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STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-Based Compensation Plans The Company maintains the following plans for which awards were granted from or had awards outstanding in 2023: the 2010 Omnibus Long-Term Incentive Plan (As Amended and Restated Effective July 27, 2017), the 2019 Omnibus Long-Term Incentive Plan, and the 2010 Employee Stock Purchase Plan. These plans are collectively referred to as the “Stock Plans.” The Stock Plans are administered by the Human Capital Committee of the Company’s Board of Directors (“Human Capital Committee”). The 2019 Omnibus Long-Term Incentive Plan provides that upon an acquisition of the Company, all equity will accelerate by a period of one year. In addition, upon the termination of an employee without cause or for good reason prior to the first anniversary of the completion of the acquisition, all equity awards then outstanding under the respective plan held by that employee will immediately vest. 2019 Omnibus Long-Term Incentive Plan. The Company adopted the 2019 Omnibus Long-Term Incentive Plan (the “2019 Stock Plan”) on July 25, 2019 to grant share-based awards to employees, officers, directors, consultants and advisors. Awards granted under the 2019 Stock Plan may include incentive stock options, as defined under the Internal Revenue Code, non-qualified options, restricted stock awards and other stock awards in amounts and with terms and conditions determined by the Human Capital Committee, subject to the provisions of the 2019 Stock Plan. The 2019 Stock Plan will expire on July 25, 2029 and after such date no further awards may be granted under the plan. Options granted under the 2019 Stock Plan expire ten years from the date of grant. Grants made from the 2019 Stock Plan generally vest over a period of three to four years. At December 31, 2023, options to purchase 404,833 shares were outstanding under the 2019 Stock Plan and 7,867,224 shares of restricted stock and restricted stock units were outstanding. The Company's stockholders approved amendments to the 2019 Stock Plan to increase the number of shares available for future grant thereunder by 14,000,000 and 4,340,000 shares on June 9, 2022 and June 8, 2023, respectively. At December 31, 2023, there were 16,046,161 shares available for future grant under the 2019 Stock Plan. 2010 Omnibus Long-Term Incentive Plan. The Company adopted the 2010 Omnibus Long-Term Incentive Plan (the “2010 Stock Plan”) on July 16, 2010 to grant share-based awards to employees, officers, directors, consultants and advisors. Awards granted under the 2010 Stock Plan may include incentive stock options, as defined under the Internal Revenue Code, non-qualified options, restricted stock awards and other stock awards in amounts and with terms and conditions determined by the Human Capital Committee, subject to the provisions of the 2010 Stock Plan. The 2010 Stock Plan expired on July 16, 2020 and after such date no further awards may be granted under the plan. Options granted under the 2010 Stock Plan expire ten years from the date of grant. Grants made from the 2010 Stock Plan generally vest over a period of three to four years. At December 31, 2023, options to purchase 881,340 shares were outstanding under the 2010 Stock Plan and 3,340 shares of restricted stock and restricted stock units were outstanding. At December 31, 2023, there were no shares available for future grant under the 2010 Stock Plan. 2010 Employee Stock Purchase Plan. The 2010 Employee Stock Purchase Plan (the “2010 Purchase Plan”) was adopted by the Company on July 16, 2010 to provide participating employees the right to purchase shares of common stock at a discount through a series of offering periods. The 2010 Purchase Plan will expire on October 31, 2030. The Company’s stockholders approved amendments to the 2010 Employee Stock Purchase Plan to increase the number of shares available for purchase thereunder by 500,000 shares, 2,000,000 shares, and 3,000,000 shares on July 24, 2014, July 28, 2016, and June 9, 2022, respectively. At December 31, 2023, there were 1,834,193 shares of common stock available for purchase by participating employees under the 2010 Purchase Plan. Generally, all