Equity Award Plans | 6 Months Ended |
Jun. 30, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Equity Award Plans | ' |
Equity Award Plans |
Equity Incentive Plans |
2008 Plans |
We adopted the 2008 Stock Option Plan (the "2008 Plan") for the purpose of granting stock-based awards to eligible service providers, which included our employees, directors, and consultants as well as employees and consultants of our subsidiaries. Stock options granted under the 2008 Plan were either incentive stock options (“ISOs”) or nonstatutory stock options (“NSOs”). With the establishment of the 2014 Equity Incentive Plan (the "2014 Plan") in March 2014, we terminated the 2008 Plan. Upon such termination, we ceased granting any awards under the 2008 Plan. |
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2014 Equity Incentive Plan |
The 2014 Plan was adopted by our board of directors and approved by our stockholders in March 2014. The 2014 Plan was effective as of the business day immediately prior to the effectiveness of our registration statement for our initial public offering. The 2014 Plan replaced the 2008 Plan. Our 2014 Plan provides for the granting of stock options, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), stock appreciation rights, performance units and performance shares to our employees, directors and consultants, and our subsidiary corporations’ employees and consultants. |
A total of 7,700,000 shares of our common stock are reserved for issuance pursuant to the 2014 Plan. On the first day of each fiscal year, starting with January 1, 2015, the number of shares in the reserve will increase by the lesser of (i) 8,000,000 shares, (ii) 5% of the outstanding shares of common stock on the last day of our immediately preceding fiscal year, or (iii) such other amount as determined by our board of directors. As of June 30, 2014, we have granted 553,123 stock options and 102,265 RSUs under the 2014 Plan to our employees and consultants, we have 7,070,532 shares available for future grant. |
Vesting periods of awards granted under the 2014 Plan are determined by the board of directors or other committees responsible for administering the 2014 Plan (the "Plan Administrators"). The Plan Administrators determine the contractual terms of awards granted under the 2014 Plan, provided that incentive stock options and stock appreciation rights granted expire no more than ten years from the grant date. In the case of an incentive stock option granted to an employee, who at the time of grant, owns stock representing more than 10% of the total combined voting power of all classes of stock, the exercise price shall be no less than 110% of the fair value per share on the date of grant, and expire five years from the date of grant, and for incentive stock options granted to any other employee, and nonstatutory stock options and stock appreciation rights granted to employees, directors or consultants, the per share exercise price shall be no less than 100% of the fair value per share on the date of grant. |
Recipients of RSAs generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, unless the Plan Administrators provide otherwise. |
RSUs granted under the 2014 Plan may be subject to vesting criteria which may be based on achievement of corporate or individual goals, including but not limited to continued services, applicable laws or any other basis that the Plan Administrators determine. |
Performance units have an initial dollar value established by the Plan Administrators on or before the grant date. Performance shares will have an initial value equal to the fair market value of a share on the date of grant. The Plan Administrators will establish, at their discretion, (and may subsequently reduce or waive) performance goals or other vesting provisions, which depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants. |
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2014 Employee Stock Purchase Plan |
The 2014 Employee Stock Purchase Plan (the "2014 ESPP") was adopted by our board of directors and approved by our stockholders in March 2014 and was effective as of the business day immediately prior to the effectiveness of our registration statement for our initial public offering. |
As of June 30, 2014, a total of 1,600,000 shares of our common stock are available for purchase under the 2014 ESPP On the first day of each fiscal year, starting with January 1, 2015, the number of shares in the reserve will increase by the least of (i) 3,500,000 shares, (ii) 1% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as determined by our board of directors or other committee administering the 2014 ESPP. |
The 2014 ESPP permits eligible employees to acquire shares of our common stock at 85% of the lower of the fair market value of our common stock on the first trading day of each offering period or on the exercise date that occurs at the end of a purchase period. Each offering period will be approximately twenty-four months in duration, starting on the first trading day on or after May 21 and November 21 of each year, except for the first offering period, which commenced on March 21, 2014 and will end on the last trading day on or before May 20, 2016. Each offering period generally consists of four purchase periods and each purchase period will begin after one exercise date and end with the next exercise date approximately six months later, except that the first purchase period of an offering period will begin on the enrollment date of each offering period and end on the next exercise date. If the fair market value of our common stock on the exercise date is less than the fair market value on the first trading day of the offering period, participants will be withdrawn from the then‑current offering period following their purchase of shares on the purchase date and automatically will be enrolled in the immediately following offering period. Participants may purchase shares of common stock through payroll deductions of up to 15% of their eligible compensation, subject to purchase limits of 1,500 shares during each six month purchase period or $25,000 worth of stock for each calendar year. |
