XML 31 R18.htm IDEA: XBRL DOCUMENT v3.23.3
Equity-Based Compensation
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Equity-Based Compensation Equity-Based Compensation
The Company’s equity-based compensation programs are intended to attract, retain and provide incentives for employees, officers and directors. The Company has the following equity-based compensation plans and programs.
Restricted Stock
The majority of the Company’s restricted stock awarded to its employees was originally issued on December 10, 2020 in exchange for the Class B Profits Interest Unit (the “Class B Units”) of EQT, which was the former parent of the Company.
Share-based compensation for the restricted stock exchanged for the time-based Class B Units is recognized on a straight-line basis over the requisite service period of the award, which is generally five years. Share-based compensation for the restricted stock exchanged for the performance-based Class B Units is recognized using the accelerated attribution approach.
In 2021, the Company granted 87,127 replacement shares of restricted stock in connection with the Pinnacle acquisition under which equity-based awards are outstanding. The fair value of the restricted stock awarded was initially based on the fair value of our common stock on the date of grant, then adjusted for time restrictions due to unregistered shares and lack of marketability. Total grant date fair value was $2,762. The restricted stock issued in 2021 generally has a three-year vesting period except for one holder whose shares vest equally on a monthly basis for two years.
SHARESWEIGHTED-
AVERAGE
GRANT DATE
FAIR VALUE
Non-vested restricted stock as of December 31, 20221,402,813$23.27 
Granted— — 
Vested*(600,016)23.28 
Forfeited(135,618)23.00 
Non-vested restricted stock as of September 30, 2023667,179$23.32 
___________________________________
•The number of the restricted stock vested includes 5,430 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.
Equity-based compensation expenses (income) related to the restricted stock exchanged for performance-based Class B Units were $333, $(319), $497, and $3,758 for the three and nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $1,237, which is expected to be recognized over a weighted-average period of 16.2 months.
Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $252, $1,174, $1,062, and $2,705 for the three and nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $1,421, which is expected to be recognized over a weighted-average period of 19.7 months.
Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle acquisition was $292, $292, $877, and $877 for the three and nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $425, which is expected to be recognized over a weighted-average period of 12 months.
2020 Incentive Plan
In order to align the Company’s equity compensation program with public company practices, the Company’s Board of Directors adopted and stockholders approved the 2020 Incentive Plan. The 2020 Incentive Plan allows for grants of non-qualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to employees, directors, officers, and consultants or advisors of the Company. The 2020 Incentive Plan allows for 20,000,000 shares (the “plan share reserve”) of common stock to be issued. No more than the number of shares of common stock equal to the plan share reserve may be issued in the aggregate pursuant to the exercise of incentive stock options. The maximum number of shares of common stock granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such non-employee director during the fiscal year, may not exceed $1,000,000 in total value, except for certain awards made to a non-executive chair of our Board of Directors.
Restricted Stock Units ("RSU")
RSUs represent the right to receive shares of the Company’s common stock at a specified date in the future. The fair value of the RSUs is based on the fair value of the underlying shares on the date of grant.
A summary of the Company’s RSU activity is as follows:
UNITSWEIGHTED-
AVERAGE
GRANT DATE
FAIR VALUE
Non-vested RSUs as of December 31, 20222,005,095$24.71 
Granted*1,626,10223.93 
Vested**(796,494)25.24 
Forfeited(304,923)23.52 
Non-vested RSUs as of September 30, 20232,529,780$24.18 
___________________________________
*The majority shares granted during 2023 were issued on April 1, 2023 under the 2020 Incentive Plan.
**The number of the RSUs vested includes 275,516 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements. The vested shares included 9,324 shares vested but deferred in connection with our director deferral plan.
Equity-based compensation expenses related to the RSUs were $7,260, $5,312, $19,397, and $14,538 for three and nine months ended September 30, 2023 and 2022, respectively. At September 30, 2023, the total unrecognized equity-based compensation expense related to outstanding RSUs was $47,479, which is expected to be recognized over a weighted-average period of 23.9 months.
Performance Stock Units ("PSU")
PSUs granted in April 2021, 2022, and 2023 were issued under the 2020 Incentive Plan and represent the right to receive shares of the Company’s common stock at a specified date in the future based on the satisfaction of various service conditions and the achievement of certain performance thresholds for individual PSU plans including year over year revenue growth, unlevered free cash flow growth, annual revenue, and annual EBITDA. The PSUs granted in 2023 also contain a market condition.
Share-based compensation for the PSUs is only recognized to the extent a threshold is probable of being achieved and is recognized using the accelerated attribution approach. The Company will continue to assess the probability of each condition being achieved at each reporting period to determine whether and when to recognize compensation cost.
A summary of the Company’s PSU activity for the period ended September 30, 2023 is as follows:
UNITS WEIGHTED-
AVERAGE
GRANT DATE
FAIR VALUE
Non-vested PSUs as of December 31, 2022654,308$23.99 
Granted484,88527.00 
Vested(18,437)24.83 
Forfeited(94,054)25.71 
Non-vested PSUs as of September 30, 20231,026,702$25.24 

Equity-based compensation expenses (income) related to the PSUs were $506, $345, $(1,035), and $1,940 for the three and nine months ended at September 30, 2023 and 2022, respectively. At September 30, 2023, the total unrecognized equity-based compensation expense related to outstanding PSUs was $780, which is expected to be recognized over a weighted-average period of 9.8 months.
The following table summarizes the components of total equity-based compensation expense included in the condensed consolidated statements of operations and comprehensive income (loss) for each period presented:
THREE MONTHS ENDED SEPTEMBER 30,NINE MONTHS ENDED SEPTEMBER 30,
2023202220232022
(In thousands)
Cost of revenues$3,198 $2,454 $8,328 $6,834 
Sales and marketing343 160 1,272 1,670 
Research and development1,919 957 4,789 4,115 
General and administrative 3,185 3,233 6,409 11,199 
Total$8,645 $6,804 $20,798 $23,818