Stock-Based Compensation

9 Months Ended

Sep. 30, 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				Nine Months Ended
	September 30,		October 1,		September 30,		October 1,
	2023		2022		2023		2022
Cost of revenues	$	192	$	288	$	774	$	834
Research and development		8,598		8,788		26,903		23,482
Selling, general and administrative		(3,000)		6,874		9,490		18,897
		5,790		15,950		37,167		43,213
Income tax benefit		505		1,230		4,446		4,444
Total	$	5,285	$	14,720	$	32,721	$	38,769

For the three months ended September 30, 2023, the Company recognized an expense reversal of $9.5 million to reflect a reduction in the estimated levels of achievement related to unvested performance stock units.

The Company had approximately $103.8 million of total unrecognized compensation cost related to equity grants as of September 30, 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.