XML 26 R14.htm IDEA: XBRL DOCUMENT v3.25.0.1
Stockholders' Equity and Equity Incentive Plans
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Stockholders' Equity and Equity Incentive Plans
(5)
Stockholders’ Equity and Equity Incentive Plans

Preferred stock

In connection with the direct listing of the Company's Class A common stock on the Nasdaq Capital Market (the "Direct Listing") on September 21, 2021, an amended and restated certificate of incorporation of the Company was filed with the Secretary of State of the State of Delaware, which authorized the issuance of 20 million shares of undesignated preferred stock with a par value of $0.00001 per share and rights and preferences, including voting rights, designated from time to time by the Company's board of directors.

Common Stock

The Company has two classes of common stock: Class A common stock and Class B common stock. The Company's amended and restated certificate of incorporation authorizes the issuance of 600 million shares of Class A common stock and 600 million shares of Class B common stock. The shares of Class A common stock and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to five votes. Class A and Class B common stock each have a par value of $0.00001 per share and are referred to as common stock throughout the notes to the consolidated financial statements, unless otherwise noted. Holders of common stock are entitled to receive any dividends whenever funds are legally available and if declared by the Company's board of directors.

Shares of Class B common stock may be converted to Class A common stock at any time at the option of the stockholder. Shares of Class B common stock will also automatically convert into one share of Class A common stock upon any transfer, except for certain permitted transfers described in the Company's amended and restated certificate of incorporation. In addition, each share of Class B common stock held by the Company's three cofounders (or any of such founder’s affiliates) will convert automatically into one share of Class A common stock on the earlier of: (i) the death or incapacity of such founder or (ii) the date that is six months following the date on which such founder is no longer an employee or director of the Company (unless such founder has rejoined the Company during such six-month period). Each outstanding share of the Company's Class B common stock will also convert automatically into one share of Class A common stock on the date that is six months following the date on which no founder is an employee or director of the Company (unless a founder has rejoined the Company during such six-month period). In addition, any transfer by a founder (or such founder’s affiliates) to one or more of the other founders (or such founders’ affiliates) will not result in the automatic conversion of such shares of Class B common stock to Class A common stock. Once converted into Class A common stock, the Class B common stock may not be reissued.

The Company has reserved shares of its Class A common stock as follows:

 

 

 

As of
December 31,
2024

 

 

As of
December 31,
2023

 

 

 

 

 

 

 

 

2014 Stock Option and Grant Plan and 2021 Incentive Award Plan:

 

 

 

 

 

 

Equity plan stock options outstanding

 

 

11,501,725

 

 

 

14,268,055

 

RSUs outstanding

 

 

13,519,769

 

 

 

11,301,279

 

Shares available for future issuance

 

 

18,310,859

 

 

 

18,260,813

 

2021 Employee Stock Purchase Plan:

 

 

 

 

 

 

Shares available for future issuance

 

 

4,810,524

 

 

 

4,079,994

 

Total reserved shares

 

 

48,142,877

 

 

 

47,910,141

 

 

Equity Incentive Plans

2014 Stock Option and Grant Plan

In December 2014, the Company adopted its 2014 Stock Option and Grant Plan (as amended, the “2014 Plan”), pursuant to which shares of the Company’s common stock were reserved for the issuance of stock options (incentive and non-statutory), restricted stock units (“RSUs”), and restricted stock to employees, directors, and consultants under terms and provisions established by the Company's board of directors and approved by the Company’s stockholders. The 2014 Plan was terminated in September 2021 in connection with the Direct Listing but continues to govern the terms of outstanding awards that were granted prior to the termination of the 2014 Plan. No further equity awards will be granted under the 2014 Plan. With the establishment of the 2021 Incentive Award Plan (the “2021 Plan”) as further discussed below, upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2014 Plan, an equal number of shares of Class A common stock will become available for grant under the 2021 Plan.

2021 Incentive Award Plan

In August 2021, the Company's board of directors adopted, and its stockholders approved, the 2021 Plan, which became effective in connection with the Direct Listing. The 2021 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, performance bonus awards, performance stock units, dividend equivalent awards and other forms of equity compensation (collectively, “equity awards”). As of December 31, 2024, a total of 18,310,859 shares of the Company's Class A common stock have been reserved for issuance under the 2021 Plan in addition to (i) any shares available for issuance under the 2014 Plan as of the effective date of the 2021 Plan, (ii) the number of shares represented by awards outstanding under the Company's 2014 Plan (“Prior Plan Awards”) that become available upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class A common stock underlying outstanding stock awards granted under the 2014 Plan, and (iii) an annual increase on the first day of each fiscal year beginning in 2022 and ending in 2031, equal to the lesser of (A) 5% of the shares of the Company's common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of stock as determined by the Company's board of directors; provided, however, that no more than 88,000,000 shares of stock may be issued upon the exercise of incentive stock options.

