EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2023

12. EMPLOYEE BENEFIT PLANS

Stock Incentive Plans

In 2013, we adopted the Coursera, Inc. Stock Incentive Plan (the “Stock Incentive Plan”) and in 2014, adopted the Coursera, Inc. 2014 Executive Stock Incentive Plan (together, the “Predecessor Plans”), pursuant to which we granted a combination of incentive and non-statutory stock options and RSUs. The Predecessor Plans were terminated in March 2021 in connection with the IPO but continue to govern the terms and conditions of the outstanding awards granted pursuant to the Predecessor Plans.

In February 2021, we adopted the 2021 Stock Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective on March 30, 2021 when the registration statement for the IPO was declared effective (collectively, the 2021 Plan, the ESPP, and the Predecessor Plans are referred to as the “Plans”). The 2021 Plan provides for the granting of incentive and non-statutory stock options, RSUs and other equity-based awards. Pursuant to the ESPP, eligible employees may purchase shares of common stock through payroll deductions at 85 percent of the lower of the market price of our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period. The offering periods start on the first trading day on or after May 11 and November 11 of each year, except for the first offering period, which commenced on the IPO effective date, or March 30, 2021, and ended on May 10, 2023.

As of December 31, 2023, 12,605,201 shares and 4,307,884 shares of our common stock were reserved for issuance under the 2021 Plan and ESPP.

Under the ESPP, if the closing market price of our common stock on the offering date of a new offering falls below the closing market price of our common stock on the offering date of an ongoing offering, the ongoing offering terminates immediately following the settlement of ESPP Rights shares on the purchase date. Participants in the terminated offering are automatically enrolled in the new offering (an “ESPP Rights Reset”), triggering a revaluation of stock-based compensation expense and a modification charge to be recognized ratably over the new offering period if the revalued expense is greater than the original expense. During the years ended December 31, 2023 and 2022, we had ESPP Rights Resets that resulted in modification charges of $3,119 and $9,047, which are being recognized ratably over the new offering periods.

Stock Options

We may grant stock options at prices not less than the grant date fair value. These stock options generally expire 10 years from the grant date. Incentive stock options and non-statutory stock options generally vest ratably over a four-year service period.

Stock option activity under the Plans for the year ended December 31, 2023 was as follows:


	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Balance—December 31, 2022	18,153,195	$	6.07	5.41	$	120,289
Granted	454,626	14.72
Exercised	(6,621,448)	4.13
Canceled	(821,235)	13.41
Balance—December 31, 2023	11,165,138	$	7.03	5.22	$	142,444
Options vested	9,462,200	$	5.70	4.74	$	131,590

Aggregate intrinsic value represents the difference between the exercise price of the stock options and the fair value of our common stock. The aggregate intrinsic value of stock options exercised was $72,649, $57,311, and $296,635 for the years ended December 31, 2023, 2022, and 2021. The weighted-average grant date fair value of options granted for the years ended December 31, 2023, 2022, and 2021 was $8.41, $7.26, and $16.23.

RSUs

RSUs grants have a service-based vesting condition, which is satisfied generally either (i) over four years with a 25% cliff vesting period after one year and 6.25% vesting each quarter thereafter for new hires, or (ii) over four years with 6.25% vesting each quarter for new grants to existing employees. The related stock-based compensation expense is recognized on a straight-line basis over the requisite service period.

RSU activity under the Plans for the year ended December 31, 2023 was as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value		Aggregate Intrinsic Value
Unvested balance—December 31, 2022	22,773,053	$	17.75	$	269,779
Granted	7,335,245	12.41
Vested	(8,449,866)	17.73
Forfeited	(3,297,386)	19.91
Unvested balance—December 31, 2023	18,361,046	$	15.24	$	355,653

The aggregate fair value of RSUs that vested was $130,891, $29,966, and $18,767 for the years ended December 31, 2023, 2022, and 2021.

Stock-Based Compensation Expense

A summary of the weighted-average assumptions we utilized to record stock-based compensation expense for stock options granted is as follows:


	Year Ended December 31,
	2023			2022			2021
Fair value of common stock	$	14.72		$	12.80		$	29.99
Risk-free interest rate	3.7		%	3.1		%	1.3		%
Expected term (in years)	6.1			6.1			6.2
Expected volatility	57.3		%	57.7		%	57.1		%
Dividend yield	—		%	—		%	—		%

The following table summarizes the assumptions used in estimating the fair value of ESPP Rights:


	Year Ended December 31,
	2023	2022	2021
Risk-free interest rate	3.9% - 5.5%	1.4% - 4.6%	0.0% - 0.5%
Expected term (in years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0
Expected volatility	39.2% - 61.0%	59.4% - 76.5%	48.3% - 61.9%
Dividend yield	—%	—%	—%

Stock-based compensation expense is classified in the Consolidated Statements of Operations as follows:


	Year Ended December 31,
	2023		2022		2021
Cost of revenue	$	2,593	$	3,089	$	2,092
Research and development	49,931		48,779		42,783
Sales and marketing	31,299		30,092		25,992
General and administrative	31,352		28,703		20,316
Restructuring related charges	(5,605)		122		—
Total	$	109,570	$	110,785	$	91,183

We capitalized $7,055, $5,407, and $4,890 of stock-based compensation related to our internal-use software during the years ended December 31, 2023, 2022, and 2021.

As of December 31, 2023, there was a total of $14,626 unrecognized employee compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 1.9 years. In addition, as of December 31, 2023, total unrecognized compensation cost related to unvested RSUs was $230,963, which is expected to be recognized over a weighted-average period of approximately 2.5 years. Total unrecognized stock-based compensation cost related to ESPP Rights as of December 31, 2023 was $7,330, which is expected to be recognized over a weighted-average period of approximately 1.0 years.

Income tax benefits recognized from stock-based compensation expense for the years ended December 31, 2023, 2022, and 2021 were $753, $835, and $821 due to cumulative losses and valuation allowances.

For the years ended December 31, 2023, 2022, and 2021, income tax benefits realized related to stock-based awards vested and exercised were $1,326, $387, and $968 due to cumulative losses and valuation allowances.

Common Stock Reserved for Issuance

Our common stock reserved for future issuance was as follows:


	December 31, 2023	December 31, 2022
Stock options outstanding	11,165,138	18,153,195
RSUs outstanding	18,361,046	22,773,053
Shares available for future grants	16,913,085	8,819,998
Total shares of common stock reserved	46,439,269	49,746,246

401(k) Plan

We have a 401(k) savings plan (the “401(k) Plan”) that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees may elect to contribute up to 100% of their eligible compensation, subject to certain limitations. The 401(k) Plan provides for a discretionary employer-matching contribution. We made matching contributions of $1,710 and $1,791 to the 401(k) Plan for the years ended December 31, 2023 and 2022. No matching contributions were made during the year ended December 31, 2021.