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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 Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cost of revenue | $ | 62 |  |  | $ | 66 |  |  | $ | 231 |  |  | $ | 311 |
Selling and marketing expense | 713 |  |  | 1,127 |  |  | 2,566 |  |  | 4,207 |
General and administrative expense | 5,029 |  |  | 5,828 |  |  | 15,802 |  |  | 19,721 |
Product development | 1,055 |  |  | 1,571 |  |  | 3,486 |  |  | 4,760 |
Restructuring and severance | — |  |  | 1,262 |  |  | — |  |  | 2,328 |
Total non-cash compensation | $ | 6,859 |  |  | $ | 9,854 |  |  | $ | 22,085 |  |  | $ | 31,327 |
Stock Options A summary of changes in outstanding stock options is as follows:
| Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value(a)
|  |  | (per option) |  | (in years) |  | (in thousands)
Options outstanding at January 1, 2024 | 734,775 |  |  | $ | 150.74 |  |  |  |  |
Granted | — |  |  | — |  |  |  |  |
Exercised | (257,155) |  |  | 26.00 |  |  |  |  |
Forfeited | (2,798) |  |  | 113.27 |  |  |  |  |
Expired | (98,876) |  |  | 193.70 |  |  |  |  |
Options outstanding at September 30, 2024 | 375,946 |  |  | 225.04 |  |  | 5.79 |  | $ | 151 |
Options exercisable at September 30, 2024 | 289,625 |  |  | $ | 217.78 |  |  | 5.58 |  | $ | 151 |
(a)The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $58.03 on the last trading day of the quarter ended September 30, 2024 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on September 30, 2024. The intrinsic value changes based on the market value of the Company's common stock. Stock Options with Market Conditions A summary of changes in outstanding stock options with market conditions at target is as follows:
| Number of Options with Market Conditions |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value(a)
|  |  | (per option) |  | (in years) |  | (in thousands)
Options outstanding at January 1, 2024 | 718,438 |  |  | $ | 229.02 |  |  |  |  |
Granted | — |  |  | — |  |  |  |  |
Exercised | — |  |  | — |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Expired | (19,126) |  |  | 275.82 |  |  |  |  |
Options outstanding at September 30, 2024 | 699,312 |  |  | 227.74 |  |  | 3.89 |  | $ | — |
Options exercisable at September 30, 2024 | 481,669 |  |  | $ | 195.10 |  |  | 2.85 |  | $ | — |
(a)The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $58.03 on the last trading day of the quarter ended September 30, 2024 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on September 30, 2024. The intrinsic value changes based on the market value of the Company's common stock. As of September 30, 2024, a maximum of 363,464 shares may be earned for achieving superior performance up to 167% of the remaining unvested target number of shares. As of September 30, 2024, no additional performance-based nonqualified stock options with a market condition had been earned. Restricted Stock Units A summary of changes in outstanding nonvested restricted stock units (“RSUs”) is as follows:
| RSUs
| Number of Units |  | Weighted Average Grant Date Fair Value
|  |  | (per unit)
Nonvested at January 1, 2024 | 471,593 |  |  | $ | 66.42 |
Granted | 434,665 |  |  | 40.71 |
Vested | (249,581) |  |  | 73.88 |
Forfeited | (80,258) |  |  | 45.20 |
Nonvested at September 30, 2024 | 576,419 |  |  | $ | 46.76 |
Restricted Stock Units with Market Conditions A summary of changes in outstanding nonvested RSUs with performance conditions is as follows:
| RSUs with Market Conditions (a)
| Number of Units |  | Weighted Average Grant Date Fair Value
|  |  | (per unit)
Nonvested at January 1, 2024 | — |  |  | $ | — |
Granted | 69,000 |  |  | 35.83 |
Vested | (23,000) |  |  | 37.02 |
Forfeited | — |  |  | — |
Nonvested at September 30, 2024 | 46,000 |  |  | $ | 35.24 |
(a)During the nine months ended September 30, 2024, the Company granted RSUs with market conditions that will vest if the Company's 45 trading day average closing stock prices equals or exceeds certain price hurdles ($41.17, $52.94 and $64.70) during the performance period of March 1, 2024 to March 1, 2028. Upon achievement of each price hurdle, one-half of the awards will vest immediately, and the other half of the awards will vest on the first anniversary of the achievement date. For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the RSUs with market conditions was estimated using the Monte Carlo simulation model, which requires the use of various key assumptions.
Expected term (1) | 5.00 years
Expected volatility (2) | 68.06 | %
Risk-free interest rate (3) | 4.13 | %
Expected dividend (4) | — |
(1)The expected term of RSUs with market conditions granted was calculated using a four-year performance period plus one year to account for the time-based vesting requirement. (2)The expected volatility rate is based on the historical volatility of the Company's common stock. (3)The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards in effect at the grant date. (4)For all RSUs with market conditions granted, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate. Employee Stock Purchase Plan In 2021, the Company implemented an employee stock purchase plan (“ESPP”), under which a total of 262,731 shares of the Company's common stock were reserved for issuance. As of September 30, 2024, 134,412 shares of common stock were available for issuance under the ESPP. The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code. Under the terms of the ESPP, eligible employees are granted options to purchase shares of the Company's common stock at 85% of the lesser of (1) the fair market value at time of grant or (2) the fair market value at time of exercise. The offering periods and purchase periods are typically six-month periods ending on June 30 and December 31 of each year. During the nine months ended September 30, 2024, 27,852 shares were issued under the ESPP. During the nine months ended September 30, 2024 and 2023, the Company granted employee stock purchase rights to certain employees with a grant date fair value per share of $12.68 and $8.53, respectively, calculated using the Black-Scholes option pricing model. For purposes of determining stock-based compensation expense, the grant date fair value per share estimated using the Black-Scholes option pricing model required the use of the following key assumptions:
| Nine Months Ended September 30,
| 2024 |  | 2023
Expected term (1) | 0.50 years |  | 0.50 years
Expected dividend (2) | — |  |  | — |
Expected volatility (3) | 78 - 82 % |  | 82 | %
Risk-free interest rate (4) | 5.28 - 5.33 % |  | 4.76 - 5.50 %
(1)The expected term was calculated using the time period between the grant date and the purchase date. (2)No dividends are expected to be paid, resulting in a zero expected dividend rate. (3)The expected volatility rate is based on the historical volatility of the Company's common stock. (4)The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the employee stock purchase rights in effect at the grant date.

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