STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

On April 30, 2015, the Company adopted the 2015 Stock Incentive Plan (the "2015 Plan"), with the objective of attracting and retaining highly competent personnel through opportunities to acquire the Company’s common stock.

There are currently 20.8 million shares of common stock available for issuance under the 2015 Plan. The 2015 Plan expires in 2025, and the Company intends to seek stockholder approval of a new plan during the 2025 annual meeting of stockholders.

The 2006 Incentive Stock Plan (the "2006 Plan"), which was adopted on January 18, 2007 and expired in 2017, similarly had the objective of attracting and retaining highly competent employees, directors, and independent consultants through opportunities to acquire the Company’s common stock. No further awards can be granted under the 2006 Plan. As of December 31, 2024, there were no unvested awards under the 2006 plan and certain vested but unexercised awards remained outstanding.

For the years ended December 31, 2024, 2023 and 2022, the Company recognized stock-based compensation expense of approximately $19.6 million, $21.2 million and $20.7 million, respectively, which is included in selling, general and administrative expenses.

Stock Options

The maximum contractual term of the Company’s stock options is 10 years.

The Company used the Black-Scholes option pricing model to estimate the fair value of its stock option awards and warrant issuances. Forfeitures are recognized as they occur.

A summary of the status of the Company’s outstanding stock options as of December 31, 2024 and changes during the period are as follows:


	Shares (000’s)	Weighted Average Exercise Price		Aggregate Intrinsic Value (000’s)(1)		Weighted Average Remaining Term (Yrs)

At December 31, 2023	4,918	$	3.81	$	249,541	4.45

Exercised	(2,490)	$	1.54	$	112,423	—
Forfeited and cancelled	—	—		—		—
At December 31, 2024	2,428	$	6.13	$	49,057	4.75
Exercisable at December 31, 2024	2,428	$	6.13	$	49,057	4.75

(1) The intrinsic value represents the amount by which the fair value of the Company's common stock exceeds the option exercise price as of December 31, 2024.

The total intrinsic value of the stock options exercised was $112.4 million, $81.4 million and $102.3 million in the years ended December 31, 2024, 2023 and 2022, respectively. The total number of stock options exercised was 2.5 million, 1.8 million and 3.8 million in the years ended December 31, 2024, 2023 and 2022, respectively.

There were no stock options granted during the years ended December 31, 2024, 2023, or 2022.

As of December 31, 2024, unrecognized non-cash compensation expense related to stock options was immaterial.

Restricted Stock Units

Restricted stock units are awards that give the holder the right to receive one share of common stock for each restricted stock unit upon meeting service-based vesting conditions (typically annual vesting in three equal annual installments, with a requirement that the holder remains in the continuous employment of the Company). The Company determines the fair value of restricted stock-based awards that vest over time based on the market price of the common stock on the date of grant. The holders of unvested units do not have the same rights as stockholders and do not have the right to receive any dividends.

A summary of the Company’s restricted stock unit activity for the years ended December 31, 2024 and 2023 is presented in the following table:


	2024			2023
	Shares (000’s)	Weighted Average Grant Date Fair Value		Shares (000’s)	Weighted Average Grant Date Fair Value
Unvested at beginning of period	1,218	$	26.13	1,617	$	20.24

Granted	377	62.65		468	36.41
Vested	(715)	23.17		(670)	19.65
Forfeited and cancelled	(79)	39.00		(197)	24.35
Unvested at end of period	801	$	44.76	1,218	$	26.13

The total fair value of shares vested during the years ended December 31, 2024, 2023, and 2022 was approximately $16.6 million, $24.9 million and $11.6 million, respectively. Unrecognized compensation expense related to outstanding restricted stock units to employees and directors as of December 31, 2024 and December 31, 2023 was approximately $23.6 million and $17.8 million respectively, and is expected to be expensed over the next 2.0 years.

Performance-based Stock Awards

PSUs are awards that give the holder the right to receive one share of common stock for each PSU upon meeting performance or market-based vesting conditions. These conditions typically include the attainment of specific metrics over a defined period. The fair value of the PSUs is determined based on either the grant date fair value for performance metrics or using a Monte Carlo simulation for market based awards. The Company recognizes expense if the metrics are probable of being achieved and expensed using either a straight line or an accelerated attribution model. Additionally, the Company recognizes compensation expense for non-employees in the same manner and periods as though cash had been paid for services received.

