STOCK-BASED AWARDS

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock Options

A summary of stock option activity for the six months ended June 30, 2022 was as follows:


	Outstanding Options
	Number of Options	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term	Intrinsic Value (in thousands)
Balance—December 31, 2021	64,119,902	$	1.08	6.6	$	2,370,666
Options granted	—	—
Options exercised	(16,195,326)	0.79
Options canceled	(1,655,679)	1.85
Balance—June 30, 2022	46,268,897	$	1.15	6.84	$	742,613
Options vested and exercisable June 30, 2022	31,731,833	$	0.93	6.26	$	515,722

As of June 30, 2022, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $8.6 million, which is expected to be recognized over a weighted-average period of 2.1 years.

Restricted Stock Unit

A summary of RSU award activity was as follows:


	Restricted Stock Units
	Time-Based Shares	Performance-Based Shares	Total Shares	Weighted-Average Grant-Date Fair Value
Balance as of December 31, 2021	32,210,200	16,024,411	48,234,611	$	20.45
Granted	11,441,063	—	11,441,063	19.98
Vested	(2,616,301)	(13,934,271)	(16,550,572)	17.56
Cancelled/Forfeited	(1,150,078)	—	(1,150,078)	24.06
Balance as of June 30, 2022	39,884,884	2,090,140	41,975,024	$	21.36

As of June 30, 2022, unrecognized stock-based compensation cost related to outstanding unvested time-based RSUs that are expected to vest was $563.3 million, which is expected to be recognized over a weighted-average period of 2.9 years.

All performance-based RSUs granted to the CEO are subject to performance and market conditions. The performance condition was satisfied upon the closing of the Merger. The fair value of these performance-based RSUs was measured on the grant date, March 27, 2021, using a Monte Carlo simulation model, with the following assumptions:


Weighted average volatility	60.0	%
Expected term (in years)	5.0
Risk-free interest rate	0.9	%
Expected dividends	—

The Company recognizes compensation expense on a graded vesting schedule over the requisite vesting period for the time-based awards and over the derived service period for the CEO performance-based awards. Stock-based compensation expense is recognized when the relevant performance condition is considered probable of achievement for the performance-based award. During the six months ended June 30, 2022, the market capitalization condition was met for the CEO performance-based awards for four of the five tranches and certified by the Board of Directors, representing an aggregate of 13,934,271 performance RSUs. We recorded stock-based compensation expense of $85.4 million for the four tranches during the six months ended June 30, 2022, and no such expense was recognized in the same period in the prior year. As of June 30, 2022, the unamortized expense for the fifth tranche, representing 2,090,140 RSUs, was $13.9 million which will be recognized over a period of 1.2 years. For the three and six months ended June 30, 2022, the Company withheld approximately 0.5 million and 8.5 million shares of common stock, respectively, by net settlement to meet the related tax withholding requirements related to the CEO time-based and performance-based RSUs.

Employee Stock Purchase Plan (“ESPP”)

The ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. The purchase price for each share purchased during an offering period will be the lesser of 85% of the fair market value of the share on the purchase date or 85% of the fair market value of the share on the offering date. As of June 30, 2022, unrecognized stock-based compensation cost related to the ESPP was $35.9 million, which is expected to be recognized over a weighted-average period of 1.9 years.

Stock-Based Compensation Expense

Total employee and nonemployee stock-based compensation expense for the three and six months ended June 30, 2022 and 2021, was classified in the condensed consolidated statements of operations as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Cost of revenue	$	10,381	$	—	$	18,980	$	—
Research and development	39,220		13,539		88,976		26,703
Selling, general and administrative	44,791		10,910		160,987		102,541
Total	$	94,392	$	24,449	$	268,943	$	129,244

Total stock-based compensation expense for the three and six months ended June 30, 2021 included the $20.7 million and $123.6 million share-based compensation expense, respectively, related to the Series E convertible preferred shares issuance in March 2021 and April 2021. Refer to Note 7 “Contingent Forward Contracts” and Note 10 “Convertible Preferred Stock” for further detail.