XML 42 R17.htm IDEA: XBRL DOCUMENT v3.19.2
Stock-Based Compensation and Employee Benefit Plan
6 Months Ended
Jun. 30, 2019
Compensation Related Costs [Abstract]  
Stock-Based Compensation and Employee Benefit Plan
Stock-Based Compensation and Employee Benefit Plan
2002 Stock Plan
Our 2002 Stock Plan (the "2002 Plan") was approved in April 2002 and amended in June 2011. In August 2012 and in connection with the adoption of the 2012 Equity Incentive Plan (the "2012 Plan"), shares authorized for issuance under the 2002 Plan were cancelled, except for those shares reserved for issuance upon exercise of outstanding stock options. As of June 30, 2019, options to purchase 2,033,654 shares of Class B common stock were outstanding and the weighted average exercise price of outstanding options was $22.74 per share.
2012 Equity Incentive Plan
Our 2012 Plan was approved in August 2012. In April 2018 and in connection with the adoption of the 2018 Equity Incentive Plan (the "2018 Plan"), any reserved shares not issued were carried over to the 2018 Equity Incentive Plan. As of June 30, 2019, options to purchase 10,728,356 shares of Class B common stock were outstanding under the 2012 Plan and the weighted average exercise price of outstanding options under the 2012 Plan was $27.14 per share. As of June 30, 2019, we had outstanding RSU awards that may be settled for 11,908,017 shares of Class B common stock under the 2012 Plan.
2018 Equity Incentive Plan
The 2018 Plan was approved in April 2018. The 2018 Plan became effective upon the IPO and will serve as the successor to the 2012 Plan.
The 2018 Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, RSUs, performance awards and stock bonuses. The 2018 Plan provides for the grant of awards to employees, directors, consultants, independent contractors and advisors provided the consultants, independent contractors, directors and advisors render services not in connection with the offer and sale of securities in a capital-raising transaction. The exercise price of stock options is at least equal to the fair market value of Class A common stock on the date of grant.
As of June 30, 2019, options to purchase 2,150,999 shares of Class A common stock were outstanding under the 2018 Plan and the weighted average exercise price of outstanding options was $19.71 per share. As of June 30, 2019, we had outstanding RSUs that may be settled for 4,022,886 shares of Class A common stock and 19,787,061 shares of Class A common stock were available for future grant.
2018 Employee Stock Purchase Plan
In April 2018, we adopted the 2018 Employee Stock Purchase Plan ("ESPP"). The ESPP is qualified under Section 423 of the Internal Revenue Code. As of June 30, 2019, there were 4,052,804 shares of Class A common stock available for future issuance.
Stock Option Activity
A summary of stock option activity under our stock plans during the six months ended June 30, 2019 is as follows:
 
 
Outstanding Options
 
 
Number of
Shares
 
Weighted
Average
Exercise
Price
 
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Balances at December 31, 2018
 
14,558,420

 
$
25.93

 
6.78
 
$
3,084

Granted
 
981,105

 
11.44

 
 
 
 
Exercised
 
(328,026
)
 
4.28

 
 
 
 
Cancelled
 
(298,490
)
 
25.37

 
 
 
 
Balances at June 30, 2019
 
14,913,009

 
25.47

 
6.53
 
2,557

Vested and expected to vest at June 30, 2019
 
14,541,060

 
25.64

 
6.47
 
2,523

Exercisable at June 30, 2019
 
8,716,781

 
28.77

 
4.96
 
1,764


RSUs Activity
A summary of our restricted stock units ("RSUs") activity and related information during the six months ended June 30, 2019 is as follows:
 
 
Number of
Awards
Outstanding
 
Weighted
Average Grant
Date Fair
Value
 
 
 
 
 
Unvested Balance at December 31, 2018
 
16,784,800

 
$
18.74

Granted
 
2,966,254

 
12.36
Vested
 
(3,504,098
)
 
20.51
Forfeited
 
(316,053
)
 
17.38
Unvested Balance at June 30, 2019
 
15,930,903

 
17.19

Stock-Based Compensation Expense
We used the following weighted-average assumptions in applying the Black-Scholes valuation model:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Risk-free interest rate
 
2.4% - 2.5%
 
2.7% - 2.8%
 
2.4% - 2.6%
 
2.5% - 2.8%
Expected term (years)
 
6.4 - 6.7
 
6.2 - 6.7
 
6.4 - 6.7
 
6.2 - 6.7
Expected dividend yield
 
 
 
 
Expected volatility
 
47.5%
 
54.6%
 
47.5% - 50.2%
 
54.6% - 55.1%

Stock-based Compensation - No stock-based compensation costs were capitalized in the three months ended June 30, 2019 and 2018. The following table summarizes the components of stock-based compensation expense in the consolidated statements of operations (in thousands):
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Cost of revenue
 
$
10,392

 
$
1,971

 
$
24,764

 
$
3,869

Research and development
 
12,218

 
1,739

 
26,448

 
3,376

Sales and marketing
 
8,935

 
1,214

 
20,447

 
2,166

General and administrative
 
19,673

 
2,894

 
43,441

 
6,362

Total stock-based compensation
 
$
51,218

 
$
7,818

 
$
115,100

 
$
15,773


During the six months ended June 30, 2019 and 2018, we recognized $115.1 million and $15.8 million of stock-based compensation expense, respectively. Our stock-based compensation expense is associated with stock options, RSUs, and our ESPP.
As of June 30, 2019, there was unrecognized compensation expense related to unvested stock options of $56.8 million. This expense is expected to be recognized over the remaining weighted-average period of 2.6 years. We had no excess tax benefits in the six months ended June 30, 2019 and 2018.
As of June 30, 2019, there was $108.2 million of unrecognized stock-based compensation cost related to unvested RSUs. This expense is expected to be recognized over a weighted average period of 1.1 years.
As of June 30, 2019, there was $6.3 million of unrecognized stock-based compensation cost related to the ESPP. This expense is expected to be recognized over a weighted average period of 0.9 years.