
	Year ended December 31,
	2023		2022		2021
Cost of revenues	$	36,484	$	34,269	$	29,307
Research and development	93,961		88,846		83,042
Sales and marketing	151,221		151,950		137,924
General and administrative	145,013		110,944		107,692
Total share-based compensation expense	$	426,679	$	386,009	$	357,965


	Year ended December 31,
	2023		2022		2021
Employee stock purchase plan rights (“ESPP”)	$	7,574	$	7,719	$	9,573
Performance stock units (“PSUs”)	27,035		1,737		298
Restricted stock units (“RSUs”)	392,070		376,553		348,094
Total share-based compensation expense	$	426,679	$	386,009	$	357,965

In September 2013, the Board adopted and the Company’s stockholders approved the 2013 Equity Incentive Plan, which became effective on September 26, 2013, and the stockholders approved an amended and restated 2013 Equity Plan on December 15, 2022 (together, “2013 Plan”). In connection with the adoption of the 2013 Plan, the Company terminated the 2010 Equity Incentive Plan (“2010 Plan”), under which stock options had been granted prior to September 26, 2013. The 2010 Plan was established in September 2010, when the 2003 Equity Incentive Plan (“2003 Plan”) was terminated. After the termination of the 2003 and 2010 Plans, no additional options were granted under these plans; however, options previously granted under these plans will continue to be governed by these plans and were exercisable into shares of Class B Common Stock. In addition, options authorized to be granted under the 2003 and 2010 Plans, including forfeitures of previously granted awards, are authorized for grant under the 2013 Plan.

A total of 6,200,000 shares of Class A Common Stock were originally reserved for issuance under the 2013 Plan. The 2013 Plan includes an annual increase on the first day of each fiscal year beginning in 2014, equal to the least of: (i) 6,200,000 shares of Class A Common Stock; (ii) 5% of the outstanding shares of all classes of common stock as of the last day of the Company’s immediately preceding fiscal year; or (iii) such other amount as the board of directors may determine. During the year ended December 31, 2023, a total of 4,769,268 shares of Class A Common Stock were added to the 2013 Plan in connection with the annual automatic increase provision. As of December 31, 2023, a total of 13,579,448 shares remain available for grant under the 2013 Plan.

The plans permit the grant of stock options and other share-based awards, such as restricted stock units, to employees, officers, directors, and consultants by the board of directors. Option awards are generally granted with an exercise price equal to

the fair market value of the Company’s Class A Common Stock at the date of grant. Option awards generally vest according to a graded vesting schedule based on four years of continuous service. On January 29, 2014, the board of directors approved an amendment to decrease the contractual term of all equity awards issued from the 2013 Plan from 10 years to 7 years for all awards granted after January 29, 2014. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the option agreement) and early exercise of options prior to vesting (subject to the Company’s repurchase right).


	Number of Options Outstanding (in thousands)	Weighted- Average Exercise Price Per Share		Weighted- Average Contractual Term (in Years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020	897	$	12.02	1.7	$	329,151

Exercised	(741)	12.58
Canceled/Forfeited	(2)	27.45
Outstanding at December 31, 2021	154	$	9.12	0.9	$	27,465

Exercised	(132)	8.54
Canceled/Forfeited	—	—
Outstanding at December 31, 2022	22	$	12.53	0.5	$	509

Exercised	(22)	12.53
Canceled/Forfeited	—	—
Outstanding at December 31, 2023	—	$	—	0.0	$	—
Vested and expected to vest as of December 31, 2023	—	$	—	0.0	$	—
Exercisable as of December 31, 2023	—	$	—	0.0	$	—

There were no options granted for the year ended December 31, 2023 and 2022. The total intrinsic value of options exercised during year ended December 31, 2023 was immaterial. The total intrinsic value of options exercised during the year ended 2022 and 2021 was $13.6 million, and $190.7 million, respectively. There is no remaining unamortized share-based compensation expense related to options.

The Company’s Employee Stock Purchase Plan (“ESPP”) allows eligible employees to purchase shares of the Company’s Class A Common Stock at a discounted price, through payroll deductions of up to the lesser of 15% of their eligible compensation or the IRS allowable limit per calendar year. A participant may purchase a maximum of 3,000 shares during an offering period. The offering periods are for a period of six months and generally start on the first trading day on or after May 13th and November 13th of each year. At the end of the offering period, the purchase price is set at the lower of: (i) 85% of the fair value of the Company’s common stock at the beginning of the six-month offering period and (ii) 85% of the fair value of the Company’s Class A Common Stock at the end of the six-month offering period.

