Etsy 2015 Annual Report Download - page 98

Download and view the complete annual report

Please find page 98 of the 2015 Etsy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126


Etsy, Inc.
Notes to Consolidated Financial Statements
Nasdaq as the fair value of its common stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in
effect at the time of grant. Expected volatilities are based on implied volatilities from market comparisons of certain publicly traded companies and other
factors. The expected term of stock options granted has been determined using the simplified method, which uses the midpoint between the vesting date and
the contractual term. The requisite service period is generally four years from the date of grant. The fair value of RSUs is determined based on the closing
price of the Company's common stock on Nasdaq on the grant date.
The fair value of options granted in each year using the Black-Scholes pricing model has been based on the following assumptions:





Volatility 45.7% - 50.3%
43.0% - 49.0%
40.4% - 45.0%
Risk-free interest rate 0.9% - 1.9%
1.7% - 2.1%
1.3% - 1.9%
Expected term (in years) 5.48 - 6.08
5.46 - 6.08
5.5 - 6.1
Dividend rate —%
—%
—%
The following table summarizes the activity for the Company’s options:








Outstanding at January 1, 2013 11,936,131
$ 2.36
Granted 3,076,101
5.52
Exercised (1,024,560)
1.30
Forfeited/Cancelled (797,252)
3.80
Outstanding at December 31, 2013 13,190,420
3.10
Granted 3,206,717
10.28
Exercised (4,215,628)
1.89
Forfeited/Cancelled (656,230)
6.58
Outstanding at December 31, 2014 11,525,279
5.34
Granted 1,660,170
16.19
Exercised (1,315,735)
2.76
Forfeited/Cancelled (800,855)
9.94
Outstanding at December 31, 2015 11,068,859
6.94
7.01
$ 31,932,259
Total exercisable at December 31, 2015 6,873,262
4.43
6.14
28,485,307
Total vested and expected to vest at December 31, 2015 10,574,276
6.79
6.94
31,678,517
The weighted-average grant date fair value of options granted in the years ended December 31, 2013, 2014 and 2015 was $2.60, $4.86 and $6.89,
respectively. The total intrinsic value of options exercised in the years ended December 31, 2013, 2014 and 2015 was $4.0 million, $24.8 million and $15.1
million, respectively, and the total fair value of awards that vested in the years ended December 31, 2013, 2014 and 2015 was $3.5 million, $4.7 million and
$8.3 million, respectively. The total unrecognized compensation at December 31, 2015 was $15.8 million, which will be recognized over a weighted-average
period of 2.6 years.
93