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Equity-based Compensation (Tables)
 9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Schedule of Restricted Stock Unit Activity
Restricted Stock Unit (“RSU”) activity was as follows during the periods indicated:
Nine Months Ended September 30, 2020
Restricted Stock UnitsWeighted Average Grant Date Fair Value
Unvested at beginning of period— $— 
Granted829,348 $27.85 
Vested(20,625)$21.00 
Forfeited(9,116)$23.67 
Unvested at end of period799,607 $28.07 
Schedule of Unvested Options Activity
Unvested Options activity was as follows during the periods indicated:
Nine Months Ended September 30, 2020
OptionsWeighted Average Exercise Price
Unvested at beginning of period— $— 
Effect of Reorganization Transactions and IPO576,708 $21.00 
Forfeited(10,120)$21.00 
Unvested at end of period566,588 $21.00 
The aggregate intrinsic value and weighted average remaining contractual terms of Options outstanding and Options exercisable were as follows as of September 30, 2020.
September 30, 2020
Aggregate intrinsic value (in millions)
Unit Options outstanding$12.5 
Unit Options exercisable$— 
Weighted average remaining contractual life (in years)
Unit Options outstanding9.7 years
Unit Options exercisableN/A
All Options outstanding were issued at the time of the IPO. No additional options have been issued to date. The fair value of Class A stock options granted at the time of the IPO was determined using the Black-Scholes option pricing model with the following assumption ranges and fair value per unit:
Nine Months Ended September 30, 2020
Volatility
39.0% to 39.3%
Expected life
5.6 to 5.9 years
Risk-free rate0.5%
Fair value per unit
$21.00
Common Units and Class P Units Activity
Unvested HoldCo Unit activity was as follows during the periods indicated:
Nine Months Ended September 30, 2020
HoldCo UnitsWeighted Average Grant Date Fair Value
Unvested at beginning of period— $— 
Effect of Reorganization Transactions and IPO1,332,239 $8.98 
Vested(68,587)$6.08 
Forfeited(12,773)$9.67 
Unvested at end of period1,250,879 $9.13 
OpCo Unit activity was as follows during the periods indicated:
Nine Months Ended September 30, 2020Nine Months Ended September 30, 2019
OpCo UnitsWeighted Average Grant Date Fair ValueOpCo Units
Unvested at beginning of period228,819 $1.72 441,681 
Effect of Reorganization Transactions and IPO(6,909)$10.48 — 
Vested(162,218)$1.72 (118,867)
Forfeited(59,692)$0.68 (93,995)
Unvested at end of period— $— 228,819 
Class P Unit activity was as follows during the periods indicated:
Nine Months Ended September 30, 2020Nine Months Ended September 30, 2019
Class P UnitsWeighted Average Participation ThresholdClass P Units
Unvested at beginning of period16,893,603 $6.19 5,716,467 
Effect of Reorganization Transactions and IPO(1,950,930)$7.01 — 
Granted642,500 $21.00 10,831,275 
Vested(5,078,777)$5.27 — 
Forfeited(430,965)$6.56 (1,571,151)
Unvested at end of period10,075,431 $6.62 14,976,591 
LTIP Unit activity was as follows during the periods indicated:
Nine Months Ended September 30, 2020
LTIP UnitsWeighted Average Participation Threshold
Unvested at beginning of period— $— 
Granted47,620 $21.00 
Unvested at end of period47,620 $21.00 
Schedule of Valuation Assumptions The fair value of these Class P Units was determined using the Black-Scholes option pricing model with the following assumption ranges and fair value per unit:
Nine Months Ended September 30,
20202019
Volatility39.9%
40.4% to 41.2%
Expected life
6.5 to 6.8 years
4 years
Risk-free rate0.5%
1.8% to 2.5%
Fair value per unit
$21.00
$5.20 to $9.04
Equity-Based Compensation Expense
The HSKB Incentive Units and HSKB Phantom Units both have time-based vesting conditions that were conditional upon the completion of an IPO. In addition, there were four Class P Unit grants with vesting that accelerated upon completion of an IPO. As a result, in the quarter ended June 30, 2020, the Company recognized an additional $57.6 million of expense attributable to the service period already elapsed on HSKB Incentive Units and HSKB Phantom Units, plus the acceleration of vesting on select Class P Units. Including this extra charge as a result of completing the IPO, compensation expense incurred from all the equity-based incentive awards described above was the following (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
(unaudited)(unaudited)
Cost of service and Operating expenses include equity-based compensation expenses as follows:
Cost of service$6.8 $1.0 $23.8 $2.9 
Sales and marketing15.2 3.1 53.6 7.2 
Research and development1.8 0.5 11.9 3.4 
General and administrative4.6 0.9 14.9 3.6 
Total equity-based compensation expense$28.4 $5.5 $104.2 $17.1 
Summary of Unamortized Equity-Based Compensation Costs
As of September 30, 2020, unamortized equity-based compensation costs related to each equity-based incentive award described above is the following:
AmountWeighted Average Remaining Service Period (years)
Restricted Stock Units$21.1 3.5
Class A Common Stock Options1.4 2.8
HoldCo Units8.1 2.8
Class P Units26.9 2.5
LTIP Units0.9 4.2
HSKB Incentive Units71.1 1.9
HSKB Phantom Units5.0 2.7
Total unamortized equity-based compensation cost$134.5 2.4