v3.25.0.1
Stock Based Awards and Other Equity Instruments (Tables)
 12 Months Ended
Dec. 31, 2024
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Amount of Stock-Based Compensation Expense Related to Income Tax Benefit

The following table presents the amount of stock-based compensation expense and the related income tax benefit included in our consolidated statements of operations during the periods presented:

 

 

 

Year ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(in millions)

 

Total stock-based compensation expense

 

$

120

 

 

$

96

 

 

$

88

 

Income tax benefit from stock-based compensation expense

 

 

(23

)

 

 

(21

)

 

 

(18

)

Total stock-based compensation expense, net of tax effect

 

$

97

 

 

$

75

 

 

$

70

 
Summary of Stock Option Activity

A summary of our stock option activity, consisting of service-based non-qualified stock options, is presented below:

 

 

 

 

 

Weighted

 

 

Weighted

 

 

 

 

 

 

 

 

 

Average

 

 

Average

 

 

 

 

 

 

 

 

 

Exercise

 

 

Remaining

 

 

Aggregate

 

 

 

Options

 

 

Price Per

 

 

Contractual

 

 

Intrinsic

 

 

 

Outstanding

 

 

Share

 

 

Life

 

 

Value

 

 

 

(in thousands)

 

 

 

 

 

(in years)

 

 

(in millions)

 

Options outstanding as of December 31, 2023

 

 

3,927

 

 

$

35.56

 

 

 

 

 

 

 

Granted

 

 

45

 

 

 

24.96

 

 

 

 

 

 

 

Exercised (1)

 

 

(80

)

 

 

24.36

 

 

 

 

 

 

 

Cancelled or expired

 

 

(1,702

)

 

 

40.93

 

 

 

 

 

 

 

Options outstanding as of December 31, 2024

 

 

2,190

 

 

 

31.57

 

 

 

5.3

 

 

$

—

 

Exercisable as of December 31, 2024

 

 

1,703

 

 

 

34.42

 

 

 

4.7

 

 

$

—

 

Vested and expected to vest after December 31, 2024 (2)

 

 

2,190

 

 

$

31.57

 

 

 

5.3

 

 

$

—

 

 

(1)
Inclusive of approximately 67,000 stock options withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares issuable under stock options that were withheld under net share settlement remain in the authorized but unissued pool under the 2023 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.
(2)
The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.
Weighted-Average Assumptions of Estimated Fair Value of Stock Option Grants

The fair value of stock option grants has been estimated at the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions for the periods presented:

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Risk free interest rate

 

 

4.07

%

 

 

3.70

%

 

 

3.07

%

Expected term (in years)

 

 

5.19

 

 

 

5.16

 

 

 

5.42

 

Expected volatility

 

 

56.69

%

 

 

53.43

%

 

 

51.63

%

Expected dividend yield

 

—  %

 

 

—  %

 

 

—  %

 

Weighted-average grant date fair value

 

$

13.37

 

 

$

10.18

 

 

$

9.93

 
Summary of RSU Activity

A summary of our RSU activity, consisting of service-based vesting terms, is presented below:

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

Grant-

 

 

Aggregate

 

 

 

RSUs

 

 

Date Fair

 

 

Intrinsic

 

 

 

Outstanding

 

 

Value Per Share

 

 

Value

 

 

 

(in thousands)

 

 

 

 

 

(in millions)

 

Unvested RSUs outstanding as of December 31, 2023

 

 

11,520

 

 

$

23.06

 

 

 

 

Granted

 

 

6,314

 

 

 

24.70

 

 

 

 

Vested and released (1)

 

 

(4,936

)

 

 

23.93

 

 

 

 

Cancelled

 

 

(1,293

)

 

 

24.02

 

 

 

 

Unvested RSUs outstanding as of December 31, 2024 (2)

 

 

11,605

 

 

$

23.47

 

 

$

171

 
(1)
Inclusive of approximately 1,070,000 RSUs withheld due to net share settlement to satisfy required employee tax withholding requirements. Potential shares issuable under RSUs that were withheld under net share settlement remain in the authorized but unissued pool under the 2023 Plan and can be reissued by the Company. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statements of cash flows.
(2)
The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore do not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.
PSUs and MSUs  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Summary of RSU Activity

A summary of our performance-based RSUs ("PSUs") and market-based RSUs (“MSUs”) activity is presented below:

 

 

 

PSUs (1)

 

 

MSUs (2)

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

Grant-

 

 

Aggregate

 

 

 

 

 

Grant-

 

 

Aggregate

 

 

 

 

 

 

Date Fair

 

 

Intrinsic

 

 

 

 

 

Date Fair

 

 

Intrinsic

 

 

 

Outstanding

 

 

Value Per Share

 

 

Value

 

 

Outstanding

 

 

Value Per Share

 

 

Value

 

 

 

(in thousands)

 

 

 

 

 

(in millions)

 

 

(in thousands)

 

 

 

 

 

(in millions)

 

Unvested and outstanding as of December 31, 2023

 

 

519

 

 

$

18.45

 

 

 

 

 

572

 

 

$

10.35

 

 

 

Granted

 

 

616

 

 

 

27.06

 

 

 

 

 

 

—

 

 

 

—

 

 

 

 

Cancelled

 

 

(153

)

 

 

22.06

 

 

 

 

 

 

(81

)

 

 

9.26

 

 

 

 

Unvested and outstanding as of December 31, 2024

 

 

982

 

 

$

23.28

 

 

$

15

 

 

 

491

 

 

$

10.53

 

 

$

7

 

 

(1)
Represents PSUs awarded primarily in February 2023 and March 2024, representing nearly all the unvested and outstanding awards as of December 31, 2024. The February 2023 PSU awards provide for vesting in two equal annual installments on each of December 31, 2024 and December 31, 2025, if and to the extent the Company achieves pre-determined revenue and adjusted EBITDA metrics (each weighted 50%) established by the Compensation Committee and Section 16 Committee of its Board of Directors (jointly, the "Compensation Committees"). The March 2024 PSU awards provide for vesting in two equal annual installments on each of December 31, 2025 and December 31, 2026, if and to the extent the Company achieves pre-determined revenue and adjusted EBITDA metrics (each weighted 50%) established by the Compensation Committees. The estimated grant-date fair values per PSU were measured based on the quoted price of our common stock at the date of grant, calculated upon the establishment of performance targets, and are amortized on a straight-line basis over the requisite service period. Based upon actual attainment relative to the target financial metrics, employees have the ability to receive up to 200% of the target number originally granted, or to be issued none at all. Probable outcome for performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable, and the impact of modifications, if any.
(2)
MSUs shall vest three years from grant date, generally with 25% vesting if the weighted-average stock price over a 30-day trading period during the vesting period is equal to or greater than $35.00 but less than $45.00, 50% vesting if equal to or greater than $45.00 but less than $55.00, and 100% vesting if equal to or greater than $55.00, subject to continuous employment with, or performance of services for, the Company. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices was
used to calculate the grant-date fair value of our MSU awards. The estimated grant-date fair value of these awards is amortized on a straight-line basis over the requisite service period and is not adjusted based on the actual number of awards that ultimately vest.