Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Stock-Based Compensation

Stock-Based Compensation

Note 8 Stock-Based Compensation

Stock-based compensation expense for the quarters ended March 31, 2023 and 2022 was ($1.1) million and $12.7 million, respectively. During the quarter ended March 31, 2023, the Company reversed previously recognized stock-based compensation expense aggregating to $4.5 million in connection with forfeiture of certain awards relating to employees that departed the Company during the quarter. The Company accounts for forfeitures as they occur.

The Company’s stock compensation (income) expense was recognized in the following captions within the consolidated statements of operations:

	Three Months Ended
(in thousands)	March 31, 2023		March 31, 2022
Cost of revenues	$	270	$	354
General and administrative		(230)		8,938
Sales and marketing		(1,581)		1,993
Technology and development		394		1,397
Total stock compensation (income) expense	$	(1,147)	$	12,682

Stock compensation decreased $13.8 million from expense of $12.7 million during the period ended March 31, 2022 to income of $1.1 million during the period ended March 31, 2023.

2021 Employee Stock Purchase Plan

In connection with the IPO, the Company also adopted the 2021 Employee Stock Purchase Plan (“2021 ESPP”). The 2021 ESPP initially reserves and authorizes the issuance of up to a total of 150,000 shares of Class A common stock to participating employees. The 2021 ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1, 2022 and each January 1 thereafter through January 1, 2031, by the lesser of (i) 1% of the outstanding number of shares of our Class A common stock and Class B common stock on the immediately preceding December 31 or (ii) such lesser number of shares of Class A common stock as determined by the administrator of the 2021 ESPP. Under the 2021 ESPP, eligible employees may be granted options to purchase shares of Class A common stock at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. No options have been granted under this plan in the quarters ended March 31, 2022 and March 31, 2023.

2021 Stock Option and Incentive Plan

In connection with the IPO, the Company adopted the 2021 Incentive Plan (the “Plan”). The Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards intended to align the interests of participants with those of the Company’s shareholders.

Restricted stock units

During the three months ended March 31, 2023, there were 597,034 restricted stock units (“RSUs”) granted under the Plan, at a weighted average exercise price of $10.99. Total unrecognized stock compensation expense related to unvested RSUs was $21.8 million as of March 31, 2023, which is expected to be recognized over a weighted-average period of 2.5 years.

Stock options

During the three months ended March 31, 2023, 71,004 options were granted under the Plan, at a weighted average exercise price of $11.06 per option.  During the three months ended March 31, 2023, 31,474 stock options were forfeited. As of March 31, 2023, there was approximately $0.5 million of unrecognized equity-based compensation expense related to the remaining stock options issued, which is expected to be recognized over a weighted-average period of approximately 2.8 years. During the three months ended March 31, 2022, no stock options were granted under the Plan and no stock options were forfeited.  

The assumptions used for the options granted under the Plan during the three months ended March 31, 2023 were as follows:

Assumptions
Expected volatility	60.91%
Expected term of award	6.5 years
Risk-free rate	3.82%
Dividend yield	0.00%

Performance-based RSUs

No Performance-based RSUs were granted in the three-months ended March 31, 2023 and March 31, 2022 respectively. Total unrecognized stock compensation expense related to unvested performance stock units (“PSUs”) was $1.1 million as of March 31, 2023, which is expected to be recognized over a weighted-average period of 1.4 years.