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Stock-Based Compensation Expense | 6 Months Ended
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Jun. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation Expense | 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 June 30, |  | Six Months Ended June 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
|  | (in thousands)
Stock-based compensation expense: |  |  |  |  |  |  |  |
Cost of revenue |  | $ | 308 |  |  | $ | 142 |  |  | $ | 510 |  |  | $ | 279 |
Research and development |  | 1,689 |  |  | 1,524 |  |  | 3,202 |  |  | 3,017 |
Sales and marketing |  | 1,779 |  |  | 1,224 |  |  | 3,182 |  |  | 4,125 |
General and administrative |  | 1,395 |  |  | 751 |  |  | 2,556 |  |  | 1,739 |
Total stock-based compensation expense |  | $ | 5,171 |  |  | $ | 3,641 |  |  | $ | 9,450 |  |  | $ | 9,160 |
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 six months ended June 30, 2017 was as follows:
|  | Restricted Stock |  | Restricted Stock Units
|  | Shares |  | Weighted-Average Grant Date Fair Value |  | Shares |  | Weighted-Average Grant Date Fair Value
Unvested balance as of December 31, 2016 |  | 585,004 |  |  | $ | 18.05 |  |  | 734,577 |  |  | $ | 13.47 |
Granted |  | — |  |  | — |  |  | 1,423,010 |  |  | 14.11 |
Vested |  | (156,765 | ) |  | 19.04 |  |  | (200,416 | ) |  | 13.72 |
Forfeited |  | (7,698 | ) |  | 23.01 |  |  | (78,441 | ) |  | 13.62 |
Unvested balance as of June 30, 2017 |  | 420,541 |  |  | $ | 17.59 |  |  | 1,878,730 |  |  | $ | 13.92 |
As of June 30, 2017, the unrecognized compensation expense related to our unvested restricted stock and restricted stock units expected to vest was $30.6 million. This unrecognized compensation expense will be recognized over an estimated weighted-average amortization period of 3.0 years. During the six months ended June 30, 2017, we repurchased 9,534 shares of our common stock in settlement of employee tax withholding obligations due upon the vesting of restricted stock.
(c) | Stock Options
Stock option activity during the six months ended June 30, 2017 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, 2016 |  | 4,580,375 |  |  | $ | 8.20 |  |  |  |  |
Granted |  | 1,266,238 |  |  | 13.38 |  |  |  |  |
Exercised |  | (670,533 | ) |  | 6.13 |  |  |  |  | $ | 7,572 |
Forfeited/cancelled |  | (134,812 | ) |  | 12.41 |  |  |  |  |
Outstanding as of June 30, 2017 |  | 5,041,268 |  |  | $ | 9.66 |  |  | 7.5 |  | $ | 36,564 |
Vested and exercisable as of June 30, 2017 |  | 2,642,121 |  |  | $ | 6.57 |  |  | 6.0 |  | $ | 27,278 |
Vested and expected to vest as of June 30, 2017 |  | 4,544,979 |  |  | $ | 9.27 |  |  | 7.1 |  | $ | 34,726 |
As of June 30, 2017, the unrecognized compensation expense related to our unvested stock options expected to vest was $14.1 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 six months ended June 30, 2017 was $3.2 million. The weighted-average grant date fair value of stock options granted in the six months ended June 30, 2017 was $6.65 per share.
(d) | Employee Stock Purchase Plan
Under the Rapid7, Inc. 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, 2017, we issued 138,085 shares of common stock to employees for aggregate proceeds of $1.5 million. The purchase prices of the shares of common stock were $10.60 and $12.79 per share, which were discounted in accordance with the terms of the ESPP from the closing prices of our common stock on March 16, 2016 of $12.47 and on March 15, 2017 of $15.05, respectively.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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