Stock-based Compensation

6 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

In February 2025, as approved at the Annual Shareholders meeting, the Company amended its 2018 Equity Incentive Plan (the “Plan”), to increase the authorized shares issuable under the Plan by 3.7 million shares and eliminate the “evergreen” provision which provides for an automatic annual increase in the number of shares reserved for issuance of future awards under the Plan.

Stock-based Compensation Expense

The Company recorded stock-based compensation expense in the condensed consolidated statement of operations and comprehensive loss for the periods presented as follows (in thousands):


	Three Months Ended March 31,				Six Months Ended March 31,
(in thousands)	2025		2024		2025		2024
Cost of revenues	$	2,074	$	1,049	$	3,280	$	1,973
Research and development	3,527		3,376		6,266		6,214
Selling, general and administrative	14,727		9,399		22,773		16,657
Total stock-based compensation expense	$	20,328	$	13,824	$	32,319	$	24,844

An immaterial amount of stock-based compensation expense was capitalized to property and equipment related to capitalized software development costs for the three and six months ended March 31, 2025 and 2024.

Restricted Stock Units

A summary of the Company’s restricted stock unit activity excluding the performance-based restricted stock units during the six months ended March 31, 2025 was as follows:


(in thousands, except per share data)	Shares	Weighted average grant date fair value per share
Nonvested shares at September 30, 2024	1,964	$	32.13
Granted	1,120	47.36
Vested/Issued	(499)	39.03
Forfeited	(170)	33.25
Nonvested shares at March 31, 2025	2,415	$	37.68

As of March 31, 2025, there was $85.3 million of total unrecognized compensation cost related to these awards that is expected to be recognized over a weighted average period of 3.0 years. The total grant date fair value of the restricted stock units excluding performance-based restricted units awarded during the six months ended March 31, 2025 was $53.0 million.

Performance-based Restricted Stock Units

During the six months ended March 31, 2025, the Company granted additional performance-based restricted stock units to executives and employees that will vest upon achievement of multiple year revenue, gross margin, and profitability metrics as determined by the board of directors. Stock compensation expense for these awards is recorded over the vesting period based on the grant date fair value of the awards and probability of the achievement of specified performance targets. The grant date fair value is equal to the closing share price of the Company’s common stock on the date of grant. These awards will vest from a minimum of 10 months to a maximum of 34 months service period following the grant date, provided that the recipient is a Company employee at the time of vesting and the performance targets applicable to each award are achieved. The percentage of these awards that vest will depend on the achievement of specified performance targets at the end of the performance period and can range from 0% to 140% of the number of units granted.

A summary of the Company’s performance-based restricted stock units activity during the six months ended March 31, 2025 was as follows:


(in thousands, except per share data)	Shares	Weighted average grant date fair value per share
Nonvested shares at September 30, 2024	1,167	$	27.01
Granted	1,354	47.75
Vested/Issued	(311)	44.89
Forfeited	(111)	25.27
Nonvested shares at March 31, 2025	2,099	$	37.83

As of March 31, 2025, the unrecognized compensation costs related to these awards was $58.3 million based on the maximum achievement of the performance targets. The Company expects to recognize those costs over a weighted average period of 1.9 years. The total grant date fair value of performance-based restricted stock units awarded during the six months ended March 31, 2025 was $64.7 million.

Stock Options

A summary of the Company’s stock options including the performance-based stock options during the six months ended March 31, 2025 was as follows:


(in thousands, except per share data)	Shares	Weighted average exercise price per share		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Outstanding at September 30, 2024	1,892	$	29.60	4.57	$	37,840
Forfeited	(61)	67.88		—	—
Exercised	(238)	15.64		—	7,154
Outstanding at March 31, 2025	1,593	$30.23		4.19	$	22,643
Vested and exercisable at March 31, 2025	1,562	$	30.14	4.13	$	22,404

As of March 31, 2025, the unrecognized compensation costs related to these awards was $0.1 million. The Company expects to recognize those costs over a weighted average period of 0.5 years.

2018 Employee Stock Purchase Plan

The number of shares of the Company's common stock reserved for issuance under the 2018 Employee Stock Purchase Plan ("ESPP") at March 31, 2025 was as follows:


(In thousands)						Shares available
Outstanding at September 30, 2024						611
Additional shares authorized						249
Shares issued during the period						(65)
Outstanding at March 31, 2025						795

During the three and six months ended March 31, 2025, ESPP expenses of $0.6 million and $1.1 million, respectively were recognized. During the three and six months ended March 31, 2024, ESPP expenses of $0.5 million and $0.8 million, respectively were recognized.