The Company grants stock options and restricted stock awards to employees and others. All outstanding stock options of the Company as of March 31, 2022 were granted with an exercise price equal to the fair market value on the date of grant. Outstanding stock options, if not exercised, expire 10 years from the date of grant.

The Company’s 2015 Amended and Restated Omnibus Incentive Plan (the “2015 Plan”) authorizes the grant of a variety of equity awards to the Company’s officers, directors, employees, consultants and advisers, including awards of unrestricted and restricted stock, restricted stock units, incentive and nonqualified stock options to purchase shares of common stock, performance share awards and stock appreciation rights. The 2015 Plan provides that options may only be granted at the current market value on the date of grant. Each share of stock issued pursuant to a stock option or stock appreciation right counts as one share against the maximum number of shares issuable under the 2015 Plan, while each share of stock issued pursuant to any other type of award counts as 1.8 shares against the maximum number of shares issuable under the 2015 Plan. The Company’s policy for issuing shares upon exercise of stock options or the vesting of its restricted stock awards and restricted stock units is to issue shares of common stock at the time of exercise or conversion. As of March 31, 2022, a total of approximately 3,033,652 shares were available for future issuance under the 2015 Plan.

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s consolidated statements of operations:


	Fiscal Years Ended March 31,
	2022		2021		2020
	(in thousands)
Cost of revenue	$	4,853	$	3,760	$	2,641
Research and development		9,007		6,941		5,534
Selling, general and administrative		38,869		36,305		31,606
	$	52,729	$	47,006	$	39,781

The components of stock-based compensation were as follows:


	Fiscal Years Ended March 31,
	2022		2021		2020
	(in thousands)
Restricted stock units	$	43,088	$	36,347	$	28,895
Stock options		7,415		8,982		9,006
Employee stock purchase plan		2,226		1,677		1,880
	$	52,729	$	47,006	$	39,781

The following table summarizes stock option activity for the fiscal year ended March 31, 2022:


						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		711		$	141.87		5.46	$	129,912
Granted		68			289.74
Exercised		(168	)		56.00
Cancelled and expired		(16	)		314.97
Outstanding at end of period		595		$	178.54		5.55	$	93,893
Exercisable at end of period		450		$	151.14		4.63	$	83,981
Options vested and expected to vest at end of period		595		$	178.54		5.55	$	93,893

Stock options generally vest and become exercisable annually over three years. The remaining unrecognized stock-based compensation expense for unvested stock option awards as of March 31, 2022 was approximately $7.9 million and the weighted-average period over which this cost is expected to be recognized is 1.8 years.

The aggregate intrinsic value of options exercised for fiscal years 2022, 2021 and 2020 was $46.9 million, $54.9 million and $15.0 million, respectively. The total cash received as a result of employee stock option exercises during the fiscal years ended March 31, 2022, 2021 and 2020 was approximately $9.4 million, $9.1 million and $3.7 million, respectively.

The Company estimates the fair value of each stock option granted at the grant date using the Black-Scholes option valuation model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of options granted were as follows:


	Fiscal Years Ended March 31,
	2022			2021			2020
Weighted average grant-date fair value	$	105.79		$	77.82		$	93.05

Valuation assumptions:
Risk-free interest rate		0.86	%		0.32	%		1.97	%
Expected option life (years)		4.33			4.22			4.14
Expected volatility		44.0	%		42.9	%		42.3	%

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for a term consistent with the expected life of the stock options. Volatility assumptions are calculated based on the historical volatility of the Company’s stock. The Company estimates the expected term of options based on historical exercise experience and estimates of future exercises of unexercised options. An expected dividend yield of zero is used in the option valuation model because the Company does not pay cash dividends and does not expect to pay any cash dividends in the foreseeable future. Forfeitures are recorded as they occur instead of estimating forfeitures that are expected to occur.

The following table summarizes restricted stock unit activity for the fiscal year ended March 31, 2022:


	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		301		$	273.57
Granted (1)		172			288.77
Vested		(133	)		296.88
Forfeited		(33	)		274.55
Restricted stock units at end of period		307		$	274.32

(1) Includes approximately 11,000 performance-based awards granted due to greater than 100% target vesting.

The weighted average grant-date fair value for restricted stock units granted during the fiscal years ended March 31, 2022, 2021 and 2020 was $288.8, $254.8 and $258.6 per share, respectively. The total fair value of restricted stock units vested in fiscal years 2022, 2021 and 2020 was $39.4 million, $27.9 million and $99.3 million, respectively.

