Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

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Stock-Based Compensation
 12 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
2020 Equity Incentive Plan of Digital Turbine, Inc. (the “2020 Plan”)
On September 15, 2020, the Company’s stockholders approved the 2020 Plan, pursuant to which the Company may grant equity incentive awards to directors, employees and other eligible participants. A total of 12,000,000 shares of common stock were reserved for grant under the 2020 Plan. The types of awards that may be granted under the 2020 Plan include incentive and non-qualified stock options, stock appreciation rights, restricted stock, and restricted stock units. The 2020 Plan became effective on September 15, 2020, and has a term of ten years. Stock options may be either incentive stock options, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified stock options. As of March 31, 2024, 4,677,162 shares of common stock were available for issuance as future awards under the 2020 Plan.
Stock Options
Stock options are granted with an exercise price no lower than the fair market value at the grant date. They typically encompass a vesting period of two to three years and a contractual term of ten years. Share-based compensation expense for stock options is recognized on a straight-line basis over the requisite vesting period, determined by the grant-date fair value for the portion of the award expected to vest. The Company employs the Black-Scholes options-pricing model to estimate the fair value of its stock options. The Company may issue either new shares or treasury shares upon exercise of these awards.
The following table summarizes stock option activity:
Number of Shares Weighted-Average Exercise Price
(per share)		 Weighted-Average Remaining
Contractual
Life
(in years)		 Aggregate Intrinsic Value
(in thousands)
Options outstanding as of March 31, 2023
 6,950,436  $ 12.73  6.12 $ 45,689 
Granted 602,491  12.66 
Exercised (1,223,630) 3.24 
Forfeited / Expired (531,428) 27.42 
Options outstanding as of March 31, 2024
 5,797,869  $ 13.26  5.39 $ 2,423 
Exercisable as of March 31, 2024
 4,779,833  $ 11.64  4.70 $ 2,423 
At March 31, 2024, total unrecognized stock-based compensation expense related to unvested stock options, net of estimated forfeitures, was $11,869, with an expected remaining weighted-average recognition period of 1.75 years.
Restricted Stock
Awards of restricted stock units may be either grants of time-based restricted stock units (“RSUs”) or performance-based restricted stock units (“PSUs”) that are issued at no cost to the recipient. The stock-based compensation expense for these awards is determined using the fair market value of the Company’s common stock on the date of the grant. No capital transaction occurs until the units vest, at which time they are converted to restricted or unrestricted stock. Compensation expense for RSUs with a time condition is recognized on a straight-line basis over the requisite service period. The Company periodically grants PSUs to certain key employees that are subject to the achievement of specified internal performance metrics over a specified performance period. The terms and conditions of the PSUs generally allow for vesting of the awards ranging between forfeiture and up to 200% of target. Stock-based compensation expense for PSUs with a performance condition are recognized on a straight-line basis based on the most likely attainment scenario over the performance period. The most likely attainment scenario is re-evaluated each period.
Restricted stock awards (“RSAs”) are awards of common stock that are legally issued and outstanding. RSAs are subject to time-based restrictions on transfer and unvested portions are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the lapse of the restrictions. The stock-based compensation expense for these awards is determined using the fair market value of the Company’s common stock on the date of the grant. The RSAs have time conditions and in some cases, once the stock vests, the individual is restricted from selling the shares of stock for a certain defined period, from three months to one year, depending on the terms of the RSA.
The following table summarizes RSU, PSU, and RSA activity:
Number of Shares Weighted-Average Grant Date Fair Value
Unvested restricted shares outstanding as of March 31, 2023
 1,670,589  $ 24.96 
Granted 4,565,093  9.92 
Vested (1,723,149) 15.93 
Forfeited (592,691) 14.53 
Unvested restricted shares outstanding as of March 31, 2024
 3,919,842  $ 12.44 
At March 31, 2024, total unrecognized stock-based compensation expense related to RSUs, PSUs and RSAs, net of estimated forfeitures was $34,445, with an expected remaining weighted-average recognition period of 1.87 years.
Valuation of Awards
For stock options granted, the Company uses the Black-Scholes option pricing model to estimate the fair
value of stock options at grant date. The Black-Scholes option pricing model incorporates various assumptions, including volatility, expected term, risk-free interest rates, and dividend yields. The assumptions utilized in this model during fiscal years 2024, 2023, and 2022 are presented below.
  Year ended March 31,
  2024 2023 2022
Risk-free interest rate
3.82% to 4.29%
2.71% to 4.38%
0.63% to 1.77%
Expected life of the options (years)
4.70 to 4.72
5.27 to 5.33
4.82 to 5.27
Expected volatility
88% to 88%
72% to 80%
72% to 72%
Expected dividend yield —% —% —%
Total fair value of options vested and total intrinsic value of options exercised was as follows for the fiscal years presented:
  Year ended March 31,
  2024 2023 2022
Total fair value of options vested $ 12,334  $ 15,375  $ 11,495 
Total intrinsic value of options exercised $ 6,441  $ 16,909  $ 68,163 
Stock-Based Compensation Expense
Stock-based compensation expense for the years ended March 31, 2024, 2023, and 2022, was $33,763, $30,401, and $19,304, respectively, and was recorded within general and administrative expenses on the consolidated statements of operations and comprehensive (loss) income