Stock-Based Compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plan

Share Reserve. As of March 31, 2024, the number of shares of common stock available for issuance under the 2021 Plan equaled the sum of 14,662,500 shares, plus up to approximately 13,719,000 shares subject to awards granted under the 2011 Plan that expire, forfeit or are repurchased following the effective date of the 2021 Plan. In addition, the 2021 Plan includes an evergreen provision from which the number of shares reserved for issuance under the 2021 Plan will be increased automatically on the first business day of each of the Company’s fiscal years and ending on January 1, 2031, by a number equal to the lowest of (i) 4,784,100 shares, (ii) 5% of the shares of Class A common stock outstanding on the last business day of the prior fiscal year; or (iii) the number of shares determined by the Board of Directors. Pursuant to this evergreen provision, the Company increased the number of shares reserved under the 2021 Plan by 1,957,530 and 809,916 shares of Class A common stock during three months ended March 31, 2024 and the year ended December 31, 2023, respectively. In July 2023, the Company increased the number of shares reserved under the 2021 Plan by 8,292,158 shares of Class A common stock pursuant to the amendment and restatement of the 2021 Plan adopted by the Company’s board of directors and approved by the stockholders.

In general, to the extent that any awards under the 2021 Plan are forfeited, terminate, expire or lapse without the issuance of shares, or if the Company reacquires the shares subject to awards granted under the 2021 Plan, those shares will again become available for issuance under the 2021 Plan, as will shares applied to pay the exercise or purchase price of an award or to satisfy tax withholding obligations related to any award.

Restricted Stock Units

Restricted stock units (“RSUs”) granted under the 2021 Plan generally vest based on continued service up to a four-year period for employees, and over a one year period for non-employee directors.

RSU activity for the three months ended March 31, 2024 was as follows:


	Shares	Weighted-average grant date fair value per share
Unvested balance as of December 31, 2023	5,256,833	$	5.63
Granted	455,028	$	10.71
Vested	(889,687)	$	7.76
Forfeited	(133,826)	$	5.45
Unvested balance as of March 31, 2024	4,688,348	$	5.72

The weighted-average grant-date fair value of 989,283 RSUs granted during the three months ended March 31, 2023 was $5.97. The fair value as of the respective vesting dates of RSUs was $10.5 million and $3.8 million during the three months ended March 31, 2024 and 2023, respectively.

A summary of equity award activity under the Company’s equity plans and related information is as follows (in thousands, except share, price and year data):


	Shares available for grant	Outstanding stock options	Weighted- average exercise Price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value
Balance as of December 31, 2023	7,400,180	9,307,142	$	6.41	5.57	$	31,250
Shares authorized	1,957,530
Options granted	—	—	—
Options exercised	—	(1,429,482)	3.00
Options canceled	97,472	(97,472)	13.88
RSU awards granted, net of forfeitures	(321,202)	—

Balance as of March 31, 2024	9,133,980	7,780,188	$	6.94	5.70	$	40,146
Vested and exercisable as of March 31, 2024		6,597,145	$	5.86	5.42	$	37,793

The intrinsic value of options exercised for the three months ended March 31, 2024 and 2023 was $9.9 million and $2.1 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock at the time of exercise. The aggregate grant-date fair value of options vested was $1.8 million and $2.3 million during the three months ended March 31, 2024 and 2023, respectively.

ESPP

As of December 31, 2022, the ESPP reserved and authorized the issuance of up to a total of 1,564,496 shares of Class A common stock to participating employees. Pursuant to its evergreen provision, the Company increased the number of shares reserved under the ESPP by 783,012 and 667,874 during the three months ended March 31, 2024 and 2023, respectively.

The Company recorded stock-based compensation expense under this plan of $0.3 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively, of which the Company capitalized $0.2 million for each of the three months ended March 31, 2024 and 2023, respectively, of stock-based compensation expense under this plan for the development of internal-use software.

As of March 31, 2024, the total unrecognized stock-based compensation expense related to the ESPP was $1.2 million and is expected to be recognized over a weighted average period of one year, of which $0.5 million is related to incremental modification expense. As of March 31, 2024, $1.3 million had been withheld on behalf of employees, respectively.

The Company did not grant stock purchase rights under the ESPP during the three months ended March 31, 2024 and 2023, respectively.

Stock-Based Compensation Expense

Stock-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended March 31,
	2024		2023
Cost of revenue	$	386	$	416
Research and development	2,108		2,133
Sales and marketing	1,822		2,152
General and administrative	1,213		1,127
Total stock-based compensation expense	$	5,529	$	5,828

During each of three months ended March 31, 2024 and 2023, the Company capitalized $1.0 million, respectively, of stock-based compensation for the development of internal-use software. As of March 31, 2024, total compensation cost related to stock options and RSUs not yet vested was $8.3 million and $24.3 million, respectively, which will be recognized over a weighted-average period of 1.2 and 2.0 years for stock options and RSUs, respectively.

Bonus Plan

During March 2022, the Company’s Compensation Committee approved a new bonus structure (“Bonus Plan”) for its employees. The Bonus Plan is contingent upon the achievement of annual corporate performance targets. In each respective calendar year, the Company accrues for the Bonus Plan. The actual payout amount is determined by the Company’s Compensation Committee based on the actual achievement with respect to the annual performance targets and paid in the subsequent year in the variable number of RSUs equal to the payout amount. These RSUs are subject to performance and service condition vesting requirements, beginning from the grant date to the payout date. Participants must remain employed with the Company through the date of payout to maintain eligibility under the Bonus Plan.

Pursuant to the Bonus Plan, during February 2023 the Company’s Compensation Committee approved the issuance of approximately 288,000 RSUs that immediately vested based on actual performance against the performance targets for 2022.

During February 2023, the Company’s Board of Directors approved 2023 corporate performance targets under its Bonus Plan for its employees. During February 2024, the Company’s Compensation Committee approved the issuance of approximately 296,000 RSUs that immediately vested based on actual performance against the performance targets for 2023.

During February 2024, the Company’s Board of Directors approved annual corporate performance targets under its Bonus Plan for 2024 for its employees. As of March 31, 2024, the accrued bonus balance is $0.3 million, reported as a component of accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Pursuant to the Bonus Plan, the Company recognized $0.8 million and $0.6 million in stock-based compensation during the three months ended March 31, 2024 and 2023, respectively, of which the Company capitalized $0.1 million of stock-based compensation expense under this plan for the development of internal-use software during both the three months ended March 31, 2024 and 2023, respectively.