The ESPP provides for annual increases in the number of shares available for issuance under the ESPP on the first day of each fiscal year beginning in fiscal 2014, equal to the least of: (i) 1% of the outstanding shares of all classes of common stock on the last day of the immediately preceding year; (ii) 1,250,000 shares; or (iii) such other amount as may be determined by the board of directors. During the year ended December 31, 2023, a total of 953,853 shares of Class A Common Stock were added to the ESPP Plan in connection with the annual increase provision. At December 31, 2023, a total of 6,293,967 shares were available for issuance under the ESPP.

The weighted-average assumptions used to value ESPP rights under the Black-Scholes-Merton option-pricing model and the resulting offering grant date fair value of ESPP rights granted in the periods presented were as follows:


	Year ended December 31,
	2023			2022			2021
Expected term (in years)	0.5			0.5			0.5
Expected volatility	67		%	81		%	48		%
Risk-free interest rate	5.36		%	3.01		%	0.05		%
Expected dividend yield	0		%	0		%	0		%
Offering grant date fair value of ESPP rights	$	9.38		$	20.18		$	71.27

As of December 31, 2023 and 2022, there was approximately $3.2 million and $4.4 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to ESPP, which will be recognized on a straight-line basis over the remaining weighted-average vesting periods of approximately 0.4 years.


	Number of RSUs/PSUs Outstanding (in thousands)	Weighted- Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2020	2,725	$	162.04	$	1,032,997
Granted	2,792	299.53
Released	(1,811)	185.55
Canceled/Forfeited	(855)	240.21
Outstanding at December 31, 2021	2,851	$	258.26	$	534,186
Granted	5,999	72.96
Released	(2,787)	131.18
Canceled/Forfeited	(963)	206.32
Outstanding at December 31, 2022	5,100	$	119.55	$	180,577
Granted	13,666	32.16
Released	(5,891)	61.12
Canceled/Forfeited	(2,828)	57.29
Outstanding at December 31, 2023	10,047	$	52.47	$	325,153

As of December 31, 2023 and 2022, there was a total of $393.5 million and $422.3 million of unrecognized share-based compensation expense, net of estimated forfeitures, related to RSUs, which will be recognized on a straight-line basis over the remaining weighted-average vesting periods of approximately 2.6 years and 2.8 years, respectively.

The 2013 Plan provides for the issuance of PSUs. The PSUs granted under the 2013 Plan are contingent upon the achievement of predetermined market, performance, and service conditions. The Company uses a Monte Carlo simulation model to determine the fair value of its market condition PSUs. PSU expense is recognized using the graded vesting method over the requisite service period. For performance-based metrics, the compensation expense is based on a probability of achievement of the performance conditions. For market-based conditions, if the market conditions are not met but the service conditions are met, the PSUs will not vest; however, any stock-based compensation expense recognized will not be reversed.

For the majority of the PSUs granted, the number of shares of common stock to be issued at vesting will range from 0% to 200% of the target number based on the achievement of the different performance and market conditions over the respective measurement period, generally ending December 31, 2023. The PSUs generally vest over a three-year period.

As of December 31, 2023, there was a total of $19.5 million unrecognized share-based compensation expense, net of estimated forfeitures, related to these PSUs, which will be recognized over the remaining service period of approximately 2.1 years.

The Company’s board of directors adopted employee equity bonus and executive equity compensation plans (“Plans”), which allow the recipients to earn fully vested shares of the Company’s Class A Common Stock upon the achievement of quarterly service and/or performance conditions and in lieu of a portion of base salary. During the year ended December 31, 2023 and 2022, the Company issued 2,222,098 and 1,047,821 RSUs, respectively, under these Plans. The shares under these Plans are issued from the reserve of shares available for issuance under the 2013 Plan. The total requisite service period for these Plans is approximately 0.4 years.

The unrecognized share-based compensation expense as of December 31, 2023 was approximately $4.4 million, which will be recognized over the remaining service period of 0.1 years. The shares issued under these Plans are issued from the reserve of shares available for issuance under the 2013 Plan.