v3.22.4

Stockholders’ Equity and Equity Incentive Plans | 12 Months Ended
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Dec. 31, 2022
Equity [Abstract] |
Stockholders’ Notes Receivable, Redeemable Common Stock and Stock Option Plans | Stockholders’ Equity and Equity Incentive Plans Common Stock The Company’s board of directors has authorized 1,000,000,000 shares of Class A common stock, $0.0001 par value per share, and 1,000,000,000 shares of Class B common stock, $0.0001 par value per share. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Holders of Class A common stock are entitled to one vote and holders of Class B common stock are entitled to ten votes and is convertible into one share of Class A common stock. Each share of Class B is convertible anytime at the option of the holder into one share of Class A common stock. Once converted or transferred and converted into Class A common stock, the Class B common stock will not be reissued. Equity Incentive Plans The Company maintains the 2020 Equity Incentive Plan (“2020 Plan”), pursuant to which the Company may grant stock options, restricted stock awards, stock appreciation rights, restricted stock units (“RSUs”), deferred stock units (“DSUs”) performance awards, and stock bonus awards. As of December 31, 2022, the Company has reserved 7,280,745 shares of Class A common stock for the issuance of awards under the 2020 Plan. These available shares will increase automatically on January 1 for each of the first ten calendar years during the term of the 2020 Plan by the number of shares equal to the lesser of five percent (5%) of the aggregate number of outstanding shares of all classes of the Company’s common stock outstanding as of the immediately preceding December 31, or a number as may be determined by the Company’s board of directors or compensation committee. No new awards were issued under the Company’s prior 2006 Plan or 2017 Plan (“Prior Plans”) after the effective date of the 2020 Plan. To the extent outstanding awards under the 2006 Plan and the 2017 Plan are forfeited, expire unexercised, or would otherwise have been returned to the share reserve under the Prior Plans, the shares of Class B common stock subject to such awards instead will be available for future issuance as Class A common stock under the 2020 Plan. Stock Options Stock options granted under the Company’s stock incentive plans generally vest over four years, subject to the holder’s continued service through the vesting date and expire no later than ten years from the date of grant. The following table summarizes stock option activity and related information under the Company’s equity incentive plans:
| Options Outstanding
| Number of Shares Underlying Outstanding Options |  | Weighted-Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding — December 31, 2021 | 6,542,351 |  |  | $ | 6.08 |  |  | 6.95 |  | $ | 184,727 |
Options granted | 450,153 |  |  | 26.05 |  |  |  |  |
Options exercised | (358,418) |  |  | 3.33 |  |  |  |  |
Options canceled | (148,070) |  |  | 15.07 |  |  |  |  |
Options expired | (9,777) |  |  | 34.40 |  |  |  |  |
Outstanding — December 31, 2022 | 6,476,239 |  |  | $ | 7.38 |  |  | 6.10 |  | $ | 55,516 |
Vested and exercisable — December 31, 2022 | 5,089,579 |  |  | $ | 4.93 |  |  | 5.58 |  | $ | 48,635 |
The aggregate intrinsic value represents the difference between the exercise price of the options and the fair market value of our common stock on the date of exercise. The intrinsic value of options exercised was $6.4 million, $80.7 million and $15.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, unrecognized stock-based compensation of $14.1 million related to unvested stock options will be recognized on a straight-line basis over a weighted average period of 2.15 years. The fair value of stock options granted under the Company’s equity incentive plans was estimated using the following assumptions:
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Fair market value of common stock | $18.63-$31.79 |  | $39.75-$54.07 |  | $3.20-$17.00
Expected term (in years) | 5.0-7.0 |  | 5.8-6.7 |  | 5.7-6.4
Risk-free interest rate | 1.8%-3.4% |  | 0.6%-1.0% |  | 0.3%-1.5%
Expected volatility | 54%-57% |  | 51%-54% |  | 50%-55%
Dividend rate | —% |  | —% |  | —%
Weighted-average grant date fair value of options granted | $13.70 |  | $20.30 |  | $4.96
Each of these inputs is subjective and generally requires significant judgment to determine. These assumptions and estimates were determined as follows: Fair Value of Common Stock - Prior to the Company’s IPO in 2020, the fair value was determined by the board of directors, with input from management and valuation reports prepared by third-party valuation specialists. Subsequent to the Company’s IPO, the fair value of each share of underlying common stock was based on the closing price of the Company’s Class A common stock as reported on the date of the grant. Expected Term - The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. For other option grants, the Company estimates expected term using historical data on employee exercises and post-vesting employment termination behavior taking into account the contractual life of the award. Risk-Free Interest Rate - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term. Expected Volatility - Since the Company has a short trading history of its common stock, the expected volatility is derived from the average historical stock volatilities of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the stock option grants. Dividend Rate - The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to do so. Restricted Stock Units RSU awards generally vest over four years, subject to the holder’s continued service through the vesting date. The following table summarizes RSU activity and related information under the Company’s 2020 Plan:
