Stock-based Compensation

2017 Employee Stock Purchase Plan—The Company’s 2017 Employee Stock Purchase Plan (“2017 ESPP”) became effective on July 27, 2017 and enables eligible employees to purchase shares of the Company’s common stock at a discount. Purchases are accomplished through participation in discrete offering periods. The Company initially reserved 1,600,000 shares of common stock for issuance under the 2017 ESPP. The number of shares reserved for issuance under the 2017 ESPP will increase automatically on January 1 of each calendar year beginning after the first offering date and continuing through January 1, 2028 by the number of shares equal to the lesser of 1% of the total outstanding shares of the Company’s common stock as of the immediately preceding December 31 or an amount determined by the board of directors. On February 22, 2018, the board of directors determined to increase to the number of shares reserved for issuance under the 2017 ESPP by 814,688 shares. On each purchase date, participating employees purchase the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the first trading day of the offering period, and (2) the fair market value of the Company’s common stock on the purchase date. Offering periods last 6 months each, and begin every January 1 and July 1.

During the three and six months ended June 30, 2018, 187,076 shares of common stock were purchased under the 2017 ESPP. The fair value of common shares to be issued under the 2017 ESPP were calculated using the Black-Scholes-Merton option-pricing model with the following assumptions:



	Three and Six Months Ended June 30, 2018

Expected life	0.5 years
Volatility	37.01%
Risk-free interest rate	1.61%
Dividend yield	—%
Weighted-average grant date fair value	$7.82

2017 Equity Incentive Plan—The Company's 2017 Equity Incentive Plan ("2017 EIP") became effective on July 26, 2017, and provides for the issuance of incentive and nonqualified common stock options and restricted stock units to employees, directors, officers, and consultants of the Company. The Company initially reserved 7,898,159 shares of common stock for issuance under the 2017 EIP. The number of shares reserved for issuance under the 2017 EIP will increase automatically on January 1 of each calendar year beginning on January 1, 2018 and continuing through January 1, 2028, by the number of shares equal to the lesser of 5% of the total outstanding shares of the Company's common stock as of the immediately preceding December 31 or an amount determined by the board of directors. On December 22, 2017, the board of directors determined that there would be no increase to the number of shares reserved for issuance under the 2017 EIP on January 1, 2018. The term of each restricted stock unit under the plan shall be no more than 10 years and generally vest over a four-year period. The term of each option grant shall be no more than 10 years and generally vest over a four-year period.

Amended and Restated 2004 Equity Incentive Plan-The Company granted options under its Amended and Restated 2004 Equity Incentive Plan, as amended (“2004 Plan”), until July 26, 2017, when the plan was terminated in connection with the Company’s IPO. Accordingly, no shares are available for future issuance under this plan. The 2004 Plan continues to govern outstanding equity awards granted thereunder.

Options to Purchase Common Stock—The Company did not issue any options to purchase common stock during the three and six months ended June 30, 2018. The fair value of the options issued under the Amended and Restated 2004 Equity Incentive Plan for the three and six months ended June 30, 2017 were calculated using the Black-Scholes-Merton option-pricing model with the following assumptions:



	Three Months Ended June 30,	Six Months Ended June 30,

	2017

Expected life	7 years	7 years
Volatility	40.97%	37.88%-40.97%
Risk-free interest rate	1.96%	1.96%-2.26%
Dividend yield	—%	—%
Weighted-average grant date fair value	4.89	4.86

The following table presents information regarding options granted, exercised, forfeited, or canceled for the periods presented:



	Number Of Options	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value

Outstanding at December 31, 2017	13,180,950	$	6.30	7.02	$	329,786
Options granted	—	—
Options exercised	(2,108,485)	5.10			0
Options forfeited	(289,712)	9.18
Options forfeited or canceled	(6,941)	8.44
Outstanding at June 30, 2018	10,775,812	6.46		6.57	179,242
Options exercisable at June 30, 2018	7,833,599	$	5.49	6.02	$	137,856

The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of June 30, 2018, there was $12,597 of total unrecognized compensation cost related to options to purchase common stock, which is expected to be recognized over a weighted-average period of 1.89 years.

Restricted Stock Units—The following table summarizes activity for restricted stock units for the six months ended June 30, 2018:



	Restricted Stock Units		Weighted Average Grant-Date Fair Value

Unvested outstanding at December 31, 2017	981,276		$	22.78
Granted	1,134,858		21.49
Vested	(31,022	)	22.67
Forfeited or canceled	(74,926	)	22.22
Unvested outstanding at June 30, 2018	2,010,186		$	22.07

The grant date fair value of restricted stock units is recorded as stock-based compensation over the vesting period. As of June 30, 2018, there was $41,026 of total unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of 3.45 years.

During the three months ended June 30, 2018, the Company granted 140,601 restricted stock units subject to performance conditions (“2018 Performance RSUs”) at 100% of the target level. Depending on the Company's achievement of the performance conditions, the actual amount of shares of common stock issuable upon vesting of the 2018 Performance RSUs will range from 0% to 200% of the target amount of restricted stock units. For each recipient of the 2018 Performance RSUs, the award will vest, subject to the recipient continuing to provide service to the Company, upon the Company's board of directors, or its compensation committee, certifying that the Company achieved certain financial targets for the three-year period from January 1, 2018 to December 31, 2020. Share-based compensation expense for 2018 Performance RSUs will be recognized when it is probable that the performance conditions will be achieved. As of June 30, 2018, $93 of share-based compensation expense was recognized for the 2018 Performance RSUs.

Compensation Cost—The following table presents detail of stock-based compensation, net of the amount capitalized in internally developed software, included in the Company’s condensed consolidated statements of operations for the periods indicated below



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017

Cost of revenue	$	1,392	$	699	$	2,691	$	1,414
Technology and development	1,726		751		3,200		1,482
Marketing	157		123		276		242
General and administrative	1,503		1,065		2,808		2,182
Total stock-based compensation	$	4,778	$	2,638	$	8,975	$	5,320