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Stock-based Compensation
 6 Months Ended
Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
The Company maintains the 2021 Equity Incentive Plan, the 2021 Partner Studio Incentive Plan, and the 2021 Employee Stock Purchase Plan, all of which were adopted by the Board and approved by its stockholders.
2021 Equity Incentive Plan
The 2021 Equity Incentive Plan (the “2021 Plan”) provides for the grant of restricted stock units ("RSUs"), incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), restricted stock, stock appreciation rights ("SARs"), performance units, and performance shares to the Company’s employees, directors, consultants, and other service providers. The total shares of the Company’s Class A common stock that were initially reserved for issuance under the 2021 Plan was 39,000,000, and provides for an annual increase of shares equal to the least of (a) 39,000,000 shares, (b) five percent (5%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s Board may determine. During the six months ended June 30, 2022, the Board decreased the number of shares of Class A common stock reserved for issuance under the 2021 Plan by 2,000,000 shares.
In the three and six months ended June 30, 2022, the Company granted 2,388,544 and 3,293,317 RSUs to certain employees under the 2021 Plan at the weighted average grant date fair value of $41.92 and $49.63 per RSU, respectively. The RSUs generally vest over an approximate period of four to five years of continuous service from their respective vesting commencement dates.
2021 Partner Studio Incentive Plan
The 2021 Partner Studio Incentive Plan (the “2021 Partner Plan”) provides for the grant of RSUs, ISOs, NSOs, SARs, performance units, and performance shares to individuals or entities engaged by the Company or a parent or subsidiary of the Company to render bona fide services to the party engaging such individual or entity. A total of 390,000 shares of the Company’s Class A common stock are reserved for issuance pursuant to the 2021 Partner Plan. During the six months ended June 30, 2022, the Board reserved an additional 2,000,000 shares of Class A common stock for issuance under the 2021 Partner Plan.
In the three and six months ended June 30, 2022, the Company granted 452,517 and 577,772 RSUs under the 2021 Partner Plan at the weighted average grant date fair value of $46.74 and $47.05 per RSU, respectively. The RSUs generally vest over an approximate period of four to five years of continuous service.
2021 Employee Stock Purchase Plan
The 2021 Employee Stock Purchase Plan (the "ESPP") permits participants to purchase shares of the Company’s Class A common stock through contributions of up to 15% of their eligible compensation. The ESPP provides for consecutive, overlapping 24-month offering periods, during which the contributed amount by the participant will be used to purchase shares of the Company’s Class A common stock at the end of each 6-month purchase period with the purchase price of the shares being 85% of the lower of the fair market value of the Company’s Class A common stock on the first day of an offering period or on the exercise date. A participant may purchase a maximum of 590 shares of the Company’s Class A common stock during a purchase period. Participants may end their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with the Company.
A total of 7,800,000 shares of the Company’s Class A common stock are available for sale under the ESPP and provides for an annual increase of shares equal to the least of: (a) 7,800,000 shares, (b) one percent (1%) of the outstanding shares of all classes of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (c) such other amount as the Company’s board of directors may determine. During the six months ended June 30, 2022, 107,781 shares were purchased under the ESPP.
The Company recognized stock-based compensation expense for the periods indicated as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Cost of revenue$2,706 $473 $3,758 $582 
Sales and marketing13,432 2,221 20,351 4,040 
Research and development25,890 13,573 46,519 20,038 
General and administrative15,128 10,877 31,168 32,443 
Total$57,156 $27,144 $101,796 $57,103 
For the three and six months ended June 30, 2022 and 2021, total stock-based compensation expense included $0.3 million and $0.6 million associated with awards that may be settled in stock of one of the Company’s subsidiaries, respectively.
Early Exercise of Stock Options—As of June 30, 2022 and December 31, 2021, the Company had 512,249 and 486,999 shares of Class A common stock subject to repurchase in connection with early exercised stock options, respectively. The liability for the shares subject to repurchase as of June 30, 2022 and December 31, 2021 was $2.5 million and $1.4 million, respectively, which was included in accrued liabilities in the Company’s condensed consolidated balance sheets.
During 2020 and 2019, the Company provided financing to certain employees in the form of promissory notes to early exercise stock options. These promissory notes are partially collateralized by shares and, for accounting purposes, in-substance are nonrecourse. For accounting purposes, exercised options via nonrecourse promissory notes are not substantive and are continued to be treated as options. In February 2021, promissory notes issued to executive officers in the amount of $20.9 million were settled through either share repurchase, in the amount of $17.2 million, or cash payment, in the amount of $3.7 million. In connection with the repurchase of shares, the Company accelerated vesting of 60,968 shares of Class A common stock for one of the Company’s officers. The acceleration of vesting was accounted as an option modification with an immaterial impact to the stock-based compensation expense. As of June 30, 2022 and December 31, 2021, the Company had 1,774,999 and 2,884,999 shares of Class A common stock options, respectively, that were exercised via nonrecourse promissory notes, of which 198,231 and 663,856 shares, were unvested and subject to repurchase, respectively. The principal balances of nonrecourse promissory notes outstanding amounted to $6.9 million and $15.1 million as of June 30, 2022 and December 31, 2021, respectively.