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Stock-Based Compensation | 9 Months Ended
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Sep. 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 nine months ended September 30, 2025 (in thousands, except per share amounts and years):
| Options Outstanding |  | SARs 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, 2024 | 178,109 |  |  | $ | 9.26 |  |  | 6.9 |  | $ | 11,821,740 |  |  | 6,437 |  |  | $ | 55.75 |  |  | 6.7 |  | $ | 127,976 |
Granted | — |  |  | — |  |  |  |  |  |  | 5,061 |  |  | 218.86 |  |  |  |  |
Exercised | (23,992) |  |  | 5.04 |  |  |  |  |  |  | — |  |  | — |  |  |  |  |
Canceled and forfeited | (168) |  |  | 6.45 |  |  |  |  |  |  | (237) |  |  | 53.81 |  |  |  |  |
Balance as of September 30, 2025 | 153,949 |  |  | $ | 9.92 |  |  | 6.4 |  | $ | 26,556,634 |  |  | 11,261 |  |  | $ | 129.10 |  |  | 7.3 |  | $ | 831,612 |
Vested and exercisable as of September 30, 2025 | 69,724 |  |  | $ | 8.15 |  |  | 5.7 |  | $ | 12,150,790 |  |  | — |  |  | $ | — |  |  | 0.0 |  | $ | — |
As of September 30, 2025, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $429.8 million and $151.3 million, respectively, which is expected to be recognized over a weighted-average service period of five and eight years, respectively. The weighted-average grant-date fair value of SARs granted during the nine months ended September 30, 2025 was $22.43 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–$250 and maximum appreciation values of between $60–$300. The Company determined the grant-date fair value of Time-Vesting SARs granted during the nine months ended September 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:
| Nine Months Ended September 30, 2025
Expected volatility rate | 56.9% - 66.1%
Expected term (in years) | 3.4 - 9.3
Risk-free interest rate | 4.0% - 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 nine months ended September 30, 2025 (in thousands, except per share amounts):
| RSUs Outstanding |  | Weighted Average Grant Date Fair Value per Share |  | P-RSUs Outstanding |  | Weighted Average Grant Date Fair Value per Share
Unvested and outstanding as of December 31, 2024 | 65,236 |  |  | $ | 14.89 |  |  | 577 |  |  | $ | 41.93 |
Granted | 4,976 |  |  | 129.64 |  |  | 695 |  |  | 93.75 |
Vested | (19,893) |  |  | 18.57 |  |  | (1,047) |  |  | 59.29 |
Canceled and forfeited | (2,730) |  |  | 25.08 |  |  | (18) |  |  | 93.98 |
Adjustment for performance achievement(1) |  |  |  |  | (74) |  |  | 68.14 |
Unvested and outstanding as of September 30, 2025 | 47,589 |  |  | $ | 24.76 |  |  | 133 |  |  | $ | 154.86 |
(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 September 30, 2025, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $947.1 million, which the Company expects to recognize over a weighted-average service period of three years. As of September 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 September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cost of revenue | $ | 15,789 |  |  | $ | 13,123 |  |  | $ | 45,778 |  |  | $ | 35,941 |
Sales and marketing | 63,148 |  |  | 50,698 |  |  | 171,701 |  |  | 141,168 |
Research and development | 35,049 |  |  | 30,715 |  |  | 98,951 |  |  | 87,532 |
General and administrative | 58,332 |  |  | 47,889 |  |  | 171,198 |  |  | 145,199 |
Total stock-based compensation expense | $ | 172,318 |  |  | $ | 142,425 |  |  | $ | 487,628 |  |  | $ | 409,840 |

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