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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
2021 Equity Incentive Plan
In May 2021, the Company’s board of directors (the “Board”) adopted, and the stockholders approved, the 2021 Equity Incentive Plan (the “2021 Plan”) with the purpose of granting stock-based awards, including stock options, stock appreciation rights, RSAs, RSUs, PSUs, and other forms of awards, to employees, directors, and consultants. As of December 31, 2023, a total of 44,622,937 shares of common stock were authorized for issuance under the 2021 Plan. The number of shares of the Company’s common stock reserved for issuance under the 2021 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2022 through January 1, 2031, in an amount equal to either (i) 5% of the total number of shares of the Company’s common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (ii) a lesser number of shares determined by the Board prior to the applicable January 1. Accordingly, on January 1, 2024, the number of shares of common stock that may be issued under the 2021 Plan increased by an additional 7,240,323 shares. As a result, as of December 31, 2024, a total of 51,863,260 shares of common stock are authorized for issuance under the 2021 Plan. As of December 31, 2024, a total of 32,973,402 shares of common stock were available for issuance under the 2021 Plan. No stock options have been issued under the 2021 Plan.
Stock options
No stock options were granted during the periods presented.
The following table summarizes the stock option activity during the year ended December 31, 2024 (aggregate intrinsic value in thousands):
Number
of Shares		Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Life		Aggregate
Intrinsic
Value
Outstanding at December 31, 20234,340,052$12.57 4.1$245,884 
Exercised(1,187,141)13.29 
Canceled/Forfeited(753)19.18 
Outstanding at December 31, 20243,152,15812.29 3.2198,832 
Exercisable at December 31, 20243,152,158$12.29 3.2$198,832 
The intrinsic value of options exercised during the years ended December 31, 2024, 2023, and 2022 was $67.6 million, $66.7 million, and $75.1 million, respectively. As of December 31, 2024, there is no unrecognized stock-based compensation cost for stock options previously granted by the Company.
Restricted stock units
Service-based restricted stock units
In 2018, the Company began issuing RSUs to certain employees, officers, non-employee consultants, and directors. Other than as described below, all of the RSUs granted subsequent to the Company’s initial public offering (“IPO”) vest based solely on continued service, which is generally over four years on either a quarterly or annual vesting schedule.
The grant date fair value of RSUs granted during 2024, 2023, and 2022 was $318.4 million, $238.8 million, and $323.0 million, respectively.
The following table summarizes the RSU activity during the year ended December 31, 2024:
Number of
Shares		Weighted-Average Grant
Date Fair Value
Unvested at December 31, 20237,382,073$59.35 
Granted4,352,80573.14 
Vested(3,359,397)61.54 
Canceled/Forfeited(1,304,038)64.81 
Unvested at December 31, 20247,071,443$65.85 
The intrinsic value of RSUs vested during the years ended December 31, 2024, 2023, and 2022 was $232.9 million, $221.9 million, and $156.4 million, respectively.
As of December 31, 2024, the total unrecognized stock-based compensation cost for all RSUs outstanding at that date was $434.1 million, which is expected to be recognized over a weighted-average vesting period of 2.6 years.
Performance-based restricted stock units
In 2022, the Company began granting PSUs to certain non-executive employees with vesting terms based on the achievement of certain operating performance goals. In March 2024, the Company granted its CEO an aggregate target number of 46,986 PSUs (the “CEO PSUs”) that would vest (if at all) over a three-year period, subject to the achievement of certain financial performance goals and continued service through the applicable vesting date. A target number of 35,239 CEO PSUs (75% of the CEO PSUs) was eligible to vest based on the attainment level of a revenue performance goal for fiscal year 2024, which was set at the beginning of fiscal year 2024, with a payout range of 0% to 200% of target. A target number of 11,747 CEO PSUs (25% of the CEO PSUs) was eligible to vest based on the attainment of a non-GAAP operating margin performance goal for fiscal year 2024, which was set at the beginning of fiscal year 2024, with a payout range of 0% to 150% of target. The actual number of CEO PSUs that became eligible to vest was determined based on the attainment level of the applicable performance goal, as certified by the Compensation Committee of the Board. As of December 31, 2024, the non-GAAP operating margin performance goal was achieved and the revenue performance goal was not achieved, which were certified in February 2025. As a result, one-third of the CEO PSUs that became eligible to vest vested on February 20, 2025. The remaining CEO PSUs that became eligible to vest will vest in substantially equal installments quarterly over the two years following February 20, 2025.
