Note 9 - Stock-based Compensation

3 Months Ended

Apr. 04, 2026

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 9 - Stock-Based Compensation

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

	Three Months Ended
	April 4,		March 29,
(In thousands)	2026		2025
Cost of revenue	$	1,673	$	1,139
Research and development		11,785		9,603
Selling, general, and administrative		14,614		9,631
Total stock-based compensation expense	$	28,072	$	20,373

Market-Based and Performance-Based Stock Compensation

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 total shareholder return ("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%.

For our awards with a market condition or performance condition, we incurred stock-based compensation expense of $10.6 million and $4.2 million, respectively, in the first quarter of fiscal 2026 and 2025. 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		—
Effect of vesting multiplier		31
Vested		(84	)
Canceled		(50	)
Balance, April 4, 2026		2,012

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.

In the first quarter of fiscal 2026, we settled 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.