The following table presents the expense classification of stock-based compensation expense recognized by the Company for stock options, restricted stock units, performance share units, and employee stock purchase plans for the three months ended July 31, 2026 and July 25, 2025:


	Three Months Ended
(in millions)		July 31, 2026		July 25, 2025
Stock options		$	—	$	1
Restricted stock units		9		5
Performance share units		—		2
Employee stock purchase plan		1		1
Total stock-based compensation expense		$	10	$	9

Cost of products sold		$	1	$	1
Research and development expense		4		2
Selling, general, and administrative expense		5		6
Total stock-based compensation expense		10		9

During the three months ended July 31, 2026, there was no stock-based compensation expense related to allocations of expense from Medtronic. During the three months ended July 25, 2025, the Company recognized $6 million of stock-based compensation expense related to direct Company employees, and $3 million of stock compensation expense related to allocations of Medtronic’s corporate and shared employee stock-based compensation expenses.

During the three months ended July 31, 2026, the Company granted restricted stock units and performance share units (“PSU”) to employees under the Company's existing equity incentive plans. The aggregate grant date fair value of RSUs granted during the period was $46 million. The PSUs granted included an embedded market condition and the related grant date fair value was calculated based on a Monte Carlo methodology. The awards vest upon the Company’s actual performance relative to certain predefined metrics and subject to the awardee’s continued service through the measurement date of April 27, 2029. The aggregate grant-date fair value of PSUs granted during the period was approximately $16 million.

As of July 31, 2026, the total unamortized stock-based compensation expense of approximately $118 million will be recognized over the remaining weighted average vesting term of approximately 1.4 years.

During the three months ended July 31, 2026, employees purchased shares under the Employee Stock Purchase Plan (“ESPP”), and a new six-month offering period commenced on July 1, 2026. The fair value of the purchase rights granted during the quarter was determined using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option pricing model for the ESPP were as follows:


	Three Months Ended
		July 31, 2026
Assumptions used:
Expected life (years)		0.5
Risk-free interest rate		3.96	%
Volatility		33.68	%
Dividend yield		—	%