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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Equity Award Plans 1995 Stock Plan The 1995 Stock Plan provides for the grant of incentive stock options, non-statutory stock options and restricted stock units (“RSUs”). Incentive stock options may be granted only to employees. All other awards may be granted to employees and non-employees. Under the terms of the 1995 Stock Plan, no incentive stock option or non-statutory stock option may be granted in the ordinary course of business with a per share exercise price that is less than 100% of the fair value of the Company’s common stock on the date of grant. RSUs have no exercise price. Both options and RSUs vest over a period of time as determined by the Company’s Board of Directors (the “Board”), generally two to four years, and options expire seven years from the date of grant. Some of the RSUs granted by the Company have performance-based vesting terms, where vesting is dependent on achievement of certain financial and non-financial operating goals of the Company (performance-based RSUs, or “PRSUs”), or where vesting is dependent on performance of the Company’s total shareholder return (“TSR”) relative to the TSR of the NASDAQ Telecommunication Index (market-based RSUs, or “MRSUs”). The fair value of PRSUs is estimated on the date of grant based on the market value of our common stock. If the performance goals are not met as of the end of the performance period, no compensation expense is recognized and any previously recognized compensation expense is reversed. The expected cost is based on the portion of the awards that is probable to vest and is reflected over the service period. The fair value of MRSUs subject to targeted levels of relative TSR is estimated on the date of grant using a Monte Carlo simulation model. Compensation expens e is recognized based upon the assumption of 100% achievement of the TSR goal and will not be reversed even if the th reshold level of TSR is never achieved and is reflected over the service period. During the fiscal year 2024, the Company granted 77,571 and 329,166 shares of PRSUs and MRSUs, respectively. The Company’s stockholders approved an amendment to the 1995 Stock Plan at the 2024 Annual Meeting to increase the number of shares of common stock reserved for issuance thereunder by 5,000,000 shares. As of December 31, 2024, an aggregate of 16,492,660 shares of common stock were reserved for issuance under the 1995 Stock Plan, of which 12,723,305 shares remained available for future grants. 2002 Director Plan The 2002 Director Plan provides for the grant of non-statutory stock options and RSUs to non-employee directors of the Company. Under the terms of the 2002 Director Plan, no non-statutory stock option may be granted with a per share exercise price that is less than 100% of the fair value of the Company’s common stock on the date of grant. RSUs have no exercise price. Both options and RSUs vest over a period of time as determined by the Board, generally one year for RSUs and three years for options, and options expire seven years from the date of grant. As of December 31, 2024, an aggregate of 576,084 shares of common stock were reserved for issuance under the 2002 Director Plan, of which 374,341 shares remained available for fu ture grants. Employee Stock Purchase Plan The 2002 Employee Stock Purchase Plan (“ESPP”) provides for the issuance of share purchase rights to employees of the Company. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. The ESPP enables employees to purchase shares at 85% of the fair market value of the Common Stock at the beginning or end of the offering period, whichever is lower. Offering periods generally begin on the first trading day on or after January 1 and July 1 of each year. Employees may participate through payroll deductions of 1% to 10% of their earnings. In the event that there are insufficient shares in the plan to fully fund the issuance, the available shares will be allocated across all participants based on their contributions relative to the total contributions received for the offering period. The Company’s stockholders approved an amendment to the ESPP Plan at the 2024 Annual Meeting to increase the number of shares of common stock reserved for issuance thereunder by 400,000 shares. As of December 31, 2024, 1,061,928 shares were reserved for future purchases by eligible employees. Under the ESPP, 622,004, 733,030 and 817,243 shares were issued during fiscal 2024, 2023 and 2022, respectively, representing $6.6 million, $6.6 million and $5.9 million in contributions. Stock Options All stock options were fully vested and exercised as of December 31, 2022. No stoc k options were granted in 2024. Restricted Stock Units
(in thousands, except per share amounts) |  | Number of Shares |  | Weighted Average Grant-Date Fair Value Per Share
Balance at December 31, 2023 |  | 3,242 |  |  | $ | 12.42 |
Granted |  | 3,180 |  |  | 13.22 |
Vested and issued |  | (2,107) |  |  | 12.16 |
Forfeited |  | (868) |  |  | 13.93 |
Balance at December 31, 2024 |  | 3,447 |  |  | $ | 12.95 |
The fair value of RSUs vested and issued during the years ended December 31, 2024, 2023 and 2022 was $25.6 million, $22.5 million and $22.4 million, respectively. Share-based Compensation Cost The following table sets forth the detailed allocation of the share-based compensation expense which was included in the Company’s Consolidated Statements of Operations:
| Year Ended December 31,
(in thousands) | 2024 |  | 2023 |  | 2022
Share-based compensation expense included in: |  |  |  |  |
Cost of revenue | $ | 1,091 |  |  | $ | 2,348 |  |  | $ | 2,233 |
Research and development expense | 8,015 |  |  | 7,889 |  |  | 7,519 |
Selling, general and administrative expense | 18,967 |  |  | 17,092 |  |  | 15,460 |
