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Stock-based Compensation
 3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock-based Compensation STOCK-BASED COMPENSATION
Stock-based compensation expense, including cash settled, for the three months ended March 31, 2021 and 2020 was recorded as follows:
Three Months Ended March 31,
in thousands20212020
Cost of subscription revenue$2,624 $169 
Cost of professional services and other revenue4,430 89 
Research and development21,332 1,964 
Sales and marketing22,777 3,783 
General and administrative151,836 6,497 
Total stock-based compensation expense, including cash settled
$202,999 $12,502 

Cash Awards
Qualtrics Rights
During the three months ended March 31, 2021, 1.7 million Qualtrics Rights vested and were settled for $69.5 million in cash. During the three months ended March 31, 2020, 2.2 million Qualtrics Rights vested and were settled for $93.0 million in cash. The unrecognized expense related to Qualtrics Rights was $1.2 million and $69 million as of March 31, 2021 and December 31, 2020, and will be recognized over a remaining vesting period of up to three years.
As of March 31, 2021 and December 31, 2020, 0.1 million and 5.5 million outstanding Qualtrics Rights were valued based on the SAP share of €104.42 and €107.22, respectively, multiplied by the Equity Award Exchange Ratio translated into US$ and less than 0.1 million and 2.0 million, respectively, outstanding Qualtrics Rights were valued at $35.00. The weighted-average remaining contractual term of the Qualtrics Rights was 0.6 years and 1.5 years at March 31, 2021 and December 31, 2020, respectively. The weighted average SAP share price for the Qualtrics Rights settled in during the three months ended March 31, 2021 and 2020 was €104.71 and €112.93, respectively.
Move SAP Plan (SAP RSU Plan)
During the three months ended March 31, 2021, less than 0.1 million Move SAP RSUs vested and were settled for $2.5 million in cash. During the three months ended March 31, 2020, less than 0.1 million Move SAP RSUs vested and were settled for $5.3 million in cash. The unrecognized expense related to Move SAP RSUs was $8.8 million and $143.0 million as of March 31, 2021 and December 31, 2020, respectively, and will be recognized over a remaining vesting period of up to three years.
Changes in Outstanding Awards Under the Company’s Cash-Settled Plans
in thousandsQualtrics RightsSAP RSU Plan
Outstanding as of December 31, 20207,518 1,427 
Exchanged into Qualtrics Equity Awards(5,445)(1,304)
Settled/exercised(1,688)(20)
Forfeited(214)(15)
Outstanding as of March 31, 2021171 88 
in thousandsAs of March 31, 2021As of December 31, 2020
Qualtrics Rights - total carrying amount of liabilities$5,646 $241,485 
SAP RSU Plan - Total carrying amount of liabilities2,024 44,428 
Equity Awards
On January 28, 2021, the Company completed a voluntary exchange offer pursuant to which 5.4 million cash-settled Qualtrics Rights and 1.3 million cash-settled SAP RSU awards were exchanged and modified into 12.8 million equity-settled Qualtrics RSU awards, representing 93% of the outstanding Qualtrics Rights and SAP RSU awards.
In January 2021, the board of directors authorized the issuance of new RSU awards representing approximately 61.4 million shares of our Class A common stock. These awards were granted to eligible employees and the executive officers of the Company on January 28, 2021. Approximately 44.2 million of the RSU awards are subject to time-based vesting, with 25% vesting on February 1, 2022 and ratably thereafter for twelve quarters, such that this portion of the RSUs will be fully vested on the fourth anniversary of their vesting commencement date. The remaining 17.2 million RSU awards vest in four equal annual installments based on the achievement of certain performance conditions, as established by our board of directors and measured annually, with vesting of 100% of each installment in the event that the performance targets are achieved and ratable downward adjustments in the event that the performance targets are partially achieved.
On January 5, 2021, the board of directors approved a one-time optional salary adjustment program that provided eligible employees with the opportunity to reduce their annual cash base salary, effective as of February 1, 2021 and on an ongoing basis, in exchange for a one-time RSU grant valued at a multiple of the cash forgone as a result of an employee’s participation in the program. RSUs granted pursuant to this program totaled 2.5 million and vest quarterly over four years, with a vesting commencement date of February 1, 2021.
The following table sets forth the outstanding Qualtrics RSUs and related activity for the three months ended March 31, 2021:
Number of RSUs (in thousands)Weighted-Average Grant Date Fair Value
Outstanding as of December 31, 2020— $— 
Exchanged from Qualtrics Rights and SAP RSU Awards12,841 30.00 
Granted65,940 45.50 
Vested(1,314)30.00 
Forfeited/Canceled(256)39.19 
Outstanding as of March 31, 202177,211 $43.21 
As of March 31, 2021, there was $2,980 million of unrecognized stock-based compensation expense related to outstanding Qualtrics RSUs which is expected to be recognized over a weighted-average period of 3.4 years.

Own SAP Plan (Own)
Starting in July 2019 under Own, employees had the opportunity to purchase, on a monthly basis, SAP shares without any required holding period. The investment per each eligible employee is limited to a percentage of the respective employee’s monthly base salary. The Company matched the employee investment by 40% and added a subsidy equivalent of €20 per month for non-executives. The number of shares purchased under this plan was 17,440 and 40,299 during the three months ended March 31, 2021 and 2020, respectively. The Company recognized compensation expense associated with the match of $0.7 million and $1.5 million during the three months ended
March 31, 2021 and 2020, respectively. In connection with the completion of the Company’s initial public offering, employees are no longer able to participate in Own.
Qualtrics Employee Stock Purchase Plan (ESPP)
In December 2020, the Company's board of directors approved the ESPP, which became effective in January 2021. The ESPP initially reserved and authorized the issuance of up to a total of 12,000,000 shares of Class A common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and ending on (and including) January 1, 2030 by the lesser of 2% of the number of shares of our Class A common stock reserved for issuance under the ESPP, 1% of the outstanding number of shares of our Class B and Class A common stock on the immediately preceding December 31, or such lesser number of shares as determined by our compensation committee. The share reserve is subject to adjustment in the event of a stock split, stock dividend or other change in our capitalization.
The first offering under the ESPP began on February 1, 2021 and will end on August 1, 2021. Each employee who is a participant in the ESPP may purchase shares by authorizing contributions at a minimum of 1% up to a maximum of 20% of his or her compensation for each pay period. Accumulated contributions will be used to purchase shares on the last business day of the purchase period at a price equal to 85% of the fair market value of the shares on the first business day of the offering period (our initial public offering price) or the last business day of the offering period, whichever is lower, provided that no more than a number of shares of Class A common stock determined by dividing $15,000 by the fair market value of the shares on the first business day of the offering period (or a lesser number as established by the plan administrator in advance of the purchase period) may be purchased by any one employee during each purchase period. Under applicable tax rules, an employee may purchase no more than $25,000 worth of shares of Class A common stock, valued at the start of the offering period, under the ESPP for each calendar year in which a purchase right is outstanding. The Company recognized compensation expense associated with the ESPP of $2.9 million during the three months ended March 31, 2021.
Sale of Class A Common Stock
As discussed in Note 10, regarding the sale of Class A common stock to Q II, the 6,000,000 shares have certain vesting conditions including the completion of the Company’s IPO and the continued employment of Ryan Smith through June 30, 2021. Based on the terms of purchase agreement, the sale of Class A common stock to Q II is accounted for as an early exercise of a stock option award. The IPO is considered a performance condition that upon occurring in January 2021 results in a cumulative catch-up of recognizing expense of the fair value of the option for the pro-rata portion of the vesting period that had occurred and the remaining expense will be recorded over the remaining vesting period.