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Equity Awards and Instruments | 6 Months Ended
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Jun. 30, 2021
Share-based Payment Arrangement [Abstract] |
Equity Awards and Instruments | Equity Awards and Instruments Stock-Based Compensation Expense Total stock‑based compensation expense was as follows:
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Stock option expense | $ | 723 |  |  | $ | 1,422 |  |  | $ | 1,721 |  |  | $ | 2,956 |
Restricted stock and restricted stock units (“RSUs”) expense | 4,961 |  |  | 37 |  |  | 6,458 |  |  | 37 |
Stock grants expense | 450 |  |  | 100 |  |  | 450 |  |  | 219 |
Bonus Plan expense (see Note 11) | 5,471 |  |  | — |  |  | 11,595 |  |  | — |
ESPP expense (see Note 13) | 428 |  |  | — |  |  | 877 |  |  | — |
Total pre-tax expense (1) | $ | 12,033 |  |  | $ | 1,559 |  |  | $ | 21,101 |  |  | $ | 3,212 |
(1)As of June 30, 2021 and December 31, 2020, $6,169 and $6,835 remained in Accruals and other current liabilities in the consolidated balance sheets, respectively. Total stock‑based compensation expense is included in the consolidated statements of operations as follows:
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Cost of subscriptions and licenses | $ | 410 |  |  | $ | 19 |  |  | $ | 499 |  |  | $ | 47 |
Cost of services | 207 |  |  | 79 |  |  | 450 |  |  | 175 |
Research and development | 4,887 |  |  | 536 |  |  | 8,842 |  |  | 1,155 |
Selling and marketing | 1,515 |  |  | 404 |  |  | 2,303 |  |  | 804 |
General and administrative | 5,014 |  |  | 521 |  |  | 9,007 |  |  | 1,031 |
Total pre-tax expense | $ | 12,033 |  |  | $ | 1,559 |  |  | $ | 21,101 |  |  | $ | 3,212 |
Stock‑based compensation expense is measured at the grant date fair value of the award and is recognized ratably over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures of equity awards as those forfeitures occur. The fair value of the common stock during periods prior to the IPO was determined by the board of directors at each award grant date based upon a variety of factors, including the results obtained from independent third‑party valuations, the Company’s financial position, and historical financial performance. Stock Options The following is a summary of stock option activity and related information under the Company’s applicable equity incentive plans:
|  |  |  |  | Weighted |  |
|  |  | Weighted |  | Average |  |
|  |  | Average |  | Remaining |  | Aggregate
| Stock |  | Exercise Price |  | Contractual |  | Intrinsic
| Options |  | Per Share |  | Life (in years) |  | Value
Outstanding, December 31, 2020 | 12,842,226 |  |  | $ | 4.87 |  |  |  |  |
Exercised | (4,517,393) |  |  | 4.30 |  |  |  |  |
Forfeited | (120,500) |  |  | 5.54 |  |  |  |  |
Outstanding, June 30, 2021 | 8,204,333 |  |  | $ | 5.18 |  |  | 1.97 |  | $ | 488,976 |
Exercisable, June 30, 2021 | 4,973,958 |  |  | $ | 4.91 |  |  | 1.67 |  | $ | 297,780 |
For the six months ended June 30, 2021 and 2020, the Company received cash proceeds of $4,324 and $2,237, respectively, related to the exercise of stock options. The total intrinsic value of stock options exercised for the six months ended June 30, 2021 and 2020 was $206,097 and $30,536, respectively. As of June 30, 2021, there was $4,642 of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of approximately 1.5 years. Acquisition Options — In addition to stock options granted under the Company’s equity incentive plans, in connection with an acquisition completed in March 2018, the Company issued to certain selling shareholder entities options to acquire an aggregate of up to 900,000 shares of Class B Common Stock. The options have a five‑year term, are exercisable on the fourth anniversary of the closing of the acquisition, and have an initial exercise price of $6.805 per share. The options had a four‑year service condition, which terminated automatically upon the completion of the IPO, and therefore, total stock‑based compensation expense associated with these options was fully recognized as of September 30, 2020. The exercise price of the options is subject to a cap and collar adjustment mechanism that automatically reduces (but not to less than $0.01) or increases the exercise price based on the difference between the exercise price and the fair market value of the Company’s Class B Common Stock on the exercise date. As of June 30, 2021, all options to acquire 900,000 shares remain outstanding. As of June 30, 2021, these options are non‑exercisable and have an aggregate intrinsic value of $7,992. Restricted Stock and RSUs Under the equity incentive plans, the Company may grant both time‑based and performance‑based shares of restricted Class B Common Stock and RSUs to eligible colleagues. Time‑based awards generally vest ratably on each of the first four anniversaries of the grant date. Performance‑based awards vesting is determined by the achievement of certain business profitability and growth targets, which include growth in annual recurring revenues, as well as actual bookings for perpetual licenses and non‑recurring services, and certain non‑financial performance targets. Performance targets are set for annual performance periods. The fair value of restricted stock and RSUs is determined by the product of the number of shares granted and the Company’s common stock price (as described above) on the grant date. The following is a summary of unvested restricted stock and RSU activity and related information under the Company’s applicable equity incentive plans:
