Share-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Equity Incentive Plan

In June 2009, our board of directors adopted and approved our 2009 Plan, which provides for the issuance of stock options, RSAs and RSUs to qualified employees, directors and consultants. Stock options granted under our 2009 Stock Plan have a maximum life of 10 years and an exercise price not less than 100% of the fair market value of our common stock on the date of grant. RSUs granted under our 2009 Plan have a maximum life of seven years. No shares of our common stock were reserved for future issuance under our 2009 Plan as of September 30, 2020.

Our 2019 Plan became effective upon closing of our IPO and succeeds our 2009 Plan. Our 2019 Plan provides for the issuance of stock options, RSAs, RSUs and other equity- or cash-based awards to qualified employees, directors and consultants. Stock options granted under our 2019 Plan have a maximum life of 10 years and an exercise price not less than 100% of the fair market value of our common stock on the date of grant. 100,443,058 shares of our Class A common stock were reserved for future issuance under our 2019 Plan as of September 30, 2020.

The number of shares of our Class A common stock available for issuance under the 2019 Plan will be increased by the number of shares of our Class B common stock subject to awards outstanding under our 2009 Plan as of the closing of our IPO that would, but for the terms of the 2019 Plan, have returned to the share reserves of the 2009 Plan pursuant to the terms of such awards, including as the result of forfeiture, repurchase, expiration or retention by us in order to satisfy an award’s exercise price or tax withholding obligations. In addition, the number of shares of our Class A common stock reserved for issuance under our 2019 Plan will automatically increase on the first day of each fiscal year, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to 5% of the total number of shares of our Class A common stock and our Class B common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by our board of directors.

Stock Option Activity

Stock option activity during the nine months ended September 30, 2020, was as follows (in thousands, except per share amounts):


	Stock Options Outstanding
	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value (1)
				(in years)
Outstanding as of December 31, 2019	56,966	$	2.25	3.5	$	933,299
Granted	1,130	22.35
Exercised	(28,855)	2.25

Outstanding as of September 30, 2020	29,241	$	3.03	3.1	$	1,124,964
Exercisable as of September 30, 2020	28,322	$	2.41	2.9	$	1,107,358

(1)We calculate intrinsic value based on the difference between the exercise price of in-the-money-stock options and the fair value of our common stock as of the respective balance sheet date.

The total grant-date fair value of stock options vested during the nine months ended September 30, 2020 and 2019, was $2.5 million and $2.1 million, respectively. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2020 and 2019, was $719 million and $5.8 million, respectively.

The total grant-date fair value of stock options granted during the nine months ended September 30, 2020 was not material. No stock options were granted during the nine months ended September 30, 2019.

Restricted Stock Unit and Restricted Stock Award Activity

RSU and RSA activity during the nine months ended September 30, 2020, was as follows (in thousands, except per share amounts):


	Restricted Stock Units and Restricted Stock Awards Outstanding
	Shares	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2019	56,791	$	20.19
Granted	29,060	17.99
Released	(17,105)	19.39
Forfeited	(9,111)	18.82
Outstanding as of September 30, 2020	59,635	$	19.55

Share-Based Compensation

Share-based compensation expense during the three and nine months ended September 30, 2020 and 2019, was as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenue	$	2,298	$	1,568	$	6,049	$	29,740
Research and development	61,357		83,539		156,621		794,161
Sales and marketing	11,958		21,243		23,803		223,400
General and administrative	16,019		23,938		48,328		218,280
Total share-based compensation	$	91,632	$	130,288	$	234,801	$	1,265,581

As of September 30, 2020, we had $764.3 million of unrecognized share-based compensation expense, which we expect to recognize over a weighted-average period of 3.1 years.