The Company grants RSUs, RSAs, and non-statutory options to eligible employees, key executives, and certain non-employee service providers with service and/or performance conditions (collectively, the “Plans”). The Company offers an Employee Stock Purchase Plan, under which eligible employees can purchase the Company’s common stock at a discounted price. The Company also offers a Non-Qualified Employee Stock Purchase Plan (“NQ ESPP”), under which employees can purchase the Company’s common stock at the fair market value. In April 2026, the Company cancelled the NQ ESPP.

As part of the Cursor Merger and Mesh Optical Merger (collectively, the “Acquisitions”), as defined and further described in Note 20 - Acquisitions, the Company granted 65 million options with a weighted average exercise price of $1.49 and weighted-average grant-date fair value per share of $140.39, 28 million RSUs with weighted-average grant date fair value per share of $141.45, and 96 million RSAs with weighted-average grant date fair value per share of $141.66. At September 30, 2026, share-based compensation expense related to these awards is expected to be recognized over a weighted-average period of 2.8 years.

The following table summarizes the Company’s share-based compensation expense by line item in the consolidated statements of operations:




	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Cost of revenue(1)	$	128	$	71	$	321	$	175
Research and development(2)	1,416		167		2,147		435
Selling, general, and administrative(3)	819		112		1,365		434
Total	$	2,363	$	350	$	3,833	$	1,044

__________________

(1)Share-based compensation expense for the three and nine months ended September 30, 2026 includes share-based compensation expense related to SpaceX awards granted to certain employees from the Acquisitions to retain key talent as well as SpaceX awards granted as a replacement of historically outstanding, unvested equity awards held by Cursor and Mesh Optical employees prior to the Acquisitions. Refer to Note 20 - Acquisitions for additional information. Share-based compensation expense recorded in Cost of revenue related to the Acquisitions was $6 million and $6 million for the three and nine months ended September 30, 2026.

(2)Share-based compensation expense recorded in Research and development related to the Acquisitions was $1,022 million and $1,022 million for the three and nine months ended September 30, 2026.

(3)Share-based compensation expense recorded in Selling, general, and administrative related to the Acquisitions was $189 million and $189 million for the three and nine months ended September 30, 2026.

During the three and nine months ended September 30, 2026, share-based compensation expense capitalized to the consolidated balance sheets was $50 million and $160 million, respectively. During the three and nine months ended September 30, 2025, share-based compensation expense capitalized to the consolidated balance sheets was $38 million and $114 million, respectively.