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Equity Incentive Plans and Stock-Based Compensation
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Equity Incentive Plans and Stock-Based Compensation

11. Equity Incentive Plans and Stock-Based Compensation

As of September 30, 2024, we have two active equity incentive plans: the 2020 Equity Incentive Plan and the Employee Stock Purchase Plan (“ESPP”).

In February 2024, we granted performance stock units (“PSU”) to certain senior members of our management team under the 2020 Equity Incentive Plan. The vesting of PSUs is conditional upon the achievement of certain internal financial targets for the year ended December 31, 2024 and these will vest over a three-year service period. The number of units issued can range from 0% to 200% of the target shares depending on the achievement of the financial targets. In the event such targets are achieved, one-third of the eligible PSUs would vest and the remaining two-thirds would thereafter vest evenly over the second and third years. In the event the minimum targets are not achieved, no PSUs would vest. The compensation expense associated with PSUs is recognized using the accelerated attribution method over the requisite service period, and it is based on the estimated number of shares that is considered probable of vesting. Adjustments to the compensation expense will be made in each reporting period based on changes in our estimate of the number of PSUs that are probable of vesting.

We measure and recognize compensation for all stock-based compensation awards, including stock options, stock purchase rights, restricted stock units (“RSU”) and PSU, based upon the grant-date fair value of those awards. The grant-date fair value of our stock options and stock purchase rights is estimated using a Black-Scholes-Merton option-pricing model. The fair value of our RSUs and PSUs are calculated based on the market value of our stock at the grant date.

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

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

435

 

 

$

569

 

 

$

1,592

 

 

$

1,576

 

Sales, general and administrative

 

 

6,077

 

 

 

6,243

 

 

 

18,790

 

 

 

18,721

 

Product development

 

 

912

 

 

 

1,013

 

 

 

2,743

 

 

 

2,972

 

Stock-based compensation expense, net of amounts capitalized (1)

 

$

7,424

 

 

$

7,825

 

 

$

23,125

 

 

$

23,269

 

Excess income tax benefits (deficiencies) related to stock-based compensation expense

 

$

47

 

 

$

118

 

 

$

174

 

 

$

2,696

 

 

(1)
Stock-based compensation expense capitalized were not material for each of the periods presented.

The following table summarizes by type of grant, the total unrecognized stock-based compensation expense and the remaining period over which such expense is expected to be recognized (in thousands, except number of years):

 

 

September 30, 2024

 

 

Unrecognized Expense

 

 

Remaining weighted average period (In years)

 

 

 

 

 

 

Stock options

 

$

26,676

 

 

2.6

RSUs

 

 

26,974

 

 

2.7

PSUs (1)

 

 

—

 

 

-

ESPP

 

 

424

 

 

0.4

Total unrecognized stock-based compensation expense

 

$

54,074

 

 

 
(1)
As of September 30, 2024, we assessed the likelihood of achieving the financial targets for the PSUs and determined that it was not probable to be achieved. As such, no PSU stock-based compensation expense was recognized in the three months ended September 30, 2024, and there is no unrecognized stock-based compensation expense remaining as of September 30, 2024.