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Stock-Based Compensation | 12 Months Ended
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Oct. 02, 2021
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation 2018 Equity Incentive Plan In July 2018, the Board of Directors (the "Board") adopted the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan became effective in connection with the Company's initial public offering ("IPO"). The number of shares reserved for issuance under the 2018 Plan increases automatically on January 1 of each year beginning in 2019 and continuing through 2028 by a number of shares of common stock equal to the lesser of (x) 5% of the total outstanding shares of the Company’s common stock and common stock equivalents as of the immediately preceding December 31 (rounded to the nearest whole share) and (y) a number of shares determined by the Company's the Board. As of October 2, 2021, there were 34,376,127 shares reserved for future issuance under the 2018 Plan. Stock Options Pursuant to the 2018 Plan, the Company issues stock options to employees and directors. The fair value of the stock options is based on the Company’s closing stock price on the trading day immediately prior to the date of grant. The option price, number of shares and grant date are determined at the discretion of the Board. For so long as the option holder performs services for the Company, the options generally vest over 48 months, on a monthly or quarterly basis, with certain options subject to an initial annual cliff vest, and are exercisable for a period not to exceed ten years from the date of grant. The summary of the Company’s stock option activity is as follows:
| Number of Options |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value
|  |  |  |  | (In years) |  | (In thousands)
Outstanding at October 3, 2020 | 28,422,940 |  |  | $ | 12.03 |  |  | 5.6 |  | $ | 99,053 |
Exercised | (13,397,782) |  |  | $ | 11.04 |  |  |  |  |
Forfeited | (479,919) |  |  | $ | 14.44 |  |  |  |  |
Outstanding at October 2, 2021 | 14,545,239 |  |  | $ | 12.86 |  |  | 5.1 |  | $ | 282,141 |
At October 2, 2021 |  |  |  |  |  |  |
Options exercisable | 12,723,601 |  |  | $ | 12.62 |  |  | 4.9 |  | $ | 249,899 |
Options vested and expected to vest | 14,404,584 |  |  | $ | 12.85 |  |  | 5.1 |  | $ | 279,604 |
The Company granted no options in fiscal 2021 and fiscal 2020. During fiscal 2019, the Company granted options with a fair value of $8.4 million with a weighted-average grant date fair value of $4.91 per share. Options vested in 2021, 2020 and 2019, respectively, have a fair value of $10.8 million, $27.4 million, and $34.3 million. The total intrinsic value of stock options exercised was $242.7 million, $40.1 million and $61.1 million for fiscal 2021, 2020 and 2019, respectively. As of October 2, 2021, and October 3, 2020, the Company had $6.2 million and $16.9 million, respectively, of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted-average period of 0.9 years and 1.5 years, respectively. The Company’s policy for issuing stock upon stock option exercise is to issue new common stock. Restricted Stock Units Pursuant to the 2018 Plan, the Company issues RSUs to employees and directors. The fair value of RSUs is based on the Company's closing stock price on the trading day immediately preceding the date of grant. RSUs vest quarterly over the service period, which is generally four years with certain awards subject to an initial annual cliff vest. The summary of the Company’s unvested RSU activity is as follows:
| Number of Units |  | Weighted-Average Grant Date Fair Value |  | Aggregate Intrinsic Value
|  |  |  |  | (In thousands)
Outstanding at October 3, 2020 | 11,647,951 |  |  | $ | 10.50 |  |  | $ | 180,543 |
Granted | 2,860,688 |  |  | $ | 19.07 |  |  |
Released | (4,146,278) |  |  | $ | 11.38 |  |  |
Forfeited | (1,078,836) |  |  | $ | 11.45 |  |  |
Outstanding at October 2, 2021 | 9,283,525 |  |  | $ | 12.64 |  |  | $ | 299,487 |
At October 2, 2021 |  |  |  |  |
Units expected to vest | 7,887,232 |  |  | $ | 12.54 |  |  | $ | 254,442 |
As of October 2, 2021, the Company had $90.0 million of unrecognized stock-based compensation expense related to RSUs, which is expected to be recognized over a weighted-average period of 2.5 years. Performance Stock Units ("PSU") Pursuant to the 2018 Plan, the Company has issued and may issue certain PSUs that vest on the satisfaction of service and performance conditions. The Company estimates the fair value of PSUs on the grant date and recognizes compensation expense in the period it becomes probable that performance conditions will be achieved. On a quarterly basis, the Company re-evaluates the assumption of the probability that performance conditions will be satisfied and revises its estimates as appropriate as new or updated information becomes available. The summary of the Company’s PSU activity is as follows:
| Number of Units |  | Weighted-Average Grant Date Fair Value |  | Aggregate Intrinsic Value
|  |  |  |  | (In thousands)
Outstanding at October 3, 2020 | — |  |  | $ | — |  |  | $ | — |
Granted | 158,521 |  |  | $ | 22.81 |  |  |
Vested | — |  |  |  |  |
Forfeited | — |  |  |  |  |
Outstanding at October 2, 2021 | 158,521 |  |  | $ | 22.81 |  |  | $ | 5,114 |
As of October 2, 2021, the Company had $3.6 million of unrecognized stock-based compensation expense related to PSUs, which is expected to be recognized over a weighted-average period of 1.2 years. Stock-based Compensation Total stock-based compensation expense by function category was as follows:
| October 2, 2021 |  | October 3, 2020 |  | September 28, 2019
(In thousands) |  |  |  |  |
Cost of revenue | $ | 988 |  |  | $ | 1,106 |  |  | $ | 985 |
Research and development | 25,075 |  |  | 23,439 |  |  | 17,643 |
Sales and marketing | 13,570 |  |  | 14,359 |  |  | 12,965 |
General and administrative | 22,494 |  |  | 18,706 |  |  | 14,982 |
Total stock-based compensation expense | $ | 62,127 |  |  | $ | 57,610 |  |  | $ | 46,575 |

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