Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Voting Rights

The holders of each share of common stock shall be entitled to one vote per share on all matters to be voted upon by the Company’s stockholders.

Stock Option Plan

In June 2020, the Company's stockholders approved the 2020 Stock Plan, which was adopted by the Company's Board of Directors in March 2020 subject to stockholder approval. The 2020 Stock Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.

A summary of the activities related to the Company’s stock option plans is as follows:

	Shares  Available for Grant	Options Outstanding
		Number of Shares	Weighted- Average Exercise Price (per share)		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Balances as of December 31, 2020	21,702,085	18,676,810	$	170.23
Granted	(1,556,725)	1,556,725	554.11
Exercised	—	(2,632,324)	65.97
Expired	—	(5,360)	34.63
Balances as of December 31, 2021	20,145,360	17,595,851	$	219.83
Granted	(3,691,257)	3,691,257	267.94
Exercised	—	(1,383,669)	27.19
Expired	—	(6,578)	11.10
Balances as of December 31, 2022	16,454,103	19,896,861	$	242.22
Granted	(1,729,218)	1,729,218	372.49
Exercised	—	(1,926,598)	87.30
Expired	—	(4,372)	36.39
Balances as of December 31, 2023	14,724,885	19,695,109	$	268.86	5.35	$	4,429,404
Vested and expected to vest as of December 31, 2023		19,695,109	$	268.86	5.35	$	4,429,404
Exercisable as of December 31, 2023		19,447,739	$	267.37	5.30	$	4,404,586

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of 2023. This amount changes based on the fair market value of the Company’s common stock.

A summary of the amounts related to option exercises, is as follows:

	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Total intrinsic value of options exercised	$	610,594	$	345,839	$	1,362,599
Cash received from options exercised	169,990		35,746		174,414

Stock-Based Compensation

Stock options are generally vested in full upon grant date and exercisable for the full ten year contractual term regardless of employment status. Stock options granted to certain named executive officers vest on the one-year anniversary of the grant date, subject to the employee’s continuous employment or service with the Company through the vesting date. The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:

	Year Ended December 31,
	2023			2022			2021
Dividend yield	—		%	—		%	—		%
Expected volatility	40% - 46%			38% - 52%			34% - 41%
Risk-free interest rate	3.57% - 4.56%			1.71% - 3.79%			1.08% - 1.62%
Suboptimal exercise factor	4.22 - 4.30			4.71 - 4.82			3.81 - 3.98
Valuation data:
Weighted-average fair value (per share)	$	211.27		$	155.88		$	259.01
Total stock-based compensation expense (in thousands)	339,368			575,452			403,220
Total income tax impact on provision (in thousands)	61,588			127,289			89,642

The Company considers several factors in determining the suboptimal exercise factor, including the historical and estimated option exercise behavior.

The Company calculates expected volatility based solely on implied volatility. The Company believes that implied volatility of publicly traded options in its common stock is more reflective of market conditions, and given consistently high trade volumes of the options, can reasonably be expected to be a better indicator of expected volatility than historical volatility of its common stock.

In valuing shares issued under the Company’s employee stock option plans, the Company bases the risk-free interest rate on U.S. Treasury zero-coupon issues with terms similar to the contractual term of the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company does not use a post-vesting termination rate as options are generally fully vested upon grant date.

The total fair value of stock options that vested during the year ended December 31, 2023 was $311 million. The Company did not grant any stock options subject to vesting conditions in the years ended December 31, 2022 and 2021. As of December 31, 2023, $26 million of total unrecognized compensation cost related to nonvested stock options is expected to be recognized over a weighted-average period of 0.45 years.

Stock Repurchases

In March 2021, the Company’s Board of Directors authorized the repurchase of up to $5 billion of its common stock, with no expiration date, and in September 2023, the Board of Directors increased the share repurchase authorization by an additional $10 billion, also with no expiration date. Stock repurchases may be effected through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, privately-negotiated transactions, accelerated stock repurchase plans, block purchases, or other similar purchase techniques and in such amounts as management deems appropriate. The Company is not obligated to repurchase any specific number of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, general economic, business and market conditions, and alternative investment opportunities. The Company may discontinue any repurchases of its common stock at any time without prior notice. During the year ended December 31, 2023, the Company repurchased 14,513,790 shares for an aggregate amount of $6,045 million. As of December 31, 2023, $8.4 billion remains available for repurchases. Shares repurchased by the Company are accounted for when the transaction is settled. Direct costs incurred to acquire the shares are included in the total cost of the shares.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated balances of other comprehensive income (loss), net of tax:

	Foreign Currency Translation Adjustments		Change in Unrealized Gains (Losses) on Cash Flow Hedges		Total
	(in thousands)
Balances as of December 31, 2020	$	44,398	$	—	$	44,398
Other comprehensive income (loss) before reclassifications	(84,893)		—		(84,893)
Balances as of December 31, 2021	(40,495)		—		(40,495)
Other comprehensive income (loss) before reclassifications	(176,811)		—		(176,811)
Balances as of December 31, 2022	(217,306)		—		(217,306)
Other comprehensive income (loss) before reclassifications	113,384		(120,023)		(6,639)
Balances as of December 31, 2023	$	(103,922)	$	(120,023)	$	(223,945)