Annual report [Section 13 and 15(d), not S-K Item 405]

Stockholders??? Equity

v3.25.0.1
Stockholders’ Equity
 12 Months Ended
Dec. 31, 2024
Equity [Abstract]  
Stockholders’ Equity Stockholders’ Equity
Stock-Based Compensation Expense
Stock-based compensation expense, consisting of service-based expense related to the equity incentive plans, including expense from stock options and restricted stock units, and the employee stock purchase plan, was classified as follows in the accompanying consolidated statements of operations for each of the periods presented (in thousands):
Year Ended December 31,
2024 2023 2022
Cost of revenue $ 1,014  $ 971  $ 723 
Sales and marketing 6,582  4,233  3,436 
Research and development 8,374  5,590  4,576 
General and administrative 16,250  12,029  10,017 
Total $ 32,220  $ 22,823  $ 18,752 
Equity Incentive Plan
In November 2021 in connection with the IPO, the Company adopted the 2021 Equity Incentive Plan (the “2021 EIP” or “EIP”) under which the Company could issue stock options or restricted stock units (“RSUs”) as awards. In addition to shares remaining available for issuance under a prior plan and shares subject to awards under the prior plan that may return to the EIP, the Company reserved 9.0 million shares of common stock for future issuance under the 2021 EIP, with scheduled annual increases to the reserve for amounts to be determined by the board of directors, subject to a maximum amount. In the first quarter of 2024, the board of directors reserved an additional 3.5 million common shares for future issuance under the 2021 EIP.
In March 2023, the Company adopted the 2022 Inducement Equity Incentive Plan (“Inducement Plan”) and reserved an additional 7.0 million shares of common stock for future issuance.