Total | $ | 28,073 |  |  | $ | 27,329 |  |  | $ | 25,212 |
Share-based compensation expense by type of award: |  |  |  |  |
RSUs | $ | 23,299 |  |  | $ | 19,863 |  |  | $ | 17,786 |
PRSUs | 1,044 |  |  | 3,398 |  |  | 3,865 |
MRSUs | 1,646 |  |  | 1,705 |  |  | 1,558 |
Employee stock purchase rights under ESPP | 2,084 |  |  | 2,363 |  |  | 2,003 |
Total | $ | 28,073 |  |  | $ | 27,329 |  |  | $ | 25,212 |
As of December 31, 2024, total unrecognized share-based compensation cost related to unvested RSUs was $28.9 million and is expected to be recognized over a weighted-average period of approximately 1.7 years. French Pension Plan Under French law, the Company’s subsidiaries in France are obligated to make certain payments to their employees upon their retirement from the Company. These payments are based on the retiring employee’s salary for a number of months that varies according to the employee’s period of service and position. Salary used in the calculation is the employee’s average monthly salary for the twelve months prior to retirement. The payments are made in one lump-sum at the time of retirement. The French pension plan is unfunded and there are no contributions to the plan required by related laws or funding regulations. No required contributions are expected in fiscal 2025, but the Company, at its discretion, may make contributions to the defined benefit plan. The Company’s defined benefit pension obligations are measured annually as of December 31. The present value of these lump-sum payments is determined on an actuarial basis and the actuarial valuation considers the employees’ age and period of service with the Company, projected mortality rates, mobility rates, increases in salaries and a discount rate. The Company’s pension obligations as of December 31, 2024 and 2023, and the changes to the Company’s pension obligations for each of those years, were as follows:
(in thousands) | 2024 |  | 2023
Projected benefit obligation: |  |  |
Balance at January 1 | $ | 5,596 |  |  | $ | 5,283 |
Service cost | 242 |  |  | 217 |
Interest cost | 205 |  |  | 169 |
Actuarial losses (gains) | 330 |  |  | (25) |
Settlement | (1,612) |  |  | — |
Benefits paid | (28) |  |  | (275) |
Foreign currency translation adjustment | (201) |  |  | 227 |
Balance at December 31 | $ | 4,532 |  |  | $ | 5,596 |
Presented on the Consolidated Balance Sheets as: |  |  |
Current portion (included in “Accrued and other current liabilities”) | $ | — |  |  | $ | 33 |
Long-term portion (included in “Other non-current liabilities”) | $ | 4,532 |  |  | $ | 5,563 |
The table below presents the components of net periodic benefit costs:
| Year Ended December 31,
(in thousands) | 2024 |  | 2023 |  | 2022
Service cost | $ | 242 |  |  | $ | 217 |  |  | $ | 259 |
Interest cost | 205 |  |  | 169 |  |  | 50 |
Net periodic benefit cost included in result of operations | $ | 447 |  |  | $ | 386 |  |  | $ | 309 |
The following assumptions were used in determining the Company’s pension obligation:
|  | As of December 31,
|  | 2024 |  | 2023
Discount rate |  | 3.2 | % |  | 3.8 | %
Mobility rate |  | 6.3 | % |  | 6.2 | %
Salary progression rate |  | 3.0 | % |  | 3.0 | %
The Company evaluates the discount rate assumption annually. The discount rate is determined using the average yields on high-quality fixed-income securities that have maturities consistent with the timing of benefit payments. The Company also evaluates other assumptions related to demographic factors, such as retirement age, mortality rates and turnover periodically, updating them to reflect experience and expectations for the future. The mortality assumption related to the Company’s defined benefit pension plan used the most current mortality tables published by the French National Institute of Statistics and Economic Studies. As of December 31, 2024, future benefits expected to be paid in each of the next five years, and in the aggregate for the five-year period thereafter are as follows (in thousands):
Year ending December 31, |
2025 | $ | — |
2026 | 74 |
2027 | 195 |
2028 | 349 |
2029 | 273 |
2030 – 2034 | 3,436 |
Total | $ | 4,327 |
Valuation Assumptions The Company estimates the fair value of stock purchase rights under the ESPP using a Black-Scholes option valuation model. The value of the stock purchase rights under the ESPP consists of: (1) the 15% discount on the purchase of the stock; (2) 85% of the fair value of the call option; and (3) 15% of the fair value of the put option. The call option and put option were valued using the Black-Scholes option pricing model. At the date of grant, the Company estimated the fair value of each stock purchase right granted under the ESPP using the following weighted average assumptions:
|  | Year Ended December 31,
|  |  |  |  |  |  | 2024 |  | 2023 |  | 2022
Expected term (in years) |  |  |  |  |  |  | 0.50 |  | 0.50 |  | 0.50
Volatility |  |  |  |  |  |  | 50 | % |  | 46 | % |  | 47 | %
Risk-free interest rate |  |  |  |  |  |  | 5.3 | % |  | 5.2 | % |  | 1.4 | %
Expected dividends |  |  |  |  |  |  | 0.0 | % |  | 0.0 | % |  | 0.0 | %
The expected term of the stock purchase right under ESPP represents the period of time from the beginning of the offering period to the purchase date. The Company uses its historical volatility for a period equivalent to the expected term to estimate the expected volatility. The risk-free interest rate that the Company uses in the Black-Scholes option valuation model is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term. The Company has not paid and does not plan to pay any cash dividends in the foreseeable future. The estimated weighted-average fair value per share of stock purchase rights under the ESPP, granted for the years ended December 31, 2024, 2023 and 2022 was $3.76, $4.23 and $2.91, respectively.

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