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Stock Based Awards and Other Equity Instruments (Tables)

3 Months Ended

Mar. 31, 2023

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 restricted stock units (“RSUs"), on our unaudited condensed consolidated statements of operations during the periods presented:


	Three months ended
	March 31,
	2023			2022
	(in millions)
Selling and marketing	$	4		$	3
Technology and content		10			9
General and administrative		9			10
Total stock-based compensation		23			22
Income tax benefit from stock-based compensation		(5	)		(4	)
Total stock-based compensation, net of tax effect	$	18		$	18

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, 2022		5,462		$	43.48
Granted		100			22.49
Cancelled or expired		(125	)		42.92
Options outstanding at March 31, 2023		5,437		$	43.11		4.8	$	1
Exercisable as of March 31, 2023		3,953		$	49.19		3.2	$	—
Vested and expected to vest after March 31, 2023 (1)		5,292		$	43.54		4.7	$	1

(1)

The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore does 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:


	Three months ended
	March 31,
	2023			2022
Risk free interest rate		3.56	%		1.53	%
Expected term (in years)		5.14			5.15
Expected volatility		52.28	%		50.32	%
Expected dividend yield	— %			— %
Weighted-average grant date fair value	$	11.16		$	12.26

Summary of RSU Activity

A summary of our RSUs activity, consisting 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, 2022		8,572		$	28.41
Granted		5,994			22.13
Vested and released (1)		(1,548	)		32.17
Cancelled		(263	)		28.01
Unvested RSUs outstanding as of March 31, 2023 (2)		12,755		$	25.01	$	253

(1)

Inclusive of approximately 358,000 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.

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 amortization period remaining as of March 31, 2023 related to our non-vested equity awards is presented below:


	Stock
	Options		RSUs
	(in millions, except in years information)
Unrecognized stock-based compensation expense	$	12	$	306
Weighted average period remaining (in years)		2.9		3.2

PSUs and MSUs

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

Summary of RSU Activity

A summary of our performance-based RSUs ("PSUs") and market-based RSUs (“MSUs”) activity is presented below:


	PSUs (1)						MSUs (2)
			Weighted						Weighted
			Average						Average
			Grant-		Aggregate				Grant-		Aggregate
			Date Fair		Intrinsic				Date Fair		Intrinsic
	Outstanding		Value Per Share		Value		Outstanding		Value Per Share		Value
	(in thousands)				(in millions)		(in thousands)				(in millions)
Unvested and outstanding as of December 31, 2022		—	$	—				592	$	10.00
Granted		546		18.45				34		14.80
Unvested and outstanding as of March 31, 2023		546	$	18.45	$	11		626	$	10.26	$	12

(1)

Represents PSUs awarded in February 2023. The PSU awards provide for vesting in two equal annual installments on each of February 15, 2024 and February 15, 2025, based on the extent to which the Company achieves certain financial metrics relative to targets established by the Company’s Compensation Committee. The estimated grant-date fair value per PSU was measured based on the quoted price of our common stock at the date of grant, calculated upon the establishment of performance targets, and will be amortized on a straight-line basis over the requisite service period. Based upon actual attainment relative to the target financial metrics, employees have the ability to receive up to 200% of the target number originally granted, or to be issued none at all.

MSUs shall vest three years from their grant date, with 25% vesting if our stock price is equal to or greater than $35.00 but less than $45.00, 50% if our stock price is equal to or greater than $45.00 but less than $55.00 and 100% if our stock price is equal to or greater than $55.00, subject to continuous employment with, or performance of services for, the Company. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices was used to calculate the grant-date fair value of our MSU awards. The estimated grant-date fair value of these awards is amortized on a straight-line basis over the requisite service period.