Stockholders' Equity

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Issuances and Repurchases of Common Stock

The Company issued 57,713 shares of common stock in conjunction with the vesting and release of RSUs, 222,378 shares of common stock upon the exercise of stock options and 32,358 shares of common stock in connection with the Company’s employee stock purchase plan (the “ESPP”), resulting in net proceeds to the Company of approximately $3.1 million during the three months ended March 31, 2017. The Company repurchased no shares of common stock under its previously announced share repurchase program during three months ended March 31, 2017. The Company withheld 21,538 shares of outstanding common stock in connection with payment of minimum tax withholding obligations for certain employees relating to the lapse of restrictions on certain RSUs for approximately $0.4 million during the three months ended March 31, 2017. The Company repurchased 1,152,386 shares of common stock under its previously announced share repurchase program for approximately $19.6 million during the three months ended March 31, 2016. The Company withheld 24,932 shares of outstanding common stock in connection with payment of minimum tax withholding obligations for certain employees relating to the lapse of restrictions on certain RSUs for approximately $0.4 million during the three months ended March 31, 2016. As of March 31, 2017, there was $35.0 million available under the Company’s share repurchase program.

Stock-Based Compensation

The compensation expense related to the Company’s stock-based compensation plans included in the accompanying Consolidated Statements of Operations was as follows (in thousands):

	Three months ended March 31,
	2017		2016
Cost of sales	$	130	$	235
Research and development	412		297
Sales and marketing	470		(63		)
General and administrative	909		1,511
Total stock-based compensation expense	$	1,921	$	1,980

Total compensation expense recognized for the three months ended March 31, 2017 includes $1.1 million related to stock options and $0.8 million related to RSUs. Total compensation expense recognized for the three months ended March 31, 2016 includes $1.4 million related to stock options and $0.6 million related to RSUs. There was a one-time benefit for stock award forfeitures recorded during the three months ended March 31, 2016 resulting in a credit to stock-based compensation expense in sales and marketing. As of March 31, 2017, total unrecognized compensation expense related to non-vested stock options was $6.7 million, which is expected to be recognized over a weighted-average period of approximately 2.6 years. As of March 31, 2017, total unrecognized compensation expense related to non-vested restricted stock was $6.7 million, which is expected to be recognized over a weighted-average period of approximately 2.7 years. Compensation expense capitalized to inventory and compensation expense related to the Company’s ESPP were not material for the three months ended March 31, 2017 or 2016.

The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants.

	Three months ended March 31,
	2017		2016
Risk-free interest rate	2.33	%	1.46	%
Expected option life (in years)	6.63		6.46
Volatility rate	36	%	36	%
Dividend rate	—	%	—	%

The weighted-average fair value of stock options granted during the three months ended March 31, 2017 and 2016 was $8.55 and $5.85, respectively. The Company granted 230,261 and 626,413 stock options during the three months ended March 31, 2017 and 2016, respectively. The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the three months ended March 31, 2017 and 2016 was $21.06 and $15.39, respectively. The Company granted 289,338 and 131,972 shares of restricted stock during the three months ended March 31, 2017 and 2016, respectively.