STOCK-BASED COMPENSATION AND STOCKHOLDERS' EQUITY

9 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION AND STOCKHOLDERS' EQUITY

The Company accounts for stock-based compensation through the measurement and recognition of compensation expense for share-based payment awards made to employees, directors or consultants over the related requisite service period, including stock appreciation rights, restricted stock, restricted stock units ("RSUs") and performance stock units ("PSUs"), qualified performance-based awards, and stock grants (all issuable under the Company's equity incentive plans).

The Company reserved 8.0 million shares of the Company's common stock for issuance under the 2022 Equity Incentive Plan (the "2022 Plan") plus the number of shares subject to awards that were outstanding under the 2012 Equity Incentive Plan (the "2012 Plan") 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, as described further below, 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, qualified performance-based awards, 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 December 31, 2023, 2,177,892 shares remained available for future grants under the 2022 Plan.

Stock-Based Compensation

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


	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Cost of service revenue	$	1,114	$	2,137	$	3,937	$	7,237
Cost of other revenue	454		893		1,308		2,929
Research and development	5,406		7,139		18,454		22,894
Sales and marketing	3,611		6,582		12,177		21,498
General and administrative	3,533		4,330		10,959		18,958
Total	$	14,118	$	21,081	$	46,835	$	73,516

Restricted Stock Units

The following table presents the RSU activity (shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in Years)
Balance as of March 31, 2023	12,993	$	8.56	1.84
Granted	6,497	3.95
Vested and released	(6,679)	8.63
Forfeited	(1,530)	7.24
Balance as of December 31, 2023	11,281	$	6.05	1.86

As of December 31, 2023, there was $51.2 million of total unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted average of 1.86 years.

Performance Stock Units

PSUs are issued to a group of executives and generally time vest over periods ranging from one to three years from the grant date; vesting is generally also contingent upon achievement of applicable performance metrics or strategic objectives. Vesting of performance-based stock units granted can be tied to our total shareholder return, as measured relative to specified market indices during the applicable performance periods and be contingent upon continued service. The related stock-based compensation expense is recognized over the requisite service period and accounts for the probability that we will satisfy the performance measures or strategic objectives.

The following table presents the PSU activity (shares in thousands):


	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (in Years)
Balance as of March 31, 2023	624	$	11.30	1.45
Granted	2,023	1.23


Forfeited	(116)	21.83
Balance as of December 31, 2023	2,531	2.77		2.86

Total unrecognized compensation cost related to PSUs was $3.1 million as of December 31, 2023, which is expected to be recognized over a weighted average of 2.86 years.

Employee Stock Purchase Plan ("ESPP")

As of December 31, 2023, there was approximately $1.7 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. As of December 31, 2023, a total of 3.7 million shares were available for issuance under the ESPP.