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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 11. Stock-Based Compensation Equity Incentive Plans On September 1, 2015, the Board adopted the 2015 Stock Incentive Plan (the “2015 Plan”). The Board or, at its sole discretion, a committee of the Board, is responsible for the administration of the 2015 Plan. As of September 30, 2023, the Company’s authorized common stock includes 82,084,191 shares of Series B common stock reserved for issuance of equity awards under the 2015 Plan; however, all future equity grants will be made pursuant to the Company’s 2023 Stock Option and Incentive Plan (the “2023 Plan”), which was approved by the Board effective as of September 19, 2023. The Board or, at its sole discretion, a committee of the Board, is responsible for the administration of the 2023 Plan. As of September 30, 2023, the Company’s authorized common stock includes 44,228,288 shares of Series A common stock reserved for issuance of equity awards under the 2023 Plan, of which 42,672,032 shares are available for future grants. The 2015 Plan provides for the grant of various types of stock-based compensation awards including, but not limited to, RSUs, incentive stock options (“ISOs”), non-qualified stock options (“NSOs,” referred to collectively with ISOs as options) and restricted stock awards (“RSAs”) to directors, consultants, employees, and officers of the Company. ISOs may only be granted to employees, and the exercise price thereon cannot be less than the fair value of the Company’s common stock on the date of grant or less than 110% of the fair value in the case of employees holding 10% or more of the voting stock of the Company. The exercise price on NSOs must be at least equal to the fair value of the Company’s common stock on the date of grant. The Company has historically granted RSUs, ISOs, NSOs, and RSAs. The 2023 Plan provides for the grants of various types of stock-based compensation awards including, but not limited to, RSUs, ISOs, NSOs, and RSAs. During the nine months ended September 30, 2023 and 2022, the Company solely granted RSUs as further described below. Restricted Stock Units During the nine months ended September 30, 2023 and 2022, the Company granted RSUs to employees under the 2015 Plan and 2023 Plan. In general, RSUs granted under the 2015 Plan vest upon the satisfaction of both a service condition and a liquidity condition (“Double-Trigger”). Generally, the service condition requires the grantee to remain an eligible participant, as that term is defined in the 2015 Plan, for a period of 4 years. Certain of the RSUs vest 25% after 1 year, with the remainder vesting quarterly over the following 3 years. Other RSUs granted vest quarterly over the entire 4-year period. The liquidity condition was satisfied upon the occurrence of the IPO. In general, RSUs granted under the 2023 Plan vest upon the satisfaction of a service condition only. These service conditions are consistent with those under the 2015 Plan detailed above. Modifications During the nine months ended September 30, 2023, the Company extended the expiration dates of four employees’ options. The extension of the expiration date impacted 1,004,667 granted stock options, resulting in incremental stock-based compensation expense of $0.8 million during the nine months ended September 30, 2023. During the nine months ended September 30, 2023, the Company accelerated the vesting start dates of two employees’ RSUs. The modification impacted 167,500 previously granted RSUs that were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of the modified RSUs is included in the total stock-based compensation recognized during the nine months ended September 30, 2023. On March 15, 2023, the Company announced a reduction in workforce that resulted in the termination of approximately 8% of the Company’s full-time workforce (130 employees). As part of the reduction in workforce, the Company modified 608,698 previously granted stock options and 64,301 previously granted RSUs. During the nine months ended September 30, 2023, the Company incurred an incremental stock-based compensation expense of $0.6 million related to the modification of the stock options modified. All RSUs that were modified were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of the modified RSUs is included in the total stock-based compensation recognized during the nine months ended September 30, 2023 and is based on the fair value of the award on the date of modification. On April 10, 2023, the Company approved an amendment to the vesting schedule of 4,250,947 RSUs governed by the 2015 Plan. Specifically, the vesting schedule of these RSUs were amended to align with the Company’s standard four quarterly vesting dates that were established on a prospective basis in June of 2022. This modification impacted 657 grantees, and all RSUs that were modified were Double-Trigger awards in which the liquidity-based vesting condition was not considered probable at the date of modification. As the liquidity-based vesting condition was met upon the IPO, the impact of this modification is included in the total stock-based compensation recognized during the nine months ended September 30, 2023 and is based on the fair value of the award on the date of modification. Secondary Transactions The Company’s employees historically participated in secondary market transactions whereby existing or third-party investors purchased shares owned by the employee associated with previously issued stock-based compensation awards. The Company’s involvement in such secondary market transactions was generally limited to waiving or assigning its right of first refusal over the respective shares. During the nine months ended September 30, 2023 and 2022, secondary investors purchased 912,187 and 901,866 shares of common stock from certain employees, respectively. Stock-based compensation expense related to these transactions, representing amounts paid in excess of then current fair value, totaled $0.8 million during the nine months ended September 30, 2022, and is recorded in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss. No stock-based compensation expense was recorded during the nine months ended September 30, 2023 related to secondary transactions. Stock-Based Compensation Expense Stock-based compensation included in the Consolidated Statements of Operations and Comprehensive Loss is as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Cost of revenue | $ | 21,902 |  |  | $ | 25 |  |  | $ | 21,945 |  |  | $ | 105 |
Selling and marketing | 95,962 |  |  | 96 |  |  | 96,141 |  |  | 909 |
Research and development | 104,829 |  |  | 298 |  |  | 105,642 |  |  | 932 |
General and administrative | 77,282 |  |  | 103 |  |  | 78,589 |  |  | 4,299 |
Stock-based compensation, net of amounts capitalized | 299,975 |  |  | 522 |  |  | 302,317 |  |  | 6,245 |
Capitalized stock-based compensation expense | 1,217 |  |  | — |  |  | 1,217 |  |  | — |
Total stock-based compensation expense | $ | 301,192 |  |  | $ | 522 |  |  | $ | 303,534 |  |  | $ | 6,245 |

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