Stock-based compensation expense related to the EIP and Inducement Plan was $31.4 million, $22.1 million and $18.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Stock Options
Most stock options have a four-year vesting schedule with a one-year cliff and are classified as incentive stock options (“ISOs”). Some stock options have been granted in lieu of bonuses and have expedited two- or three-year vesting schedules. All awards vest based on service conditions.
Unrecognized stock-based compensation expense related to outstanding stock options as of December 31, 2024 and December 31, 2023 was $0.5 million and $3.4 million, respectively. Stock-based compensation expense is recognized on a straight-line basis over the remaining weighted-average vesting periods. As of December 31, 2024 and December 31, 2023 the weighted-average vesting periods approximated 0.55 years and 1.21 years, respectively.
The aggregate intrinsic value of stock options outstanding is outlined in the table below. The intrinsic value represents the excess of the estimated fair value of the Company's common stock on the date of exercise over the exercise price of each stock option.
Stock option activity was as follows for the year ended December 31, 2024:
Number of Stock Options
 Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value
(in thousands)
Outstanding as of December 31, 2023 1,840,735  $ 4.32  5.96 $ 13,165 
Exercisable as of December 31, 2023 1,480,536  $ 3.82  5.62 $ 11,320 
2024 Activity
Exercised (325,641) $ 5.30 
Forfeited and expired (53,984) $ 6.82 
Outstanding as of December 31, 2024 1,461,110  $ 4.01  4.54 $ 17,408 
Exercisable as of December 31, 2024 1,400,993  $ 3.88  4.46 $ 16,866 
The aggregate intrinsic value of options exercised for the years ended December 31, 2024, 2023 and 2022 was $2.5 million, $3.9 million and $5.5 million, respectively.
Stock-based compensation expense is measured at the grant date based on the estimated fair value of the award. The fair value of the awards is fixed at grant date and amortized over the remaining service period. The Company uses the Black-Scholes model to estimate the value of its stock options issued under the EIP. Management reviews option grants and determines whether further valuation adjustments are appropriate based on recent company performance and/or changes in market conditions. The volatility assumed in the estimate was based on publicly traded companies in the same industry and
considers the expected term calculated by the Company. The expected term of the options was derived from a simplified method which estimated the term based on an averaging of the vesting period and contractual term of the option grant. The risk-free rate utilized was the average of the five- and seven-year U.S. Treasury yields as the estimated expected term for options approximated 6 years. The Company has no plans to declare dividends in the foreseeable future.
The Company did not grant any stock options during the years ended December 31, 2024, 2023, and 2022.
In November 2022, the Company held a special meeting to approve a one-time repricing of 1,159,479 of its outstanding common stock option awards previously granted to certain service providers under the 2015 Equity Incentive Plan (the “Option Repricing”). The repricing only affected stock options held by “service providers” as defined under the 2015 Plan (“Eligible Participants”) other than (x) any current or former member of the Company’s board of directors, (y) any of the Company’s current or former Chief Executive Officers and (z) former employees or other service providers. Prior to the Option Repricing, these awards had per share exercise prices between $9.04 and $19.60; the Option Repricing reduced the exercise price of these awards to $7.00 per share. All other terms of the awards remained the same. This repricing resulted in incremental stock-based compensation expense of approximately $1.1 million to be recognized over the weighted average remaining vesting period of 2.5 years. Of this, approximately $0.4 million was recognized during the year ended December 31, 2022, which is included within the total 2022 EIP expense amount reported above.
Restricted Stock Units
RSUs granted under the Plan vest and settle upon the satisfaction of a service-based condition. The service-based condition for these awards is generally satisfied over three or four years. As of December 31, 2024, 15,900 RSUs are outstanding for awards that have a four-year vesting schedule with 25% cliff vesting one year from grant date and the remaining 75% vesting monthly over the remaining three years. As of December 31, 2024, a total of 19,788 RSUs are outstanding for awards that were issued to non-employee directors that have a three-year vesting schedule, with 33% vesting one year from the grant date and the remaining 67% vesting annually over the remaining two years. As of December 31, 2024, a total of 116,298 RSUs are outstanding that that were issued to non-employee directors that have a one-year vesting schedule, with 100% vesting on the earlier of one year from the grant date or the annual meeting of stockholders. The remaining RSUs that have been issued have a three-year vesting schedule with 33% vesting one year from grant date and the remaining 67% vesting quarterly over the remaining two years.
RSU activity was as follows:
Number of Shares Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2023 7,504,848  $ 5.98 
Granted 3,847,441  11.20
Vested (4,198,162) 5.87
Forfeited (478,189) 7.78
Outstanding as of December 31, 2024 6,675,938  $ 8.93 
The total fair value of awards vested was $24.7 million, $20.5 million, and $1.0 million during the years ended December 31, 2024, 2023 and 2022, respectively. In February 2023, the Company’s board of directors approved a net share settlement approach for satisfaction of tax withholding obligations in connection with settlement of taxes for RSUs. Accordingly a portion of the vested RSUs were net-settled such that the Company withheld shares with a value equivalent to the employees’ obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. During the year ended December 31, 2024, the Company withheld 1,634,949 shares, which was based on the value of the RSUs on their respective vesting dates as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to taxing authorities was
$18.9 million and $10.4 million for the years ended December 31, 2024 and 2023, respectively. Prior to 2023, there were no net settlements of RSUs.
As of December 31, 2024 there was $48.9 million of unrecognized stock-based compensation expense related to outstanding RSUs which is expected to be recognized over a weighted-average period of 2.07 years.
Employee Stock Purchase Plan
In October 2021, the Company adopted the ESPP in which eligible employees may contribute up to 50% of their base compensation to purchase shares of common stock at a price equal to 85% of the lower of (1) the fair market value of a share of the Company’s common stock at the beginning of the offering period and (2) the fair market value of a share of the Company’s common stock on the purchase date. No participant may purchase more than 2,500 shares during any offering period. The ESPP became effective in November 2021 in connection with the Company’s IPO. As of December 31, 2024, 2023, and 2022, there were 3,301,800, 2,600,637, and 1,943,246 shares reserved for issuance, respectively, and 677,635, 457,593, and 165,347 shares, respectively, of common stock had been issued under the ESPP. The number of shares available for issuance under the ESPP may be increased on the first day of each fiscal year beginning with the 2022 fiscal year by an amount to be determined by the board of directors.
Except for the initial offering period, the ESPP provides for six-month offering periods beginning February 16 and August 16 of each year, and the last day of each offering period is the purchase date for that period. The initial offering period began on December 1, 2021 and ended on August 15, 2022 and consisted of one purchase period, which was the last day of the offering period.
During the years ended December 31, 2024, 2023 and 2022, the Company recognized $0.9 million, $0.7 million, and $0.6 million, respectively, of stock-based compensation expense related to the ESPP. As of December 31, 2024 and 2023, $1.0 million and $0.9 million in accrued ESPP employee payroll contributions are included within accrued liabilities on the consolidated balance sheets, respectively. As of December 31, 2024, total unrecognized compensation costs related to the ESPP was $0.1 million, which will be amortized over the remaining offering period through February 15, 2025.
The following assumptions were used to calculate the fair value of shares to be granted under the ESPP during the years ended December 31, 2024, 2023, and 2022:
Year Ended December 31,
2024 2023 2022
Risk free interest rate
5.02% - 5.54%
4.98% - 5.54%
 3.12  %
Expected term 0.50 years 0.50 years 0.50 years
Expected volatility
59.98% - 67.16%
61.48% - 67.16%
90.62  %
Dividend yield 0.00  % 0.00  % 0.00  %