Restricted stock units generally vest annually over three years. The remaining unrecognized compensation expense for outstanding restricted stock units, including performance-based and market-based restricted stock units, as of March 31, 2022 was $48.2 million and the weighted-average period over which this cost is expected to be recognized is 1.7 years.

As of March 31, 2022, 2021 and 2020, the Company recognized compensation expense based on the probable outcomes related to the prescribed performance targets on the outstanding awards. The remaining unrecognized compensation expense for outstanding performance-based and market-based restricted stock units as of March 31, 2022 was $17.7 million and the weighted-average period over which this cost is expected to be recognized is 1.6 years.

The Company grants performance-based restricted stock units to certain executive officers and employees, which vest upon achievement of prescribed service-based milestones by the award recipients and the achievement of prescribed performance milestones by the Company, as defined in the respective agreements.

In May 2021 performance-based awards of restricted stock units for the potential issuance of up to 42,060 shares of common stock were issued to employees, which vest over a three-year service period and upon the achievement of prescribed performance milestones by the Company.

In November 2020, performance-based awards of restricted stock units for the potential issuance of up to 66,000 shares of common stock were issued to certain executive officers, which vest over a two-year service period and upon the achievement of prescribed performance milestones by the Company.

In May 2020, performance-based awards of restricted stock units for the potential issuance of up to 62,000 shares of common stock were issued to certain executive officers and employees, which vest over a three-year service period and upon the achievement of prescribed performance milestones by the Company.

In May 2019, performance-based awards of restricted stock units for the potential issuance of up to 196,580 shares of common stock were issued to certain executive officers and employees, which vest upon achievement of prescribed service milestones by the award recipients and the achievement of prescribed performance milestones by the Company. The Company did not meet the prescribed performance milestones in fiscal year 2020 and therefore no shares vested for these performance-based awards and the Company reversed all previously recorded stock stock-based compensation expense related to this award during the fiscal year ended March 31, 2020.

The Company grants market-based restricted stock units to certain executive officers and employees. These restricted stock units vest upon achievement of prescribed service-based milestones, relative TSR goals by the Company and the achievement of prescribed performance milestones by the Company, as defined in the respective agreements.

The relative total shareholder return (“TSR”) is based on the Company’s common stock in relation to the TSR of twenty peer companies over a defined period, based on a comparison of average closing stock prices during the 20 trading days prior to the first day of the performance period, reinstated dividends during each performance period and the average closing stock prices during the final 20 trading days of each performance period. The actual number of market-based restricted stock units that may be earned can range from 0% to 200% of the target number of shares. The payout percentage may be further adjusted based on the Company’s performance relative to the constituents of the S&P 500 Index on the first day of the performance period that are still actively trading on the last day of each performance period, as defined in the respective agreements.

In May 2021 and 2020, market-based restricted stock units for the potential issuance of up to 62,930 and 61,762 shares of common stock were issued to certain executive officers. These restricted stock units will vest and result in the issuance of shares of common stock based on continuing employment and realization of the market-based and performance-based vesting terms included within the grants.

The Company used a Monte-Carlo simulation model to estimate the grant-date fair value of the TSR restricted stock units. The fair value related to these awards is recorded as compensation expense over the period from date of grant to May 2022 and May 2023, respectively, regardless of the actual TSR outcome reached.

The table below sets forth the assumptions used to value the awards and the estimated grant-date fair value:


	May 2021	May 2020
Risk-free interest rate	0.3%	0.2%
Expected volatility	44.8%	35.5%
Dividend yield	—	—
Remaining performance period (years)	2.80	1.9 - 2.9
Estimated grant date fair value per share	$292.4	$347.05-$349.28
Target performance (number of shares)	25,172	30,881

The Company has an employee stock purchase plan, or ESPP. Under the ESPP, eligible employees, including officers and directors, who have completed at least three months of employment with the Company or its subsidiaries who elect to participate in the purchase plan instruct the Company to withhold a specified amount of the employee’s income each payroll period during a six-month payment period (the periods April 1—September 30 and October 1—March 31). On the last business day of each six-month payment period, the amount withheld is used to purchase shares of the Company’s common stock at an exercise price equal to 85% of the lower of its market price on the first business day or the last business day of the payment period.