The Company sponsors the 2018 Equity Incentive Plan (the “2018 Plan”), which was approved by stockholders on September 5, 2018. The purpose of the 2018 Plan is to promote the long-term growth and profitability of the Company by (i) providing employees with incentives to improve stockholder value and to contribute to the growth and financial success of the Company through their future services, and (ii) enabling the Company to attract, retain and reward the best‑available persons. The options granted under the 2018 Plan, may be granted at a price not less than the fair market value on the grant date.

The Board, or a committee of the Board, has granted options with an exercise price at fair value on the grant date. Grants of time-based awards generally vest over a four-year period for new hires and over a three-year period for subsequent grants to existing employees. Options expire as determined by the Board, or committee of the Board, but not more than ten years after the date of the grant.

As of September 30, 2021, 16,844,015 shares of common stock remain available for grant under the 2018 Plan.

The following is a summary of restricted stock units for the current year period:


	Restricted Stock Units
	Number of Shares			Weighted Average Grant-Date Fair Value		Weighted Average Remaining Contractual Term (in years)
Unvested at December 31, 2020		7,000,855		$	17.72		1.1
Granted		4,262,348		$	24.32
Vested		(2,924,389	)	$	18.24
Forfeited/cancelled		(1,618,582	)	$	20.45
Unvested at September 30, 2021		6,720,232		$	21.03		1.1

The following is a summary of stock option activity for the current year period:


	Stock Options
	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Term (in years)
Outstanding at December 31, 2020		15,100,142		$	16.07	$	143,156		6.9
Granted		2,904,930		$	21.61
Exercised		(1,543,809	)	$	13.95
Forfeited		(1,133,816	)	$	19.59
Expired		(106,057	)	$	19.35
Outstanding, vested and expected to vest at September 30, 2021		15,221,390		$	17.06	$	47,918		6.5
Vested and exercisable at September 30, 2021		10,986,983		$	15.92	$	43,565		5.6

On February 16, 2021, the Company granted 580,911 options to purchase shares of the Company’s common stock to its Chief Executive Officer at an exercise price of $21.99 per share (the “Executive Option Grant”). The stock options contain a service condition and a market condition of achieving a per share price milestone. The grant-date fair value of the award is $5.7 million, which will be recognized using the accelerated attribution method. Stock-based compensation is recognized for each vesting tranche using service periods that range from 9 months to 3 years. The grant-date fair value was determined using the Monte Carlo valuation, which incorporates various assumptions including expected stock price volatility, contractual term, dividend yield, and stock price at grant date. During the three and nine months ended September 30, 2021, the Company recognized $1.1 million and $2.7 million of stock-based compensation expense, respectively, related to this award, which is included in general and administrative expense in the condensed consolidated statement of operations.

The following is a summary of restricted stock awards for the current year period:


	Restricted Stock Awards
	Number of Shares			Weighted Average Grant-Date Fair Value		Weighted Average Remaining Contractual Term (in years)
Unvested at December 31, 2020		102,460		$	18.30		1.2
Granted		329,417		$	25.68
Vested		(86,163	)	$	21.78
Forfeited/cancelled		(64,823	)	$	26.89
Unvested at September 30, 2021		280,891		$	23.91		2.1

Except for the Executive Option Grant discussed above, the Company used the Black-Scholes-Merton option pricing model to estimate the fair value of stock options granted using the following weighted-average assumptions:


	Three Months Ended September 30,			Nine Months Ended September 30,
	2021	2020	2021		2020
Expected life (in years)	5.7	5.6	5.8		5.8
Risk-free interest rate	0.9%	0.4%	0.8%		1.2%
Volatility	50%	52%	52%		48%
Dividend yield	—%	—%	—%		—%
Fair value of common stock	$20.05	$24.10	$21.51		$21.47

The Company sponsors the 2018 Employee Stock Purchase Plan, as amended (the “ESPP”), which was approved by stockholders on September 5, 2018. The ESPP provides for 24-month offering periods beginning May 22 and November 22 of each year, and each offering period will consist of four six-month purchase periods, subject to a reset provision. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date, or (2) the fair market value of its common stock on the purchase date.

Under the reset provision, if the closing stock price on the purchase date falls below the closing stock price on the offering date of an ongoing offering period, the ongoing offering terminates immediately following the purchase of ESPP shares on the purchase date and participants in the terminated offering are automatically enrolled in the new offering period (“ESPP reset”), resulting in a modification charge to be recognized over the new offering period. During the nine months ended September 30, 2021, there was an ESPP reset that resulted in a modification charge of $2.0 million, which is being recognized over the new offering period ending in May 2023.

During the nine months ended September 30, 2021, the Company’s employees purchased 245,914 shares of its common stock under the ESPP with a weighted average purchase price of $15.75, with aggregate proceeds to the Company of $3.9 million. During the nine months ended September 30, 2020, the Company’s employees purchased 267,757 shares of its common stock under the ESPP with a weighted average purchase price of $11.51, with aggregate proceeds to the Company of $3.1 million.

As of September 30, 2021, 5,416,004 shares of common stock remain available for issuance under the ESPP.

The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of ESPP purchase rights granted using the following weighted-average assumptions:


	Three Months Ended September 30,			Nine Months Ended September 30,
	2021	2020	2021		2020
Expected life (in years)	n/a	n/a	1.3		1.3
Risk-free interest rate	n/a	n/a	0.1%		0.2%
Volatility	n/a	n/a	53%		58%
Dividend yield	n/a	n/a	—%		—%
Fair value of common stock	n/a	n/a	$19.12		$19.81

Stock-based compensation expense recognized in the condensed consolidated financial statements is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Cost of revenue	$	1,639	$	1,222	$	4,701	$	3,229
Research and development		10,081		8,322		29,891		22,275
Sales and marketing		5,672		5,912		17,864		15,096
General and administrative		7,202		6,150		21,310		17,979
Stock-based compensation expense, net of amounts capitalized		24,594		21,606		73,766		58,579
Capitalized stock-based compensation expense		530		206		1,666		1,692
Stock-based compensation expense	$	25,124	$	21,812	$	75,432	$	60,271

As of September 30, 2021, unamortized stock-based compensation was as follows:


	Unrecognized stock-based compensation (in thousands)		Weighted average vesting period (in years)
Restricted stock units	$	129,340		2.3
Stock options		34,430		2.2
Restricted stock awards		6,130		2.3
ESPP		5,564		1.6
Total unrecognized stock-based compensation	$	175,464

In the United States, the Company offers its employees a defined contribution plan that qualifies as a deferred salary arrangement under Section 401 of the U.S. Internal Revenue Code (“401(k) Plan”). Under the 401(k) Plan, participating employees may defer a portion of their pretax earnings not to exceed the maximum amount allowed by the Internal Revenue Service. The Company currently provides a matching contribution of 25% of deferrals for eligible employees. Compensation expense for the Company's matching contributions was $1.2 million and $3.8 million during the three months and nine months ended September 30, 2021, respectively, and $1.1 million and $3.3 million during the three and nine months ended September 30, 2020, respectively.