| RSUs
| Number of Shares |  | Weighted-Average Grant Date Fair Value per Share |  | Aggregate Intrinsic Value (in thousands)
Unvested — December 31, 2021 | 483,302 |  |  | $ | 35.23 |  |  | $ | 17,025 |
Granted | 1,587,930 |  |  | 25.01 |  |  | — |
Vested | (308,433) |  |  | 30.76 |  |  | — |
Canceled/Forfeited | (180,817) |  |  | 29.51 |  |  | — |
Unvested — December 31, 2022 | 1,581,982 |  |  | $ | 26.49 |  |  | $ | 20,264 |
As of December 31, 2022, unrecognized stock-based compensation of $37.8 million related to unvested RSUs will be recognized on a straight-line basis over a weighted average period of 2.96 years. 2020 Employee Stock Purchase Plan In November 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective in connection with the Company’s IPO. A total of 500,000 shares of the Company’s Class A common stock were initially reserved for issuance under the ESPP. The aggregate number of shares reserved for issuance under the ESPP will increase automatically on January 1st of each of the first ten calendar years during the term of the ESPP by the number of shares equal to the lesser of (a) 1% of the total outstanding shares of all classes of the Company’s common stock as of the immediately preceding December 31 and (b) such number of shares of common stock as determined by the Company’s board of directors. The aggregate number of shares issued over the term of the ESPP may not exceed 7,500,000 shares of Class A common stock. As of December 31, 2022, the Company has reserved 529,888 shares of its common stock for issuance under the ESPP. Under the ESPP, Class A common stock will be purchased for the accounts of employees participating in the ESPP on each purchase date at a price per share equal to 85% of the lesser of: (a) the fair market value on the offering date or (b) the fair market value on the purchase date. The ESPP provides for, at maximum, 27 month offering periods and each offering period may consist of one or more six-month purchase periods, whereby the latest offering period commenced on June 1, 2022, and the offering periods thereafter consist of two six-month purchase periods ending May 31, 2023. As of December 31, 2022, $0.1 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions and is included in accrued liabilities. For the twelve months ended December 31, 2022, 183,587 shares of our Class A common stock have been purchased under the ESPP. As of December 31, 2022, unrecognized stock-based compensation expense related to the ESPP was $0.4 million, which is expected to be recognized over a weighted-average period of 0.41 years. The fair value of purchase right granted the under the Company’s 2020 Employee Stock Purchase Plan was estimated using the following assumptions:
| Year Ended December 31,
| 2022 |  | 2021
Expected term (in years) | 0.5-1.0 |  | 0.4-1.4
Risk-free interest rate | 1.6%-2.2% |  | 0.1%
Expected volatility | 83%-79% |  | 60%-76%
Dividend rate | —% |  | —%
Expected Term - The expected term of the ESPP represents the period of time that purchase rights are expected to be outstanding. Risk-Free Interest Rate - The risk-free interest rate for the expected term of the awards was based on the U.S. Treasury yield curve in effect at the time of the grant. Expected Volatility - Since the Company has a short trading history of its common stock, the expected volatility was estimated by taking the average historic price volatility of several unrelated public companies within the Company’s industry that the Company considers to be comparable to its business over a period equivalent to the expected term of the awards. Dividend rate - The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. As a result, an expected dividend yield of zero percent was used. Stock-Based Compensation Total stock-based compensation expense recognized in the consolidated statements of operations was as follows (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Cost of revenue | $ | 1,135 |  |  | $ | 825 |  |  | $ | 86 |
Technology and development | 3,225 |  |  | 2,232 |  |  | 599 |
Sales and marketing | 7,645 |  |  | 5,176 |  |  | 1,101 |
General and administrative | 8,641 |  |  | 5,874 |  |  | 1,777 |
Total stock-based compensation expense | 20,646 |  |  | 14,107 |  |  | 3,563 |
Tax benefit from stock-based compensation | (3,537) |  |  | (1,825) |  |  | (493) |
Total stock-based compensation expense, net of tax effect | $ | 17,109 |  |  | $ | 12,282 |  |  | $ | 3,070 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 6 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008 + Details
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