In June 2021, the Company’s Board of Directors adopted, and its stockholders approved, the 2021 Omnibus Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (“ESPP”). The 2021 Plan provides for the grant of restricted shares, restricted share units, performance shares, performance share units, deferred share units, share options and share appreciation rights. All employees, non-employee directors and selected third-party service providers of the Company and its subsidiaries and affiliates are eligible to receive grants under the 2021 Plan. Eligible employees may purchase the Company’s common stock under the ESPP.

Both the 2021 Plan and ESPP include a provision to increase the share reserves on July 1 of each year through 2031. On July 1, 2023, 4,226,691 and 845,338 shares were added to the 2021 Plan and ESPP, respectively.

As of September 30, 2023, shares of common stock reserved for future issuance were as follows (in thousands):


	September 30, 2023
Stock plans:
Outstanding stock options		9,839
Unvested performance stock units and restricted stock units		7,325
Reserved for ESPP		2,902
Reserved for future stock award grants		5,397
Total shares of common stock reserved for issuance		25,463

The Company has granted time-based and performance-based stock options, time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”), collectively referred to as “Stock Awards”. The Company accounts for stock-based compensation using the fair value method which requires the Company to measure stock-based compensation based on the grant-date fair value of the awards and recognize compensation expense over the requisite service or performance period. Awards that contain only service conditions, are generally earned over four years and expensed on a straight-line basis over that term. Compensation expense for awards that contain performance conditions is calculated using the graded vesting method and the portion of expense recognized in any period may fluctuate depending on changing estimates of the achievement of the performance conditions.

Stock options granted generally become exercisable ratably over a four-year period following the date of grant and expire ten years from the date of grant.

Stock option activity under the Company’s equity incentive plans during the three months ended September 30, 2023 was as follows (in thousands, except per share data):


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (1)
Balance as of June 30, 2023		10,137		$	10.42		5.5	$	319,250
Exercised		(229	)		10.14
Forfeited		(69	)		20.82
Balance as of September 30, 2023		9,839		$	10.35		5.2	$	228,001
Vested and exercisable as of September 30, 2023		9,221		$	9.73		5.0	$	219,371
Vested and expected to vest as of September 30, 2023		9,839		$	10.35		5.2	$	228,001

(1)

Aggregate intrinsic value for stock options represents the difference between the exercise price and the per share fair value of the Company’s common stock as of the end of the period, multiplied by the number of stock options outstanding.

There were no stock options granted during the three months ended September 30, 2023. The total intrinsic value of stock options exercised and the proceeds from option exercises during the three months ended September 30, 2023 were $6.2 million and $2.3 million, respectively.

During the three months ended September 30, 2023, the Company granted stock units to certain of its employees with vesting terms based on meeting certain operating performance targets, including annual recurring revenue and profitability targets, and continued service conditions. The Company also granted stock units to certain employees that vest based on continued service.

Performance stock unit activity during the three months ended September 30, 2023 was as follows (in thousands, except per share data):


	Number of Shares			Weighted- Average Grant Date Fair Value
Balance as of June 30, 2023		3,645		$	23.43
Granted		1,124			39.20
Vested		(412	)		23.95
Forfeited		(29	)		20.56
Balance as of September 30, 2023		4,328		$	27.49

Restricted stock unit activity during the three months ended September 30, 2023 was as follows (in thousands, except per share data):


	Number of Shares			Weighted- Average Grant Date Fair Value
Balance as of June 30, 2023		2,154		$	24.46
Granted		1,081			37.27
Vested		(163	)		22.14
Forfeited		(75	)		26.60
Balance as of September 30, 2023		2,997		$	29.15

The Company recorded stock-based compensation expense in the unaudited condensed consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,
	2023		2022
Cost of revenues
Cost of SaaS and support	$	541	$	285
Cost of professional services		1,333		748
Research and development		4,646		2,134
Sales and marketing		5,339		5,753
General and administrative		6,898		6,848
Total stock-based compensation	$	18,757	$	15,768

As of September 30, 2023, there was approximately $148.0 million of unrecognized compensation cost related to unvested stock-based awards granted, which is expected to be recognized over the weighted-average period of approximately 2.6 years.

Under the ESPP, eligible employees may purchase the Company’s common stock at a price equal to 85% of the lower of the fair market value of the Company’s common stock on the offering date or the applicable purchase date. The ESPP provides an offering period that begins on June 1 and December 1 of each year, except for the first offering period, which began on December 16, 2021 and will end on November 30, 2023. Each offering period consists of two or more purchase dates at six-month intervals.

As of September 30, 2023, total unrecognized compensation cost related to the ESPP was $0.3 million, which will be amortized over a weighted-average vesting term of 0.2 years.