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Stock-Based Compensation and Stockholders' Equity | 12 Months Ended
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Dec. 31, 2024
Equity [Abstract] |
Stock-Based Compensation and Stockholders' Equity | Stock-Based Compensation and Stockholders' Equity The Stock Incentive Plans provide for several forms of incentive awards to be granted to designated eligible employees, non-management directors, and independent contractors providing services to the Company. On September 3, 2020, the Company's Board of Directors adopted and the Company's stockholders approved, the Company's 2020 Plan. The 2020 Plan replaced the 2016 Plan, as the Company determined not to make additional awards under the 2016 Plan following the effectiveness of the 2020 Plan. However, the terms of the 2016 Plan continue to govern outstanding equity awards granted under the 2016 Plan. The maximum number of shares of the Company’s common stock authorized for issuance under the 2016 Plan is 6,166,667. Any shares reserved for issuance, but unissued, forfeited or lapse unexercised under the 2016 Plan will be made available under the 2020 Plan for issuance. On May 18, 2021, the Company’s stockholders approved an amendment to the 2020 Plan to provide that commencing on January 1, 2022 and ending on (and including) January 1, 2030, there will be an annual increase in the total number of shares of common stock reserved and available for delivery in connection with the 2020 Plan of up to 5% of the total number of shares of common stock outstanding on December 31st of the preceding year, pending approval by the Compensation Committee of the Board. On January 1, 2022, the 2020 Plan share pool increased by 1,703,584 shares, 5% of the outstanding common stock of 34,071,684 shares on December 31, 2021. On January 1, 2023, the 2020 Plan share pool increased by 1,723,944 shares, 5% of the outstanding common stock of 34,478,892 shares on December 31, 2022. On January 1, 2024, the 2020 Plan share pool increased by 1,759,429 shares, 5% of the outstanding common stock of 35,188,599 shares on December 31, 2023. As of December 31, 2024, the maximum number of shares of the Company’s common stock authorized for issuance under the 2020 Plan was 5,627,647. The following table sets forth stock-based compensation expense recognized by the Company in the following line items in the Company's consolidated statements of operations and comprehensive (loss) income during the periods presented:
| Years Ended December 31,
(in thousands) | 2024 |  | 2023 |  | 2022
Cost of services | $ | 662 |  |  | $ | 613 |  |  | $ | 421 |
Sales and marketing | 7,351 |  |  | 11,089 |  |  | 6,634 |
General and administrative | 16,105 |  |  | 10,499 |  |  | 7,573 |
Stock-based compensation expense | $ | 24,118 |  |  | $ | 22,201 |  |  | $ | 14,628 |
The following table sets forth the Company's stock-based compensation expense by award type during the periods presented:
| Years Ended December 31,
(in thousands) | 2024 |  | 2023 |  | 2022
RSUs | $ | 12,765 |  |  | $ | 9,637 |  |  | $ | 3,569 |
PSUs | 9,747 |  |  | 9,372 |  |  | 3,141 |
Stock Options | 459 |  |  | 1,674 |  |  | 6,156 |
ESPP | 1,147 |  |  | 1,518 |  |  | 1,762 |
Stock-based compensation expense | $ | 24,118 |  |  | $ | 22,201 |  |  | $ | 14,628 |
Restricted Stock Units The following table sets forth the Company's RSU activity during the years ended December 31, 2024, 2023 and 2022:
| Number of Restricted Stock Units |  | Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2021 | — |  |  | — |
Granted | 525,735 |  |  | $ | 25.93 |
Vested | (890) |  |  | — |
Forfeited | (7,710) |  |  | 26.09 |
Nonvested balance as of December 31, 2022 | 517,135 |  |  | $ | 25.93 |
Granted | 709,175 |  |  | 19.58 |
Vested | (208,345) |  |  | 25.66 |
Forfeited | (25,501) |  |  | 23.20 |
Nonvested balance as of December 31, 2023 | 992,464 |  |  | $ | 21.52 |
Granted | 891,598 |  |  | 18.42 |
Vested | (455,517) |  |  | 22.10 |
Forfeited | (241,119) |  |  | 19.31 |
Nonvested balance as of December 31, 2024 | 1,187,426 |  |  | $ | 19.42 |
