Noncash Share-based Compensation (Note)

9 Months Ended

Sep. 30, 2021

Noncash Share-based Compensation [Abstract]

The Company's 2017 Equity Incentive Plan (as amended and restated, the "2017 Stock Plan") was approved by the Company's stockholders in May 2019 and reserved an aggregate amount of 4,550,000 shares available for issuance. In May 2021, the Company's stockholders approved an amendment to the 2017 Stock Plan increasing the aggregate amount of shares available for issuance to 7,650,000. As of September 30, 2021, 4,080,355 shares remain available for issuance under the 2017 Stock Plan.

The following table presents the number of shares or units outstanding for each award type as of September 30, 2021 and December 31, 2020, respectively, (in thousands):


Award type	September 30, 2021	December 31, 2020

Restricted stock units (time-based)	1,822	1,802
Restricted stock units (performance-based)	140	162

Stock appreciation rights	—	28
Market stock units	126	111

During the three months ended September 30, 2021, the Company granted 11,239 RSUs (time-based) with a weighted average grant-date fair value of $44.48 per share.

During the nine months ended September 30, 2021, the Company granted 834,828 RSUs (time-based) with a weighted average grant-date fair value of $47.54 per share. The Company also granted 125,541 MSUs with a weighted average grant-date fair value of $56.05 to certain executive employees during the nine months ended September 30, 2021. These MSUs vest on January 31, 2024 and the actual number of MSUs that will be eligible to vest is based on the total stockholder return of the Company relative to the total stockholder return of the Index over the performance period, as defined by each award's plan documents or individual award agreements. The maximum number of shares issuable upon vesting is 200% of the MSUs initially granted. The Company did not grant any stock options, SARs or performance-based RSUs during the nine months ended September 30, 2021.

The assumptions used to value the MSUs granted during the nine months ended September 30, 2021 were as follows:


	September 30, 2021
Volatility	53.29	%
Risk-free interest rate	0.22	%
Expected award life in years	2.97
Dividend yield	—

Share-based compensation expense is allocated to expense categories on the unaudited condensed consolidated statements of comprehensive income (loss). The following table summarizes share-based compensation expense included in the Company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Share-based compensation:
Cost of revenue	$	951	$	519	$	2,753	$	1,545
Operating expenses:
Selling and marketing	2,600		1,727		7,334		5,558
Research and development	1,924		1,539		5,867		4,414
General and administrative	3,159		2,593		9,456		6,960
Total included in operating expenses	7,683		5,859		22,657		16,932
Total share-based compensation expense	$	8,634	$	6,378	$	25,410	$	18,477

At September 30, 2021, the Company had an estimated $68.3 million of total unrecognized compensation costs related to share-based compensation arrangements. These costs will be recognized over a weighted average period of 2.6 years.

The Company's Employee Stock Purchase Plan (as amended, the "ESPP") provides for eligible employees to purchase shares on an after-tax basis in an amount between 1% and 10% of their annual pay: (i) on June 30 of each year at a 15% discount of the fair market value of the Company's common stock on January 1 or June 30, whichever is lower, and (ii) on December 31 of each year at a 15% discount of the fair market value of the Company's common stock on July 1 or December 31, whichever is lower. An employee may not purchase more than $5,000 in either of the six-month measurement periods described above or more than $10,000 annually. In May 2021, the Company's stockholders approved an amendment to the ESPP Plan increasing the aggregate amount of shares available for issuance under the ESPP to 1,000,000. During the three and nine months ended September 30, 2021, the Company issued 39,113 and 81,083 shares under the ESPP, respectively. As of September 30, 2021, 493,711 shares remain authorized and available for issuance under the ESPP. As of September 30, 2021, the Company held approximately $0.9 million on behalf of employees for future purchases under the ESPP, and this amount was recorded in accrued payroll and other employee benefits in the Company's unaudited condensed consolidated balance sheet.