 2.1
Expected volatility	41.6% — 60.1%	34.4% — 44.6%	31.9% — 33.5%
Risk-free interest rate	0.1% — 0.9%	1.5% — 2.5%	2.3% — 2.7%
Expected dividend yield	—	—	—