XML 32 R19.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Stock-based Compensation and Stockholders' Equity | 3 Months Ended
--- | ---
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation and Stockholders' Equity | Stock-based Compensation and Stockholders’ Equity Preferred Stock The Company has 10,000,000 shares of undesignated preferred stock, $0.001 par value per share, authorized but not issued with rights and preferences determined by the Company’s Board of Directors at the time of issuance of such shares. As of September 30, 2024 and 2023, there were no shares of preferred stock issued and outstanding. Common Stock The Company may issue up to 1,000,000,000 shares of common stock, $0.001 par value per share. The holders of our Company's common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Equity Incentive Plan On June 5, 2020, the stockholders of the Company approved the 2020 Equity and Incentive Compensation Plan (the “Original 2020 Plan”). The maximum number of shares available under the Original 2020 Plan was 50,000,000, plus 10,450,000 shares of common stock that remained available for future awards under the 2016 Equity Incentive Plan (the “2016 Plan”), at the time of adoption of the Original 2020 Plan. No other awards can be granted under the 2016 Plan and 72,460,000 shares of common stock remained reserved for outstanding awards issued under the 2016 Plan at the time of adoption of the Original 2020 Plan. On May 18, 2022, the stockholders of the Company approved an amendment and restatement of the Original 2020 Plan which, among other things, increased the number of shares available for award under the 2020 Plan by an additional 20,000,000 shares. On January 22, 2024, the stockholders of the Company approved a further amendment and restatement of the Original 2020 Plan (as amended and restated from time to time, the “2020 Plan”) which, among other things, further increased the number of shares available for award under the 2020 Plan by an additional 15,000,000 shares. Under the 2020 Plan, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, dividend equivalents, and certain other awards, including those denominated or payable in, or otherwise based on, the Company’s common stock. The exercise price per share for incentive stock options granted to employees owning shares representing more than 10% of the Company’s outstanding voting stock at the time of grant cannot be less than 110% of the fair value of the underlying shares on the grant date. Nonqualified stock options and incentive stock options granted to all other persons are granted at a price not less than 100% of the fair value. Options generally expire ten years after the date of grant. Stock options and RSUs generally vest over four years; 25% at the end of one year and one sixteenth per quarter thereafter. As of September 30, 2024, the Company had 9,926,450 authorized shares available for future issuance under the 2020 Plan. Offerings of Common Stock On December 5, 2023, the Company completed a public offering of 24,158,050 shares of the Company's common stock at $26.20 per share, with 23,151,050 shares sold by the Company and 1,007,000 shares sold by selling stockholders. The Company received net proceeds of approximately $582.8 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The Company did not receive any proceeds from the sale of the shares of common stock by the selling stockholders. On March 22, 2024, the Company completed a public offering of 20,000,000 shares of the Company's common stock at $87.50 per share. The Company received net proceeds of $1,731.5 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. Determining Fair Value The fair value of the Company's RSUs are based on the closing market price of the Company's common stock on the date of grant. The Company estimates the fair value of stock options granted using the Black-Scholes-option-pricing model. This fair value is then amortized ratably over the requisite service periods of the awards, which is generally the vesting period. The key inputs in using the Black-Scholes-option-pricing model were as follows: Expected Term—The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on the Company’s historical experience. Expected Volatility—Expected volatility is based on the Company’s implied and historical volatility. Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input and the Company has no plans to pay dividends. Risk-Free Interest Rate—The risk-free interest rate used in the Black-Scholes valuation method is based on the United States Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. The fair value of stock option grants for the three months ended September 30, 2024 and 2023 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:
| Three Months Ended September 30, |  |
| 2024 |  | 2023 |  |  |  |
Risk-free interest rate | 3.82% - 4.00% |  | 4.15% - 4.32% |  |  |  |
Expected term | 3.00 years - 5.98 years |  | 3.00 years - 5.99 years |  |  |  |
Dividend yield | —% |  | —% |  |  |  |
Volatility | 63.67% - 69.97% |  | 56.87% - 58.27% |  |  |  |
Weighted-average fair value of options | $40.71 |  | $18.83 |  |  |  |
The following table shows total stock-based compensation expense included in the condensed consolidated statements of operations for the three months ended September 30, 2024 and 2023 (in thousands):
