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Stock-Based Compensation
 3 Months Ended
Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation Stock-Based Compensation 
We grant stock-based incentive awards to attract, motivate and retain qualified employees, non-employee directors and consultants, and to align their financial interests with those of our stockholders. We utilize stock-based compensation in the form of restricted stock awards, restricted stock units, options to purchase Class A common stock and Employee Stock Purchase Plan ("ESPP") purchase rights. 
As of March 31, 2018, awards outstanding under the 2009 Plan consisted of stock options, and awards outstanding under the 2014 Plan consisted of stock options and restricted stock units. 
As of March 31, 2018, 550,242 shares of Class A common stock were available for grant under the 2014 Plan. 
Our ESPP became effective on June 13, 2017. Under the ESPP, eligible employees are granted options to purchase shares of Class A common stock at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are granted twice yearly on or about January 15 and July 15 and are exercisable on or about the succeeding July 14 and January 14, respectively, of each year. As of March 31, 2018, 4,920,003 shares of Class A common stock were available for issuance under the ESPP. No participant may purchase more than $12,500 worth of common stock in a six-month offering period. The ESPP’s initial offering period began in July 2017. Accordingly, 79,997 shares of common stock had been purchased or distributed pursuant to the ESPP as of March 31, 2018.
Stock-Based Compensation Expense
Stock-based compensation expense was recorded in the following cost and expense categories consistent with the respective employee or service provider’s related cash compensation (in thousands):
 
Three months ended March 31, 
20182017
Cost of revenue 
Subscription and support $171 $140 
Professional services 150 100 
Operating expenses 
Research and development 1,021 493 
Sales and marketing 1,113 659 
General and administrative 3,450 2,747 
Total $5,905 $4,139 
The fair value of each option grant and each share issued under the ESPP is estimated on the date of grant using the Black-Scholes option-pricing model. For stock options, expected volatility is based on the historical volatility of our common stock and historical volatilities for publicly traded stock of comparable companies over the estimated expected life of the options. For the ESPP purchase rights, expected volatility is based on the historical volatility of our common stock. The expected term represents the period of time the options and the ESPP purchase rights are expected to be outstanding. For stock options, the expected term is based on the “simplified method” as defined by SEC Staff Accounting Bulletin No. 110 (Topic 14.D.2). We use the “simplified method” due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the options. The expected term for the ESPP purchase rights approximates the offering period. The risk-free interest rate is based on yields on U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal of Securities) with a maturity similar to the estimated expected term of the options and ESPP purchase rights. 
The fair value of our stock options and ESPP purchase rights was estimated assuming no expected dividends and the following weighted-average assumptions: 
Three months ended March 31, 
20182017
Stock Options 
Expected term (in years) — 6.0 - 6.1 
Risk-free interest rate —%  2.10%  
Expected volatility —%  39.9% - 43.8% 
ESPP 
Expected term (in years) 0.5— 
Risk-free interest rate 1.8%  —%  
Expected volatility 22.2%  —%  
Stock Options
The following table summarizes the option activity under the Plans for the three months ended March 31, 2018: 
Options 

Weighted-
Average
 Exercise
 Price
Weighted-
Average
 Remaining
 Contractual
 Term (Years)
Aggregate Intrinsic Value 
(in thousands) 
Outstanding at December 31, 20178,145,777 $13.33 7.0$65,913 
Granted — — 
Forfeited (42,110)18.30 
Exercised (296,061)10.39 
Outstanding at March 31, 20187,807,606 $13.42 6.8$80,299 
Exercisable at March 31, 20185,026,156 $11.95 5.9$59,037 
Options to purchase Class A common stock generally vest over a three- or four-year period and are generally granted for a term of ten years. The total intrinsic value of options exercised during the three months ended March 31, 2018 and 2017 was $3.6 million and $1.0 million, respectively. 
The weighted-average grant-date fair value of options granted during the three months ended March 31, 2017 was $5.78. No options were granted during the three months ended March 31, 2018. The total fair value of options vested during the three months ended March 31, 2018 and 2017 was approximately $4.6 million and $3.2 million, respectively. Total unrecognized compensation expense of $16.7 million related to options will be recognized over a weighted-average period of 2.4 years. 
Restricted Stock Awards
We have granted restricted stock awards to our executive officers that vest in three equal annual installments from the date of grant. The recipient of an award of restricted stock under the Plan may vote and receive dividends on the shares of restricted stock covered by the award. The fair value for restricted stock awards is calculated based on the stock price on the date of grant. The total fair value of restricted stock awards vested during the three months ended March 31, 2018 and 2017 was approximately $2.2 million and $2.4 million, respectively.
The following table summarizes the restricted stock award activity under the Plan for the three months ended March 31, 2018:
Number of Shares Weighted-Average Grant Date Fair Value 
Unvested at December 31, 2017163,332 $13.40 
Granted — — 
Forfeited — — 
Vested (163,332)13.40 
Unvested at March 31, 2018— $— 
Compensation expense associated with unvested restricted stock awards is recognized on a straight-line basis over the vesting period. At March 31, 2018, there was no unrecognized compensation expense related to restricted stock awards.
Restricted Stock Units
Restricted stock units granted to employees generally vest over a three- or four-year period in equal, annual installments, and restricted stock units granted to non-employee members of our Board of Directors generally have one-year cliff vesting from the date of grant. The recipient of a restricted stock unit award under the Plan will have no rights as a stockholder until share certificates are issued by us, but, at the discretion of our Compensation Committee, has the right to receive a dividend equivalent payment in the form of additional restricted stock units. Additionally, until the shares are issued, they have no voting rights and may not be bought or sold. The fair value for restricted stock units is calculated based on the stock price on the date of grant. The total fair value of restricted stock units vested during the three months ended March 31, 2018 and 2017 was approximately $3.0 million and $1.6 million, respectively.
The following table summarizes the restricted stock unit activity under the Plan for the three months ended March 31, 2018:



 Number of Shares Weighted-Average Grant Date Fair Value 
Unvested at December 31, 2017574,072 $14.51 
Granted 1,552,187 22.24 
Forfeited (2,592)21.25 
Vested(1)
(206,619)14.34 
Unvested at March 31, 20181,917,048 $20.78 
(1) As of March 31, 2018, recipients of 388,747 shares had elected to defer settlement of the vested restricted stock units in accordance with our Nonqualified Deferred Compensation Plan. 
Compensation expense associated with unvested restricted stock units is recognized on a straight-line basis over the vesting period. At March 31, 2018, there was approximately $36.7 million of total unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 2.7 years.
Employee Stock Purchase Plan
Compensation expense associated with ESPP purchase rights is recognized on a straight-line basis over the vesting period. At March 31, 2018, there was approximately $0.3 million of total unrecognized compensation expense related to the ESPP, which is expected to be recognized over a weighted-average period of 0.3 years.