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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Our board of directors has adopted and our stockholders have approved our 2018 Equity Incentive Plan ("2018 Plan"). Our 2018 Plan became effective on February 8, 2018, the date our registration statement in connection with our initial public offering ("IPO") was declared effective. We do not expect to grant any additional awards under our 2008 Stock Plan ("2008 Plan"). Any awards granted under the 2008 Plan will remain subject to the terms of our 2008 Plan and applicable award agreements. Initially, the aggregate number of shares of our common stock that may be issued pursuant to stock awards under the 2018 Plan is the sum of (i) 1,875,000 shares plus (ii) 61,247 shares reserved, and remaining available for issuance, under our 2008 Plan at the time our 2018 Plan became effective and (iii) the number of shares subject to stock options or other stock awards granted under our 2008 Plan that would have otherwise returned to our 2008 Plan (such as upon the expiration or termination of a stock award prior to vesting). The number of shares of our common stock reserved for issuance under our 2018 Plan will automatically increase on January 1 of each year, beginning on January 1, 2019 and continuing through and including January 1, 2028, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors. Accordingly, in January 2019, the number of shares of our common stock reserved for issuance under our 2018 Plan automatically increased by 1,123,312 shares, representing 5% of the total number of shares of our capital stock outstanding on December 31, 2018. The following table summarizes the allocation of stock-based compensation in the consolidated statements of operations (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2018 |  | 2019 |  | 2018 |  | 2019
Delivery costs | $ | 203 |  |  | $ | 176 |  |  | $ | 471 |  |  | $ | 539 |
Sales and marketing expense | 1,939 |  |  | 1,432 |  |  | 5,550 |  |  | 3,091 |
Research and development expense | 915 |  |  | 638 |  |  | 3,141 |  |  | 1,204 |
General and administration expense | 2,666 |  |  | 5,240 |  |  | 7,806 |  |  | 7,432 |
Total stock-based compensation expense | $ | 5,723 |  |  | $ | 7,486 |  |  | $ | 16,968 |  |  | $ | 12,266 |
During each of the nine months ended September 30, 2018 and 2019, we capitalized less than $0.1 million of stock-based compensation expense for software development. Common Stock Options Options to purchase shares of common stock generally vest over four years and expire 10 years following the date of grant. A summary of common stock option activity is as follows:
| Shares (in thousands) |  | Weighted-Average Exercise Price |  | Weighted Average Remaining Vesting Period (in years) |  | Aggregate Intrinsic Value(1) (in thousands)
Options outstanding — December 31, 2018 | 1,774 |  |  | $ | 20.55 |  |  | 2.01 |  | $ | 1,214 |
Granted | 39 |  |  | 20.64 |  |  |  |  |
Exercised | (215 | ) |  | 13.25 |  |  |  |  |
Forfeited | (28 | ) |  | 23.82 |  |  |  |  |
Canceled | (65 | ) |  | 22.36 |  |  |  |  |
Options outstanding — September 30, 2019 | 1,505 |  |  | 21.46 |  |  | 1.33 |  | $ | 18,871 |
Exercisable — September 30, 2019 | 1,195 |  |  | $ | 20.70 |  |  |  |  |
(1) | The aggregate intrinsic value represents the total pre-tax intrinsic value based on the $10.83 and $33.52 per share closing price of our common stock as reported on the Nasdaq Global Market on December 31, 2018 and September 30, 2019, respectively, that would have been received by option holders had all in-the-money options been exercised on that date.
The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2018 and 2019 was $10.00 and $0.47 per share, respectively. The total fair value of options vested during the nine months ended September 30, 2018 and 2019 was approximately $5.0 million and $3.2 million, respectively. As of September 30, 2019, unamortized stock-based compensation expense related to unvested common stock options was $3.6 million, and the weighted-average period over which such stock-based compensation expense will be recognized was 1.3 years. Restricted Stock Units We grant restricted stock units ("RSUs") to employees and our non-employee directors. A summary of RSU activity, inclusive of performance-based RSUs, is as follows:
| Shares (in thousands) |  | Weighted-Average Grant Date Fair Value |  | Weighted-Average Remaining Vesting Period (in years) |  | Unamortized Compensation Costs (in thousands)
Unvested — December 31, 2018 | 381 |  |  | $ | 18.11 |  |  | 2.42 |  | $ | 4,536 |
Granted | 1,792 |  |  | 15.86 |  |  |  |  |
Vested(1) | (324 | ) |  | 14.65 |  |  |  |  |
Forfeited | (112 | ) |  | 19.02 |  |  |  |  |
Unvested — September 30, 2019 | 1,737 |  |  | $ | 16.38 |  |  | 3.06 |  | $ | 21,519 |
(1) | Includes 160 RSUs that have vested but have not been settled.
During the nine months ended September 30, 2019, we granted 539,523 RSUs, exclusive of performance-based RSUs, to employees and non-employee directors, which have annual vesting periods ranging from one to four years. Subsequent to September 30, 2019, we granted 186,309 RSUs to employees. The unamortized stock-based compensation expense related to these RSUs is $6.8 million. Performance-based RSUs In February 2018, we granted 875,000 performance-based restricted stock units ("2018 PSUs"). We recognized $6.9 million in stock-based compensation expense during the nine months ended September 30, 2018. The performance targets were achieved during the fourth quarter of 2018, resulting in the issuance of 850,000 shares of our common stock to fully settle the 2018 PSUs. During 2018, 25,000 of the 2018 PSUs were forfeited prior to the performance targets being reached. In April 2019, we granted 1,252,500 performance-based restricted stock units (“2019 PSUs”). The 2019 PSUs are composed of four equal tranches, each of which have an independent performance-based vesting condition. The vesting criteria for the four tranches are as follows:
• | a minimum growth rate in adjusted contribution over a trailing 12-month period,
• | a minimum number of advertisers that are billed above a specified amount over a trailing 12-month period,
• | a minimum cumulative adjusted EBITDA target over a trailing 12-month period, and
• | a minimum trailing 30-day average closing price of our common stock.
The vesting conditions of each of the four tranches must be achieved within four years of the grant date. Upon a vesting event, 50% of the related tranche vests immediately, 25% of the related tranche vests six months after achievement date and 25% of the related tranche vests 12 months after the achievement date. Adjusted EBITDA and adjusted contribution are performance metrics defined within Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations." In August 2019, the Compensation Committee of our Board of Directors certified that the target minimum trailing 30-day average closing price of our common stock was achieved resulting in the immediate vesting of 50% of the related PSU tranche. Employee Stock Purchase Plan Our 2018 Employee Stock Purchase Plan ("2018 ESPP") enables eligible employees to purchase shares of our common stock at a discount. Purchases are accomplished through participation in discrete offering periods. On each purchase date, participating employees purchase our common stock at a price per share equal to 85% of the lesser of the fair market value of our common stock on the first trading day of the offering period or the date of purchase. During the nine months ended September 30, 2019, 93,584 shares of common stock were purchased by employees under the 2018 ESPP. Initially, the aggregate number of shares of our common stock that may be issued pursuant to our 2018 ESPP was 375,000 shares. Additionally, the number of shares of our common stock reserved for issuance under our 2018 ESPP will automatically increase on January 1 of each year, beginning on January 1, 2019 and continuing through and including January 1, 2026, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, (ii) 500,000 shares of our common stock or (iii) such lesser number of shares of common stock as determined by our board of directors. Accordingly, on January 1, 2019, the number of shares of our common stock reserved for issuance under our 2018 ESPP increased by 224,662 shares, representing 1% of the total number of shares of our common stock outstanding on December 31, 2018.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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