Stock Based Awards

6 Months Ended

Jun. 30, 2025

Share-Based Payment Arrangement [Abstract]

NOTE 9: STOCK BASED AWARDS

Stock-Based Compensation Expense

The following table presents the amount of stock-based compensation expense and the related income tax benefit included in our unaudited condensed consolidated statements of operations during the periods presented:


	Three months ended						Six months ended
	June 30,						June 30,
	2025			2024			2025			2024
	(in millions)						(in millions)
Total stock-based compensation expense	$	29		$	34		$	57		$	61
Income tax benefit from stock-based compensation		(5	)		(7	)		(10	)		(12	)
Total stock-based compensation expense, net of tax	$	24		$	27		$	47		$	49

We capitalized $4 million and $7 million of stock-based compensation expense as website development costs during the three and six months ended June 30, 2025, respectively, and $3 million and $6 million during the three and six months ended June 30, 2024, respectively.

Stock-Based Award Activity and Valuation

2025 Stock Option Activity

A summary of our stock option activity, consisting of service-based non-qualified stock options, is presented below:


				Weighted		Weighted
				Average		Average
				Exercise		Remaining		Aggregate
	Options			Price Per		Contractual		Intrinsic
	Outstanding			Share		Life		Value
	(in thousands)					(in years)		(in millions)
Options outstanding at December 31, 2024		2,190		$	31.57
Canceled or expired		(115	)		49.69
Options outstanding at June 30, 2025		2,075		$	30.57		4.9	$	—
Exercisable as of June 30, 2025		1,757		$	32.39		4.5	$	—
Vested and expected to vest after June 30, 2025(1)		2,075		$	30.57		4.9	$	—

(1)

The Company accounts for forfeitures as they occur, rather than estimate expected forfeitures as allowed under GAAP and therefore does not include a forfeiture rate in our vested and expected to vest calculation unless necessary for a performance condition award.

Our stock options generally have a term of ten years from the date of grant and typically vest equally over a four-year requisite service period. We amortize the grant-date fair value of our stock option grants as stock-based compensation expense over the vesting term on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. The total fair value of stock options vested was $2 million and $4 million for the six months ended June 30, 2025 and 2024, respectively. Aggregate intrinsic value represents the difference between the closing stock price of our common stock and the exercise price of outstanding, in-the-money options. Our closing stock price as reported on Nasdaq as of June 30, 2025 was $13.05. The total intrinsic value of stock options exercised was not material for the six months ended June 30, 2025 and 2024.

2025 Restricted Stock Units ("RSUs") Activity

A summary of our RSU activity, consisting of service-based vesting terms, is presented below:


				Weighted
				Average
				Grant-		Aggregate
	RSUs			Date Fair		Intrinsic
	Outstanding			Value Per Share		Value
	(in thousands)					(in millions)
Unvested RSUs outstanding as of December 31, 2024		11,605		$	23.47
Granted(1)		6,640			14.86
Vested and released(2)		(2,970	)		25.33
Canceled		(963	)		22.23
Unvested RSUs outstanding as of June 30, 2025(3)		14,312		$	19.17	$	187

(1)

Inclusive of approximately 77,000 deferred stock units (“DSUs”) granted to certain non-employee directors during the second quarter of 2025. Each DSU represents the right to receive one share of the Company’s common stock upon vesting. The DSUs shall vest one year after the grant date. However, settlement of the shares represented by DSUs that have vested will occur on January 15th of the calendar year immediately following the year in which the director experiences a "separation of service" as defined in Section 409A of the Internal Revenue Code of 1986.

(2)

Inclusive of approximately 630,000 shares of common stock withheld in connection with RSU vesting to satisfy required employee tax withholding requirements. Shares which could have been issued in connection with the vesting of RSUs but were instead withheld under net share settlement remain in the authorized but unissued pool under the Tripadvisor, Inc. 2023 Stock and Annual Incentive Plan (the “2023 Plan”) and can be reissued by the Company under the 2023 Plan. Total payments for the employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statement of cash flows.

(3)

RSUs are measured at fair value based on the quoted price of our common stock at the date of grant. We amortize the grant-date fair value of RSUs as stock-based compensation expense over the vesting term, which is typically over a four-year requisite service period on a straight-line basis, with the amount of compensation expense recognized at any date at least equaling the portion of the grant-date fair value of the award that is vested at that date. The total fair value of RSUs vested was $75 million and $68 million for the six months ended June 30, 2025 and 2024, respectively.

A summary of our performance-based RSUs ("PSUs") and market-based RSUs (“MSUs”) activity is presented below:


	PSUs (1)			MSUs (2)
		Weighted			Weighted
		Average			Average
		Grant-	Aggregate		Grant-	Aggregate
		Date Fair	Intrinsic		Date Fair	Intrinsic
	Outstanding	Value Per Share	Value	Outstanding	Value Per Share	Value
	(in thousands)		(in millions)	(in thousands)		(in millions)
Unvested and outstanding as of December 31, 2024	982	$23.28		491	$10.53
Granted	932	14.92		—	—
Vested and released (3)	(190)	18.49		—	—
Canceled	(63)	19.93		—	—
Unvested and outstanding as of June 30, 2025	1,661	$19.27	$22	491	$10.53	$6

(1)

PSUs generally vest in two equal annual installments on December 31 in the first and second years following the grant date, based on the extent to which the Company achieves certain financial metrics relative to targets established by the Company’s Compensation and Section 16 Committees of its Board of Directors (jointly, the “Compensation Committee”). The estimated grant-date fair value of PSUs are measured based on the quoted price of our common stock at the date of grant, calculated upon the establishment of performance targets, and amortized on a straight-line basis over the requisite service period. Based upon actual attainment relative to the target financial metrics, employees have the ability to receive up to 200% of the target number originally granted, or to be issued none at all. Probable outcome for performance-based awards is updated based upon changes in actual and forecasted operating results or expected achievement of performance goals, as applicable, and the impact of modifications, if any.

(2)

MSUs vest three years from grant date, generally with 25% vesting if the weighted-average stock price over a 30-day trading period during the vesting period is equal to or greater than $35.00 but less than $45.00, 50% vesting if equal to or greater than $45.00 but less than $55.00, and 100% vesting if equal to or greater than $55.00, subject to continuous employment with, or performance of services for, the Company. A Monte-Carlo simulation model, which simulated the present value of the potential outcomes of future stock prices, was used to calculate the grant-date fair value of our MSU awards. The estimated grant-date fair value of these awards is amortized on a straight-line basis over the requisite service period and is not adjusted based on the actual number of awards that ultimately vest.

(3)

Inclusive of approximately 81,000 shares of common stock withheld in connection with PSU vesting to satisfy required employee tax withholding requirements. Shares which could have been issued in connection with the vesting of PSUs but were instead withheld under net share settlement remain in the authorized but unissued pool under the 2023 Plan and can be reissued by the Company under the 2023 Plan. Total payments for the

employees’ tax obligations to the taxing authorities due to net share settlements are reflected as a financing activity within the consolidated statement of cash flows.

Total current income tax benefits associated with the exercise or settlement of Tripadvisor stock-based awards held by our employees was $3 million and $5 million during the three and six months ended June 30, 2025, respectively, and $4 million and $7 million during the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, total unrecognized compensation cost related to stock-based awards, substantially RSUs (including PSUs, MSUs and DSUs), was $270 million, which the Company expects to recognize over a weighted-average period of 2.7 years.