Common Stock |
6 Months Ended |
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Jun. 30, 2026 | |
| Equity [Abstract] | |
| Common Stock | Note 12 - Common Stock Prior to the completion of the IPO on May 15, 2026, the Company had two classes of authorized common stock: Class A common stock and Class N common stock. The rights of holders of Class A common stock and Class N common stock were identical, except with respect to voting and conversion rights. Each holder of Class A common stock was entitled to one vote per share, and each holder of Class N common stock was entitled to no votes per share. Each share of Class N common stock automatically converted to one fully paid and nonassessable share of Class A common stock upon the occurrence of a common transfer, meaning any direct or indirect sale, exchange, redemption, assignment, distribution, gift, retirement, transfer, conveyance, or other disposition. Permitted transferees included entities under common control with or controlled by such holder of the Class N common stock or a transferee if the holder provided prior written notice to the Company electing for the transfer to not result in a conversion. Once converted into Class A common stock, the Class N common stock would not be reissued. In May 2026, in connection with the IPO, the Company filed an amended and restated certificate of incorporation (the “Restated Certificate”) to authorize a total of 3,500,000,000 shares of Class A common stock, 240,000,000 shares of Class B common stock, 100,000,000 shares of Class N common stock, and 100,000,000 shares of preferred stock. The rights of the holders of Class A common stock, Class B common stock, and Class N common stock (referred to together as the “common stock”) are identical, except with respect to voting and conversion rights. Voting Rights Each holder of the Company’s Class A common stock is entitled to one vote per share, each holder of the Company’s Class B common stock is entitled to 20 votes per share, and each holder of the Company’s Class N common stock is entitled to no votes per share. The holders of the Company’s Class A common stock and Class B common stock will generally vote as a single class on all matters submitted to a vote of its stockholders, unless otherwise required by Delaware law or the Restated Certificate. Delaware law could require holders of the Company’s Class A common stock or Class B common stock, or Class N common stock to vote separately as a single class in the following circumstances: •if the Company were to seek to amend its Restated Certificate to increase or decrease the par value of a class of its capital stock, then that class would be required to vote separately to approve the proposed amendment; and •if the Company were to seek to amend its Restated Certificate in a manner that alters or changes the powers, preferences, or special rights of a class of its capital stock in a manner that affects its holders adversely, then that class would be required to vote separately to approve the proposed amendment. The Restated Certificate does not provide for cumulative voting for the election of directors. As a result, the holders of a majority of shares of the Company’s Class A common stock and Class B common stock can elect all of the directors then standing for election. The Restated Certificate established a classified board of directors, to be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of the Company’s stockholders, with the other classes continuing for the remainder of their respective three-year terms. Conversion Rights Each share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. Following the completion of the IPO and prior to the Final Conversion Date (as defined below), each share of Class B common stock will convert automatically into one share of Class A common stock upon sale or transfer, except for certain permitted transfers, as set forth in the Restated Certificate, including estate planning or other transfers among the Founders (as defined below) and their permitted entities and permitted transferees. In addition, each share of Class B common stock held by a Founder will convert automatically into one share of the Company’s Class A common stock on the earlier of (i) the death or incapacity of such Founder or (ii) the date that is six months following the date on which such Founder is no longer an employee or director of the Company (unless such Founder has rejoined the Company during such six-month period). In addition, all outstanding shares of Class B common stock will convert automatically into one share of Class A common stock on the date that is six months following the date on which no Founder is an employee or director of the Company (unless a Founder has rejoined the Company during such six-month period). We refer to the date on which such final conversion of all outstanding shares of Class B common stock pursuant to the terms of the Restated Certificate occurs as the “Final Conversion Date,” and we refer to each of Andrew D. Feldman, Sean Lie, Jean-Philippe Fricker, and Michael James as the “Founders.” Once converted into Class A common stock, the Class B common stock will not be reissued. Each share of Class N common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain permitted transfers, as set forth in the Restated Certificate. Permitted transferees include entities under common control with or controlled by such holder of Class N common stock or a transferee if the holder provides prior written notice to us electing for the transfer to not result in a conversion. Once converted into Class A common stock, the Class N common stock will not be reissued. Dividend Rights Subject to preferences that may apply to any outstanding preferred stock, holders of the Company’s common stock are entitled to receive dividends out of legally available funds if, when, and in the amounts declared by the Company’s board of directors. However, if a dividend is paid in the form of common stock, rights to acquire common stock, or securities convertible into or exchangeable for common stock, holders of Class A, Class B, and Class N common stock will generally receive securities of their respective class, unless different treatment is approved by a majority of the outstanding shares of each class voting separately. Preferred Stock The Restated Certificate also authorizes the issuance of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the Company’s board of directors. Common Stock Warrants G42 In December 2025, the Company issued a warrant to G42 (as defined above) to purchase an aggregate of up to 1,857,516 shares of Class N common stock at an exercise price of $0.01 per share (the “G42 Warrant”). The warrant was fully vested and immediately exercisable upon issuance. The warrant is classified as an equity instrument, and the grant date