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STOCK CAPITAL | 12 Months Ended
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Dec. 31, 2023
Share-based Payment Arrangement [Abstract] |
STOCK CAPITAL | NOTE 19: STOCK CAPITAL
a. | Common stock rights:
Common stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each share of common stock shall have one vote for all purposes, to share equally, on a per share basis, in bonuses, profits, or distributions out of fund legally available therefor, and to participate in the distribution of the surplus assets of the Company in the event of liquidation of the Company.
b. | Secondary public offering:
On March 17, 2022, the Company offered and sold 2,300,000 shares of the Company’s common stock, at a public offering price of $295.00 per share. The shares of Common Stock were issued and sold in a registered offering pursuant to the underwriting agreement dated March 17, 2022, among the Company, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC (the “Underwriting Agreement”). All of the offered shares were issued at closing, including 300,000 shares of Common Stock that were issued and sold pursuant to the underwriters’ option to purchase additional shares under the Underwriting Agreement, which was exercised in full on March 18, 2022. The net proceeds to the Company were $650,526 after deducting underwriters' discounts of $27,140 and commissions of $834.
c. | Equity Incentive Plans:
The Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. The 2007 Plan terminated upon the Company’s IPO on March 31, 2015 and no further awards may be granted thereunder. All outstanding awards will continue to be governed by their existing terms and 379,358 available options for future grants were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 plan. The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, restricted stock units ("RSU"), performance stock units ("PSU"), and other share-based awards to directors, employees, officers, and non-employees of the Company and its subsidiaries. As of December 31, 2023, a total of 20,853,755 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”), an aggregate of 11,042,805 shares are still available for future grants. The Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan, commencing on January 1st of the year following the year in which the 2015 Plan becomes effective, in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year; provided, however, that the Company’s board of directors may determine that there will not be a January 1st increase in the Share Reserve in a given year or that the increase will be less than 5% of the shares of capital stock outstanding on the preceding December 31st. The Company granted under its 2015 Plan, PSU awards to certain employees and officers which vest upon the achievement of certain performance or market conditions subject to their continued employment with the Company. In 2021, the Company has also committed to issuing additional shares, which are subject to resale registration rights and which carry certain performance conditions (including business performance targets and a continued service relationship with the Company) and are treated as PSUs for accounting purposes. The market condition for the PSUs is based on the Company’s total shareholder return ("TSR") compared to the TSR of companies listed in the S&P 500 index over a one to three year performance period. The Company uses a Monte-Carlo simulation to determine the grant date fair value for these awards, which takes into consideration the market price of a share of the Company’s common stock on the date of grant less the present value of dividends expected during the requisite service period, as well as the possible outcomes pertaining to the TSR market condition. The Company recognizes such compensation expenses on an accelerated vesting method. The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is 10,000,000. As of December 31, 2023, an aggregate of 8,617,974 options are still available for future grants under the 2015 Plan. A summary of the activity in stock options and related information is as follows:
|  | Number of options |  |  | Weighted average exercise price |  |  | Weighted average remaining contractual term in years |  |  | Aggregate intrinsic Value |
Outstanding as of December 31, 2022 |  |  | 339,029 |  |  | $ | 50.64 |  |  |  | 4.86 |  |  | $ | 79,414 |
Exercised |  |  | (21,613 | ) |  |  | 10.48 |  |  |  | - |  |  |  | 3,572 |
Outstanding as of December 31, 2023 |  |  | 317,416 |  |  | $ | 53.38 |  |  |  | 4.05 |  |  | $ | 17,366 |
Vested and expected to vest as of December 31, 2023 |  |  | 317,166 |  |  | $ | 53.24 |  |  |  | 4.05 |  |  | $ | 17,366 |
Exercisable as of December 31, 2023 |  |  | 307,719 |  |  | $ | 47.70 |  |  |  | 3.97 |  |  | $ | 17,366 |
The intrinsic value is the amount by which the closing price of the Company’s common stock on December 31, 2023 of $93.60 or the price on the day of exercise exceeds the exercise price of the stock options multiplied by the number of in-the-money options. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 was $3,572, $37,948, and $65,668, respectively. No options were granted in 2023. A summary of the activity in the RSUs and related information is as follows:
|  | Number of RSUs |  |  | Weighted average grant date fair value |
Unvested as of January 1, 2023 |  |  | 1,488,515 |  |  | $ | 232.05 |
Granted |  |  | 1,138,764 |  |  |  | 133.44 |
Vested |  |  | (661,967 | ) |  |  | 198.16 |
Forfeited |  |  | (105,026 | ) |  |  | 253.80 |
Unvested as of December 31, 2023 |  |  | 1,860,286 |  |  | $ | 182.52 |
A summary of the activity in the PSUs and related information is as follows:
|  | Number of PSUs |  |  | Weighted average grant date fair value |
Unvested as of January 1, 2023 |  | $ | 149,232 |  |  | $ | 295.88 |
Granted |  |  | 32,348 |  |  |  | 314.22 |
Vested |  |  | (107,165 | ) |  |  | 296.76 |
Unvested as of December 31, 2023 |  | $ | 74,415 |  |  | $ | 302.58 |
d. | Employee Stock Purchase Plan:
The Company adopted an ESPP effective upon the consummation of the IPO. As of December 31, 2023, total of 4,150,380 shares were reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1% of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares. However, the Company’s board of directors may reduce the amount of the increase in any particular year at their discretion, including a reduction to zero. The ESPP is implemented through an offering every six months. According to the ESPP, eligible employees may use up to 15% of their salaries to purchase common stock up to an aggregate limit of $15 per participant for every six months plan. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the subscription date of each offering period or on the purchase date. As of December 31, 2023, 938,164 shares of common stock had been purchased under the ESPP. As of December 31, 2023, 3,212,216 shares of common stock were available for future issuance under the ESPP. In accordance with ASC No. 718, the ESPP is compensatory and, as such, results in recognition of compensation cost.
e. | Stock-based compensation expenses:
The Company recognized stock-based compensation expenses related to all stock-based awards in the consolidated statement of income for the years ended December 31, 2023, 2022 and 2021, as follows:
|  | Year ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Stock-based compensation expenses: |  |  |  |  |  |  |  |  |
Cost of revenues |  | $ | 23,200 |  |  | $ | 21,818 |  |  | $ | 18,743 |
Research and development |  |  | 66,944 |  |  |  | 63,211 |  |  |  | 45,424 |
Selling and marketing |  |  | 30,987 |  |  |  | 31,017 |  |  |  | 22,834 |
General and administrative |  |  | 28,814 |  |  |  | 29,493 |  |  |  | 15,592 |
Total stock-based compensation expenses |  | $ | 149,945 |  |  | $ | 145,539 |  |  | $ | 102,593 |
Stock-based compensation capitalized: |  |  |  |  |  |  |  |  |  |  |  |
Inventories, net |  | $ | 2,460 |  |  | $ | - |  |  | $ | - |
Other long-term assets |  |  | 1,666 |  |  |  | 380 |  |  |  | - |
Total stock-based compensation capitalized |  | $ | 4,126 |  |  | $ | 380 |  |  | $ | - |
The total tax benefit associated with share-based compensation for the year ended December 31, 2023, 2022 and 2021 was $27,551, $7,747 and $19,113, respectively. The tax benefit realized from share-based compensation for the year ended December 31, 2023, 2022 and 2021 was $8,866, $10,171 and $13,379, respectively. As of December 31, 2023, there were total unrecognized compensation expenses in the amount of $332,367 related to non-vested equity-based compensation arrangements granted. These expenses are expected to be recognized during the period from January 1, 2024 through November 30, 2027.

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