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STOCK-BASED COMPENSATION (Tables)
12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Schedule of non-cash stock-based compensation expense by department
A summary of non-cash stock-based compensation expense by expense category included in the Company's consolidated statements of operations for the years ended December 31, 2020, 2019, and 2018 is as follows:
Year Ended December 31,
(In thousands)
202020192018
Cost of sales
$12,852 $5,799 $3,531 
Research and development
19,976 17,196 10,189 
General and administrative
75,999 64,222 34,181 
Sales and marketing
44,079 21,266 12,363 
Total stock-based compensation
$152,906 $108,483 $60,264 
Schedule of valuation assumptions
The Company determines the fair value of each service-based option award on the date of grant using the Black-Scholes option-pricing mode, which utilizes several key assumptions which are disclosed in the following table:
Year Ended December 31
202020192018
Option Plan Shares
Risk-free interest rates
1.26% - 1.47%
2.54% - 2.59%
2.73% - 2.79%
Expected term (in years)
6.15
6.28
5.45 - 6.44
Expected volatility
65.67% - 65.71%
64.95% - 64.99%
61.82% - 66.17%
Dividend yield0%0%0%
The fair value of ESPP shares is based on the assumptions in the following table:
Year Ended December 31,
202020192018
ESPP Shares
Risk-free interest rates
0.11% - 0.2%
1.6% - 2.4%
2.1% - 2.8%
Expected term (in years)
0.5 - 2
0.4 - 2
0.5 - 2
Expected volatility
61.59% - 89.0%
43.2% - 57.6%
51.7% - 65.4%
Dividend yield0%0%0%
Summary of stock option activity under the Stock Plans
A summary of stock option activity under the Stock Plans is as follows:
OptionsSharesWeighted
Average
Exercise
Price (1)
Weighted
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value(2)
(Aggregate intrinsic value in thousands)
Outstanding, January 1, 20202,700,293 $34.01 6.7
Granted309,143 97.66 
Exercised(707,013)39.07 
Forfeited(71,364)82.76 
Outstanding, December 31, 20202,231,059 $39.67 6.0$207,090 
Vested and expected to vest, December 31, 20202,231,059 $39.67 6.0$207,090 
Exercisable, December 31, 20201,399,721 $22.53 4.9$153,912 
_________________________________
(1) The weighted average grant date fair value of options granted during the years ended December 31, 2020, 2019, and 2018 was $58.57, $57.11, and $24.55.
(2) The total intrinsic value of options exercised during the years ended December 31, 2020, 2019, and 2018 was $40.6 million, $52.0 million, and $53.0 million, respectively, determined as of the date of exercise.
Summary of restricted stock and restricted stock unit activity under the Stock Plans
A summary of restricted stock and restricted stock unit activity is as follows:
Restricted
Shares
Weighted
Average Grant
Date Fair Value (2)
Outstanding, January 1, 20203,800,722 $58.68 
Granted2,236,535 92.55
Released (1)(1,731,631)50.67
Forfeited(337,412)81.36
Outstanding, December 31, 20203,968,214 $79.38 
_________________________________
(1) The fair value of restricted stock units vested and converted to shares of the Company's common stock was $152.4 million, $173.8 million, and $63.8 million for the years ended December 31, 2020, 2019, and 2018, respectively.
(2) The weighted average grant date fair value of the restricted stock units granted during the years ended December 31, 2019 and 2018 was $93.20, and $50.45, respectively.
Share-based Payment Arrangement, Performance Shares, Activity
A summary of performance share unit activity is as follows:
Performance Share Units (2)Weighted
Average Grant
Date Fair Value (3)
Outstanding, December 31, 2019583,283 $93.40 
Granted35,232 90.17 
Released (1)— — 
Forfeited— — 
Outstanding, December 31, 2020618,515 $93.22 
_________________________________
(1) The fair value of performance share units vested and converted to shares of the Company's common stock was $183.8 million for the year ended December 31, 2019. There were no performance share units vested and converted to shares of the Company's common stock during the years ended December 31, 2020 and 2018.
(2) Participants may ultimately earn between zero and 200% of the target number of performance share units granted based on the degree of achievement of the performance criteria. The performance share units listed above assumes attainment of maximum payout rates as set forth in the performance criteria. Applying actual or expected payout rates, the number of outstanding performance share units as of December 31, 2020 was 158,958.
(3) The weighted average grant date fair value of the performance share units granted during the years ended December 31, 2019 was $93.40. There were no performance share units granted during the year ended December 31, 2018.
Schedule of shares of common stock issued
A summary of ESPP activity is as follows:
Year Ended December 31,
(in thousands, except share and per share amounts)202020192018
Shares issued under the 2010 Purchase Plan301,064176,458346,609
Cash received under the 2010 Purchase Plan$18,355 $8,396 $4,895 
Weighted average fair value per share of stock purchase rights granted during the period$32.57 $29.21 $20.47 
Schedule of Common Stock Issued
The 301,064 shares issued during the year ended December 31, 2020 were as follows:
Offering period ended
Number of Shares
Weighted Average
price per Share
April 30, 2020167,921 $57.95 
November 2, 2020133,143 $64.35 
Summary of shares of authorized common stock reserved for issuance
The Company has reserved shares of its authorized common stock for issuance pursuant to its employee stock purchase and equity plans, including all outstanding stock option grants noted above at December 31, 2020, as follows:
Shares reserved for issuance
2019 Stock Plan11,898,737 
2010 Purchase Plan
759,015 
12,657,752