Stockholders' Equity | Stockholders’ Equity Class A and Class B Common Stock The Company has two classes of common stock, Class A and Class B. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder, and are automatically converted to Class A common stock upon sale or transfer, subject to certain limited exceptions. During the three and six months ended June 30, 2022, 6,284,309 shares and 24,393,510 shares of Class B common stock were converted into Class A common stock, respectively. As of June 30, 2022, the Company had authorized 2,000,000,000 shares of Class A common stock and 310,000,000 shares of Class B common stock, each at a par value per share of $0.00001, of which 290,783,440 shares of Class A common stock and 25,632,342 shares of Class B common stock were issued and outstanding. Equity Incentive Plans The Company has two equity incentive plans, the 2012 Equity Incentive Plan (the “2012 Plan”) and the 2019 Equity Incentive Plan (the “2019 Plan”). In connection with the Company's initial public offering of Class A common stock (the "IPO"), the Company ceased granting awards under the 2012 Plan, and all shares that remained available for issuance under the 2012 Plan at that time were transferred to the 2019 Plan. Additionally, as of June 30, 2022, there were 19,567,562 shares of Class A common stock issuable upon conversion of Class B common stock underlying options outstanding under the 2012 Plan. Under the 2019 Plan, the Board and any other committee or subcommittee of the Board may grant stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) and performance stock units ("PSUs") and other awards, each equity award valued or based on the Company’s Class A common stock, to employees, directors, consultants and advisors of the Company. As of June 30, 2022, there were 67,352,167 shares available for grant under the 2019 Plan. Stock Options The following table summarizes the Company’s stock option activity and weighted-average exercise prices: Number Of Weighted- Weighted- Aggregate Balance outstanding—December 31, 2021 21,372,561 $ 3.31 5.5 $ 3,735,819 Options granted — — Options exercised (1,673,753) 3.83 Options forfeited or expired (101,980) 5.94 Balance outstanding—June 30, 2022 19,596,828 $ 3.26 4.9 $ 1,802,576 Ending Exercisable—June 30, 2022 16,977,114 $ 2.37 4.6 $ 1,576,610 As of June 30, 2022, there were 29,266 shares of Class A common stock and 19,567,562 shares of Class B common stock issuable upon the exercise of options outstanding. As of December 31, 2021, there were 31,671 shares of Class A common stock and 21,340,890 shares of Class B common stock issuable upon the exercise of options outstanding. Total compensation cost related to unvested awards not yet recognized was approximately $20.0 million and $31.6 million as of June 30, 2022 and December 31, 2021, respectively. The weighted-average period over which this compensation cost related to unvested employee awards will be recognized is 0.9 years and 1.3 years as of June 30, 2022 and December 31, 2021, respectively. There were no options granted during the six months ended June 30, 2022 and 2021. The Company received approximately $6.5 million and $6.2 million in cash proceeds from options exercised during the six months ended June 30, 2022 and 2021, respectively. The intrinsic value of options exercised during the six months ended June 30, 2022 and 2021 was approximately $217.0 million and $229.6 million, respectively. The aggregate fair value of options vested during the six months ended June 30, 2022 and 2021 was $12.7 million and $14.5 million, respectively. Common stock purchased pursuant to an early exercise of stock options is not deemed to be outstanding for accounting purposes until those shares vest. The consideration received for an exercise of an option is considered to be a deposit of the exercise price and the related dollar amount is recorded as a liability. The shares issued upon the early exercise of these unvested stock option awards, which are reflected as exercises in the table above, are considered to be legally issued and outstanding on the date of exercise. Upon termination of service, the Company may repurchase unvested shares acquired through early exercise of stock options at a price equal to the price per share paid upon the exercise of such options. The Company has no liability recorded related to early exercises of options as of June 30, 2022. As of December 31, 2021, the Company had recorded liabilities related to early exercises of options for 31,500 shares of Class B common stock. Restricted Stock Units, Restricted Stock Awards and Performance Stock Units The following table summarizes the activity for the Company’s unvested RSUs and PSUs: Shares Weighted- Balance—December 31, 2021 8,081,269 $ 101.21 Awarded 3,119,713 124.03 Vested (1,039,058) 74.93 Forfeited/canceled (422,308) 103.66 Unvested and outstanding—June 30, 2022 9,739,616 $ 111.22 The Company granted 244,445, 96,210, 117,538, 245,761, 98,593, and 191,809 restricted shares of Class A common stock in November 2019, June 2020, February 2021, April 2021, December 2021, and June 2022, respectively, in connection with acquisitions which are subject to service-based vesting conditions over approximately four years from the respective grant dates. Total compensation cost related to unvested RSUs, PSUs and restricted shares of common stock not yet recognized was approximately $976.8 million and $773.6 million as of June 30, 2022 and December 31, 2021, respectively. The weighted-average period over which this compensation cost related to unvested RSUs, PSUs and restricted shares will be recognized is 2.9 years and 3.1 years as of June 30, 2022 and December 31, 2021, respectively. Employee Stock Purchase Plan In September 2019, the Board adopted and approved the 2019 Employee Stock Purchase Plan (the “ESPP”), which became effective on the date of the final prospectus for the IPO. The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of the Company’s Class A common stock on specified dates during such offerings. Under the ESPP, the Company may specify offerings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP. The Company recognized $2.5 million and $4.7 million of stock-based compensation expense related to the ESPP during the three and six months ended June 30, 2022, respectively. As of June 30, 2022, $4.7 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions. During the three months ended June 30, 2022, the Company issued 146,515 shares of Class A common stock under the ESPP. As of June 30, 2022, 14,976,951 shares of Class A common stock remain available for grant under the ESPP. Stock-Based Compensation The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options on the date of grant. The Company recognizes and measures compensation expense for all stock-based payment awards granted to employees, directors and nonemployees based on the fair value of the awards on the date of grant. The determination of the grant date fair value using an option-pricing model is affected by the estimated fair value of the Company’s common stock as well as assumptions regarding a number of other complex and subjective variables. These variables include expected stock price volatility over the expected term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate for the expected term of the award and expected dividends. The fair value of RSUs and PSUs is determined by the closing price on the date of grant of the Company’s Class A common stock, as reported on the Nasdaq Global Select Market. The Company estimates the fair value of the rights to acquire stock under the ESPP using the Black-Scholes option-pricing model. Stock-based compensation for stock options and RSUs is recognized on a straight-line basis over the requisite service period and account for forfeitures as they occur. Stock-based compensation for PSUs is amortized under the accelerated attribution method and may be adjusted over the vesting period based on interim estimates of performance against pre-set objectives. PSUs will vest upon achievement of specified performance targets and subject to continuous service through the applicable vesting dates. The compensation cost is recognized over the requisite service period when it is considered probable that the performance condition will be satisfied and account for forfeitures as they occur. Stock-based compensation expense was included in the condensed consolidated statement of operations as follows (in thousands): Three Months Ended Six Months Ended 2022 2021 2022 2021 Cost of revenue $ 2,355 $ 829 $ 4,008 $ 1,530 Research and development 53,309 21,639 98,005 37,708 Sales and marketing 17,590 6,606 32,185 13,616 General and administrative 9,145 5,441 15,085 10,522 Stock-based compensation, net of amounts capitalized 82,399 34,515 149,283 63,376 Capitalized stock-based compensation expense 3,334 2,059 6,840 4,212 Total stock-based compensation expense $ 85,733 $ 36,574 $ 156,123 $ 67,588 |