employees whose customary employment is more than 20 hours per week and more than five months in any calendar year are eligible to participate in the 2010 Purchase Plan. Participating employees authorize an amount, between 1% and 15% of the employee’s compensation, to be deducted from the employee’s pay during the offering period. On the last day of the offering period, the employee is deemed to have exercised the employee’s option to purchase shares of Company common stock, at the option exercise price, to the extent of accumulated payroll deductions. Under the terms of the 2010 Purchase Plan, the option exercise price is an amount equal to 85% of the fair market value, as defined under the 2010 Purchase Plan, and no employee can purchase more than $25,000 of Company common stock under the 2010 Purchase Plan in any calendar year. Rights granted under the 2010 Purchase Plan terminate upon an employee’s voluntary withdrawal from the 2010 Purchase Plan at any time or upon termination of employment. At December 31, 2023, there were 3,965,807 cumulative shares issued under the 2010 Purchase Plan. Stock-Based Compensation Expense The Company records stock-based compensation expense in connection with the amortization of restricted stock and restricted stock unit awards (“RSUs”), performance share units (“PSUs”), stock purchase rights granted under the Company’s employee stock purchase plan and stock options granted to employees, non-employee consultants and non-employee directors. A summary of non-cash stock-based compensation expense by expense category included in the Company's consolidated statements of operations for the years ended December 31, 2023, 2022, and 2021 is as follows:
|  | Year Ended December 31,
(In thousands) |  | 2023 |  | 2022 |  | 2021
Cost of sales |  | $ | 20,761 |  |  | $ | 19,218 |  |  | $ | 16,835 |
Research and development |  | 41,242 |  |  | 33,825 |  |  | 49,723 |
Sales and marketing |  | 65,552 |  |  | 62,568 |  |  | 55,716 |
General and administrative |  | 103,757 |  |  | 91,212 |  |  | 216,952 |
Total stock-based compensation |  | $ | 231,312 |  |  | $ | 206,823 |  |  | $ | 339,226 |
As of December 31, 2023, there was approximately $354.8 million of expected total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under all equity compensation plans. The Company expects to recognize that cost over a weighted average period of 2.42 years. In connection with the acquisition of Thrive, the Company accelerated the vesting of shares of previously unvested stock options and restricted stock units for employees with qualifying termination events. During the year ended December 31, 2021, the Company accelerated 139,096 shares of previously unvested stock options and 58,171 shares of previously unvested restricted stock awards and restricted stock units and recorded $19.0 million of non-cash stock-based compensation for the accelerated awards. As further discussed in Note 18, the Company also recorded $86.2 million in stock-based compensation related to accelerated vesting of awards held by Thrive employees in connection with the acquisition. Stock Options The Company determined the fair value of each service-based option award on the date of grant using the Black-Scholes option-pricing model, which utilized several key assumptions including risk-free interest rate, expected term, expected volatility, and dividend yield. There were no option awards granted during the years ended December 31, 2023, 2022 and 2021. A summary of stock option activity under the Stock Plans is as follows:
Options |  | Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (1)
(Aggregate intrinsic value in thousands) |  |  |  |  |  |  |  |
Outstanding, January 1, 2023 |  | 1,517,876 |  |  | $ | 44.82 |  |  | 4.7 |  |
Exercised |  | (194,629) |  |  | 16.44 |  |  |  |  |
Forfeited |  | (37,074) |  |  | 95.02 |  |  |  |  |
Outstanding, December 31, 2023 |  | 1,286,173 |  |  | $ | 47.67 |  |  | 3.8 |  | $ | 42,878 |
Vested and expected to vest, December 31, 2023 |  | 1,286,173 |  |  | $ | 47.67 |  |  | 3.8 |  | $ | 42,878 |
Exercisable, December 31, 2023 |  | 1,228,594 |  |  | $ | 45.32 |  |  | 3.7 |  | $ | 42,878 |