The Company recognizes compensation expense for PSUs in the period in which it becomes probable that the underlying performance target will be achieved. Compensation expense for awards that contain
performance conditions is calculated using the graded vesting method and the portion of expense recognized in any period may fluctuate depending on changing estimates of the achievement of the performance conditions.
The grant date fair value of PSUs granted during 2024, 2023, and 2022 was $9.5 million, $1.9 million, and $3.4 million, respectively.
The following table summarizes the PSU activity during the year ended December 31, 2024:
Number of
Shares		Weighted-Average Grant
Date Fair Value
Unvested at December 31, 202377,971$55.63 
Granted(1)
127,46574.36 
Vested(34,435)67.21 
Canceled/Forfeited(15,210)63.52 
Unvested at December 31, 2024155,791$67.63 
(1) This represents awards granted at 100% attainment of the performance conditions.
The intrinsic value of PSUs vested during the years ended December 31, 2024, 2023, and 2022 was $2.3 million, $0.7 million, and $0.5 million, respectively.
As of December 31, 2024, the total unrecognized stock-based compensation cost for all PSUs outstanding at that date was $2.8 million, which is expected to be recognized over a weighted-average vesting period of 1.7 years.
Restricted stock awards
In November 2021, the Company issued 199,670 RSAs to certain key employees in connection with the acquisition of Levelset that vest based on their continued service over a two-year period. The fair value of the RSAs issued was $95.05 per share, which was the closing trading stock price of the Company’s common stock on the acquisition date. These shares are released from restriction quarterly over a two-year period assuming the continued service of the employees. As of December 31, 2023, all shares have vested. As of December 31, 2022, 99,833 shares had vested. During the years ended December 31, 2023 and 2022, the Company recognized stock-based compensation expense of $7.8 million and $9.5 million, respectively, relating to these shares.
Employee Stock Purchase Plan
In May 2021, the Board adopted, and the stockholders approved, the ESPP, which became effective immediately prior to the effective date of the Company’s IPO. As of December 31, 2023, a total of 5,332,064 shares of common stock had been reserved for issuance under the ESPP. The number of shares of the Company’s common stock reserved for issuance under the ESPP automatically increases on January 1 of each year for a period of ten years, beginning on January 1, 2022 and continuing through January 1, 2031, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 3,900,000 shares, except before the date of any such increase, the Board may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Accordingly, on January 1, 2024, the number of shares of common stock reserved under the ESPP increased by an additional 1,448,064 shares.
The offering periods are scheduled to start in May and November of each year. The ESPP provides for consecutive offering periods that will typically have a duration of 12 months in length and comprise two purchase periods of six months in length, subject to reset and rollover provisions.
The ESPP provides eligible employees with an opportunity to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their eligible compensation, subject to a maximum of $25,000 of stock per calendar year. A participant may purchase a maximum of 2,500 shares of common stock during a purchase period. Amounts deducted and accumulated by the participant are used to purchase shares of common stock at the end of each six-month purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of the common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the related offering period. However, in the event the fair value of the common stock on the purchase date is lower than the fair value on the first trading day of the offering period, the offering period is terminated immediately following the purchase and a new offering period begins the following day. Participants may end their participation at any time prior to the last 15 days of a purchase period and will be repaid their accrued contributions that have not yet been used to purchase shares of common stock. Participation ends automatically upon termination of employment.
