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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2020
Share-based Payment Arrangement [Abstract] |
STOCK PLANS AND SHARE-BASED COMPENSATION | STOCK-BASED COMPENSATION: The following table summarizes the stock-based compensation expense recognized in accordance with ASC 718-10 for the three and nine months ended September 30, 2020, and September 30, 2019:
| Three Months Ended |  | Nine Months Ended
(In thousands) | September 30, 2020 |  | September 30, 2019 |  | September 30, 2020 |  | September 30, 2019
Cost of revenues | $ | 602 |  |  | $ | 280 |  |  | $ | 1,250 |  |  | $ | 824 |
Research and development | 2,976 |  |  | 1,893 |  |  | 7,436 |  |  | 5,669 |
Sales and marketing | 1,900 |  |  | 1,211 |  |  | 4,550 |  |  | 3,413 |
General and administrative | 3,880 |  |  | 1,722 |  |  | 8,813 |  |  | 5,103 |
Total stock-based compensation expense | $ | 9,358 |  |  | $ | 5,106 |  |  | $ | 22,049 |  |  | $ | 15,009 |
Stock-based compensation expense in the three months ended September 30, 2020, was approximately $9.4 million, comprising approximately $4.7 million related to restricted stock unit (RSU) awards, $4.2 million related to performance-based (PSU) awards and long-term performance-based (PRSU) awards and $0.5 million related to the Company’s employee stock purchase plan. Stock-based compensation expense in the nine months ended September 30, 2020, was approximately $22.0 million, comprising approximately $14.1 million related to RSUs, $6.6 million related to PSUs and PRSUs and $1.3 million related to the Company’s employee stock purchase plan. Stock-based compensation expense in the three months ended September 30, 2019, was approximately $5.1 million, comprising approximately $4.4 million related to RSUs, $0.3 million related to PSUs and PRSUs and $0.4 million related to the Company’s employee stock purchase plan. In the nine months ended September 30, 2019, stock-based compensation expense was approximately $15.0 million, comprising approximately $13.2 million related to RSUs, $0.6 million related to PSUs and PRSUs and $1.2 million related to the Company’s employee stock purchase plan. Stock Options A summary of stock options outstanding as of September 30, 2020, and activity during the nine months then ended, is presented below:
| Shares (In thousands) |  | Weighted- Average Exercise Price |  | Weighted-Average Remaining Contractual Term (In years) |  | Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2020 | 335 |  |  | $ | 19.44 |  |  |  |  |
Granted | — |  |  | — |  |  |  |  |
Exercised | (198) |  |  | $ | 18.87 |  |  |  |  |
Forfeited or expired | — |  |  | — |  |  |  |  |
Outstanding at September 30, 2020 | 137 |  |  | $ | 20.27 |  |  | 1.21 |  | $ | 4,795 |
Vested and exercisable at September 30, 2020 | 137 |  |  |  |  | 1.21 |  | $ | 4,795 |
PSU Awards Under the performance-based awards program, the Company grants awards in the performance year in an amount equal to twice the target number of shares to be issued if the maximum performance metrics are met. The number of shares that are released at the end of the performance year can range from zero to 200% of the target number depending on the Company’s performance. The performance metrics of this program are annual targets consisting of a combination of net revenue, non-GAAP operating income and strategic goals. As the net revenue, non-GAAP operating income and strategic goals are considered performance conditions, expense associated with these awards, net of estimated forfeitures, is recognized over the service period based on an assessment of the achievement of the performance targets. The fair value of these PSUs is determined using the fair value of the Company’s common stock on the date of the grant, reduced by the discounted present value of dividends expected to be declared before the awards vest. If the performance conditions are not achieved, no compensation cost is recognized and any previously recognized compensation is reversed. In January 2020, it was determined that approximately 121,000 shares subject to the PSUs granted in 2019 vested in aggregate; the shares were released to the Company’s employees and executives in the first quarter of 2020. A summary of PSUs outstanding as of September 30, 2020, and activity during the nine months then ended, is presented below:
| Shares (In thousands) |  | Weighted- Average Grant Date Fair Value Per Share |  | Weighted-Average Remaining Contractual Term (In years) |  | Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2020 | 121 |  |  | $ | 35.06 |  |  |  |  |
Granted | 149 |  |  | $ | 46.25 |  |  |  |  |
Vested | (121) |  |  | $ | 35.06 |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Outstanding at September 30, 2020 | 149 |  |  | $ | 46.21 |  |  | 0.25 |  | $ | 8,235 |
Outstanding and expected to vest at September 30, 2020 | 140 |  |  |  |  | 0.25 |  | $ | 7,733 |
PRSU Awards The Company's PRSU program provides for the issuance of PRSUs which will vest based on the Company's performance measured against the PRSU program's established performance targets. PRSUs are granted in an amount equal to twice the target number of shares to be issued if the maximum performance metrics are met. The actual number of shares the recipient receives is determined at the end of a three-year performance period based on results achieved versus the Company's performance goals, and may range from zero to 200% of the target number. The performance goals for PRSUs granted in fiscal 2018, 2019 and 2020 were based on the Company’s annual revenue growth over the respective three-year performance period. Expense associated with these awards, net of estimated forfeitures, is recorded throughout the year based on an assessment of the expected achievement of the performance targets. If the performance conditions are not achieved, no compensation cost is recognized and any previously recognized compensation is reversed. In January 2020 it was determined that no shares subject to the PRSUs granted in 2017 vested in aggregate; thus no shares were released to the Company’s executives in the first quarter of 2020. A summary of PRSUs outstanding as of September 30, 2020, and activity during the nine months then ended, is presented below:
| Shares (In thousands) |  | Weighted- Average Grant Date Fair Value Per Share |  | Weighted-Average Remaining Contractual Term (In years) |  | Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2020 | 287 |  |  | $ | 32.03 |  |  |  |  |
Granted | 152 |  |  | $ | 49.67 |  |  |  |  |
Vested | — |  |  | — |  |  |  |  |
Forfeited | — |  |  | — |  |  |  |  |
Outstanding at September 30, 2020 | 439 |  |  | $ | 38.14 |  |  | 1.25 |  | $ | 24,345 |
Outstanding and expected to vest at September 30, 2020 | 267 |  |  |  |  | 1.82 |  | $ | 14,816 |
RSU Awards A summary of RSUs outstanding as of September 30, 2020, and activity during the nine months then ended, is presented below:
| Shares (In thousands) |  | Weighted- Average Grant Date Fair Value Per Share |  | Weighted-Average Remaining Contractual Term (In years) |  | Aggregate Intrinsic Value (In thousands)
Outstanding at January 1, 2020 | 1,719 |  |  | $ | 31.33 |  |  |  |  |
Granted | 430 |  |  | $ | 44.48 |  |  |  |  |
Vested | (589) |  |  | $ | 30.16 |  |  |  |  |
Forfeited | (30) |  |  | $ | 36.89 |  |  |  |  |
Outstanding at September 30, 2020 | 1,530 |  |  | $ | 35.37 |  |  | 1.66 |  | $ | 84,733 |
Outstanding and expected to vest at September 30, 2020 | 1,418 |  |  |  |  | 1.60 |  | $ | 78,580 |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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