In March 2021, the Company’s Board of Directors adopted, and the stockholders approved, the 2021 Equity Incentive Plan. The 2021 Equity Incentive Plan is a successor to and continuation of the 2013 Stock Plan. The 2021 Equity Incentive Plan became effective on the date of the IPO with no further grants being made under the 2013 Stock Plan, however, awards outstanding under the 2013 Stock Plan will continue to be governed by their existing terms. The 2021 Equity Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units awards (“RSUs”), performance awards, and other awards to employees, directors, and consultants. Shares issued pursuant to the exercise of these awards are transferable by the holder.

Stock options granted have a maximum term of ten years from the grant date, are exercisable upon vesting and typically vest over a period of four years. Stock option activity for the nine months ended September 30, 2024 was as follows:


	Number of Options Outstanding	Weighted-Average Exercise Price (Per share)		Weighted-Average Remaining Life (In years)	Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2024	3,289,019	$	9.43	4.17	$	89,671


Exercised	(1,696,804)	7.03
Forfeited or cancelled	(32,987)	16.30
Outstanding at September 30, 2024	1,559,228	$	11.86	5.40	$	44,484
Vested and exercisable at September 30, 2024	1,526,692	11.72		5.38	43,777
Vested and unvested expected to vest at September 30, 2024	1,558,803	$	11.86	5.40	$	44,475

The aggregate intrinsic value represents the difference between the fair value of common stock and the exercise price of outstanding in-the-money options. The aggregate intrinsic value of exercised options for the nine months ended September 30, 2024 and 2023 was $47,392 and $64,463, respectively.

No options were granted during the nine months ended September 30, 2024. The aggregate estimated fair value of stock options granted to participants that vested during the nine months ended September 30, 2024 and 2023 was $5,201 and $10,284, respectively.

As of September 30, 2024, there was $470 of unrecognized stock-based compensation, net of estimated forfeitures, related to outstanding stock options granted that is expected to be recognized over a weighted-average period of 0.21 years.

RSUs granted typically vest over four years. RSU activity for the nine months ended September 30, 2024 was as follows:


	Shares	Weighted-Average Grant Date Fair Value (Per share)
Unvested balance at January 1, 2024	6,308,499	$	36.07
Granted	2,983,779	37.09
Vested	(1,641,401)	37.38
Forfeited or cancelled	(1,889,799)	36.02
Unvested balance at September 30, 2024	5,761,078	36.23
Vested and expected to vest at September 30, 2024	4,833,171	$	36.17

As of September 30, 2024, there was $161,773 of unrecognized stock-based compensation, net of estimated forfeitures, related to outstanding RSUs granted that is expected to be recognized over a weighted-average period of 2.86 years.

The Company has issued PRSUs which vest based on the achievement of each award’s established performance targets. PRSU activity for the nine months ended September 30, 2024 was as follows:


	Shares	Weighted-Average Grant Date Fair Value (Per share)
Unvested balance at January 1, 2024	537,715	$	35.25
Granted	168,944	36.48
Vested	(96,469)	51.25
Forfeited or cancelled	(98,833)	31.75
Adjusted by performance factor	(305,948)	31.75
Unvested balance at September 30, 2024	205,409	$	35.64

At the end of each reporting period, the Company adjusts compensation expense for the PRSUs based on its best estimate of attainment of specified performance metrics. The cumulative effect on current and prior periods of a change in the estimated number of PRSUs that are expected to be earned during the performance period is recognized as an adjustment to earnings in the period of the revision. Compensation cost in connection with the probable number of shares that will vest is recognized using the accelerated attribution method.

The Company grants Long Term Incentive Plan (“LTIP”) PRSUs to certain executives of the Company typically during the first half of each fiscal year. A percentage of the LTIP PRSUs becomes eligible to vest based on the Company’s financial performance level at the end of each fiscal year. The number of LTIP PRSUs received will depend on the achievement of financial metrics relative to the approved performance targets. Depending on the actual financial metrics achieved relative to the target financial metrics throughout the defined performance period of the award, the number of LTIP PRSUs that vest could range from 0% to 200% of the target amount and are subject to the Compensation Committee’s approval of the level of achievement against the approved performance targets.

Assuming the minimum performance level is achieved, one-third of the aggregate number of the achieved LTIP PRSUs shall vest on the later of (i) March 1 of the year after grant or (ii) two trading days following the public release of the Company’s financial results, and the remainder shall vest in 8 equal quarterly installments subject, in each case, to the individual’s continuous service through the applicable vesting date.

