STOCK-BASED COMPENSATION AND STOCKHOLDERS' EQUITY

12 Months Ended

Mar. 31, 2024

STOCK-BASED COMPENSATION AND STOCKHOLDERS' EQUITY

2012 Equity Incentive Plan

In June 2012, the Company's board of directors approved the 2012 Equity Incentive Plan (the "2012 Plan"). The Company's stockholders subsequently adopted the 2012 Plan in July 2012, which became effective in August 2012. The Company reserved 4.1 million shares of the Company's common stock for issuance under this plan. In August 2014, 2016, 2018 and 2019, the 2012 Plan was amended to allow for an additional 6.8 million shares, 4.5 million shares, 16.3 million shares, and 12.0 million shares reserved for issuance, respectively. The 2012 Plan provided for granting incentive stock options to employees and non-statutory stock options to employees, directors or consultants, and granting of stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards, and stock grants. The stock option price of incentive stock options granted was not permitted to be less than the fair market value on the effective date of the grant. Other types of options and awards under the 2012 Plan could be granted at any price approved by the administrator. Options, restricted stock, and restricted stock units generally vest over three or four years and expire ten years after grant. The 2012 Plan expired in June 2022. As of March 31, 2024, there were no shares available for future grants under the 2012 Plan.

2013 New Employee Inducement Incentive Plan

In September 2013, the Company's board of directors approved the 2013 New Employee Inducement Incentive Plan (the "2013 Plan"). The Company reserved 1.0 million shares of the Company's common stock for issuance under this plan. In November 2014, the 2013 Plan was amended to allow for an additional 1.2 million shares reserved for issuance. In July 2015, the 2013 Plan was amended to allow for an additional 1.2 million shares reserved for issuance. In connection with its approval of the August 2016 amendments to the 2012 Plan, the Company's board of directors has approved the suspension of future grants under the 2013 Plan, which became effective immediately upon stockholder approval of the proposed 2012 Plan amendments in

August 2016. In addition, the 2013 Plan was amended to reduce the number of shares reserved for issuance under the 2013 Plan to the number of shares that were then subject to outstanding awards under the 2013 Plan, leaving no shares available for future grant. The 2013 Plan provided for granting non-statutory stock options, stock appreciation rights, restricted stock, restricted stock and performance units, and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options were granted at market value on the grant date under the 2013 Plan, unless determined otherwise at the time of grant by the administrator. Grants generally vested over four years and expire ten years after grant.

2017 New Employee Inducement Incentive Plan

In October 2017, the Company's board of directors approved the 2017 New Employee Inducement Incentive Plan (the "2017 Plan"). The Company reserved 1.0 million shares of the Company's common stock for issuance under this plan. In January 2018, the 2017 Plan was amended to allow for an additional 1.5 million shares to be reserved for issuance. In December 2020, the 2017 Plan was further amended to allow for an additional 1.4 million shares to be reserved for issuance. In February 2022, the 2017 Plan was further amended to allow for an additional 1.5 million shares to be reserved for issuance. In February 2024, the 2017 Plan was further amended to allow for an additional 0.8 million shares to be reserved for issuance. The 2017 Plan provides for granting non-statutory stock options, stock appreciation rights, restricted stock, and performance units and stock grants solely to newly hired employees as a material inducement to accepting employment with the Company. Options are granted at market value on the grant date under the 2017 Plan, unless determined otherwise at the time of grant by the administrator, which generally will be the compensation committee of the board of directors. Grants generally vest over three years and expire ten years after grant. As of March 31, 2024, 0.2 million shares remained available for future grants under the 2017 plan.

2022 Equity Incentive Plan

On May 26, 2022, the Company's board of directors approved the 2022 Equity Incentive Plan (the "2022 Plan"). The Company's stockholders subsequently approved the 2022 Plan on July 12, 2022. The Company reserved 8.0 million shares of the Company's common stock for issuance under the 2022 Plan plus the number of shares subject to awards that were outstanding under the 2012 Plan (as defined below) as of 12:01 a.m. Pacific Time on June 22, 2022 (the “Prior Plan Expiration Time”), to the extent that, after the Prior Plan Expiration Time, such shares would have recycled back to the 2012 Plan in connection with the awards’ expiration, termination, cancellation, forfeiture, or repurchase, and in each case, subject to adjustment upon certain changes in the Company’s capitalization. The 2022 Plan provides for the granting of incentive stock options to employees and non-statutory stock options to employees, directors or consultants, and granting of stock appreciation rights, restricted stock, restricted stock units and performance units, and stock grants. The stock option price of incentive stock options granted cannot be less than the fair market value on the effective date of the grant. Options, restricted stock, and restricted stock units generally vest over three or four years and expire ten years after the grant. As of March 31, 2024, 2.6 million shares remained available for future grants under the 2022 Plan.