| Three Months Ended September 30, |  |
| 2024 |  | 2023 |  |  |  |
Cost of sales | $ | 3,959 |  |  | $ | 5,904 |  |  |  |  |
Research and development | 36,527 |  |  | 35,710 |  |  |  |  |
Sales and marketing | 7,763 |  |  | 5,665 |  |  |  |  |
General and administrative | 15,765 |  |  | 10,100 |  |  |  |  |
Stock-based compensation expense before taxes | 64,014 |  |  | 57,379 |  |  |  |  |
Income tax impact | (15,873) |  |  | (16,049) |  |  |  |  |
Stock-based compensation expense, net | $ | 48,141 |  |  | $ | 41,330 |  |  |  |  |
During the three months ended September 30, 2024, stock-based compensation expense capitalized to our condensed consolidated balance sheets was $0.1 million. No stock-based compensation expense was capitalized for the three months ended September 30, 2023. As of September 30, 2024, $191.3 million of unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 3.12 years and $551.1 million of unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted-average period of 2.65 years. Stock Option Activity 2021 CEO Performance Award In March 2021, the Company’s Compensation Committee of the Board of Directors (the “Compensation Committee”) approved the grant of a stock option award for 10,000,000 shares of common stock to the Company’s CEO (the “2021 CEO Performance Stock Option”). As of September 30, 2024, the 2021 CEO Performance Stock Option had fully vested based upon achievement of operational and stock price milestones as follows:
Annualized Revenue Milestone (in billions) |  | Achievement Status |  | Stock Price Milestone |  | Achievement Status |  |
$4.0 |  | Achieved |  | $4.50 |  | Achieved (1) |  |
$4.8 |  | Achieved |  | $6.00 |  | Achieved (2) |  |
$5.8 |  | Achieved |  | $7.50 |  | Achieved (3) |  |
$6.8 |  | Achieved |  | $9.50 |  | Achieved (4) |  |
$8.0 |  | Achieved |  | $12.00 |  | Achieved (5) |  |
(1)The vesting of the first tranche of 2,000,000 option shares under the 2021 CEO Performance Stock Option, representing one-fifth of such award, was certified by the Company’s Compensation Committee in August 2022. (2)The vesting of the second tranche of 2,000,000 option shares under the 2021 CEO Performance Stock Option representing one-fifth of such award was certified by the Company’s Compensation Committee in October 2022. (3)The vesting of the third tranche of 2,000,000 option shares under the 2021 CEO Performance Stock Option representing one-fifth of such award was certified by the Company’s Compensation Committee in January 2023. (4)The vesting of the fourth tranche of 2,000,000 option shares under the 2021 CEO Performance Stock Option representing one-fifth of such award was certified by the Company’s Compensation Committee in September 2023. (5)The vesting of the fifth tranche of 2,000,000 option shares under the 2021 CEO Performance Stock Option representing one-fifth of such award was certified by the Company’s Compensation Committee in February 2024. During the three months ended September 30, 2024 and 2023, the Company recognized compensation expense related to the 2021 CEO Performance Stock Option of $0.0 million and $0.2 million, respectively. As of September 30, 2024 and June 30, 2024, the Company had no unrecognized compensation cost related to the 2021 CEO Performance Stock Option. 2023 CEO Performance Award In November 2023, the Compensation Committee approved the grant of a stock option award for 5,000,000 shares of common stock to the Company’s CEO (the “2023 CEO Performance Stock Option”). The 2023 CEO Performance Stock Option has five vesting tranches with a vesting schedule based entirely on the attainment of operational milestones (performance conditions) and market conditions, assuming (1) continued employment either as the CEO or in such capacity as agreed upon between the Company’s CEO and the Board and (2) service through each vesting date. Each of the five vesting tranches of the 2023 CEO Performance Stock Option will vest upon certification by the Compensation Committee that both (i) the market price milestone for such tranche, which begins at $45.00 per share for the first tranche and increases up to $110.00 per share thereafter (based on a 60 trading day average stock price), has been achieved, and (ii) any one of five operational milestones focused on total revenue, as reported under U.S. GAAP, have been achieved for the previous four consecutive fiscal quarters. Upon vesting and exercise, including the payment of the exercise price of $45.00 per share, prior to November 14, 2026, the Company’s CEO must hold shares that he acquires until November 14, 2026, other than those shares sold pursuant to a cashless exercise where shares are simultaneously sold to pay for the exercise price and any required tax withholding. The achievement status of the operational and stock price milestones as of September 30, 2024 was as follows:
Annualized Revenue Milestone (in billions)(1) |  | Achievement Status |  | Stock Price Milestone(1) |  | Achievement Status
$13.0 |  | Probable |  | $45.00 |  | Achieved (2)
$15.0 |  | Probable |  | $60.00 |  | Achieved (3)
$17.0 |  | Probable |  | $75.00 |  | Achieved (4)
$19.0 |  | Probable |  | $90.00 |  | Achieved (5)
$21.0 |  | Probable |  | $110.00 |  | Not yet achieved
