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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock Options
A summary of stock option activity for the three months ended March 31, 2024 is as follows:

Shares Under OptionWeighted- Average Exercise PriceWeighted- Average Contractual LifeAggregate Intrinsic Value

(in thousands)(in thousands)
Outstanding at December 31, 20234,262 $8.65 
Granted130 $9.20 
Expired(7)$15.30 
Outstanding at March 31, 20244,385 $8.66 5.3 years$18,357 
Exercisable at March 31, 20243,781 $7.70 4.8 years$18,036 
At March 31, 2024, the Company had unrecognized employee stock-based compensation expense relating to nonvested stock options of approximately $5.4 million, which is expected to be recognized over a weighted-average period of 2.3 years. Total grant date fair value of options vested during the three months ended March 31, 2024 was $1.1 million.
The Company estimates the fair value of stock options that contain service conditions using the Black-Scholes option pricing model. The grant date fair value of options granted during the three months ended March 31, 2024 was $6.34 per share. The weighted-average input assumptions used by the Company were as follows:
Three Months Ended
March 31, 2024March 31, 2023
Expected term (in years)5.05.0
Risk-free interest rate3.93 %3.99 %
Expected volatility84 %84 %
Dividend yield— %— %

Restricted Stock Units
A summary of restricted stock unit ("RSU") activity for the three months ended March 31, 2024 is as follows:
Number of SharesWeighted-Average Grant Date Fair Value
(in thousands)
Restricted stock units outstanding at December 31, 2023
11,450 $12.63 
Granted6,673 $9.20 
Canceled(216)$10.30 
Vested and released
(2,363)$11.90 
Restricted stock units outstanding and unvested at March 31, 2024
15,544 $11.30 
The weighted-average grant date fair value per share of restricted stock units granted during the three months ended March 31, 2024 was $9.20. The intrinsic value of restricted stock units that vested during the three months ended March 31, 2024 was $23.2 million. At March 31, 2024, the intrinsic value of unvested restricted stock units was $167.1 million. At March 31, 2024, the Company had unrecognized stock-based compensation expense relating to unvested restricted stock units of approximately $161.2 million, which is expected to be recognized over a weighted-average period of 3.0 years.
Performance Stock Units
The Company grants performance stock units ("PSU") to select executive employees that vest based on share price metrics tied to total shareholder return relative ("TSR") to a peer group, subject to a time-based service component. Between 0% and 150% of the performance stock units will vest at the end of the performance period, which is generally on the third anniversary of the PSU grant date.
During the three months ended March 31, 2024, the Company granted PSUs with an aggregate target of 486,431 shares, assuming a performance measurement of 100%. The amount of shares that will ultimately vest will be determined based on the
Company's TSR relative to the TSRs of a peer group for the three year-period beginning January 1, 2024, as well as certain interim measurements based on relative TSR for the one-year and two-year periods beginning on January 1, 2024.
A summary of PSU activity for the three months ended March 31, 2024 is as follows:
Number of SharesWeighted-Average Grant Date Fair Value
(in thousands)
Outstanding at December 31, 2023
967 $18.17 
Granted486 $11.76 
Outstanding at March 31, 2024
1,453 $16.03 
The grant date fair value for the PSUs was estimated using a Monte-Carlo simulation model that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period. Stock-based compensation expense for PSUs is based on the grant date fair value and the number of shares assuming a performance measurement of 100%. The compensation expense will not be reversed if the performance metrics are not met. The weighted-average input assumptions used by the Company were as follows:
Three Months Ended
March 31, 2024March 31, 2023
Performance period (in years)
3.03.0
Risk-free interest rate4.05 %4.19 %
Expected volatility of Magnite87 %94 %
Expected volatility of selected peer companies55 %64 %
Expected correlation coefficients of Magnite0.590.62
Expected correlation coefficients of selected peer companies0.470.54
Dividend yield— %— %
At March 31, 2024, the intrinsic value of unvested performance stock units based on expected achievement levels was $13.3 million. As of March 31, 2024, the Company had unrecognized stock-based compensation expense relating to outstanding PSUs of approximately $12.0 million, which will be recognized over a weighted-average period of 2.2 years.
Stock-Based Compensation Expense
Total stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows:
Three Months Ended
March 31, 2024March 31, 2023
(in thousands)
Cost of revenue$500 $468 
Sales and marketing8,236 7,405 
Technology and development5,416 5,446 
General and administrative6,679 5,825 
Merger, acquisition, and restructuring costs— 143 
Total stock-based compensation expense$20,831 $19,287 
As of March 31, 2024, an aggregate of 16,787,890 shares remained available for future grants under the Magnite, Inc. Amended and Restated 2014 Equity Incentive Plan (the "Amended and Restated 2014 Equity Incentive Plan").
As of March 31, 2024, the Company has reserved 4,730,838 shares of its common stock for issuance under the Magnite, Inc. Amended and Restated 2014 Employee Stock Purchase Plan (the "Amended and Restated 2014 Employee Stock Purchase Plan").