Stock-Based Compensation

The following table presents stock-based compensation expense (in thousands):


	Years Ended March 31,
	2024		2023		2022
Cost of service revenue	$	4,993	$	9,236	$	8,815
Cost of other revenue	1,918		3,531		4,717
Research and development	24,112		29,581		32,655
Sales and marketing	15,271		24,921		47,202
General and administrative	15,616		22,267		39,942
Total	$	61,910	$	89,536	$	133,331

Stock Options

There were no options exercised in the year ended March 31, 2024. The options cancelled in the years ended March 31, 2024, 2023 and 2022, were 0.3 million, 0.2 million and 31.0 thousand, respectively. The options outstanding as of March 31, 2024, 2023 and 2022, were 0.4 million, 0.7 million and 0.9 million, respectively. The total intrinsic value of options exercised in the years ended March 31, 2023, and 2022, was $40.0 thousand and $15.3 million, respectively.

As of March 31, 2024, there was no unrecognized compensation cost related to stock options.

The Company did not grant any stock options during fiscal years 2024, 2023, or 2022.

Stock Purchase Rights

There were no activities related to stock purchase rights during the years ended March 31, 2024, 2023, and 2022.

As of March 31, 2024, there was no unrecognized compensation cost related to stock purchase rights.

Restricted Stock Units

The following table presents the RSU activity during the years ended March 31, 2024, 2023, and 2022 (shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in Years)
Balance at March 31, 2021	8,646	$	19.27	1.85
Granted	8,333	21.37
Vested and released	(5,146)	19.82
Forfeited	(2,458)	20.85
Balance at March 31, 2022	9,375	20.41		2.11
Granted	13,297	5.71
Vested and released	(5,275)	19.18
Forfeited	(4,404)	12.46
Balance at March 31, 2023	12,993	8.56		1.84
Granted	7,186	3.85
Vested and released	(7,613)	8.87
Forfeited	(2,241)	7.13
Balance at March 31, 2024	10,325	$	5.36	1.75

As of March 31, 2024, there was $38.6 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted average of 1.75 years.

Performance Stock Units

PSUs are issued to a group of executives with vesting that is contingent on a combination of stock performance and continued service. The PSUs generally vest over periods ranging from one to four years based on Total Shareholder Return ("TSR"), as measured relative to specified market indices during the period from grant date through vesting date, or on the achievement of specific pre-established absolute stock price hurdles. For PSU awards that allow for performance above or below target, actual PSU vesting amounts are based on performance measured against pre-established threshold, target and maximum performance levels, based either on relative TSR performance or achievement of specific pre-established absolute stock price hurdles. All PSU awards vest at the end of the respective performance periods for those executives with continued service.

The following table presents the PSU activity during the years ended March 31, 2024, 2023, and 2022 (shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in Years)
Balance at March 31, 2021	1,576	$	27.33	1.24
Granted	497	30.41
Granted for performance achievement(1)	20	30.41
Vested and released	(250)	17.15
Forfeited	(817)	23.45
Balance at March 31, 2022	1,026	35.36		0.89
Granted	853	7.31
Granted for performance achievement(1)	24	7.31
Vested and released	(128)	25.65
Forfeited	(1,151)	28.11
Balance at March 31, 2023	624	11.30		1.45
Granted	2,023	3.25


Forfeited	(116)	21.83
Balance at March 31, 2024	2,531	$	4.38	1.16

(1) Represents additional PSUs awarded as a result of the achievement of performance goals above the performance targets established at grant.

Total unrecognized compensation cost related to PSUs was $3.7 million as of March 31, 2024, which is expected to be recognized over a weighted average of 1.16 years.

