Quarterly report pursuant to Section 13 or 15(d)

Share-based Compensation

v3.22.2
Share-based Compensation
3 Months Ended
Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]  
Share-based Compensation Share-based Compensation
Amended and Restated 2019 Equity Incentive Plan
In July 2019, the Company’s board of directors (the “Board”), upon the recommendation of the compensation committee of the board of directors, adopted the 2019 Equity Incentive Plan, as amended and restated (the “2019 Plan”) which was subsequently approved by the Company’s shareholders and was later amended and restated by the Board in January 2021.
The Company initially reserved 52,000,000 shares of common stock, or the Initial Limit, for the issuance of awards under the 2019 Plan. The 2019 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each April 1, beginning on April 1, 2020, by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31 or such lesser number determined by the compensation committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of June 30, 2022, 45,109,077 shares of common stock were available for future issuance under the 2019 Plan.
Stock options
The following table summarizes activity for stock options during the period ended June 30, 2022:
Number of Options
Weighted Average
Exercise Price
Weighted Average Remaining Contractual Term Aggregate Intrinsic Value
(in thousands) (per share) (years) (in thousands)
Balance, March 31, 2022 6,968  $ 21.87  7.6 $ 176,839 
Exercised (68) 18.79 
Forfeited or expired (368) 24.33 
Balance, June 30, 2022 6,532  $ 21.77  6.8 $ 117,968 
Options vested and expected to vest at June 30, 2022 6,532  $ 21.77  6.8 $ 117,968 
Options vested and exercisable at June 30, 2022 3,627  $ 20.36  6.3 $ 69,870 
As of June 30, 2022, the total unrecognized compensation expense related to non-vested stock options is $24.0 million and is expected to be recognized over a weighted average period of 1.5 years. The Company recognized $5.2 million and $4.7 million of share-based compensation expense related to stock options for the three months ended June 30, 2022 and 2021, respectively.
Restricted shares and units
The following table provides a summary of the changes in the number of restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) for the period ended June 30, 2022:
Number of
 RSAs
Weighted Average
Grant Date Fair Value
Number of RSUs Weighted Average
Grant Date Fair Value
(in thousands) (per share) (in thousands) (per share)
Balance, March 31, 2022 202  $ 16.00  5,180  $ 42.43 
Granted —  —  4,714  40.60 
Vested (116) 16.00  (886) 39.87 
Forfeited (14) 16.00  (379) 42.48 
Balance, June 30, 2022 72  $ 16.00  8,629  $ 41.61 
RSUs outstanding as of June 30, 2022 were comprised of 7.5 million RSUs with only service conditions and 1.1 million RSUs with both service and performance conditions (“PSUs”).
During the three months ended June 30, 2022, the Company granted PSUs to certain key employees that vest 33% one year after the grant date and the remaining 67% vest ratably on a quarterly basis over the following two years (the “Annual PSUs”). The number of shares that may be earned pursuant to the Annual PSUs is based on specific company metrics related to the Company’s fiscal year ending March 31, 2023. No Annual PSUs will be earned with respect to any metric if the applicable “threshold” percentage of the specific metric is not achieved, and the overall number of shares that may be earned shall not exceed 150% of the target award. Once the Annual PSUs are earned, they are then also subject to time-based vesting, with 33% of the earned Annual PSUs vesting on the first anniversary of the grant date, and with the remaining 67% vesting in eight equal quarterly installments over the following two years, and provided that the executive officer remains employed by the Company through the applicable vesting date.
As of June 30, 2022, the total unrecognized compensation expense related to unvested restricted stock awards is $1.0 million and is expected to be recognized over a weighted average period of 0.6 years. As of June 30, 2022, the total unrecognized compensation expense related to unvested restricted stock units is $322.9 million and is expected to be recognized over a weighted average period of 2.6 years. The Company recognized $22.0 million and $13.5 million of share-based compensation expense related to restricted shares and units for the three months ended June 30, 2022 and 2021, respectively.
Employee Stock Purchase Plan
In July 2019, the Board adopted, and the Company’s shareholders approved, the 2019 Employee Stock Purchase Plan (“ESPP”). The Company expects to offer, sell and issue shares of common stock under this ESPP from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under this ESPP. The ESPP provides for six-month offering periods beginning May 15 and November 15 of each year, and each offering period will consist of six-month purchase periods. On each purchase date, eligible employees will purchase shares of the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. For the three months ended June 30, 2022, 265,681 shares of common stock were purchased under the ESPP. As of June 30, 2022, 13,782,205 shares of common stock were available for future issuance under the ESPP.
As of June 30, 2022, there was approximately $3.6 million of unrecognized share-based compensation related to the ESPP that is expected to be recognized over the remaining term of the current offering period. The Company recognized $1.5 million and $1.1 million of share-based compensation expense related to the ESPP for the three months ended June 30, 2022 and 2021, respectively.
Share-based compensation
The following table summarizes the components of total share-based compensation expense included in the condensed consolidated financial statements for each period presented (in thousands):
Three Months Ended June 30,
2022 2021
Cost of revenue $ 3,890  $ 2,652 
Research and development 7,285  3,967 
Sales and marketing 10,076  7,608 
General and administrative 7,444  5,025 
Total share-based compensation $ 28,695  $ 19,252