Stock-Based Compensation

6 Months Ended

Jul. 01, 2023

Stock-Based Compensation

Stock-Based Compensation

9. Stock-Based Compensation

Stock-based compensation costs are based on the fair values on the date of grant for stock awards and stock options and on the date of enrollment for the employee stock purchase plans. The fair values of stock awards (such as restricted stock units (“RSUs”), performance stock units (“PSUs”) and restricted stock awards (“RSAs”)) are estimated based on their intrinsic values. The fair values of market stock awards (“MSUs”) are estimated using a Monte Carlo simulation. The fair values of stock options and employee stock purchase plans are estimated using the Black-Scholes option-pricing model.

The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands):

	Three Months Ended				Six Months Ended
	July 1,		July 2,		July 1,		July 2,
	2023		2022		2023		2022
Cost of revenues	$	283	$	274	$	582	$	546
Research and development		8,813		7,703		18,305		14,694
Selling, general and administrative		5,643		6,412		12,490		12,024
		14,739		14,389		31,377		27,264
Income tax benefit		2,155		1,371		3,941		3,215
Total	$	12,584	$	13,018	$	27,436	$	24,049

The Company had approximately $140.1 million of total unrecognized compensation cost related to equity grants as of July 1, 2023 that is expected to be recognized over a weighted-average period of approximately 2.2 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.