_________________________________ (1) The total intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021 was $11.7 million, $36.4 million, and $155.8 million, respectively, determined as of the date of exercise. The Company received approximately $3.2 million, $6.5 million, and $14.4 million from stock option exercises during the years ended December 31, 2023, 2022 and 2021, respectively. Restricted Stock and Restricted Stock Units The fair value of restricted stock and restricted stock units is determined on the date of grant using the closing stock price on that day. A summary of restricted stock and restricted stock unit activity is as follows:
|  | Restricted Shares |  | Weighted Average Grant Date Fair Value (1)
Outstanding, January 1, 2023 |  | 5,254,709 |  |  | $ | 85.87 |
Granted |  | 3,510,373 |  |  | 62.36 |
Released (2) |  | (1,797,915) |  |  | 88.28 |
Forfeited |  | (694,404) |  |  | 73.54 |
Outstanding, December 31, 2023 |  | 6,272,763 |  |  | $ | 73.39 |
_________________________________ (1) The weighted average grant date fair value of the restricted stock units granted during the years ended December 31, 2022 and 2021 was $68.18 and $129.16, respectively. (2) The fair value of restricted stock units vested and converted to shares of the Company's common stock was $158.2 million, $117.6 million, and $219.4 million for the years ended December 31, 2023, 2022, and 2021, respectively. Performance Share Units The Company has issued performance-based equity awards to certain employees which vest upon the achievement of certain performance goals, including financial performance targets and operational milestones. A summary of performance share unit activity is as follows:
|  | Performance Share Units (1) |  | Weighted Average Grant Date Fair Value (2)
Outstanding, January 1, 2023 |  | 967,846 |  |  | $ | 102.58 |
Granted |  | 782,966 |  |  | 80.50 |
Released (3) |  | (12,284) |  |  | 78.32 |
Forfeited |  | (140,727) |  |  | 93.73 |
Outstanding, December 31, 2023 |  | 1,597,801 |  |  | $ | 92.73 |
_________________________________ (1) The performance share units listed above assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding performance share units as of December 31, 2023 was 772,906. (2) The weighted average grant date fair value of the performance share units granted during the years ended December 31, 2022 and 2021 was $89.43 and $138.09, respectively. (3) The fair value of performance share units vested and converted to shares of the Company's common stock was $1.0 million and $27.2 million for the years ended December 31, 2023 and 2022, respectively. There were no performance share units vested and converted to shares of the Company's common stock during the year ended December 31, 2021. Employee Stock Purchase Plan (“ESPP”) A summary of ESPP activity is as follows:
|  | Year Ended December 31,
(in thousands, except share and per share amounts) |  | 2023 |  | 2022 |  | 2021
Shares issued under the 2010 Purchase Plan |  | 924,448 |  |  | 668,605 |  | 331,769
Cash received under the 2010 Purchase Plan |  | $ | 28,344 |  |  | $ | 25,491 |  |  | $ | 23,070 |
Weighted average fair value per share of stock purchase rights granted during the period |  | $ | 16.32 |  |  | $ | 17.52 |  |  | $ | 34.93 |
The 924,448 shares issued during the year ended December 31, 2023 were as follows:
Offering period ended |  | Number of Shares |  | Weighted Average price per Share
April 30, 2023 |  | 544,453 |  |  | $ | 30.02 |
October 31, 2023 |  | 379,995 |  |  | $ | 31.57 |
The fair value of ESPP shares is based on the assumptions in the following table:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
Risk-free interest rates |  | 4.68% - 4.71% |  | 1.49% - 4.71% |  | 0.04% - 0.16%
Expected term (in years) |  | 1.25 |  | 0.5 - 2 |  | 0.5 - 2
Expected volatility |  | 63.13% - 67.30% |  | 50.94% - 63.13% |  | 43.00% - 68.51%
Dividend yield |  | 0% |  | 0% |  | 0%
Shares Reserved for Issuance The Company has reserved shares of its authorized common stock for issuance pursuant to its employee stock purchase and equity plans, including all outstanding stock option grants noted above at December 31, 2023, as follows:
Shares reserved for issuance |  |
2019 Stock Plan |  | 16,046,161 |
2010 Purchase Plan |  | 1,834,193 |
|  | 17,880,354 |

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