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Stock-based Compensation
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
As of March 31, 2024, the Company has five equity incentive plans: its Amended and Restated 2015 Stock Plan (the “2015 Plan”), the Sense Photonics, Inc. 2017 Equity Incentive Plan (the “Sense Plan”), the Velodyne Lidar, Inc. 2020 Equity Incentive Plan (the “Velodyne Plan”), its 2021 Incentive Award Plan (the “2021 Plan”) and its 2022 Employee Stock Purchase Plan (the “2022 ESPP” and, collectively with the 2015 Plan, the Sense Plan, the Velodyne Plan and the 2021 Plan, the “Plans”).
The Plans, other than the 2022 ESPP, provide for the grant of stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock unit awards and other forms of equity compensation (collectively, “equity awards”). In addition, the 2021 Plan provides for the grant of performance bonus awards. New equity awards may only be granted under the Velodyne Plan and the 2021 Plan. Awards under the Velodyne Plan may be granted to employees, including officers, and other service providers who were not previously employed by or who did not previously provide services to the Company or a subsidiary of the Company, in each case, prior to February 10, 2023, within the limits provided in the Velodyne Plan. Awards under the 2021 Plan can also be granted to employees, including officers, directors and consultants of the Company and its subsidiaries, in each case, within the limits provided in the 2021 Plan.
The Company’s 2022 ESPP has been offered to all eligible employees since August 2022 and generally permits certain employees to purchase shares of our common stock through payroll deductions of up to 15% of their compensation of each offering period, subject to certain limitations.
The 2022 ESPP provides offering periods that have a duration of 24 months in length and are comprised of purchase periods of six months in length. The offering periods are scheduled to start on the first trading day on or after May 16 and November 16 of each year. Under the 2022 ESPP, the purchase price of a share under the ESPP equals 85% of the lesser of the fair market value
of a share of common stock on either the first or last day of the applicable offering period, or the last day of the applicable purchase period.
In May 2023, the Company increased the share purchase limit under the 2022 ESPP to 3,000 shares of Company common stock per offering period and added Velodyne Lidar, Inc. as a participating employer in the 2022 ESPP.
During the three months ended March 31, 2024, there were no shares of common stock issued under the 2022 ESPP Plan.
The stock-based compensation expense is calculated as of the beginning of the offering period as the fair value of the 2022 ESPP shares utilizing the Black-Scholes option valuation model and is recognized over the offering period. The first offering period under the 2022 ESPP commenced on September 6, 2022.
Certain employees have the right to early exercise unvested stock options, subject to rights held by the Company to repurchase unvested shares in the event of voluntary or involuntary termination. The Company accounts for cash received in consideration for the early exercise of unvested stock options as a non-current liability, included as a component of other liabilities in the Company’s unaudited condensed consolidated balance sheets.
Stock option activity for the three months ended March 31, 2024 is as follows (in thousands, except share and per share data):
Number of
Shares
Underlying
Outstanding
Options		Weighted-
Average Exercise
Price per Share		Weighted-
Average
Remaining
Contractual
Term (in years)		Aggregate
Intrinsic
Value
Outstanding—December 31, 20231,871,649 $7.36 6.71$5,160 
Options exercised(54,374)1.92 
Options cancelled(6,403)16.90 
Outstanding—March 31, 20241,810,872 $7.49 6.47$6,135 
Vested and expected to vest—March 31, 20241,810,872 $7.49 6.47$6,135 
Exercisable—March 31, 20241,578,366 $7.42 6.46$5,423 
The following table summarizes information about stock options outstanding and exercisable at March 31, 2024.
Options OutstandingOptions
Exercisable
Exercise
Price		Options
Outstanding		Weighted
Average
Remaining
Contractual
Life (Years)
$1.85 231,119 6.29222,579 
2.13 814,027 6.52700,364 
14.22 752,408 6.50642,679 
$52.40 13,318 5.6612,744 
1,810,872 1,578,366 
As of March 31, 2024, there was approximately $3.0 million of unamortized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted average period of 0.4 years.
Restricted Stock Units
A summary of RSU activity is as follows:
Number of
Shares		Weighted Average
Grant Date Fair
Value (per share)
Unvested—December 31, 20233,074,939 $13.19 
Granted193,894 7.91 
Canceled(65,574)12.58 
Vested(759,919)10.53 
Unvested—March 31, 20242,443,340 $13.62 
Stock compensation expense is recognized on a straight-line basis over the vesting period of each award of RSUs. As of March 31, 2024, total compensation expense related to unvested RSUs granted to employees, but not yet recognized, was
$31.0 million, with a weighted-average remaining vesting period of 1.9 years. RSUs settle into shares of the Company’s common stock upon vesting.
Restricted Stock Awards
A summary of RSA activity is as follows:
Number of
Shares		Weighted Average
Grant Date Fair
Value (per share)
Unvested—December 31, 2023380,383 $15.30 
Granted533,601 7.94 
Vested(168,271)12.66 
Unvested—March 31, 2024745,713 $10.63 
Stock compensation expense is recognized on a straight-line basis over the vesting period of each award of RSAs. As of March 31, 2024, total compensation expense related to unvested RSAs granted to employees, but not yet recognized, was $6.7 million, with a weighted-average remaining vesting period of 1.4 years. The common stock comprising RSAs is issued at grant but, generally, is subject to a risk of forfeiture if the holder terminates service with the Company and its subsidiaries prior to vesting.
Stock-Based Compensation Expense
The Company recognized stock-based compensation expense for all share-based awards in the unaudited condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
Three Months Ended March 31,
20242023
Cost of revenue$913 $774 
Research and development4,188 7,505 
Sales and marketing1,400 2,881 
General and administrative2,903 10,620 
Total stock-based compensation$9,404 $21,780 
The following table summarizes stock-based compensation expense by award type (in thousands):
Three Months Ended March 31,
20242023
RSUs$6,809 $16,330 
Stock Options1,530 2,005 
Employee stock purchase plan505 184 
RSAs560 3,261 
Total stock-based compensation$9,404 $21,780 
Share based compensation recognized upon completion of the Velodyne Merger
The Company recognized $6.1 million of stock-based compensation expense in the three months March 31, 2023 related to accelerated vesting of certain RSUs upon completion of the Velodyne Merger and termination of employment of some of its executives and members of the board, who had accelerated vesting provisions in the event of a change in control. Additionally, in the three months March 31, 2023, the Company recognized $2.4 million of stock-based compensation expense related to accelerated vesting of certain Velodyne restricted stock units, restricted stock awards and performance-based awards upon completion of the Velodyne Merger and termination of employment of some of Velodyne executives.