On March 1, 2023, the Company granted an LTIP PRSU award (the “2023 LTIP PRSU”). The financial performance level under the PRSUs was the percentage equal to the sum of the revenue growth percentage and profitability percentage, which on February 21, 2024, was determined to be achieved at 38.5% of the target amount. This resulted in a performance factor reduction of 305,948 shares from the original maximum shares achievable of 378,882, excluding forfeitures.

On April 11, 2024, the Company granted an LTIP PRSU award (the “2024 LTIP PRSU”). The financial performance level under the PRSUs can be attained based on the achievement of certain revenue and adjusted free cash flow margin targets. Under the 2024 LTIP PRSU, 75% of the award can be achieved based on the revenue targets and 25% of the award can be achieved based on the adjusted free cash flow margin targets. The target shares granted under the 2024 LTIP PRSU was 84,472. The actual number of shares that are received under the 2024 LTIP PRSU may be higher or lower than the target shares based on the actual financial metrics achieved relative to the target financial metrics for fiscal year 2024.

As of September 30, 2024, there was $2,211 of unrecognized stock-based compensation related to LTIP PRSUs that is expected to be recognized over a weighted-average period of 2.27 years.

On February 12, 2024, Padmanabhan Srinivasan joined the Company in the role of CEO. As part of his compensation package, Mr. Srinivasan received an MRSU with an estimated grant date fair value of approximately $8 million, which vests upon the satisfaction of certain service conditions and the achievement of certain Company stock price goals during a five-year performance period, as described below. A cumulative percentage of the MRSU target is earned based on the achievement of stock price goals, measured based on the average of the Company’s closing stock price over a consecutive 60 trading day period during the performance period as set forth in the table below:


Tranche	Company Stock Price Target	Total Payout
1	$65.00	25% of Target MRSUs
2	$100.00	50% of Target MRSUs
3	$135.00	100% of Target MRSUs
4	$170.00	150% of Target MRSUs

The target number of achievable shares is 193,178 and the maximum number of achievable shares is 289,767. There will be no pro-rata or straight-line interpolation vesting for achievement of a stock price target between the stock price targets, except in the event of a qualifying termination.

If the stock price targets are achieved during the first three years following the grant date (the “First Performance Period”), 50% of the eligible MRSUs will vest on the third anniversary of the grant date and the remaining 50% of the eligible MRSUs will vest on the fifth anniversary of the grant date. Each tranche of MRSUs whose stock price target was not achieved during the First Performance Period that is subsequently achieved during the period between the third anniversary of the grant date and fifth anniversary of the grant date will vest on the fifth anniversary of the grant date.

The unvested balance of 3,000,000 shares related to the former CEO’s MRSU were forfeited and canceled during the first quarter of 2024. There was no unrecognized stock-based compensation related to the former CEO’s MRSU award.

As of September 30, 2024, there was $6,651 of unrecognized stock-based compensation related to the current CEO’s MRSU award that is expected to be recognized over a weighted-average period of 4.42 years.

In March 2021, the Company’s Board of Directors adopted, and the stockholders approved, the 2021 Employee Stock Purchase Plan (“ESPP”). Eligible employees enroll in the offering period at the start of each purchase period, whereby they may purchase a number of shares at a price per share equal to 85% of the lesser of (1) the stock price at the employee’s first participation in the offering period or (2) the fair market value of the Company’s common stock on the

A new offering period commenced on November 21, 2023, and consists of two purchase periods, the first of which had a purchase date of May 20, 2024 and the second will have a purchase date of November 20, 2024 (the “2023 Offering”). In connection with the purchase period that ended on May 20, 2024, there were 94,162 shares of common stock, net of shares withheld for taxes, purchased by employees at a price of $24.15.

The Company recorded stock-based compensation associated with the ESPP of $474 and $689 during the three months ended September 30, 2024 and 2023, respectively, and $1,317 and $1,909 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, $1,642 has been withheld on behalf of employees for the second purchase of the 2023 Offering.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Cost of revenue	$	506	$	497	$	1,583	$	1,350
Research and development	10,828		9,502		29,099		35,280
Sales and marketing	2,063		4,701		9,105		11,759
General and administrative (1)	9,552		(17,071)		27,872		13,263
Restructuring and other charges	—		—		—		3,937
Total	$	22,949	$	(2,371)	$	67,659	$	65,589