ACM Research, Inc.ACMR
ACM Research, Inc. Stock Compensation Disclosure
STOCK-BASED COMPENSATION
ACM’s stock-based compensation consists of employee and non-employee awards issued under its 1998 Stock Option Plan and its 2016 Omnibus Incentive Plan. The vesting condition may consist of service period condition or certain performance conditions, as determined by the Board of Directors. The fair value of the stock options granted with a service period based condition and/or performance condition is estimated at the date of grant using the Black-Scholes option pricing model. The fair value of the stock options granted with a market based condition is estimated at the date of grant using the Monte Carlo simulation model.
Employee Awards
The following table summarizes the ACM’s employee share option activities:
| Number of Option Shares | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||||||||||||
| Outstanding at December 31, 2021 | 8,402,247 | $ | 2.45 | $ | 5.88 | 6.53 years | |||||||||||||||||
| Granted | 1,653,300 | 10.31 | 22.41 | ||||||||||||||||||||
| Exercised | (416,546) | 1.20 | 2.97 | ||||||||||||||||||||
| Forfeited/cancelled | (427,360) | 11.41 | 25.24 | ||||||||||||||||||||
| Outstanding at December 31, 2022 | 9,211,641 | $ | 3.58 | $ | 8.24 | 6.36 years | |||||||||||||||||
| Granted | 2,230,500 | 10.38 | 13.91 | ||||||||||||||||||||
| Exercised | (1,080,952) | 0.90 | 2.28 | ||||||||||||||||||||
| Forfeited/cancelled | (362,552) | 11.24 | 22.92 | ||||||||||||||||||||
| Outstanding at December 31, 2023 | 9,998,637 | $ | 5.15 | $ | 9.47 | 6.17 years | |||||||||||||||||
| Granted | 461,000 | 15.31 | 20.69 | ||||||||||||||||||||
| Exercised | (1,523,619) | 1.91 | 4.10 | ||||||||||||||||||||
| Forfeited/cancelled | (84,423) | 11.47 | 24.29 | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 8,851,595 | $ | 6.18 | $ | 10.84 | 5.81 years | |||||||||||||||||
| Vested and exercisable at December 31, 2024 | 5,528,459 | $ | 4.73 | $ | 9.23 | 4.81 years | |||||||||||||||||
As of December 31, 2024, $23,133 of total unrecognized employee stock-based compensation expense, net of estimated forfeitures, related to stock-based awards for ACM was expected to be recognized over a weighted-average period of 3.30 years. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.
The aggregate intrinsic value of options exercised in the years ended December 31, 2024, 2023 and 2022 was $35,675, $15,457, and $6,429 respectively. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2024 were $53,004 and $42,841, respectively.
The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023 and 2022 were $26,137, $18,378 and $13,137, respectively.
The fair value of options granted to employees is estimated on the grant date using the Black-Scholes valuation model with the following assumptions:
| Year ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Fair value of common stock(1) | $18.67-$31.92 | $11.85-$17.23 | $16.83-$25.45 | ||||||||||||||
| Expected term in years(2) | 5.50-6.25 | 5.50-6.25 | 5.50-6.25 | ||||||||||||||
| Volatility(3) | 83.85-85.48% | 84.95-86.45% | 49.43-50.87% | ||||||||||||||
| Risk-free interest rate(4) | 3.80-4.49% | 4.16-4.69% | 1.70-3.04% | ||||||||||||||
| Expected dividend(5) | 0 | % | 0 | % | 0 | % | |||||||||||
(1)Fair value of Class A common stock value was the closing market price of the Class A common stock on the grant date.
(2)Expected term of share options is based on the average of the vesting period and the contractual term for each grant.
(3)Volatility is calculated based on the historical volatility of ACM in the period equal to the expected term of each grant.
(4)Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant.
(5)Expected dividend is assumed to be 0% as ACM has no history or expectation of paying a dividend on its common stock.