fair value was $82.02 per share. The G42 Warrant was exercised in full in January 2026. In April 2026, the Company issued a warrant to G42 to purchase an aggregate of up to 1,655,975 shares of Class N common stock at an exercise price of $0.01 per share (the “2026 G42 Warrant”). The warrant was fully vested and immediately exercisable upon issuance. The warrant is classified as an equity instrument, and the grant date fair value was $90.23 per share. The 2026 G42 Warrant was exercised in full in April 2026. The Company recorded a customer warrant asset of $149.4 million in the three months ended June 30, 2026, all of which will be recognized as a reduction in revenue in the consolidated statement of operations in proportion to the amount of related revenues through October 2031. OpenAI Concurrent with the MRA, as discussed in Note 3 - Revenue, the Company issued to OpenAI a warrant to purchase an aggregate of up to 33,445,026 shares of the Company’s Class N common stock at an exercise price of $0.00001 per share (the “OpenAI Warrant”). The OpenAI Warrant vests in multiple tranches upon achievement of specified milestones associated with the MRA, including funding of the Working Capital Loan, delivery of the Committed Capacity and Additional Capacity in tranches, and certain market capitalization or customer payment thresholds. The Company concluded that vesting of the tranches related to the Working Capital Loan, the Committed Capacity, and the tranche that vests upon the earlier of achieving specified market capitalization or customer payment thresholds under the MRA was probable of vesting, while the remaining tranches associated with the Additional Capacity were not considered probable of vesting. Subject to certain terms and conditions, the OpenAI Warrant expires on the earlier of December 24, 2035 and five business days following the first date during which there are no binding capacity purchase commitments or contractually obligated current or future payments under the MRA. The OpenAI Warrant is classified as an equity instrument, and the grant date fair value was $82.02 per share. In January 2026, the vesting condition associated with 4,459,337 shares of Class N common stock was satisfied under the OpenAI Warrant. In June 2026, the vesting condition associated with 5,574,171 shares of Class N common stock was satisfied under the OpenAI Warrant. The Company recorded customer warrant assets of $457.2 million and $822.9 million for the three and six months ended June 30, 2026. The customer warrant asset will be recognized as a reduction of revenue in proportion to the related revenue recognized. As of June 30, 2026, none of the vested portion of the OpenAI Warrant had been exercised. The Company has recorded customer warrant assets that total $1.1 billion and $152.4 million as of June 30, 2026 and December 31, 2025, respectively. During the three and six months ended June 30, 2026, the Company recognized $44.3 million and $46.3 million, respectively, as a reduction in revenue in the condensed consolidated statements of operations in proportion to the amount of related revenues. The remaining balance of the customer warrant assets as of June 30, 2026 will be recorded as a reduction in revenue in the consolidated statement of operations through October 2031. AWS In June 2026, the Company issued to Amazon.com NV Investment Holdings LLC (the “AWS Warrantholder”) a warrant (the “AWS Warrant”) to acquire up to 2,696,678 shares of Class N common stock (the “AWS Warrant Shares”) at an exercise price of $100.00 per AWS Warrant Share. The warrant is classified as an equity instrument, and the grant date fair value was determined using a Black-Scholes option-pricing model. The estimated grant date fair value is $185.38 per AWS Warrant Share. Of these AWS Warrant Shares, 269,668 AWS Warrant Shares vested immediately upon issuance of the AWS Warrant, and the remaining 2,427,010 AWS Warrant Shares vest in tranches upon the attainment of specified payment thresholds prior to the fifth anniversary of issuance, based on aggregate payments by Amazon Web Services to us pursuant to certain commercial arrangements between the parties. The AWS Warrant expires on June 19, 2033. The Company recorded a customer warrant asset of $50.0 million in the three months ended June 30, 2026. 2016 Equity Incentive Plan and 2026 Incentive Award Plan In connection with the IPO, the Company’s board of directors adopted, and its stockholders approved, the 2026 Incentive Award Plan (the “2026 Plan”), which became effective on May 12, 2026. The 2026 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance awards, and other stock-based awards to employees, directors, and consultants. An aggregate of 42,650,268 shares of the Company’s Class A common stock was initially reserved for issuance under the 2026 Plan. The number of shares available for issuance under the 2026 Plan is subject to adjustment pursuant to the terms of the plan, including annual automatic increases beginning January 1, 2027. Upon effectiveness of the 2026 Plan, no further awards may be granted under the Company’s 2016 Equity Incentive Plan (as amended, the “2016 Plan”), although awards previously granted under the 2016 Plan remain outstanding and continue to be governed by their existing terms. Employee Stock Purchase Plan In connection with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2026 Employee Stock Purchase Plan (the “ESPP”), which became effective on May 12, 2026. The option purchase price will be the lower of 85% of the closing trading price per share of the Company’s Class A common stock as of the first date of an offering period in which a participant is enrolled or 85% of the closing trading price per share as of the purchase date, which will occur on the last day of each purchase period within an offering period. The maximum number of shares of the Company’s Class A common stock that will be authorized for sale under the ESPP is equal to the sum of (i) 3,554,189 shares of Class A common stock and (ii) an annual increase on the first day of each fiscal year beginning in 2027 and ending in 2036, equal to the lesser of (A) 1% of the sum of (1) all shares of all classes of the Company’s common stock, and (2) the number of shares issuable upon the exercise of warrants to purchase shares of the Company’s common stock with an exercise price per share of $0.01 or less, in each case, outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of Class A common stock as determined by the Company’s board of directors; provided, however, that no more than 48,870,099 shares of the Company’s Class A common stock may be issued under the ESPP. The shares reserved for issuance under the ESPP may be authorized but unissued shares, treasury shares, or reacquired shares.
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