Note 4. Equity-based Compensation

In 2013, Twist Holdings, LLC, or Twist, and Advance Holdings, LLC, or Advance, which subsequently became part of Revolve Group, Inc., adopted equity incentive plans that we refer to collectively as the 2013 Plan, pursuant to which the board of managers could grant options to purchase Class A units to officers and employees. Options could be granted with an exercise price equal to or greater than the unit’s fair value at the date of grant. All issued awards have 10 year terms and generally vest and become fully exercisable annually over five years of service from the date of grant. Awards will become fully vested upon the sale of the company. The then-outstanding options to purchase Class A units were converted into options to purchase shares of our Class B common stock in connection with our corporate conversion in June 2019.

In September 2018, the board of directors adopted the 2019 Equity Incentive Plan, or the 2019 Plan, which became effective in June 2019. Under the 2019 Plan, a total of 4,500,000 shares of our Class A common stock are reserved for issuance as options, stock appreciation rights, restricted stock, restricted stock units, or RSUs, performance units or performance shares. Upon the completion of our IPO, the 2019 Plan replaced the 2013 Plan, however, the 2013 Plan continues to govern the terms and conditions of the outstanding awards previously granted under that plan. The number of shares that will be available for issuance under our 2019 Plan also will increase annually on the first day of each year in an amount equal to the least of: (1) 6,900,000 shares, (2) 5% of the outstanding shares of all classes of our common stock as of the last day of the immediately preceding year and (3) such other amount as our board of directors may determine. Our board of directors determined not to increase the number of shares reserved for issuance under the 2019 Plan as of January 1, 2024. As of June 30, 2025, approximately 8.6 million shares of Class A common stock remain available for future issuance under the 2019 Plan.

There were 37,826 options and 13,464 RSUs granted during the three months ended June 30, 2025 and 318,317 options and 131,243 RSUs granted during the six months ended June 30, 2025. The weighted average grant-date fair value of options granted during the three and six months ended June 30, 2025 was $11.66 and $14.62, respectively. The weighted average grant-date fair value of RSUs granted during the three and six months ended June 30, 2025 was $22.28 and $26.05 per share.

As of June 30, 2025, there was $14.7 million of total unrecognized compensation cost related to unvested RSUs and time-based options granted under the 2013 Plan and 2019 Plan, which is expected to be recognized over a weighted average service period of 3.1 years.

2023 Performance Option Awards

On September 15, 2023, the Company granted an aggregate of 1,701,479 performance-based options to certain members of management with an exercise price of $13.05 and a grant-date fair value of $6.79. In addition, on November 3, 2023, the Company granted 49,971 performance-based options to a member of management with an exercise price of $13.35 and a grant-date fair value of $6.94. Collectively, we refer to these option awards as the 2023 Performance Option Awards. The 2023 Performance Option Awards are subject to multiple vesting tranches that vest upon achievement of certain predefined financial milestones. As of June 30, 2025, we had $1.3 million of total unrecognized stock-based compensation expense for the financial milestones that were considered probable of achievement, which will be recognized over a weighted-average period of 1.8 years. As of June 30, 2025, we had unrecognized stock-based compensation expense of $9.0 million for the operational milestones that were considered not probable of achievement. During the three and six months ended June 30, 2025, we recorded stock-based compensation expense of $0.8 million and $0.9 million, respectively, related to the 2023 Performance Option Awards.

Equity‑based compensation cost included in general and administrative expense in the accompanying condensed consolidated statements of income amounted to $2.3 million and $2.1 million for the three months ended June 30, 2025 and 2024, respectively and $5.1 million and $4.7 million for the six months ended June 30, 2025 and 2024, respectively. There was an excess income tax benefit of $0.2 million and $0.1 million recognized in the condensed consolidated statements of income for equity‑based compensation arrangements for the six months ended June 30, 2025 and 2024, respectively. The amount of excess tax benefit for the three months ended June 30, 2025 and 2024, was insignificant.