Equity and Employee Stock Plans

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Common Stock—At September 30, 2019 and December 31, 2018, the Company was authorized to issue 500,000,000 shares of common stock with a par value of $0.001 per share.

Preferred Stock—As of September 30, 2019 and December 31, 2018, the Company was authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001, of which no shares were issued or outstanding.

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 number of shares of common stock initially reserved for issuance under the 2017 EIP was 7,898,159. 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.

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

2017 Employee Stock Purchase Plan—The Company initially reserved 1,600,000 shares of common stock for issuance under the 2017 Employee Stock Purchase Plan (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. During the three and nine months ended September 30, 2019, zero and 262,110 shares of common stock, respectively, were issued under the 2017 ESPP.

The Company has reserved shares of common stock, on an as-converted basis, for future issuance as follows:



	September 30, 2019	December 31, 2018
Equity Incentive Plans
Shares underlying outstanding stock options	8,102,171	9,435,349
Shares underlying outstanding restricted stock units	4,536,677	3,264,702
Shares available for future equity grants	7,837,918	5,068,013
Total shares reserved for issuance	20,476,766	17,768,064



2017 Employee Stock Purchase Plan
Shares available for issuance on January 1, 2019 and 2018, respectively	2,890,973		2,414,688
Shares issued since January 1, 2019 and 2018, respectively	(262,110	)	(425,228	)
Total shares available for future issuance	2,628,863		1,989,460

Stock Options—The following table summarizes activity for stock options for the nine months ended September 30, 2019:



	Number Of Options	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2018	9,435,349	$	6.48	6.06	$	74,669
Options granted	150,000	27.50
Options exercised	(1,397,074)	5.49
Options forfeited	(81,826)	9.16
Options canceled	(4,278)	8.22
Outstanding as of September 30, 2019	8,102,171	7.01		5.59	81,204
Options exercisable as of September 30, 2019	7,100,240	6.30		5.32	74,839

The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of September 30, 2019, there was $4,092 of total unrecognized compensation cost related to options to purchase common stock, which is expected to be recognized over a weighted-average period of 1.25 years.

On June 1, 2019, the Company granted stock options subject to performance conditions, with a target of 150,000 shares and a maximum 300,000 shares, to the Company's Chief Executive Officer. The options have an exercise price of $27.50 per share and have the same performance and vesting conditions as the restricted stock units subject to performance conditions that the Company granted in 2019 (the "2019 PSUs").

Restricted Stock Units—The following table summarizes activity for restricted stock units for the nine months ended September 30, 2019:



	Restricted Stock Units		Weighted-Average Grant Date Fair Value
Unvested outstanding as of December 31, 2018	3,264,702		$	19.68
Granted	2,102,975		17.79
Vested	(562,755	)	21.00
Forfeited	(268,245	)	20.06
Unvested outstanding as of September 30, 2019	4,536,677		18.62

The grant date fair value of restricted stock units is recorded as stock-based compensation over the vesting period. As of September 30, 2019, there was $76,009 of total unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of 3.08 years.

As of September 30, 2019, there were outstanding 279,826 restricted stock units subject to performance conditions (the "PSUs") at 100% of the target level. During the nine months ended September 30, 2019, a net ($126) for share-based compensation expense was recognized for the PSUs, which includes (i) an adjustment of ($610) related to the PSUs granted in 2018 as the probability of achieving the performance conditions was determined to be not probable and (ii) a charge of $484 related to the 2019 PSUs.

Compensation Cost—The following table details, for each period indicated, (i) the Company's stock-based compensation net of forfeitures, and the amount capitalized in internally developed software and (ii) includes changes to the probability of achieving outstanding performance-based equity awards, each as included in the Company’s condensed consolidated statements of operations:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Cost of revenue	$	1,605	$	1,370	$	4,398	$	4,061
Technology and development	3,320		2,135		8,661		5,335
Marketing	390		155		1,025		431
General and administrative	2,195		1,838		5,708		4,646
Total stock-based compensation	$	7,510	$	5,498	$	19,792	$	14,473