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Employee Benefits and Share-Based Compensation | 9 Months Ended
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Sep. 30, 2021
Share-based Payment Arrangement [Abstract] |
Employee Benefits and Share-Based Compensation | Employee Benefits and Share-Based Compensation Stock-Based Plans For a detailed explanation of the Company's stock plans, refer to Note 14, Employee Benefits and Share-Based Compensation, of the audited Consolidated Financial Statements and accompanying Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 24, 2021. Share-Based Compensation Expense The following table sets forth the total share-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
| (In thousands)
Cost of product and service revenues | $ | 1,909 |  |  | $ | 1,758 |  |  | $ | 5,890 |  |  | $ | 5,658 |
Research and development | 1,998 |  |  | 1,577 |  |  | 5,429 |  |  | 5,199 |
Selling, general, and administrative | 9,759 |  |  | 7,689 |  |  | 27,158 |  |  | 22,177 |
Total share-based compensation expense | $ | 13,666 |  |  | $ | 11,024 |  |  | $ | 38,477 |  |  | $ | 33,034 |
Employee Stock Purchase Plan (“ESPP”) The following assumptions were used to value shares under the ESPP for the three and nine months ended September 30, 2021 and 2020:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Expected life, years | 0.5 - 2.0 |  | 0.5 - 2.0 |  | 0.5 - 2.0 |  | 0.5 - 2.0
Expected volatility, % | 27.4% - 46.6% |  | 30.4% - 53.5% |  | 27.4% - 53.5% |  | 30.4% - 53.5%
Risk-free interest rate, % | 0.1% - 1.5% |  | 0.1% - 2.7% |  | 0.1% - 2.6% |  | 0.1% - 2.7%
Dividend yield, % | — | % |  | — | % |  | — | % |  | — | %
For the nine months ended September 30, 2021 and 2020, employees purchased approximately 287,000 and 333,000 shares of common stock, respectively, under the ESPP at a weighted-average price of $62.14 and $48.77, respectively. As of September 30, 2021, the unrecognized compensation cost related to the shares to be purchased under the ESPP was approximately $3.1 million and is expected to be recognized over a weighted-average period of 1.5 years. Stock Options The following assumptions were used to value stock options granted pursuant to the Company’s 2009 Equity Incentive Plan (as amended, the “2009 Plan”) for the three months ended September 30, 2020, and the nine months ended September 30, 2021 and 2020. There were no stock options granted during the three months ended September 30, 2021.
|  |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  |  | 2020 |  | 2021 |  | 2020
Expected life, years |  |  | 4.7 |  | 4.9 |  | 4.7
Expected volatility, % |  |  | 41.2 | % |  | 30.1 | % |  | 39.0 | %
Risk-free interest rate, % |  |  | 0.3 | % |  | 0.6 | % |  | 0.7 | %
Estimated forfeiture rate, % |  |  | 5.7 | % |  | 7.9 | % |  | 5.7 | %
Dividend yield, % |  |  | — | % |  | — | % |  | — | %
The following table summarizes the stock options activity during the nine months ended September 30, 2021:
| Number of Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Years |  | Aggregate Intrinsic Value
| (In thousands, except per share data)
Outstanding at December 31, 2020 | 3,932 |  |  | $ | 62.50 |  |  | 7.8 |  | $ | 226,160 |
Granted | 150 |  |  | 125.80 |  |  |  |  |
Exercised | (648) |  |  | 55.70 |  |  |  |  |
Expired | (11) |  |  | 60.64 |  |  |  |  |
Forfeited | (180) |  |  | 74.79 |  |  |  |  |
Outstanding at September 30, 2021 | 3,243 |  |  | $ | 66.11 |  |  | 7.1 |  | $ | 266,946 |
Exercisable at September 30, 2021 | 1,640 |  |  | $ | 51.96 |  |  | 5.8 |  | $ | 158,170 |
Vested and expected to vest at September 30, 2021 and thereafter | 3,104 |  |  | $ | 65.35 |  |  | 7.0 |  | $ | 257,873 |
The weighted-average fair value per share of options granted during the three months ended September 30, 2020 was $23.75, and the weighted-average fair value per share of options granted during the nine months ended September 30, 2021 and 2020 was $33.89 and $25.30, respectively. The intrinsic value of options exercised during the three months ended September 30, 2021 and 2020 was $26.0 million and $4.1 million, respectively, and during the nine months ended September 30, 2021 and 2020 was $56.8 million and $16.5 million, respectively. As of September 30, 2021, total unrecognized compensation cost related to unvested stock options was $38.4 million, which is expected to be recognized over a weighted-average vesting period of 2.4 years. Restricted Stock Units (“RSUs”) The following table summarizes the restricted stock units activity under the 2009 Plan during the nine months ended September 30, 2021:
