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Stockholders Equity | 9 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
Stockholders Equity | Note 11. Stockholders Equity Common and Preferred Stock The rights of the holders of Class A common stock and Class B-1 common stock are identical in all respects, except that Class B-1 common stock will not vote on the election or removal of directors. The holders of Class B-2 common stock have no participating rights (voting or otherwise), except for the right to vote on the election or removal of directors and will be entitled to a nominal annual dividend of CAD$15,000 in the aggregate. Equity Incentive Plans The Company’s equity incentive plans are administered by the Compensation Committee. The Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”) and most recently amended and restated the 2015 Plan in October 2021. Under the 2015 Plan, the Company issued equity awards in the form of options to acquire shares of the Company. The options are not intended to qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code. The term of the options granted under this plan is ten years with a vesting requirement of continued employment through the applicable vesting date, and in certain cases attainment of performance criteria (“performance-based options”). In connection with the adoption of the 2021 Plan (as defined below), the 2015 Plan was terminated with respect to future awards. The 2015 Plan continues to govern awards that were granted prior to the effectiveness of the 2021 Plan. In October 2021, the Company’s Compensation Committee adopted, and its stockholders approved, the 2021 Equity Incentive Plan (the ”2021 Plan”), which became effective in connection with the IPO. As of September 30, 2024, a total of approximately 78.7 million shares of the Company’s Class A common stock has been reserved for issuance under the 2021 Plan. In addition, the shares reserved for issuance under the 2021 Plan includes any shares subject to awards granted under the 2015 Plan that, after the date the 2015 Plan was terminated, are cancelled, expire or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest (provided that the maximum number of shares that may be added to the 2021 Plan pursuant to this provision is 26,288,211 shares). Option Awards The following table summarizes the option award activity for the nine months ended September 30, 2024 (in thousands, except share price, fair value and term):
| Number of Options |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
| Total |  | Service based |  | Performance- based |  |  |
Outstanding at December 31, 2023 | 17,004 |  |  | 11,278 |  |  | 5,726 |  |  | $ | 17.27 |  |  | 5.59 |  | $ | 189,134 |
Exercised | (3,851) |  |  | (3,050) |  |  | (801) |  |  | $ | 16.40 |  |  |  |  |
Forfeited or expired | (268) |  |  | (32) |  |  | (236) |  |  | $ | 19.16 |  |  |  |  |
Outstanding at September 30, 2024 | 12,885 |  |  | 8,196 |  |  | 4,689 |  |  | $ | 17.48 |  |  | 4.99 |  | $ | 100,602 |
As of September 30, 2024, total unrecognized stock-based compensation expense related to unvested options was $1.7 million and is expected to be recognized over the remaining weighted-average vesting period of 0.98 years. Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) The Company issues RSUs to employees and directors under the 2021 Plan. RSUs vest upon the satisfaction of a service-based vesting condition only. The service-based condition for the majority of the employee awards is generally satisfied pro-rata over two to four years. The Company also issues PSUs to employees under the 2021 Plan. PSUs that are granted are subject to vesting conditions based on certain performance metrics or on attainment of specified stock prices, measured over the performance period. The PSU awards granted to employees under the 2021 Plan typically vest over 3 years and are subject to forfeiture in whole if employment terminates, or in whole or in part, if specified vesting conditions are not satisfied in each case prior to vesting. PSUs are not considered issued or outstanding common stock until they vest. The following table summarizes RSU and PSU activity and related information during the nine months ended September 30, 2024 under the 2021 Plan (in thousands, except share price):
| Number of Shares |  | Weighted-Average Grant Date Fair Value
Unvested and outstanding as of December 31, 2023 | 21,063 |  |  | $ | 20.81 |
Granted | 4,987 |  |  | 31.48 |
Vested | (8,334) |  |  | 21.63 |
Forfeited | (1,403) |  |  | 21.81 |
Unvested and outstanding as of September 30, 2024 | 16,313 |  |  | $ | 23.57 |
As of September 30, 2024, the total unrecognized stock-based compensation expense related to the RSUs and PSUs outstanding was $314.9 million and is expected to be recognized over the remaining weighted-average vesting period of 1.48 years. Employee Stock Purchase Plan (“ESPP”) In October 2021, the Company’s Compensation Committee approved the ESPP, which became effective in connection with the IPO. The ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. As of September 30, 2024, a total of 14.0 million shares of the Company’s Class A common stock has been reserved for issuance under the ESPP. Under the ESPP, eligible employees are able to acquire shares of Class A common stock by accumulating funds through payroll deductions. Offering periods are generally twelve months long and begin on March 1 and September 1 of each year. The purchase price for shares of the Company’s Class A common stock purchased under the ESPP is 85% of the lesser of the fair market value of the Company’s Class A 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 applicable offering period. The ESPP also includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the first date of the offering period. As of September 30, 2024, the total unrecognized stock-based compensation expense related to the ESPP was $9.8 million and is expected to be recognized over the remaining offering period. Summary of Assumptions for ESPP The following table summarizes the weighted-average assumptions used in estimating the fair value of the ESPP for the offering periods during the nine months ended September 30, 2024 and 2023 using the Black-Scholes pricing model:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
ESPP: |  |  |  |  |  |  |
Expected term (in years) | 0.5 - 1.0 |  | 0.5 - 1.0 |  | 0.5 - 1.0 |  | 0.5 - 1.0
Expected volatility | 32.5% - 38.5% |  | 36.2% - 39.4% |  | 32.5% - 43.5% |  | 36.2% - 48.5%
Risk-free interest rate | 4.4% - 4.8% |  | 5.4% - 5.5% |  | 4.4% - 5.3% |  | 5.1% - 5.5%
Expected dividend yield | — | % |  | — | % |  | —% |  | —%
Fair value of common stock | $24.41 |  | $21.14 |  | $24.41 - $32.46 |  | $17.06 - $21.14
Stock Compensation The stock-based compensation for all equity awards for the periods indicated below are as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cost of revenues | $ | 8,946 |  |  | $ | 8,764 |  |  | $ | 26,422 |  |  | $ | 25,074 |
Research and development | 18,390 |  |  | 16,671 |  |  | 52,883 |  |  | 47,003 |
Sales and marketing | 20,694 |  |  | 16,317 |  |  | 60,657 |  |  | 45,854 |
General and administrative | 17,970 |  |  | 14,756 |  |  | 55,638 |  |  | 44,127 |
Total stock-based compensation | $ | 66,000 |  |  | $ | 56,508 |  |  | $ | 195,600 |  |  | $ | 162,058 |

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