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Stock-based Compensation | 6 Months Ended
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Mar. 31, 2021
Share Based Compensation Allocation And Classification In Financial Statements [Abstract] |
Stock-Based Compensation | 4. Stock-based Compensation Our equity incentive plan provides for grants of nonqualified and incentive stock options, common stock, restricted stock, restricted stock units (RSUs) and stock appreciation rights to employees, directors, officers and consultants. We award RSUs, including performance-based awards, as our principal equity incentive awards. The following table shows RSU activity for the six months ended March 31, 2021:
(in thousands, except grant date fair value data) |  | Number of RSUs |  |  | Weighted-Average Grant Date Fair Value Per RSU |
Balance of outstanding restricted stock units, October 1, 2020 |  |  | 3,509 |  |  | $ | 79.13 |
Granted(1) |  |  | 1,004 |  |  | $ | 103.64 |
Vested |  |  | (861 | ) |  | $ | 79.86 |
Forfeited or not earned |  |  | (67 | ) |  | $ | 80.39 |
Balance of outstanding restricted stock units, March 31, 2021 |  |  | 3,585 |  |  | $ | 85.91 |
(1) | Restricted stock granted includes 33,000 shares from prior period TSR awards that were earned upon achievement of the performance criteria and vested in November 2020.
The following table presents the number of RSU awards granted by award type:
(in thousands) |  | Six months ended March 31, 2021 |
Performance-based RSUs(1) |  |  | 90 |
Service-based RSUs(2) |  |  | 791 |
Total Shareholder Return RSUs(3) |  |  | 90 |
(1) | The performance-based RSUs were granted to our executives and are eligible to vest based upon annual performance measures over a three-year period. To the extent earned, those performance-based RSUs will vest in three substantially equal installments on November 15, 2021, 2022 and 2023, or the date the Compensation Committee determines the extent to which the applicable performance criteria have been achieved for each performance period. Up to a maximum of two times the number of RSUs can be earned (a maximum aggregate of 179,000 RSUs).
(2) | The service-based RSUs were granted to employees, including our executive officers. Substantially all service-based RSUs will vest in three substantially equal annual installments on or about the anniversary of the date of grant.
(3) | The Total Shareholder Return RSUs (TSR RSUs) were granted to our executives and are eligible to vest based on the performance of PTC stock relative to the stock performance of an index of PTC peer companies established as of the grant date, as determined at the end of three measurement periods ending on September 30, 2021, 2022 and 2023, respectively. The RSUs earned for each period will vest on November 15, 2021, 2022, and 2023. Up to a maximum of two times the number of TSR RSUs eligible to be earned for the period (up to a maximum aggregate of 179,000 RSUs) may vest. If the return to PTC shareholders is negative for a period but still meets or exceeds the peer group indexed return, a maximum of 100% of the eligible TSR RSUs may vest for the measurement period.
The weighted-average fair value of the TSR RSUs was $124.04 per target RSU on the grant date. The fair value of the TSR RSUs was determined using a Monte Carlo simulation model. The significant assumptions used in the Monte Carlo simulation model were as follows:
Average volatility of peer group |  |  | 41.5 | %
Risk free interest rate |  |  | 0.21 | %
Dividend yield |  |  | — | %
Compensation expense recorded for our stock-based awards is classified in our Consolidated Statements of Operations as follows:
(in thousands) |  | Three months ended |  |  | Six months ended |
|  | March 31, 2021 |  |  | March 28, 2020 |  |  | March 31, 2021 |  |  | March 28, 2020 |
Cost of license revenue |  | $ | 20 |  |  | $ | 11 |  |  | $ | 40 |  |  | $ | 11 |
Cost of support and cloud services revenue |  |  | 2,309 |  |  |  | 1,524 |  |  |  | 4,611 |  |  |  | 3,010 |
Cost of professional services revenue |  |  | 2,177 |  |  |  | 1,465 |  |  |  | 4,289 |  |  |  | 3,022 |
Sales and marketing |  |  | 13,305 |  |  |  | 7,146 |  |  |  | 28,304 |  |  |  | 14,598 |
Research and development |  |  | 7,921 |  |  |  | 4,765 |  |  |  | 16,364 |  |  |  | 11,697 |
General and administrative |  |  | 19,008 |  |  |  | 5,573 |  |  |  | 37,220 |  |  |  | 16,082 |
Total stock-based compensation expense |  | $ | 44,740 |  |  | $ | 20,484 |  |  | $ | 90,828 |  |  | $ | 48,420 |
Stock-based compensation expense includes $1.8 million and $3.8 million in the second quarter and first six months of 2021, respectively, and $1.3 million and $2.8 million in the second quarter and first six months of 2020, respectively, related to our employee stock purchase plan.

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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