Stock-based Compensation

9 Months Ended

Oct. 03, 2026

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Note 10 - Stock-Based Compensation

Total stock-based compensation expense included in our Consolidated Statements of Operations is presented in the following table:

	Three Months Ended				Nine Months Ended
(In thousands)	October 3, 2026		September 27, 2025		October 3, 2026		September 27, 2025
Cost of revenue	$	2,766	$	1,961	$	7,058	$	4,203
Research and development		22,086		15,103		52,608		34,977
Selling, general, and administrative		25,440		18,710		63,098		41,053
Total stock-based compensation expense	$	50,292	$	35,774	$	122,764	$	80,233

Market-Based and Performance-Based Stock Compensation

In the second and third quarters of fiscal 2026, we granted awards of restricted stock units (“RSUs”) with a market condition to members of our executive leadership team (“ELT”) and certain other senior executives. Under the terms of these grants, the RSUs with a market condition vest over a three-year period based on the Company’s total shareholder return (“TSR”) relative to the Russell 3000 index. The awards may vest at 250% or 200% (depending on the executive) if the 75th percentile of the market condition is achieved, at 100% if the 55th percentile of the market condition is achieved, and at 0% if the relative TSR is below the 25th percentile. Vesting is interpolated on a straight-line basis for market condition achievement between the 25th and 75th percentiles. For grants to members of the ELT, the market condition will be measured on the third anniversary of the grant date. For grants to other senior executives, the market condition will be measured equally on the first, second, and third anniversary of the grant date, using calendar years 2026, 2027, and 2028, respectively, as the measurement period for each of the three tranches.

In connection with the acquisition of AMI in the third quarter of fiscal 2026, we granted awards of RSUs with a market condition to certain former employees of AMI. Under the terms of these grants, the RSUs with a market condition vest over a three-year period based on the Company’s TSR relative to the Russell 3000 index. The awards may vest at 200% if the 75th percentile of the market condition is achieved, at 100% if the 55th percentile of the market condition is achieved, and at 0% if the relative TSR is below the 25th percentile. Vesting is interpolated on a straight-line basis for market condition achievement between the 25th and 75th percentiles. For the grants to AMI’s former CEO, the market condition will be measured equally on the first, second, and third anniversary of the grant date, using calendar years 2026, 2027, and 2028, respectively, as the measurement period for each of the three tranches. For grants to other former AMI executives, the market condition will be measured on the third anniversary of the grant date.

In the first nine months of fiscal 2026, certain awards with a market condition granted in prior fiscal years vested. During the first quarter of fiscal 2026, the market condition for awards granted to certain executives in the first quarter of fiscal 2023 exceeded the 25th percentile of their TSR condition, and these awards vested at 87%. Also during the first quarter of fiscal 2026, the market condition for the first tranche of awards granted to certain executives in the first quarter of fiscal 2025 exceeded the 75th percentile of their TSR condition, and these awards vested at 200%. During the second quarter of fiscal 2026, the market condition for the second tranche of awards granted to a certain executive in the third quarter of fiscal 2024 exceeded the 75th percentile of their TSR condition, and these awards vested at 200%. During the third quarter of fiscal 2026, the market condition for awards granted to a certain executive in the third quarter of fiscal 2023 exceeded the 25th percentile of their TSR condition, and these awards vested at 96%.

For our awards with a market condition or performance condition, we incurred stock-based compensation expense of $17.7 million and $17.9 million, respectively, in the third quarter of fiscal 2026 and 2025 and $50.6 million and $27.7 million, respectively, in the first nine months of fiscal 2026 and 2025. Stock-based compensation expense for the first nine months of 2026 included $9.6 million recorded in the second quarter of fiscal 2026 resulting from updates to the expected achievement of certain awards with a performance condition. These amounts are recorded as components of total stock-based compensation expense.

The following table summarizes the activity for our awards with a market condition or performance condition:

(Shares in thousands)	Total
Balance, January 3, 2026		2,115
Granted		211
Effect of vesting multiplier		48
Vested		(126	)
Canceled		(72	)
Balance, October 3, 2026		2,176

Incentive Compensation Settled In Equity

Under our Corporate Incentive Plan, incentive payments may be made in cash or in shares of our Common Stock, or a combination of both, as determined at the discretion of the Compensation Committee of our Board of Directors. To the extent incentive payments are settled in equity under the 2023 Equity Incentive Plan, the number of shares of our Common Stock to be issued is determined by dividing the eligible employee’s incentive payment value by the 30-calendar day average closing price of our Common Stock during the period ending the day before the date of settlement. Under this methodology, the value of the shares of our Common Stock issued on the settlement date could differ from the incentive payment value accrued. Any shares of our Common Stock issued to settle incentive payments under this plan vest immediately upon issuance.

Our results for the first nine months of fiscal 2026 include our settlement in the first quarter of fiscal 2026 of a portion of the incentive compensation accrued during fiscal 2025 by issuing shares of our Common Stock with a total value of $5.8 million to certain employees.