Stock-Based Compensation

12 Months Ended

Dec. 31, 2018

Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]

Stock-Based Compensation

Stock-Based Compensation

We use the Black-Scholes options pricing model to estimate the fair value of our stock option grants. This model incorporates various assumptions including expected volatility, expected term, risk-free interest rates and expected dividend yields. The following assumptions were used for each respective period to calculate our stock-based compensation for each stock option grant on the date of the grant:

	Year Ended December 31,
	2017		2016
Stock Options:
Expected volatility	39% - 42%		41% - 42%
Expected term (in years)	4.89		4.89 - 5.60
Risk-free interest rate	1.78% - 2.47%		1.18% - 1.87%
Dividend yield	—	%	—	%

No stock options were granted during the year ended December 31, 2018.

The following assumptions were used to calculate our stock-based compensation for each stock purchase right granted under the 2012 ESPP:

	Year Ended December 31,
	2018		2017		2016
ESPP:
Expected volatility	26% - 31%		28% - 49%		31% - 49%
Expected term (in years)	0.50		0.50		0.50
Risk-free interest rate	1.15% - 2.22%		0.40% - 1.15%		0.17% - 0.47%
Dividend yield	—	%	—	%	—	%

Expected volatility. The expected volatility is based on the historical volatility of our common stock for a period similar to our expected term.

Expected term. We determine the expected term for stock options based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. We estimate the expected term for ESPP using the purchase period.

Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the stock-based award.

Expected dividend yield. Our expected dividend yield is zero, as we have not and do not currently intend to declare dividends in the foreseeable future.