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Stock-based Compensation
 6 Months Ended
Jun. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
Stock Options
Squarespace, Inc. Amended and Restated 2008 Equity Incentive Plan
In January 2008, the Company established and approved the Squarespace, Inc. 2008 Equity Incentive Plan which was ratified in 2010 and was subsequently amended and restated in March 2016 (the “2008 Plan”). Under the 2008 Plan, which covers certain employees and consultants, the Company granted shares of its Class B common stock in the form of stock options. After November 17, 2017, there were no additional grants from the 2008 Plan.
A summary of the Company’s stock option activity for the 2008 Plan during the six months ended June 30, 2024 is as follows:
Number of
Options
Weighted-
Average
Exercise
Price
As of December 31, 2023
1,117,616 $2.56 
Exercised
(1,030,422)2.51 
Expired
(1)1.82 
As of June 30, 2024
87,193 $3.13 
Vested at June 30, 2024
87,193 $3.13 
Exercisable at June 30, 2024
87,193 $3.13 
Restricted Stock Units ("RSUs") and Performance Stock Units ("PSUs")
Squarespace, Inc. 2017 Equity Incentive Plan
On November 17, 2017, the Company’s board of directors approved the Squarespace, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). Under the 2017 Plan, the Company may grant shares of its Class A common stock in the form of RSUs, PSUs, stock options, stock appreciation rights and other stock awards. RSUs are subject to continuous service, generally vest over four years and are measured based on the fair market value of the underlying Class A common stock on the date of grant. After April 15, 2021, no additional grants were issued from the 2017 Plan.
Squarespace, Inc. 2021 Equity Incentive Plan
On March 25, 2021, the Company’s board of directors adopted the Squarespace, Inc. 2021 Equity Incentive Plan (the “2021 Plan”) which was approved by the stockholders on May 3, 2021 and went into effect on May 9, 2021. Under the 2021 Plan, the Company may grant shares of its Class A common stock in the form of RSUs, PSUs, stock options, stock appreciation rights and other stock awards. RSUs and PSUs are measured based on the closing price of the Company's Class A common stock as reported on the date of grant. RSUs are subject to continuous service and generally vest over four years. PSUs are subject to continuous service and generally vest over three years based on the achievement of certain performance targets over a one-year performance cycle. The percentage of PSUs that will vest can range from 0% to 200% of the target number of shares granted based on the performance targets that are achieved. The Company begins recognizing stock-based compensation costs when the achievement of a performance target becomes probable. Quarterly, the Company reassesses the probability of each possible outcome and, if applicable, recognizes a cumulative adjustment for any changes to the previously determined expectation using the grant date fair value of the PSU award. The Company recognizes stock-based compensation expense for PSUs ratably, net of forfeitures, over the requisite service period, which is the vesting period.
During the six months ended June 30, 2024, the Company granted 349,417 shares of Class A common stock in the form of PSUs under the 2021 Plan. Additionally, the granted activity below includes 111,738 PSUs awarded for the achievement of performance targets as of December 31, 2023 which were approved by the Company’s board of directors during the six months ended June 30, 2024.
A summary of the Company’s RSU and PSU activity during the six months ended June 30, 2024, is as follows:
Number of Share Units
Weighted Average
Grant Date Fair
Value Per Share Unit
Outstanding – December 31, 2023
10,025,607 $28.31
Granted
4,832,302 32.57
Vested
(2,599,225)28.61
Forfeited
(733,200)29.91
Outstanding – June 30, 2024
11,525,484 $29.92
In connection with the vesting of shares, the Company reacquired 300,446 shares for $13,262 and 1,069,635 shares for $37,284 during the three and six months ended June 30, 2024, respectively, in order to satisfy employee tax withholding obligations. The employees received the net number of shares after consideration to those reacquired. The reacquired shares subsequently became available again for issuance under the Plan.
Casalena Performance Award
On April 15, 2021 (“Grant Date”), the board of directors of the Company approved an RSU grant to Anthony Casalena, CEO, of 2,750,000 Class A common shares (the “Casalena Performance Award”). The Casalena Performance Award vesting is contingent on both service- and market-based vesting conditions. The Company estimated the fair value of the Casalena Performance Award using a Monte Carlo simulation with a weighted-average grant date fair value of $30.38 per Class A common share. The Company will recognize the fair value of the award as stock-based compensation expense using the accelerated attribution method over the longer of (i) the period of time the market condition for each tranche is expected to be met (i.e., the derived service period) or (ii) the service vesting condition of four years. The Company recorded compensation expense of $1,776 and $3,551 during the three and six months ended June 30, 2024, respectively, and $4,869 and $9,685 during the three and six months ended June 30, 2023, respectively, related to the Casalena Performance Award in general and administrative expenses in the condensed consolidated statements of operations.
Stock-based Compensation
The classification of stock-based compensation by line item in the condensed consolidated statements of operations was as follows:
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cost of revenue$2,026 $1,549 $3,795 $2,601 
Research and product development19,025 15,650 34,675 26,337 
Marketing and sales3,590 3,045 6,801 4,916 
General and administrative8,157 9,235 15,694 17,751 
Total stock-based compensation$32,798 $29,479 $60,965 $51,605 
The amount above excludes $593 and $1,404 of stock-based compensation capitalized as property and equipment, net, for the three and six months ended June 30, 2024, respectively, and $1,169 and $1,638 for the three and six months ended June 30, 2023, respectively.