Stock-Based Compensation

For stock-based awards granted by the Company, stock-based compensation expense is measured at grant date based on the fair value of the award and is expensed over the requisite service period. The Company recorded stock-based compensation expense of

$685

and

$1,028

for the

three

months ended

March 31, 2019

and

2018,

respectively.

Stock Options

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options. This model requires the input of highly subjective assumptions including the expected volatility, risk-free interest rate and the expected life of options. The Company used the following assumptions for its Black-Scholes option-pricing model for the

three

months ended

March 31, 2018 (

there were

stock options granted during the

three

months ended

March 31, 2019):

Dividend yield	—
Expected volatility	56.1	%
Risk-free interest rate	2.52	%
Expected life of options (in years)	4.00

The Company estimates the expected volatility of its common stock and expected life of its stock options based on its own historical experience. The expected volatility reflects the actual historical volatility of the price of the Company’s common stock since it began trading publicly in

March 2013.

The expected life represents the period of time that stock options are expected to be outstanding, based on historical exercise and employee departure behavior. The Company has

history or expectation of paying cash dividends on its common stock. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the options in effect at the time of grant.

There were

exercises of stock options during the

three

months ended

March 31, 2019

and

2018.

Compensation expense, net of estimated forfeitures, is recognized ratably over the requisite service period. As of

March 31, 2019,

there was

$414

of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of

1.7

years.

RSUs

As of

March 31, 2019,

there was

$4,306

of unrecognized compensation expense, net of estimated forfeitures, related to RSUs, which is expected to be recognized over a weighted-average period of

2.6

years. The Company uses the fair market value of the underlying common stock on the dates of grant to determine the fair value of RSUs.

Employee Stock Purchase Plan

The Company estimates the fair value of purchase rights under the

2013

ESPP using the Black-Scholes valuation model. The fair value of each purchase right under the

2013

ESPP is estimated on the date of grant using the Black-Scholes option valuation model and the straight-line attribution approach with assumptions substantially similar to those used for the valuation of stock option awards, with the exception of the expected life, which was determined to be

six

months. This is consistent with the purchase periods under the

2013

ESPP.