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Stockholders' Equity
3 Months Ended
Mar. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stockholders' Equity

4. Stockholders’ Equity

We maintain three share-based employee compensation plans: the 2017 Equity Incentive Plan (“2017 Plan”), the 2014 Equity Incentive Plan (“2014 Plan”), and the 2012 Equity Incentive Plan (“2012 Plan”, and collectively with the 2017 Plan and the 2014 Plan, the “Stock Plans”). In January 2017, our board of directors adopted the 2017 Plan, and in February 2017 our stockholders approved the 2017 Plan, effective on March 1, 2017, which serves as the successor to the 2014 Plan and 2012 Plan and provides for the grant of incentive stock options to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, stock appreciation rights, RSAs, RSUs, performance stock awards, performance cash awards, and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our affiliates.

Restricted Stock Units

The following table summarizes the RSU activity during the three months ended March 31, 2019:

 

  

 

Class A

Outstanding

RSUs

 

 

Class B

Outstanding

RSUs

 

 

Weighted-

Average

Grant Date

Fair Value

per RSU

 

 

 

(in thousands, except per share data)

 

Unvested at December 31, 2018

 

 

149,638

 

 

 

492

 

 

$

13.34

 

Granted

 

 

50,941

 

 

 

 

 

$

8.50

 

Vested

 

 

(14,343

)

 

 

(382

)

 

$

13.93

 

Forfeited

 

 

(11,496

)

 

 

(1

)

 

$

13.32

 

Unvested at March 31, 2019

 

 

174,740

 

 

 

109

 

 

$

11.89

 

 

RSUs granted to employees before January 1, 2017 (“Pre-2017 RSUs”) included both service-based and performance conditions to vest in the underlying common stock. The performance condition related to Pre-2017 RSUs was satisfied on the effectiveness of the registration statement for our IPO, which occurred in March 2017. Total unrecognized compensation cost related to Pre-2017 RSUs was $140.0 million as of March 31, 2019 and is expected to be recognized over a weighted-average period of 1.5 years.

All RSUs granted after December 31, 2016 vest on the satisfaction of only a service-based condition (“Post-2017 RSUs”). Total unrecognized compensation cost related to Post-2017 RSUs was $1.4 billion as of March 31, 2019 and is expected to be recognized over a weighted-average period of 3.1 years. The service condition for Post-2017 RSUs granted prior to February 2018 is generally satisfied over four years, 10% after the first year of service, 20% over the second year, 30% over the third year, and 40% over the fourth year. In limited instances, we have issued Post-2017 RSUs with vesting periods in excess of four years. The service condition for Post-2017 RSUs granted after February 2018 is generally satisfied in equal monthly installments over four years.

Additionally, we have 20.8 million and 22.4 million RSUs that are vested but have not yet settled as of March 31, 2019 and December 31, 2018, respectively. These RSUs are primarily related to the CEO award.

Restricted Stock Awards

The following table summarizes the RSA activity during the three months ended March 31, 2019:

 

  

 

 

 

Class A

Outstanding

RSAs

 

 

Weighted-

Average

Grant Date

Fair Value

per RSA

 

 

 

 

 

(in thousands, except per share data)

 

Unvested at December 31, 2018

 

 

 

 

8,134

 

 

$

7.51

 

Granted

 

 

 

 

 

 

$

 

Vested

 

 

 

 

(546

)

 

$

8.44

 

Forfeited

 

 

 

 

(1,115

)

 

$

5.58

 

Unvested at March 31, 2019

 

 

 

 

6,473

 

 

$

7.77

 

 

The total fair value of RSAs vested during the three months ended March 31, 2019 and 2018 was $4.6 million and $1.6 million, respectively.

 

Total unrecognized compensation cost related to RSAs was $48.4 million as of March 31, 2019 and is expected to be recognized over a weighted-average period of 3.3 years.

Stock Options

The following table summarizes the stock option award activity under the Stock Plans during the three months ended March 31, 2019:

 

 

 

Class A

Number

of Shares

 

 

Class B

Number

of Shares

 

 

Weighted-

Average

Exercise

Price

 

 

Weighted-

Average

Remaining

Contractual

Term

(in years)

 

 

Aggregate

Intrinsic

Value(1)

 

 

 

(in thousands, except per share data)

 

Outstanding at December 31, 2018

 

 

13,322

 

 

 

2,969

 

 

$

7.83

 

 

 

6.41

 

 

$

34,567

 

Granted

 

 

 

 

 

 

 

$

 

 

 

 

 

$

 

Exercised

 

 

(1,260

)

 

 

(651

)

 

$

2.93

 

 

 

 

 

$

 

Forfeited

 

 

(969

)

 

 

(29

)

 

$

13.58

 

 

 

 

 

$

 

Outstanding at March 31, 2019

 

 

11,093

 

 

 

2,289

 

 

$

8.10

 

 

 

5.98

 

 

$

61,054

 

 

(1)

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing market price of our Class A common stock as of December 31, 2018 and March 31, 2019, respectively.

 

Total unrecognized compensation cost related to unvested stock options granted was $32.3 million as of March 31, 2019 and is expected to be recognized over a weighted-average period of 2.3 years.

Stock-Based Compensation Expense by Function

Total stock-based compensation expense by function was as follows:

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

 

(in thousands)

 

Cost of revenue

$

1,849

 

 

$

276

 

Research and development

 

112,242

 

 

 

77,815

 

Sales and marketing

 

17,760

 

 

 

16,185

 

General and administrative

 

30,705

 

 

 

38,982

 

Total

$

162,556

 

 

$

133,258