Our equity incentive plan provides for grants of nonqualified and incentive stock options, common stock, restricted stock, restricted stock units (RSUs) and stock appreciation rights to employees, directors, officers and consultants. We award RSUs as our principal equity incentive awards.

The following table shows RSU activity for the three months ended December 31, 2022:


(in thousands, except grant date fair value data)	Number of RSUs			Weighted-Average Grant Date Fair Value Per RSU
Balance of outstanding restricted stock units, October 1, 2022		2,754		$	105.07
Granted(1)		817		$	131.58
Vested		(1,090	)	$	103.61
Forfeited or not earned		(72	)	$	111.90
Balance of outstanding restricted stock units, December 31, 2022		2,409		$	114.54

(1)

Restricted stock units granted includes 38 thousand shares from prior period rTSR awards that were earned upon achievement of the performance criteria and vested in November 2022, and 61 thousand shares from prior period performance-based awards that were earned upon achievement of the performance criteria and vested in November 2022.

The following table presents the number of RSU awards granted by award type:


(in thousands)	Three months ended December 31, 2022
Performance-based RSUs(1)		69
Service-based RSUs(2)		580
Relative Total Shareholder Return RSUs(3)		69

(1)

The performance-based RSUs are primarily made up of RSUs granted to our executives and are eligible to vest based upon annual performance measures over a three-year period. To the extent earned, those performance-based RSUs will vest in three substantially equal installments on November 15, 2023, November 15, 2024, and November 15, 2025, or the date the Compensation Committee determines the extent to which the applicable performance criteria have been achieved for each performance period. Up to a maximum of two times the number of RSUs can be earned (up to a maximum aggregate of 139 thousand RSUs).

(2)

The service-based RSUs were granted to employees, including our executive officers. Substantially all service-based RSUs will vest in three substantially equal annual installments on or about the anniversary of the date of grant.

(3)

The rTSR RSUs were granted to our executives and are eligible to vest based on the performance of PTC stock relative to the stock performance of an index of PTC peer companies established as of the grant date, as determined at the end of the measurement period ending on September 30, 2025. The RSUs earned will vest on November 15, 2025. Up to a maximum of two times the number of rTSR RSUs eligible to be earned for the period (up to a maximum aggregate of 139 thousand RSUs) may vest. If the PTC stock price as of September 30, 2022 is higher than the PTC stock price as of September 30, 2025, but still meets or exceeds the peer group indexed return, a maximum of 100% of the rTSR RSUs may vest.

The weighted-average fair value of the rTSR RSUs was $179.60 per target RSU on the grant date. The fair value of the rTSR RSUs was determined using a Monte Carlo simulation model.

The significant assumptions used in the Monte Carlo simulation model were as follows:


Average volatility of peer group	41.54	%
Risk free interest rate	4.12	%
Dividend yield	—	%

Total value on vest date of RSUs vested are as follows:


(in thousands)	Three months ended
Value of stock option and stock-based award activity	December 31, 2022		December 31, 2021
Total value of restricted stock unit awards at vest	$	143,794	$	134,330

Compensation expense recorded for our stock-based awards is classified in our Consolidated Statements of Operations as follows:


(in thousands)	Three months ended
	December 31, 2022		December 31, 2021
Cost of license revenue	$	37	$	38
Cost of support and cloud services revenue		2,790		3,478
Cost of professional services revenue		1,248		2,456
Sales and marketing		12,196		13,081
Research and development		11,458		10,176
General and administrative		13,775		16,713
Total stock-based compensation expense	$	41,504	$	45,942

Stock-based compensation expense includes $1.9 million in the first quarter of 2023 and $2.0 million in the first quarter of 2022 related to our employee stock purchase plan.

As of December 31, 2022, we had liability-classified awards related to stock-based compensation of $7.4 million.