Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

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 2024 we reserved an additional 5.9 million shares of our common stock. At June 30, 2024, there were 26.1 million shares available for grant.

Stock-based compensation expense included in the consolidated statements of operations was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	3,288	$	2,906	$	6,270	$	5,531
Sales and marketing	16,276		16,423		31,576		30,817
Research and development	11,799		9,764		22,960		18,629
General and administrative	10,035		8,767		20,311		17,000
Total stock-based compensation expense	$	41,398	$	37,860	$	81,117	$	71,977

A summary of the unrecognized stock-based compensation expense related to unvested stock at June 30, 2024 is presented below:

	Unrecognized Stock-Based Compensation Expense (in thousands)		Estimated Weighted Average Period (in years)
Restricted stock units ("RSUs")	$	347,395	2.9
Performance stock units ("PSUs")	9,225		3.3
Restricted stock	9,979		1.8
2018 Employee Stock Purchase Plan ("2018 ESPP")	3,570		0.7

Restricted Stock, RSUs and PSUs

A summary of our restricted stock, RSU and PSU activity is presented below:

	Restricted Stock			RSUs			PSUs
(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		Number of Shares	Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2023	311	$	45.67	7,343	$	43.80	258	$	43.90
Granted	—	—		3,595	46.61		170	47.20
Performance adjustment(1)	—	—		—	—		(10)	43.24
Vested	(62)	45.67		(1,936)	42.80		(69)	43.79
Forfeited	—	—		(536)	44.70		—	—
Unvested balance at June 30, 2024	249	45.67		8,466	45.15		349	45.54

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(1)    Represents adjustments due to the achievement of predefined financial performance targets.

Stock Options

A summary of our stock option activity is presented below:

(in thousands, except for exercise prices and years)	Number of Shares	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2023	5,095	$	8.95	3.5	$	189,108
Exercised	(647)	6.39			26,036
Forfeited/canceled	—	—			—
Outstanding and exercisable at June 30, 2024	4,448	9.32		3.1	152,410

2018 Employee Stock Purchase Plan

Under the evergreen provision in our 2018 ESPP, in January 2024 we reserved an additional 1.8 million shares of our common stock. At June 30, 2024, there were 10.1 million shares reserved for issuance under our 2018 ESPP.

In the six months ended June 30, 2024, employees purchased 304,579 shares of our common stock at a weighted average price of $32.43 per share, resulting in $9.9 million of cash proceeds. At June 30, 2024, there was $5.3 million of employee contributions to the 2018 ESPP included in accrued compensation.

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:

	Six Months Ended June 30,
	2024	2023
Expected term (in years)	0.5 — 2.0	0.5 — 2.0
Expected volatility	41.1% — 51.4%	51.0% — 58.1%
Risk-free interest rate	4.4% — 5.1%	4.8% — 5.0%
Expected dividend yield	—	—