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Stock-based Compensation | 9 Months Ended
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Jul. 01, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation | 9. Stock-based Compensation 2018 Equity Incentive Plan In July 2018, 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 Board. Stock options Pursuant to the 2018 Plan, the Company issues stock options to employees and directors. 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 1, 2022 |  |  | 10,802,882 |  |  | $ | 13.37 |  |  |  | 4.5 |  |  | $ | 10,956 |
Exercised |  |  | (1,865,278 | ) |  | $ | 10.71 |  |  |  |  |  |  |
Forfeited |  |  | (26,581 | ) |  | $ | 15.17 |  |  |  |  |  |  |
Outstanding at July 1, 2023 |  |  | 8,911,023 |  |  | $ | 13.93 |  |  |  | 3.9 |  |  | $ | 21,457 |
As of July 1, 2023, all outstanding stock options have vested and the Company had no unrecognized stock-based compensation expense related to stock options. As of October 1, 2022, the Company had $0.4 million of unrecognized stock-based compensation expense related to stock options, which are expected to be recognized over weighted-average periods of 0.2 years. Restricted stock units ("RSU") Pursuant to the 2018 Plan, the Company issues RSUs to employees and directors. 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 RSU activity is as follows:
|  | Number of Units |  |  | Weighted-Average Grant Date Fair Value |  |  | Aggregate Intrinsic Value |
|  |  |  |  |  |  |  | (In thousands) |
Outstanding at October 1, 2022 |  |  | 8,308,177 |  |  | $ | 19.25 |  |  | $ | 115,484 |
Granted |  |  | 5,085,052 |  |  | $ | 17.46 |  |  |  |
Released |  |  | (3,300,998 | ) |  | $ | 16.62 |  |  |  |
Forfeited |  |  | (1,244,302 | ) |  | $ | 19.05 |  |  |  |
Outstanding at July 1, 2023 |  |  | 8,847,929 |  |  | $ | 19.23 |  |  | $ | 144,487 |
At July 1, 2023 |  |  |  |  |  |  |  |  |
Units expected to vest |  |  | 7,605,402 |  |  | $ | 19.14 |  |  | $ | 124,196 |
As of July 1, 2023, and October 1, 2022, the Company had $126.8 million and $120.6 million of unrecognized stock-based compensation expense related to RSUs, which are expected to be recognized over weighted-average periods of 2.5 and 2.5 years, respectively. 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 number of outstanding PSUs is based on the target number of share awards. The number of shares vested at the end of the performance period is based on achievement of performance conditions and may include adjustments to reflect the extent to which the corresponding performance goals have been achieved. The number of shares vested during the nine months ended July 1, 2023, includes performance achievement adjustments of a net reduction of 12,895 units. 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 1, 2022 |  |  | 398,077 |  |  | $ | 26.96 |  |  | $ | 5,533 |
Granted |  |  | 249,370 |  |  | $ | 17.54 |  |  |  |
Vested |  |  | (263,158 | ) |  | $ | 26.26 |  |  |  |
Forfeited |  |  | (63,033 | ) |  | $ | 21.07 |  |  |  |
Outstanding at July 1, 2023 |  |  | 321,256 |  |  | $ | 21.38 |  |  | $ | 5,246 |
As of July 1, 2023, and October 1, 2022, the Company had $1.4 million and $0.4 million of unrecognized stock-based compensation expense related to PSUs, which are expected to be recognized over weighted-average periods of 1.5 and 0.6 years, respectively. Stock-based compensation Total stock-based compensation expense by functional category was as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | July 1, 2023 |  |  | July 2, 2022 |  |  | July 1, 2023 |  |  | July 2, 2022 |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Cost of revenue |  | $ | 450 |  |  | $ | 448 |  |  | $ | 1,601 |  |  | $ | 1,153 |
Research and development |  |  | 8,637 |  |  |  | 7,858 |  |  |  | 27,353 |  |  |  | 22,687 |
Sales and marketing |  |  | 3,590 |  |  |  | 3,826 |  |  |  | 12,178 |  |  |  | 11,650 |
General and administrative |  |  | 5,652 |  |  |  | 6,647 |  |  |  | 18,417 |  |  |  | 21,973 |
Total stock-based compensation expense |  | $ | 18,329 |  |  | $ | 18,779 |  |  | $ | 59,549 |  |  | $ | 57,463 |

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