SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

NOTE 11:-

SHAREHOLDERS' EQUITY

Composition of shares capital of the Company:

December 31, 2017		December 31, 2018
Authorized	Issued and outstanding	Authorized	Issued and outstanding
Number of shares

500,000,000	46,453,583	500,000,000	49,269,626

Ordinary shares:

The ordinary shares of the Company confer on the holders thereof voting rights, rights to receive dividends and rights to participate in distribution of assets upon liquidation after all the preferred shares received their preference amount in full as detailed below.

Share based payment:

In April 2007, the Company's Board of Directors adopted an Employee Shares Incentive Plan (the "2007 Plan"). Under the 2007 Plan, options may be granted to employees, officers, non-employees consultants and directors of the Company and its Subsidiaries. The 2007 plan was terminated on October 15, 2013, although option awards outstanding as of that date will continue in full force in accordance with the terms under which they were granted. In October 2013, the Company's Board of Directors adopted a new Employee Shares Incentive Plan (the "2013 Plan"). The 2013 Plan provides for the grant of options, restricted shares, RSUs, share appreciation rights, cash-based awards, dividend equivalents and other share-based awards to directors, employees, officers, consultants of the Company and its subsidiaries.

Under the Plans, as of December 31, 2018, an aggregate of 1,940,314 shares were still available for future grant. Each option granted under the Plan expires no later than ten years from the date of grant. The vesting period of the options is generally four years, unless the Board of Directors or the Board's Compensation Committee determines otherwise. Any option which is forfeited or cancelled before expiration becomes available for future grants.

The total share-based compensation expense related to all of the Company's equity-based awards, which include options, RSUs and employee stock purchase rights issued pursuant to our Employee Share Purchase Plan (“ESPP”) and recognized for the years ended December 31, 2016, 2017 and 2018 was comprised as follows:

	Year ended December 31,
	2016		2017		2018

Cost of revenues	$	1,798	$	2,930	$	4,418
Research and development		14,543		26,227		39,417
Sales and marketing		4,553		6,585		9,770
General and administrative		7,154		11,958		18,725

Total share-based compensation expense	$	28,048	$	47,700	$	72,330

Total unrecognized compensation cost amounted to 177,942 (thousands) as of December 31, 2018, and is expected to be recognized over a weighted average period of approximately 2.88 years.

Options granted to employees:

A summary of the activity in options granted to employees for the year ended December 31, 2018 is as follows:

	Number of options			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value

Balance as of December 31, 2017		8,198,154		$	16.65		6.27	$	337,517

Granted		1,258,302		$	68.25
Exercised		(1,761,534	)	$	13.29
Forfeited		(31,609	)	$	38.79

Balance as of December 31, 2018		7,663,313		$	25.81		5.91	$	496,978

Exercisable as of December 31, 2018		5,110,726		$	14.2		4.83	$	389,208

Vested and expected to vest as of December 31, 2018		7,536,284		$	25.3		5.87	$	492,396

The computation of expected volatility is based on actual historical share price volatility of comparable companies and the Company’s share price. The expected option term represents the period of time that options granted are expected to be outstanding. For stock-option awards which were at the money when granted (plain vanilla stock-options), it is determined based on the simplified method in accordance with SAB No. 110, as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term. For stock-option awards which were in the money when granted, a binomial model was used to determine the expected term as an input to the Black-Scholes-Merton option pricing model. For restricted stock units the fair value is based on the closing market value of the underlying shares at the date of grant. The Company has historically not paid dividends and has no foreseeable plans to pay dividends and, therefore, uses an expected dividend yield of zero in the option pricing model.

The risk-free interest rate is based on the yield of U.S. treasury bonds with equivalent terms.

The following table set forth the parameters used in computation of the options compensation to employees for the years ended December 31, 2016, 2017 and 2018:

	Year ended December 31,
	2016		2017		2018

Expected volatility		49.6%-54.0%		45.46%-48.04		45.19%-46.64%
Expected dividends		0%		0%		0%
Expected term (in years)		5 -6.32		5.03 -7.07		5.17 -7.53
Risk free rate		1.15%-2.26%		1.82%-2.27%		2.59%-3.03%

The following table set forth the parameters used in computation of the employee stock purchase plan for the years ended December 31, 2016, 2017 and 2018:

	Year ended December 31,
	2016		2017		2018

Expected volatility		44.6%-45.8%		33.6%-43.4%		39.9%-41.2%
Expected dividends		0%		0%		0%
Expected term (in years)		0.5		0.5		0.5
Risk free rate		0.26%-0.46%		0.47%-0.79%		1.85%-2.28%

A summary of options data for the years ended December 31, 2016, 2017 and 2018, is as follows:

	Year ended December 31,
	2016		2017		2018

Weighted-average grant date fair value of options granted	$	9.02	$	27.50	$	34.93
Total intrinsic value of the options exercised	$	64,062	$	75,763	$	137,448
Total fair value of shares vested	$	18,602	$	20,780	$	27,629

The aggregate intrinsic value is calculated as the difference between the per-share exercise price and the deemed fair value of the Company's ordinary share for each share subject to an option multiplied by the number of shares subject to options at the date of exercise.

The following tables summarize information about the Company's outstanding and exercisable options granted to employees as of December 31, 2018:

Exercise price (Range)		Options outstanding as of December 31, 2018		Weighted average remaining contractual term		Options exercisable as of December 31, 2018		Weighted average remaining contractual term
				(years)				(years)

	0.001-0.08		1,217,241		4.64		947,832		4.61
	0.09-0.5		1,285,879		1.97		1,285,879		1.97
	0.51-8.73		744,092		4.01		744,092		4.01
	8.74-19.86		672,158		5.86		589,790		5.82
	19.87-21.13		814,247		6.75		563,773		6.63
	21.14-51.32		707,035		7.20		414,664		6.82

	51.33-52.2		739,000		8.12		323,310		8.12

	52.21-60.33		264,532		9.05		51,741		9.01

	60.34-61.75		719,000		9.12		75,748		9.12

	61.76-108.9		500,129		9.23		113,897		8.80
			7,663,313		5.91		5,110,726		4.83

Options granted to non-employees consultants:

The following table summarizes information about the Company's outstanding and exercisable options to purchase ordinary shares granted to non-employees consultants as of December 31, 2018:

Options

outstanding

Exercisable

as of

Grant

December 31,

Exercise

December 31,

Exercisable

date

2018

price

2018

Through

January 25, 2011

10,000

0.67

10,000

January 25, 2021

January 9, 2013

3,400

2.34

3,400

January 9, 2023

13,400

No options were granted to non-employees during the years ended December 31, 2018, 2017 and 2016.

A summary of RSU activity for the year ended December 31, 2018, is as follows:

	Number of shares			Weighted average grant date fair value Per Share

Unvested as of December 31, 2017		2,080,126		$	48.62
Granted		1,052,893		$	84.04
Vested		(870,733	)	$	46.72
Forfeited		(171,774	)	$	57.79

Unvested as of December 31, 2018		2,090,512		$	66.53