Stock Option Awards

Stock options granted under the 2014 Plan and the 2021 Plan (collectively, the “combined stock plans”) generally vest based on continued service over four years.

Option activity under the Company's combined stock plans is set forth below:

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

Weighted

 

 

average

 

 

Aggregate

 

 

 

Outstanding

 

 

average

 

 

remaining

 

 

intrinsic

 

 

 

stock

 

 

exercise

 

 

contractual

 

 

value

 

 

 

options

 

 

price

 

 

life (years)

 

 

(in thousands)

 

Balances as of December 31, 2023

 

 

14,268,055

 

 

$

4.40

 

 

 

6.27

 

 

$

118,757

 

Granted

 

 

—

 

 

 

—

 

 

 

 

 

 

 

Exercised

 

 

(2,256,288

)

 

 

2.89

 

 

 

 

 

 

 

Cancelled/forfeited

 

 

(510,042

)

 

 

10.81

 

 

 

 

 

 

 

Balances as of December 31, 2024(1)

 

 

11,501,725

 

 

$

4.41

 

 

 

5.25

 

 

$

70,628

 

Exercisable as of December 31, 2024(2)

 

 

10,998,001

 

 

$

4.05

 

 

 

5.16

 

 

$

71,436

 

 

(1)
As no forfeitures are estimated due to the Company's adoption of ASU No. 2016-09, all options are vested or expected to vest. As of December 31, 2024, no options were outstanding that were subject to a future performance condition
(2)
Exercisable shares include vested options as well as unvested shares that can be early exercised

The aggregate intrinsic values of options are calculated as the difference between the exercise price of the options and the market price for shares of the Company’s Class A common stock as of each period-end. The total intrinsic value of options exercised for the years ended December 31, 2024, 2023, and 2022 was $17.3 million, $16.4 million, and $23.3 million, respectively.

No stock options were granted in the year ended December 31, 2024. Stock options granted during the years ended December 31, 2023 and 2022 had a weighted average grant date fair value of $6.69 and $8.27 per share, respectively. The fair value is being

expensed over the vesting period of the options on a straight-line basis as the services are being provided. No tax benefits were realized from options during the periods.

As of December 31, 2024, total unrecognized stock-based compensation expense related to options outstanding under the combined stock plans was $3.2 million. This unrecognized expense as of December 31, 2024 is expected to be recognized over the weighted average remaining vesting period of 2.10 years. As of December 31, 2024, the Company had 342,000 shares of non-employee stock options outstanding under the combined stock plans.

The fair value of each option granted to employees under the 2021 Plan is estimated on the grant date using the Black-Scholes pricing model.

The following range of assumptions and data inputs were used in the Black-Scholes option-pricing model to estimate the fair value of the options granted under the 2021 Plan:

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Fair value of common stock

 

 

—

 

 

$11.37 - $12.37

 

 

$14.62 - $15.63

 

Expected dividend yield

 

 

—

 

 

 

—

 

 

 

—

 

Risk-free interest rate

 

 

—

 

 

3.59% - 4.36%

 

 

3.01% - 3.36%

 

Expected volatility

 

 

—

 

 

56.5% - 56.8%

 

 

55.3% - 55.6%

 

Expected term (years)

 

 

—

 

 

5.5 - 6.0

 

 

6.0 - 6.3

 

Restricted Stock Units

RSUs granted under the 2021 Plan generally vest based on continued service. During the years ended December 31, 2024, 2023, and 2022, the Company recorded $85.2 million, $77.1 million, and $46.0 million in expense related to RSUs, respectively.

The total fair value of RSUs vested during the years ended December 31, 2024, 2023, and 2022 was $69.7 million, $56.3 million, and $25.4 million, respectively. As of December 31, 2024, total unrecognized stock-based compensation expense related to RSUs was $138.8 million. This unrecognized expense as of December 31, 2024 is expected to be recognized over the weighted average remaining vesting period of 2.13 years. As of December 31, 2024, the Company had 177,661 shares of non-employee RSUs outstanding under the combined stock plans.

