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Stock-Based Compensation | 6 Months Ended
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Jun. 30, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 8. Stock-Based Compensation 2012 Stock Incentive Plan In October 2012, the Company adopted the 2012 Stock Incentive Plan (the “2012 Plan”). Under the 2012 Plan, employees and non-employees could be granted stock options, RSUs and other stock-based awards, including awards earned in connection with the Agent Equity Program. Generally, these awards were based on stock agreements with a maximum ten-year term for stock options and a maximum seven-year term for RSUs, subject to board approval. 2021 Equity Incentive Plan In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Equity Incentive Plan (the “2021 Plan”), with an initial pool of 29.7 million shares of common stock available for granting stock-based awards plus any reserved shares of common stock not issued or subject to outstanding awards granted under the 2012 Plan. In addition, on January 1 st of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the 2021 Plan shall be increased automatically by the number of shares equal to 5% of the total number of outstanding shares of common stock and outstanding shares of preferred stock (on an as converted to common stock basis) on the immediately preceding December 31 st, although the Company’s board of directors or one of its committees may reduce the amount of such increase in any particular year. The 2021 Plan became effective on March 30, 2021 and as of that date, the Company ceased granting new awards under the 2012 Plan and all remaining shares available under the 2012 Plan were transferred to the 2021 Plan. Effective January 1, 2022, the shares available for future grants were increased by an additional 20.5 million shares as a result of the annual increase provision described above. As of June 30, 2022, there were 25.5 million shares available for future grants under the 2021 Plan, inclusive of those shares transferred from the 2012 Plan. 2021 Employee Stock Purchase Plan In February 2021, the Company’s board of directors and stockholders adopted and approved the 2021 Employee Stock Purchase Plan (the “ESPP”) which authorized purchase rights to the Company’s employees or to employees of its designated affiliates. In addition, on January 1 st of each year beginning in 2022 and continuing through 2031, the aggregate number of shares of common stock authorized for issuance under the ESPP shall be increased automatically by the number of shares equal to 1% of the total number of outstanding shares of common stock and outstanding shares of preferred stock (on an as converted to common stock basis) on the immediately preceding December 31 st, although the Company’s board of directors or one of its committees may reduce the amount of the increase in any particular year. No more than 150.0 million shares of common stock may be issued over the term of the ESPP, subject to certain exceptions set forth in the ESPP. The ESPP initially authorized the issuance of 7.4 million shares of common stock and effective January 1, 2022, the authorized shares increased by 3.9 million shares as a result of the annual increase provision described above. The ESPP permits employees to purchase shares of the Company’s Class A common stock through payroll deductions accumulated during six-month offering periods up to a maximum value of $12,500 per offering period. The offering periods begin each February and August, or such other period determined by the Compensation Committee. The Company’s first offering began in February 2022 and will continue for six months until the purchase date in August 2022. On each purchase date, eligible employees may purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP. As of the date of this filing, no shares have been purchased under the ESPP. The Company recognized $0.6 million and $1.0 million of stock-based compensation expense related to the ESPP during the three and six months ended June 30, 2022, respectively. As of June 30, 2022, $3.3 million has been withheld on behalf of employees for a future purchase under the ESPP. Stock Options A summary of stock option activity under the 2012 Plan and the 2021 Plan, including 1.1 million stock options that were granted outside of the 2012 Plan in 2019, is presented below (in millions, except share and per share amounts):
| Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contract Term (in years) |  | Aggregate Intrinsic Value (1)
Balances as of December 31, 2021 | 54,525,539 |  |  | $ | 5.30 |  |  | 7.1 |  | $ | 221.3 |
Granted | 215,027 |  |  | 5.89 |  |  |  |  |
Exercised | (3,532,188) |  |  | 2.14 |  |  |  |  |
Forfeited | (1,315,060) |  |  | 6.96 |  |  |  |  |
Balances as of June 30, 2022 | 49,893,318 |  |  | $ | 5.49 |  |  | 6.6 |  | $ | 25.7 |
Exercisable and vested at June 30, 2022 | 34,382,199 |  |  | $ | 4.49 |  |  | 5.9 |  | $ | 25.7 |
