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Stock-based Compensation | 6 Months Ended
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Jun. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation | Stock-based Compensation Stock-based Compensation Expense We recorded stock-based compensation expense in the following categories in the accompanying unaudited condensed consolidated statements of operations and balance sheets (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
|  |  |  | (Restated) |  |  |  | (Restated)
Cost of revenue |  | $ | 1,105 |  |  | $ | 1,331 |  |  | $ | 1,979 |  |  | $ | 1,608 |
Sales and marketing |  | 1,447 |  |  | 3,536 |  |  | $ | 2,979 |  |  | $ | 6,661 |
Technology and development |  | 4,875 |  |  | 4,148 |  |  | $ | 9,195 |  |  | $ | 8,446 |
General and administrative |  | 11,529 |  |  | 13,832 |  |  | $ | 21,270 |  |  | $ | 27,997 |
Total stock-based compensation expense |  | 18,956 |  |  | 22,847 |  |  | $ | 35,423 |  |  | $ | 44,712 |
Amount capitalized to internal-use software |  | 1,075 |  |  | 749 |  |  | $ | 1,986 |  |  | $ | 1,230 |
Total stock-based compensation expense |  | $ | 20,031 |  |  | $ | 23,596 |  |  | $ | 37,409 |  |  | $ | 45,942 |
Stock Options During the six months ended June 30, 2023, we granted 4.2 million stock options to members of our senior leadership team. Fair value of the options was measured using the Black-Scholes option pricing model on the date of grant, and associated expense will be recognized over the requisite service period. Vesting of the options will be accelerated upon a qualifying termination that occurs during the change-in-control period, as defined in the option grant agreement, or immediately prior to the effective time of a change-in-control if the option award is not assumed, continued or substituted by the surviving or acquiring entity (or its parent) in connection with such change-in-control. The weighted-average assumptions that were used to calculate the grant-date fair value of our stock option grants using the Black-Scholes option pricing model were as follows:
|  | Six Months Ended June 30,
|  | 2023
Expected life (years) |  | 5.87
Risk-free interest rate |  | 3.4% - 3.8%
Expected volatility |  | 50.4% - 50.7%
Expected dividend yield |  | —
Restricted Stock Units During the six months ended June 30, 2023, we granted 7.8 million restricted stock units, or RSUs, with a total grant date fair value of $66.4 million to various employees. RSUs are measured based on the fair market value of the underlying stock on the date of grant and recognized as expense over the requisite service period. During the six months ended June 30, 2023, we also granted 1.3 million RSUs with performance conditions, or PSUs, to members of our senior leadership team. Vesting of the PSUs is contingent upon the recipient’s continuous employment over the requisite service period and is subject to fulfillment by the Company of predefined performance criteria. Such awards will be earned only if certain performance targets established by and under the direction of the compensation committee of the board of directors are met during the performance period. The number of PSUs subject to vesting is determined at the end of the performance period and may equal zero percent (0%) to one hundred and fifty percent (150%) of the target award based upon Company’s achievement of certain revenue, profitability, and market share targets. If the performance criteria are achieved, 75% of the PSUs will vest on the date the compensation committee of the board of directors certifies achievement of the performance criteria, and the remaining 25% of the PSUs will vest on the one year anniversary of such certification date. PSUs are measured based on the fair market value of the underlying stock on the date of grant and recognized as expense over the employee’s requisite service period using graded vesting attribution method to the extent it is probable that the performance conditions will be achieved. We recognized $1.6 million and $1.7 million in stock-based compensation expense during three and six months ended June 30, 2023, respectively, related to these PSU awards. In the event of change-in-control (as defined in the employment agreement between the Company and each recipient of the performance award), the vesting conditions of PSUs will be modified resulting in a vesting of a greater of (i) one hundred percent (100%) of the target award, or (ii) the number of shares commensurate with the Company’s market share for the trailing 12-month period ending on the date that is the end of the nearest month prior to the date of the change of control, provided that 75% of such PSUs will vest on June 30, 2024 and the remaining 25% of such PSUs will vest on June 30, 2025, subject to the recipients continuing to be service providers through each such date and accelerated if the acquirer does not assume the awards in an economically equivalent manner. On May 5, 2023, the compensation committee of the board of directors approved amendments to the terms of the stock option and RSU awards granted to members of our senior leadership team during the year ended December 31, 2022, whereby the vesting of such stock options and RSUs will be accelerated upon (i) a qualifying termination that occurs during the change-in-control period or (ii) the individual’s termination as a result of his or her death or disability (as each such term is defined in the employment agreement between the Company and applicable individual). Further, the amendments provide that such stock options, to the extent vested and outstanding on the date of the individual’s qualifying termination or the termination of the individual’s employment in the event of his or her death or disability, as applicable and after giving effect to the vesting acceleration, shall remain outstanding and exercisable until the earlier of: (x) the original expiration date of the stock options, (y) the one-year anniversary of the date of the individual’s termination of employment with the Company, and (z) immediately prior to the effective time of a change in control if such stock option is not assumed, continued or substituted by the surviving or acquiring entity (or its parent) in connection with such change in control. The modification to add the foregoing provisions did not result in an incremental fair value of the impacted awards because the original vesting conditions were expected to be satisfied as of the modification date and the termination of the individual’s employment in the event of change-in-control or as a result of his or her death or disability was not probable as of the date of this filing.

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