Tenable Holdings Inc
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
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Jun 30, 2024 · Filed Aug 6, 2024
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10. Stock-Based Compensation
- Stock-Based Compensation
In 2018, our Board of Directors adopted, and our stockholders approved, our 2018 Equity Incentive Plan ("2018 Plan"). Under the evergreen provision in the 2018 Plan, in January 2024 we reserved an additional 5.9 million shares of our common stock. At June 30, 2024, there were 26.1 million shares available for grant.
Stock-based compensation expense included in the consolidated statements of operations was as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||
|---|---|---|---|---|
| (in thousands) | 2024 | 2023 | 2024 | 2023 |
| Cost of revenue | $3,288 | $2,906 | $6,270 | $5,531 |
| Sales and marketing | 16,276 | 16,423 | 31,576 | 30,817 |
| Research and development | 11,799 | 9,764 | 22,960 | 18,629 |
| General and administrative | 10,035 | 8,767 | 20,311 | 17,000 |
| Total stock-based compensation expense | $41,398 | $37,860 | $81,117 | $71,977 |
A summary of the unrecognized stock-based compensation expense related to unvested stock at June 30, 2024 is presented below:
| Unrecognized Stock-Based Compensation Expense (in thousands) | Estimated Weighted Average Period (in years) | |
|---|---|---|
| Restricted stock units ("RSUs") | $347,395 | 2.9 |
| Performance stock units ("PSUs") | 9,225 | 3.3 |
| Restricted stock | 9,979 | 1.8 |
| 2018 Employee Stock Purchase Plan ("2018 ESPP") | 3,570 | 0.7 |
Restricted Stock, RSUs and PSUs
A summary of our restricted stock, RSU and PSU activity is presented below:
| Restricted Stock · RSUs · PSUs | ||||||
|---|---|---|---|---|---|---|
| (in thousands, except for per share data) | Number of Shares | Weighted Average Grant Date Fair Value | Numberof Shares | WeightedAverageGrant Date Fair Value | Numberof Shares | WeightedAverageGrant Date Fair Value |
| Unvested balance at December 31, 2023 | 311 | $45.67 | 7,343 | $43.80 | 258 | $43.90 |
| Granted | — | — | 3,595 | 46.61 | 170 | 47.20 |
| Performance adjustment(1) | — | — | — | — | (10) | 43.24 |
| Vested | (62) | 45.67 | (1,936) | 42.80 | (69) | 43.79 |
| Forfeited | — | — | (536) | 44.70 | — | — |
| Unvested balance at June 30, 2024 | 249 | 45.67 | 8,466 | 45.15 | 349 | 45.54 |
(1) Represents adjustments due to the achievement of predefined financial performance targets.
Stock Options
A summary of our stock option activity is presented below:
| (in thousands, except for exercise prices and years) | Numberof Shares | WeightedAverageExercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value |
|---|---|---|---|---|
| Outstanding at December 31, 2023 | 5,095 | $8.95 | 3.5 | $189,108 |
| Exercised | (647) | 6.39 | 26,036 | |
| Forfeited/canceled | — | — | — | |
| Outstanding and exercisable at June 30, 2024 | 4,448 | 9.32 | 3.1 | 152,410 |
2018 Employee Stock Purchase Plan
Under the evergreen provision in our 2018 ESPP, in January 2024 we reserved an additional 1.8 million shares of our common stock. At June 30, 2024, there were 10.1 million shares reserved for issuance under our 2018 ESPP.
In the six months ended June 30, 2024, employees purchased 304,579 shares of our common stock at a weighted average price of $32.43 per share, resulting in $9.9 million of cash proceeds. At June 30, 2024, there was $5.3 million of employee contributions to the 2018 ESPP included in accrued compensation.
The fair value of the 2018 ESPP purchase rights was estimated on the offering or modification dates using a Black-Scholes option-pricing model and the following assumptions:
| Six Months Ended June 30, | ||
|---|---|---|
| 2024 | 2023 | |
| Expected term (in years) | 0.5 — 2.0 | 0.5 — 2.0 |
| Expected volatility | 41.1% — 51.4% | 51.0% — 58.1% |
| Risk-free interest rate | 4.4% — 5.1% | 4.8% — 5.0% |
| Expected dividend yield | — | — |
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