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Share-Based Compensation | 6 Months Ended
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Jun. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Note 10. Share-based Compensation Share-based compensation expense is recognized in cost of services, product and technology expense, and selling, general, and administrative expense, in the accompanying condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands):
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Share-based compensation expense |  |  |  |  |  |  |  |  |  |  |  |
Cost of services |  | $ | 410 |  |  | $ | 313 |  |  | $ | 767 |  |  | $ | 588 |
Product and technology expense |  |  | 683 |  |  |  | 568 |  |  |  | 1,337 |  |  |  | 1,025 |
Selling, general, and administrative expense |  |  | 3,955 |  |  |  | 2,720 |  |  |  | 7,695 |  |  |  | 4,046 |
Total share-based compensation expense |  | $ | 5,048 |  |  | $ | 3,601 |  |  | $ | 9,799 |  |  | $ | 5,659 |
Prior to the IPO, all share-based awards were issued by Fastball Holdco, L.P., the Company’s previous parent company, under individual grant agreements and the partnership agreement of such parent company (collectively, the “the 2020 Equity Plan”). In connection with the IPO, the Company adopted the 2021 Omnibus Incentive Plan (as amended by the First Amendment, dated as of May 10, 2023, the “2021 Equity Plan”). In May 2023, the Company’s Board of Directors approved a modification of the vesting terms of outstanding unvested and unearned performance-based options, restricted stock units, and restricted stock (collectively, “Performance Awards”) previously issued under its equity plans. The modification, effective May 10, 2023, allowed for unvested and unearned Performance Awards outstanding as of the date of the modification, to vest based on time on the fourth, fifth, and sixth anniversaries of the relevant vesting commencement date, as set forth in each grant agreement (the “Vesting Commencement Date”), while preserving the eligibility to vest upon the Company’s investors receiving a targeted money-on-money return, subject to continued service. In connection with the Company’s declaration of a one-time special dividend in August 2023, the exercise price of outstanding stock option awards and stock purchases under the Company’s employee stock purchase plan (“ESPP”) was reduced by $1.50, in accordance with the non-discretionary anti-dilution provisions of the equity and stock purchase plans. 2020 Equity Plan Awards issued under the 2020 Equity Plan consist of options and profit interests. No awards have been issued under the plan since the Company’s IPO. A summary of the stock option activity for the six months ended June 30, 2024 is as follows:
|  |  |  | Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
December 31, 2023 |  | Grants outstanding |  |  | 1,915,252 |  |  | $ | 5.15 |  |  |  |  |
|  | Grants exercised |  |  | (51,916 | ) |  | $ | 5.46 |  |  |  |  |
|  | Grants cancelled/forfeited |  |  | (16,978 | ) |  | $ | 5.11 |  |  |  |  |
June 30, 2024 |  | Grants outstanding |  |  | 1,846,358 |  |  | $ | 5.15 |  |  | 5.7 Years |  | $20.2 million
June 30, 2024 |  | Grants vested |  |  | 823,498 |  |  | $ | 5.12 |  |  | 5.6 Years |  | $9.0 million
June 30, 2024 |  | Grants unvested |  |  | 1,022,860 |  |  | $ | 5.18 |  |  |  |  |
2021 Equity Plan The 2021 Equity Plan is intended to provide a means through which to attract and retain key personnel and to provide a means whereby our directors, officers, employees, consultants, and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, thereby strengthening their commitment to our welfare and aligning their interests with those of our stockholders. The 2021 Equity Plan provides for the grant of awards of stock options, stock appreciation rights, restricted shares, restricted stock units, and other equity-based or cash-based awards as determined by the Company’s Compensation Committee. The 2021 Equity Plan initially had a total of 17,525,000 shares of common stock reserved. The number of reserved shares automatically increases on the first day of each calendar year commencing on January 1, 2022 and ending on January 1, 2030, in an amount equal to the lesser of (x) 2.5% of the total number of shares of common stock outstanding on the last day of the immediately preceding calendar year and (y) a number of shares as determined by the Board of Directors. As of June 30, 2024, 20,048,521 shares were available for issuance under the 2021 Equity Plan. Stock Options A summary of the stock option activity for the six months ended June 30, 2024 is as follows:
|  |  |  | Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
December 31, 2023 |  | Grants outstanding |  |  | 4,686,659 |  |  | $ | 13.61 |  |  |  |  |
|  | Grants issued |  |  | 162,640 |  |  | $ | 15.82 |  |  |  |  |
|  | Grants exercised |  |  | (19,624 | ) |  | $ | 14.14 |  |  |  |  |
|  | Grants cancelled/forfeited |  |  | (65,729 | ) |  | $ | 13.73 |  |  |  |  |
June 30, 2024 |  | Grants outstanding |  |  | 4,763,946 |  |  | $ | 13.68 |  |  | 7.4 Years |  | $11.4 million
June 30, 2024 |  | Grants vested |  |  | 2,365,286 |  |  | $ | 13.63 |  |  | 7.2 Years |  | $5.8 million
June 30, 2024 |  | Grants unvested |  |  | 2,398,660 |  |  | $ | 13.73 |  |  |  |  |
The fair value for stock options granted for the six months ended June 30, 2024 was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:
|  | Options |
Expected stock price volatility |  |  | 34.99 | %
Risk-free interest rate |  |  | 4.25 | %
Expected term (in years) |  |  | 6.25 |
Fair-value of the underlying unit |  | $ | 15.82 |
Restricted Stock Units A summary of the restricted stock units (“RSU”) activity for the six months ended June 30, 2024 is as follows:
|  |  |  | Shares |  |  | Weighted Average Grant Date Fair Value |
December 31, 2023 |  | Nonvested RSUs |  |  | 507,143 |  |  | $ | 15.10 |
|  | Granted |  |  | 218,417 |  |  | $ | 15.94 |
|  | Vested |  |  | (136,792 | ) |  | $ | 14.44 |
|  | Forfeited |  |  | (23,325 | ) |  | $ | 14.86 |
June 30, 2024 |  | Nonvested RSUs |  |  | 565,443 |  |  | $ | 15.59 |
Restricted Stock A summary of the restricted stock activity for the six months ended June 30, 2024 is as follows:
|  |  |  | Shares |  |  | Weighted Average Grant Date Fair Value |
December 31, 2023 |  | Nonvested restricted stock |  |  | 1,954,630 |  |  | $ | 8.50 |
|  | Vested |  |  | (586,927 | ) |  | $ | 7.73 |
June 30, 2024 |  | Nonvested restricted stock |  |  | 1,367,703 |  |  | $ | 9.16 |
As of June 30, 2024, the Company had approximately $32.2 million of unrecognized pre-tax non-cash compensation expense, comprised of approximately $10.3 million related to restricted stock, $7.8 million related to RSUs, and approximately $14.1 million related to stock options, which the Company expects to recognize over a weighted average period of 1.2 years. 2021 Employee Stock Purchase Plan The Company adopted the ESPP, which allows eligible employees to voluntarily make after-tax contributions of up to 15% of such employee’s cash compensation to acquire Company stock during designated offering periods. Each offering period consists of one six-month purchase period. During the holding period, ESPP purchased shares are not eligible for sale or broker transfer. The Company recorded an associated expense of approximately $0.2 million for both the three months ended June 30, 2024 and 2023. The Company recorded an associated expense of approximately $0.3 million and $0.4 million for the six months ended June 30, 2024 and 2023, respectively.

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