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Employee Benefit Plans (Tables)
 9 Months Ended
Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Stock Option Activity

The following is a summary of stock option activity for the current year period:

 

 

 

Stock Options

 

 

 

Number of

Shares

 

 

Weighted

Average

Exercise

Price

 

 

Aggregate

Intrinsic Value

(in thousands)

 

 

Weighted

Average

Remaining

Contractual

Term

(in years)

 

Outstanding at December 31, 2018

 

 

18,452,375

 

 

$

14.39

 

 

$

8,482

 

 

 

7.5

 

Granted

 

 

3,128,591

 

 

$

13.95

 

 

 

 

 

 

 

 

 

Exercised

 

 

(3,319,196

)

 

$

12.65

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(1,240,835

)

 

$

14.05

 

 

 

 

 

 

 

 

 

Expired

 

 

(934,413

)

 

$

15.88

 

 

 

 

 

 

 

 

 

Outstanding, vested and expected to vest at September 30, 2019

 

 

16,086,522

 

 

$

14.60

 

 

$

41,101

 

 

 

7.5

 

Vested and exercisable at September 30, 2019

 

 

9,412,266

 

 

$

14.86

 

 

$

21,157

 

 

 

6.6

 
Summary of Estimated Fair Value of Stock Options on Grant Date

The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of stock options granted using the following assumptions:

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

2019

 

2018

Expected life (in years)

 

5.2 to 6.1

 

5.8 to 6.0

 

5.2 to 6.1

 

5.8 to 6.0

Risk-free interest rate

 

1.5% - 1.6%

 

2.8% - 3.0%

 

1.5% - 2.5%

 

2.7% - 3.0%

Volatility

 

44% - 45%

 

44% - 60%

 

44% - 46%

 

43% - 60%

Dividend yield

 

—%

 

—%

 

—%

 

—%

Fair value of common stock

 

$18.11 to $18.41

 

$12.00 to $13.65

 

$12.35 to $18.41

 

$12.00 to $13.65

 
Summary of Estimated Fair Value of ESPP Purchase Rights Using a Black-Scholes Option Pricing Model Assumptions

The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of ESPP purchase rights granted using the following assumptions:

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

2019

 

2018

Expected life (in years)

 

n/a

 

n/a

 

0.5 to 2.0

 

n/a

Risk-free interest rate

 

n/a

 

n/a

 

2.1% - 2.4%

 

n/a

Volatility

 

n/a

 

n/a

 

40% - 45%

 

n/a

Dividend yield

 

n/a

 

n/a

 

—%

 

n/a

Fair value of common stock

 

n/a

 

n/a

 

$16.98

 

n/a
Summary of Stock-based Compensation Expense Recognized in Financial Statements

Stock-based compensation expense recognized in the condensed consolidated financial statements is as follows:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(in thousands)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Cost of revenue

 

$

718

 

 

$

6,472

 

 

$

2,805

 

 

$

7,776

 

Research and development

 

 

5,468

 

 

 

37,490

 

 

 

15,863

 

 

 

43,903

 

Sales and marketing

 

 

2,918

 

 

 

14,496

 

 

 

8,714

 

 

 

16,411

 

General and administrative

 

 

5,678

 

 

 

40,354

 

 

 

17,665

 

 

 

48,014

 

Stock-based compensation expense, net of amounts capitalized

 

 

14,782

 

 

 

98,812

 

 

 

45,047

 

 

 

116,104

 

Capitalized stock-based compensation expense

 

 

858

 

 

 

495

 

 

 

2,889

 

 

 

1,251

 

Stock-based compensation expense

 

$

15,640

 

 

$

99,307

 

 

$

47,936

 

 

$

117,355

 
Summary of Unamortized Stock-based Compensation

As of September 30, 2019, unamortized stock-based compensation was as follows:

 

 

Unrecognized

stock-based

compensation

(in thousands)

 

 

Weighted

average

vesting

period

(in years)

 

Stock options

 

$

39,378

 

 

 

2.3

 

Restricted stock awards

 

 

4,575

 

 

 

2.5

 

Restricted stock units (service-based)

 

 

65,870

 

 

 

2.9

 

Restricted stock units (performance-based)(1)

 

 

9,260

 

 

 

1.2

 

ESPP

 

 

3,428

 

 

 

1.3

 

Total unrecognized stock-based compensation

 

$

122,511

 

 

 

 

 

 

(1)

The Performance Vesting Condition occurred upon the effectiveness of the registration statement for the Company's IPO, which was September 25, 2018. The remaining unrecognized stock-based compensation expense is recognized on an accelerated basis over the weighted-average remaining requisite service period.
Restricted Stock Awards  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Restricted Stock Awards and Restricted Stock Units

The following is a summary of restricted stock awards for the current year period:

 

 

Restricted Stock Awards

 

 

 

Number of

Shares

 

 

Weighted

Average

Grant-Date Fair

Value

 

 

Weighted

Average

Remaining

Contractual

Term

(in years)

 

Unvested at December 31, 2018

 

 

—

 

 

$

—

 

 

 

0.0

 

Granted

 

 

299,798

 

 

$

18.30

 

 

 

 

 

Unvested at September 30, 2019

 

 

299,798

 

 

$

18.30

 

 

 

2.5

 

 
Restricted Stock Units  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Summary of Restricted Stock Awards and Restricted Stock Units

The following is a summary of restricted stock units for the current year period:

 

 

Restricted Stock Units

 

 

 

Number of

Shares

 

 

Weighted

Average

Grant-Date Fair

Value

 

 

Weighted

Average

Remaining

Contractual

Term

(in years)

 

Unvested at December 31, 2018

 

 

5,752,046

 

 

$

12.77

 

 

 

1.2

 

Granted

 

 

5,449,311

 

 

$

15.01

 

 

 

 

 

Vested

 

 

(2,859,765

)

 

$

12.93

 

 

 

 

 

Forfeited

 

 

(1,147,189

)

 

$

13.42

 

 

 

 

 

Unvested at September 30, 2019

 

 

7,194,403

 

 

$

14.30

 

 

 

2.2