The PSUs granted were valued for compensation expense purposes at weighted average share price determined by the Monte Carlo simulations using volatility factors and risk-free rates as follows:


Year Ended March 31,	Value per Weighted Average Share		Volatility Range			Risk-Free Interest Rate Range
2024	$	3.25	68.85%	—	68.97%	4.03%	—	4.08%
2023	$	7.05	51.96%	—	69.30%	3.15%	—	4.42%
2022	$	30.98	58.65%	—	59.67%	0.34%	—	0.40%

1996 Employee Stock Purchase Plan

The Company's Amended and Restated 1996 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") was adopted in June 1996 and became effective upon the closing of the Company's initial public offering in July 1997. In May 2006, the Company's board of directors approved a ten-year extension of the Employee Stock Purchase Plan. Stockholders approved the ten-year extension of the Employee Stock Purchase Plan at the 2006 Annual Meeting of Stockholders held September 2006. The Company's board of directors then approved the Second Amended and Restated 1996 Stock Purchase Plan in May 2017 which (i) eliminated the expiration date of the plan and (ii) approved a ten-year “evergreen provision” which would increase annually the number of shares available for issuance by up to 0.5 million on the first day of each fiscal year. Stockholders approved these changes in August 2017. In May 2020, the Company’s board of directors approved the Amended and Restated 1996 Employee Stock Purchase Plan which (i) eliminated the “evergreen provision” and (ii) reserved for issuance 3.0 million additional shares. At the 2020 Annual Meeting of Stockholders in August 2020, these changes were approved. As a result of these amendments, the Employee Stock Purchase Plan is effective until terminated by the Company's board of directors. In May 2022, the Company's board of directors approved amendments to the Employee Stock Purchase Plan, including an amendment that reserved for issuance of an additional 3.6 million shares, which were approved by the stockholders in July 2022 at the 2022 Annual Meeting. During fiscal 2024, 2023 and 2022, approximately 1.9 million, 1.1 million, and 0.7 million shares, respectively, were issued under the Amended and Restated Employee Stock Purchase Plan.

The Employee Stock Purchase Plan permits eligible employees to purchase common stock through payroll deductions at a price equal to 85% of the fair market value of the common stock at the beginning of each one-year offering period or the end of each six-month purchase period, whichever is lower. When the Employee Stock Purchase Plan was reinstated in fiscal 2005, the offering period was reduced from two years to one year. Commencing with the purchase period beginning in August 2020, the contribution amount may not exceed 20% of an employee's base compensation, including commissions and standard incentive cash bonuses, but not including non-standard bonuses and overtime wages. Prior to the August 2020 purchase period, the contribution amount was limited to 10% of an employee's base compensation, including commissions, but not including bonuses and overtime wages. In the event of a merger of the Company with or into another corporation or the sale of all or substantially all of the assets of the Company, the Employee Stock Purchase Plan provides that a new exercise date will be set for each purchase right under the plan which exercise date will occur before the date of the merger or asset sale.

As of March 31, 2024, there was approximately $2.5 million of unrecognized compensation cost related to employee stock purchases. This cost is expected to be recognized over a weighted average period of 0.4 years.

The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the following weighted-average assumptions:


	Years Ended March 31,
	2024	2023	2022
Expected volatility	75%	72%	45%
Expected dividend yield	—	—	—
Risk-free interest rate	5.26%	3.30%	0.57%
Weighted average expected term	0.8 years	0.8 years	0.8 years
Weighted average fair value of rights granted	$1.31	$2.09	$5.81

Stock Repurchases

In May 2017, the Company's board of directors authorized the Company to purchase $25.0 million of its common stock from time to time under the 2017 Repurchase Plan (the "Repurchase Plan"). The Repurchase Plan expires when the maximum purchase amount is reached, or upon the earlier revocation or termination by the Company's board of directors. The remaining amount available under the Repurchase Plan as of March 31, 2024 was approximately $7.1 million.

In December 2021, in a private placement, the Company's board of directors authorized the Company to repurchase approximately $45.0 million of its common stock from certain qualified investors in connection with the issuance of $137.5 million in additional aggregate principal amount of the 2024 Notes.

In August 2022, the Company repurchased in privately negotiated transactions with a limited number of holders 10,695,000 shares of its common stock for approximately $60.0 million, in connection with the Exchange Transaction and negotiation of the Term Loan, as further described in Note 8, Convertible Senior Notes and Term Loan.