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STOCKHOLDERS' EQUITY | 3 Months Ended
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Mar. 31, 2025
Share-Based Payment Arrangement [Abstract] |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY 2021 Equity Incentive Plan In May 2021, the Company’s board of directors (the “Board”) adopted, and the stockholders approved, the 2021 Equity Incentive Plan (the “2021 Plan”) with the purpose of granting stock-based awards, including stock options, stock appreciation rights, restricted stock awards (“RSAs”), RSUs, PSUs, and other forms of awards, to employees, directors, and consultants. As of December 31, 2024, a total of 51,863,260 shares of common stock were authorized for issuance under the 2021 Plan. The number of shares of the Company’s common stock reserved for issuance under the 2021 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2022 through January 1, 2031, in an amount equal to either (i) 5% of the total number of shares of the Company’s common stock outstanding on December 31 of the fiscal year before the date of each automatic increase, or (ii) a lesser number of shares determined by the Board prior to the applicable January 1. Accordingly, on January 1, 2025, the number of shares of common stock that may be issued under the 2021 Plan increased by an additional 7,492,656 shares. As a result, as of March 31, 2025, a total of 59,355,916 shares of common stock are authorized for issuance under the 2021 Plan. As of March 31, 2025, a total of 39,766,423 shares of common stock were available for issuance under the 2021 Plan. No stock options have been issued under the 2021 Plan. Stock options No stock options were granted during the periods presented. The following table summarizes the stock option activity during the three months ended March 31, 2025:
| Number of Shares |  | Weighted- Average Exercise Price
Outstanding at December 31, 2024 | 3,152,158 |  | $ | 12.29 |
Exercised | (149,650) |  | 15.72 |
Outstanding at March 31, 2025 | 3,002,508 |  | 12.12 |
Exercisable at March 31, 2025 | 3,002,508 |  | $ | 12.12 |
As of March 31, 2025, there is no unrecognized stock-based compensation cost for stock options previously granted by the Company. Restricted stock units Service-based restricted stock units In 2018, the Company began issuing RSUs to certain employees, officers, non-employee consultants, and directors. Other than as described below, all of the RSUs granted subsequent to the Company’s initial public offering (“IPO”) vest based solely on continued service, which is generally over four years, on either a quarterly or annual vesting schedule. The following table summarizes the RSU activity during the three months ended March 31, 2025:
| Number of Shares |  | Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2024 | 7,071,443 |  | $ | 65.85 |
Granted | 2,648,939 |  | 68.31 |
Vested | (874,963) |  | 62.58 |
Canceled/Forfeited | (426,443) |  | 65.67 |
Outstanding at March 31, 2025 | 8,418,976 |  | $ | 66.97 |
As of March 31, 2025, the total unrecognized stock‑based compensation cost for all RSUs outstanding was $538.5 million, which is expected to be recognized over a weighted‑average vesting period of 2.9 years. Performance-based restricted stock units In 2022, the Company began granting PSUs to certain non-executive employees with vesting terms based on the achievement of certain operating performance goals. In March 2025, the Company granted its CEO an aggregate target number of 93,438 PSUs (the “2025 CEO PSUs”) that will vest (if at all) over a three-year period, subject to the achievement of certain financial performance goals and continued service through the applicable vesting date. A target number of 70,078 2025 CEO PSUs (75% of the 2025 CEO PSUs) will become eligible to vest (if at all) based on the attainment level of a revenue performance goal for fiscal year 2025, which was set near the beginning of fiscal year 2025, with a payout range of 0% to 200% of target. A target number of 23,360 2025 CEO PSUs (25% of the 2025 CEO PSUs) will become eligible to vest (if at all) based on the attainment of a non-GAAP operating margin performance goal for fiscal year 2025, which was set near the beginning of fiscal year 2025, with a payout range of 0% to 150% of target. The actual number of 2025 CEO PSUs that become eligible to vest will be determined based on the attainment level of the applicable performance goal, as certified by the Compensation Committee of the Board (the “Compensation Committee”). One-third of the 2025 CEO PSUs that become eligible to vest will vest on February 20, 2026 (or a subsequent quarterly vesting date, to the extent the number of 2025 CEO PSUs eligible to vest have not been certified by such date). The remaining 2025 CEO PSUs that become eligible to vest will vest in substantially equal installments quarterly over the two years following February 20, 2026 (or a subsequent quarterly vesting date, to the extent the number of 2025 CEO PSUs eligible to vest have not been certified by such date). In March 2024, the Company granted its CEO an aggregate target number of 46,986 PSUs (the “2024 CEO PSUs”) that would vest (if at all) over a three-year period, subject to the achievement of certain financial performance goals and continued service through the applicable vesting date. A target number of 35,239 2024 CEO PSUs (75% of the 2024 CEO PSUs) were eligible to vest based on the attainment level of a revenue performance goal for fiscal year 2024, which was set near the beginning of fiscal year 2024, with a payout range of 0% to 200% of target. A target number of 11,747 2024 CEO PSUs (25% of the 2024 CEO PSUs) were eligible to vest based on the attainment of a non-GAAP operating margin performance goal for fiscal year 2024, which was set near the beginning of fiscal year 2024, with a payout range of 0% to 150% of target. The actual number of 2024 CEO PSUs that became eligible to vest was determined based on the attainment level of the applicable performance goal, as certified by the Compensation Committee. As of December 31, 2024, the non-GAAP operating margin performance goal was achieved and the revenue performance goal was not achieved, which was certified by the Compensation Committee in February 2025. As a result, one-third of the 2024 CEO PSUs that became eligible to vest vested on February 20, 2025. The remaining 2024 CEO PSUs that became eligible to vest will vest in substantially equal installments quarterly over the two years following February 20, 2025. The Company recognizes compensation expense for PSUs in the period in which it becomes probable that the underlying performance target will be achieved. Compensation expense for awards that contain performance conditions is calculated using the graded vesting method and the portion of expense recognized in any period may fluctuate depending on changing estimates of the achievement of the performance conditions. The following table summarizes the PSU activity during the three months ended March 31, 2025:
