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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
10. Stock-Based Compensation

We account for stock-based compensation expense related to stock-based awards based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options containing only a service condition using the Black-Scholes option pricing model. The fair value of restricted stock units (“RSUs”) is based on the closing market price of our common stock on the Nasdaq Global Market on the date of grant. For service-based awards such as RSUs, stock-based compensation expense is recognized on a straight-line basis over the requisite service period.
In June 2022, our Board of Directors granted to our Chief Executive Officer (“CEO”) a stock option award that is eligible to vest based on the achievement of various stock price appreciation targets. This 2022 CEO option grant is our only stock-based award that vests based on the achievement of market conditions.

For awards with market-based conditions, compensation expense is measured using a Monte Carlo simulation and expense is recognized using the accelerated attribution method over the derived service period based on the expected market performance as of the grant date. We account for forfeitures of our stock-based awards as they occur rather than estimating expected forfeitures. As of September 30, 2023, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $12.2 million and will be recognized over a weighted average period of 2.4 years. Total unrecognized compensation cost related to unvested RSUs was approximately $45.9 million, which will be recognized over a weighted average period of 1.4 years.

The following table summarizes the components of our stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Cost of revenue
Subscriptions$211 $284 $713 $712 
Professional services1,535 1,401 4,598 3,788 
Operating expenses
Sales and marketing3,245 2,667 8,462 6,721 
Research and development2,930 3,454 9,466 8,831 
General and administrative3,090 3,530 9,976 7,375 
Total stock-based compensation expense$11,011 $11,336 $33,215 $27,427