Stock-Based Compensation |
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| Stock-Based Compensation | 10. Stock-Based Compensation The Board of Directors has authorized the 2016 Plan. Under the 2016 Plan, the Board of Directors may grant incentive stock awards to employees, and non-statutory stock options to employees, directors and consultants. The 2016 Plan provides for the grant of stock options, restricted stock, and other stock-related and performance awards that may be settled in cash, stock, or other property. In connection with the IPO, the Company’s board of directors and its stockholders: • Adopted and approved the 2026 Plan. Under the 2026 Plan, 19.0 million shares of the Company’s common stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, and other stock-based awards. In connection with the effectiveness of the 2026 Plan, the Company’s 2016 Plan terminated, and no further awards will be granted under the 2016 Plan. However, all outstanding awards will continue to be governed by their existing terms. The 2026 Plan provides that the initial aggregate number of shares that may be issued pursuant to awards will not exceed 13.0 million plus up to 6.0 million returning shares, as they become available from time to time. In addition, subject to any adjustments as necessary to implement any Capitalization Adjustments (as defined therein), the aggregate number of shares of the Company's common stock reserved will automatically increase on January 1 of each year for a period of ten years commencing 2027 and ending on (and including) 2036, in an amount equal to 5% of the total number of shares of capital stock outstanding on the preceding December 31. The aggregate maximum number of shares that may be issued pursuant to the exercise of Incentive Stock Options is 39.0 million shares. • Adopted and approved the 2026 Employee Stock Purchase Plan (the “2026 ESPP”). The 2026 ESPP provides that the maximum number of shares of the Company's common stock that may be issued under the 2026 ESPP will not exceed 1.3 million shares of the Company’s Class A common stock, plus the number of shares that are automatically added on January 1 of each calendar year for a period of up to ten years, commencing on January 1, 2027 and ending on (and including) January 1, 2036, in an amount equal to the lesser of (a) 1% of the total number of shares of capital stock outstanding on the last day of the preceding calendar year, or (b) 2.6 million shares.
Stock Options The following table summarizes the stock option activities under the Company’s stock plans for the six months ended June 30, 2026 (in thousands, except for per share data):
* NM - not meaningful On January 29, 2026, 0.2 million fully vested stock options were exercised resulting in issuance of 0.2 million shares of common stock which immediately converted into 0.2 million shares of Class A common stock upon the closing of the IPO. The Company recorded compensation expense for stock options of $0.1 and $0.5 million for the three months ended June 30, 2026 and 2025, respectively, and $0.1 million and $10.6 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, all outstanding options were fully vested. Restricted Stock Units The following table summarizes the RSUs activity under the Company’s stock plans for the six months ended June 30, 2026 (in thousands, except for per share data):
In February 2025, the performance triggers were lifted for 0.3 million RSUs, the awards were vested and $8.0 million was recognized as compensation expense. On January 29, 2026, 5.7 million RSUs meeting both service and performance triggers became vested and released, resulting in the recognition of $181.7 million in compensation cost and net issuance of 3.1 million shares of common stock after considering the withholding tax impact, which subsequently converted into 2.0 million and 1.1 million shares of Class A and Class B common stock, respectively, upon the closing of the IPO.
As of June 30, 2026, unrecognized compensation costs related to unvested RSUs and performance-based restricted stock units ("PRSUs") were $32.1 million and $56.2 million, respectively. The remaining unrecognized compensation costs for RSUs and PRSUs are expected to be recognized over a weighted-average period of 2.2 years and 1.8 years, respectively, excluding additional stock-based compensation expense related to any future grants of share-based awards. Stock-based Compensation— The Company recognizes stock-based compensation expense for awards with only service conditions on a straight-line basis over the requisite service period of the related award. For stock-based awards with both service and performance conditions, the Company records compensation expense when it is deemed probable that the performance condition will be met and records compensation expenses for each vesting tranche for awards subject to graded vesting method. The amount of stock-based compensation related to stock-based awards in the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Common Stock Warrants April 2024 Warrant In April 2024, the Company issued warrants to a third party to purchase an aggregate of up to 0.4 million shares of common stock at an exercise price of $10.15 per share (“April 2024 Warrant”). The April 2024 Warrant expires in April 2027, and none vested during the three and six months ended June 30, 2026. The remainder of the shares underlying the April 2024 Warrant may vest and become exercisable over the contractual term, contingent upon the achievement of certain performance conditions. For the three months ended June 30, 2026 and 2025, the Company recognized nil for both periods, related to the issuance of the April 2024 Warrant. For the six months ended June 30, 2026 and 2025, the Company recognized nil and less than $0.1 million, respectively. The April 2024 warrant remained outstanding following the closing of the IPO and will convert to Class A common stock upon exercise of this warrant. January 2025 Warrant In January 2025, the Company issued fully vested warrants to a third party to purchase an aggregate of up to 0.03 million shares of common stock at an exercise price of $0.07 per share (“January 2025 Warrant”). The January 2025 Warrant expired in 2030. The Company recognized nil and $1.3 million during the three and six months ended June 30, 2025, respectively, related to the issuance of the January 2025 Warrant. In October 2025, all of the 0.03 million warrants were exercised and became outstanding Class A Common Stock. April 2025 Warrant In April 2025, the Company issued warrants to a third party to purchase an aggregate of up to 0.08 million shares of common stock at an exercise price of $40.32 per share (“April 2025 Warrant”). The April 2025 Warrant expires in April 2027, and no warrants vested during the three and six months ended June 30, 2026. The remainder of the shares underlying the April 2025 Warrant may vest and become exercisable over the contractual term, contingent upon the achievement of certain performance conditions. The Company recognized nil for the three and six months ended June 30, 2026. The Company recognized less than $0.1 million for the three and six months ended June 30, 2025, respectively. A total of 0.05 million April 2025 warrant remained outstanding following the closing of the IPO and will convert to Class A common stock upon exercise of this warrant. The grant date fair value of the April 2024 Warrant, January 2025 Warrant, and April 2025 Warrant were determined using the Black-Scholes option pricing model using the following assumptions:
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