Equity and Equity Compensation Plans

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Common Stock—As of March 31, 2021 and December 31, 2020, our amended and restated certificate of incorporation authorized us to issue 500,000,000 shares of common stock with a par value of $0.001 per share.

Preferred Stock—As of March 31, 2021 and December 31, 2020, our amended and restated certificate of incorporation authorized us to issue 10,000,000 shares of preferred stock with a par value of $0.001.

Amended and Restated 2004 Equity Incentive Plan—We granted options under our 2004 Equity Incentive Plan, as amended (our "2004 Plan"), until July 26, 2017, when we terminated it in connection with our initial public offering. Accordingly, no shares are available for future issuance under our 2004 Plan. Our 2004 Plan continues to govern outstanding equity awards granted thereunder. The term of each stock option under the plan is no more than 10 years, and each stock option generally vests over a four-year period.

2017 Equity Incentive Plan—Our 2017 Equity Incentive Plan (our "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, and consultants. The number of shares of common stock initially reserved for issuance under our 2017 EIP was 7,898,159. The number of shares reserved for issuance under our 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 our common stock as of the immediately preceding December 31 or an amount determined by our board of directors. The term of each stock option and restricted stock unit under the plan will not exceed 10 years, and each award generally vests between two and four years.

We have reserved shares of common stock for future issuance under our 2017 EIP as follows:


	March 31, 2021	December 31, 2020

Stock options issued and outstanding	5,063,462	5,733,738
Restricted stock units outstanding	3,879,392	4,459,743
Shares available for future equity grants	16,796,584	11,309,377
Total shares reserved for future issuance	25,739,438	21,502,858

2017 Employee Stock Purchase Plan—Our 2017 Employee Stock Purchase Plan (our "ESPP") was approved by our board of directors on July 27, 2017 and enables eligible employees to purchase shares of our common stock at a discount. Purchases will be accomplished through participation in discrete offering periods. We initially reserved 1,600,000 shares of common stock for issuance under our ESPP. The number of shares reserved for issuance under our 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 our common stock as of the immediately preceding December 31 or an amount determined by our board of directors. On each purchase date, eligible employees will purchase our common stock at a price per share equal to 85% of the lesser of (i) the fair market value of our common stock on the first trading day of the offering period and (ii) the fair market value of our common stock on the purchase date.

We have reserved shares of common stock for future issuance under our ESPP as follows:


	Three Months Ended March 31, 2021	Year Ended December 31, 2020

Shares available for issuance at beginning of period	4,039,667	3,330,271
Shares issued during the period	—	(320,609)
Total shares available for future issuance at end of period	4,039,667	3,009,662

Stock Options—Option activity for the three months ended March 31, 2021 was as follows:


	Number of Options	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value

Outstanding as of January 1, 2021	5,733,738	$	7.23	4.39	$	352,076

Options exercised	(670,050)	5.17
Options forfeited	(223)	10.80
Options expired	(3)	8.61
Outstanding as of March 31, 2021	5,063,462	7.50		4.28	299,210
Options exercisable as of March 31, 2021	4,891,618	6.87		4.15	292,128

The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of March 31, 2021, there was $480 of total unrecognized compensation cost related to stock options. These costs are expected to be recognized over a weighted-average period of 0.67 years.

On June 1, 2019, we granted stock options subject to performance conditions ("PSOs"), with a target of 150,000 shares and a maximum 300,000 shares, to our 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 we granted in 2019. We determined that vesting is probable and have accrued compensation expense for the PSOs. None of the options vested during the three months ended March 31, 2021.

Restricted Stock Units—Restricted stock unit activity for the three months ended March 31, 2021 was as follows:


	Restricted Stock Units	Weighted Average Grant-Date Fair Value

Outstanding as of January 1, 2021	4,459,743	$	27.44
Granted	76,942	59.84
Vested(1)	(357,737)	20.97
Forfeited or canceled	(299,556)	22.77
Outstanding or deferred as of March 31, 2021(1)	3,879,392	$	29.04

(1) Starting with the restricted stock units granted to them in June 2019, our non-employee directors have the option to defer the issuance of common stock receivable upon vesting of such restricted stock units until 60 days following the day they are no longer providing services to us or, if earlier, upon a change in control transaction. The amount reported as vested excludes restricted stock units that have vested but whose settlement into shares have been deferred. The amount reported as outstanding or deferred as of March 31, 2021 includes these restricted stock units. As no further conditions exist to prevent the issuance of the shares of common stock underlying these restricted stock units, the shares are included in basic and diluted weighted shares outstanding used to calculate net loss per share attributable to common stock. The amount of shares whose issuance have been deferred is not considered material and is not reported separately from stock-based compensation in our consolidated statements of changes in mezzanine equity and stockholders’ equity.

The grant date fair value of restricted stock units is recorded as stock-based compensation over the vesting period. As of March 31, 2021, there was $102,465 of total unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of 2.45 years.

As of March 31, 2021, there were 260,509 restricted stock units subject to performance and market conditions ("PSUs") at 100% of the target level. Depending on our achievement of the performance and market conditions, the actual number of shares of common stock issuable upon vesting of PSUs will range from 0% to 200% of the target amount. For each PSU recipient, the awards will vest only if the recipient is continuing to provide service to us upon our board of directors, or its compensation committee, certifying that we have achieved the PSU's related performance or market conditions. Stock-based compensation expense for PSUs with performance conditions is recognized when it is probable that the performance conditions will be achieved. For PSUs with market conditions, the market condition is reflected in the grant-date fair value of the award and the expense is recognized over the life of the award. Stock-compensation expense associated with the PSUs is as follows:


	Three Months Ended March 31,
	2021		2020

Expense associated with the current period	$	1,099	$	153
Expense due to reassessment of achievement related to prior periods	—		$	(617)
Total expense	$	1,099	$	(464)

Compensation Cost—The following table details, for each period indicated, our stock-based compensation, net of forfeitures, and the amount capitalized in internally developed software, each as included in our consolidated statements of comprehensive loss:


	Three Months Ended March 31,
	2021		2020

Cost of revenue	$	2,978	$	1,638
Technology and development (1)	5,761		3,648
Marketing	542		375
General and administrative	3,302		1,550
Total stock-based compensation	$	12,583	$	7,211

(1) Net of $732 and $504 of stock-based compensation that was capitalized in the three months ended March 31, 2021 and 2020, respectively,