Shareholders' Equity and Share-based Compensation

6 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Shareholders' Equity and Share-based Compensation

Shareholders’ Equity and Share-based Compensation

Time-based Restricted Stock Units (“TRSUs”)

The following table summarizes the Company’ TRSU activities for the six months ended December 31, 2024:


	Number of Time-based Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Nonvested at June 30, 2024	1,469,135	$	29.13	1.66	$	54,901,575
Granted	126,192	$	37.07
Vested	(102,204)	$	29.00
Forfeited	(23,088)	$	28.65
Nonvested at December 31, 2024	1,470,035	$	29.83	1.31	$	54,435,396

Market-based Restricted Stock Units (“MSUs”)

In December 2021, the Company granted 1.0 million market-based restricted stock units (“MSUs”) to certain personnel. The number of shares to be earned at the end of performance period was determined based on the Company’s achievement of specified stock prices and revenue thresholds during the performance period from January 1, 2022 to December 31, 2024 as well as the recipients remaining in continuous service with the Company through such period. The MSUs vest in four equal annual installments after the end of performance period. The Company estimated the grant date fair values of its MSUs using a Monte-Carlo simulation model. In September 2023, the Company determined it was no longer probable that it would achieve the minimum revenue threshold specified in the awards. Therefore, the Company reversed all of the previously recognized expenses of $6.4 million for these MSUs. In addition, on September 19, 2023, the Compensation Committee of the Board approved a modification of the terms of MSUs to extend the performance period through December 31, 2025, changed the commencement date for the four-year time-based service period to January 1, 2026, and reduced the achievement of specified stock prices and revenue thresholds. The fair value of these MSUs was revalued to reflect the change using a Monte-Carlo simulation model. In June 2024, the Company determined it was no longer probable that the revenue thresholds for the modified MSU would be achieved. Therefore, the Company reversed $2.4 million in the June 2024 quarter that was recorded during the fiscal year 2024 related to the modification on September 19, 2023. On August 8, 2024, the Compensation Committee of the Board approved a modification of the terms of MSUs to extend the performance period through December 31, 2026, change the commencement date for the four-year time-based service period to January 1, 2027, and reduce the revenue thresholds. The fair value of these MSUs was revalued to reflect the change using a Monte-Carlo simulation model with the following assumptions: risk-free interest rate of 3.93%, expected term of 2.40 years, expected volatility of 57.81% and dividend yield of 0%. The Company recorded $1.4 million and $2.2 million of expenses for the three and six months ended December 31, 2024. The Company recorded $1.2 million of expenses for the three months ended December 31, 2023, and a negative $5.1 million of expenses for the six months ended December 31, 2023 due to a $6.4 million of reversal of the prior recognized expenses.

During the quarter ended September 30, 2018, the Company granted 1.3 million MSUs to certain personnel. The number of shares to be earned at the end of performance period is determined based on the Company’s achievement of specified stock prices and revenue thresholds during the performance period from January 1, 2019 to December 31, 2021 as well as the recipients remaining in continuous service with the Company through such period. The MSUs vest in four equal annual installments after the end of the performance period. The Company estimated the grant date fair values of its MSUs using a Monte-Carlo simulation model. On August 31, 2020, the Compensation Committee of the Board approved a modification of the terms of MSU to (i) extend the performance period through December 31, 2022 and (ii) change the commencement date for the four-year time-based service period to January 1, 2023. The fair value of these MSUs was recalculated to reflect the change as of August 31, 2020 and the unrecognized compensation amount was adjusted to reflect the increase in fair value. The Company recorded $0.2 million and $0.4 million of expenses for MSUs during the three and six months ended December 31, 2024, respectively, and $0.3 million and $0.6 million of

expenses during the three and six months ended December 31, 2023, respectively.

The following table summarizes the Company’ MSUs activities for the six months ended December 31, 2024:


	Number of Market-based Performance-based Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Nonvested at June 30, 2024	1,727,000	$	28.15	2.83	$	64,537,990

Vested	(270,000)	$	5.17
Forfeited	(8,000)	$	48.44
Nonvested at December 31, 2024	1,449,000	$	32.31	3.38	$	53,656,470

Performance-based Restricted Stock Units (“PRSUs”)

In March of each year since year 2017, the Company granted PRSUs to certain personnel. The number of shares to be earned under the PRSUs is determined based on the level of attainment of predetermined financial goals. The PRSUs vest in four equal annual installments from the first anniversary date after the grant date if certain predetermined financial goals were met. The Company recorded approximately $1.0 million and $1.9 million of expense for these PRSUs during the three and six months ended December 31, 2024, respectively, and $0.8 million and $1.2 million of expense for the three and six months ended December

31, 2023, respectively.

The following table summarizes the Company’s PRSUs activities for the six months ended December 31, 2024:


	Number of Performance-based Restricted Stock Units	Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Nonvested at June 30, 2024	344,125	$	30.69	1.73	$	12,859,951



Nonvested at December 31, 2024	344,125	$	30.69	1.25	$	12,742,949

Stock Options

The Company did not grant any stock options during the six months ended December 31, 2024 and 2023. The following table summarizes the Company’s stock option activities for the six months ended December 31, 2024:


				Weighted
		Weighted		Average
		Average		Remaining
	Number of	Exercise Price		Contractual	Aggregate
	Shares	Per Share		Term (in years)	Intrinsic Value
Outstanding at June 30, 2024	10,000	$	9.07	0.13	$	283,000

Exercised	(10,000)	$	9.07		$	265,267

Outstanding at December 31, 2024	0	$	0.00	0.00	$	0.00

Employee Share Purchase Plan (“ESPP”)

The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows:



			Six Months Ended December 31,
			2024
Volatility rate			54.1%
Risk-free interest rate			4.4%
Expected term			1.3 years
Dividend yield			0%

Share-based Compensation Expense

The total share-based compensation expense recognized in the Condensed Consolidated Statements of Income (Loss) for the periods presented was as follows:


	Three Months Ended December 31,				Six Months Ended December 31,
	2024		2023		2024		2023
	(in thousands)				(in thousands)
Cost of goods sold	$	1,123	$	1,504	$	2,138	$	1,716
Research and development	2,193		2,417		4,128		2,423
Selling, general and administrative	4,634		4,770		8,586		5,470
	$	7,950	$	8,691	$	14,852	$	9,609

As of December 31, 2024, total unrecognized compensation cost under the Company’s share-based compensation plans was $46.2 million, which is expected to be recognized over a weighted-average period of 2.9 years.