Equity-Based Compensation |
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| Equity-Based Compensation | Equity-Based Compensation The Company’s equity-based compensation programs are intended to attract, retain and provide incentives for employees, officers, and directors. The Company has the following stock-based compensation plans and programs. Restricted Stock The majority of the Company’s restricted stock awarded to its employees was originally issued on December 10, 2020 in exchange for the Class B Profits Interest Unit (the “Class B Units”) of EQT Avatar Parent LP, which was the former parent of the Company. Share-based compensation for the restricted stock exchanged for the time-based Class B Units is recognized on a straight-line basis over the requisite service period of the award, which is generally five years. Share-based compensation for the restricted stock exchanged for the performance-based Class B Units is recognized using the accelerated attribution approach.
Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $55, $156, $121, and $406 for the three and six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $39, which is expected to be recognized over a weighted-average period of 2.6 months. Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $118, $221, $242 and $598 for the three and six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $80, which is expected to be recognized over a weighted-average period of 2.4 months. 2020 Incentive Plan In order to align the Company’s equity compensation program with public company practices, the Company’s Board of Directors adopted and stockholders approved the 2020 Incentive Plan. The 2020 Incentive Plan allows for grants of non-qualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to employees, directors, officers, and consultants or advisors of the Company. The 2020 Incentive Plan allows for 20,000,000 shares (the “plan share reserve”) of common stock to be issued. No more than the number of shares of common stock equal to the plan share reserve may be issued in aggregate pursuant to the exercise of incentive stock options. The maximum number of shares of common stock granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such non-employee director during the fiscal year, may not exceed $1,000,000 in total value, except for certain awards made to a non-executive chair of our Board of Directors. Restricted Stock Units RSUs represent the right to receive shares of the Company’s common stock at a specified date in the future. The fair value of the RSUs is based on the fair value of the underlying shares on the date of grant. A summary of the Company’s RSU activity is as follows:
* The number of the RSUs vested included 479,577 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements. Equity-based compensation expenses related to the RSUs were $5,507, $8,614, $12,240 and $16,319 for three and six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding RSUs was $32,375, which is expected to be recognized over a weighted-average period of 20.7 months. Performance Stock Units PSUs are issued under the 2020 Incentive Plan and represent the right to receive shares of the Company’s common stock at a specified date in the future based on the satisfaction of various service conditions and the achievement of certain performance thresholds, including year over year revenue growth, unlevered free cash flow growth, annual revenue, and annual EBITDA. The PSUs granted in 2023, 2024, and 2025 also contains market conditions. Share-based compensation for the PSUs is only recognized to the extent a threshold is probable of being achieved and is recognized using the accelerated attribution approach. The Company will continue to assess the probability of each condition being achieved at each reporting period to determine whether and when to recognize compensation costs. A summary of the Company’s PSU activity for the period ended June 30, 2025 is as follows:
*During the first half of 2025, the Company cancelled 201,138 PSU shares that did not meet the required performance conditions for vesting. Equity-based compensation expenses related to the PSUs were $2,565, $686, $2,713 and $1,321 for the three and six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding PSUs was $8,704, which is expected to be recognized over a weighted-average period of 19.4 months. The following table summarizes the components of total equity-based compensation expense included in the condensed consolidated statements of operations and comprehensive income (loss) for each period presented:
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