Share-based Compensation

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

We currently grant stock options, RSUs and PSUs under our Amended and Restated 2021 Stock Plan (“2021 Stock Plan”), which was approved by the stockholders on May 5, 2021 and provides for the grant of up to 17.8 million shares of common stock to selected employees, consultants and non-employee members of our Board of Directors as stock options, stock appreciation rights, RSUs and PSUs. Awards are subject to terms and conditions established by the Compensation Committee of our Board of Directors. During the year ended December 31, 2024, we granted share-based awards under the 2021 Stock Plan. As of December 31, 2024, 7.4 million shares were subject to outstanding awards and 10.1 million shares were available for future grants of share-based awards.

The following table summarized share-based compensation expense included in our consolidated statements of income related to share-based awards (in thousands):


	Year Ended December 31,
	2024		2023		2022
Research and development	$	12,985	$	13,345	$	9,903
Selling, general and administrative	30,400		23,275		14,494
Total share-based compensation expense	$	43,385	$	36,620	$	24,397

Share-based compensation expense by type of share-based award was as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Stock options	$	16,078	$	16,351	$	10,973
RSUs, PSUs and ESPP	27,307		20,269		13,424
Total share-based compensation expense	$	43,385	$	36,620	$	24,397

Total unrecognized estimated compensation cost by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized as of December 31, 2024 (in thousands, unless otherwise noted):


	December 31, 2024
	Unrecognized Expense		Remaining Weighted-Average Recognition Period ( in years)
Stock options	$	29,046	2.25
RSUs	42,361		2.50
PSUs	15,285		1.55
ESPP	303		0.37

ESPP. In February 2021, our Board of Directors approved our 2021 ESPP and our stockholders approved the plan in May 2021. The 2021 ESPP enables eligible employees to purchase shares of our common stock at the end of each offering period at a price equal to 85% of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower. Share purchases are funded through payroll deduction of at least 1% and up to 15% of an employee’s compensation for each payroll period, and no employee may purchase shares under the 2021 ESPP that exceeds $25,000 worth of our common stock for a calendar year. As of December 31, 2024, 2,559,594 shares were available for future purchase. The offering period is generally for a six-month period and the first offering period commenced on June 16, 2021. Offering periods shall commence on or about the sixteenth day of June and December of each year and end on or about the fifteenth day of the next December and June, respectively, occurring thereafter. During the twelve months ended December 31, 2024, 44,628 shares were issued pursuant to the 2021 ESPP.

Stock Options. Options granted under the 2021 Stock Plan must have an exercise price equal to at least 100% of the fair market value of our common stock on the date of grant. The options generally have a maximum contractual term of ten years and vest at the rate of one-fourth of the shares on the first anniversary of the date of grant and 1/48 of the shares monthly thereafter. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2021 Stock Plan).

A summary of our stock option award activity as of and for the year ended December 31, 2024 is as follows:


	Shares Underlying Stock Options	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term ( in years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2023	6,422,837	$	30.50
Granted	675,412	42.77
Exercised	(1,207,914)	27.06
Canceled/forfeited	(414,129)	42.86
Outstanding as of December 31, 2024	5,476,206	31.83		6.16	$	90.5
Vested and expected to vest as of December 31, 2024	5,476,206	31.83		6.16	90.5
Exercisable as of December 31, 2024	3,592,590	$	26.38	4.97	$	78.1

The weighted average grant date fair value of options granted during the years ended December 31, 2024, 2023 and 2022 was $17.75 per share, $17.72 per share and $14.22 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was approximately $31.4 million, $13.7 million and $21.6 million, respectively. Cash received from stock option exercises for the years ended December 31, 2024, 2023 and 2022 was approximately $32.7 million, $10.0 million and $15.3 million, respectively.

The exercise price of stock options granted is equal to the closing price of the common stock on the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model (“Black-Scholes Model”). Expected volatility is based on historical volatility of our common stock. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The dividend yield assumption is based on the expectation of no future dividend payments. The assumptions used in the Black-Scholes Model were as follows:


	Year Ended December 31,
	2024	2023	2022
Expected volatility	40.01 - 42.13%	39.68 - 40.82%	39.91 - 50.81%
Average expected term (in years)	5.0	4.8	4.7
Risk-free interest rate	3.65 - 4.70%	3.37 - 4.72%	1.37 - 4.27%
Expected dividend yield	—	—	—

Restricted Stock Units. A RSU is a promise by us to issue a share of our common stock upon vesting of the unit. RSUs will generally vest at the rate of one-fourth of the shares on each anniversary of the date of grant.

The following table summarizes our RSU activity during the year ended December 31, 2024:


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2023	1,139,336	$	41.38
Granted	882,672	41.84
Vested	(408,025)	37.92
Forfeited	(215,207)	43.03
Outstanding as of December 31, 2024	1,398,776	$	42.43	1.33	$	66.9

The estimated fair value of the RSUs was based on the closing market value of our common stock on the date of grant. The total grant date fair value of RSUs vested during the years ended December 31, 2024, 2023 and 2022 was approximately $15.5 million, $12.9 million and $8.6 million, respectively. The fair value of RSUs vested during the years ended December 31, 2024, 2023 and 2022 was approximately $16.5 million, $18.3 million and $11.3 million, respectively.

Performance Stock Units. A PSU is a promise by us to issue a share of our common stock upon achievement of a specific performance condition.

The following table summarizes our PSU activity during the year ended December 31, 2024:


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2023	242,555	$	51.72
Granted	332,400	45.06
Vested	(43,955)	62.51
Forfeited	(48,597)	46.82
Outstanding as of December 31, 2024	482,403	$	46.64

The estimated fair value of the PSUs was based on the closing market value of our common stock on the date of grant. The fair value of PSUs vested during the years ended December 31, 2024, 2023 and 2022 was $1.6 million, $0.2 million and $0.2 million, respectively.