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STOCK INCENTIVE PLANS | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK INCENTIVE PLANS | STOCK INCENTIVE PLANS 2009 and 2019 Stock Plans In 2009, the Board of Directors approved the 2009 Stock Plan ("2009 Stock Plan"). As amended in 2015, the 2009 Stock Plan permitted the Company to grant up to 16,495,150 shares of common stock. In January 2018, the Company increased the number of shares of common stock reserved under the 2009 Stock Plan by 535,130 shares to 17,030,280 shares. In April 2019, the Board of Directors approved the adoption of the 2019 Stock Plan ("2019 Stock Plan", and together with the 2009 Stock Plan, "Stock Plans"). The 2019 Stock Plan permitted the Company to grant up to 8,173,970 additional shares, increasing the overall common stock reserved for grant under the Stock Plans to 25,204,250 shares. In September 2021, under the 2019 Stock Plan, the Board of Directors approved the grant of 8,679,380 restricted stock units under the 2019 Stock Plan, which consisted of an aggregate of 4,339,690 shares of each of Class A and LT50 common stock effective immediately prior to the effectiveness of the Company's IPO Registration Statement. On November 9, 2021, the Board of Directors amended and restated the 2019 Stock Plan to, among other things, increase the common stock reserved for issuance under the 2019 Stock Plan to an aggregate of 16,856,770 shares of Class A and LT50 common stock. The Stock Plans will continue to govern the terms and conditions of the outstanding awards granted under the Stock Plans. Upon the expiration, forfeiture, cancellation, withholding of shares upon exercise or settlement of an award to satisfy the exercise price or tax withholding, or repurchase of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2009 Stock Plan or of Class A or LT50 common stock underlying outstanding stock-based awards granted under the 2019 Stock Plan, an equal number of shares of Class A common stock will become available for grant under the 2021 Incentive Award Plan ("2021 Plan") and the Company's Stock Purchase and Matching Plan ("Matching Plan" and together with the 2021 Plan, "2021 Incentive Plans"). 2021 Incentive Plans In November 2021, the Company's Board of Directors adopted, and its stockholders approved, the 2021 Incentive Plans, which both became effective immediately before the effectiveness of the IPO Registration Statement and use a combined share reserve. Under the 2021 Incentive Plans, 11,676,932 shares of Class A common stock were initially reserved for issuance pursuant to a variety of stock-based awards, including incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units ("RSUs") and other forms of equity and cash compensation under the 2021 Plan and purchase rights and matching awards under the Matching Plan. The number of shares initially reserved for issuance or transfer pursuant to awards under the 2021 Incentive Plans will be increased upon the expiration, forfeiture, cancellation, withholding of shares upon exercise or settlement of an award to satisfy the exercise price or tax withholding, or repurchase of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2009 Stock Plan or of Class A or LT50 common stock underlying outstanding stock-based awards granted under the 2019 Stock Plan. The number of shares of Class A common stock reserved and available for issuance under the 2021 Incentive Plans as of December 31, 2024 and 2023 was 20,879,081 shares and 19,712,910 shares, respectively. The number of shares reserved for issuance under the 2021 Incentive Plans will automatically increase each subsequent January 1 through January 1, 2031, by the lesser of (A) 6% of the aggregate number of shares of all classes of common stock outstanding on the immediately preceding calendar year, or (B) such lesser number of shares as determined by the Company’s Board of Directors or compensation committee; provided, however, that no more than 87,576,990 shares of Class A common stock may be issued upon the exercise of incentive stock options. Stock Purchase and Matching Plan The Matching Plan operates using consecutive three-month offering periods that commenced on March 15, 2022. Service Providers of the Company can participate in the Matching Plan by electing to contribute compensation through deductions from payroll or fee payments, or by receiving discretionary awards under the plan. On the last day of the offering period, the contributions made during the offering period are used to purchase shares of Class A common stock. The price at which Class A common stock is purchased under