Stock-Based Compensation

12 Months Ended

Dec. 31, 2025

Stock-Based Compensation

Stock-Based Compensation

11.    Stock-Based Compensation

Equity Plans

2015 Equity Incentive Plan

General. The Company’s board of directors adopted its 2015 Equity Incentive Plan (the “2015 Plan”), in June 2015. The Company’s 2015 Plan replaced all of its prior stock plans. In the second quarter of 2024, the Company’s stockholders approved an amended and restated version of the 2015 Plan which increased the shares reserved for issuance by 6.0 million shares of the Company’s common stock, extended the term of the plan by an additional 10 years and eliminated the “evergreen” feature which provided for automatic annual increases in the number of shares available for issuance under the 2015 Plan.

Stock options vest as determined by the compensation committee. In general, they will vest over a four-year period following the date of grant. These awards generally expire earlier if the participant's service terminates earlier.

Restricted Shares and Stock Units.  Restricted shares and stock units (collectively “RSUs”) may be awarded under the 2015 Plan in return for any lawful consideration, and participants who receive RSUs generally are not required to pay cash for their awards. These awards may be subject to vesting. Vesting may be based on length of service, the attainment of performance-based milestones or a combination of both, as determined by the compensation committee. Further, RSUs may be granted and immediately vested in lieu of certain obligations.

The Company also periodically awards phantom stock units, under a separate incentive arrangement, to certain international personnel, which are settled in cash upon vesting and accounted for as liability-based awards with no impact to the shares available for grant.

Employee Stock Purchase Plan

General. The Company’s 2015 Employee Stock Purchase Plan (the “ESPP”), was adopted by its board of directors in June 2015 and its stockholders approved it in June 2015. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code.

Share Reserve. The Company has 4,953,702 shares available for issuance under the ESPP as of December 31, 2025, a number that is automatically increased on the first business day of each fiscal year of the Company during the term of the ESPP by the least of (i) 1% of the total number of shares of common stock actually issued and outstanding on the last business day of the prior fiscal year, (ii) 880,000 shares of common stock (subject to the ESPP), or (iii) a number of shares of common stock determined by the Company’s board of directors. The number of shares reserved under the 2015 ESPP will automatically be adjusted in the event of a stock split, stock dividend or a reverse stock split (including an adjustment to the per-purchase period share limit).

Purchase Price. Employees may purchase each share of common stock under the 2015 ESPP at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of the six-month offering periods. An employee’s payroll deductions under the ESPP are limited to 15% of the compensation, and up to a maximum of 5,000 shares may be purchased during any offering period. A participant shall not be granted an option under the ESPP if such option would permit the participant’s rights to purchase stock to accrue at a rate exceeding $25,000 fair market value of stock for each calendar year in which such option is outstanding at any time.

Offering Periods. Each offering period will last a number of months determined by the compensation committee, not to exceed 27 months. A new offering period will begin periodically, as determined by the compensation committee. Offering periods may overlap or may be consecutive. Unless otherwise determined by the compensation committee, two offering periods of six months' duration will begin in each year on May 1 and November 1.

Stock-Based Compensation Expense

The following table presents stock-based compensation expense recorded for equity classified awards in the statement of operations and comprehensive loss:

	Year Ended December 31,
	2025		2024		2023
	(in thousands)
Cost of revenues	$	23,595	$	16,468	$	11,752
Research and development		120,362		88,705		66,326
Selling, general and administrative		210,447		169,255		113,730
Total	$	354,404	$	274,428	$	191,808

As of December 31, 2025, approximately $636.9 million of unrecognized compensation expense, adjusted for estimated forfeitures, related to unvested option awards and RSUs will be recognized over a weighted-average period of approximately 1.7 years.

Stock Options

The following table summarizes option activity during the year ended December 31, 2025:

				Weighted-
		Weighted-		Average
		Average		Remaining	Aggregate
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Life	Value
(in thousands, except for contractual life and exercise price)				(in years)
Balance at December 31, 2024	3,875	$	30.22	4.45	$	496,135
Options assumed(1)	88	$	29.28
Options exercised	(370)		60.99
Options forfeited/cancelled	(2)	$	3.78
Balance at December 31, 2025	3,591	$	27.03	3.57	$	725,400
Exercisable at December 31, 2025	3,321	$	25.79	3.26	$	675,149
Vested and expected to vest at December 31, 2025	3,573	$	26.96	3.55	$	722,275

(1) Related to Assumed Options replaced in conjunction with the acquisition of Foresight Diagnostics. See Note 3 for further details.

The total intrinsic value of stock options exercised during the years ended December 31, 2025, 2024, and 2023 were $48.1 million, $145.6 million, and $14.7 million, respectively.

No options were granted in the years ended December 31, 2025 and 2024. The weighted-average average grant date fair value of options granted during the year ended December 31, 2023 was $27.31 per share.

As part of the acquisition of Foresight Diagnostics, the portion of Assumed Options attributable to post-combination service was excluded from purchase consideration and will be recognized as stock-based compensation expense over the remaining requisite service period. The total value as of the acquisition date was $6.9 million.

Valuation of Stock Option Grants

The Company utilizes Black-Scholes option pricing model when estimating the fair value of stock options. The fair value of the Assumed Options in the year ended December 31, 2025 was measured as of the acquisition date of

Foresight Diagnostics in accordance with ASC 718, Compensation—Stock Compensation. The following valuation assumptions were applied to options.

	Year ended December 31,
	2025					2024			2023
Expected term (years)	1.30		—	3.56			—		5.20		—	6.11
Expected volatility	46.47	%	—	50.48	%		—	%	67.75	%	—	70.07	%
Expected dividend rate				—	%		—	%				—	%
Risk-free interest rate	3.21	%	—	3.36	%		—	%	3.41	%	—	4.80	%

As of December 31, 2025, there were no options outstanding held by non-employees. Stock-based compensation expense related to stock options granted to non-employees is recognized as the stock option is earned and the services are rendered. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services rendered.

Restricted Stock Units and Performance-based Awards

The following table summarizes unvested RSUs and PSUs for the year ended December 31, 2025:

		Weighted-
		Average
	Number of	Grant Date
	Shares	Fair Value
	(in thousands)
Balance at December 31, 2024	10,593	$	61.28
Granted	3,504	$	172.76
Vested	(5,324)	$	61.62
Cancelled/Forfeited	(450)	$	89.92
Balance at December 31, 2025	8,323	$	100.44

The above table of unvested RSU and PSU activity reflects unvested PSUs at 100% of their target vesting amount; however, vesting can vary from 0% to 200% of target, depending on the level of achievement of performance criteria.

The Company grants certain senior-level executives performance stock units which vest based on performance and time-based service conditions, which are referred to herein as performance-based awards. During the years ended December 31, 2025, 2024, and 2023, the Company granted 0.4 million, 0.8 million, and 0.5 million performance-based awards with an aggregate grant date fair value at 100% of their target vesting amount at $64.9 million, $55.0 million, and $44.1 million, respectively. Stock-based compensation for these performance-based awards milestones are assessed to be 200% of the grant value.

The Company has recognized $98.8 million in stock-based compensation for performance-based awards for the year ended December 31, 2025 compared to $89.8 million for the year ended December 31, 2024 and $54.2 million for the year ended December 31, 2023.