Stockholders' Equity (Deficit) | 11. Stockholders’ Equity (Deficit) In January In As of December 31, 2019, 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 64,308,498 shares of Class A common stock and 232,078,452 shares of Class B common stock were issued and outstanding. At December 31, 2019 and 2018, December 31, 2019 2018 Seed Preferred Stock — 19,403,952 Series A Preferred Stock — 49,195,632 Series B Preferred Stock — 39,619,992 Series C Preferred Stock — 30,389,424 Series D Preferred Stock — 41,205,912 2012 and 2019 stock option plans: Options and RSU's outstanding 37,031,861 38,865,057 Shares available for future option and RSU grants 31,729,237 69,225 Shares available subject to the 2019 ESPP Plan 6,725,000 — 75,486,098 218,749,194 Convertible Preferred Stock —Immediately prior to the completion of the IPO in September 2019, all shares of convertible preferred stock then outstanding were converted into 179,011,431 shares of Class B common stock. 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 upon sale or transfer to Class A common stock, subject to certain limited exceptions. During the year ended December 31, 2019, 36,464,053 shares of Class B common stock were converted into Class A common stock. Employee Stock Purchase Plan —In September 2019, the Board adopted and approved the 2019 ESPP, which became effective on September 18, 2019. The ESPP initially reserved and authorized the issuance of up to a total of 6,725,000 shares of Class A common stock to participating employees. As of December 31, 2019, 6,725,000 shares of Class A common stock remain available for grant under the ESPP. The initial offering period began on September 18, 2019 and will end on May 15, 2020. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the $27.00 initial public offering price of the Company’s Class A common stock 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 $1.2 million of stock-based compensation expense related to the ESPP during the year ended December 31, 2019, beginning upon the IPO in September 2019. Total compensation cost related to the ESPP not yet recognized was approximately $1.5 million as of December 31, 2019. The weighted average period over which this compensation cost will be recognized is 0.4 years as of December 31, 2019. As of December 31, 2019, $3.3 million has been withheld on behalf of employees for a future purchase under the ESPP. There were no purchases for the year ended December 31, 2019 related to the ESPP. Stock-Based n —The Company has two equity incentive plans, the 2012 equity incentive plan (the “2012 Plan”) and the 2019 equity incentive plan (the “2019 Plan”). On September 18, 2019, 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 December 31, 2019, there were 36,364,067 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, RSUs and performance-based and other awards, each valued or based on the Company’s Class A common stock, to employees, consultants, and advisors of the Company. Through December 31, 2019, the Company has only issued stock options and RSUs in connection with the 2012 and 2019 Plans. As of December 31, 2019, the Company was authorized to grant awards representing up to 70,296,733 shares under the 2019 Plan and had awards representing 31,729,237 shares of Class A common stock available to grant under the 2019 Plan. The The following Year Ended December 31, 2019 2018 2017 Expected volatility 38.9% - 39.5% 38.4% - 39.0% 37.1% - 38.8% Risk-free interest rate 1.4% - 2.6% 2.6% - 3.0% 1.8% - 2.2% Expected dividend yield —% —% —% Expected term (in years) 5.2 - 6.3 5.8 - 6.1 5.1 - 6.1 Fair value of common stock $6.16 - $38.21 $2.23 - $5.63 $0.87 - $1.02 Expected y —The Company performed an analysis of its peer companies with similar expected lives to develop an expected volatility assumption. Expected —Derived from the life of the options granted under the option plan and is based on the simplified method which is essentially the weighted average of the vesting period and contractual term. Risk-free e —Based upon quoted market yields for the United States Treasury debt securities. Expected d —Since the Company has never paid and has no intention to pay cash dividends on common stock, the expected dividend yield is zero. Fair k —Prior to the IPO, the fair value of common stock underlying the stock-based awards was determined by the Company’s Board of Directors. The Board of Directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock at each meeting in which awards were approved. The factors considered included, but were not limited to: (i) the results of contemporaneous independent third-party valuations of the Company’s common stock; (ii) the prices, rights, preferences, and privileges of the Company’s redeemable convertible Preferred Stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions; and (vii) precedent transactions involving the Company’s shares. Since the Company’s IPO, the fair value of the underlying common stock is determined by the closing price, on the date of grant, of the Company’s Class A common stock, which is traded publicly on The Nasdaq Global Market. Stock Number Of Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in Years) Balance—January 1, 2017 35,825,160 $ 0.39 8.9 Options granted 12,841,968 $ 0.89 Options exercised (2,165,976 ) $ 0.21 Options forfeited (1,623,264 ) $ 0.64 Balance—December 31, 2017 44,877,888 $ 0.53 8.3 Options granted 11,236,803 $ 1.61 Options exercised (14,882,622 ) $ 0.52 Options forfeited (2,367,012 ) $ 0.79 Balance—December 31, 2018 38,865,057 $ 0.83 7.9 Options granted 9,518,730 $ 9.15 Options exercised (10,546,987 ) $ 0.75 Options forfeited (1,452,033 ) $ 2.54 Balance—December 31, 2019 36,384,767 $ 2.96 7.6 Exercisable—December 31, 2019 22,327,967 $ 2.19 7.0 As of December 31, 2019, there were 20,700 shares of Class A common stock and 36,364,067 shares of Class B common stock issuable upon the exercise of options outstanding. The 9, , , Total compensation cost related to unvested stock options not yet recognized was approximately $90.5 million and $28.4 million as of December 31, 2019 and December 31, 2018, respectively. The weighted average period over which this compensation cost related to unvested stock options will be recognized is 2.7 years and 3.4 years as of December 31, 2019 and December 31, 2018, respectively. The following table summarizes the activity for the Company's unvested RSUs: Shares Weighted-Average Fair Value Balance at December 31, 2018 — $ — Granted 647,094 $ 36.08 Vested — $ — Forfeited/canceled — $ — Balance at December 31, 2019 647,094 $ 36.08 In November 2019, the Company granted 244,445 restricted shares of Class A common stock, which are subject to service-based vesting conditions over approximately four years. Total compensation cost related to unvested RSUs and restricted shares of common stock not yet recognized was approximately $30.4 million as of December 31, 2019. The weighted average period over which this compensation cost related to unvested RSUs will be recognized is 3.9 years as of December 31, 2019. The Company expects to settle RSUs with shares of its Class A common stock. Stock-based Year Ended December 31, 2019 2018 2017 Cost of revenue $ 582 $ 287 $ 112 Research and development 7,972 1,641 1,160 Sales and marketing 5,538 1,910 977 General and administrative 4,942 1,406 819 Stock-based compensation, net of amounts capitalized 19,034 5,244 3,068 Capitalized stock-based compensation expense 201 167 248 Total stock-based compensation expense $ 19,235 $ 5,411 $ 3,316 Common The Company has recorded liabilities related to early exercises of 1,239,750 shares of common stock and 2,095,656 shares of common stock as of December 31, 2019 and 2018, respectively. |