(1)Under the terms of the 2023 CEO Performance Stock Option, the annualized revenue milestones and stock price milestones set forth in the table above must be achieved by December 31, 2028 and March 31, 2029, respectively. (2)On March 2, 2024, the Compensation Committee certified achievement of the $45 stock price milestone based upon the 60 trading day average stock price from November 29, 2023 through February 26, 2024. (3)On April 1, 2024, the Compensation Committee certified achievement of the $60 stock price milestone based upon the 60 trading day average stock price from December 15, 2023 through March 13, 2024. (4)On April 1, 2024, the Compensation Committee certified achievement of the $75 stock price milestone based upon the 60 trading day average stock price from January 4, 2024 through April 1, 2024. (5)On May 5, 2024, the Compensation Committee certified achievement of the $90 stock price milestone based upon the 60 trading day average stock price from January 31, 2024 through April 25, 2024. During the three months ended September 30, 2024, the Company recognized compensation expense related to the 2023 CEO Performance Stock Option of $7.7 million. As of September 30, 2024, the Company had $11.2 million in unrecognized compensation cost related to the 2023 CEO Performance Stock Option. The unrecognized compensation cost as of September 30, 2024 is expected to be recognized over a period of 2.25 years. On the respective grant dates of each of the 2021 CEO Performance Award and the 2023 CEO Performance Award, a Monte Carlo simulation was used to determine for each tranche of each award (i) a fixed expense amount for such tranche and (ii) the future time when the market price milestone for such tranche was expected to be achieved, or its “expected market price milestone achievement time.” Separately, based on a subjective assessment of the Company’s future financial performance, each quarter, the Company will determine, using a Monte Carlo simulation, whether achievement is probable for each operational milestone that has not previously been achieved or deemed probable of achievement, and, if so, the future time when the Company expects to achieve that operational milestone, or its “expected operational milestone achievement time.” When the Company first determines that an operational milestone has become probable of being achieved, the Company will allocate the entire expense for the related tranche over the number of quarters between the grant date and the then-applicable “expected vesting time.” The “expected vesting time” at any given time is the later of (i) the expected operational milestone achievement time (if the related operational milestone has not yet been achieved) and (ii) the expected market price milestone achievement time (if the related market price milestone has not yet been achieved). The Company will immediately recognize a catch-up expense for all accumulated expenses from the respective grant date through the quarter in which the operational milestone was first deemed probable of being achieved. Each quarter thereafter, the Company will recognize the prorated portion of the then-remaining expense for the tranche based on the number of quarters between such quarter and the then-applicable expected vesting time, except that upon vesting of a tranche, all remaining expenses for that tranche will be immediately recognized. The following table summarizes stock option activity during the three months ended September 30, 2024 under all plans:
|  | Options Outstanding |  | Weighted Average Exercise Price per Share |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Term (in Years) |  |
Balance as of June 30, 2024 |  | 35,443,550 |  |  | $ | 17.57 |  |  |  |  |  |  |
Granted |  | 1,084,500 |  |  | $ | 66.41 |  |  | $40.71 |  |  |  |
Exercised |  | (1,330,560) |  |  | $ | 4.91 |  |  |  |  |  |  |
Forfeited/Cancelled |  | (179,250) |  |  | $ | 22.61 |  |  |  |  |  |  |
Balance as of September 30, 2024 |  | 35,018,240 |  |  | $ | 19.53 |  |  |  |  | 6.99 |  |
Options vested and expected to vest as of September 30, 2024 |  | 35,018,240 |  |  | $ | 19.53 |  |  |  |  |  |  |
Options exercisable as of September 30, 2024 |  | 19,316,140 |  |  | $ | 5.18 |  |  |  |  | 5.49 |  |
The total pretax intrinsic value of options exercised during the three months ended September 30, 2024 and 2023 was $63.1 million and $45.9 million, respectively. RSU Activity The following table summarizes RSU activity during the three months ended September 30, 2024 under all plans:
| Time-Based RSUs Outstanding |  | Weighted Average Grant-Date Fair Value per Share |  |  |  |  |
Balance as of June 30, 2024 | 21,272,990 |  |  | $ | 24.19 |  |  |  |  |  |
Granted | 2,111,600 |  |  | $ | 66.53 |  |  |  |  |  |
Released | (2,264,940) |  |  | $ | 13.63 |  |  |  |  |  |
Forfeited | (274,200) |  |  | $ | 33.62 |  |  |  |  |  |
Balance as of September 30, 2024 | 20,845,450 |  |  | $ | 29.51 |  |  |  |  |  |

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2)(i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 718 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (l) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480429/718-10-50-2 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration