Stock-Based Compensation

Note 12—Stock-Based Compensation

During the three and nine months ended September 30, 2022, the Company granted RSUs, including financial performance-based restricted stock units (“Financial PBRSUs”) and total shareholder return performance-based restricted stock units (“TSR PBRSUs”), under its 2015 Equity Incentive Plan (“2015 Plan”) and, pursuant to the evergreen increase provision of the 2015 Plan, 6,351,106 additional shares were added to the total number of shares available for issuance under the 2015 Plan effective as of January 3, 2022. At September 30, 2022, 50,391,850 shares were authorized under the 2015 Plan and 32,035,675 shares were available for future grant.

The following table summarizes the activity for the Company’s unvested RSUs, which includes Financial PBRSUs and TSR PBRSUs, during the nine months ended September 30, 2022:


	Shares	Weighted-Average Grant Date Fair Value
Unvested at December 31, 2021	3,506,721	$	137.87
Granted	4,895,738	120.39
Vested	(897,273)	105.23
Forfeited/Canceled	(500,420)	157.15
Unvested at September 30, 2022	7,004,766	128.29

The total unrecognized compensation expense at September 30, 2022 related to the Company’s unvested RSUs, including the Financial PBRSUs and TSR PBRSUs, was $730.3 million, which will be recognized over an estimated weighted-average amortization period of 3.11 years.

In connection with the acquisition of Depop, certain Depop executives are eligible to receive deferred consideration of $44.0 million in shares of Etsy common stock over the three years following the acquisition date, subject to certain service-based vesting conditions during the vesting period. These awards will be settled by issuing shares of Etsy common stock on or shortly following the applicable vesting date, with the number of shares to be determined based on the Company’s stock price on, or leading up to, the applicable vesting date. These awards will be recognized as post-combination service stock-based compensation expense over a vesting period equal to the mandatory service period associated with the award, with a corresponding liability included within Other liabilities on the Company’s Consolidated Balance Sheets until the service-based vesting criteria are met and the awards are settled in shares of Etsy common stock. The unrecognized compensation expense at September 30, 2022 related to these awards was $5.4 million, which will be recognized over an estimated weighted-average amortization period of 1.78 years. The decrease from the initial unrecognized compensation expense of $44.0 million primarily relates to the departure of Depop’s Chief Executive Officer, effective September 2022, and the partial payments of Depop deferred consideration in the nine months ended September 30, 2022. These amounts are excluded from the unrecognized compensation expense associated with the Company’s unvested RSUs noted above.

The total unrecognized compensation expense at September 30, 2022 related to the Company’s options was $17.1 million, which will be recognized over an estimated weighted-average amortization period of 2.07 years.

Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for the periods presented below is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cost of revenue	$	6,089	$	3,587	$	16,545	$	8,985
Marketing	5,083		4,102		14,552		7,639
Product development	34,106		17,345		88,656		40,588
General and administrative	7,627		17,222		46,780		32,835
Stock-based compensation expense	$	52,905	$	42,256	$	166,533	$	90,047