Stock-based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

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,
		2024		2023		2024		2023
Cost of revenue		$	1,747	$	1,105	$	3,340	$	1,979
Sales and marketing		1,906		1,447		3,485		2,979
Technology and development		6,525		4,875		12,228		9,195
General and administrative		8,737		11,529		14,718		21,270
Total stock-based compensation expense		18,915		18,956		33,771		35,423
Amount capitalized to internal-use software		1,627		1,075		3,044		1,986
Total stock-based compensation		$	20,542	$	20,031	$	36,815	$	37,409

Restricted and Performance Stock Units

During the six months ended June 30, 2024, we granted 5.5 million restricted stock units, or RSUs, with a total grant date fair value of $71.9 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, 2024 and in July 2024, we also granted 1.5 million and 0.8 million, respectively, 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 a predefined profitability target 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 two hundred percent (200%) of the target award. If the performance criteria are achieved, one

third 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 awards will vest quarterly thereafter through February 2027. These PSU awards also include a modifier to the total number of shares earned based on the Company’s total shareholder return, or TSR, compared to the TSR of the Nasdaq Composite Index during the performance period. The total number of shares issued pursuant to the PSU award may be increased, decreased, or remain unchanged based on the TSR modifier. The TSR modifier applicable to the PSUs is considered a market condition and therefore is reflected in the respective grant-date fair values of the awards. A Monte Carlo simulation was used to account for this market condition in the grant-date fair value of the awards. Expense related to the PSUs is recognized 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 $3.0 million and $3.5 million in stock-based compensation expense during three and six months ended June 30, 2024, respectively, related to these awards.

The assumptions that were used to calculate the grant-date fair value of our PSU grants during the six months ended June 30, 2024 using a Monte Carlo simulation model were as follows:


	Six Months Ended June 30,
	2024
Expected life (years)	0.8
Risk-free interest rate	5.2	%
Expected volatility	47.4	%
Expected dividend yield	—

In July 2024, we granted 2.7 million RSUs with a market vesting condition. Vesting of this award is contingent upon the recipient’s continuous employment over the requisite service period and is subject to achievement of predetermined stock price targets, which are measured based on a 45-trading day weighted-average closing price of our common stock during a five-year performance period, subject to a 44-day extension in certain circumstances. The number of RSUs subject to vesting during the performance period may equal zero percent (0%) to two hundred percent (200%) of the target award. Upon the achievement of a stock price target during the performance period, one-half of the eligible RSUs will vest on the date the compensation committee of the board of directors certifies achievement of the stock price target and the other half will vest one year from such date, subject to the recipient’s continued employment through the vesting date.

In July 2024, we also granted 0.8 million RSUs to members of our senior leadership team. The RSUs will vest in two substantially equal annual installments in July 2025 and July 2026, subject to the recipient’s continued service through the applicable vesting date.