In 2018, our Board of Directors adopted, and our stockholders approved, our 2018 Equity Incentive Plan ("2018 Plan"). Under the evergreen provision in the 2018 Plan, in January 2021 we reserved an additional 5,185,762 shares of our common stock. At December 31, 2021, there were 19,828,070 shares available for grant.


	Year Ended December 31,
(in thousands)	2021		2020		2019
Cost of revenue	$	4,446	$	3,158	$	2,817
Sales and marketing	29,410		19,842		16,032
Research and development	20,593		14,794		8,911
General and administrative	24,956		21,779		15,683
Total stock-based compensation expense	$	79,405	$	59,573	$	43,443

At December 31, 2021, the unrecognized stock-based compensation expense related to unvested RSUs was $186.3 million, which is expected to be recognized over an estimated weighted average remaining period of 2.8 years.

At December 31, 2021, the unrecognized stock-based compensation expense related to outstanding stock options was $2.5 million, which is expected to be recognized over an estimated remaining weighted average period of 0.5 years.

At December 31, 2021, the unrecognized stock-based compensation expense related to our 2018 ESPP was $8.1 million, which is expected to be recognized over an estimated weighted average period of 0.9 years.


	Restricted Stock			RSUs
(in thousands, except for per share data)	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Unvested balance at December 31, 2018	890	$	4.25	1,129	$	18.90
Granted	—	—		2,715	27.81
Vested	(395)	4.25		(479)	18.28
Forfeited	—	—		(471)	25.21
Unvested balance at December 31, 2019	495	4.25		2,894	26.34
Granted	—	—		3,570	28.23
Vested	(396)	4.25		(1,504)	25.37
Forfeited	—	—		(470)	26.68
Unvested balance at December 31, 2020	99	4.25		4,490	28.13
Granted	—	—		3,842	43.57
Vested	(99)	4.25		(1,872)	28.14
Forfeited	—	—		(679)	33.64
Unvested balance at December 31, 2021	—	—		5,781	37.74

RSUs granted under our stock incentive plans generally vest over a period of two to four years. Our outstanding RSUs vest upon the satisfaction of a service-based vesting condition.


(in thousands, except for per share data and years)	Number of Shares	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2018	19,219	$	7.78	8.0	$	277,114
Granted	—	—
Exercised	(4,205)	4.53			98,378
Forfeited/canceled	(2,075)	10.63
Outstanding at December 31, 2019	12,939	8.38		7.1	201,608
Granted	—	—
Exercised	(2,956)	7.34			73,277
Forfeited/canceled	(542)	10.80
Outstanding at December 31, 2020	9,441	8.56		6.4	412,547
Granted	—	—
Exercised	(2,671)	6.84			111,256
Forfeited/canceled	(39)	14.96
Outstanding at December 31, 2021	6,731	9.21		5.5	308,677
Exercisable at December 31, 2021	5,851	8.30		5.4	273,642

Stock options granted under our stock incentive plans have a maximum term of ten years, generally vest over a period of three to four years, and the exercise price cannot be less than the fair market value on the date of grant.

Estimating the fair value of stock options and ESPP purchase rights using the Black-Scholes option-pricing model requires assumptions as to the fair value of common stock, expected term, expected volatility, the risk-free interest rate and the expected dividend yield.

Fair Value of Common Stock. Following our IPO, we use the market price of our common stock at the date of grant. Prior to our IPO, the lack of an active public market for our common stock required an estimate of the fair value of the common stock for granting stock options and restricted shares, and for determining stock-based compensation expense. Contemporaneous third-party valuations were obtained to assist in determining the fair value of our common stock. The contemporaneous valuations were performed in accordance with applicable methodologies, approaches and assumptions of the technical practice-aid issued by the American Institute of Certified Public Accountants Practice Aid entitled Valuation of Privately-Held Company Equity Securities Issued as Compensation.

Expected Term. This is the period of time that the options granted are expected to remain unexercised. We employ the simplified method to calculate the average expected term.

Expected Volatility. Volatility is a measure of the amount by which a financial variable, such as a share price, has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. In 2021, we began using the volatility of our common stock to calculate expected volatility. Prior to 2021, we identified several public entities of similar size, complexity, and stage of development and estimated our volatility based on the volatility of the common stock of these companies.

In 2018, our board of directors adopted, and our stockholders approved, our 2018 ESPP. Under the evergreen provision, in January 2021 we reserved an additional 1,555,728 shares of our common stock for issuance. At December 31, 2021, there were 6,316,370 shares reserved for issuance under the 2018 ESPP.

Under our 2018 ESPP, employees may set aside up to 15% of their gross earnings, on an after-tax basis, to purchase our common stock at a discounted price, which is calculated at 85% of the lower of the fair market value of our common stock on the first day of an offering or on the date of purchase. The 2018 ESPP permits offerings up to 27 months in duration, with one or more purchase periods in each offering. Additionally, in cases where the fair market value of a share of our common stock on the first day of a new purchase period within an offering is less than or equal to the fair market value of a share of our common stock at the beginning of the offering, that offering will be terminated and participants will be automatically enrolled in a new offering with a new 24-month duration and purchase periods every six months.

The fair value of the 2018 ESPP purchase rights was estimated on the offering or modification dates using a Black-Scholes option-pricing model and the following assumptions:


	Year Ended December 31,
	2021	2020	2019
Expected term (in years)	0.5 — 2.0	0.5 — 2.0	0.5 — 2.0
Expected volatility	37.2% — 59.4%	41.6% — 60.1%	34.4% — 44.6%
Risk-free interest rate	0.1% — 0.2%	0.1% — 0.9%	1.5% — 2.5%
Expected dividend yield	—	—	—