v3.23.2
Stock Incentive Plans
 6 Months Ended
Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock Incentive Plans Stock Incentive PlansThe Company has granted share-based awards to employees, non-employee directors, and other service providers of the Company under the Amended and Restated 2011 Equity Incentive Plan (“2011 Plan”) and the 2021 Stock Option and Incentive Plan (“2021 Plan”), collectively, the Plans. The 2011 Plan was terminated in June 2021 in connection with the Company’s initial public offering (“IPO”) but continues to govern the terms of outstanding awards that were granted prior to the IPO. Additionally, the Company offers an employee stock purchase plan (“ESPP”), which allows employees to purchase shares of common
stock at 85% of the fair value of the Company’s Class A common stock on the first or last day of the offering period, whichever is lower. The offering periods are six months long and start in May and November of each year.
The following table presents the share-based compensation expense recognized in the periods presented:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Restricted stock units$25,179 $15,078 $49,970 $30,423 
Stock options5,309 6,160 12,793 13,818 
Executive Chairman Long-Term Performance Award13,267 13,267 26,388 26,388 
Employee Stock Purchase Plan410 643 1,013 1,524 
Total$44,165 $35,148 $90,164 $72,153 
Restricted Stock Units
Restricted stock units (“RSUs”), generally vest over three or four years.
A summary of the Company's RSU activity under the Plans is as follows:
Number of Restricted Stock UnitsWeighted-average grant date fair value per share
Balance as of December 31, 2022
34,146,546$9.74 
Granted26,556,5004.45 
Vested(6,289,563)9.60 
Canceled and forfeited(9,271,109)8.39 
Balance as of June 30, 2023
45,142,374$6.92 
As of June 30, 2023, unrecognized compensation costs related to unvested RSUs was $283.4 million. These costs are expected to be recognized over a weighted-average period of 2.9 years.
Stock Options
Under the Plans, the exercise price of a stock option shall not be less than the fair market value per share of the Company’s common stock on the date of grant (and not less than 110% of the fair market value per share of common stock for grants to stockholders owning more than 10% of the total combined voting power of all classes of stock of the Company, or a 10% stockholder). Options are exercisable over periods not to exceed ten years from the date of grant (five years for incentive stock options granted to 10% stockholders).
A summary of the Company's stock option activity under the Plans is as follows:
Number of OptionsWeighted-Average Exercise Price per ShareWeighted-Average Remaining Contractual Life
Aggregate Intrinsic Value(1)
Balance as of December 31, 2022
36,156,445 $16.37 7.67 years$29,101 
Granted6,080,148 5.35 
Exercised(1,631,016)1.41 
Canceled and forfeited(2,228,604)10.45 
Balance as of June 30, 2023
38,376,973$15.61 7.75 years$14,943 
Exercisable as of June 30, 2023(2)
11,157,842$11.17 7.39 years$13,162 
Vested as of June 30, 2023
8,267,104$9.39 6.26 years$11,972 
(1) Intrinsic value is calculated based on the difference between the exercise price of in-the-money-stock options and the fair value of the common stock as of the respective balance sheet dates.
(2) The 2011 Plan allows for early exercise of stock options. Accordingly, options granted under this plan are included as exercisable stock options regardless of vesting status.
As of June 30, 2023, aggregate unrecognized compensation costs related to unvested outstanding stock options, excluding the Executive Chairman Long-Term Performance Award, was $57.0 million. These costs are expected to be recognized over a weighted-average period of 2.5 years.
The fair value of stock options granted was estimated using the Black-Scholes option pricing model and the following weighted average assumptions:
Three Months Ended June 30,Six Months Ended June 30,
2023 (1)
202220232022
Dividend yield—%0.0%0.0%0.0%
Expected volatility—%61.90%70.78%59.37%
Expected term (in years)—6.086.046.08
Risk-free interest rate—%2.81%3.78%2.18%
(1) The Company did not grant any stock options during the three months ended June 30, 2023.
The fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its Class A common stock, which is traded on the Nasdaq Global Select Market.
Executive Chairman Long-Term Performance Award
In April and May 2021, the Company’s board of directors granted the Company’s Executive Chairman and then-Chief Executive Officer equity incentive awards in the form of performance-based stock options covering 19,740,923 and 47,267 shares of the Company’s Class B common stock with an exercise price of $21.49 and $23.40 per share, respectively (collectively, the “Executive Chairman Long-Term Performance Award,” formerly known as the CEO Long-Term Performance Award). The Executive Chairman Long-Term Performance Award vests upon the satisfaction of a service condition and the achievement of certain stock price hurdles over a seven-year performance period following the expiration of the lock-up period associated with the Company’s IPO in 2021. The stock price hurdle will be achieved if the average closing price of a share of the Company’s Class A common stock during any 90 consecutive trading day period during the performance period equals or exceeds the Company stock price hurdle set forth in the table below.
The Executive Chairman Long-Term Performance Award is divided into seven equal tranches which vest upon the achievement of the following Company stock price hurdles:
TrancheCompany Stock Price HurdleNumber of Options Eligible to Vest
1$67.502,826,884
2$78.982,826,884
3$92.402,826,884
4$108.112,826,884
5$126.492,826,884
6$147.992,826,884
7$173.152,826,884
Total19,788,188
The grant date fair value of the Executive Chairman Long-Term Performance Award was estimated using a Monte Carlo simulation model that incorporated multiple stock price paths and probabilities that the Company stock price hurdles are met. The weighted-average grant date fair value of the seven tranches of the Executive Chairman Long-Term Performance Award was estimated to be $10.53 per option share.
As of June 30, 2023, the aggregate unrecognized compensation cost of the Executive Chairman Long-Term Performance Award was $90.6 million, which is expected to be recognized over the remaining derived service period of 2.6 years.