Stockholders' Equity

9 Months Ended

Sep. 27, 2025

Stockholders’ Equity

2019 Equity Incentive Award Plan

Employees and consultants of the Company, its subsidiaries and affiliates, as well as members of the Company’s Board of Directors, are eligible to receive awards under the Fourth Amended and Restated 2019 Equity Incentive Award Plan (the “2019 Plan”). The 2019 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock or cash-based awards and dividend equivalents to eligible individuals. At the Company’s 2025 annual meeting of stockholders, the stockholders approved an increase in the number of shares of common stock issuable under the 2019 Plan by 4.0 million shares. As of September 27, 2025, there were 3.8 million shares available for issuance under the 2019 Plan.

In February 2025, stock option awards exercisable for up to an aggregate of 3.1 million shares of common stock were granted to certain members of the Company’s leadership team with a grant date exercise price of $39.68 per share. The actual number of shares earned is contingent upon achievement of annual corporate financial targets for bookings and non-GAAP net operating income for 2025 (collectively, the “2025 Performance Targets”) during the one-year performance period. The stock option awards will vest, subject to certification by the Compensation Committee of the Company’s Board of Directors upon the achievement of the 2025 Performance Targets, as to 25% of the shares of common stock earned on the one year anniversary of the date of grant, and as to the remaining 75% of the shares of common stock earned, in substantially equal quarterly installments over the subsequent 36 months, subject to the executive’s continuous service with the Company through the respective vesting dates. If the combined non-GAAP net operating income target and the bookings target are achieved below 50% of target, 50% of the shares would be awarded, and the balance would be forfeited. If the combined target is achieved at the minimum threshold of 50% of target, then 75% of the shares would be awarded, with an increasing percentage of shares awarded above the minimum thresholds up to 100% of the granted shares for each target. Each target result is then weighted by 50% and the combined total determines the percent of target shares. The maximum combined award is 100%. The probability of meeting the performance conditions was assessed to be probable as of September 27, 2025, and stock-based compensation expense of $6.6 million was recognized for the three months ended September 27, 2025. For the nine months ended September 27, 2025, stock-based compensation expense of $17.4 million was recognized.

During the three months ended September 27, 2025, stock option awards exercisable for up to an aggregate of 0.4 million shares of common stock were granted with a grant date weighted-average exercise price of $56.67 per share. During the nine months ended September 27, 2025, stock option awards exercisable for up to an aggregate of 1.0 million shares of common stock were granted with a grant date weighted-average exercise price of $47.39 per share. These stock option awards generally vest 25% on the first anniversary of the vesting commencement date and on a quarterly basis thereafter over an additional three years.

During the three months ended September 27, 2025, 0.7 million shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $11.09 per share. During the nine months ended September 27, 2025, 1.1 million shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $15.85 per share. As of September 27, 2025, unrecognized stock-based compensation expense of $89.0 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.3 years.

During the nine months ended September 27, 2025, 38,000 restricted stock awards, with a one-year vesting period, were granted to the Company’s Board of Directors with a grant date fair value of $42.65 per share. As of September 27, 2025, unrecognized stock-based compensation expense of $1.0 million related to restricted stock awards is expected to be recognized over a weighted-average period of 0.6 years.

Employee Stock Purchase Plans

The Company maintains two plans under which employees can purchase Company common stock - the Amended and Restated Employee Stock Purchase Plan (the “ESPP”) and the non-executive Stock Purchase and Matching Plan (“SPMP”). In March 2025, the Company’s Board of Directors approved amending and restating the Third Amended and Restated 2017 Nonqualified

Employee Stock Purchase Plan (the “NQ ESPP”) as the SPMP, which better describes the nature of the plan whereby when a non-executive employee buys a share, the Company matches it. The Company’s Board of Directors approval included reserving 2.9 million shares of Company common stock under each of the purchase component and the matching component of the SPMP, including 1.25 million shares for the matching component subject to stockholder approval, with a corresponding decrease in shares authorized in the ESPP of 2.5 million shares. At the Company’s 2025 annual meeting of stockholders, the stockholders approved an increase to the authorized shares to the SPMP of 1.25 million shares of Common Stock under the matching component, resulting in a corresponding decrease in the shares authorized for issuance under the ESPP of 2.5 million shares. Shares will be issued from the SPMP starting with the August 8, 2025 purchase period.

The ESPP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 15% of their eligible compensation subject to certain Internal Revenue Code limitations.

The offering periods under the ESPP are two six-month offering periods from August 15th through February 14th and February 15th through August 14th of each year. The price of common stock purchased under the ESPP is 85% of the lower of the fair market value of the common stock on the commencement date and the end date of each six-month offering period. As of September 27, 2025, there were 1.5 million shares available for issuance under the ESPP. During the nine months ended September 27, 2025, 0.3 million shares were purchased under the ESPP. As of September 27, 2025, unrecognized stock-based compensation expense of $1.2 million related to the ESPP is expected to be recognized over a remaining service period of 0.4 years.

The SPMP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 25% of their eligible compensation. Eligible employees have the right to (a) purchase the maximum number of whole shares of common stock that can be purchased with the elected payroll deductions during each offering period for which the employee is enrolled at a purchase price equal to the closing price of the Company’s common stock on the last day of such offering period and (b) receive an equal number of shares of the Company’s common stock that are subject to a risk of forfeiture in the event the employee terminates employment within the one year period immediately following the purchase date. The SPMP provides quarterly offering periods from February 8th through May 7th, May 8th through August 7th, August 8th through November 7th and November 8th through February 7th of each year, with a maximum of 0.35 million shares allocated per purchase period for the combination of the purchase and matching components. As of September 27, 2025, there were 2.9 million shares and 2.8 million shares available for issuance under the SPMP purchase and matching components, respectively. During the nine months ended September 27, 2025, 0.7 million shares were purchased and issued. As of September 27, 2025, unrecognized stock-based compensation expense of $12.9 million related to the NQ ESPP is expected to be recognized over a remaining weighted-average service period of 0.8 years.

Stock-Based Compensation

The following table summarizes stock-based compensation expense (in thousands):


	Three Months Ended				Nine Months Ended
	September 27, 2025		September 28, 2024		September 27, 2025		September 28, 2024
Cost of revenue	$	753	$	770	$	2,297	$	2,113
Sales and marketing	6,158		4,630		23,674		13,672
Research and development	5,965		4,783		16,935		13,695
General and administrative	7,742		6,188		23,069		19,206
	$	20,618	$	16,371	$	65,975	$	48,686
Income tax benefit recognized	$	1,584	$	2,688	$	7,071	$	8,114

Stock Repurchase Program

The Company maintains a common stock repurchase program. Under the repurchase program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements. The specific timing, price and size of the purchases depends on prevailing stock prices, general economic and market conditions and other considerations consistent with the Company’s capital allocation strategy. The repurchase program does not obligate the Company to acquire a particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. In April 2025, the Company’s Board of Directors authorized a $100.0 million increase to this program. During the three months ended September 27, 2025, the Company purchased 0.1 million shares of common stock for an aggregate purchase price of $3.5 million at an average price per share of $59.20. During the nine months ended September 27, 2025, the Company purchased 2.2 million shares of common stock for an aggregate purchase price of $77.0 million at an average price per share of $34.61. As of September 27, 2025, the remaining authorized balance under this program was $125.9 million.