The total fair value of RSUs vested during the years ended December 31, 2024, 2023 and 2022 was $10.1 million, $5.3 million, and less than $0.1 million, respectively. The Company grants RSUs to the Company's employees and non-employee directors under the 2020 Plan. Pursuant to the RSU award agreements, each RSU entitles the recipient to one share of the Company’s common stock, subject to time-based vesting conditions set forth in individual agreements. The fair value of each RSU grant is determined based upon the market closing price of the Company’s common stock on the date of grant. The RSUs vest and are expensed on a straight-line basis over the requisite service period, which ranges between one year and three years from the date of grant, subject to the continued employment of the employees and services of the non-employee board members. As of December 31, 2024, the unrecognized stock-based compensation expense related to the unvested portion of the Company's RSU awards was $12.5 million and is expected to be recognized over a weighted-average period of 1.49 years. During the year ended December 31, 2024, the Company issued an aggregate of 455,309 shares of common stock to employees and non-employee directors upon the vesting of RSUs previously granted under the 2020 Plan. As of December 31, 2024, there were 1,187,426 RSUs expected to vest with a weighted-average grant date fair value of 19.42 per unit. As of December 31, 2023, there were 992,464 RSUs expected to vest with a weighted-average grant date fair value of 21.52 per unit. Performance-Based Restricted Stock Units The following table sets forth the Company's PSU activity during the years ended December 31, 2024, 2023 and 2022:
| Number of Performance-Based Restricted Stock Units |  | Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2021 | — |  |  | — |
Granted | 473,371 |  |  | $ | 26.76 |
Vested | — |  |  | — |
Forfeited | — |  |  | — |
Nonvested balance as of December 31, 2022 | 473,371 |  |  | $ | 26.76 |
Granted | 657,408 |  |  | 21.46 |
Vested | — |  |  | — |
Forfeited | — |  |  | — |
Nonvested balance as of December 31, 2023 | 1,130,779 |  |  | $ | 23.68 |
Granted | 693,936 |  |  | 18.89 |
Vested | (122,241) |  |  | 26.33 |
Forfeited | (352,116) |  |  | 22.31 |
Nonvested balance as of December 31, 2024 | 1,350,358 |  |  | $ | 22.01 |
The total fair value of PSUs vested during the year ended December 31, 2024 was $3.2 million. No PSUs were vested during the years ended December 31, 2023 or 2022. The Company grants PSUs to employees under the Company’s 2020 Plan. Pursuant to the PSU Award Agreement, each PSU entitles the recipient to up to 1.5 shares of the Company’s common stock, subject to certain performance measures set forth in individual agreements. The PSUs will vest, if at all, following the achievement of certain performance measures over a three year performance period, relative to certain performance and market conditions. Grant date fair value of PSUs that vest relative to a performance condition are measured based upon the market closing price of the Company’s common stock on the date of grant and expensed on a straight-line basis when it becomes probable that the performance conditions will be satisfied, net of forfeitures, over the service period of the awards, which is generally the vesting term of three years. Grant date fair value of PSUs that vest relative to a market condition are measured using a Monte Carlo simulation model and expensed on a straight-line basis, net of forfeitures, over the service period of the awards, which is generally the vesting term of three years. As of December 31, 2024, the nonvested balance of PSUs that vest based on performance and market conditions were 540,149 and 810,209, respectively. As of December 31, 2024, the unrecognized stock-based compensation expense related to the unvested portion of the Company's PSU awards was $10.2 million and is expected to be recognized over a weighted average period of 1.14 years. The following table sets forth the PSUs weighted-average fair values and assumptions used in the Monte Carlo simulation model during the periods presented:
| Years Ended December 31,
| 2024 | 2023 | 2022
Weighted-average fair value | $ | 18.80 |  | $ | 21.46 |  | $ | 27.21 |
Dividend yield | — |  | — |  | — |
Volatility | 51.13 | % | 75.80 | % | 77.12 | %
Risk-free interest rate | 4.13 | % | 4.14 | % | 2.87 | %
Expected life (in years) | 2.99 | 2.99 | 2.66
