v3.25.2
Stock-Based Compensation
 6 Months Ended
Jun. 30, 2025
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock Options and SARs
The following table summarizes stock option and stock appreciation right (“SAR”) activity for the six months ended June 30, 2025 (in thousands, except per share amounts and years):
Options OutstandingSARs Outstanding
Number of Awards
Weighted-Average Exercise Price Per Share
Weighted-Average
Remaining Contractual Life (years)
Aggregate Intrinsic Value
Number of Awards
Weighted-Average Exercise Price Per Share
Weighted-Average
Remaining Contractual Life (years)
Aggregate Intrinsic Value
Balance as of December 31, 2024178,109 $9.26 6.9$11,821,740 6,437 $55.75 6.7$127,976 
Granted— — 913 131.18 
Exercised(19,102)4.98 — — 
Canceled and forfeited(97)6.01 (122)53.55 
Balance as of June 30, 2025158,910 $9.77 6.6$20,109,743 7,228 $65.31 6.5$522,117 
Vested and exercisable as of June 30, 202570,110 $7.73 5.9$9,015,071 — $— 0.0$— 
As of June 30, 2025, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $453.6 million, and $60.6 million, respectively, which is expected to be recognized over a weighted-average service period of six years. The weighted-average grant date fair value of SARs granted during the six months ended June 30, 2025 was $18.56 per share.
Time-Vesting SARs
The Company grants SARs that vest over explicit service periods of up to nine years and are exercisable at expiration, during a limited window, if the Company’s stock price reaches a certain threshold (“Time-Vesting SARs”). Time-Vesting SARs have exercise prices of between $39–$150 and maximum appreciation values of between $60–$300.
The Company determined the grant date fair value of Time-Vesting SARs granted during the six months ended June 30, 2025 using a Black-Scholes option-pricing model, calculated as the difference in fair value between a SAR with a strike price at the exercise price and a SAR with the strike price at its maximum appreciation, using the following assumptions:
Six Months Ended
June 30, 2025
Expected volatility rate
61.0% - 66.1%
Expected term (in years)
3.4 - 8.9
Risk-free interest rate
4.3% - 4.6%
Expected dividend yield—%
The expected volatility rate is based on a combination of the Company’s implied and historical volatility, and the historical volatility of comparable publicly-traded companies. The expected term represents the period of time the SARs are expected to be outstanding. The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the SAR. The Company has never paid and has no plans to pay dividends on its common stock, therefore the expected dividend yield is zero.
RSUs and P-RSUs
The following table summarizes the RSU and P-RSU activity for the six months ended June 30, 2025 (in thousands, except per share amounts):
RSUs OutstandingWeighted Average Grant Date Fair Value per ShareP-RSUs OutstandingWeighted Average Grant Date Fair Value per Share
Unvested and outstanding as of December 31, 202465,236 $14.89 577 $41.93 
Granted3,292 106.06 559 78.85 
Vested(13,425)18.25 (821)49.73 
Canceled and forfeited(1,941)22.13 (16)78.87 
Adjustment for performance achievement(1)
(74)68.14 
Unvested and outstanding as of June 30, 202553,162 $19.42 225 $93.99 
—————
(1)This amount represents the difference between the maximum number of shares that could have been issued under the grant and the actual number of shares earned based on final performance.
As of June 30, 2025, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $800.2 million, which the Company expects to recognize over a weighted-average service period of three years. As of June 30, 2025, there was no unrecognized stock-based compensation expense related to the P-RSUs outstanding.
Stock-based Compensation Expense
Total stock-based compensation expense was as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Cost of revenue$14,973 $12,402 $29,989 $22,818 
Sales and marketing56,040 48,314 108,553 90,470 
Research and development32,068 29,943 63,902 56,817 
General and administrative56,890 51,105 112,866 97,310 
Total stock-based compensation expense$159,971 $141,764 $315,310 $267,415