Non-employee Award
The following table summarizes the ACM's non-employee share option activities:
| Number of Option Shares (1) | Weighted Average Grant Date Fair Value (1) | Weighted Average Exercise Price (1) | Weighted Average Remaining Contractual Term | ||||||||||||||||||||
| Outstanding at December 31, 2021 | 2,067,018 | $ | 0.33 | $ | 0.97 | 3.98 years | |||||||||||||||||
| Exercised | (563,808) | 0.21 | 0.51 | ||||||||||||||||||||
| Forfeited/cancelled | (19,552) | 0.21 | 0.48 | ||||||||||||||||||||
| Outstanding at December 31, 2022 | 1,483,658 | 0.38 | 1.15 | 3.68 years | |||||||||||||||||||
| Exercised | (299,934) | 0.24 | 0.55 | ||||||||||||||||||||
| Forfeited/cancelled | (12,929) | 0.22 | 0.50 | ||||||||||||||||||||
| Outstanding at December 31, 2023 | 1,170,795 | $ | 0.42 | $ | 1.31 | 2.66 years | |||||||||||||||||
| Exercised | (379,094) | 0.22 | 0.57 | ||||||||||||||||||||
| Forfeited/cancelled | (7,569) | 0.22 | 0.50 | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 784,132 | $ | 0.52 | $ | 1.68 | 2.12 years | |||||||||||||||||
| Vested and exercisable at December 31, 2024 | 784,132 | $ | 0.52 | $ | 1.68 | 2.12 years | |||||||||||||||||
As of December 31, 2024, all of the non-employee share options were fully-vested. The aggregate intrinsic value of options exercised in the years ended December 31, 2024, 2023 and 2022 was $7,901, $3,796 and $9,110, respectively. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2024 were $10,523 and $10,523, respectively.
The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023 and 2022 were $408, $479, and $501, respectively.
ACM Shanghai 2019 Option Grants
In January 2020, ACM Shanghai adopted a 2019 Stock Option Incentive Plan (the “2019 Subsidiary Stock Option Plan”) that provides for, among other incentives, the granting to officers, directors, employees of options to purchase shares of ACM Shanghai’s common stock. The vesting conditions consist of service periods conditions and performance conditions related to certain earning targets determined by the Board of Directors of ACM Shanghai.
The following table summarizes the ACM Shanghai employee stock option activities:
| Number of Option Shares in ACM Shanghai | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||||||||||||
| Outstanding at December 31, 2021 | 5,377,500 | $ | 0.24 | $ | 2.04 | 2.50 years | |||||||||||||||||
| Forfeited/cancelled | — | — | — | ||||||||||||||||||||
| Outstanding at December 31, 2022 | 5,377,500 | $ | 0.23 | $ | 1.93 | 1.76 years | |||||||||||||||||
| Exercised | (2,150,309) | 0.20 | 1.85 | ||||||||||||||||||||
| Forfeited/cancelled | (92,308) | 0.22 | 1.85 | ||||||||||||||||||||
| Outstanding at December 31, 2023 | 3,134,883 | $ | 0.24 | $ | 1.85 | 0.85 years | |||||||||||||||||
| Exercised | (3,033,344) | 0.20 | 1.83 | ||||||||||||||||||||
| Forfeited/cancelled | (101,539) | 0.20 | 1.83 | ||||||||||||||||||||
| Outstanding at December 31, 2024 | $ | — | $ | — | $ | — | 0.00 years | ||||||||||||||||
| Vested and exercisable at December 31, 2024 | $ | — | $ | — | $ | — | 0.00 years | ||||||||||||||||
The aggregate intrinsic value of options exercised in the years ended December 31, 2024 and 2023 and 2022 was $25,946, $31,144 and nil, respectively. There were nil options outstanding and exercisable as of December 31, 2024.
The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023, and 2022 were nil, $99, and $568, respectively.
ACM Shanghai 2023 Option Grants
In June 2023, ACM Shanghai adopted a 2023 Stock Option Incentive Plan ( the "2023 Subsidiary Stock Option Plan”) that provides for, among other incentives, the granting to officers, directors, employees of options to purchase shares of ACM Shanghai’s common stock. The vesting conditions consist of service periods conditions and performance conditions related to certain sales and research and development progress targets determined by the Board of Directors of ACM Shanghai.