| Number of Shares |  | Weighted-Average Grant Date Fair Value |  | Weighted-Average Remaining Years |  | Aggregate Intrinsic Value
| (In thousands, except per share data)
Outstanding at December 31, 2020 | 580 |  |  | $ | 72.87 |  |  | 1.6 |  | $ | 69,670 |
Granted (Awarded) | 409 |  |  | 145.44 |  |  |  |  |
Vested (Released) | (157) |  |  | 72.39 |  |  |  |  |
Forfeited | (54) |  |  | 74.75 |  |  |  |  |
Outstanding and unvested at September 30, 2021 | 778 |  |  | $ | 111.00 |  |  | 1.7 |  | $ | 115,456 |
As of September 30, 2021, total unrecognized compensation cost related to RSUs was $73.4 million, which is expected to be recognized over the remaining weighted-average vesting period of 3.1 years. Restricted Stock Awards (“RSAs”) The following table summarizes the restricted stock awards activity under the 2009 Plan during the nine months ended September 30, 2021:
| Number of Shares |  | Weighted-Average Grant Date Fair Value
| (In thousands, except per share data)
Outstanding at December 31, 2020 | 21 |  |  | $ | 68.11 |
Granted (Awarded) | 11 |  |  | 137.36 |
Vested (Released) | (21) |  |  | 68.11 |
Outstanding and unvested at September 30, 2021 | 11 |  |  | $ | 137.36 |
As of September 30, 2021, total unrecognized compensation cost related to RSAs was $1.0 million, which is expected to be recognized over the remaining weighted-average vesting period of 0.7 years. Performance-Based Restricted Stock Units (“PSUs”) The following table summarizes the performance-based restricted stock units activity under the 2009 Plan during the nine months ended September 30, 2021:
| Number of Shares |  | Weighted-Average Grant Date Fair Value Per Unit
| (In thousands, except per share data)
Outstanding at December 31, 2020 | 155 |  |  | $ | 74.26 |
Granted | 51 |  |  | 156.79 |
Vested | (41) |  |  | 70.68 |
Forfeited | (7) |  |  | 64.06 |
Outstanding and unvested at September 30, 2021 | 158 |  |  | $ | 102.29 |
As of September 30, 2021, total unrecognized compensation cost related to PSUs was approximately $7.0 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.2 years. Summary of Shares Reserved for Future Issuance under Equity Incentive Plans The Company had the following ordinary shares reserved for future issuance under its equity incentive plans as of September 30, 2021:
| Number of Shares
| (In thousands)
Share options outstanding | 3,243 |
Non-vested restricted stock awards | 947 |
Shares authorized for future issuance | 1,514 |
ESPP shares available for future issuance | 919 |
Total shares reserved for future issuance | 6,623 |
Stock Repurchase Program On August 2, 2016, the Company’s Board of Directors (the “Board”) authorized a stock repurchase program providing for the repurchase of up to $50.0 million of the Company’s common stock (the “2016 Repurchase Program”). The 2016 Repurchase Program is in addition to the stock repurchase program approved by the Board on November 4, 2014 providing for the repurchase of up to $50.0 million of the Company’s common stock (the “2014 Repurchase Program”). As of September 30, 2021, the maximum dollar value of shares that may yet be purchased under the two repurchase programs was $54.9 million. The stock repurchase programs do not obligate the Company to repurchase any specific number of shares, and the Company may terminate or suspend the repurchase programs at any time. On September 17, 2020, the Board authorized a one-time stock repurchase transaction providing for the repurchase of up to $75.0 million of the Company’s common stock in privately negotiated transactions concurrently with the issuance of the Notes, described in Note 10, Convertible Senior Notes. In September 2020, the Company repurchased 749,300 shares of its common stock from purchasers of the Notes in the offering in privately negotiated transactions effected through one of the initial purchasers or its affiliate at an average price of $70.78 per share for an aggregate purchase price of approximately $53.0 million. There will be no further repurchases under this one-time authorization. During the three and nine months ended September 30, 2021 and 2020, the Company did not repurchase any of its outstanding common stock, including under the 2014 Repurchase Program and the 2016 Repurchase Program, other than the separately-authorized one-time stock repurchase concurrent with the offering of the Notes in September 2020.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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