Note 12. Share-Based Compensation

Share-based compensation cost is measured at the grant date fair value of the award and recognized over the requisite service period. Compensation expense is recorded within cost of revenue, selling, general and administrative, and research and development expenses in the Consolidated Statements of Income. Forfeitures are accounted for as they occur.

Omnibus Incentive Plans

The Company's 2021 Omnibus Plan authorized the issuance of shares of common stock for equity-based compensation awards to employees, directors, and consultants. On November 4, 2025, the Company terminated the 2021 Omnibus Plan and adopted the 2025 Omnibus Plan, which authorized the issuance of up to 10,000,000 shares of common stock. Awards outstanding under the 2021 Omnibus Plan continue to be governed by the terms of that plan. As of June 30, 2026, 9,768,170 shares remained available for future grant under the 2025 Omnibus Plan.

Stock Options

Stock options generally vest based on service conditions, typically over four years, and have contractual terms of up to ten years. Stock option activity for the periods presented is as follows:

As of June 30, 2026, all outstanding stock options were vested and exercisable, subject to the approval requirement described above for certain awards. For the three and six months ended June 30, 2026, there was no share-based compensation expense or deferred tax benefits related to stock options. For the three and six months ended June 30, 2025, the Company recognized $348 and $690, respectively, of compensation expense within selling, general and administrative expenses in the Consolidated Statements of Income related to stock options. Deferred tax benefits related to stock options for the three and six months ended June 30, 2025 were $25 and $50, respectively, and were recorded as an income tax benefit in the Consolidated Statements of Income. As of June 30, 2026 and December 31, 2025, there was no unrecognized compensation expense related to nonvested stock options.

Restricted Stock Awards

As of June 30, 2026 and December 31, 2025, there was approximately $10,599 and $11,747, respectively, of total unrecognized share-based compensation costs related to nonvested restricted stock awards. The remaining compensation costs are expected to be recognized over a weighted average period of approximately 3.75 years.

HCI Equity Incentive Plan

HCI maintains an incentive plan that provides restricted stock awards to employees of HCI and its subsidiaries. The terms of the restricted stock awards include service and market conditions, and the awards generally vest over a period of four years. In December 2024, certain employees of HCI and its subsidiaries were transferred to the Company. The Company recognizes share-based compensation expense for those employees' nonvested shares based on the fair value determined by HCI at the original grant date and the same vesting terms established at the grant date. The awards are not remeasured following the transfer.

For the three and six months ended June 30, 2026, the Company recognized compensation expense related to HCI restricted stock of $4 and $8, respectively. For the three and six months ended June 30, 2025, the Company recognized compensation expense related to HCI restricted stock of $4 and $25, respectively. Compensation expense related to HCI restricted stock is recognized in the Consolidated Statements of Income and as a non-cash capital contribution in the Consolidated Balance Sheets.