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Stock-based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation
Note 16—Stock-based Compensation
The Company’s 2015 Equity Incentive Plan (the “2015 Plan”) was adopted by its Board of Directors and approved by stockholders in March 2015. The 2015 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, PBRSUs, and performance cash awards to employees and directors. Beginning in 2016, the number of shares available for issuance under the 2015 Plan may be increased annually by an amount equal to the lesser of 7,050,000 shares of common stock, 5% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year, or such other amount as determined by the Company’s Board of Directors. The Board of Directors approved an increase of 0, 6,252,714, and 6,351,106 shares available for issuance under the 2015 Plan as of January 2, 2024, January 2, 2023, and January 3, 2022, respectively. Any awards issued under the 2015 Plan that are forfeited by the participant will become available for future grant under the 2015 Plan. At December 31, 2023, 56,644,564 shares were authorized under the 2015 Plan and 37,275,895 shares were available for future grant.
In the year ended December 31, 2023, the Company granted nonqualified stock options and RSUs, including Financial PBRSUs and TSR PBRSUs, to eligible participants under its 2015 Plan.
The Company recognizes forfeitures as they occur. Options were granted for a term of 10 years, and vest over a one year requisite service period for board members and a four year requisite service period for employees. For RSUs, vesting is typically over a four-year requisite service period for employees and is contingent upon continued employment with the Company on each vesting date. In general, for newly-hired employees, RSUs vest 25% after the first year of service and ratably each six-month period over a four-year period following the vesting commencement date, which is the first day of the month following the date of grant. In general, for current employees who receive an additional grant, awards vest ratably each six-month period over a four-year period following the vesting commencement date.
For Financial PBRSUs, the number of RSUs received will depend on the achievement of financial metrics relative to the approved performance targets. Depending on the actual financial metrics achieved relative to the target financial metrics, throughout the defined performance period of the award, the number of PBRSUs that vest could range from 0% to 200% of the target amount, and are subject to the Compensation Committee’s approval of the level of achievement against the approved performance targets. For the TSR PBRSUs, the number of RSUs received will depend on the Company’s total shareholder return relative to that of the Nasdaq Composite Index over a three-year measurement period.
The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of RSUs is determined based on the closing price of the Company’s common stock on Nasdaq on the grant date. Additionally, the fair value of the Financial PBRSUs is determined using a probability assessment and the fair value of the TSR PBRSUs with market conditions is determined using a Monte-Carlo simulation model. For PBRSUs, the Company recognizes stock-based compensation expenses on a straight-line basis over the longest of the derived, explicit, or implicit service period. As of interim and annual reporting periods, the Financial PBRSUs stock-based compensation expense is adjusted based on expected achievement of performance targets, while TSR PBRSUs stock-based compensation expense is not adjusted.
The fair value of options granted in the periods indicated using the Black-Scholes pricing model has been based on the following assumptions:
 Year Ended  
December 31,
 202320222021
Expected Volatility
63.3%
62.5%
43.4% - 57.4%
Risk-free interest rate
4.1%
3.4%
0.8% - 1.2%
Expected term (in years)
4.5
4.6
4.6 - 6.2
The following table summarizes the activity for the Company’s options (in thousands, except share and per share amounts):
SharesWeighted-Average
Exercise Price		Weighted-Average
Remaining Contract
Term (in years)		Aggregate
Intrinsic Value
Outstanding at December 31, 20205,099,952 $20.97 6.81$800,453 
Granted198,193 218.93 
Exercised(994,456)22.83 
Forfeited/Canceled(29,964)47.86 
Outstanding at December 31, 20214,273,725 29.52 5.99810,321 
Granted9,916 76.05 
Exercised(816,620)18.40 
Forfeited/Canceled(10,704)126.22 
Outstanding at December 31, 20223,456,317 31.99 5.06322,230 
Granted8,131 95.06 
Exercised(623,161)22.83 
Forfeited/Canceled(65,356)123.29 
Outstanding at December 31, 20232,775,931 32.08 4.03158,476 
Total exercisable at December 31, 20232,650,630 27.44 3.89156,256 

The following table summarizes the weighted-average grant date fair value of options granted, intrinsic value of options exercised and fair value of awards vested in periods indicated (in thousands, except per share amounts):
 Year Ended December 31,
 202320222021
Weighted average grant date fair value of options granted$51.65 $40.84 $95.00 
Intrinsic value of options exercised44,266 87,892 206,709 
Fair value of awards vested278,537 195,929 96,592 
The total unrecognized compensation expense at December 31, 2023 related to the Company’s options was $5.3 million, which will be recognized over an estimated weighted-average amortization period of 1.16 years.

In connection with the acquisitions of Depop and Elo7 in July 2021, outstanding, unvested options held by continuing employees of each acquired entity as of the respective acquisition dates were replaced with Etsy RSU awards with the same aggregate fair value, with a total dollar value of $78.8 million, $5.6 million of which relates to pre-combination service and was included as a component of the purchase price. These RSUs generally follow the original vesting schedule of the replaced options, which provided that they will vest 25% on the first anniversary of their original vesting commencement date with the remaining 75% vesting ratably each month thereafter until the fourth anniversary of their original vesting commencement date.
The following table summarizes the activity for the Company’s unvested RSUs, which includes Financial PBRSUs and TSR PBRSUs:
SharesWeighted-Average
Fair Value
Unvested at December 31, 20203,085,987 $50.28 
Granted (1)2,136,685 208.84
Vested(1,400,241)59.80
Forfeited/Canceled(315,710)108.22
Unvested at December 31, 20213,506,721 137.87
Granted 5,226,948 119.83
Vested(1,670,084)110.53
Forfeited/Canceled(669,799)154.06
Unvested at December 31, 20226,393,786 128.37
Granted3,644,341 100.24
Vested(2,350,706)114.95
Forfeited/Canceled(1,490,623)127.68
Unvested at December 31, 20236,196,798 117.14
(1)Includes RSU awards issued to Depop and Elo7 employees in connection with the acquisitions in the third quarter of 2021.
The total unrecognized compensation expense at December 31, 2023 related to the Company’s unvested RSUs, including the Financial PBRSUs and TSR PBRSUs, was $596.0 million, which will be recognized over an estimated weighted-average amortization period of 2.57 years.
In connection with the acquisition of Depop, certain Depop executives were eligible to receive deferred consideration of $44.0 million in shares of Etsy common stock over the three years following the acquisition date, subject to certain service-based vesting conditions during the vesting period. These awards were to be settled by issuing shares of Etsy common stock on or shortly following the applicable vesting date, with the number of shares to be determined based on the Company’s stock price on, or leading up to, the applicable vesting date. These awards were to be recognized as post-combination service stock-based compensation expense over a vesting period equal to the mandatory service period associated with the award, with a corresponding liability included within Other liabilities on the Company’s Consolidated Balance Sheets until the service-based vesting criteria are met and the awards are settled in shares of Etsy common stock. As of December 31, 2023, the Company’s obligation related to this compensation is substantially complete.
Stock-based compensation expense included in the Consolidated Statements of Operations is as follows (in thousands):
 Year Ended  
December 31,
 202320222021
Cost of revenue$31,246 $23,283 $13,085 
Marketing22,784 19,571 11,339 
Product development146,017 124,559 58,900 
General and administrative84,511 63,475 56,586 
Stock-based compensation expense$284,558 $230,888 $139,910