|  |  |  |  |  |  | Time- |  | Performance-
|  |  |  |  |  |  | Based |  | Based
|  |  | Time- |  | Performance- |  | Weighted |  | Weighted
| Total |  | Based |  | Based |  | Average |  | Average
| Restricted |  | Restricted |  | Restricted |  | Grant Date |  | Grant Date
| Stock |  | Stock |  | Stock |  | Fair Value |  | Fair Value
| and RSUs |  | and RSUs |  | and RSUs |  | Per Share |  | Per Share
Unvested, December 31, 2020 | 1,423,715 |  |  | 1,263,193 |  |  | 160,522 |  | (3) | $ | 16.38 |  |  | $ | 16.62 |
Granted | 602,616 |  | (1) | 502,808 |  |  | 99,808 |  | (4) | 49.85 |  | 49.93
Vested | (41,695) |  |  | (6,765) |  |  | (34,930) |  | (3) | 24.15 |  |  | 17.53 |
Forfeited | (147,672) |  |  | (22,080) |  |  | (125,592) |  |  | 17.17 |  |  | 16.36 |
Unvested, June 30, 2021 | 1,836,964 |  | (2) | 1,737,156 |  |  | 99,808 |  |  | $ | 26.02 |  |  | $ | 49.93 |
(1)For the six months ended June 30, 2021, the Company only granted RSUs. No shares of restricted stock were granted during the six months ended June 30, 2021. (2)Includes 56,360 RSUs which are expected to be settled in cash. (3)Relates to the 2020 annual performance period. Total stock‑based compensation expense associated with these awards was fully recognized as of December 31, 2020. (4)Relates to the 2021 annual performance period. For the six months ended June 30, 2020, the Company granted 12,454 shares of restricted stock, which were subject to a quarterly time‑based vesting schedule ending March 31, 2021, and had a weighted average grant date fair value of $10.84. No performance shares were granted during the six months ended June 30, 2020. For the six months ended June 30, 2021, the weighted average grant date fair value of time‑based and performance‑based RSUs was $49.85 and $49.93, respectively. No RSUs were granted during the six months ended June 30, 2020. In 2016, the Company granted RSUs subject to performance‑based vesting as determined by the achievement of certain business growth targets. Certain colleagues elected to defer delivery of such shares upon vesting. During the six months ended June 30, 2021 and 2020, 10,864 and 9,830 shares, respectively, were delivered to colleagues, and 23 and 211 additional shares, respectively, were earned as a result of dividends. As of June 30, 2021 and December 31, 2020, 20,199 and 31,040 shares, respectively, of these RSUs remained outstanding. For the six months ended June 30, 2021 and 2020, restricted stock and RSUs were issued net of 14,869 and 11,942 shares, respectively, which were sold back to the Company to settle applicable income tax withholdings of $708 and $120, respectively. As of June 30, 2021, there was $41,102 of unrecognized compensation expense related to unvested time‑based restricted stock and RSUs, which is expected to be recognized over a weighted average period of approximately 3.5 years. There was no remaining unrecognized compensation expense related to unvested performance‑based restricted stock. As of June 30, 2021, there was $2,043 of unrecognized compensation expense related to unvested performance‑based RSUs, which is expected to be recognized over a weighted average period of approximately 0.5 years. Stock Grants For the six months ended June 30, 2021 and 2020, the Company granted 7,824 and 17,411 fully vested shares of Class B Common Stock, respectively, with a fair value of $450 and $219, respectively. ESPP In accordance with the guidance in ASC 718-50, Compensation—Stock Compensation, the ability to purchase shares of the Company’s Class B Common Stock for 85% of the of the lower of the price of the first day of the offering period or the last day of the offering period (i.e., the purchase date) represents an option and, therefore, the ESPP is a compensatory plan under this guidance. The fair value of each purchase right under the ESPP was calculated as a sum of its components, which includes the discount, a six‑month call option, and a six‑month put option. The call and put options were valued using the Black‑Scholes option pricing model. Stock‑based compensation expense is recognized ratably over the six‑month offering period. Equity Awards Subsequent to June 30, 2021 In July 2021, the Company granted 90,400 time‑based RSUs. The unrecognized compensation expense related to these RSUs is approximately $5,300, which is expected to be recognized over a weighted average period of approximately three years.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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