The following table summarizes stock option and SAR activity for the nine months ended September 30, 2024 (in thousands, except per share amounts and years):


	Options Outstanding						SARs Outstanding
	Number of Awards	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value		Number of Awards	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
Balance as of December 31, 2023	278,470	$	8.62	7.6	$	2,381,172	—	$	—	0.0	$	—
Granted	—	—					51,458	50.71
Exercised	(44,188)	6.11					—	—
Canceled and forfeited	(925)	5.76					(3,495)	50.00
Balance as of September 30, 2024	233,357	$	9.10	7.1	$	6,556,252	47,963	$	50.76	35.0	$	—
Vested and exercisable as of September 30, 2024	130,807	$	7.32	6.5	$	3,908,239	—	$	—	0.0	$	—

As of September 30, 2024, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $524.3 million and $176.5 million, respectively, which is expected to be recognized over a weighted-average service period of six and five years, respectively. Of the total SARs outstanding, $119.7 million of unrecognized expense would be accelerated if the market condition related to Market-Vesting SARs is achieved earlier than its derived service period. The weighted-average grant-date fair value of SARs granted during the nine months ended September 30, 2024 was $4.06 per share.

During the nine months ended September 30, 2024, the Company granted Market-Vesting SARs that vest upon the satisfaction of a market-based vesting condition and are subject to continued service. The market-based vesting condition is satisfied when the price per share of the Company’s Class A common stock exceeds $50 within an open trading window (measured based on the closing price on the immediately prior trading day) (an “Above Price Day”). Following the satisfaction of such condition, Market-Vesting SARs may only be exercised on an Above Price Day. The maximum appreciation is up to $20 per Market-Vesting SAR.

The Company determined the grant-date fair value of Market-Vesting SARs using a Monte Carlo simulation model which incorporates various assumptions including the contractual term, expected stock price volatility, risk-free interest rate, suboptimal exercise factor, annual post-vest termination rate, and cost of capital as of the grant date.

For the Market-Vesting SARs granted during the nine months ended September 30, 2024, the assumptions used in the Monte Carlo simulation model included the following:


			Nine Months Ended September 30, 2024
Expected volatility rate			58.2% - 58.9%
Risk-free interest rate			4.1% - 4.7%
Grant-date fair value per share			$3.30 - $6.15

The expected volatility rate is based on a combination of the Company’s implied volatility and the historical volatility of comparable publicly-traded companies. The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the SAR. The Market-Vesting SARs granted during the nine months ended September 30, 2024 had derived service periods of up to five years.

During the nine months ended September 30, 2024, the Company granted Time-Vesting SARs which vest over explicit service periods of up to nine years. Additionally, such Time-Vesting SARs become exercisable at expiration, during a limited window

(“Exercise Window”), if the Company’s stock price reaches a certain threshold. Time-Vesting SARs have exercise prices of between $39–$70 and maximum appreciation values of between $60–$180.

The Company determined the grant-date fair value of Time-Vesting SARs using a Black-Scholes option-pricing model, calculated as the difference in fair value between a SAR with a strike price at the exercise price and a SAR with the strike price at its maximum appreciation, using the following assumptions:


			Nine Months Ended September 30, 2024
Expected volatility rate			55.0% - 59.2%
Expected term (in years)			3.7 - 9.2
Risk-free interest rate			3.4% - 3.7%
Expected dividend yield			—%

The expected volatility rate is based on a combination of the Company’s implied and historical volatility, and the historical volatility of comparable publicly-traded companies. The expected term represents the period of time the SARs are expected to be outstanding. The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the SAR. The Company has never paid and has no plans to pay dividends on its common stock, therefore the expected dividend yield is zero.

The following table summarizes the RSU and P-RSU activity for the nine months ended September 30, 2024 (in thousands, except per share amounts):


	RSUs Outstanding	Weighted Average Grant Date Fair Value per Share		P-RSUs Outstanding	Weighted Average Grant Date Fair Value per Share
Unvested and outstanding as of December 31, 2023	82,262	$	10.71	1,976	$	15.39
Granted	17,722	30.04		3,746	21.20
Vested	(24,595)	13.58		(2,991)	18.68
Canceled and forfeited	(3,188)	13.39		(499)	10.43
Adjustment for performance achievement(1)	—	—		(1,370)	17.46
Unvested and outstanding as of September 30, 2024	72,201	$	14.36	862	$	28.81

(1) This amount represents the difference between the maximum number of shares that could have been issued under the grant and the actual number of shares earned based on final performance.

As of September 30, 2024, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $789.2 million, which the Company expects to recognize over a weighted-average service period of three years. As of September 30, 2024, there was no unrecognized stock-based compensation expense related to the P-RSUs outstanding.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenue	$	13,123	$	7,814	$	35,941	$	24,995
Sales and marketing	50,698		39,290		141,168		116,956
Research and development	30,715		21,952		87,532		65,068
General and administrative	47,889		45,324		145,199		136,276
Total stock-based compensation expense	$	142,425	$	114,380	$	409,840	$	343,295