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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2022
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock options Activity of options outstanding are as follows (in thousands, except per share and years data):
| Options Outstanding |  | Weighted Average Exercise Price per Share |  | Weighted Average Remaining Contractual Life (Years) |  | Aggregate Intrinsic Value
Balance at January 1, 2022 | 37,208 |  |  | $ | 18.60 |  |  | 7.83 |  | $ | 8,698,078 |
Issued | 937 |  |  | 177.79 |  |  |  |  |
Exercised | (3,012) |  |  | 13.59 |  |  |  |  |
Forfeited and cancelled | (1,722) |  |  | 22.79 |  |  |  |  |
Balance at September 30, 2022 | 33,411 |  |  | 23.30 |  |  | 7.19 |  | 1,481,640 |
Vested and exercisable at September 30, 2022 | 18,506 |  |  | 18.19 |  |  | 6.70 |  | 882,457 |
Vested and expected to vest at September 30, 2022 | 27,277 |  |  | 23.26 |  |  | 7.04 |  | 1,229,963 |
During the three and nine months ended September 30, 2022, the Company granted stock options for the purchase of 143,751 and 937,247 shares of the Company’s Class A common stock with a weighted-average grant date fair value of $42.69 and $83.25 per share, respectively, to certain employees of the Company. The stock options vest over three years at a rate of 1/12 per quarter. As of September 30, 2022, there was total unrecognized compensation cost of $159.7 million related to unvested stock options. These costs are expected to be recognized over a weighted-average period of approximately 2.4 years. The assumptions used under the Black-Scholes-Merton Option-Pricing Model and the weighted average calculated value of the options granted to employees were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Dividend yield | 0.0 | % |  | N/A |  | 0.0 | % |  | 0.0 | %
Expected volatility | 76.1 | % |  | N/A |  | 59.3 | % |  | 44.0 | %
Expected term (in years) | 5.8 |  | N/A |  | 5.8 |  | 4.8
Risk-free interest rate | 3.0 | % |  | N/A |  | 2.1 | % |  | 0.5 | %
As of September 30, 2022, there were 213,757 shares of Class A common stock subject to repurchase related to stock options exercised early and not yet vested, but that are expected to vest. As of September 30, 2022, the Company recorded a liability related to these shares subject to repurchase in the amount of $4.3 million, which is included within accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. Chief Executive Officer performance award During the three and nine months ended September 30, 2022, stock-based compensation expense of $1.0 million and $2.9 million, respectively, was recognized related to this award. During the three and nine months ended September 30, 2021, stock-based compensation expense of $22.2 million and $28.5 million was recognized related to this award, respectively. Restricted stock units The Company’s RSUs vest upon the satisfaction of a service-based condition. In general, the RSUs vest over a service period ranging from one to four years. Once vested, the RSUs are settled by delivery of Class A common stock. Activity of RSUs outstanding are as follows (in thousands, except per share data):
| Number of Shares |  | Weighted-Average Grant Date Fair Value per Share
Balance at January 1, 2022 | 7,482 |  |  | $ | 157.22 |
Granted | 7,860 |  |  | 144.69 |
Vested | (6,906) |  |  | 153.57 |
Forfeited and cancelled | (1,582) |  |  | 164.86 |
Balance at September 30, 2022 | 6,854 |  |  | 144.64 |
For RSUs granted during the three months and nine months ended September 30, 2022, the closing price of the Company’s Class A common stock as reported on The Nasdaq Global Select Market on the grant date was used as the fair value. As of September 30, 2022, there was total unrecognized compensation cost of $841.3 million related to unvested RSUs. These costs are expected to be recognized over a weighted-average period of approximately 1.9 years. Restricted common stock As part of the Company’s acquisitions, the Company has issued shares of restricted Class A common stock. Vesting of this restricted Class A common stock is dependent on a service-based vesting condition that is generally satisfied over three years. The Company has the right to repurchase shares at par value for which the vesting condition is not satisfied. Activity of restricted Class A common stock is as follows (in thousands, except per share data):
| Number of Shares |  | Weighted-Average Grant Date Fair Value per Share
Balance at January 1, 2022 | 2,014 |  |  | $ | 137.57 |
Granted | 323 |  |  | 137.05 |
Vested | (925) |  |  | 129.72 |
Forfeited and cancelled | — |  |  | — |
Balance at September 30, 2022 | 1,412 |  |  | 143.33 |
As of September 30, 2022, there was total unrecognized compensation cost of $163.1 million related to unvested restricted Class A common stock. These costs are expected to be recognized over a weighted-average period of approximately 1.6 years. Employee Stock Purchase Plan The ESPP allows eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount, over a series of offering periods through accumulated payroll deductions over the period. The ESPP also includes a look-back provision for the purchase price if the stock price on the purchase date is lower than the stock price on the offering date. The Company recognizes stock-based compensation expenses related to purchase rights issued pursuant to its ESPP on a straight-line basis over the offering period, which is 24 months. The fair value of purchase rights under the ESPP are estimated on the date of grant using the Black-Scholes-Merton Option-Pricing Model. The grant date of the initial offering period was May 3, 2021, and that offering period will end on April 30, 2023. As of September 30, 2022, the Company recorded a liabili ty of $8.6 million related to the accumulated payroll deductions, which are refundable to employees who withdraw from the ESPP. T his amount is included within accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. Stock-based compensation expense Stock-based compensation is included in the following components of expenses on the accompanying condensed consolidated statements of operations (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Technology and development | $ | 275,817 |  |  | $ | 176,785 |  |  | $ | 793,573 |  |  | $ | 381,030 |
Sales and marketing | 18,461 |  |  | 10,095 |  |  | 52,813 |  |  | 20,299 |
General and administrative | 97,163 |  |  | 77,314 |  |  | 288,692 |  |  | 156,828 |
Total | $ | 391,441 |  |  | $ | 264,194 |  |  | $ | 1,135,078 |  |  | $ | 558,157 |
During the three and nine months ended September 30, 2022, $26.3 million and $97.7 million of stock-based compensation expense was included in capitalized software, respectively. During the three and nine months ended September 30, 2021, $0.7 million and $1.5 million of stock-based compensation expense was included in capitalized software, respectively.

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