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Stockholder's Equity
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stockholder's Equity Stockholder's Equity
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 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 December 31, 2023.
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. 145,335,295 shares of our Class A common stock were reserved for future issuance under our 2019 Plan as of December 31, 2023.
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 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 through 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 year ended December 31, 2023, 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, 202215,799 $13.25 6.1$174,165 
Exercised
(2,756)3.08 
Outstanding as of December 31, 202313,043 $15.41 6.1$282,197 
Exercisable as of December 31, 20237,164 $11.67 4.2$181,762 
(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 years ended December 31, 2023, 2022 and 2021 was $28.4 million, $9.5 million and $3.2 million, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2023, 2022 and 2021 was $70.2 million, $180.2 million and $511.4 million, respectively.
Restricted stock unit and restricted stock award activity
RSU and RSA activity during the year ended December 31, 2023, 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, 202254,518$25.46 
Granted (1)
26,878 25.35 
Released
(27,552)25.11 
Forfeited (1)
(8,745)24.35 
Outstanding as of December 31, 202345,099$25.83 
(1)Includes the effects of awards modified during the year ended December 31, 2023.
Share-based compensation
Share-based compensation expense during the years ended December 31, 2023, 2022 and 2021, was as follows (in thousands):
Year Ended December 31,
202320222021
Cost of revenue $11,117 $7,629 $7,438 
Research and development 422,964 324,161 309,715 
Sales and marketing 96,798 99,467 52,691 
General and administrative 116,981 65,866 45,538 
Total share-based compensation
$647,860 $497,123 $415,382 
As of December 31, 2023, we had $1,128.1 million of unrecognized share-based compensation expense, which we expect to recognize over a weighted-average period of 2.2 years.
Fair value of stock options
We measure stock options based on their estimated grant date fair values, which we determine using the Black-Scholes option-pricing model, and we record the resulting expense in our consolidated statements of operations over the requisite service period, which is generally four years.
Stock options granted during the years ended December 31, 2023 and 2021 were not material. The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2022 was $11.79, which we estimated using the Black‑Scholes option-pricing model with the following assumptions:
Year Ended December 31, 2022
Expected term (in years)6.1
Risk-free interest rate3.2 %
Expected volatility61.1 %
Dividend yield— %
The key inputs we used in the Black-Scholes model are:
•Expected term – The expected term represents the period we expect our share-based awards to be outstanding, which is also the period we used to measure risk-free interest rates and expected volatility. We estimated the expected term using the simplified method as we do not have sufficient historical stock option exercise data.
•Risk-free interest rate – We estimated the risk-free interest rate based on zero-coupon U.S. Treasury notes.
•Expected volatility – We estimated expected volatility based on a combination of our historical volatility and that of comparable publicly-traded companies.
•Dividend yield – We applied a dividend yield of zero because we have never paid or declared dividends, and we have no plan to do so in the foreseeable future.
Stock Repurchase
On February 2, 2023, our board of directors authorized a stock repurchase program of up to $500.0 million of our Class A common stock, which we completed in the second quarter of 2023. Under the program, we repurchased and retired 21,215,663 shares of our Class A common stock for an aggregate purchase price of $500.0 million at an average price per share of $23.57.
On September 16, 2023, our board of directors authorized a new stock repurchase program of up to $1.0 billion of our Class A common stock. Under the stock repurchase program, we are authorized to repurchase, from time-to-time, shares of our Class A common stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide. The program does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. As of December 31, 2023, $1.0 billion remains available for repurchases under the stock repurchase program.