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Stock-based compensation
 6 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
Stock-based compensation Stock-based compensation
2018 Equity Incentive Plan
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 options (PSOs) under the 2018 Plan. The number of PSOs 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 performance stock options 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 options granted. The provisions of the PSO 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 options that are expected to vest. As of March 31, 2022, the Company determined that 256,665 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 $45.18 per share. As of March 31, 2022, the unrecognized compensation costs related to these awards was $2.8 million. The Company expects to recognize those costs over a weighted average period of 0.5 years.
Any shares subject to outstanding awards under the 2013 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 non-statutory 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, 2022 is summarized below:

(In thousands, except per share data)Shares
available		Options
outstanding		Weighted
average exercise price per share		Weighted average remaining contractual term
(years)		Aggregate
intrinsic
value
Outstanding at September 30, 2021
1,7283,132$27.15 7.3$251,343 
Additional shares authorized1,000
Stock options granted(214)21426.14——
Stock options exercised—(368)13.05——
Stock options forfeited89(89)31.96——
Restricted stock units granted(1,150)————
Forfeiture of restricted stock units67————
Shares withheld for payment of taxes62————
Outstanding at March 31, 2022
1,5822,889$28.79 7.0$70,722 
Vested or expected to vest at March 31, 2022
—2,889$28.79 7.0$70,722 
Vested and exercisable at March 31, 2022
—1,739$21.00 6.4$51,266 

Total stock-based compensation expense recognized was as follows:

Three months ended
March 31,		Six months ended
March 31,
(in thousands)2022202120222021
Cost of revenues$1,241 $731 $2,119 $1,218 
Research and development4,8382,4278,8654,428
Selling, general and administrative16,2588,39429,42112,929
Total stock-based compensation$22,337 $11,552 $40,405 $18,575 

As of March 31, 2022, there was $22.3 million of total unrecognized compensation cost related to non-vested stock options under the equity incentive plans that is expected to be recognized over a weighted average period of 1.3 years. The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2022 was $73.39 per share.
Performance Stock Units

Performance stock unit awards (“PSUs”) were granted to certain employees that will vest upon achievement of operational milestones related to the Wilsonville facility and to Company executives that will vest upon achievement of revenue and gross profit metrics as determined by the board. Stock compensation expense for PSUs is recorded over the vesting period based on the grant date fair value of the awards and probability of the achievement of specified performance targets. The grant date fair value is equal to the closing share price of the Company’s common stock on the date of grant. PSUs generally vest over a one to two-year service period following the grant date, provided that the recipient is a Company employee at the time of vesting and the achievement of performance targets applicable to each award. The percentage of PSUs that vest will depend on the achievement of specified performance targets at the end of the performance period and can range from 0% to 150% of the number of units granted. Forfeitures of PSUs are recognized as they occur. As of March 31, 2022, the unrecognized compensation costs related to these awards was $22.7 million. The Company expects to recognize those costs over a weighted average period of 2.1 years.
Activity under the PSUs during the six months ended March 31, 2022 is summarized below:
(in thousands, except per share data)Number of sharesWeighted average grant date fair valueWeighted average remaining contractual termAggregate intrinsic value
Outstanding at September 30, 202110 $3.59 2.3$1,016 
Performance stock units granted342 80.31 — — 
Performance stock units forfeited(1)3.34 — — 
Outstanding at March 31, 2022351 $81.21 2.1$17,328 
Vested or expected to vest and exercisable at March 31, 2022351 $81.21 2.1$17,328 

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, 2022 was as follows:

(in thousands, except per share data)Number
of
Shares		Weighted
average
grant date
fair value
per share		Weighted
average
remaining
contractual
term (years)		Aggregate
Intrinsic
Value
Outstanding at September 30, 2021
698$73.27 2.7$74,613 
Restricted stock units granted80779.26—— 
Restricted stock units vested(164)72.93—— 
Restricted stock units forfeited(66)73.95—— 
Outstanding at March 31, 2022
1,275$85.41 3.2$62,971 
Expected to vest at March 31, 2022
1,275$85.41 3.2$62,971 

As of March 31, 2022, there was $114.7 million of total unrecognized compensation cost related to these issuances that is expected to be recognized over a weighted average period of 3.1 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, 2022 is as follows:

(In thousands)Shares
available
Outstanding at September 30, 2021
355
Additional shares authorized249
Shares issued during the period(50)
Outstanding at March 31, 2022
554

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, 2022 and 2021, activity under the 2018 ESPP was immaterial.

Abveris Acquisition
As discussed further in Note 14 “Business acquisition”, on December 1, 2021, the Company completed the acquisition of Abveris and granted certain equity awards to new employees. These equity awards include up to 231,876 restricted shares of the Company’s common stock which are issuable based on achievement of the 2022 calendar revenue target, which have an aggregate grant date fair value of $20.1 million. In addition, all employees must remain employed through the payout date, and certain employees have an additional vesting period of up to two years from the acquisition date. The vesting upon achievement of the 2022 calendar revenue target is 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 stock price as of December 1, 2021 for the fair value of restricted shares. As of March 31, 2022, the Company determined that 231,876 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 Company recorded approximately $4.5 million in stock-based compensation expense for the six months ended March 31, 2022 related to these awards. The grant date fair value was determined to be $87.06 per share for restricted shares. As of March 31, 2022, the unrecognized compensation costs related to these awards were $15.7 million. The Company expects to recognize those costs over a weighted average period of 1.4 years.