Stock Options No stock options were issued during the years ended December 31, 2024 or 2023. In 2020, the Company granted stock options to certain employees and non-management directors that vest over the service period, which is a three-year to four-year period ending on October 15, 2024 and have a 10-year term from the date of grant. A stock option holder may pay the option exercise price in cash, by delivering to the Company unrestricted shares having a value at the time of exercise equal to the exercise price, by a cashless broker-assisted exercise, by a loan from the Company, (unless prohibited by law) or by a combination of these methods. Any unvested portion of the stock option award will be forfeited upon the employee’s termination of employment with the Company for any reason before the date the option vests, except that the Compensation Committee of the Company, at its sole option and election, may provide for the accelerated vesting of the stock option award. If the Company terminates the employee without cause or the employee resigns for good reason, then the employee is eligible to exercise the stock options that vested on or before the effective date of such termination or resignation. If the Company terminates the employee for cause, then the employee's stock options, whether or not vested, shall terminate immediately upon termination of employment. The Compensation Committee of the Company shall have the authority to determine the treatment of awards in the event of a change in control of the Company or the affiliate which employs the award holder. The following table sets forth the Company's stock options activity during the year ended December 31, 2024:
| Number of Stock Option Awards |  | Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2023 | 401,075 |  |  | $ | 12.62 |
Granted | — |  |  | — |
Vested | (401,075) |  |  | 12.62 |
Forfeited | — |  |  | — |
Outstanding stock option awards expected to vest as of December 31, 2024 | — |  |  | N/A
The following table reflects changes in the Company's outstanding stock option awards for the year ended December 31, 2024:
| 2024
| Number of Stock Option Awards |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding stock option awards at January 1 | 3,309,222 |  |  | $ | 11.65 |  |  | 5.52 |  | $ | 28,781 |
Granted | — |  |  | — |  |  | — |  | — |
Exercises (issuance of shares) | (604,360) |  |  | 10.04 |  |  | 4.13 |  | 90 |
Forfeitures/expirations | — |  |  | — |  |  | — |  | — |
Outstanding stock option awards as of December 31 | 2,704,862 |  |  | $ | 12.01 |  |  | 4.60 |  | $ | 7,540 |
Options exercisable as of December 31 | 2,704,862 |  |  | $ | 12.01 |  |  | 4.60 |  | $ | 7,540 |
As of December 31, 2024, there was no unrecognized stock-based compensation expense related to the unvested portion of the Company's stock options, as all granted stock options were fully vested on October 15, 2024. The following table reflects changes in the Company's outstanding stock option awards for the year ended December 31, 2023:
| 2023
| Number of Stock Option Awards |  | Weighted- Average Exercise Price |  | Weighted- Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding stock option awards at January 1 | 3,533,507 |  |  | $ | 11.62 |  |  | 6.52 |  | $ | 26,070 |
Granted | — |  |  | — |  |  | — |  |  | — |
Exercises (issuance of shares) | (216,549) |  |  | 11.22 |  |  | 5.56 |  | 173 |
Forfeitures/expirations | (7,736) |  |  | 10.35 |  |  | 6.95 |  | 91 |
Outstanding stock option awards at December 31 | 3,309,222 |  |  | $ | 11.65 |  |  | 5.52 |  | $ | 28,781 |
Options exercisable as of December 31 | 2,908,147 |  |  | $ | 11.52 |  |  | 5.39 |  | $ | 25,682 |
As of December 31, 2023, the unrecognized stock-based compensation expense related to the unvested portion of the Company's stock options was $0.5 million and was expected to be recognized over a weighted-average period of 0.1 years. Proceeds from Exercises of Stock Options Cash proceeds received from exercises of stock options during the years ended December 31, 2024, 2023 and 2022 were $8.9 million, $3.1 million and $2.8 million, respectively. The associated tax benefit from options exercised and RSUs issued were $3.8 million, $1.7 million and $0.