v3.26.1
Stock-Based Compensation
 6 Months Ended
Jun. 30, 2026
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock Options and SARs
The following table summarizes stock option and SAR activity for the six months ended June 30, 2026 (in thousands, except per share amounts, years, and aggregate intrinsic value):
Options OutstandingSARs Outstanding
Number of Awards
Weighted-Average Exercise Price Per Share
Weighted-Average
Remaining Contractual Life (years)		Aggregate Intrinsic Value (millions)Number of Awards
Weighted-Average Exercise Price Per Share
Weighted-Average
Remaining Contractual Life (years)		Aggregate Intrinsic Value (millions)
Balance as of December 31, 2025152,202 $9.98 6.1$25,536 11,271 $130.00 7.1$794 
Granted— — 2,889 143.59 
Exercised(2,067)4.72 — — 
Canceled and forfeited(458)6.22 (489)165.15 
Balance as of June 30, 2026149,677 $10.06 5.7$15,957 13,671 $131.61 11.1$377 
Vested and exercisable as of June 30, 202679,177 $8.89 5.3$8,534 1,772 $113.27 40.0$6 
As of June 30, 2026, the total unrecognized stock-based compensation expense related to options and SARs outstanding was $361 million, and $136 million, respectively, which is expected to be recognized over a weighted-average service period of five and eight years, respectively. The weighted-average grant date fair value of SARs granted during the six months ended June 30, 2026 was $38.00 per share.
The Company grants SARs that vest over explicit service periods of up to approximately ten years and are exercisable at expiration, during a limited window, if the Company’s stock price reaches a certain threshold. These awards have exercise prices of between $39–$250 and maximum appreciation values of between $60–$300.
The Company determined the grant date fair value of these awards 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:
Six Months Ended June 30,
20262025
Expected volatility rate
56.7% - 57.0%
61.0% - 66.1%
Expected term (in years)
8.7 - 9.7
3.4 - 8.9
Risk-free interest rate
3.9% - 4.2%
4.3% - 4.6%
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 Company also grants SARs that are fully vested and exercisable upon grant, with an exercise price equal to the fair market value of the Company’s common stock on the grant date and contractual periods of up to 40 years. The Company determined the grant-date fair value of these awards using a Monte Carlo simulation model using the following assumptions:
Six Months Ended June 30,
2026
Expected volatility rate60.0%
Expected exercise factor2.6x
Risk-free interest rate4.9%
Expected dividend yield—%
The expected volatility rate is based on the Company’s implied volatility. The expected exercise factor represents the multiple of the strike price at which the SARs are expected to be exercised. The risk-free interest rate is based on the long-term U.S. Treasury zero coupon issues in effect at the time of grant. The Company has never paid and has no plans to pay dividends on its common stock, therefore the expected dividend yield is zero.
RSUs and P-RSUs
The following table summarizes the RSU and P-RSU activity for the six months ended June 30, 2026 (in thousands, except per share amounts):
RSUs OutstandingWeighted Average Grant Date Fair Value per ShareP-RSUs OutstandingWeighted Average Grant Date Fair Value per Share
Unvested and outstanding as of December 31, 202541,644 $27.74 118 $180.79 
Granted2,653 138.14 233 158.25 
Vested(9,745)31.83 (218)179.69 
Canceled and forfeited(1,303)67.71 (12)158.22 
Adjustment for performance achievement(1)
— — 
Unvested and outstanding as of June 30, 202633,249 $33.79 121 $141.57 
—————
(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 June 30, 2026, the total unrecognized stock-based compensation expense related to the RSUs outstanding was $916 million, which the Company expects to recognize over a weighted-average service period of three years. As of June 30, 2026, there was no unrecognized stock-based compensation expense related to the P-RSUs outstanding.
Stock-based Compensation Expense
Total stock-based compensation expense was as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Cost of revenue$30,889 $14,973 $48,795 $29,989 
Sales and marketing106,067 56,040 182,963 108,553 
Research and development58,193 32,068 94,738 63,902 
General and administrative70,060 56,890 140,305 112,866 
Total stock-based compensation expense$265,209 $159,971 $466,801 $315,310