Stock-Based Compensation

3 Months Ended

Mar. 31, 2017

Stock-Based Compensation

Stock-Based Compensation

Note 13. Stock‑Based Compensation

Stock Options

The following is a summary of stock option activity under the Plans:

				Weighted
		Weighted		average
		average		remaining	Aggregate
	Outstanding	exercise price		contractual life	Intrinsic Value
	Options	per share		(Years)	(in thousands)
Outstanding at December 31, 2016	5,997,372	$	10.18	7.30	$	145,270
Granted	534,262		34.39			—
Forfeited	(35,008)		12.58			—
Exercised	(1,096,999)		6.86			—
Expired	(2,893)		13.79			—
Outstanding at March 31, 2017	5,396,734	$	13.23	7.56	$	153,263
Vested, exercisable, expected to vest
at March 31, 2017	5,396,734	$	13.23	7.56	$	153,263
Exercisable at March 31, 2017	3,188,518	$	9.95	6.99	$	101,004

Aggregate intrinsic value represents the difference between our estimated fair value of common stock and the exercise price of outstanding in‑the‑money options. The fair value per share of common stock was $41.63 as of March 31, 2017 based upon the closing price of our common stock on the NYSE. The total intrinsic value of stock options exercised was $33,482 for the three months ended March 31, 2017 and insignificant for the three months ended March 31, 2016.  

Restricted Stock Units

The following is a summary of RSU activity under the 2016 Plan:

		Weighted
		average
		grant date fair value
	Number of Awards	per share
Outstanding at December 31, 2016	67,295	$	25.88
Granted	235,412		34.39
Forfeited	(3,875)		24.70
Vested and converted to shares, net of units withheld for taxes	(131)		19.00
Units withheld for taxes	(77)		19.00
Outstanding at March 31, 2017	298,624	$	32.59
Expected to vest at March 31, 2017	298,624	$	32.59

Employee Stock Purchase Plan

We have an ESPP for US and non-US employees (collectively, “ESPP”), both of which have a series of six month offering periods, with a new offering period beginning on the first day of January and July each year. The ESPP was adopted by our Board of Directors in May 2016. In order for the US ESPP to qualify as an “employee stock purchase plan” under the requirements of Section 423 of the United States Internal Revenue Code of 1986, as amended, the ESPP is subject to stockholder approval at our first annual meeting of stockholders to be held on May 25, 2017. The ESPP was effective January 1, 2017 with the first purchase date scheduled for June 30, 2017. Employees may contribute up to 10% of their pay towards the purchase of common stock via payroll deductions to a maximum of $10 per year, or $5 per offering period. Purchase dates occur on the last business day of June and December of each year.

Stock Compensation Expense

We used the following weighted average assumptions to estimate the fair value of stock options granted for the periods presented as follows:

	Three Months Ended March 31,
		2017
Expected term (years)			6.25
Expected volatility			40.00	%
Expected dividend yield			0.00	%
Weighted average risk-free interest rate			1.93	%
Weighted average grant date fair value		$	14.45

No stock options were granted during the three months ended March 31, 2016.

We recorded total stock‑based compensation expense of $2,083 and $1,074 for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, we had total unrecognized compensation cost related to 2,506,840 unvested stock options and RSUs under the Plans of $25,037 which we expect to recognize over the next 2.9 years.