Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Stock-Based Compensation

Stock-Based Compensation

10. Stock-Based Compensation

The Company recorded stock-based compensation expense for all stock awards in the following expense categories of its condensed consolidated statements of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	202	$	140	$	373	$	255
Research and development expenses		900		732		1,649		1,327
Selling, general and administrative expenses		1,994		1,706		3,717		3,162
	$	3,096	$	2,578	$	5,739	$	4,744

As of June 30, 2024, there was $19.2 million of unrecognized compensation cost related to unvested restricted stock units (“RSUs”) that is expected to be recognized over a weighted average period of 2.7 years.

In March 2023, 53,794 performance-based restricted stock units, (“Market Condition Based PSUs”) was granted under the Company’s 2020 Stock Option and Incentive Plan (the “2020 Plan”) to the Company’s chief executive officer. The vesting of the shares underlying the Market Condition Based PSUs is subject to the achievement of stock price levels pre-established by the compensation committee of the Company’s board of directors at the grant date. The Market Condition Based PSUs are subject to the market and service conditions and valued using the Monte Carlo simulation model, which requires certain assumptions, including the risk-free interest rate, expected volatility, and the estimated dividend yield. The risk-free interest rate used in the Monte Carlo simulation model is based on zero-coupon yields implied by U.S. Treasury issues with remaining terms similar to the performance period on the market condition based PSUs. The performance period of the Market Condition Based PSUs represents the period of time between the grant date and the end of the performance period. Expected volatility is based on historical data of the peers and certain indices over the most recent time period equal to the performance period.

In May 2024, 52,084 performance-based restricted stock units, (“Performance Condition Based PSUs”) were granted under the 2020 Plan to employees. Each Performance Condition Based PSU is equivalent in value to one share of the Company’s common stock and related to revenue targets for the period up to April 2026.

The maximum payout percentage for all performance-based restricted stock units, including Market Condition Based PSUs and Performance Condition Based PSUs, granted by the Company is 100%.

As of June 30, 2024, there was $0.3 million of unrecognized compensation cost related to unvested Market Condition Based PSUs and Performance Condition Based PSUs that is expected to be recognized over a weighted average period of 1.6 years.