Stock Based Awards and Other Equity Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

Amount of Stock-Based Compensation Expense Related to Stock-Based Awards, Primarily Stock Options and RSUs

The following table presents the amount of stock-based compensation expense related to stock-based awards, primarily stock options and RSUs, on our unaudited condensed consolidated statements of operations during the periods presented:

	Three months ended						Six months ended
	June 30,						June 30,
	2022			2021			2022			2021
	(in millions)						(in millions)
Cost of revenue	$	—		$	—		$	1		$	1
Selling and marketing		3			4			6			8
Technology and content		9			13			18			24
General and administrative		9			15			18			28
Total stock-based compensation expense		21			32			43			61
Income tax benefit from stock-based compensation		(5	)		(6	)		(9	)		(11	)
Total stock-based compensation expense, net of tax	$	16		$	26		$	34		$	50

Summary of Stock Option Activity

A summary of our stock option activity, consisting of service-based non-qualified stock options, is presented below:

				Weighted		Weighted
				Average		Average
				Exercise		Remaining		Aggregate
	Options			Price Per		Contractual		Intrinsic
	Outstanding			Share		Life		Value
	(in thousands)					(in years)		(in millions)
Options outstanding at December 31, 2021		5,671		$	47.03
Granted		45			25.84
Exercised (1)		(7	)		24.32
Cancelled or expired		(906	)		44.53
Options outstanding at June 30, 2022		4,803		$	47.34		5.0	$	—
Exercisable as of June 30, 2022		3,476		$	51.47		4.0	$	—
Vested and expected to vest after June 30, 2022 (2)		4,803		$	47.34		5.0	$	—

(1)Inclusive of approximately 4,000 stock options which were not converted into shares due to net share settlement in order to cover the aggregate exercise price and the required amount of employee withholding taxes. Potential shares which had been convertible under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Stock and Annual Incentive Plan (the “2018 Plan”) and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.

(2)The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.

Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants

The fair value of stock option grants has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented:

	Six months ended
	June 30,
	2022			2021
Risk free interest rate		2.21	%		0.66	%
Expected term (in years)		5.14			5.33
Expected volatility		51.21	%		49.69	%
Expected dividend yield	—  %			—  %
Weighted-average grant date fair value	$	12.13		$	20.39

Summary of RSU Activity

A summary of our activity with respect to restricted stock units (“RSUs”), consisting primarily of service-based vesting terms, is presented below:

				Weighted
				Average
				Grant-		Aggregate
	RSUs			Date Fair		Intrinsic
	Outstanding			Value Per Share		Value
	(in thousands)					(in millions)
Unvested RSUs outstanding as of December 31, 2021		5,786		$	36.82
Granted		5,440			26.86
Vested and released (1)		(1,528	)		41.52
Cancelled		(847	)		33.92
Unvested RSUs outstanding as of June 30, 2022 (2)		8,851		$	30.17	$	158

(1)Inclusive of approximately 340,000 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares which had been convertible under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2018 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.

(2)The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.

Summary of Unrecognized Stock-Based Compensation Expense and Weighted Average Period Remaining

A summary of our remaining unrecognized stock-based compensation expense and the weighted average remaining amortization period at June 30, 2022 related to our non-vested equity awards is presented below (in millions, except in years information):

	Stock
	Options		RSUs/MSUs
Unrecognized compensation expense	$	11	$	212
Weighted average period remaining (in years)		2.3		3.0

MSUs

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

Summary of RSU Activity

A summary of our activity related to market-based RSUs (“MSUs”), is presented below:

				Weighted
				Average
				Grant-		Aggregate
	MSUs			Date Fair		Intrinsic
	Outstanding			Value Per Share		Value
	(in thousands)					(in millions)
Unvested MSUs outstanding as of December 31, 2021		120		$	28.15
Cancelled		(35	)		28.15
Unvested MSUs outstanding as of June 30, 2022 (1)		85		$	28.15	$	2

(1)MSUs provide for vesting based upon the Company’s total shareholder return, or TSR, performance over the period commencing January 1, 2020 through December 31, 2022 relative to the TSR performance of The Nasdaq Composite Total Return Index. Based upon actual attainment relative to the target performance metric, the grantee has the ability to receive up to 200% of the target number of MSUs originally granted, or to receive none at all.