Common Stock

6 Months Ended

Jun. 30, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Common Stock

7. Common Stock

Equity Award Plans

In March 2019, the Company issued 3,162,797 shares of its common stock, valued at $205.6 million, pursuant to the exercise by the Company’s co-founders of all of their respective vested and outstanding options (after withholding an aggregate of 3,617,460 shares of common stock subject to such options for payment of the exercise price and satisfaction of the aggregate tax withholding obligations, totaling $235.1 million, in connection with the exercises of certain of those options). During the three months ended June 30, 2019, these shares of common stock were reclassified into shares of Class A common stock and subsequently exchanged for shares of Class B common stock as described above in Note 1 – Description of Business and Basis of Presentation – Initial Public Offering.

Restricted Stock Units

In March 2019, the Company’s board of directors approved the grant of 15,065,349 RSUs to certain officers, employees and consultants, effective one business day prior to the effectiveness of the IPO Registration Statement on March 28, 2019. These RSUs vest upon satisfaction of both a service-based condition and a performance condition. The service-based condition for a majority of such RSUs is satisfied over a period of four years. The performance-based condition of such RSUs was satisfied upon the effectiveness of the IPO Registration Statement on March 28, 2019. The aggregate grant-date fair value of these RSUs was $834.3 million, net of forfeitures, which is expected to be recognized over a weighted-average period of approximately two years.

In March 2019, the Company settled 17,688,423 RSUs for which the service-based and performance condition was satisfied upon the effectiveness of the IPO on March 28, 2019. In connection with these settlements, the Company withheld 7,798,045 shares and remitted tax liabilities of $561.2 million on behalf of the RSU holders to the relevant tax authorities in cash.

In May 2019, the Company settled 3,476,272 RSUs for which the service-based condition was satisfied. In connection with thesesettlements, the Company withheld 1,478,224 shares and remitted tax liabilities of $77.5 million on behalf of the RSU holders to the relevant tax authorities in cash.

As of June 30, 2019, the total unrecognized compensation cost related to RSUs was $1.2 billion. The Company expects to recognize this expense over the remaining weighted-average period of approximately two years. The Company recognizes compensation expense on the RSUs granted prior to the effectiveness of its IPO Registration Statement on March 28, 2019 using the accelerated attribution method. All RSUs granted after March 28, 2019 vest on the satisfaction of a service-based condition only. The Company recognizes compensation expense for such RSUs upon a straight-line basis over their requisite service periods.

2019 Employee Stock Purchase Plan

In March 2019, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2019 Employee Stock Purchase Plan (the “2019 ESPP”). The 2019 ESPP went into effect on March 27, 2019. Subject to any limitations contained therein, the 2019 ESPP allows eligible employees to contribute, through payroll deductions, up to 15% of their eligible compensation to purchase the Company’s Class A common stock at a discounted price per share. The 2019 ESPP provides for consecutive, overlapping 12-month offering periods. The initial offering period runs from March 28, 2019 through June 30, 2020.

A total of 6,000,000 shares of Class A common stock were reserved for issuance under the 2019 ESPP. As of June 30, 2019, no shares of Class A common stock have been purchased under the 2019 ESPP. The number of shares reserved under the 2019 ESPP will automatically increase on the first day of each calendar year beginning on January 1, 2020 in a number of shares equal to the least of (i) 7,000,000 shares of Class A common stock, (ii) one percent of the outstanding shares of all classes of the Company’s common stock on the last day of the immediately preceding fiscal year, or (iii) an amount determined by the administrator of the 2019 ESPP.