The fair value of the ESPP purchase rights on the date of grant using the Black-Scholes option pricing model was estimated using the following assumptions:
December 31,
202420232022
Risk-free interest rate
4.29% to 5.33%
4.68% to 5.33%
1.47% to 4.55%
Expected term (in years)
0.5 to 1.0
0.5 to 1.0
0.5 to 1.0
Estimated dividend yield0.00%0.00%0.00%
Estimated weighted-average volatility
29.80% to 44.34%
46.29% to 64.76%
61.14% to 72.69%
The term of the ESPP purchase rights is the offering period. Beginning in the fourth quarter of 2023, the Company estimates volatility for ESPP purchase rights based on the historical volatility of its own common stock price. Prior to that, given the Company’s limited trading history, the Company estimated volatility using the historical volatilities of a group of public companies in a similar industry and stage of life cycle, selected by management, in addition to considering the Company’s own historical volatility, for a period commensurate with the term of the ESPP purchase rights. The interest rate is derived from government bonds with a similar term to the ESPP purchase right granted. The Company has not declared, nor does it expect to declare, dividends in the foreseeable future. Consequently, an expected dividend yield of zero was utilized. The fair value of the Company’s common stock used to value ESPP purchase rights is based on the trading price of its publicly traded common stock.
Employee payroll contributions accrued in connection with the ESPP were $5.4 million and $5.0 million as of December 31, 2024 and 2023, respectively, and are included within accrued expenses in the accompanying consolidated balance sheets. Employee payroll contributions ultimately used to purchase shares will be reclassified to stockholders’ equity on the purchase date. Stock-based compensation expense related to the ESPP is recognized on a straight-line basis over the offering period. During the years ended December 31, 2024, 2023, and 2022, the Company recognized stock-based compensation of $9.3 million, $10.7 million, and $15.0 million, respectively, in connection with the ESPP. During the years ended December 31, 2024, 2023, and 2022, 465,698, 575,928, and 551,753 shares of the Company’s common stock were purchased under the ESPP, respectively.
As of December 31, 2024, unrecognized stock-based compensation expense related to the ESPP was $7.5 million, which is expected to be recognized over a weighted-average period of 0.5 years.
Stock repurchase program
In October 2024, the Board authorized a stock repurchase program to repurchase up to $300.0 million of the Company’s outstanding common stock. The Company intends to opportunistically repurchase shares of its common stock from time to time through the open market, or other transactions in accordance with applicable securities laws, in each case, subject to market conditions, applicable legal requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter
into Rule 10b5-1 trading plans to facilitate repurchases of its common stock under this authorization. The timing of stock repurchases and the actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities, and will be subject to the discretion of the Company’s management within its authorization. The stock repurchase program will be funded using the Company's working capital. The stock repurchase program does not obligate the Company to acquire any particular number of shares of the Company’s common stock, or any shares at all. The stock repurchase program expires on October 29, 2025, and may be suspended or discontinued at any time at the Company's discretion and without notice. The Company did not repurchase any shares under its stock repurchase program during the year ended December 31, 2024.
Stock-based compensation
The Company recorded total stock-based compensation cost from stock options, RSUs, PSUs, ESPP, RSAs, and sales of stock by employees in excess of fair value as follows (in thousands):
Year Ended December 31,
202420232022
Cost of revenue$8,191 $7,388 $7,253 
Sales and marketing57,629 54,901 53,397 
Research and development67,926 68,265 63,262 
General and administrative53,134 44,281 38,974 
Total stock-based compensation expense$186,880 $174,835 $162,886 
Stock-based compensation capitalized for software development and cloud-computing arrangement implementation costs13,339 9,717 8,818 
Total stock-based compensation cost$200,219 $184,552 $171,704 
There were no net tax benefits recognized in the accompanying consolidated statements of operations and comprehensive loss for stock-based compensation arrangements for the years ended December 31, 2024, 2023, and 2022 due to the Company having a full valuation allowance against its deferred tax assets.