Stock-based compensation expense recognized for the three and nine months ended September 30, 2023 and 2022, is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Costs of revenue	$	11	$	8	$	32	$	24
Sales and marketing	15		12		43		37
Research and development	23		18		69		52
General and administrative	22		19		62		54
Total Stock based compensation	$	71	$	57	$	206	$	167

Stock-based compensation expense of $4 and $10, respectively, was capitalized as software development costs during the three and nine months ended September 30, 2023. Stock-based compensation expense of $3 and $5, respectively, was capitalized as software development costs during each of the three and nine months ended September 30, 2022.

The fair value of each option grant was estimated on its grant date using the Black-Scholes option-pricing model. The following table indicates the weighted-average assumptions made in estimating the fair value for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30,
	2023			2022
Risk-free interest rate	3.90		%	2.37		%
Expected term (in years)	6.1			6.1
Expected volatility	56.19		%	52.28		%
Expected dividend yield	—		%	—		%
Weighted-average fair value of common stock	$	18.01		$	17.20
Weighted-average grant date fair value	$	10.24		$	8.89

The following is a summary of stock option activity under our stock option plans for the nine months ended September 30, 2023:


(in millions, except share and per share amounts)	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (1)

Outstanding as of December 31, 2022	53,728,512	$	5.98	6.9	$	655
Granted	3,147,911	18.01
Exercised	(6,479,120)	3.07
Forfeited	(1,077,890)	13.09
Outstanding as of September 30, 2023	49,319,413	$	6.98	6.5	$	587


Options vested and expected to vest as of September 30, 2023	47,502,892	$	6.73	6.4	$	577
Options exercisable as of September 30, 2023	42,553,432	$	5.17	6.1	$	576

(1) The aggregate intrinsic value was determined as the difference between the closing price of the Class A common stock on the last trading day of September 2023, or the date of exercise, as appropriate, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their in-the-money options at period end.

There were no options granted during the three months ended September 30, 2023. The weighted average grant date fair value of options granted during the three months ended September 30, 2022 was $15.94. The aggregate intrinsic values of options exercised was $30 and $116, respectively, during the three and nine months ended September 30, 2023 and $31 and $112, respectively, during the three and nine months ended September 30, 2022.

As of September 30, 2023, total unrecognized stock-based compensation expense related to option awards was $92 and is expected to be recognized over the remaining weighted-average service period of 2.7 years .


	RSU	Weighted Average Grant Date Fair Value
Unvested balance as of December 31, 2022	31,242,263	$	22.11
Granted	13,848,380	$	18.82
Vested	(7,759,507)	$	21.69
Forfeited	(2,109,436)	$	21.77
Unvested balance as of September 30, 2023	35,221,700	$	20.93

The weighted average grant-date fair value of RSUs granted during the three months ended September 30, 2023 and 2022 was $22.41 and $17.37, respectively. The weighted average grant-date fair value of RSUs granted during the nine months ended September 30, 2022 was 18.23. The fair value of RSUs vested during the three months ended September 30, 2023 and 2022 was $66 and $32, respectively. The fair value of RSUs vested during the nine months ended September 30, 2023 and 2022 was $159 and $61, respectively.

As of September 30, 2023, total unrecognized stock-based compensation expense related to the RSUs was $532 and is expected to be recognized over the remaining weighted-average service period of 3 years.

As of September 30, 2023, we had 67,377,775 shares of Class A common stock available for future issuance under our 2021 Stock Option and Incentive Plan.

In 2021, our Board adopted, and our stockholders approved, the 2021 Employee Stock Purchase Plan ("ESPP") which became effective on September 23, 2021. As of September 30, 2023, 21,212,317 shares of our Class A common stock were available for issuance to participating employees who are allowed to purchase shares of Class A common stock at a price equal to 85% of its fair market value at the beginning or the end of the offering period, whichever is lower.

During the three months ended September 30, 2023, 440,763 shares were purchased under the ESPP at $15.51 per share, resulting in cash proceeds of $7. During the nine months ended September 30, 2023, 727,849 shares were purchased under the ESPP at $15.57 per share, resulting in cash proceeds of $11. No shares were purchased under the ESPP during the three and nine months ended September 30, 2022.

The number of issued and outstanding shares of Class A and Class B common stock subject to restrictions as of September 30, 2023 and December 31, 2022, were 881,133 and 2,703,538, respectively.

As of September 30, 2023, this included 30,015 shares of Class A common stock and Class B common stock issued upon the early exercise of stock options and 851,118 shares of restricted Class A common stock issued to certain members of management of Delphi and Sling, Inc. as part of their consideration in connection with the acquisitions.

As of December 31, 2022, this included 1,365,310 shares of Class A common stock and Class B common stock issued upon the early exercise of stock options and 1,338,228 shares of restricted Class A common stock issued to certain members of management of Sling, Inc. as part of their consideration in connection with the acquisition in 2022.