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Stock-based compensation | 3 Months Ended
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Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-based compensation | Stock-based compensation Equity incentive plans The Company has issued equity grants from its three stock-based employee compensation plans: the 2014 Equity Incentive Plan (2014 Plan), the 2010 Equity Incentive Plan (2010 Plan), and the Employee Stock Purchase Plan (ESPP). The 2014 Plan serves as the successor to the 2010 Plan and provides for the granting of incentive and nonqualified stock options, restricted stock awards (RSAs), restricted stock units (RSUs), stock appreciation rights, stock bonus awards, and performance awards to employees, non-employee directors, and consultants. No shares have been issued under the 2010 Plan since June 2014. Options granted under the 2014 Plan generally expire within 10 years from the date of grant and generally vest over four years. Options with performance or market-based conditions are generally subject to a required service period along with the performance or market condition. RSUs granted under the 2014 Plan generally vest either annually or quarterly over three or four years based upon on continued service. The ESPP allows eligible employees to purchase shares of the Company's Class A common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. For additional information regarding the Company's equity incentive plans, please refer to the footnotes to the audited financial statements contained in its Annual Report on Form 10-K for the year ended December 31, 2014. Stock option activity A summary of the Company’s stock option activity and related information is as follows:
|  | Options outstanding
(shares in thousands) |  | Shares |  | Weighted- average exercise price |  | Weighted- average grant date fair value |  | Total intrinsic value of exercises (in thousands) |  | Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2014: |  | 25,134 |  |  | $ | 6.62 |  |  |  |  |  |  | $ | 1,425,339 |
Granted |  | 420 |  |  | 45.56 |  |  | $ | 22.47 |  |  |  |  |
Exercised |  | (4,143 | ) |  | 1.44 |  |  |  |  | $ | 203,784 |  |  |
Forfeited/Cancelled |  | (74 | ) |  | 20.91 |  |  |  |  |  |  |
Outstanding at March 31, 2015: |  | 21,337 |  |  | $ | 8.34 |  |  |  |  |  |  | $ | 756,135 |
Exercisable at March 31, 2015 |  | 14,678 |  |  | $ | 2.68 |  |  |  |  |  |  | $ | 597,831 |
Vested and expected to vest at March 31, 2015 |  | 20,966 |  |  | $ | 8.08 |  |  |  |  |  |  | $ | 748,068 |
At March 31, 2015, there was $66.3 million of unearned stock-based compensation expense related to unvested options, which is expected to be amortized over a weighted average period of 2.6 years. Restricted stock awards RSAs represent share awards of the Company’s common stock that are generally subject to repurchase at the original issuance price upon termination of services prior to vesting. These repurchase terms are considered to be a forfeiture provision and do not result in mark-to-market accounting each reporting period. At March 31, 2015, all RSAs were fully vested. A summary of the Company’s restricted stock awards is as follows:
(shares in thousands) | Shares |  | Weighted- average grant date fair value |  | Aggregate intrinsic value (in thousands)
Non-vested shares at December 31, 2014 | 17 |  |  | $ | 6.30 |  |  | $ | 1,017 |
Vested | (17 | ) |  |  |  |
Non-vested shares at March 31, 2015 | — |  |  | $ | — |  |  | $ | — |
Restricted stock units The cost of RSUs is determined using the fair value of the Company's common stock on the date of grant, and compensation is recognized on a straight-line basis over the requisite service period. The Company also has issued RSUs with both a market condition and service condition. The Company estimated the fair value of these market-based RSUs using a Monte Carlo valuation model on the date of grant. A summary of the Company’s RSU activity is as follows:
(shares in thousands) | Shares |  | Weighted- average grant date fair value
Non-vested shares at December 31, 2014 | 4,307 |  |  | $ | 21.98 |
Granted | 332 |  |  | 46.42 |
Vested | (817 | ) |  | 15.80 |
Forfeited | (8 | ) |  | 79.22 |
Non-vested shares at March 31, 2015 | 3,814 |  |  | 25.30 |
In June 2014, the Company granted a 4.5 million RSU award to the Chief Executive Officer (CEO RSUs), which included 1.5 million RSUs that vested immediately upon grant and 3.0 million RSUs that were subject to a market-based condition and a service condition. In January 2015, the market-based condition was achieved and the Company recorded stock-based compensation expense of $15.8 million during the three months ended March 31, 2015. At March 31, 2015, $20.6 million of total unearned compensation costs related to the CEO RSUs is expected to be recognized over the remaining vesting period of 2.3 years. At March 31, 2015, there was $70.3 million of unearned stock-based compensation related to RSUs (including the CEO RSUs), which is expected to be amortized over a weighted average period of 2.3 years. Employee stock purchase plan On February 13, 2015, the first purchase under the Company's ESPP was made and employees purchased an aggregate of 313,233 shares at a price of $20.40 per share. During the three months ended March 31, 2015, the Company recorded $1.1 million of stock-based compensation expense related to the ESPP. At March 31, 2015, there was $1.5 million of unearned stock-based compensation related to the Company’s ESPP, which is expected to be recognized over 0.4 years. Stock-based compensation expense The Company measures compensation expense for all stock-based payment awards, including stock options, RSUs, and purchases under the Company's ESPP, based on the estimated fair values on the date of the grant. The fair value of stock options granted and purchases under the Company's ESPP is estimated using the Black-Scholes option pricing model. There have been no significant changes in the Company’s valuation assumptions for measuring compensation expense from those disclosed in the footnotes to the audited financial statements contained in its Annual Report on Form 10-K for the year ended December 31, 2014. The following tables set forth the detailed allocation of stock-based compensation expense:
| Three months ended
(in thousands) | March 31, 2015 |  | March 31, 2014
Stock-based compensation expense: |  |  |
Cost of revenue | $ | 283 |  |  | $ | 168 |
Research and development | 3,535 |  |  | 1,401 |
Sales and marketing | 3,066 |  |  | 1,414 |
General and administrative | 19,617 |  |  | 1,054 |
Total stock-based compensation expense | 26,501 |  |  | 4,037 |
Total tax benefit recognized | (9,304 | ) |  | (342 | )
Decrease in net income | $ | 17,197 |  |  | $ | 3,695 |
Stock-based compensation expense by type of award: |  |  |
Stock options | $ | 5,957 |  |  | $ | 2,894 |
RSUs | 18,920 |  |  | 179 |
RSAs | 566 |  |  | 964 |
ESPP | 1,058 |  |  | — |
Total stock-based compensation expense | $ | 26,501 |  |  | $ | 4,037 |

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References No definition available. + Details
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