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Stock Option Activity |
The following table summarizes our stock option activity and related information as of and for the six months ended June 30, 2014 (in thousands, except for years and per share amounts): |
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| | Number of Shares Underlying Outstanding Options | | Weighted-Average Exercise Price | | Weighted-Average Remaining Contractual Term (Years) | | Aggregate Intrinsic Value | |
Outstanding as of December 31, 2013 | | 9,971 | | | $ | 4.14 | | | 7.9 | | $ | 58,515 | | |
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Granted | | 1,264 | | | $ | 13.36 | | | | | | | |
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Exercised | | (1,050 | ) | | $ | 2.54 | | | | | | | |
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Canceled | | (444 | ) | | $ | 5.71 | | | | | | | |
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Outstanding as of June 30, 2014 | | 9,741 | | | $ | 5.44 | | | 7.8 | | $ | 77,371 | | |
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Vested and expected to vest as of June 30, 2014 | | 9,284 | | | $ | 5.27 | | | 7.7 | | $ | 75,244 | | |
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Vested and exercisable as of June 30, 2014 | | 4,697 | | | $ | 2.73 | | | 6.5 | | $ | 49,664 | | |
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The following table provides information pertaining to our stock options for the six months ended June 30, 2014 and 2013 (in thousands, except weighted-average fair values): |
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| Six Months Ended June 30, | | | | | | | |
| 2014 | | 2013 | | | | | | | |
Total fair value of options granted | $ | 7,536 | | | $ | 3,300 | | | | | | | | |
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Weighted average fair value of options granted | $ | 5.96 | | | $ | 2.59 | | | | | | | | |
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Intrinsic value of options exercised | $ | 8,818 | | | $ | 1,111 | | | | | | | | |
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The aggregate intrinsic value represents the difference between our estimated fair value of our common stock, prior to the IPO, or the closing stock price of our common stock, following the IPO, compared to the exercise price of the outstanding, in-the-money options. |
Restricted Stock Units Activity |
The following table summarizes restricted stock units activity under all of our equity incentive plans for the six months ended June 30, 2014 (in thousands, except for weighted average grant date fair value): |
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| Number of Shares | | Weighted Average Grant Date Fair Value | | | | | | | | |
Outstanding as of December 31, 2013 | — | | | $ | — | | | | | | | | | |
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Granted | 102 | | | 13.15 | | | | | | | | | |
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Released | — | | | — | | | | | | | | | |
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Canceled | — | | | — | | | | | | | | | |
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Outstanding as of June 30, 2014 | 102 | | | $ | 13.15 | | | | | | | | | |
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Valuation Assumptions |
We use the Black-Scholes valuation model to determine the fair value of stock options and ESPP. The Black-Scholes model requires the input of highly subjective assumptions, which are summarized in the table below for the three and six months ended June 30, 2014 and 2013: |
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| Three Months Ended June 30, | | Six Months Ended June 30, | | | | | | | |
| 2014 | | 2013 | | 2014 | | 2013 | | | | | | | |
Stock Options: * | | | | | | | | | | | | | | |
Expected term (in years) | 5.5 | | n/a | | 5.5 | | 6.08 | | | | | | | |
Risk-free interest rate | 1.73% | | n/a | | 1.73% | | 1.12% | | | | | | | |
Expected volatility | 45% | | n/a | | 47% | | 46% | | | | | | | |
Dividend rate | —% | | n/a | | —% | | —% | | | | | | | |
ESPP: ** | | | | | | | | | | | | | | |
Expected term (in years) | 1.4 | | n/a | | 1.4 | | n/a | | | | | | | |
Risk-free interest rate | 0.24% | | n/a | | 0.24% | | n/a | | | | | | | |
Expected volatility | 31% | | n/a | | 31% | | n/a | | | | | | | |
Dividend rate | —% | | n/a | | —% | | n/a | | | | | | | |
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* We did not grant stock options during the three months ended June 30, 2013 |
** We did not have an ESPP plan prior to the adoption of our 2014 ESPP plan in March 2014. |
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Stock-based Compensation |
The total stock-based compensation recognized for stock-based awards granted under the 2014 Plan, the 2008 Plan, the 2004 Plan and the 2014 ESPP for the three and six months ended June 30, 2014 and 2013 are as follows (in thousands): |
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| Three Months Ended June 30, | Six Months Ended June 30, |
| 2014 | | 2013 | 2014 | | 2013 |
Cost of revenue | $ | 216 | | | $ | 32 | | $ | 301 | | | $ | 64 | |
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Sales and marketing | 1,457 | | | 471 | | 2,341 | | | 945 | |
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Research and development | 944 | | | 268 | | 1,407 | | | 529 | |
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General and administrative | 389 | | | 93 | | 727 | | | 189 | |
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Total stock-based compensation | $ | 3,006 | | | $ | 864 | | $ | 4,776 | | | $ | 1,727 | |
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At June 30, 2014, total compensation expense related to unvested share-based awards granted to employees under our stock plans but not yet recognized was $17.5 million, net of estimated forfeitures. This expense is expected to be amortized on a straight-line basis over a weighted-average period of 2.9 years. |