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STOCK-BASED AWARDS
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED AWARDS STOCK-BASED AWARDS
Stock Options
A summary of stock option activity for the nine months ended September 30, 2023 was as follows:
Outstanding Options
Number of OptionsWeighted Average Exercise PriceWeighted-Average Remaining Contractual TermIntrinsic Value (in thousands)
Balance as of December 31, 2022
39,011,116 $1.19 6.52$224,721 
Options granted3,534,993 8.40 
Options exercised
(6,827,738)1.07 
Options canceled
(1,398,034)2.41 
Balance as of September 30, 2023
34,320,337 $1.91 5.75$140,380 
Options vested and exercisable as of September 30, 2023
27,690,560 $1.11 5.47$127,260 
As of September 30, 2023, unrecognized stock-based compensation cost related to outstanding unvested stock options that are expected to vest was $14.7 million, which is expected to be recognized over a weighted-average period of 3.2 years.
Restricted Stock Units (“RSUs”)
A summary of RSUs activity for the nine months ended September 30, 2023 was as follows:
Restricted Stock Units
Time-Based SharesPerformance-Based SharesTotal SharesWeighted-Average Grant-Date Fair Value
Balance as of December 31, 2022
38,570,298 2,090,140 40,660,438 $19.38 
Granted33,708,323 7,362,343 41,070,666 7.29 
Vested(13,613,955)— (13,613,955)16.51 
Cancelled/Forfeited(6,846,819)— (6,846,819)15.19 
Balance as of September 30, 2023
51,817,847 9,452,483 61,270,330 $12.38 
As of September 30, 2023, unrecognized stock-based compensation cost related to outstanding unvested time-based RSUs that are expected to vest was $485.2 million, which is expected to be recognized over a weighted-average period of 2.3 years.
In 2021, the Company granted performance-based RSUs to the CEO and they 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 volatility60.0 %
Expected term (in years)5.0
Risk-free interest rate0.9 %
Expected dividends— 
The Company recognizes compensation expense using a graded vesting attribution method 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 year ended December 31, 2022, the market 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. The Company recorded stock-based compensation expense of $85.4 million for the four tranches during the year ended December 31, 2022. The unamortized expense of $8.2 million as of December 31, 2022 for the fifth tranche, representing 2,090,140 RSUs, was fully recognized during the nine months ended September 30, 2023. The Company withheld approximately 0.5 million and 1.4 million shares of common stock, respectively, for the three and nine months ended September 30, 2023, and 0.4 million and 8.9 million shares of common stock, respectively, for the same periods in the prior year, by net settlement to meet the related tax withholding requirements related to the CEO time-based and performance-based RSUs.
During the three and nine months ended September 30, 2023, the Company granted performance-based RSUs to certain employees. Performance-based RSUs granted to certain employees are subject to corporate performance conditions and/or individual performance. The number of awards granted represents 100% of the target goal. Under the terms of the awards, the recipient may earn between 0% to 150% of the original number of grants based on actual achievement of corporate performance goals and/or individual performance. Performance-based RSUs earned are subject to service condition which will be met generally over 3 years. Stock-based compensation expense is recognized when the relevant performance condition is considered probable of achievement for the performance-based award. During the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expenses of $2.9 million and $3.6 million, respectively, related to these performance-based RSUs. As of September 30, 2023, the unamortized expense for the performance-based RSUs was $17.9 million which will be recognized over a weighted-average period of 1.4 years.
Employee Stock Purchase Plan (“ESPP”)
The ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. The plan provides for 24-month offering periods beginning in December and June of each year, and each offering period will consist of four six-month purchase periods. 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 September 30, 2023, unrecognized stock-based compensation cost related to the ESPP was $31.1 million, which is expected to be recognized over a weighted-average period of 1.7 years.
Stock-based Compensation Expense
Total employee and nonemployee stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022, was classified in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Cost of revenue$1,221 $10,836 $2,560 $29,816 
Research and development35,963 34,083 101,356 123,059 
Selling, general and administrative31,053 38,383 90,959 199,370 
Restructuring charges— — (1,443)— 
Total$68,237 $83,302 $193,432 $352,245