Stockholders' Equity (Deficit)

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

Stockholders' Equity (Deficit)

9. STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock—In connection with the IPO, the Company authorized the issuance of 10,000,000 shares of undesignated preferred stock with a par value of $0.00001 per share, with rights and preferences, including voting rights, to be designated from time to time by the board of directors. As of June 30, 2022, there were no shares of preferred stock issued or outstanding.

Stock Incentive Plans—In 2013, the Company adopted the Coursera, Inc. Stock Incentive Plan (“Stock Incentive Plan”) and in 2014, adopted the Coursera, Inc. 2014 Executive Stock Incentive Plan (together, the “Predecessor Plans”), pursuant to which the Company granted a combination of incentive and nonstatutory stock options and restricted stock units (“RSUs”).

The Predecessor Plans were terminated in March 2021 in connection with the IPO but continue to govern the terms and conditions of the outstanding awards granted pursuant to the Predecessor Plans. No further equity awards will be granted under the Predecessor Plans.

The Company adopted the 2021 Stock Incentive Plan (the “2021 Plan”) and 2021 Employee Stock Purchase Plan (the “ESPP”) in February 2021, which became effective on March 30, 2021 when the registration statement for the IPO was declared effective (collectively, the 2021 Plan, the ESPP, and the Predecessor Plans are referred to as the “Plans”). The 2021 Plan provides for the granting of incentive and nonstatutory stock options, RSUs, and other equity awards. Pursuant to the ESPP, participants may contribute up to 15 percent of their eligible compensation to purchase shares of common stock at 85 percent of the lower of the market price of the Company’s common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period. The offering periods start on the first trading day on or after May 11 and November 11 of each year, except for the first offering period, which commenced on the Company’s IPO effective date, or March 30, 2021.

As of June 30, 2022, 16,516,807 shares of the Company’s common stock were reserved for future issuance under the 2021 Plan. As of June 30, 2022, 3,637,184 shares of the Company’s common stock were reserved for issuance under the ESPP.

Under the ESPP, if the closing market price of the Company's common stock on the offering date of a new offering falls below the closing market price of the Company's common stock on the offering date of an ongoing offering, the ongoing offering would terminate immediately following the purchase of ESPP shares on the purchase date immediately preceding the new offering. Participants in the terminated offering would automatically be enrolled in the new offering ("ESPP reset"), resulting in a stock-based compensation modification charge to be recognized over the new offering period. During the three and six months ended June 30, 2022, there was an ESPP reset that resulted in a stock-based compensation modification charge of $7,781, which is being recognized over the new offering period ending on May 10, 2024.

Stock Options—The Company may grant options at prices not less than the grant date fair value. These options generally expire 10 years from the grant date. Incentive stock options and nonstatutory options generally vest ratably over a four-year service period.

Stock option activity under the Plans for the six months ended June 30, 2022 was as follows:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value
Balance—December 31, 2021		23,000,872		$	5.62		6.81	$	436,630
Granted		—			—
Exercised		(2,873,688	)		4.00
Canceled		(637,691	)		6.85
Balance—June 30, 2022		19,489,493		$	5.82		6.34	$	174,531
Options vested		13,493,649		$	3.85		5.65	$	139,755

The aggregate intrinsic value of options exercised was $44,744 for the six months ended June 30, 2022.

RSUs—During the year ended December 31, 2020, the Company began granting RSUs to its employees and directors. RSUs granted prior to the IPO had service-based and performance-based vesting conditions, both of which had to be satisfied in order for the RSUs to vest. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition was to be satisfied on the earlier of (i) a change in control event or (ii) the first sale of the Company’s common stock pursuant to an initial public offering. Both events were not deemed probable until consummated. Upon the first sale of the Company’s common stock pursuant to the IPO on April 5, 2021, the performance-based vesting condition was satisfied, and therefore, the Company recognized cumulative stock-based compensation expense of $16,803 using the accelerated attribution method for the portion of the awards for which the service-based vesting condition had been satisfied. RSUs granted after the IPO do not contain the performance-based vesting condition described above, and the related stock-based compensation expense is recognized on a straight-line basis over the requisite service period.

RSU activity for the six months ended June 30, 2022 was as follows:

	Number of Shares			Weighted-Average Grant Fair Value		Aggregate Intrinsic Value
Unvested balance—December 31, 2021		7,387,288		$	29.68	$	180,545
Granted		6,538,162			19.36
Released		(722,365	)		30.28
Forfeited		(717,931	)		30.42
Unvested balance—June 30, 2022		12,485,154		$	24.20	$	177,039

Stock-Based Compensation Expense—The Company records stock-based compensation expense based on the fair value as determined on the grant date. The Company estimates the fair value of stock options and shares of common stock to be issued under the ESPP utilizing the Black-Scholes valuation model. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term, and expected dividends. The Company recognizes such compensation expense on a straight-line basis over the vesting period for each award. The fair value of restricted stock awards equals the market value of the underlying stock on the grant date. These amounts are estimates and, thus, may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants.

Stock-based compensation expense for the three and six months ended June 30, 2022 and 2021 is classified in the unaudited condensed consolidated statements of operations as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of revenue	$	812	$	903	$	1,389	$	1,010
Research and development		12,619		18,363		22,362		20,391
Sales and marketing		8,048		11,310		14,322		12,658
General and administrative		6,026		8,599		11,410		10,400
Total	$	27,505	$	39,175	$	49,483	$	44,459

The Company capitalized $1,981 and $1,835 of stock-based compensation related to its internal-use software during the three months ended June 30, 2022 and 2021, respectively, and $3,230 and $2,361 during the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, there was a total of $38,220 unrecognized employee compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 1.9 years. In addition, as of June 30, 2022, total unrecognized compensation cost related to unvested RSUs was $225,090, which is expected to be recognized over a weighted-average period of approximately 2.9 years. Total unrecognized compensation cost related to the ESPP as of June 30, 2022 was $19,024, which is expected to be recognized over a weighted-average period of approximately 1.0 year.

Common Stock Reserved for Issuance—The Company’s common stock reserved for future issuance was as follows:

	As of
	June 30, 2022		December 31, 2021
Stock options outstanding		19,489,493		23,000,872
RSUs outstanding		12,485,154		7,387,288
Shares available for future grants		20,153,991		16,905,525
Total shares of common stock reserved		52,128,638		47,293,685