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Stockholders' Equity
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Shares Reserved for Future Issuance
The following shares of the Company's common stock were reserved for future issuance at December 31, 2021 (in thousands):
Shares reserved for issuance upon conversion of Convertible Senior Notes2,554 
Shares underlying outstanding warrants215 
Shares underlying outstanding stock options4,814 
Shares underlying unvested restricted stock units612 
Shares authorized for issuance pursuant to awards granted under the ESPP1,216 
Shares authorized for future equity award grants1,382 
10,793 
Common Stock Warrants

Warrants outstanding to purchase shares of the Company's common stock as of December 31, 2021 were as follows:

Issue DateExercise Price Per ShareWarrants OutstandingExpiration Date of Warrants Outstanding
October 2017$3.501,000 October 2022
March 2017$23.50193,788 March 2027
August 2011 - August 2012$73.7319,722 May 2022 - August 2022
214,510 
Each warrant allows the holder to purchase one share of the Company's common stock at the exercise price per share of the respective warrant. The Company issued 155,517 and 295,526 shares of its common stock upon the exercise of warrants during the years ended December 31, 2021 and 2020, respectively.
Stock Plans
The Company’s Amended and Restated 2013 Stock Incentive Plan (2013 Plan) was originally approved by the Company’s board of directors in October 2013. Under the 2013 Plan, the Company may grant stock options, stock appreciation rights, restricted stock and restricted stock units to individuals who are then employees, officers, directors or consultants of the Company. In June 2019, the Company received approval from its stockholders to increase the number of shares of its common stock reserved for issuance under the 2013 Plan by an additional 5,000,000 shares.
The Company issued 1,128,791 and 2,339,467 shares of its common stock, respectively, upon the exercise of stock options during the years ended December 31, 2021 and 2020. During the years ended December 31, 2021 and 2020, the Company issued 38,156 and 1,892 shares of its common stock, respectively, upon the vesting of RSUs.
Common Stock Options
The maximum term of stock options granted under the 2006 Plan and 2013 Plan is ten years. Common stock options have an exercise price equal to the closing price of the Company's common stock on the applicable award date, and generally vest over a four year period as to 25% of the underlying shares on the first anniversary of the award, with the balance of the options vesting monthly over the following three years.
The following table summarizes stock option activities for the 2006 Plan and 2013 Plan:
Total
Options		Weighted-
Average
Exercise
Price Per
Share		Weighted-
Average
Remaining Contractual
Life (in years)		Aggregate
Intrinsic
Value (in thousands)
Outstanding at December 31, 20197,174,927 $38.40 8.45$181,408 
Granted1,130,040 $83.55 
Exercised(2,339,467)$24.69 $161,688 
Canceled/forfeited/expired(161,995)$27.00 $4,516 
Outstanding at December 31, 20205,803,505 $52.08 7.90$268,649 
Granted355,008 $86.68 
Exercised(1,128,791)$37.05 $86,149 
Canceled/forfeited/expired(215,372)$76.29 $6,963 
Outstanding at December 31, 20214,814,350 $57.08 7.07$452,081 
Vested and expected to vest at December 31, 20214,769,317 $56.95 7.06$448,460 
Exercisable at December 31, 20213,013,030 $49.28 6.50$307,235 
Restricted Stock Units
Restricted stock units (RSUs) have a grant price equal to the closing price of the Company’s common stock on the award date, and generally vest over a four year period based only on service as to 25% of the underlying shares on the first anniversary of the award, with the balance of the RSUs vesting quarterly over the following three years. In addition, the Company granted 25,674 performance-based RSUs during the year ended December 31, 2021. The performance-based RSUs have a grant value equal to the closing price of the Company’s common stock on the award date, and vest upon the Company’s actual performance relative to predefined performance metrics and subject to the awardee’s continuing service through the December 31, 2024 measurement date. A summary of RSU activity for the years ended December 31, 2021 and 2020 is as follows:

Total RSUsWeighted-Average Grant Date Fair ValueAggregate Intrinsic Value
(in thousands)
Unvested awards outstanding at December 31, 2019— $— $— 
Granted134,694 $82.82 
Vested(1,892)$95.68 
Unvested awards outstanding at December 31, 2020132,802 $82.82 $12,706 
Granted564,034 $96.37 
Vested(53,957)$82.74 
Canceled/forfeited(30,705)$87.21 
Unvested awards outstanding at December 31, 2021
612,174 $95.11 $92,144 
Employee Stock Purchase Plan
In October 2013, the Company adopted the ESPP, which enables eligible employees to purchase shares of the Company’s common stock using their after-tax payroll deductions, subject to certain conditions. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Eligible employees may contribute, through payroll deductions, up to 15% of their earnings for the purchase of common stock under the ESPP. The purchase price of common stock under the ESPP is the lesser of: (a) 85% of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85% of the fair market value of a share of the Company’s common stock on the date of purchase. Generally, the ESPP consists of a two-year offering period with four six-month purchase periods.
During the years ended December 31, 2021 and 2020, 172,694 shares and 302,509 shares of our common stock, respectively, were purchased under the ESPP for proceeds of $11.1 million and $9.1 million, respectively.
Stock-Based Compensation
The following table summarizes the allocation of stock-based compensation expense included in the consolidated statements of operations for all stock-based compensation arrangements (in thousands):
Year Ended December 31,
202120202019
Cost of sales$6,434 $8,210 $6,415 
Selling, general & administrative43,567 41,563 42,857 
Research and development10,751 8,658 8,799 
Total stock-based compensation expense$60,752 $58,431 $58,071 
The total stock-based compensation capitalized as part of the cost of the Company’s inventories was $1.0 million and $0.6 million at December 31, 2021 and 2020, respectively.
At December 31, 2021, the total unamortized stock-based compensation expense of approximately $129.2 million will be recognized over the remaining weighted average vesting term of approximately 2.6 years.
The assumptions used in the Black-Scholes option-pricing model are as follows:
Stock Options
Year Ended December 31,
202120202019
Weighted average grant date fair value (per share)$56.89 $54.20 $39.06 
Risk-free interest rate1.0 %0.6 %2.1 %
Expected dividend yield0.0 %0.0 %0.0 %
Expected volatility75.1 %74.6 %71.8 %
Expected term (in years)6.16.16.0
ESPP
Year Ended December 31,
202120202019
Weighted average grant date fair value (per share)$38.19 $36.83 $30.32 
Risk-free interest rate0.2 %0.2 %1.9 %
Expected dividend yield0.0 %0.0 %0.0 %
Expected volatility44.2 %60.3 %69.9 %
Expected term (in years)1.31.31.3

Risk-free Interest Rate. The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.
Expected Dividend Yield. The expected dividend yield is zero because the Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future.
Expected Volatility. The expected volatility for 2021 was estimated based on a weighted-average of the Company’s actual historical volatility of its common stock measured over the expected term. During 2020, the Company transitioned to solely using the expected volatility of its own common stock. Prior to this transition, the expected volatility was estimated based on a weighted-average of the Company’s actual historical volatility since its initial public offering in November 2013, and the historical stock volatilities of a peer group of similar companies whose share prices were publicly available. The peer group consisted of publicly traded companies in the same industry and in a similar stage of development.
Expected Term. The Company utilized the simplified method for estimating the expected term of stock option grants. Under this approach, the weighted-average expected term is presumed to be the average of the vesting term and the contractual term of the option. The Company estimates the expected term of the ESPP using expected life for each tranche during the two-year offering period.
The Company also estimates forfeitures at the time of grant, and revises those estimates in subsequent periods if actual forfeitures differ from its estimates. Historical data was used to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest.