Equity-Based Compensation

3 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

EQUITY-BASED COMPENSATION

A summary of equity-based compensation expense recognized during the three months ended December 31, 2021 and 2020 is as follows:


	Three months ended December 31,
	2021		2020
Stock options	$	6,624	$	3,441

Amounts are included in general and administrative expense on the condensed consolidated statements of operations. Income tax benefits of $27 and $205 were recognized during the three months ended December 31, 2021 and 2020, respectively.

Stock Options

In May 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) under which the Company may grant up to 3,500,000 stock options and other equity-based awards to employees, directors and officers. The number of shares of Class A common stock available for issuance under the 2018 Plan includes an annual increase on the first day of each year, beginning with the 2019 calendar year, equal to 4.0% of the outstanding shares of all classes of the Company's common stock as of the last day of the immediately preceding calendar year, unless the Company’s board of directors determines prior to the last trading day of December of the immediately preceding calendar year that the increase shall be less than 4.0%. As of December 31, 2021, there were 262,692 equity awards available for grant under the 2018 Plan.

In September 2020, the Company adopted the 2020 Acquisition Equity Incentive Plan (the “2020 Inducement Plan”) under which the Company may grant up to 1,500,000 stock options and other equity-based awards to individuals that were not previously employees of the Company or its subsidiaries in connection with acquisitions, as a material inducement to the individual's entry into employment with the Company or its subsidiaries within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. In May 2021, the Company amended the 2020 Inducement Plan to increase the number of shares of the Company's Class A common stock available for issuance from 1,500,000 to 3,000,000 shares. As of December 31, 2021, there were 892,072 equity awards available for grant under the 2020 Inducement Plan.

The fair value of the stock option awards during the three months ended December 31, 2021 and during the year ended September 30, 2021 was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:


	December 31, 2021		September 30, 2021
Expected volatility(1)	55.8	%	59.7	%
Expected dividend yield(2)	—	%	—	%
Expected term(3)	6 years		6 years
Risk-free interest rate(4)	1.2	%	0.7	%

_________________

1.Expected volatility is based on the Company's own share price.

2.The Company has assumed a dividend yield of zero as management has no plans to declare dividends in the foreseeable future.

3.Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.

4.The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

A summary of stock option activity for the three months ended December 31, 2021 is as follows:


	Stock Options	Weighted Average Exercise Price
Outstanding at beginning of period	7,547,622	$	25.26
Granted	942,821	23.19
Exercised	(43,889)	15.17
Forfeited	(147,336)	30.05
Outstanding at end of period	8,299,218	$	24.99

The weighted-average grant date fair value of stock options granted during the three months ended December 31, 2021 was $12.14. As of December 31, 2021, there were 8,299,218 stock options outstanding, of which 3,339,373 were exercisable. As of December 31, 2021, total unrecognized compensation expense related to unvested stock options, including an estimate for pre-vesting forfeitures, was $45,867, which is expected to be recognized over a weighted-average period of two years. The Company's policy is to account for forfeitures of stock-based compensation awards as they occur. The total fair value of stock options that vested during the three months ended December 31, 2021 was $4,941.