Share-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Equity Incentive Plan

In June 2009, our board of directors adopted and approved our 2009 Plan, which provides for the issuance of stock options, restricted stock and RSUs to qualified employees, directors and consultants. Stock options granted under our 2009 Stock Plan have a maximum life of 10 years and an exercise price not less than 100% of the fair market value of our common stock on the date of grant. RSUs granted under our 2009 Plan have a maximum life of seven years. No shares of our common stock were reserved for future issuance under our 2009 Plan as of March 31, 2020.

Our 2019 Plan became effective upon closing of our IPO and succeeds our 2009 Plan. Our 2019 Plan provides for the issuance of stock options, restricted stock awards, RSUs and other equity- or cash-based awards to qualified employees, directors and consultants. Stock options granted under our 2019 Plan have a maximum life of 10 years and an exercise price not less than 100% of the fair market value of our common stock on the date of grant.

117,448,816 shares of our Class A common stock were reserved for future issuance under our 2019 Plan as of March 31, 2020.

The number of shares of our Class A common stock available for issuance under the 2019 Plan will be increased by the number of shares of our Class B common stock subject to awards outstanding under our 2009 Plan as of the closing of our IPO that would, but for the terms of the 2019 Plan, have returned to the share reserves of the 2009 Plan pursuant to the terms of such awards, including as the result of forfeiture, repurchase, expiration or retention by us in order to satisfy an award’s exercise price or tax withholding obligations. In addition, the number of shares of our Class A common stock reserved for issuance under our 2019 Plan will automatically increase on the first day of each fiscal year, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to 5% of the total number of shares of our Class A common stock and our Class B common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by our board of directors.

Stock Option Activity

Stock option activity during the three months ended March 31, 2020, was as follows (in thousands, except per share amounts):


	Stock Options Outstanding
		Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value ⁽¹⁾
						(in years)
Outstanding as of December 31, 2019		56,966		$	2.25	3.5	$	933,299
Granted	1,130		22.35
Exercised		(8,923)		2.28

Outstanding as of March 31, 2020		49,173		$	2.71	3.4	$	625,770
Exercisable as of March 31, 2020		48,105		$	2.28	3.3	$	632,999

(1)We calculate intrinsic value based on the difference between the exercise price of in-the-money-stock options and the fair value of our common stock as of the respective balance sheet date.

The total grant-date fair value of stock options vested during the three months ended March 31, 2020 and 2019, was $0.8 million and $0.6 million, respectively. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2020 and 2019, was $179.1 million and $1.2 million, respectively.

The total grant-date fair value of stock options granted during the three months ended March 31, 2020 was not material. No stock options were granted during the three months ended March 31, 2019.

Restricted Stock Unit Activity

RSU activity during the three months ended March 31, 2020, was as follows (in thousands, except per share amounts):


	Restricted Stock Units Outstanding
	Shares	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2019	56,791	$	20.19
Granted	4,853	22.02
Released	(5,296)	19.04
Forfeited	(2,643)	19.20
Outstanding as of March 31, 2020	53,705	$	20.51

Share-Based Compensation

Share-based compensation expense during the three months ended March 31, 2020 and 2019, was as follows (in thousands):



	Three Months Ended March 31,
	2020		2019
Cost of revenue	$	1,426	$	15
Research and development	48,906		626
Sales and marketing	13,919		29
General and administrative	16,773		24
Total share-based compensation	$	81,024	$	694

As of March 31, 2020, we had $623.0 million of unrecognized share-based compensation expense, which we expect to recognize over a weighted-average period of 3.1 years.