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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation |
13. Stock-based Compensation
Employee stock-based compensation plans Under the 2016 Equity and Incentive Compensation Plan Amended and Restated as of June 9, 2022 (the "2016 Equity Plan"), we may grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, other stock awards and cash incentive awards to employees, directors and consultants. Our Compensation Committee of the Board of Directors administers this plan and the stock-based awards are granted under terms determined by it. The total number of authorized stock-based awards available under our plan was 2,875,892 as of December 31, 2022. We issue common stock from our pool of authorized stock upon exercise of stock options and stock appreciation rights, vesting of restricted stock units or upon granting of restricted stock. Recently, we have issued three types of awards under our plans: restricted stock awards, time-based restricted stock units, and performance-based restricted stock units. The following table sets forth the number of awards outstanding for each award type as of:
| Outstanding at December 31,
Award type | 2022 |  | 2021
Restricted stock awards | 1,345,608 |  | 1,192,810 |
Time-based restricted stock units | 455,708 |  | 336,199 |
Performance-based restricted stock units | 1,104,260 |  | 943,071 |
Awards granted to our executive officers and certain members of management are subject to accelerated vesting upon a change in control as defined in the employees’ retention agreement. Expense recognition We recognize compensation expense associated with stock options and awards with performance or market based vesting conditions on an accelerated basis over the requisite service period of the individual grantees, which generally equals the vesting period. We recognize compensation expense associated with restricted stock awards and SARs on a straight-line basis over the requisite service period of the individual grantees, which generally equals the vesting period. We recognize the effect of awards for which the requisite service period is not rendered when the award is forfeited (that is, we recognize the effect of forfeitures in compensation cost when they occur). Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Stock-based compensation expense is allocated to cost of revenue and operating expenses on the consolidated statements of comprehensive income based on where the associated employee’s compensation is recorded. The following table summarizes stock-based compensation expense:
| Years ended December 31,
(in thousands) | 2022 | 2021 | 2020
Included in cost of revenue: |  |  |
Cost of recurring | $ | 11,258 |  | $ | 12,405 |  | $ | 5,793 |
Cost of one-time services and other | 3,178 |  | 7,547 |  | 7,581 |
Total included in cost of revenue | 14,436 |  | 19,952 |  | 13,374 |
Included in operating expenses: |  |  |
Sales, marketing and customer success | 21,409 |  | 20,283 |  | 15,514 |
Research and development | 24,207 |  | 27,080 |  | 18,527 |
General and administrative | 50,242 |  | 53,064 |  | 39,842 |
Total included in operating expenses | 95,858 |  | 100,427 |  | 73,883 |
Total stock-based compensation expense | $ | 110,294 |  | $ | 120,379 |  | $ | 87,257 |
The total amount of compensation cost related to unvested awards not recognized was $93.0 million at December 31, 2022. It is expected that this amount will be recognized over a weighted average period of 1.3 years. Restricted stock awards We have granted shares of common stock subject to certain restrictions under the 2016 Equity Plan. Restricted stock awards granted to employees vest in equal annual installments generally over 3 years from the grant date subject to the recipient’s continued employment with us. Restricted stock awards granted to non-employee directors vest after one year from the date of grant or, if earlier, immediately prior to the next annual election of directors, provided the non-employee director is serving as a director at that time. The fair market value of the stock at the time of the grant is amortized on a straight-line basis to expense over the period of vesting. Recipients of restricted stock awards have the right to vote such shares and receive dividends, if declared. The following table summarizes our unvested restricted stock awards as of December 31, 2022, and changes during the year then ended:
Restricted stock awards | Restricted stock awards | Weighted average grant-date fair value |  | Aggregate intrinsic value(1) (in thousands)
Unvested at January 1, 2022 | 1,192,810 |  | $ | 78.73 |  |  |
Granted | 846,295 |  | 60.90 |  |  |
Forfeited | (179,686) |  | 69.29 |  |  |
Vested | (513,811) |  | 79.83 |  |  |
Unvested at December 31, 2022 | 1,345,608 |  | 68.09 |  |  | $ | 79,202 |
(1)The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of restricted stock awards that vested during the years ended December 31, 2022, 2021 and 2020 was $41.0 million, $38.5 million and $39.9 million, respectively. The weighted average grant-date fair value of restricted stock awards granted during the years ended December 31, 2021 and 2020 was $77.39 and $77.16, respectively. Restricted stock units We have also granted restricted stock units subject to certain restrictions under the 2016 Equity Plan. Restricted stock units granted to employees vest in equal annual installments generally over 3 years from the grant date subject to the recipient’s continued employment with us. We have also granted restricted stock units for which vesting is subject to meeting certain performance conditions. The fair market value of the stock at the time of the grant is amortized to expense on a straight-line basis over the period of vesting except for awards with performance conditions, which are amortized on an accelerated basis over the period of vesting. The following table summarizes our unvested, time-based restricted stock units as of December 31, 2022, and changes during the year then ended:
Time-based restricted stock units | Restricted stock units | Weighted average grant-date fair value |  | Aggregate intrinsic value(1) (in thousands)
Unvested at January 1, 2022 | 336,199 |  | $ | 77.99 |  |  |
Granted | 287,198 |  | 62.38 |  |  |
Forfeited | (48,343) |  | 65.80 |  |  |
Vested | (119,346) |  | 77.59 |  |  |
Unvested at December 31, 2022 | 455,708 |  | 68.81 |  |  | $ | 26,823 |
(1)The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of time-based restricted stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $9.3 million, $9.4 million and $1.7 million, respectively. The weighted average grant date fair value of time-based restricted stock units granted for the years ended December 31, 2021 and 2020 was $77.74 and $56.66, respectively. The following table summarizes our unvested, performance-based restricted stock units as of December 31, 2022, and changes during the year then ended:
Performance-based restricted stock units | Restricted stock units | Weighted average grant-date fair value |  | Aggregate intrinsic value(1) (in thousands)
Unvested at January 1, 2022 | 943,071 |  | $ | 73.62 |  |  |
Granted | 977,377 |  | 61.79 |  |  |
Forfeited | (114,071) |  | 63.47 |  |  |
Vested | (702,117) |  | 71.93 |  |  |
Unvested at December 31, 2022 | 1,104,260 |  | 64.94 |  |  | $ | 64,997 |
(1)The intrinsic value is calculated as the market value as of the end of the fiscal period. The total fair value of performance-based restricted stock units that vested during the years ended December 31, 2022, 2021 and 2020 was $50.5 million, $44.9 million, and $17.2 million, respectively. The weighted average grant date fair value of performance-based restricted stock units granted for the years ended December 31, 2021 and 2020 was $71.91 and $60.21, respectively.

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