Stock-Based Compensation

3 Months Ended

Dec. 31, 2023

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

Stock-Based Compensation

11. Stock-Based Compensation

In accordance with the 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 recorded during the three months ended December 31, 2023 and 2022 (in thousands):

	Three Months Ended December 31,
	2023		2022
Restricted stock units	$	2,850	$	1,759
Employee stock purchase plan		352		346
Total stock-based compensation expense	$	3,202	$	2,105

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the three months ended December 31, 2023:

		Weighted
		Average
		Grant-Date
	Shares	Fair Value
Outstanding as of September 30, 2023	718,954	$	67.40
Granted	587,848	$	55.33
Vested	(144,394)	$	69.23
Forfeited	(226,395)	$	62.53
Outstanding as of December 31, 2023	936,013	$	60.71

The fair value of restricted stock units vested during the three months ended December 31, 2023 and 2022 was $7.8 million and $7.0 million, respectively.

As of December 31, 2023, the future unrecognized stock-based compensation expense related to restricted stock units expected to vest is $31.6 million and is expected to be recognized over an estimated weighted average amortization period of 2.1 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 three months ended December 31, 2023 and 2022:

	Three Months Ended December 31,
	2023	2022
Time-based restricted stock units	199,316	225,139
Performance-based restricted stock units	388,532	260,741
Total units	587,848	485,880

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 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 vest 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 macro-economic 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 compensation cost of $5.5 million recognized over the service period through November 2025. The Company recorded expense of $0.2 million for the three months ended December 31, 2023, related to the modified awards.