the Matching Plan equals the average of the high and low trading price of a share of Class A common stock as of the last trading day of the offering period. At the end of each offering period, the Company may provide a discretionary match up to 1/10 of a share of Class A common stock for each share of Class A common stock purchased by or issued to a service provider under the Matching Plan that is retained through the end of the applicable offering period. No fractional shares will be issued by the Company. The Company will round to the nearest full share for shares purchased or matched shares issued to a Service Provider under the Matching Plan. The match rate applicable to each offering period shall be limited to 1.50% of the shares of any class of capital stock outstanding as of the exercise date applicable to such offering period. The Company estimates the fair value of matched shares provided under the Matching Plan using the closing stock price on the date of grant. The Company recognizes stock-based compensation expense related to the matched shares pursuant to its Matching Plan on a straight-line basis over the applicable three-month offering period. Service Providers who participated in the Matching Plan during 2024 purchased a total of 1,922,139 in Class A common shares, based on an average purchase price of $2.13, resulting in gross cash proceeds to the Company of $4.1 million. Service Providers who participated in the Matching Plan during 2023 purchased a total of 1,010,412 in Class A common shares, based on an average purchase price of $4.21, resulting in gross cash proceeds to the Company of $4.3 million. Service Providers who participated in the Matching Plan during 2022 purchased a total of 272,196 in Class A common shares, based on an average purchase price of $13.49, resulting in gross cash proceeds to the Company of $3.7 million. The Company has historically elected to match each share of Class A common stock purchased or issued under the Matching Plan with 1/20 of a share of Class A common stock. During 2024, the Company granted a total of 638,850 shares of Class A common stock under the Matching Plan with no shares withheld for taxes. During 2023, the Company granted 147,109 shares of Class A common stock under the Matching Plan, net of 15,871 shares withheld for taxes. During 2022, the Company granted 22,201 shares of Class A common stock under the Matching Plan. The Company has made discretionary contributions under the Matching Plan to eligible Service Providers. During 2024, the Company granted a total of 1,523,525 shares of Class A common stock as discretionary contributions under the Matching Plan with no shares withheld for taxes. During 2023, the Company granted a total of 1,050,969 shares of Class A common stock as discretionary contributions under the Matching Plan with 64,411 shares withheld for taxes. There were no discretionary contributions under the Matching Plan during the year ended December 31, 2022. Restricted Stock Units The 2019 Stock Plan and the 2021 Plan authorize the grant of RSUs. In September 2021, under the 2019 Stock Plan, the Company's Board of Directors approved and authorized 8,679,380 restricted stock units to be granted, which consisted of an aggregate of 4,339,690 shares each of Class A and LT50 common stock effective as of immediately prior to the effectiveness of the Company's IPO Registration Statement. Of this total, 2,980,260 RSUs, comprised of 1,490,130 shares of each of Class A and LT50 common stock were considered granted for accounting purposes in September 2021 to the Company's named executive officers and certain members of management as the Company and these certain Service Providers had a mutual understanding of the key terms and conditions of the award on the board approval date, which occurred on September 24, 2021. RSUs granted to Service Providers in September 2021 vest upon the satisfaction of both a performance and service condition. The performance condition was satisfied immediately prior to the effectiveness of the IPO Registration Statement. The service condition for these awards is satisfied over eight years with a cliff vest for 1/8 of the grant on September 15, 2022 and quarterly vesting of 1/32 of the grant every December 15, March 15, June 15 and September 15 thereafter until fully vested. All remaining stock-based compensation for these awards will be recognized over the remaining service period using the accelerated graded method. In November 2021, the Company granted 5,666,260 RSUs, comprised of 2,833,130 shares of each of Class A common stock and LT50 common stock, to certain