The following table summarizes the ACM Shanghai 2023 Subsidiary Stock Option Plan’s stock option activities:
| Number of Option Shares in ACM Shanghai | Weighted Average Grant Date Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | ||||||||||||||||||||
| Outstanding at December 31, 2022 | — | $ | — | $ | — | 0.00 years | |||||||||||||||||
| Granted | 10,648,500 | 9.49 | 7.06 | ||||||||||||||||||||
| Forfeited/cancelled | (73,000) | 9.49 | 7.06 | ||||||||||||||||||||
| Outstanding at December 31, 2023 | 10,575,500 | $ | 9.49 | $ | 7.06 | 3.09 years | |||||||||||||||||
| Granted | 1,391,000 | 6.04 | 7.00 | ||||||||||||||||||||
| Forfeited/cancelled | (362,190) | 9.08 | 7.00 | ||||||||||||||||||||
| Outstanding at December 31, 2024 | 11,604,310 | $ | 9.01 | $ | 7.00 | 2.48 years | |||||||||||||||||
| Vested and exercisable at December 31, 2024 | 2,559,435 | $ | 8.50 | $ | 6.99 | 0.59 years | |||||||||||||||||
The fair value of options granted to employees is estimated on the grant date using the Black-Scholes valuation with following assumptions:
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||
| Fair value of common stock(1) | $4.93-$6.89 | $14.87 | ||||||
| Expected term in years(2) | 1.5-4.5 | 1.5-4.5 | ||||||
| Volatility(3) | 45.92%-56.18% | 60.00%-60.60% | ||||||
| Risk-free interest rate(4) | 1.50%-2.75% | 1.50%-2.75% | ||||||
| Expected dividend (5) | — | % | — | % | ||||
(1) Equal to closing value on the grant date.
(2) Expected term of share options is based on the average of the vesting period and the contractual term for each grant.
(3) Volatility is calculated based on the historical volatility of ACM in the period equal to the expected term of each grant.
(4) Risk-free interest rate is based on the yields of RMB deposit in mainland China with maturities similar to the expected term of the share options in effect at the time of grant.
(5) Expected dividend is assumed to be 0% as the impact is adjusted on the value of share of common stock.
The aggregate intrinsic value of options exercised in the years ended December 31, 2024 and 2023 was $20,712 and nil, respectively. The aggregate intrinsic value of options outstanding as of December 31, 2024 and 2023 was $62,244 and $81,981, respectively.
As of December 31, 2024, $40,490 of total unrecognized employee stock-based compensation expense, net of estimated forfeitures, related to ACM Shanghai stock-based awards were expected to be recognized over a weighted-average period of 1.5 years. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.
The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023 and 2022 were $21,748, nil, and nil, respectively.
The following table summarizes the components of stock-based compensation expense included in the consolidated statements of comprehensive income (loss):
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Stock-Based Compensation Expense: | |||||||||||||||||
| Cost of revenue | $ | 2,385 | $ | 1,406 | $ | 520 | |||||||||||
| Sales and marketing expense | 10,552 | 5,684 | 1,877 | ||||||||||||||
| Research and development expense | 14,112 | 8,459 | 2,565 | ||||||||||||||
| General and administrative expense | 22,527 | 11,789 | 2,768 | ||||||||||||||
| $ | 49,576 | $ | 27,338 | $ | 7,730 | ||||||||||||
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
| Stock-based compensation expense by type: | |||||||||||||||||
| Employee stock option plan | $ | 10,469 | $ | 6,213 | $ | 7,346 | |||||||||||
| Non-employee stock option plan | 30 | 46 | 46 | ||||||||||||||
| 2019 and 2023 Subsidiary stock option plans | 39,077 | 21,079 | 338 | ||||||||||||||
| $ | 49,576 | $ | 27,338 | $ | 7,730 | ||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Mar 3, 2025 | Showing above |
| 2022 | Mar 2, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.