RSU activity for the year ended December 31, 2024 was as follows:

 

 

 

Restricted stock
units

 

 

Weighted-average
grant date fair
value per share

 

Balance as of December 31, 2023

 

 

11,301,279

 

 

$

14.76

 

Granted

 

 

12,135,585

 

 

 

9.59

 

Vested

 

 

(6,794,806

)

 

 

13.59

 

Cancelled/forfeited

 

 

(3,122,289

)

 

 

13.45

 

Balance as of December 31, 2024

 

 

13,519,769

 

 

$

11.02

 

 

2021 Employee Stock Purchase Plan

In August 2021, the Company’s board of directors adopted, and its stockholders approved, the 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective in connection with the Direct Listing. The ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. As of December 31, 2024, a total of 4,810,524 shares of the Company’s Class A common stock have been reserved for future issuance under the ESPP, in addition to any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under the ESPP. The ESPP offers employees the option to purchase shares through a series of consecutive 12-month offering periods on each May 15th and November 15th (with two six-month purchase periods during each offering period). The price at which Class A common stock is purchased under the ESPP is equal to the lower of (i) 85% of the closing trading price per share of the Company's Class A common stock on the first trading date of an offering period in which a participant is enrolled or (ii) 85% of the closing trading price per share

on the purchase date, which will occur on the last trading day of each purchase period, or such other price designated by the administrator.

The ESPP offers a rollover feature pursuant to which, if the fair market value of a share of Class A common stock on the first purchase date is lower than the fair market value on the first trading day of the offering period, the respective offering period will terminate and each participant will be automatically enrolled in the offering period that commences immediately following the purchase date. In accordance with the rollover feature, immediately following the conclusion of the purchase period ended May 14, 2024, the offering period was terminated and participants were automatically enrolled in a new 12-month offering period commencing on May 15, 2024 and ending on May 14, 2025. The impact of the rollover feature did not result in material incremental compensation cost for the year ended December 31, 2024.

The following assumptions were used to calculate the fair value of shares to be granted under the ESPP during the period utilizing the Black-Scholes option-pricing model:

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Fair value of common stock

 

$9.34 - $9.59

 

 

$9.98 - $10.76

 

 

$14.77 - $17.04

 

Expected dividend yield

 

 

—

 

 

 

—

 

 

 

—

 

Risk-free interest rate

 

4.34% - 5.43%

 

 

4.75% - 5.41%

 

 

1.54% - 4.63%

 

Expected volatility

 

44.4% - 56.0%

 

 

56.8% - 60.0%

 

 

60.0%

 

Expected term (years)

 

0.5 - 1.0

 

 

0.5 - 1.0

 

 

0.5 - 1.0

 

 

The expected term for the ESPP purchase rights is based on the duration of the offering period. Estimated volatility for ESPP purchase rights is based on the historical volatility of the Company's Class A common stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time the ESPP purchase right was granted at the beginning of the offering period. The Company has not declared, nor does it expect to declare dividends.

As of December 31, 2024, 1.3 million shares have been purchased under the ESPP. During the years ended December 31, 2024, 2023, and 2022, the Company issued 469,567, 473,792, and 350,341 shares under the ESPP, respectively, in settlement of $3.8 million, $4.1 million, and $4.7 million of ESPP liabilities, respectively.

During the years ended December 31, 2024, 2023, and 2022 the Company recognized $1.6 million, $2.4 million, and $5.7 million of stock-based compensation expense related to the ESPP, respectively. As of December 31, 2024, total unrecognized compensation costs related to the ESPP was $0.5 million, which will be amortized over a weighted average period of 0.52 years.

 

Stock-based compensation expense, net of actual forfeitures is reflected in the consolidated statement of operations and comprehensive loss (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Cost of revenue

 

$

6,472

 

 

$

7,300

 

 

$

6,468

 

Research and development

 

 

44,421

 

 

 

36,643

 

 

 

27,855

 

Sales and marketing

 

 

32,119

 

 

 

29,404

 

 

 

17,143

 

General and administrative

 

 

17,007

 

 

 

14,085

 

 

 

15,757

 

Restructuring and other related charges

 

 

—

 

 

 

853

 

 

 

—

 

Total stock-based compensation expense

 

$

100,019

 

 

$

88,285

 

 

$

67,223