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Employee Benefit Plans (Tables)
 6 Months Ended
Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Stock Option Activity

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, 2018

 

 

18,452,375

 

 

$

14.39

 

 

$

8,482

 

 

 

7.5

 

Granted

 

 

2,452,116

 

 

$

12.73

 

 

 

 

 

 

 

 

 

Exercised

 

 

(2,956,897

)

 

$

12.73

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(873,331

)

 

$

14.30

 

 

 

 

 

 

 

 

 

Expired

 

 

(917,719

)

 

$

15.95

 

 

 

 

 

 

 

 

 

Outstanding, vested and expected to vest at June 30, 2019

 

 

16,156,544

 

 

$

14.36

 

 

$

34,902

 

 

 

7.7

 

Vested and exercisable at June 30, 2019

 

 

8,712,991

 

 

$

14.78

 

 

$

15,165

 

 

 

6.8

 
Summary of Estimated Fair Value of Stock Options on Grant Date

The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of stock options granted using the following assumptions:

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2019

 

2018

 

2019

 

2018

Expected life (in years)

 

6.0

 

6.0

 

5.9 to 6.0

 

5.8 to 6.0

Risk-free interest rate

 

2.2%

 

3.0%

 

2.2% - 2.5%

 

2.7% - 3.0%

Volatility

 

46%

 

49%

 

46%

 

43% - 49%

Dividend yield

 

—%

 

—%

 

—%

 

—%

Fair value of common stock

 

$16.48

 

$13.65

 

$12.35 to $16.48

 

$13.20 to $13.65

 
Summary of Estimated Fair Value of ESPP Purchase Rights Using a Black-Scholes Option Pricing Model Assumptions

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

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2019

 

2018

 

2019

 

2018

Expected life (in years)

 

0.5 to 2.0

 

n/a

 

0.5 to 2.0

 

n/a

Risk-free interest rate

 

2.1% - 2.4%

 

n/a

 

2.1% - 2.4%

 

n/a

Volatility

 

40% - 45%

 

n/a

 

40% - 45%

 

n/a

Dividend yield

 

—%

 

n/a

 

—%

 

n/a

Fair value of common stock

 

$16.98

 

n/a

 

$16.98

 

n/a
Summary of Stock-based Compensation Expense Recognized in Financial Statements

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

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Cost of revenue

 

$

991

 

 

$

646

 

 

$

2,087

 

 

$

1,304

 

Research and development

 

 

5,629

 

 

 

2,966

 

 

 

10,395

 

 

 

6,413

 

Sales and marketing

 

 

3,016

 

 

 

1,147

 

 

 

5,796

 

 

 

1,915

 

General and administrative

 

 

5,518

 

 

 

3,993

 

 

 

11,987

 

 

 

7,660

 

Stock-based compensation expense, net of amounts capitalized

 

 

15,154

 

 

 

8,752

 

 

 

30,265

 

 

 

17,292

 

Capitalized stock-based compensation expense

 

 

1,078

 

 

 

428

 

 

 

2,031

 

 

 

756

 

Stock-based compensation expense

 

$

16,232

 

 

$

9,180

 

 

$

32,296

 

 

$

18,048

 
Summary of Unamortized Stock-based Compensation

As of June 30, 2019, unamortized stock-based compensation was as follows:

 

 

Unrecognized

stock-based

compensation

(in thousands)

 

 

Weighted

average

vesting

period

(in years)

 

Stock options

 

$

42,318

 

 

 

2.2

 

Restricted stock awards

 

 

5,036

 

 

 

2.8

 

Restricted stock units (service-based)

 

 

61,393

 

 

 

2.9

 

Restricted stock units (performance-based)(1)

 

 

13,633

 

 

 

1.3

 

ESPP

 

 

4,304

 

 

 

1.5

 

Total unrecognized stock-based compensation

 

$

126,684

 

 

 

 

 

 

(1)

The Performance Vesting Condition occurred upon the effectiveness of the registration statement for the Company's IPO, which was September 25, 2018. The remaining unrecognized stock-based compensation expense is recognized on an accelerated basis over the weighted-average remaining requisite service period.
Restricted Stock Awards  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Restricted Stock Awards and Restricted Stock Units

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, 2018

 

 

—

 

 

$

—

 

 

 

0.0

 

Granted

 

 

299,798

 

 

$

18.30

 

 

 

 

 

Unvested at June 30, 2019

 

 

299,798

 

 

$

18.30

 

 

 

2.8

 

 
Restricted Stock Units  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Restricted Stock Awards and Restricted Stock Units

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, 2018

 

 

5,752,046

 

 

$

12.77

 

 

 

1.2

 

Granted

 

 

4,699,163

 

 

$

14.47

 

 

 

 

 

Vested

 

 

(1,780,128

)

 

$

12.92

 

 

 

 

 

Forfeited

 

 

(755,658

)

 

$

13.35

 

 

 

 

 

Unvested at June 30, 2019

 

 

7,915,423

 

 

$

13.69

 

 

 

1.2