Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2025

During the three years ended December 31, 2025, we recognized the following stock-based compensation expense:


	Year ended December 31,
	2025	2024	2023
	(in millions)
Stock-based compensation expense by type of award:
Restricted stock units (including PSUs)	$672.1	$689.1	$563.7
ESPP share issuances	27.0	18.2	15.8
Stock options	1.2	1.8	4.0
Stock-based compensation expense related to inventories	(14.4)	(10.6)	(2.3)
Total stock-based compensation expense included in “Total costs and expenses”	$685.9	$698.5	$581.2

Stock-based compensation expense by line item:
Cost of sales	$11.1	$7.5	$7.5
Research and development expenses	415.4	425.8	354.9
Selling, general and administrative expenses	259.4	265.2	218.8
Total stock-based compensation expense included in “Total costs and expenses”	685.9	698.5	581.2
Income tax effect	(128.6)	(251.6)	(167.5)
Total stock-based compensation expense, net of tax	$557.3	$446.9	$413.7

The following table sets forth our unrecognized stock-based compensation expense as of December 31, 2025, by type of

award and the weighted-average period we expect to recognize the expense:


	As of December 31, 2025
	Unrecognized Expense	Weighted-average Recognition Period
	(in millions)	(in years)
Type of award:
Restricted stock units (including PSUs)	$737.1	1.89
ESPP share issuances	5.2	0.46
Total unrecognized stock-based compensation expense	$742.3

The following table reflects the weighted-average assumptions used in our Black-Scholes option pricing

model:


	Year ended December 31,
	2025	2024	2023
Expected stock price volatility	31.81%	29.37%	28.52%
Risk-free interest rate	4.02%	4.63%	5.13%
Expected term (in years)	0.74	0.73	0.71
Expected annual dividends	—	—	—