Service Providers that were not included in the September RSU grant. These RSUs only have a service condition, which is equivalent with the service condition of the awards granted in September 2021, and were deemed granted for accounting purposes on November 10, 2021, the date these certain Service Providers had a mutual understanding of the key terms and conditions of the award. On March 28, 2022, the Company granted a Service Provider 43,060 Class A common stock RSUs at a grant date fair value of $18.93 per share. These RSUs only have a service condition, which is satisfied over approximately eight years with a cliff vest for 1/8 of the grant on September 15, 2022 and quarterly vesting of 1/32 of the grant every December 15, March 15, June 15 and September 15 thereafter until fully vested. On December 2, 2024 the Company granted Service Providers 400,675 RSUs, net of 159,841 shares withheld for taxes, comprised fully of Class A common stock at a grant date fair value of $3.40 per share. These RSUs have no future service requirement and were fully vested on the grant date. Pursuant to the Company's Non-Employee Director Compensation Program, which was adopted under the 2021 Incentive Plans, the Company granted 230,064 Class A common stock RSUs during the year ended December 31, 2024. A total of 64,992 Class A common stock RSUs vested during the year ended December 31, 2024 related to previously-granted RSU awards as the quarterly service conditions were satisfied. The Company granted 27,780 Class A common stock RSUs to members of the Company's Audit Committee during November 2021 in connection with each member's initial appointment to the Board of Directors and the consummation of the IPO. For accounting purposes, the grant date was considered to be November 12, 2021, as this was the date the Company filed its final prospectus pursuant to Rule 424(b)(4) related to the pricing of the IPO. The IPO price was a key determination of the number of RSUs awarded to members of the Audit Committee and therefore on this date the Company and each Audit Committee member had a mutual understanding of the key terms and conditions of the awards granted. The RSUs granted were fully vested as of December 31, 2024 upon satisfaction of the three year service condition. During the year ended December 31, 2024, RSU activity was as follows:
| Class A Common Stock |  | LT50 Common Stock |  | Weighted average grant date fair value per share
Outstanding at December 31, 2023 | 2,742,273 |  |  | 2,646,332 |  |  | $ | 32.59 |
RSUs granted | 790,580 |  |  | — |  |  | $ | 2.82 |
RSUs vested | (1,036,347) |  |  | (405,457) |  |  | $ | 20.15 |
RSUs cancelled/forfeited/expired | (346,405) |  |  | (346,405) |  |  | $ | 38.38 |
Outstanding at December 31, 2024 | 2,150,101 |  |  | 1,894,470 |  |  | $ | 30.21 |
The fair value of RSUs vested during the years ended December 31, 2024, 2023 and 2022, was $3.9 million, $5.1 million, and $19.1 million, respectively. The weighted average grant date fair value per share of RSUs granted during the years ended December 31, 2024, 2023 and 2022, was $2.82, $8.17, and $18.21, respectively. As of December 31, 2024, there was $100.6 million of unamortized stock-based compensation cost related to unvested RSUs, which is expected to be recognized over the remaining weighted average life of 4.47 years. Stock Options The Stock Plans and the 2021 Plan provide for the grant of incentive and nonstatutory stock options to employees, non-employee directors and consultants of the Company. Under the Stock Plans and the 2021 Plan, the exercise price of incentive stock options must be equal to at least 110% of the fair market value of the common stock on the grant date for a “ten-percent holder” or 100% of the fair market value of the common stock on the grant date for any other participant. The exercise price of nonstatutory options granted must be equal to at least 100% of the fair market value of the Company’s common stock on the date of grant. The Company has only granted options under the Stock Plans. Options typically vest over four years and are exercisable at any time after the grant date, provided that Service Providers exercising unvested options receive restricted common stock that is subject to repurchase at the original exercise price upon termination of service. The repurchase right lapses in accordance with the vesting schedule of the exercised option. Early exercises of options prior to vesting are not deemed to be substantive exercises for accounting purposes and accordingly, amounts received for early exercises of unvested options are recorded as a