Stock Plans (Tables)

For the three months ended March 31, 2018 and 2017, RSU grants were composed of the following:



	Three Months Ended March 31,
	2018			2017
	Shares granted (in thousands)	Average grant date fair value		Shares granted (in thousands)	Average grant date fair value
Service-based	921	$	5.77	667	$	5.44
Performance objectives	78	5.85		—	—
Market-condition	335	7.55		303	7.20
Total RSUs granted	1,334	6.22		970	5.99

Stock-based compensation cost included in cost of revenue; selling, general and administrative expense; and research and development expense is as follows (in thousands):



	Three Months Ended March 31,
	2018		2017
Cost of revenue	$	346	$	193
Selling, general and administrative	1,834		1,069
Research and development	444		276
Total stock-based compensation expense	$	2,624	$	1,538

The fair value of the market-condition PSUs granted was calculated using a Monte Carlo valuation model with the following assumptions:



	Three Months Ended March 31,
	2018		2017
Expected dividend yield	—	%	—	%
Expected volatility	46% - 47%		53	%
Risk-free interest rate	2.36% - 2.39%		1.55	%
Expected term (in years)	2.8 - 2.9		2.8

The following table summarizes the amount of compensation expense recognized for RSUs for the three months ended March 31, 2018 and 2017 (in thousands):



	Three Months Ended March 31,
RSU Type	2018		2017
Service-based	$	1,084	$	667
Performance objectives	120		6
Market-condition	298		192
	$	1,502	$	865

The fair value of the ESPP shares was estimated using the Black-Scholes valuation model for a call and a put option with the following weighted-average assumptions:



	Three Months Ended March 31,
	2018			2017
Expected dividend yield	—		%	—		%
Expected volatility	43		%	29		%
Risk-free interest rate	1.39		%	0.62		%
Expected term (in years)	0.50			0.50
Fair value per share	$	1.29		$	1.19