STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

STOCK-BASED COMPENSATION.

STOCK-BASED COMPENSATION

NOTE 16.           STOCK-BASED COMPENSATION

The Compensation Committee of our Board of Directors administers our stock plans. As of December 31, 2024, we have two active stock-based incentive compensation plans: the Amended and Restated 2023 Omnibus Incentive Plan (the “2023 Incentive Plan”) and the Employee Stock Purchase Plan (“ESPP”). We issue all new equity compensation grants under the 2023 Incentive Plan. Outstanding awards previously issued under inactive plans will continue to vest and remain exercisable in accordance with the terms of the respective plans.

The 2023 Incentive Plan provides for the grant of awards including stock options, stock appreciation rights, performance stock units, performance units, stock, restricted stock, restricted stock units, and cash incentive awards.

The following table summarizes information related to our stock-based incentive compensation plans:

	December 31, 2024
	(in thousands)
Shares available for future issuance under the 2023 Incentive Plan	1,828
Shares available for future issuance under the ESPP	535

Stock-based Compensation Expense

We recognize stock-based compensation expense based on the fair value of the awards issued and the functional area of the employee receiving the award. For the year ended December 31, 2024, stock-based compensation expense includes $1.8 million related to a modification for accounting purposes of prior awards and $1.9 million related to the Airity acquisition (see Note 2. Acquisition). Stock-based compensation expense was as follows:

	Years Ended December 31,
	2024		2023		2022
	(in thousands)
Stock-based compensation expense	$	45,940	$	31,001	$	19,849

Restricted Stock Units

Generally, we grant restricted stock units (“RSUs”) with a three year time-based vesting schedule. Certain RSUs contain performance-based or market-based vesting conditions in addition to the time-based vesting requirements. RSUs are generally granted with a grant date fair value based on the market price of our stock on the date of grant.

Changes in our RSUs were as follows:

	Year Ended December 31, 2024
		Weighted-
		Average
	Number of	Grant Date
	RSUs	Fair Value
	(in thousands)
RSUs outstanding at beginning of period	917	$	85.96
RSUs granted	548	$	104.84
RSUs vested	(314)	$	90.04
RSUs forfeited	(107)	$	81.97
RSUs outstanding at end of period	1,044	$	95.05

For vested RSUs, employees withheld shares for income tax totaling $9.1 million.

The weighted-average grant date fair value for RSUs granted in the years ended December 31, 2024, 2023, and 2022 was $104.84, $100.04, and $74.62, respectively. The fair value of RSUs vested for the years ended December 31, 2024, 2023 and 2022 was $28.2 million, $19.5 million, and $13.5 million, respectively. As of December 31, 2024, there was $53.4 million of total unrecognized compensation cost, net of expected forfeitures, related to non-vested RSUs, that we expect to recognize through December 2027, with a weighted-average remaining vesting period of 1.0 years.

Stock Options

Generally, we grant stock option awards with an exercise price equal to the market price of our stock at the date of grant and with either a three or four-year vesting schedule or performance-based vesting. Stock option awards generally have a term of ten years.

Changes in our stock options were as follows:

	Year Ended December 31, 2024
		Weighted-		Weighted-
		Average		Average
	Number of	Exercise Price		Remaining
	Options	per Share		Contractual Life
	(in thousands)
Options outstanding at beginning of period	89	$	76.69	7.10 years
Options exercised	(10)	$	26.32
Options outstanding at end of period	79	$	83.05	6.86 years
Options vested at end of period	54	$	81.70	6.70 years

The total intrinsic value of options exercised for the years ended December 31, 2024, 2023 and 2022 was $0.8 million, $4.6 million, and $2.6 million, respectively. As of December 31, 2024, the aggregate intrinsic value of options outstanding and exercisable was $2.6 million and $1.8 million, respectively. As of December 31, 2024, there was $0.2 million of total unrecognized compensation cost, net of expected forfeitures, related to the unvested options that we expect to recognize over a remaining period of 0.2 years.

Employee Stock Purchase Plan

The ESPP is a stockholder-approved plan that allows eligible employees to purchase our common stock at a discount. Employees who meet the eligibility criteria may contribute up to the lesser of 15% of their eligible earnings or $5,000 during each plan period. Currently, the plan period is six months. The purchase price of common stock purchased under the ESPP is currently equal to the lower of 1) 85% of the fair market value of our common stock on the commencement date of each plan period or 2) 85% of the fair market value of our common shares on each plan period purchase date.

As of December 31, 2024, there was $0.5 million of total unrecognized compensation cost related to the ESPP that we expect to recognize over a remaining period of five months.

Deferred Compensation Plan

We offer certain employees the opportunity to elect to defer compensation for salary, bonus, commission, and stock awards. The Company maintains a rabbi trust in connection with the deferred compensation plan. Assets of the rabbi trust not held in Company shares are presented in other assets, and the fair value of the Company shares held in the rabbi trust is classified in stockholders’ equity. After a holding period, employees have the option to diversify the Company shares into other funds. Stock awards that have been elected for deferral but have not yet vested and are probable of vesting are reported as deferred compensation in the temporary equity section of the Consolidated Balance Sheets. The stock awards recorded in temporary equity are recognized at fair value, with any difference from stock-based compensation recorded in retained earnings.