liability. These repurchase terms are considered to be a forfeiture provision and do not result in variable accounting. During each of the years ended December 31, 2024, 2023 and 2022, the Company repurchased an immaterial amount of exercised restricted common stock. As of December 31, 2024 and 2023, there were 92,230 and 393,251 shares subject to repurchase, respectively, related to unvested stock options that had been early exercised. As of December 31, 2024 and 2023, the Company recorded a liability related to shares subject to repurchase of $0.1 million and $0.6 million, respectively, which is included within Accrued expenses and other liabilities in the accompanying Consolidated Balance Sheets. These amounts are reclassified to common stock and additional paid in capital as the underlying shares vest. A summary of the Company's stock option activity was as follows:
| Shares |  | Weighted average exercise price per share |  | Weighted average remaining contractual life (in years)
Outstanding at December 31, 2023 | 5,902,591 |  |  | $ | 1.68 |  |  | 4.03
Options exercised | (2,014,063) |  |  | $ | 0.38 |  |  |
Options cancelled/forfeited/expired | (128,948) |  |  | $ | 3.12 |  |  |
Outstanding at December 31, 2024 | 3,759,580 |  |  | $ | 2.29 |  |  | 4.11
Exercisable at December 31, 2024 | 3,744,480 |  |  | $ | 2.28 |  |  | 4.11
The to tal pretax intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was $5.6 million, $1.3 million and $10.9 million, respectively. The total pretax intrinsic value of options outstanding and exercisable at December 31, 2024 and 2023, was $7.4 million and $8.9 million, respectively. The intrinsic value is the difference between the estimated fair market value of the Company’s common stock at the date of exercise and the exercise price for in-the-money options. No options were granted during the years ended December 31, 2024, 2023 and 2022. The total grant date fair value of options vested during the years ended December 31, 2024, 2023 and 2022, was $2.8 million, $3.4 million, and $3.9 million, respectively. As of December 31, 2024, there was $1.0 million of unrecognized stock-based compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 0.30 years. Cash received from option exercises and purchases of shares under the Stock Plans for the years ended December 31, 2024, 2023 and 2022 was $0.4 million, $0.3 million and $0.8 million, re spectively. During the year ended December 31, 2024, 98,403 shares were withheld for the cashless exercise of stock options. During the years ended December 31, 2023 and 2022, t here were no cashless exercises of stock options. Stock-Based Compensation The following table summarizes the stock-based compensation expense recognized for awards granted under the Company's authorized stock incentive plans (in thousands):
| Year ended December 31, |
| 2024 |  | 2023 |  | 2022 |
Matching Plan shares | $ | 4,835 |  |  | $ | 5,260 |  |  | $ | 67 |  |
Restricted stock units | 28,426 |  |  | 35,669 |  |  | 50,134 |  |
Stock options | 2,964 |  |  | 3,409 |  |  | 3,888 |  |
Total stock-based compensation | 36,225 |  |  | 44,338 |  |  | 54,089 |  |
Less: stock-based compensation capitalized as software development costs | (2,688) |  |  | (3,126) |  |  | (1,757) |  |
Total stock-based compensation expense | $ | 33,537 |  |  | $ | 41,212 |  |  | $ | 52,332 |  |
Stock-based compensation expense is allocated based on the cost center to which the award holder spent time during the reported periods. Stock-based compensation is included in the following components of expenses on the accompanying Consolidated Statements of Operations (in thousands):
| Year ended December 31,
| 2024 |  | 2023 |  | 2022
Cost of revenue, net | $ | 12,506 |  |  | $ | 13,868 |  |  | $ | 18,403 |
Research and development | 11,900 |  |  | 10,870 |  |  | 7,875 |
General and administrative | 6,815 |  |  | 9,842 |  |  | 17,850 |
Sales and marketing | 2,316 |  |  | 6,632 |  |  | 8,204 |
Total stock-based compensation expense | $ | 33,537 |  |  | $ | 41,212 |  |  | $ | 52,332 |
For RSUs granted to members of the Audit Committee, the Company records all stock-based compensation expense on a straight line basis over the requisite service period from the day of grant, which is considered one year for annual grants and three years for the initial RSUs granted to members of the Audit Committee. During the years ended December 31, 2024, 2023 and 2022, total stock-based compensation recorded by the Company related to members of the Audit Committee was $0.8 million, $0.8 million and $0.6 million, respectively.

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