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SHARE-BASED COMPENSATION (Tables) | 9 Months Ended
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Sep. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Summary of RSU Activity | A summary of RSU activity under all stock plans for the nine months ended September 30, 2024, is presented as follows (in millions, except per share amounts):
| Shares |  | Weighted-Average Grant-Date Fair Value
Unvested balance as of December 31, 2023 | 5.0 |  |  | $ | 245.75 |
RSUs granted | 2.4 |  |  | $ | 390.22 |
RSUs vested | (1.8) |  |  | $ | 236.63 |
RSUs forfeited | (0.3) |  |  | $ | 282.86 |
Unvested balance as of September 30, 2024 | 5.3 |  |  | $ | 311.73 |
Summary of Stock Option Activity Under All Stock Plans | A summary of stock option activity under all stock plans for the nine months ended September 30, 2024, is presented as follows (in millions, except per share amounts):
|  | Stock Options Outstanding
|  | Number Outstanding |  | Weighted-Average Exercise Price Per Share
Balance as of December 31, 2023 |  | 9.8 |  |  | $ | 174.90 |
Options granted |  | — |  |  | $ | — |
Options exercised |  | (2.2) |  |  | $ | 117.26 |
Options forfeited or expired |  | (0.1) |  |  | $ | 255.85 |
Balance as of September 30, 2024 |  | 7.5 |  |  | $ | 190.36 |
Share-Based Payment Arrangement, Performance Shares, Activity | A summary of PSU activity for the nine months ended September 30, 2024, is presented as follows (in millions, except per share amounts):
|  | Shares |  | Weighted-Average Grant Date Fair Value Per Share
Unvested balance as of December 31, 2023 |  | 0.2 |  |  | $ | 259.60 |
Granted |  | 0.1 |  |  | $ | 395.92 |
Vested |  | — |  |  | $ | 276.20 |
Performance change |  | — |  |  | $ | 290.33 |
Forfeited |  | — |  |  | $ | 294.75 |
Unvested balance as of September 30, 2024 |  | 0.3 |  |  | $ | 306.94 |
Summary of Share-Based Compensation Expense | The following table summarizes share-based compensation expense for the three and nine months ended September 30, 2024, and 2023 (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cost of revenue – product (before capitalization) | $ | 27.5 |  |  | $ | 24.7 |  |  | $ | 75.7 |  |  | $ | 70.4 |
Amounts capitalized into inventory | (25.6) |  |  | (23.2) |  |  | (70.7) |  |  | (63.1) |
Amounts recognized in income for amounts previously capitalized in inventory | 23.0 |  |  | 21.1 |  |  | 66.2 |  |  | 53.0 |
Cost of revenue – product | $ | 24.9 |  |  | $ | 22.6 |  |  | $ | 71.2 |  |  | $ | 60.3 |
Cost of revenue – service | 7.9 |  |  | 7.3 |  |  | 22.5 |  |  | 21.3 |
Total cost of revenue | 32.8 |  |  | 29.9 |  |  | 93.7 |  |  | 81.6 |
Selling, general, and administrative | 77.6 |  |  | 71.9 |  |  | 225.4 |  |  | 206.6 |
Research and development | 65.4 |  |  | 55.3 |  |  | 188.7 |  |  | 157.7 |
Share-based compensation expense before income taxes | 175.8 |  |  | 157.1 |  |  | 507.8 |  |  | 445.9 |
Income tax benefit | 36.9 |  |  | 28.7 |  |  | 105.4 |  |  | 85.2 |
Share-based compensation expense after income taxes | $ | 138.9 |  |  | $ | 128.4 |  |  | $ | 402.4 |  |  | $ | 360.7 |
Schedule of Estimated Fair Value of the Option Using Black-Scholes Option Pricing Model, Weighted Average Assumptions | The weighted-average estimated fair values of stock options and the rights to acquire stock under the ESPP, as well as the weighted-average assumptions used in calculating the fair values of stock options and the rights to acquire stock under the ESPP that were granted during the three and nine months ended September 30, 2024, and 2023, were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Stock Options |  |  |  |  |  |  |
Risk-free interest rate | — |  | 4.5% |  | — |  | 4.6%
Expected term (in years) | — |  | 2.9 |  | — |  | 3.2
Expected volatility | — |  | 32% |  | — |  | 33%
Fair value at grant date | — |  | $82.63 |  | — |  | $77.41
ESPP |  |  |  |  |  |  |
Risk-free interest rate | 4.6% |  | 5.2% |  | 4.6% |  | 5.0%
Expected term (in years) | 1.2 |  | 1.2 |  | 1.2 |  | 1.2
Expected volatility | 29% |  | 31% |  | 29% |  | 33%
Fair value at grant date | $131.01 |  | $98.96 |  | $130.00 |  | $89.42

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