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Stock-Based Compensation | 9 Months Ended
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Sep. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation The Company recorded stock-based compensation expense of $7,575 and $19,856 during the three and nine months ended September 30, 2024, respectively, and recorded $4,203 and $10,764 during the three and nine months ended September 30, 2023, respectively. The following table shows stock-based compensation expense by where the stock-based compensation expense is recorded in the Company’s unaudited condensed consolidated statement of operations:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cost of revenue | $ | 71 |  |  | $ | 33 |  |  | $ | 169 |  |  | $ | 82 |
Sales and marketing | 1,228 |  |  | 822 |  |  | 3,207 |  |  | 2,190 |
Research and development | 1,707 |  |  | 579 |  |  | 3,714 |  |  | 1,464 |
General and administrative | 4,569 |  |  | 2,769 |  |  | 12,766 |  |  | 7,028 |
Total stock-based compensation | $ | 7,575 |  |  | $ | 4,203 |  |  | $ | 19,856 |  |  | $ | 10,764 |
As of September 30, 2024, there was $12,119 of unrecognized compensation cost related to unvested common stock option arrangements, which is expected to be recognized over a weighted-average period of 2.21 years. As of September 30, 2024, there was $41,236 of unrecognized compensation cost related to unvested restricted stock unit awards, which is expected to be recognized over a weighted-average period of 2.34 years. As of September 30, 2024, there was $10,014 of unrecognized compensation cost related to unvested performance stock unit awards, which is expected to be recognized over a weighted-average period of 2.32 years. The fair value of each option award was estimated on the date of grant using the Black-Scholes option-pricing model. As there was no public market for its common stock prior to March 25, 2021, which was the first day of trading, and as the trading history of the Company’s common stock is limited, the Company determined the expected volatility for options granted based on an analysis of reported data for a peer group of companies that issued options with substantially similar terms. The expected volatility of options granted has been determined using an average of the historical volatility measures of this peer group of companies. The expected life of options granted to employees was calculated using the simplified method, which represents the average of the contractual term of the option and the weighted-average vesting period of the option. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate expected term. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the share option. The Company has not paid, nor anticipates paying, cash dividends on its ordinary shares; therefore, the expected dividend yield is assumed to be zero. The weighted-average assumptions utilized to determine the fair value of options granted to employees are presented in the following table:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Expected volatility | N/A |  | 62.6 | % |  | 61.8 | % |  | 63.2 | %
Weighted-average risk-free interest rate | N/A |  | 4.03 | % |  | 4.28 | % |  | 3.71 | %
Expected dividend yield | N/A |  | — |  |  | — |  |  | — |
Expected life – in years | N/A |  | 6 |  | 6 |  | 6
A summary of the Company’s option activity as of September 30, 2024, and changes during the nine months then ended are as follows:
| Number of Options |  | Weighted-Average Exercise Price (per share) |  | Weighted-Average Remaining Contractual Term (in years)
Outstanding at January 1, 2024 | 7,175,494 |  |  | $ | 7.02 |  |  | 7.78
Granted | 15,888 |  |  | 12.62 |  |  |
Exercised | (1,464,641) |  |  | 2.53 |  |  |
Forfeited | (355,225) |  |  | 8.94 |  |  |
Outstanding at September 30, 2024 | 5,371,516 |  |  | 8.14 |  |  | 7.34
Options exercisable at September 30, 2024 | 3,220,402 |  |  | 6.76 |  | 6.71
The Company did not grant option awards during the three months ended September 30, 2024. The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2024 was $7.71 per share. The weighted-average grant-date fair value of options granted during the three and nine months ended September 30, 2023 was $6.15 and $5.58 per share, respectively. Tax benefits of $13 and $712 were realized from options during the three and nine months ended September 30, 2024, respectively. Tax benefits of $653 and $696 were realized from options during the three and nine months ended September 30, 2023, respectively. The aggregate intrinsic value of options outstanding as of September 30, 2024 and December 31, 2023 was $41,886 and $49,221, respectively. The aggregate intrinsic value for options exercised during the three and nine months ended September 30, 2024 was $3,249 and $16,913, respectively. The aggregate intrinsic value for options exercised during the three and nine months ended September 30, 2023 was $2,521 and $7,923, respectively. The aggregate intrinsic value for options exercisable as of September 30, 2024 and December 31, 2023 was $29,705 and $34,471, respectively. The aggregate intrinsic value was calculated based on the positive difference, if any, between the estimated fair value of the Company’s common stock on September 30, 2024 and December 31, 2023, respectively, or the date of exercise, as appropriate, and the exercise price of the underlying options. During the three and nine months ended September 30, 2024, the Company granted to employees RSUs for 66,720 and 2,857,598 shares of Class A common stock, respectively. During the three and nine months ended September 30, 2023, the Company granted to employees RSUs for 68,463 and 1,908,880 shares of Class A common stock, respectively. During the three and nine months ended September 30, 2024, the Company recorded stock-based compensation expense related to the RSUs of $4,802 and $12,234, respectively. During the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expense related to the RSUs of $2,461 and $5,702, respectively. A summary of RSU activity for the nine months ended September 30, 2024 is as follows:
|  | Number of Shares |  | Weighted-Average Grant Date Fair Value |  | Aggregate Fair Value
Unvested balance at January 1, 2024 |  | 2,571,318 |  | $ | 9.88 |  |  | $ | 25,405 |
Granted |  | 2,857,598 |  | 12.60 |  | 36,006
Vested |  | (996,837) |  |  | 9.73 |  | 9,699 |
Forfeited |  | (280,756) |  |  | 9.77 |  | 2,743 |
Unvested balance as of September 30, 2024 |  | 4,151,323 |  | $ | 11.79 |  |  | $ | 48,944 |
The Company did not grant PSU awards during the three months ended September 30, 2024. During the nine months ended September 30, 2024, the Company granted to employees PSU awards for 1,146,491 shares of Class A common stock. During the three and nine months ended September 30, 2024, $1,187 and $2,753 of stock-based compensation expense has been recognized in connection with PSU awards, respectively. The Company did not grant PSU awards during the three and nine months ended September 30, 2023. During the three and nine months ended September 30, 2023, an insignificant amount of stock-based compensation expense has been recognized in connection with PSU awards, respectively. A summary of PSU activity for the nine months ended September 30, 2024 is as follows:
|  | Number of Shares |  | Weighted-Average Grant Date Fair Value |  | Aggregate Fair Value
Unvested balance at January 1, 2024 |  | 1,077,726 |  | $ | 11.61 |  |  | $ | 12,512 |
Granted |  | 1,146,491 |  | 12.56 |  | 14,400
Vested |  | — |  |  | — |  | — |
Forfeited |  | — |  |  | — |  | — |
Unvested balance at September 30, 2024 |  | 2,224,217 |  | $ | 12.10 |  |  | $ | 26,913 |

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