Quarterly report pursuant to Section 13 or 15(d)

Share-based Compensation

v3.21.2
Share-based Compensation
6 Months Ended
Sep. 30, 2021
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 September 30, 2021, 38,435,666 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 September 30, 2021:
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, 2021 8,393  $ 21.31  8.6 $ 226,438 
Granted 114  52.86 
Exercised (913) 20.05 
Forfeited (190) 22.64 
Balance, September 30, 2021 7,404  $ 21.92  8.1 $ 363,138 
Options vested and expected to vest at September 30, 2021 7,404  $ 21.92  8.1 $ 363,138 
Options vested and exercisable at September 30, 2021 2,376  $ 19.53  8.0 $ 122,226 
As of September 30, 2021, the total unrecognized compensation expense related to non-vested stock options is $42.2 million and is expected to be recognized over a weighted average period of 2.2 years. The Company recognized $4.6 million and $4.4 million of share-based compensation expense related to stock options for the three months ended September 30, 2021 and 2020, respectively, and $9.3 million and $7.8 million of share-based compensation expense related to stock options for the six months ended September 30, 2021 and 2020, respectively.
Restricted shares and units
During the first six months of fiscal 2022, the Company granted an aggregate of 2,651,777 restricted stock units (“RSUs”) to certain key employees and non-employee directors. The total grants consisted of: (i) 1,826,397 time-based restricted stock units that vest 25% one year after the grant date and the remaining 75% vest ratably on a quarterly basis over three years, (ii) 21,580 time-based restricted shares that vest on August 26, 2022 or at the annual shareholder meeting, if earlier, (iii) 295,900 performance-based restricted stock units that are subject to vest 33.3% on a yearly basis over three years (the “Incentive PSUs”), and (iv) 507,900 performance-based restricted stock units that are subject to vest 25% one year after the grant date and the remaining 75% vest ratably on a quarterly basis over the following three years (the “Annual PSUs”).
The Incentive PSUs vest in three equal installments, with one-third of the Incentive PSUs eligible to vest on each of the first three anniversaries of the date of grant, subject to the Company’s achievement of specific company metrics, and provided that the executive officer remains employed by the Company through the applicable vesting date. No Incentive PSUs will vest with respect to any year if the Company fails to achieve 95% of the applicable target for that year, and the overall number of shares that may be issued pursuant to the Incentive PSUs with respect to any year shall not exceed 150% of the target award for such year. The Incentive PSUs are not carried forward from year to year; if the Incentive PSUs are not earned in any given year, they are terminated for that year.
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, 2022. 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 25% of the earned Annual PSUs vesting on the first anniversary of the grant date, and with the remaining 75% vesting in twelve equal quarterly installments over the following three years, and provided that the executive officer remains employed by the Company through the applicable vesting date.
Compensation expense for the Incentive PSUs and Annual PSUs is measured using the fair value at the date of grant and recorded over the vesting period of three or four years, respectively, under the graded-vesting attribution method and may be adjusted over the vesting period based on interim estimates of performance against the pre-set objectives.
The following table provides a summary of the changes in the number of restricted shares for the period ended September 30, 2021:
Number of Shares of
Restricted Stock Awards
Weighted Average
Grant Date Fair Value
Number of Restricted Stock Units Weighted Average
Grant Date Fair Value
(in thousands) (per share) (in thousands) (per share)
Balance, March 31, 2021 728  $ 16.00  3,041  $ 24.44 
Granted —  —  2,652  48.92 
Vested (355) 16.00  (797) 24.99 
Forfeited (19) 16.00  (169) 30.30 
Balance, September 30, 2021 354  $ 16.00  4,727  $ 37.87 
As of September 30, 2021, the total unrecognized compensation expense related to unvested restricted stock is $4.8 million and is expected to be recognized over a weighted average period of 1.0 year. As of September 30, 2021, the total unrecognized compensation expense related to unvested restricted stock units is $163.2 million and is expected to be recognized over a weighted average period of 2.7 years. The Company recognized $19.6 million and $9.9 million of share-based compensation expense related to restricted shares and units for the three months ended September 30, 2021 and 2020, respectively, and $33.1 million and $18.7 million of share-based compensation expense related to restricted shares and units for the six months ended September 30, 2021 and 2020, respectively.
Employee Stock Purchase Plan
In July 2019, the board of directors 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 six months ended September 30, 2021, 204,016 shares of common stock were purchased under the ESPP. As of September 30, 2021, 11,355,078 shares of common stock were available for future issuance under the ESPP.
As of September 30, 2021, there was approximately $0.8 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 $1.3 million and $0.5 million of share-based compensation expense related to the ESPP for the three months ended September 30, 2021 and 2020, respectively, and $2.4 million and $1.0 million of share-based compensation expense related to the ESPP for the six months ended September 30, 2021 and 2020, 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 September 30, Six Months Ended September 30,
2021 2020 2021 2020
Cost of revenue $ 3,485  $ 1,866  $ 6,137  $ 3,364 
Research and development 5,456  2,989  9,423  5,407 
Sales and marketing 9,612  6,122  17,220  11,527 
General and administrative 7,022  3,854  12,047  7,205 
Total share-based compensation expense $ 25,575  $ 14,831  $ 44,827  $ 27,503