Stock-Based Compensation

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

Stock Option, Restricted Stock Units and Equity Incentive Plans

The Company has historically had various stock incentive plans and agreements that provide for the issuance of non-qualified and incentive stock options and restricted stock units as well as other equity awards. Such awards may be granted by the Company’s Board of Directors to certain of the Company’s employees, directors and consultants.

Options granted to employees and non-employees under these plans expire no later than ten years from the date of grant. Options and restricted stock units generally become exercisable or vest over a four year period (other than options and restricted stock units awarded annually to non-employee directors, which generally vest over one year, and options and restricted stock units awarded to non-employee directors upon initial appointment to the Vericel Board of Directors, which generally vest over a three year period), under a graded-vesting methodology for stock options and annually on the anniversary grant date for restricted stock units, following the date of grant. The Company generally issues new shares upon the exercise of stock options or vesting of restricted stock units.

The Vericel Corporation 2022 Omnibus Incentive Plan (“2022 Plan”) was approved on April 27, 2022, and the Vericel Corporation Amended and Restated 2022 Omnibus Incentive Plan (“Amended and Restated 2022 Plan”) was approved on April 30, 2025. The Amended and Restated 2022 Plan provides incentives through the grant of stock options, stock appreciation rights, restricted stock awards and restricted stock units. The exercise price of stock options granted under the Amended and Restated 2022 Plan shall not be less than the fair market value of the Company’s common stock on the date of grant. The Amended and Restated 2022 Plan amended and restated the 2022 Plan, which replaced the 1992 Stock Option Plan, the 2001 Stock Option Plan, the Amended and Restated 2004 Equity Incentive Plan, the 2009 Second Amended and Restated Omnibus Incentive Plan, the 2017 Omnibus Incentive Plan and the Amended and Restated 2019 Omnibus Incentive Plan (collectively the “Prior Plans”), and no new grants have been granted under the Prior Plans after approval of the 2022 Plan. However, the expiration or forfeiture of options previously granted under the Prior Plans will increase the number of shares available for issuance under the Amended and Restated 2022 Plan.

As of December 31, 2025, there were 5,060,613 shares available for future grant under the Amended and Restated 2022 Plan.

Stock Compensation Expense

Non-cash stock-based compensation expense (service-based stock options, restricted stock units and employee stock purchase plan) is summarized in the following table:


	Years Ended December 31,
(in thousands)	2025		2024		2023
Cost of product sales	$	4,217	$	3,911	$	2,970
Research and development	4,680		4,068		3,705
Selling, general and administrative	29,870		28,516		25,650
Total non-cash stock-based compensation expense	$	38,767	$	36,495	$	32,325

Service-Based Stock Options

The fair value of each service-based stock option grant for the reported periods is estimated on the date of the grant using the Black-Scholes option-pricing model using the assumptions noted in the following table:


	Year Ended December 31,
Service-Based Stock Options	2025	2024	2023
Expected dividend rate	—%	—%	—%
Expected stock price volatility	54.2 - 58.2%	57.3 - 62.5%	62.5 - 66.7%
Risk-free interest rate	3.6 - 4.5%	3.4 - 4.7%	3.40 -4.7%
Expected life (years)	5.3	5.5	5.5
Weighted-average grant date fair value	$28.18	$28.05	$18.85

The following table summarizes the activity for service-based stock options for the indicated periods:


Service-Based Stock Options	Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (Thousands)
Outstanding at December 31, 2024	5,764,107	$	31.22	6.1	$	137,365
Granted	620,373	51.34
Exercised	(675,645)	18.48
Expired	(81,074)	36.84
Forfeited	(85,220)	35.29
Outstanding at December 31, 2025	5,542,541	$	34.88	5.7	$	42,291
Exercisable at December 31, 2025	4,439,220	$	32.09	5.0	$	41,007

As of December 31, 2025, 5,412,478 shares are vested and expected to vest. As of December 31, 2025, there was approximately $16.5 million of total unrecognized compensation cost related to non-vested service-based stock options granted under the Amended and Restated 2022 Plan and the Prior Plans. That cost is expected to be recognized over a weighted-average period of 2.7 years.

The total intrinsic value of stock options exercised for the years ended December 31, 2025, 2024, and 2023 was $19.4 million, $50.1 million and $7.5 million, respectively.

Restricted Stock Units

The following table summarizes the activity for restricted stock units for the indicated periods:


Restricted Stock Units	Number of Restricted Stock Units	Weighted-Average Grant Date Fair Value
Outstanding at December 31, 2024	1,135,261	$	40.80
Granted	607,991	50.48
Vested	(401,140)	40.78
Forfeited	(158,117)	45.41
Unvested at December 31, 2025	1,183,995	$	45.17

The weighted-average grant-date fair value of restricted stock units granted during the years ended December 31, 2025, 2024, and 2023 was $50.48, $48.20 and $30.36, respectively.

At December 31, 2025 the total unrecognized compensation cost related to the restricted stock units was $30.3 million, and the weighted-average period over which that cost is expected to be recognized was 2.6 years. The total fair value of restricted stock units vested in the years ended December 31, 2025 and 2024 was $20.9 million and $15.7 million respectively.

Employee Stock Purchase Plan

Employees are able to purchase stock under the ESPP. The ESPP allows for the issuance of an aggregate of 2.0 million shares of common stock of which 935,238 have been issued since the inception of the benefit in 2015. Participation in this plan is available to substantially all employees. The ESPP is a compensatory plan accounted for under the expense recognition provisions of the share-based payment accounting standards. Compensation expense is recorded based on the fair market value of the purchase options at the grant date, which corresponds to the first day of each purchase period and is amortized over the purchase period.