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. Employee Stock Purchase Plan The ESPP was approved by the Company's Board of Directors on September 10, 2020 and became effective on September 23, 2020. Under the ESPP, eligible employees may purchase a limited number of shares of our common stock at the lesser of 85% of the market value at the beginning of the offering period or 85% of the market value at the end of the offering period. The ESPP is intended to enable eligible employees to use payroll deductions to purchase shares of stock in offerings under the plan, and thereby acquire an interest in the Company. The maximum aggregate number of shares of stock available for purchase under the plan by eligible employees is 2,000,000 shares. A total of 149,983 shares were issued on June 30, 2024, and 114,055 shares were issued on December 31, 2024, for a total of 264,038 shares issued through the ESPP during the year ended December 31, 2024. A total of 189,837 shares were issued on June 30, 2023, and 114,147 shares were issued on December 31, 2023, for a total of 303,984 shares issued through the ESPP during the year ended December 31, 2023. A total of 157,250 shares were issued on June 30, 2022, and 114,945 shares were issued on December 31, 2022, for a total of 272,195 shares issued through the ESPP during the year ended December 31, 2022. Share Repurchase Program On April 30, 2024, the Board authorized a new share repurchase program (the “Share Repurchase Program”), under which the Company may repurchase up to $40.0 million in shares of common stock through April 30, 2029. The repurchase program will be subject to market conditions, the periodic capital needs of the Company’s operating activities, and the continued satisfaction of all covenants under the Company’s New Term Loan and ABL Credit Agreement. The Share Repurchase Program does not obligate the Company to repurchase shares and may be suspended, terminated, or modified at any time. On June 20, 2024, the Company repurchased approximately 26,495 shares of its outstanding common stock. The total purchase price of this transaction was approximately $0.5 million. The acquired shares were recorded as Treasury stock upon repurchase. As of December 31, 2024, $39.5 million remains available for common stock share repurchases. Common Stock Offering To finance the Keap Acquisition, the Company entered into an underwriting agreement (the “Underwriting Agreement”), dated October 29, 2024 with RBC Capital Markets, LLC (the “Underwriter”). The Company closed an underwritten public offering of 5,715,000 shares of common stock. The Company raised approximately $76.8 million in proceeds (after deducting underwriting discounts and commissions) and borrowed $5.5 million under its New ABL Facility. The Company granted the Underwriter an option to purchase up to an additional 857,250 shares of the Company’s common stock. On November 12, 2024, the Company sold 857,250 shares of its common stock to the Underwriter pursuant to the Underwriter’s exercise in full of such option to purchase additional shares. The Company raised approximately $11.5 million in proceeds (after deducting underwriting discounts and commissions) from the sale of these additional shares of its common stock. The Company also incurred approximately $0.9 million of offering expenses related to the public offering and the underwriter's option, which brought the total net proceeds of the offering to approximately $87.4 million (after deducting underwriting discounts and commissions and offering expenses). Stock Warrants As of December 31, 2022, the Company had fully vested outstanding warrants of 9,427,343 and the holders of such warrants were entitled to purchase, in the aggregate, up to 5,237,413 shares of common stock at an exercise price of $24.39 per common share. The warrants were issued in 2016 upon the Company's emergence from its pre-packaged bankruptcy. During the year ended December 31, 2023, 1,173,348 warrants were exercised. Cash proceeds from exercises of stock warrants during the year ended December 31, 2023 was $15.9 million and is recorded in Proceeds from exercises of stock warrants in Cash flows from financing activities on the Company's consolidated statements of cash flows. On August 15, 2023, 8,253,997 warrants expired unexercised. As of August 16, 2023, the Company did not have any warrants outstanding.

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