Stock-Based Compensation Expense

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Note 5. Stock-Based Compensation Expense

(a)

General

Stock-based compensation expense for restricted stock, restricted stock units, stock options and issuances of common stock pursuant to our employee stock purchase plan was classified in the accompanying consolidated statements of operations as follows:


	Three Months Ended March 31,
	2016		2015
	(in thousands)
Stock-based compensation expense:
Cost of revenue	$	137	$	49
Research and development		1,493		144
Sales and marketing		2,901		115
General and administrative		988		267

Total stock-based compensation expense	$	5,519	$	575

We recognize compensation cost of all awards on a straight-line basis over the applicable vesting period, which is generally four years.

(b)

Restricted Stock and Restricted Stock Units

Restricted stock and restricted stock unit activity during the three months ended March 31, 2016 was as follows:


	Restricted Stock			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2015		1,149,257		$	19.34
Granted		528,550			12.97
Vested		(84,649	)		19.14
Forfeited		(32,290	)		13.61

Outstanding as of March 31, 2016		1,560,868		$	17.31

As of March 31, 2016, the unrecognized compensation expense related to our unvested restricted stock and restricted stock units expected to vest was $16.8 million. This unrecognized compensation expense will be recognized over an estimated weighted-average amortization period of 2.8 years.

(c)

Stock Options

Stock option activity during the three months ended March 31, 2016 was as follows:


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2015		4,246,525		$	5.99
Granted		916,558			12.96
Exercised		(122,284	)		4.13
Forfeited/cancelled		(159,444	)		10.11

Outstanding as of March 31, 2016		4,881,355			7.21		7.6	$	29,337

Vested and exercisable as of March 31, 2016		2,793,056			4.53		6.6	$	23,891
Vested and expected to vest as of March 31, 2016		4,460,388			6.78		7.4	$	28,639

As of March 31, 2016, the unrecognized compensation expense related to our unvested stock options expected to vest was $7.7 million. This unrecognized compensation expense will be recognized over an estimated weighted-average amortization period of 2.9 years.

The total fair value of stock options vested in the three months ended March 31, 2016 was $2.3 million. The weighted-average grant date fair value of stock options granted in the three months ended March 31, 2016 was $6.18 per share.

(d)

Employee Stock Purchase Plan

Under the 2015 Employee Stock Purchase Plan (ESPP), employees may set aside up to 15% of their gross earnings, on an after-tax basis, to purchase our common shares at a discounted price, which is calculated at 85% of the lesser of: (i) the market value of our common stock at the beginning of each offering period and (ii) the market value of our common stock on the applicable purchase date.

On March 15, 2016 we issued 192,676 shares of common stock to employees for aggregate proceeds of $2.1 million. The purchase price of the shares of common stock was $10.88 per share, which was discounted from the market price of $12.80 at the close of business on March 15, 2016, in accordance with the terms of the ESPP.