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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-based Compensation
2013 Equity Incentive Plan
In October 2013, the Company adopted the 2013 Equity Incentive Plan (the “2013 Plan”), which became effective in March 2014 and serves as the successor to the Company’s 2006 Stock Plan (the “2006 Plan”). Pursuant to the 2013 Plan, 4,000,000 shares of common stock were initially reserved for grant, plus (1) any shares that were reserved and available for issuance under the 2006 Plan at the time the 2013 Plan became effective, (2) any shares that become available upon forfeiture or repurchase by the Company under the 2006 Plan and (3) any shares added to the 2013 Plan pursuant to the next paragraph.
Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, restricted stock and restricted stock units (“RSUs”), performance-based stock and units to employees, directors and consultants. The shares available will be increased at the beginning of each year by the lesser of (i) 4% of outstanding common stock on the last day of the immediately preceding year, or (ii) such number determined by the Board of Directors and subject to additional restrictions relating to the maximum number of shares issuable pursuant to incentive stock options. Under the 2013 Plan, both the ISOs and NSOs are granted at a price per share not less than 100% of the fair market value on the effective date of the grant. The Board of Directors determines the vesting period for each option award on the grant date, and the options generally expire 10 years from the grant date or such shorter term as may be determined by the Board of Directors.
Stock Options
The fair value of each option was estimated using the Black-Scholes model on the date of grant for the periods presented using the following assumptions:
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Expected life (in years)—6.086.02
6.02 - 6.08
Risk-free interest rate—1.42%0.96%
1.42% - 2.66%
Volatility—50%50%50%
Dividend yield————
 
There were no option grants during the three months ended September 30, 2020. The weighted-average grant date fair value of options was $4.26 during the nine months ended September 30, 2020. The weighted-average grant date fair value of options was $3.56 and $4.34 per share during the three and nine months ended September 30, 2019, respectively.
Restricted Stock Units and Performance-Based Restricted Stock Units
The fair value of RSUs equals the market value of the Company’s common stock on the date of the grant. The RSUs are excluded from issued and outstanding shares until they are vested.
A summary of the Company’s stock option and RSU award activity under the 2013 Plan is as follows:
  RSUs OutstandingOptions Outstanding
 Shares
Available
for Grant		Number of
Shares		Weighted
Average
Grant
Date Fair
Value		Number of
Shares		Weighted
Average
Exercise
Price		Weighted
Average
Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value
(in thousands)
Balance at December 31, 20196,036,180 5,022,675 $10.66 8,600,441 $11.40 5.16$8,811 
Increase in shares authorized3,574,847 — — — — — — 
Options granted(1,150,178)— — 1,150,178 $8.95 — — 
Options exercised— — — (74,307)$7.11 — $220 
Options canceled or expired723,824 — — (723,824)$11.76 — — 
RSUs granted(3,304,032)3,304,032 $8.33 — — — — 
RSUs vested— (1,767,543)$10.57 — — — — 
RSUs canceled or expired789,849 (789,849)$10.91 — — — — 
RSUs vested and withheld for taxes
631,186 — — — — — — 
Balance as of September 30, 20207,301,676 5,769,315 $9.32 8,952,488 $11.09 5.15$1,559 
Vested and exercisable as of September 30, 20205,871,020 $12.13 3.74$1,526 
 
The aggregate intrinsic value disclosed in the table above is based on the difference between the exercise price of the options and the fair value of the Company’s common stock.
The aggregate total fair value of options vested was $2.5 million and $5.4 million during the three and nine months ended September 30, 2020, respectively and $1.7 million and $4.7 million during the three and nine months ended September 30, 2019, respectively.
Employee Stock Purchase Plan
The Company’s Board of Directors adopted the 2013 Employee Stock Purchase Plan (“ESPP”), which became effective in March 2014. Eligible employees can enroll and elect to contribute up to 15% of their base compensation through payroll withholdings in each offering period which is six months in duration, subject to certain limitations. The purchase price of the stock is the lower of 85% of the fair market value on (a) the first day of the offering period or (b) the purchase date.
The fair value of the option feature is estimated using the Black-Scholes model for the period presented based on the following assumptions:
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Expected life (in years)0.500.500.500.50
Risk-free interest rate0.15%2.43%
0.15% - 1.59%
2.43% - 2.50%
Volatility60%35%
55% - 60%
35%
Dividend yield————
 
As of September 30, 2020, a total of 1,667,810 shares of common stock were issued under the ESPP since inception of the plan. As of September 30, 2020, a total of 1,932,190 shares are available for issuance under the ESPP.
Stock-based Compensation Expense
The following table sets forth the total stock-based compensation expense resulting from stock options, RSUs and ESPP included in the Company’s condensed consolidated statements of operations (in thousands):
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Cost of revenues$442 $508 $1,264 $1,672 
Sales and marketing1,187 1,433 3,912 4,996 
Research and development1,003 1,140 2,723 3,579 
General and administrative3,857 4,527 13,122 13,445 
Total stock-based compensation
   expense
$6,489 $7,608 $21,021 $23,692 
 
As of September 30, 2020, there was $61.2 million of unrecognized stock-based compensation expense, of which $13.0 million is related to stock options and ESPP shares and $48.2 million is related to RSUs. The total unrecognized stock-based compensation expense related to stock options and ESPP as of September 30, 2020 will be amortized over a weighted-average period of 2.69 years. The total unrecognized stock-based compensation expense related to RSUs as of September 30, 2020 will be amortized over a weighted-average period of 2.83 years.
During the three and nine months ended September 30, 2020, the Company capitalized $0.1 million and $0.3 million, respectively, and $0.2 million and $0.4 million during the three and nine months ended September 30, 2019, respectively, of stock-based compensation expense in projects in process as part of property and equipment, net on the accompanying condensed consolidated balance sheets.