(1)The aggregate intrinsic values have been calculated using the Company’s closing stock prices of $3.61 and $9.09 as of June 30, 2022 and December 31, 2021, respectively. During the six months ended June 30, 2022 and 2021, the intrinsic value of options exercised was $19.5 million and $88.5 million, respectively. As of June 30, 2022, included in the table above are 1.2 million options with an exercise price of $6.44 that only vest upon the satisfaction of both (i) a service-based vesting condition and (ii) the achievement of performance-based vesting conditions. The performance-based conditions provide that 25% of the options will vest subject to the achievement of a market price per share of $23.14 of the Company's Class A common stock (the "reference price"). An additional 25% of the options will vest upon the achievement of a market price per share of the Company's Class A common stock at each of 200%, 250% and 300% of the reference price. Early Exercise of Stock Options A majority of the stock options granted under the 2012 Plan provide option holders the right to elect to exercise unvested options in exchange for restricted common stock. Shares received from such early exercises are subject to repurchase in the event of the optionee’s termination of service until the stock options are fully vested at the lesser of the original issuance price or the fair value the Company’s common stock. As of June 30, 2022, 0.7 million shares of common stock received by holders from an early exercise were subject to repurchase. The cash proceeds received for unvested shares of common stock recorded within Accrued expenses and other current liabilities and Other non-current liabilities in the condensed consolidated balance sheets was $1.3 million and $2.7 million, respectively, as of June 30, 2022. Amounts recorded are transferred into Common stock and Additional paid-in capital within the condensed consolidated balance sheets as the shares vest. During the six months ended June 30, 2022, no stock options were early exercised. Restricted Stock Units A summary of RSU activity under the 2012 Plan and the 2021 Plan is presented below:
| Number of Awards |  | Weighted Average Grant Date Fair Value
Balances as of December 31, 2021 | 54,517,930 |  |  | $ | 10.29 |
Granted | 31,015,818 |  |  | 7.21 |
Vested and converted to common stock (1) | (18,926,274) |  |  | 8.64 |
Forfeited | (6,869,161) |  |  | 12.49 |
Balances as of June 30, 2022 | 59,738,313 |  |  | $ | 8.96 |
(1)During the six months ended June 30, 2022, the Company net settled all RSUs through which it issued an aggregate of 18.9 million shares of Class A common stock and withheld an aggregate of 1.9 million shares of Class A common st ock to satisfy $13.8 million million of tax withholding obligations on behalf of the Company’s employees. Included in the table above, 17.2 million RSUs that only vest upon the satisfaction of both (i) a service-based vesting condition and (ii) the achievement of performance-based vesting conditions remain outstanding as of June 30, 2022. The performance-based vesting conditions provide that 12.5% of the shares subject to the RSU will vest subject to the achievement of a market price per share of $23.14 of the Company's Class A common stock. An additional 12.5% of the shares subject to the RSU will vest upon the achievement of a market price per share of the Company's Class A common stock at each of 200%, 250%, 300%, 350%, 400%, 450% and 500% of the reference price. Agent Equity Program In connection with the 2021 Agent Equity Program, the Company recognized a total of $100.0 million in stock-based compensation expense of which $84.8 million was recognized during the year ended December 31, 2021 and $15.2 million was recognized during the six months ended June 30, 2022. In February 2022, the Company granted 13.6 million RSUs which immediately vested and converted to Class A common stock in connection with the 2021 Agent Equity Program. Prior to the issuance of the underlying RSUs, the stock-based compensation expense associated with these awards was recorded as a liability and $100.0 million was ultimately reclassified to Additional paid-in capital at the end of the vesting period when the underlying RSUs were granted. For the six months ended June 30, 2022, the Company recognized stock-based compensation expense and an associated liability of $7.2 million in connection with RSUs earned as a part of the 2022 Agent Equity Program. The associated liability is recorded within Accrued expenses and other current liabilities in the condensed consolidated balance sheets. Stock-Based Compensation Expense Total stock-based compensation expense included in the condensed consolidated statements of operations for the three and six months ended June 30, 2022 and 2021 is as follows (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Commissions and other related expense | $ | 6.4 |  |  | $ | 11.7 |  |  | $ | 23.4 |  |  | $ | 56.3 |
Sales and marketing | 11.2 |  |  | 8.6 |  |  | 21.9 |  |  | 17.6 |
Operations and support | 4.1 |  |  | 2.8 |  |  | 8.4 |  |  | 7.8 |
Research and development | 18.9 |  |  | 13.5 |  |  | 35.8 |  |  | 63.0 |
General and administrative | 18.6 |  |  | 17.7 |  |  | 33.5 |  |  | 77.1 |
Total stock-based compensation expense | $ | 59.2 |  |  | $ | 54.3 |  |  | $ | 123.0 |  |  | $ | 221.8 |
As more fully described in Note 1 – “Business and Basis of Presentation”, the Company recognized $148.5 million in stock-based compensation expense in connection with the effectiveness of the Company’s IPO registration statement on March 31, 2021. Stock-based compensation expense for the six months ended June 30, 2021 includes the following amounts related to a one-time acceleration of stock-based compensation expense in connection with the IPO (in millions):
| IPO Related Expense
Commissions and other related expense | $ | 41.7 |
Sales and marketing | 1.8 |
Operations and support | 3.1 |
Research and development | 46.9 |
General and administrative | 55.0 |
Total stock-based compensation expense | $ | 148.5 |
As of June 30, 2022, unrecognized stock-based compensation expense totaled $518.8 million and is expected to be recognized over a weighted-average period of 2.8 years. The Company has not recognized any tax benefits from stock-based compensation as a result of the full valuation allowance maintained on its deferred tax assets.

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