The Human Resources and Compensation Committee of the Board approved certain PSUs under the 2015 Plan, with each PSU initially equivalent in value to one share of common stock.

In the third quarter of 2022, PSUs with an aggregate grant date fair value of $7.5 million, were issued to certain employees. These awards included an immediate vesting of 20% of the shares as well as specific performance-based metrics to be met in year one and year two of the issuance. These awards were fully vested, using the accelerated attribution method according to ASC 718, during the year ended December 31, 2024.

In March 2024, PSUs representing an aggregate of approximately 65,000 shares of common stock were granted to certain officers of the Company. The PSUs vest over a period of three years from the grant date based on continuous service, with the number of shares earned (50% to 200% of the target awarded) depending upon the extent to which the Company achieves certain financial and market performance targets measured over the period beginning January 1, 2024 and ending December 31, 2026. Approximately one-third of the PSUs were valued at $79.27 per PSU based on the Company's common stock price on the grant date, and the financial targets for vesting are based on the Company's achievement of certain revenue metrics. The Company recognizes the grant-date fair value of these PSUs as stock-based compensation expense ratably over the vesting period based on the number of awards expected to vest at each reporting date. The remaining PSUs were valued using a Monte Carlo simulation model. This model incorporates assumptions such as the risk-free interest rate based on zero-coupon yields implied by U.S. Treasury issuances, and expected volatility derived from historical data of the Company's common stock and certain indices. The Company recognizes the grant-date fair value of these awards as stock-based compensation expense ratably over the vesting period. Approximately one-third of the performance target for vesting is based on total shareholder return relative to the Company's peer group, with each PSU valued at $134.75. The remaining one-third have a vesting performance target based on a specific market price, with each PSU valued at $20.25.

In August 2024, an aggregate of 104,000 PSUs were issued to certain employees of the Company with a performance period ending on December 31, 2025. The PSUs were valued at $39.40 per unit based on the Company's common stock price on the grant date. A total of 87,000 shares vest dependent on the Company meeting specific market share MULO+C metrics for each of the years ending December 31, 2024, and 2025. Should the performance goal not be met by the period ended December 31, 2024, the portion of shares shall remain outstanding and vest if the December 31, 2025 goal is met. The remaining 17,000 shares vest if the Company meets a cumulative international revenue target, in 2024 and 2025 to be achieved by December 31, 2025.

The Company grants PSUs throughout the year, which vest based on the achievement of various performance metrics over different service periods. These performance criteria include financial or market-based targets. Awards tied to financial targets are assessed for the probability of achieving the goal, which determines whether the related expense will be recognized.

A summary of the Company’s PSU activity for the years ended December 31, 2024 and 2023 is presented in the following table:


	2024			2023
	Shares (000’s)	Weighted Average Grant Date Fair Value		Shares (000’s)	Weighted Average Grant Date Fair Value
Unvested at beginning of period	123	$	29.43	228	$	30.49

Granted	175	52.78		—	—
Vested	(78)	32.76		(92)	32.76
Forfeited and cancelled	—	—		(13)	24.87
Unvested at end of period	220	$	47.41	123	$	29.43

Unrecognized compensation expense related to outstanding PSUs issued to employees as of December 31, 2024, was approximately $5.4 million and is expected to be expensed over the next 1.8 years.

Issuance of Common Stock Pursuant to Exercise of Stock Options and Other Awards

During the year ended December 31, 2024, the Company issued an aggregate of 3.3 million shares of common stock under the 2015 Plan and received aggregate proceeds of approximately $3.9 million.

During the year ended December 31, 2023, the Company issued an aggregate of 2.6 million shares of common stock under the 2015 Plan and 2006 Plan and received aggregate proceed of approximately $2.3 million.

To cover employees’ tax withholding obligations, the Company uses net settlement, withholding shares upon vesting and paying the related taxes. For the year ended December 31, 2024, $2.3 million related to these net settlements was recorded and is reflected as repurchase of common stock related to tax withholdings in the consolidated statements of changes in stockholders' equity and mezzanine equity as well as in the consolidated statements of cash flows. No amount was recorded for the same periods in the prior year.