Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Total stock-based compensation expense related to options, restricted stock awards, employee stock purchases, restricted stock units and stock purchase rights granted were allocated as follows (in thousands):

	Three Months Ended March 31,
	2015		2014
Cost of revenue	$	636	$	211
Research and development	4,928		2,467
Sales and marketing	2,409		1,428
General and administrative	866		676
Total stock-based compensation	$	8,839	$	4,782

Stock Option Activities

The following table summarizes the option and RSA (Restricted Stock Award) activity under our equity stock plans and related information:

			Options and RSAs Outstanding
	Shares Available for Grant (in thousands)		Number of Shares Underlying Outstanding Options and RSAs  (in thousands)		Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Term (Years) of Stock Options	Aggregate Intrinsic Value of Stock Options Outstanding (in thousands)
Outstanding—December 31, 2014	11,612		13,654		$	17.63	8.3	$	598,775
Options granted	(283	)	283		66.05
Options exercised	—		(773	)	6.92
Options canceled	221		(221	)	20.66
Early exercised shares repurchased	10		—		3.95
Outstanding—March 31, 2015	11,560		12,943		$	19.27	8.1	$	661,984
Vested and exercisable—March 31, 2015			3,371		$	6.29	7.2	$	216,548
Vested and expected to vest—March 31, 2015			11,454		$	17.80	8.0	$	605,313

The weighted-average grant-date fair value of options granted during the three months ended March 31, 2015 was $29.71 per share. The aggregate intrinsic value of options exercised for the three months ended March 31, 2015 was $47.1 million.

As of March 31, 2015, the total unrecognized stock-based compensation expense related to unvested stock options, net of expected forfeitures, was $108.4 million, which is expected to be recognized over a weighted-average period of 4.3 years. The total fair value of options vested for the three months ended March 31, 2015 was $6.1 million.

Restricted Stock Unit (RSU) Activities

A summary of the RSU activity under our stock plans during the reporting period and a summary of information related to RSUs expected to vest are presented below (in thousands, except per share and year amounts):

	Number of Shares		Weighted- Average Grant Date Fair Value Per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Unvested balance—December 31, 2014	108		$	75.56	2.0	$	6,557
RSUs granted	72		67.37
RSUs vested	—		—
RSUs forfeited/canceled	(3	)	73.10
Unvested balance—March 31, 2015	177		$	72.27	1.9	$	12,480
RSUs expected to vest—March 31, 2015	156		$	72.27	1.8	$	10,974

As of March 31, 2015, there was $10.2 million of unrecognized stock-based compensation cost related to unvested RSUs, net of estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 3.7 years.

Employee Stock Purchase Plan Activities

During the three months ended March 31, 2015, we issued 132,862 shares at a weighted average price of $36.55. On February 17, 2015, the board authorized the increase to shares available for issuance under the plan of 1% of the total shares outstanding on January 1, 2015. The approved increase amounted to 655,139 shares. As a result there remain 1,173,277 shares available for issuance under the 2014 Employee Stock Purchase Plan, or ESPP, as of March 31, 2015. 

As of March 31, 2015, the total unrecognized stock-based compensation expense related to unvested ESPP options, net of expected forfeitures, was $3.0 million, which is expected to be recognized over a weighted-average period of 1.6 years.

Early Exercise of Stock Options

For the three months ended March 31, 2015, we repurchased 9,667 shares of common stock at the original exercise price due to the termination of the holders of the unvested shares. As of March 31, 2015, shares held by employees and directors that were subject to repurchase were 1.2 million with an aggregate price of $3.9 million.