Stockholders’ Equity

9 Months Ended

Sep. 30, 2024


11.						Stockholders' Equity

Stock Repurchase Program

In November 2023, the Company’s board of directors authorized a $500 million share repurchase program, which was subsequently increased to $1 billion in February 2024. During the six months ended June 30, 2024, the Company repurchased and retired a total of 32,804,891 shares of its common stock for an aggregate amount of $965 million, which completed the repurchases under the share repurchase program originally authorized in November 2023. The amount of shares repurchased under this repurchase program during the six months ended June 30, 2024 included 14,395,994 shares repurchased in privately negotiated transactions with three shareholders in February 2024 for an aggregate amount of $390 million.

In June 2024, the Company’s board of directors authorized a new $500 million share repurchase program, which was subsequently increased to $750 million in November 2024. During the three and nine months ended September 30, 2024, the Company repurchased and retired a total of 10,782,385 and 13,069,383 shares of its common stock, respectively, for an aggregate amount, including broker commissions, fees, and excise taxes, of $362 million and $437 million, respectively, under this new share repurchase program. The amount of shares repurchased under this new repurchase program during the nine months ended September 30, 2024 included 3,700,000 shares repurchased in August 2024 in a privately negotiated transaction with one shareholder, a related party, for $117 million. As of September 30, 2024, the Company had $68 million remaining available to repurchase shares pursuant to the new share repurchase program.

The Company's share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act. The excise tax recognized as part of the cost basis of shares acquired during the three and nine months ended September 30, 2024 was immaterial.

Common Stock Reserved for Future Issuance

The following table summarizes the Company’s shares of common stock reserved for future issuance on an as-converted basis:


	As of December 31,	As of September 30,
	2023	2024

	(in thousands)
Series A redeemable convertible preferred stock	5,833	5,833
Restricted stock units	33,459	23,319
Stock options outstanding	19,553	7,900
Remaining shares available for future issuance	39,523	51,450
Shares available for issuance under the 2023 Employee Stock Purchase Plan	7,000	9,790
Total	105,368	98,292

The holders of common stock are entitled to receive dividends out of funds that are legally available, when and if declared by the board of directors and subject to the rights of the holders of redeemable convertible preferred stock and approval from the holders of the Series A redeemable convertible preferred stock, as applicable. No dividends were declared or paid during the three or nine months ended September 30, 2023 or 2024.

Stock Options

The following table summarizes the activity related to the Company’s equity incentive plans:


	Shares Available for Future Grant	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life	Aggregate Intrinsic Value

	(in thousands)				(in years)	(in millions)
As of January 1, 2024	39,523	19,553	$	8.60	3.36	$	302
Additional shares reserved	13,952	—
Options exercised	—	(11,583)	$	6.56
Options cancelled and forfeited	70	(70)	$	44.94
Shares withheld related to net share settlement	3,319	—
Restricted stock units granted	(11,480)	—
Restricted stock units forfeited	6,009	—
Restricted stock forfeited	57	—
As of September 30, 2024	51,450	7,900	$	11.27	3.44	$	235
Options vested and exercisable as of September 30, 2024		7,900	$	11.27	3.44	$	235

The total intrinsic value of the stock options exercised during the nine months ended September 30, 2023 and 2024 was $244 million and $288 million, respectively. The total fair value of stock options vested during the nine months ended September 30, 2023 and 2024 was $4 million and $3 million, respectively.

Restricted Stock

The following table summarizes the activity related to the Company’s restricted stock for the nine months ended September 30, 2024:


	Number of Shares	Weighted-Average Grant-Date Fair Value per Share

	(in thousands)
Unvested and outstanding as of January 1, 2024	326	$	82.83

Vested	(191)	$	88.55
Forfeited	(61)	$	119.55
Unvested and outstanding as of September 30, 2024	74	$	38.37

RSUs

The following table summarizes the activity related to the Company’s RSUs for the nine months ended September 30, 2024:


	Number of Shares	Weighted-Average Grant-Date Fair Value per Share

	(in thousands)
Unvested and outstanding as of January 1, 2024	29,119	$	49.45
Granted (1)	11,480	$	35.99
Vested	(11,271)	$	49.86
Vested and not settled	(139)	$	87.54
Forfeited	(6,009)	$	47.60
Unvested and outstanding as of September 30, 2024	23,180	$	42.78

___________

(1) Includes 586,920 of RSUs with certain service-based and gross transaction value (“GTV”) performance conditions granted during the nine months ended September 30, 2024, which represents 100% achievement.

In April 2024, the Company granted an aggregate of 586,920 RSUs to certain employees of the Company that vest upon satisfaction of certain performance-based and service-based vesting conditions. The performance-based vesting conditions will be satisfied based on the proportion of certain GTV targets achieved during applicable performance periods. The actual number of shares that may satisfy the performance-based vesting condition ranges from 0% to 100% of the maximum achievable shares for that performance period. Shares that satisfy the performance-based condition are subject to a service-based condition that vests quarterly over a period of one year following the applicable performance period. Each of the RSU awards granted is subject to potential vesting acceleration under certain circumstances. The weighted-average grant-date fair value per share of such awards is $36.35 and the weighted-average requisite service period is satisfied over a period of 2.70 years.

Stock-Based Compensation Expense Summary

The following table summarizes stock-based compensation expense by line item in the condensed consolidated statements of operations related to stock options, restricted stock, and RSUs, as applicable:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2024		2023		2024

	(in millions)
Cost of revenue	$	17	$	2	$	17	$	6
Operations and support	85		4		85		9
Research and development	1,711		45		1,715		99
Sales and marketing	292		14		294		46
General and administrative	500		4		503		54
Total stock-based compensation expense (1)(2)	$	2,605	$	69	$	2,614	$	214

___________

(1) The Company recognized $2,581 million of stock-based compensation expense, net of $39 million capitalized related to the development of internal-use software, associated with vested RSUs and certain shares of vested restricted stock as a result of the satisfaction of the liquidity event-based vesting condition upon the effective date of the registration statement on Form S-1 in connection with the Company’s IPO during the three and nine months ended September 30, 2023. To meet the related tax withholding requirements for the net settlement, net exercise, and cancellation and repurchase, as applicable, of the vested RSUs, for certain vested stock options, and shares of vested restricted stock, the Company withheld or cancelled, as applicable, 20,810,882 of the 43,052,572 shares underlying such equity awards, resulting in the net issuance of 22,241,690 shares of common stock. Based on an IPO price of $30.00 per share, the Company’s tax withholding obligation was $570 million and was paid during the three months ended September 30, 2023.

(2) Stock-based compensation expense during the nine months ended September 30, 2024 includes a benefit of $4 million, $79 million, $8 million, and $4 million for operations and support, research and development, sales and marketing, and general and administrative, respectively, related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures during the three months ended March 31, 2024 and for terminated employees in connection with the restructuring plan. Refer to Note 15 — Restructuring for further discussion.

As of September 30, 2024, there was $478 million of unrecognized stock-based compensation expense related to all

unvested equity awards, which is expected to be recognized over a weighted-average period of 1.59 years.

The amount of stock-based compensation capitalized related to the development of internal-use software was $41 million and $9 million during the three months ended September 30, 2023 and 2024, respectively. The amount of stock-based compensation capitalized related to the development of internal-use software was $41 million and $27 million during the nine months ended September 30, 2023 and 2024, respectively.

The income tax benefit recognized related to equity awards was $247 million and $29 million during the three months ended September 30, 2023 and 2024, respectively. The income tax benefit was $247 million and $62 million during the nine months ended September 30, 2023 and 2024, respectively