Share-based Compensation

3 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

2019 Equity Incentive Plan

In July 2019, the Company’s board of directors (the “Board”), upon the recommendation of the compensation committee of the board of directors, adopted the 2019 Equity Incentive Plan, or the 2019 Plan, which was subsequently approved by the Company’s shareholders.

The Company initially reserved 52,000,000 shares of common stock, or the Initial Limit, for the issuance of awards under the 2019 Plan. The 2019 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each April 1, beginning on April 1, 2020, by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31 or such lesser number determined by the compensation committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of June 30, 2020, 30,148,242 shares of common stock were available for future issuance under the 2019 Plan.

Stock options

The following table summarizes activity for stock options during the period ended June 30, 2020:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in thousands)		(per share)		(years)	(in thousands)
Balance, March 31, 2020	7,147		$	16.26	9.3	$	54,423
Granted	2,070		32.83
Exercised	—		—
Forfeited	(171	)	16.44
Balance, June 30, 2020	9,046		$	20.05	9.3	$	185,890
Options vested and exercisable at June 30, 2020	—		$	—	0.0	$	—

As of June 30, 2020, the total unrecognized compensation expense related to non-vested stock options granted is $60.1 million and is expected to be recognized over a weighted average period of 3.3 years. For the three months ended June 30, 2020, the Company recognized $3.3 million of share-based compensation expense related to stock options.

Restricted shares and units

During the first three months of fiscal 2021, the Company granted an aggregate of 1,128,049 restricted stock units to certain key employees and non-employee directors. The total grants consisted of 1,128,049 time-based restricted stock units that vest 25% one year after the grant date and the remaining 75% vest ratably on a quarterly basis over 3 years.

The following table provides a summary of the changes in the number of restricted shares for the period ended June 30, 2020:



	Number of Shares of Restricted Stock Awards		Weighted Average Grant Date Fair Value		Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
	(in thousands)		(per share)		(in thousands)		(per share)
Balance, March 31, 2020	1,984		$	16.00	3,123		$	16.39
Granted	—		—		1,128		32.88
Vested	(650	)	16.00		(132	)	16.00
Forfeited	(88	)	16.00		(82	)	16.59
Balance, June 30, 2020	1,246		$	16.00	4,037		$	21.01

As of June 30, 2020, the total unrecognized compensation expense related to unvested restricted stock is $17.8 million and is expected to be recognized over a weighted average period of 1.7 years. As of June 30, 2020, the total unrecognized compensation expense related to unvested restricted stock units is $74.9 million and is expected to be recognized over a weighted average period of 3.1 years. For the three months ended June 30, 2020, the Company recognized $8.8 million of share-based compensation expense related to restricted shares and units.

Employee Stock Purchase Plan

In July 2019, the board of directors adopted, and the Company’s shareholders approved, the 2019 Employee Stock Purchase Plan (“ESPP”) for the issuance of up to a total of 6,250,000 shares of common stock, subject to automatic annual increases. The Company expects to offer, sell and issue shares of common stock under this ESPP from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under this ESPP. The ESPP provides for 6-month offering periods beginning May 15 and November 15 of each year, and each offering period will consist of six-month purchase periods. On each purchase date, eligible employees will purchase shares of the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. For the three months ended June 30, 2020, 159,066 shares of common stock were purchased under the ESPP. As of June 30, 2020, 8,899,464 shares of common stock were available for future issuance under the ESPP.

As of June 30, 2020, there was approximately $0.8 million of unrecognized stock-based compensation related to the ESPP that is expected to be recognized over the remaining term of the current offering period. For the three months ended June 30, 2020, the Company recognized $0.5 million of share-based compensation expense related to the ESPP.

Share-based compensation

The following table summarizes the components of total share-based compensation expense included the condensed consolidated financial statements for each period presented (in thousands):



	Three Months Ended June 30,
	2020		2019
Cost of revenue	$	1,498	$	3,309
Research and development	2,418		7,127
Sales and marketing	5,405		15,104
General and administrative	3,351		15,885
Total share-based compensation expense	$	12,672	$	41,425