In May 2025, our stockholders approved the 2025 Equity Incentive Plan (the 2025 Plan). The 2025 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other awards. As of December 31, 2025, 7.4 million shares of common stock remain available for future grant under the 2025 Plan.

Under the terms of the 2025 Plan, the number of shares of common stock available for issuance will be: (i) reduced by (a) one share for each share issued pursuant to an appreciation award (as defined in the 2025 Plan) and (b) 2.43 shares for each share issued pursuant to a full value award (as defined in the 2025 Plan); and (ii) increased by (a) one share for each share subject to an appreciation award that becomes available again for issuance under the terms of the 2025 Plan and (b) 2.43 shares for each share subject to a full value award that becomes available again for issuance under the terms of the 2025 Plan.

In May 2020, we adopted the 2020 Equity Incentive Plan (as amended, the Amended 2020 Plan). The Amended 2020 Plan was a stockholder-approved plan pursuant to which no additional awards will be granted following the effective date of the 2025 Plan. Outstanding awards under the Amended 2020 Plan will continue to be governed by its terms.

In May 2011, we adopted the 2011 Equity Incentive Plan (the 2011 Plan). The 2011 Plan was a stockholder-approved plan pursuant to which outstanding awards have been made, but from which no further awards can or will be made.

In May 2022 and 2025, our stockholders approved amendments and restatements of the 2018 Employee Stock Purchase Plan (as so amended and restated, the Amended 2018 ESPP). As of December 31, 2025, 1.0 million shares of common stock remain available for future issuance under the Amended 2018 ESPP.

The effect of stock-based compensation expense on the consolidated statements of income and comprehensive income by line-item follows:


	Year Ended December 31,
(in millions)	2025		2024		2023
Selling, general, and administrative	$	126.9	$	126.7	$	126.3
Research and development	91.0		68.8		68.0
Total stock-based compensation expense	$	217.9	$	195.5	$	194.3


	Year Ended December 31,
(in millions)	2025		2024		2023
Stock options	$	83.8	$	80.7	$	91.6
RSUs	107.6		97.7		93.4
PRSUs	19.0		11.5		4.6
ESPP	7.5		5.6		4.7
Total stock-based compensation expense	$	217.9	$	195.5	$	194.3

As of December 31, 2025, unrecognized stock-based compensation expense by award-type and the weighted-average period over which such expense is expected to be recognized, as applicable, was as follows:


(dollars in millions)	Unrecognized Expense		Weighted-Average Recognition Period
Stock options	$	95.3	2.4 years
RSUs	$	213.8	2.3 years
PRSUs	$	22.7

Typically, stock options have a 10-year term and vest over a three to four-year period. The exercise price of stock options granted is equal to the closing price of our common stock on the date of grant. We estimate the fair value of stock options using the Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model incorporates various and highly sensitive assumptions including expected volatility, term and interest rates. The weighted-average grant-date fair values of stock options granted were $49.66 for 2025, $55.74 for 2024, and $45.19 for 2023.

The fair value of each stock option granted was estimated on the date of grant using the Black-Scholes option-pricing valuation model with the following weighted-average assumptions:


	Year Ended December 31,
	2025		2024		2023
Risk-free interest rate	4.4	%	4.3	%	3.9	%
Expected volatility of common stock	37.6	%	37.2	%	40.8	%
Dividend yield	0.0	%	0.0	%	0.0	%
Expected option term	5.4 years		5.5 years		5.5 years

•The expected volatility of common stock is estimated based on the historical volatility of our common stock over the most recent period commensurate with the estimated expected term of our stock options.

•The expected option term is estimated based on historical experience as well as the status of the employee. For example, directors and officers have a longer expected option term than all other employees.

•The risk-free interest rate for periods within the contractual life of a stock option is based upon observed interest rates appropriate for the expected term of our employee stock options.


(in millions, except weighted average data)	Number of Stock Options	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2024	9.6	$	95.48
Granted	1.9	$	118.85
Exercised	(1.5)	$	76.54
Canceled	(0.2)	$	117.03
Outstanding at December 31, 2025	9.8	$	102.54	6.0 years	$	384.9
Exercisable at December 31, 2025	7.0	$	95.65	5.1 years	$	324.8

The total intrinsic value of stock options exercised was $96.2 million for 2025, $122.5 million for 2024, and $39.9 million for 2023. Cash received from stock option exercises was $115.5 million for 2025, $110.8 million for 2024, and $55.5 million for 2023.

RSUs typically vest over a four-year period and may be subject to a deferred delivery arrangement at the election of eligible employees. The fair value of RSUs is based on the closing sale price of our common stock on the date of issuance. The total fair value of RSUs that vested was $116.1 million for 2025, $116.7 million for 2024, and $101.0 million for 2023.


(in millions, except weighted average data)	Number of RSUs	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Unvested at December 31, 2024	2.4	$	111.90
Granted	1.3	$	119.14
Released	(0.9)	$	107.48
Canceled	(0.2)	$	115.53
Unvested at December 31, 2025	2.6	$	116.79	1.2 years	$	373.4

PRSUs vest based on the achievement of certain predefined Company-specific performance criteria. Any unvested PRSUs will expire if it is determined the related performance criteria has not been met during the applicable three to four-year performance period. The fair value of PRSUs is estimated based on the closing sale price of our common stock on the date of grant. The fair value of PRSUs that vested was $34.4 million during 2023. No PRSUs vested during 2025 or 2024.


(in millions, except weighted average data)	Number of PRSUs	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
Unvested at December 31, 2024	0.4	$	105.11
Granted	0.1	$	118.24

Canceled	(0.1)	$	81.19
Unvested at December 31, 2025	0.4	$	114.70	1.5 years	$	61.2

Under the Amended 2018 ESPP, eligible employees may purchase shares of our common stock at a discount semi-annually based on a percentage of their annual compensation. The discounted purchase price is equal to the lower of 85% of (i) the market value per share of the common stock on the first day of the offering period or (ii) the market value per share of common stock on the purchase date.