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Stock-based compensation
6 Months Ended
Mar. 31, 2021
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-based compensation

11. Stock-based compensation

2018 Equity Incentive Plan

On September 26, 2018, the board of directors adopted the 2018 Equity Incentive Plan (the 2018 Plan) as a successor to the 2013 Stock Plan (the 2013 Plan). The number of shares reserved for issuance under the 2018 Plan upon approval of the plan was 5,856,505 shares of the Company’s common stock. The number of shares reserved for issuance under the 2018 Plan will increase automatically on the first day of each fiscal year, following the fiscal year in which the 2018 Plan became effective, by a number equal to the least of 999,900 shares, 4% of the shares of common stock outstanding at that time, or such number of shares determined by the Company’s board of directors. The common shares issuable under the 2018 Plan were registered pursuant to a registration statement on Form S-8 on November 1, 2018.

On September 1, 2020, the board of directors approved the implementation of a revised annual equity award program for executive officers and senior level employees to be granted as performance-based stock units (PSUs) under the 2018 Plan. The number of PSUs ultimately earned under these awards is calculated based on the achievement of certain total revenue threshold during the fiscal year ending September 30, 2022. The percentage of PSUs that vest will depend on the board of directors’ determination of total revenue at the end of the performance period and can range from 0% to 150% of the number of units granted. The provisions of the PSUs are considered a performance condition, and the effects of that performance condition are not reflected in the grant date fair value of the awards. The Company used the Black-Scholes method to calculate the fair value at the grant date without regard to the vesting condition and will recognize compensation cost for the units that are expected to vest. As of March 31, 2021, the Company determined that 245,913 shares are expected to vest based on the probability of the performance condition that will be achieved under this equity award program. The Company reassesses the probability of the performance condition at each reporting period and adjusts the compensation cost based on the probability assessment. The weighted-average grant date fair value was determined to be $45.01 per share. As of March 31, 2021, the unrecognized compensation costs related to these awards were $8.0 million. The Company expects to recognize those costs over a weighted average period of 1.5 years.

Any shares subject to outstanding awards under the 2013 Equity Incentive Plan that are canceled or repurchased subsequent to the 2018 Plan’s effective date are returned to the pool of shares reserved for issuance under the 2018 Plan. Awards granted under the 2018 Plan may be nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, and performance units.

Activity under the equity incentive plans during the six months ended March 31, 2021 is summarized below:

    

    

    

Weighted

    

Weighted

    

average

average

exercise

remaining

Aggregate

Shares

Options

price per

contractual

intrinsic

(in thousands, except per share data)

available

outstanding

share

term (years)

value

Outstanding at September 30, 2020

 

1,034

 

3,913

$

24.35

 

8.1

$

204,365

Additional shares authorized

 

1,000

 

 

 

 

Stock options granted

 

(108)

 

108

 

50.13

 

 

Stock options exercised

 

 

(498)

 

18.66

 

 

Stock options forfeited

 

57

 

(57)

 

29.46

 

 

Restricted stock units granted

 

(315)

 

 

 

 

Forfeiture of restricted stock units

 

27

 

 

 

 

Shares withheld for payment of taxes

 

46

 

 

 

 

Early exercised options repurchased

 

2

 

 

 

 

Outstanding at March 31, 2021

 

1,743

 

3,466

$

25.21

 

7.7

$

342,000

Vested or expected to vest at March 31, 2021

 

 

3,466

$

25.21

 

7.7

$

342,000

Vested and exercisable at March 31, 2021

 

 

1,477

$

16.07

 

6.9

$

159,173

Total stock-based compensation expense recognized was as follows:

Three months ended

Six months ended

March 31,

March 31,

(in thousands)

    

2021

    

2020

    

2021

    

2020

Cost of revenues

    

$

731

    

$

250

    

$

1,218

    

$

610

Research and development

 

2,427

 

797

 

4,428

 

1,524

Selling, general and administrative

 

8,394

 

3,150

 

12,929

 

5,760

Total stock-based compensation

$

11,552

$

4,197

$

18,575

$

7,894

As of March 31, 2021, there was $33.9 million of total unrecognized compensation cost related to non-vested stock options under the equity incentive plans that are expected to be recognized over a weighted average period of 2.1 years. The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2021 was $30.33 per share.

Restricted Stock Units

Restricted stock primarily consists of restricted stock unit awards (RSUs) which have been granted to employees. The value of an RSU award is based on the Company’s stock price on the date of grant. The shares underlying the RSU awards are not issued until the RSUs vest. Upon vesting, each RSU converts into one share of the Company’s common stock.

Activity with respect to the Company’s restricted stock units during the six months ended March 31, 2021 was as follows:

    

    

Weighted

    

Weighted

    

average

average

Number

grant date

remaining

Aggregate

of

fair value

contractual

Intrinsic

(in thousands, except share and per share data)

Shares

per share

term (years)

Value

Outstanding at September 30, 2020

 

569

$

32.96

 

3.2

$

43,260

Restricted stock units granted

 

315

 

106.80

 

 

Restricted stock units vested

 

(121)

 

36.47

 

 

Restricted stock units forfeited

 

(27)

 

79.88

 

 

Outstanding at March 31, 2021

 

736

$

62.27

 

3.1

$

91,209

Expected to vest at March 31, 2021

 

736

$

62.27

 

3.1

$

91,209

As of March 31, 2021, there was $43.6 million of total unrecognized compensation cost related to these issuances that is expected to be recognized over a weighted average period of 2.8 years.

2018 Employee Stock Purchase Plan

On September 26, 2018, the board of directors adopted the 2018 Employee Stock Purchase Plan (the 2018 ESPP). The number of shares reserved for issuance under the 2018 ESPP upon approval was 275,225 shares of the Company’s common stock, and it increases automatically on the first day of each fiscal year, following the fiscal year in which the 2018 ESPP becomes effective, by a number equal to the least of 249,470 shares, 1% of the shares of common stock outstanding at that time, or such number of shares determined by the Company’s board of directors. The number of shares reserved for issuance as at March 31, 2021 is as follows:

Shares

(In thousands)

    

available

Outstanding at September 30, 2020

179

Additional shares authorized

250

Shares issued during the period

(49)

Outstanding at March 31, 2021

380

Subject to any plan limitations, the 2018 ESPP allows eligible service providers (through qualified and non-qualified offerings) to contribute, normally through payroll deductions, up to 15% of their earnings for the purchase of the Company’s common stock at a discounted price per share. The offering periods begin in February and August of each year, except for the initial offering period which commenced with the initial public offering in October 2018 and ended on August 20, 2019. The common shares issuable under the 2018 ESPP were registered pursuant to a registration statement on Form S-8 on November 26, 2018.

Unless otherwise determined by the board of directors, the Company’s common stock will be purchased for the accounts of employees participating in the 2018 ESPP at a price per share that is the lesser of 85% of the fair market value of the Company’s common stock on the first trading day of the offering period. During the three and six months ended March 31, 2021 and 2020, activity under the 2018 ESPP was immaterial.