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Employee Benefits and Share-Based Compensation | 9 Months Ended
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Sep. 30, 2023
Share-Based Payment Arrangement [Abstract] |
Employee Benefits and Share-Based Compensation | Employee Benefits and Share-Based Compensation 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, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (In thousands)
Cost of product and service revenues | $ | 2,213 |  |  | $ | 2,203 |  |  | $ | 6,489 |  |  | $ | 6,607 |
Research and development | 1,917 |  |  | 3,054 |  |  | 5,220 |  |  | 7,912 |
Selling, general, and administrative | 10,852 |  |  | 12,053 |  |  | 31,404 |  |  | 36,212 |
Total share-based compensation expense | $ | 14,982 |  |  | $ | 17,310 |  |  | $ | 43,113 |  |  | $ | 50,731 |
During the three and nine months ended September 30, 2023, the Company capitalized approximately $1.1 million and $3.3 million, respectively, of non-cash share-based compensation expense to internal-use and external-use software development costs related to internal labor. The Company did not capitalize any material non-cash share-based compensation expense to inventory during the three and nine months ended September 30, 2023 and 2022, or any material non-cash share-based compensation expense to internal-use and external-use software development costs during the three and nine months ended September 30, 2022. 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, 2023 and 2022:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Expected life, years | 0.5 - 2.0 |  | 0.5 - 2.0 |  | 0.5 - 2.0 |  | 0.5 - 2.0
Expected volatility, % | 32.0% - 63.9% |  | 28.8% - 44.8% |  | 31.7% - 63.9% |  | 28.8% - 45.6%
Risk-free interest rate, % | 0.2% - 5.5% |  | 0.1% - 3.2% |  | 0.1% - 5.5% |  | 0.1% - 3.2%
Dividend yield, % | — | % |  | — | % |  | — | % |  | — | %
For the nine months ended September 30, 2023 and 2022, employees purchased approximately 353,000 and 316,000 shares of common stock, respectively, under the ESPP at a weighted-average price of $46.68 and $67.63, respectively. As of September 30, 2023, the unrecognized compensation cost related to the shares to be purchased under the ESPP was approximately $2.0 million and is expected to be recognized over a weighted-average period of 1.6 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 nine months ended September 30, 2023. There were no stock options granted during the three months ended September 30, 2023, and the three and nine months ended September 30, 2022.
|  |  |  |  | Nine Months Ended September 30,
|  |  |  |  |  |  | 2023
Expected life, years |  |  |  |  |  |  | 3.2
Expected volatility, % |  |  |  |  |  |  | 44.8 | %
Risk-free interest rate, % |  |  |  |  |  |  | 3.7 | %
Estimated forfeiture rate, % |  |  |  |  |  |  | 10.0 | %
Dividend yield, % |  |  |  |  |  |  | — | %
The following table summarizes the stock option activity under the 2009 Plan during the nine months ended September 30, 2023:
| Number of Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Years |  | Aggregate Intrinsic Value
| (In thousands, except per share data)
Outstanding at December 31, 2022 | 2,434 |  |  | $ | 68.65 |  |  | 6.1 |  | $ | 7,887 |
Granted | 200 |  |  | 55.60 |  |  |  |  |
Exercised | (157) |  |  | 41.85 |  |  |  |  |
Expired | (177) |  |  | 80.44 |  |  |  |  |
Forfeited | (180) |  |  | 74.17 |  |  |  |  |
Outstanding at September 30, 2023 | 2,120 |  |  | $ | 67.96 |  |  | 5.0 |  | $ | 3,418 |
Exercisable at September 30, 2023 | 1,801 |  |  | $ | 66.84 |  |  | 4.9 |  | $ | 3,418 |
Vested and expected to vest at September 30, 2023 and thereafter | 2,103 |  |  | $ | 67.90 |  |  | 5.0 |  | $ | 3,418 |
The weighted-average fair value per share of options granted during the nine months ended September 30, 2023 was $19.48. The intrinsic value of options exercised during the three months ended September 30, 2023 and 2022 was $0.5 million and $7.6 million, respectively, and during the nine months ended September 30, 2023 and 2022 was $3.1 million and $23.1 million, respectively. As of September 30, 2023, total unrecognized compensation cost related to unvested stock options was $5.3 million, which is expected to be recognized over a weighted-average vesting period of 0.9 years. Restricted Stock Units (“RSUs”) The following table summarizes the RSU activity under the 2009 Plan during the nine months ended September 30, 2023:
| 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, 2022 | 1,117 |  |  | $ | 115.75 |  |  | 1.6 |  | $ | 56,297 |
Granted (Awarded) | 675 |  |  | 64.44 |  |  |  |  |
Vested (Released) | (252) |  |  | 117.13 |  |  |  |  |
Forfeited | (304) |  |  | 112.82 |  |  |  |  |
Outstanding and unvested at September 30, 2023 | 1,236 |  |  | $ | 87.89 |  |  | 1.7 |  | $ | 55,649 |
As of September 30, 2023, total unrecognized compensation cost related to RSUs was $78.2 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 RSA activity under the 2009 Plan during the nine months ended September 30, 2023:
| Number of Shares |  | Weighted-Average Grant Date Fair Value
| (In thousands, except per share data)
Outstanding at December 31, 2022 | 13 |  |  | $ | 109.39 |
Granted (Awarded) | 24 |  |  | 70.96 |
Vested (Released) | (13) |  |  | 109.39 |
Outstanding and unvested at September 30, 2023 | 24 |  |  | $ | 70.96 |
As of September 30, 2023, 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 0.6 years. Performance-Based Stock Unit Awards (“PSUs”) The following table summarizes the PSU activity under the 2009 Plan during the nine months ended September 30, 2023:
| Number of Shares |  | Weighted-Average Grant Date Fair Value
| (In thousands, except per share data)
Outstanding at December 31, 2022 | 135 |  |  | $ | 147.42 |
Granted | 65 |  |  | 122.29 |
Vested | (35) |  |  | 127.40 |
Forfeited | (66) |  |  | 153.68 |
Outstanding and unvested at September 30, 2023 | 99 |  |  | $ | 129.36 |
As of September 30, 2023, total unrecognized compensation cost related to PSUs was approximately $6.7 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.4 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, 2023:
| Number of Shares
| (In thousands)
Stock options outstanding | 2,120 |
Non-vested restricted stock awards | 1,359 |
Shares authorized for future issuance | 2,417 |
ESPP shares available for future issuance | 3,250 |
Total shares reserved for future issuance | 9,146 |
Stock Repurchase Programs 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”). During the first quarter of 2022, the 2014 Repurchase Program was completed, and as of September 30, 2023, the maximum dollar value of shares that may yet be purchased under the 2016 Repurchase Program was $2.7 million. The 2016 Repurchase Program does not obligate the Company to repurchase any specific number of shares, and the Company may terminate or suspend the 2016 Repurchase Program at any time. During the nine months ended September 30, 2022, the Company repurchased approximately 389,300 shares of its common stock under the repurchase programs at an average price of $134.11 per share for an aggregate purchase price of approximately $52.2 million. During the three and nine months ended September 30, 2023 and the three months ended September 30, 2022, the Company did not repurchase any of its outstanding common stock under the 2016 Repurchase Program.

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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 -Topic 710 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//710/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 712 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//712/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//715/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//718/tableOfContent + Details
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