Stock-Based Compensation

12 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The following tables summarize the allocation of the stock-based compensation expense (in thousands):



	Fiscal Years Ended March 31,
	2016			2015		2014
Stock-based compensation expense by type of grant:
Stock options and employee stock purchase rights	$	1,155		$	1,408	$	2,520
RSUs	24,667			16,892		14,517
	25,822			18,300		17,037
Stock-based compensation expensed from (capitalized to) inventory	(18		)	5		(16		)
Total stock-based compensation expense	$	25,804		$	18,305	$	17,021



	Fiscal Years Ended March 31,
	2016			2015		2014
Stock-based compensation expense by cost centers:
Cost of revenues	$	540		$	285	$	460
Research and development	18,018			11,657		6,371
Selling, general and administrative	7,264			6,358		10,206
	25,822			18,300		17,037
Stock-based compensation expensed from (capitalized to) inventory	(18		)	5		(16		)
Total stock-based compensation expense	$	25,804		$	18,305	$	17,021

As of March 31, 2016, the amount of unrecognized stock-based compensation cost, net of estimated forfeitures, related to unvested stock-based awards was $27.4 million which will be recognized over a weighted average period of 1.1 years.

There was no income tax benefit related to stock-based compensation because all of the Company's U.S. deferred tax assets, net of U.S. deferred tax liabilities, continue to be subject to a full valuation allowance.

The fair values of the options and employee stock purchase rights granted are estimated as of the grant date using the Black-Scholes option-pricing model with the following assumptions:



	Options					Employee Stock Purchase Rights
	Fiscal Years Ended March 31,					Fiscal Years Ended March 31,
	2016	2015	2014			2016			2015			2014
Expected life (years)	*	*	4.4			0.5			0.5			0.5
Risk-free interest rate	*	*	0.6		%	0.1		%	0.1		%	—		%
Volatility	*	*	49		%	57		%	57		%	56		%
Expected forfeiture rate	*	*	5.8		%	—		%	—		%	—		%
Weighted average fair value	*	*	$	2.95		$	1.80		$	2.17		$	3.40

* The Company did not grant options during the twelve months ended March 31, 2016 and 2015.

Compensation Amortization Period. All stock-based compensation is amortized over the requisite service period of the awards, which is generally the same as the vesting period of the awards. The Company amortizes the fair value cost on a straight-line basis over the expected service periods.

Expected Life. The expected life of stock options granted represents the expected weighted average period of time from the date of grant to the estimated date that the stock option would be fully exercised. To calculate the expected term, the Company assumes that all outstanding stock options would be exercised at the midpoint of the vesting date and the full contractual term of the options.

Risk-Free Interest Rate. The risk-free interest rate is the implied yield currently available on zero-coupon government issues with a remaining term equal to the expected life.

Expected Volatility. Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. The Company estimates the expected volatility of its stock options at their grant date by equally weighting the historical volatility and the implied volatility of its stock. The historical volatility is calculated using the weekly stock price of its stock over a recent historical period equal to its expected life. The implied volatility is calculated from the implied market volatility of exchange-traded call options on its common stock.

Expected Dividends. The Company has never paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero percent in valuation models.

Expected Forfeitures. Stock-based compensation expense is based on awards that are ultimately expected to vest, therefore, it is reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeiture rates were based upon the expected forfeiture data using the Company’s current demographics and standard probabilities of employee turnover.