Stock-Based Compensation

The Company's equity incentive plans provide for the grant of equity awards, including non-statutory or incentive stock options, restricted stock, and restricted stock units, to the Company’s employees, officers, directors, and consultants. The Company’s board of directors administers the plans. Options outstanding vest based upon continued service at varying rates, but generally over four years from issuance with 25% vesting after one year of service and the remainder vesting monthly thereafter. Restricted stock and restricted stock units vest at varying rates. Options, restricted stock, and restricted stock units granted under the plans accelerate under certain circumstances on a change in control, as defined therein. An aggregate of 1,861,914 shares remained available for issuance at March 31, 2016 under the plans.

Stock Options

A summary of stock option activity for the three months ended March 31, 2016 is as follows:



	Shares Under Option		Weighted- Average Exercise Price		Weighted- Average Contractual Life	Aggregate Intrinsic Value

	(in thousands)					(in thousands)
Outstanding at December 31, 2015	6,203		$	9.76
Granted	291		$	14.02
Exercised	(941	)	$	7.14
Canceled	(110	)	$	12.06
Outstanding at March 31, 2016	5,443		$	10.39	7.45 years	$	42,926
Vested and expected to vest March 31, 2016	5,368		$	10.35	7.44 years	$	42,584
Exercisable at March 31, 2016	3,004		$	8.52	6.79 years	$	29,320

At March 31, 2016, the Company had unrecognized employee stock-based compensation expense relating to stock options of approximately $13.7 million, which is expected to be recognized over a weighted-average period of 2.1 years.

The weighted-average grant date per share fair value of stock options granted in the three months ended March 31, 2016 was $6.20.

The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The weighted-average input assumptions used by the Company were as follows:



	Three Months Ended
	March 31, 2016		March 31, 2015
Expected term (in years)	6.0		6.0
Risk-free interest rate	1.45	%	1.74	%
Expected volatility	45	%	46	%
Dividend yield	—	%	—	%

Restricted Stock

A summary of restricted stock activity for the three months ended March 31, 2016 is as follows:



	Number of Shares		Weighted-Average Grant Date Fair Value
	(in thousands)
Nonvested shares of restricted stock outstanding at December 31, 2015	1,479		$	15.58
Granted	525		$	12.15
Canceled	(40	)	$	16.22
Vested	(34	)	$	16.22
Nonvested shares subject to restricted stock outstanding at March 31, 2016	1,930		$	14.62

At March 31, 2016, the Company had unrecognized employee stock-based compensation expense relating to restricted stock with service conditions of approximately $12.9 million, which is expected to be recognized over a weighted-average period of 2.8 years. At March 31, 2016, the Company had unrecognized employee stock-based compensation expense relating to restricted stock with market conditions granted in a prior year of approximately $1.0 million, which is expected to be recognized over a weighted-average period of 5.1 years.

In February 2016, the Company granted certain executives shares of restricted stock that vest based on certain stock price performance metrics. The grant date fair value per share of restricted stock was $11.07, which was estimated using a Monte-Carlo lattice model. In May 2015, the Company granted certain executives shares of restricted stock that vest based on certain stock price performance metrics. The grant date fair value per share of restricted stock was $13.81, which was estimated using a Monte-Carlo lattice model. At March 31, 2016, the Company had unrecognized employee stock-based compensation expense relating to restricted stock with market conditions of approximately $5.6 million, which is expected to be recognized over a weighted-average period of 2.4 years. The compensation expense will not be reversed if the performance metrics are not met.

Restricted Stock Units

A summary of restricted stock unit activity for the three months ended March 31, 2016 is as follows:



	Number of Shares		Weighted-Average Grant Date Fair Value
	(in thousands)
Nonvested shares of restricted stock units outstanding at December 31, 2015	2,647		$	15.76
Granted	1,370		$	13.79
Canceled	(160	)	$	15.41
Vested	(7	)	$	16.08
Nonvested shares subject to restricted stock units outstanding at March 31, 2016	3,850		$	15.08

At March 31, 2016, the Company had unrecognized employee stock-based compensation expense relating to restricted stock units of approximately $44.9 million, which is expected to be recognized over a weighted-average period of 3.4 years.

Employee Stock Purchase Plan

In November 2013, the Company adopted the Company's 2014 Employee Stock Purchase Plan, or ESPP. The ESPP is designed to enable eligible employees to periodically purchase shares of the Company's common stock at a discount through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. At the end of each six month offering period, employees are able to purchase shares at a price per share equal to 85% of the lower of the fair market value of the Company's common stock on the first trading day of the offering period or on the last trading day of the offering period. Offering periods generally commence and end in May and November of each year.

As of March 31, 2016, the Company has reserved 1,193,565 shares of its common stock for issuance under the ESPP. Shares reserved for issuance will increase on January 1 of each year by the lesser of (i) a number of shares equal to 1% of the total number of outstanding shares of common stock on the December 31 immediately prior to the date of increase or (ii) such number of shares as may be determined by the board of directors. In 2015, a total of 169,362 shares of common stock were purchased under the ESPP. The Company estimated the total grant date fair value of the ESPP awards for the offering period ending in May 2016 of $0.4 million using a Black-Scholes model with the following assumptions: term of 6 months corresponding with the offering period; volatility of 48% based on the Company's historical volatility for a six month period; no dividend yield; and risk-free interest rate of 0.33%. Compensation costs are recognized on a straight-line basis over the offering period.

Stock-Based Compensation Expense

Total stock-based compensation expense recorded in the consolidated statements of operations was as follows:



	Three Months Ended
	March 31, 2016		March 31, 2015

	(in thousands)
Cost of revenue	$	62	$	42
Sales and marketing	2,114		1,125
Technology and development	1,374		790
General and administrative	4,841		3,541
Total stock-based compensation expense	$	8,391	$	5,498