Note 11 - Stock-based Compensation

6 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

11. Stock-Based Compensation

In accordance with the Company's 2020 Equity Incentive Plan, the Company may issue to eligible employees options to purchase shares of the Company’s common stock, restricted stock units and other equity incentives which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues common stock to participating employees pursuant to an employee stock purchase plan, and may issue common stock awards and deferred restricted stock units to members of its Board of Directors in accordance with its Board of Director compensation program.

2020 Equity Incentive Plan

The following table reflects the total stock-based compensation expense for continuing operations recorded during the three and six months ended March 31, 2025 and 2024 (in thousands):

	Three Months Ended March 31,				Six Months Ended March 31,
	2025		2024		2025		2024
Restricted stock units	$	7,820	$	5,092	$	12,435	$	7,741
Employee stock purchase plan		211		318		469		670
Total stock-based compensation expense	$	8,031	$	5,410	$	12,904	$	8,411

The Company recorded $0.3 million and $0.2 million of stock-based compensation expense for discontinued operations during the three months ended March 31, 2025 and 2024, respectively, and $0.5 million and $0.4 million of stock-based compensation expense for discontinued operations during the six months ended March 31, 2025 and 2024, respectively.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the six months ended March 31, 2025:

				Weighted
				Average
				Grant-Date
	Shares			Fair Value
Outstanding as of September 30, 2024		764,111		$	59.65
Granted		558,839		$	47.50
Vested		(171,507	)	$	60.03
Forfeited		(92,961	)	$	81.65
Outstanding as of March 31, 2025		1,058,482		$	51.05

Awards vested during the six months ended March 31, 2025 per the table above include 9,209 shares for discontinued operations. The fair value of restricted stock units vested during the six months ended March 31, 2025 was $7.2 million for continuing operations.

As of March 31, 2025, the future unrecognized stock-based compensation expense related to restricted stock units for continuing operations expected to vest is $32.2 million and is expected to be recognized over an estimated weighted average amortization period of 1.8 years.

Restricted stock units granted with performance goals may also have a required service period following the achievement of all or a portion of the performance goals. The following table reflects restricted stock units granted during the six months ended March 31, 2025 and 2024: 

	Six Months Ended March 31,
	2025		2024
Time-based restricted stock units		403,150		220,174
Performance-based restricted stock units		155,689		388,532
Total units		558,839		608,706

All restricted stock units granted during the six months ended March 31, 2025 included in the table above relate to continuing operations. Restricted stock units granted during the six months ended March 31, 2024 included in the table above include 31,475 units related to discontinued operations.

Time-Based Restricted Stock Unit Grants

Restricted stock units granted with a required service period typically have three-year vesting schedules in which one-third of awards vest at each annual anniversary of grant date, subject to the award holders meeting service requirements.

Performance-Based Restricted Stock Unit Grants

Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Human Resources and Compensation Committee and approved by the Company's Board of Directors. The criteria for performance-based awards are weighted and have threshold, target, and maximum performance goals. 

Performance-based restricted stock unit awards granted allow participants to earn 100% of restricted stock units if the Company’s performance meets or exceeds its target goal for each applicable financial metric, and up to a maximum of 200% if the Company’s performance for such metrics meets or exceeds the maximum or stretch goal. Performance below the minimum threshold for each financial metric results in award forfeiture. Performance goals are measured over a three-year period for each year’s restricted stock unit awards and at the end of the period to determine the number of restricted stock units earned, if any, by recipients who continue to meet the service requirement. Upon the third anniversary of each year’s restricted stock unit awards’ grant date, the Company’s Board of Directors approves the number of restricted stock units earned for participants who continue to meet the service requirements on the vesting date. For restricted stock unit awards that include vesting based on performance conditions, the fair values are estimated based on the intrinsic values of the awards at the grant date.

In October 2023, the Company’s Board of Directors approved an amendment to the performance goals associated with the previously issued performance-based restricted stock units for all impacted employees, excluding members of the executive team. The performance goals, as amended, are more reflective of the current macroeconomic environment and consideration toward employee retention in the competitive life sciences industry. Before the amendment, the original performance goals were not expected to be satisfied. Subsequent to the amendment, vesting became probable based on the forecasted achievement of the amended performance goals. The amendment of these restricted stock units is treated as a modification with the total potential maximum compensation cost of $3.8 million recognized over the service period through November 2025. The Company recorded expense of $0.3 million and $0.9 million in the three and six months ended March 31, 2025, respectively, related to the modified awards.  ​

In November 2024, the Company issued restricted stock unit awards with vesting based on market conditions, which will vest based on achievement of the Company's relative total shareholder return against the defined peer group over a three-year period. The fair values for those grants that include vesting based on market conditions are estimated using the Monte Carlo simulation model. The key assumptions used in the Monte Carlo simulation included (i) the expected volatility based on the three-year daily historical volatility as measured on the grant date, (ii) risk-free interest rate based on U.S. Treasury constant maturities yields as of the grant date, (iii) correlation assumption based on daily share price changes over three years between the Company and the peer companies measured on the grant date, and (iv) no expected dividend yield.