STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2025

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

6. STOCK-BASED COMPENSATION:

The following table summarizes the stock-based compensation expense recognized in accordance with ASC 718-10 for the three months ended March 31, 2025 and 2024:

	Three Months Ended
	March 31,
(In thousands)	2025		2024
Cost of revenues	$	657	$	346
Research and development		2,250		2,425
Sales and marketing		1,586		1,604
General and administrative		4,190		2,039
Total stock-based compensation expense	$	8,683	$	6,414

Stock-based compensation expense in the three months ended March 31, 2025, was approximately $8.7 million, comprising approximately $5.8 million related to restricted stock unit (“RSU”) awards, $2.5 million related to performance-based (“PSU”) awards and long-term performance-based (“PRSU”) awards and $0.4 million related to the Company’s employee stock purchase plan.

Stock-based compensation expense in the three months ended March 31, 2024, was approximately $6.4 million, comprising approximately $6.1 million related to RSUs, an immaterial amount related to PSUs and PRSUs and $0.3 million related to the Company’s employee stock purchase plan.

PSU Awards

Under the performance-based awards program, the Company grants awards in the performance year in an amount equal to twice the target number of shares to be issued if the maximum performance metrics are met. The number of shares that are released at the end of the performance year can range from zero to 200% of the target number depending on the Company’s performance. The performance metrics of this program are annual targets consisting of a combination of net revenue, non-GAAP operating income and strategic goals.

As the net revenue, non-GAAP operating income and strategic goals are considered performance conditions, expense associated with these awards, net of estimated forfeitures, is recognized over the service period based on an assessment of the expected achievement of the performance targets. The fair value of these PSUs is determined using the fair value of the Company’s common stock on the date of the grant, reduced by the discounted present value of dividends expected to be declared before the awards vest. If the performance conditions are not achieved, no compensation cost is recognized and any previously recognized compensation is reversed.

In February 2025, it was determined that approximately 66,000 shares subject to the PSUs granted in 2024 vested in aggregate; the shares were released to the Company’s employees and executives in the first quarter of 2024.

A summary of PSUs outstanding as of March 31, 2025 and activity during the three months ended, is presented below:

				Weighted-Average
		Weighted-Average		Remaining	Aggregate
	Shares	Grant Date Fair		Contractual Term	Intrinsic Value
	(In thousands)	Value Per Share		(In years)	(In thousands)
Outstanding at January 1, 2025	66	$	69.95
Granted	102	$	58.05
Vested	(66)	$	69.95
Forfeited	—		—
Outstanding at March 31, 2025	102	$	58.05	0.75	$	5,159
Outstanding and expected to vest at March 31, 2025	92			0.75	$	4,638

PRSU Awards

The Company’s PRSU program provides for the issuance of PRSUs which will vest based on the Company’s performance measured against the PRSU program’s established performance targets. PRSUs are granted in an amount equal to twice the target number of shares to be issued if the maximum performance metrics are met. The actual number of shares the recipient receives is determined at the end of a three-year performance period based on results achieved versus the Company’s performance goals, and may range from zero to 200% of the target number. The performance goals for PRSUs granted in fiscal 2023, 2024 and 2025 were based on the Company’s compound annual growth rate (“CAGR”) of revenue as measured against the revenue CAGR of the analog semiconductor industry (“Relative Measure”) or the Company’s revenue growth over as compared to defined targets (“Absolute Measure”) in each case over the respective three-year performance period. Actual vesting of the PRSUs is calculated based on higher achievement under the Relative Measure or the Absolute Measure. Expense associated with these awards, net of estimated forfeitures, is recorded throughout the year based on an assessment of the expected achievement of the performance targets. If the performance conditions are not achieved, no compensation cost is recognized and any previously recognized compensation is reversed.

In February 2025, it was determined that no shares subject to the PRSUs granted in 2022 vested, thus no shares were released to the Company’s executives.

A summary of PRSUs outstanding as of March 31, 2025 and activity during the three months ended, is presented below:

				Weighted-Average	Aggregate
		Weighted-Average		Remaining	Intrinsic
	Shares	Grant Date Fair		Contractual Term	Value
	(In thousands)	Value Per Share		(In years)	(In thousands)
Outstanding at January 1, 2025	317	$	73.85
Granted	202	$	56.40
Vested	—		—
Forfeited	—		—
Outstanding at March 31, 2025	519	$	67.05	1.87	$	26,189
Outstanding and expected to vest at March 31, 2025	379			2.28	$	19,160

RSU Awards

A summary of RSUs outstanding as of March 31, 2025 and activity during the three months ended, is presented below:

				Weighted-Average	Aggregate
		Weighted-Average		Remaining	Intrinsic
	Shares	Grant Date Fair		Contractual Term	Value
	(In thousands)	Value Per Share		(In years)	(In thousands)
Outstanding at January 1, 2025	929	$	70.82
Granted	194	$	55.64
Vested	(140)	$	76.30
Forfeited	(11)	$	73.10
Outstanding at March 31, 2025	972	$	66.79	1.93	$	49,060
Outstanding and expected to vest at March 31, 2025	902			1.55	$	45,575