Share-based grants are designed to reward employees for their long-term contributions to us and provide incentives for them to remain with us.

As of September 30, 2020, options to purchase 1,595,345 shares of Class B common stock were outstanding with a weighted average exercise price of $25.52 per share. The 2002 Stock Plan has been canceled; however, it continues to govern outstanding grants under the 2002 Stock Plan.

As of September 30, 2020, stock options to purchase 9,191,693 shares of Class B common stock were outstanding with a weighted average exercise price of $27.28 per share and no shares were available for future grant. As of September 30, 2020, we had outstanding restricted stock units ("RSUs") that may be settled for 1,353,878 shares of Class B common stock under the plan. The 2012 Equity Incentive Plan has been canceled; however, it continues to govern outstanding grants under the 2012 Equity Incentive Plan.

As of September 30, 2020, stock options to purchase 5,817,989 shares of Class A common stock were outstanding with a weighted average exercise price of $9.16 per share and 6,239,837 shares of outstanding RSUs that may be settled for Class A common stock which were granted pursuant to the 2018 Equity Incentive Plan (the "2018 EIP").

We used the following weighted-average assumptions in applying the Black-Scholes valuation model for determination of option valuation:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019

Risk-free interest rate	—%	1.9%- 2.0%	0.6%	1.9% - 2.6%
Expected term (years)	—	6.4 - 6.7	6.6	6.4 - 6.7
Expected dividend yield	—	—	—	—
Expected volatility	—%	45.7%	71.0%	45.7% - 50.2%

The following table summarizes the components of stock-based compensation expense in the condensed consolidated statements of operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
			As Restated				As Restated

Cost of revenue	$	3,568	$	7,985	$	13,811	$	36,835
Research and development	4,103		6,589		14,913		33,037
Sales and marketing	2,234		5,823		8,358		26,270
General and administrative	5,830		20,650		20,303		64,091
	$	15,735	$	41,047	$	57,385	$	160,233

Stock-based Compensation - During the three months ended September 30, 2020 and 2019, we recognized $0.7 million and $5.7 million, respectively, of stock-based compensation expense previously capitalized in inventory and property, plant and equipment. During the nine months ended September 30, 2020 and 2019, we recognized $3.8 million and $22.7 million, respectively, of stock-based compensation expense previously capitalized in inventory and property, plant and equipment.


	Outstanding Options
	Number of Shares	Weighted Average Exercise Price		Remaining Contractual Life (Years)	Aggregate Intrinsic Value

					(in thousands)




December 31, 2019	17,837,316	$	20.76	6.94	$	14,964
Granted	200,000	7.30
Exercised	(443,929)	9.56
Cancelled	(988,360)	23.01
Balances at September 30, 2020	16,605,027	20.76		6.24	66,358
Vested and expected to vest at Current period end	16,188,459	21.08		6.18	62,085
Exercisable at Current period end	10,047,183	27.82		4.71	5,338

Stock Options - During the three months ended September 30, 2020 and 2019, we recognized $4.4 million and $8.5 million of stock-based compensation costs for stock options, respectively. During the nine months ended September 30, 2020 and 2019, we recognized $14.9 million and $26.7 million of stock-based compensation costs for stock options, respectively.

We granted zero and 200,000 options of Class A common stock during the three and nine months ended September 30, 2020 and the weighted average grant-date fair value of those options was $7.30 per share.

As of September 30, 2020 and 2019, we had unrecognized compensation costs related to unvested stock options of $25.1 million and $48.0 million, respectively. This cost is expected to be recognized over the remaining weighted-average period of 2.1 years and 2.6 years, respectively. We had no excess tax benefits in the quarters ended September 30, 2020 and 2019. Cash received from stock options exercised totaled $4.2 million and $1.4 million for the nine months ended September 30, 2020 and 2019, respectively.


	Number of Awards Outstanding	Weighted Average Grant Date Fair Value





Unvested Balance at December 31, 2019	10,112,266	$	17.29
Granted	4,421,528	11.73
Vested	(6,524,088)	17.59
Forfeited	(415,991)	15.05
Balances at September 30, 2020	7,593,715	13.92

Restricted Stock Units - The estimated fair value of RSU awards is based on the fair value of our Class A common stock on the date of grant. For the three months ended September 30, 2020 and September 30, 2019, we recognized $9.6 million and $27.8 million of stock-based compensation costs for RSUs, respectively. For the nine months ended September 30, 2020 and September 30, 2019, we recognized $33.3 million and $118.5 million of stock-based compensation costs for RSUs, respectively.

As of September 30, 2020, we had $62.0 million of unrecognized stock-based compensation cost related to unvested RSUs. This cost is expected to be recognized over a weighted average period of 2.2 years. As of September 30, 2019, we had $76.9 million of unrecognized stock-based compensation cost related to unvested RSUs. This expense was expected to be recognized over a weighted average period of 1.1 years.

The following table presents the stock activity and the total number of RSUs available for grant under our stock plans as of September 30, 2020:


						Plan Shares Available for Grant







Balances at December 31, 2019						17,233,144
Added to plan						6,928,556
Granted						(4,621,528)

Cancelled						1,396,524
Expired						(949,280)
Balances at September 30, 2020						19,987,416

During the three months ended September 30, 2020 and 2019, we recognized $0.5 million and $3.2 million of stock-based compensation costs under our 2018 Employee Stock Purchase Plan (the "2018 ESPP"), respectively. During the nine months ended September 30, 2020 and 2019, we recognized $5.2 million and $8.4 million of stock-based compensation costs for the 2018 ESPP, respectively. We issued 1,937,825 shares in the nine months ended September 30, 2020. During the first nine months of 2020, we added an additional 1,494,819 shares and there were 2,587,401 shares available for issuance as of September 30, 2020.

As of September 30, 2020, we had $2.6 million of unrecognized stock-based compensation costs. This cost is expected to be recognized over a weighted average period of 0.5 years.

We used the following weighted-average assumptions in applying the Black-Scholes valuation model for determination of the ESPP share valuation:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019

Risk-free interest rate	0.12% - 0.14%	1.90% - 2.00%	0.12% - 1.51%	1.9% - 2.6%
Expected term (years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0	0.6 - 2.1
Expected dividend yield	—	—	—	—
Expected volatility	98.9% - 119.2%	45.7%	61.0% - 119.2%	47.0% - 50.2%

In November 2019, the Board approved stock options ("2019 Executive Awards") to certain executive staff. The 2019 Executive Awards were granted pursuant to the 2018 EIP and consist of three vesting tranches with a vesting schedule based on the attainment of market conditions and assuming continued employment and service through each vesting date. Stock-based compensation costs associated with the 2019 Executive Awards are recognized over the service period, even though no tranches of the 2019 Performance Awards vest unless a market condition is achieved. The grant date fair value of the options is determined using a Monte Carlo simulation.

In June 2020, the Board approved stock awards ("2020 Executive Awards") to certain executive staff. The 2020 Executive Awards were granted pursuant to the 2018 EIP and consist of three vesting tranches with an annual vesting schedule based on the attainment of performance conditions and assuming continued employment and service through each vesting date. Stock-based compensation costs associated with the 2020 Executive Awards is recognized over the service period as we evaluate the probability of the achievement of the performance conditions.