| Number of Shares |  | Weighted- Average Grant Date Fair Value
Outstanding at December 31, 2024 | 155,791 |  | $ | 67.63 |
Granted (1) | 93,438 |  | 66.80 |
Vested | (8,016) |  | 76.64 |
Canceled/Forfeited | (86,406) |  | 64.68 |
Outstanding at March 31, 2025 | 154,807 |  | $ | 68.31 |
(1) This represents awards granted at 100% attainment of the performance conditions. As of March 31, 2025, the total unrecognized stock‑based compensation cost for all PSUs outstanding was $8.1 million, which is expected to be recognized over a weighted‑average vesting period of 1.3 years. Employee Stock Purchase Plan In May 2021, the Board adopted, and the stockholders approved, the 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective immediately prior to the effective date of the Company’s IPO. As of December 31, 2024, a total of 6,780,128 shares of common stock had been reserved for issuance under the ESPP. The number of shares of the Company’s common stock reserved for issuance under the ESPP automatically increases on January 1 of each year for a period of 10 years, beginning on January 1, 2022 and continuing through January 1, 2031, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 3,900,000 shares, except before the date of any such increase, the Board may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Accordingly, on January 1, 2025, the number of shares of common stock reserved under the ESPP increased by an additional 1,498,531 shares. The offering periods are scheduled to start in May and November of each year. The ESPP provides for consecutive offering periods that will typically have a duration of 12 months in length and comprise two purchase periods of six months in length, subject to reset and rollover provisions. The ESPP provides eligible employees with an opportunity to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their eligible compensation, subject to a maximum of $25,000 of stock per calendar year. A participant may purchase a maximum of 2,500 shares of common stock during a purchase period. Amounts deducted and accumulated by the participant are used to purchase shares of common stock at the end of each six-month purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of the common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the related offering period. However, in the event the fair value of the common stock on the purchase date is lower than the fair value on the first trading day of the offering period, the offering period is terminated immediately following the purchase and a new offering period begins the following day. Participants may end their participation at any time prior to the last 15 days of a purchase period and will be repaid their accrued contributions that have not yet been used to purchase shares of common stock. Participation ends automatically upon termination of employment. Employee payroll contributions accrued in connection with the ESPP were $12.2 million and $5.4 million as of March 31, 2025 and December 31, 2024, respectively, and are included within accrued expenses on the accompanying condensed consolidated balance sheets. Employee payroll contributions ultimately used to purchase shares will be reclassified to stockholders’ equity on the purchase date. Stock-based compensation expense related to the ESPP is recognized on a straight-line basis over the offering period. During the three months ended March 31, 2025 and 2024, the Company recognized stock-based compensation expense of $2.8 million and $2.4 million, respectively, in connection with the ESPP. As of March 31, 2025, unrecognized stock-based compensation expense related to the ESPP was $4.1 million, which is expected to be recognized over a weighted-average period of 0.3 years. Stock repurchase program In October 2024, the Board authorized a stock repurchase program to repurchase up to $300.0 million of the Company’s outstanding common stock. Repurchases may be effected from time to time either on the open market (including via pre-set trading plans) or through other transactions, in accordance with applicable securities laws. The timing of stock repurchases and the actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities, and will be subject to the discretion of the Company’s management within its authorization. The stock repurchase program does not obligate the Company to acquire any particular number of shares of the Company’s common stock, or any shares at all. The stock repurchase program expires on October 29, 2025, and may be suspended or discontinued at any time at the Company's discretion and without notice. During the three months ended March 31, 2025, the Company repurchased and retired a total of 1,450,591 shares of the Company’s common stock at a weighted average per share price of $68.96 for an aggregate amount of $100.0 million, which includes the transaction costs associated with the repurchases but excludes the 1% excise tax on stock repurchases imposed by the Inflation Reduction Act of 2022. Stock-based compensation The Company recorded total stock-based compensation cost from stock options, RSUs, PSUs, RSAs, and the ESPP as follows (in thousands):
| Three Months Ended March 31,
| 2025 |  | 2024
Cost of revenue | $ | 2,752 |  |  | $ | 1,810 |
Sales and marketing | 14,834 |  |  | 12,915 |
Research and development | 18,372 |  |  | 13,726 |
General and administrative | 12,321 |  |  | 11,681 |
Total stock-based compensation expense | $ | 48,279 |  |  | $ | 40,132 |
Stock-based compensation capitalized for software development and cloud-computing arrangement implementation costs | 4,123 |  |  | 2,458 |
Total stock-based compensation cost | $ | 52,402 |  |  | $ | 42,590 |

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