Fluence Energy, Inc.FLNC
Fluence Energy, Inc. Stock Compensation Disclosure
Stock-Based Compensation
The Option Plan
In 2020, Fluence Energy, LLC established the 2020 Unit Option Plan (the “Option Plan”) whereby employees, directors, and consultants, were originally granted non-qualified options to purchase Class A-1 units of Fluence Energy, LLC. As of September 30, 2021, the Company determined that achievement of the performance conditions related to awards granted under the Option Plan was not probable and therefore, no expense was recognized for the non-qualified options during the fiscal year ended September 30, 2021.
The completion of the IPO on November 1, 2021 resulted in achievement of the performance condition for the majority of the underlying awards granted under the Option Plan. In connection with the IPO, the non-qualified options were converted into non-qualified stock options to purchase shares of Class A common stock of Fluence Energy, Inc. Non-qualified stock options under the Option Plan have a contractual term of ten years from the date of grant and an exercise price of $2.45. The Company estimated the fair value of the awards using the Black-Scholes option-pricing model. The outstanding unexercised options will continue to be governed by the terms of the existing Option Plan. The Option Plan is accounted for as an equity plan. The Company will not grant any further awards under the Option Plan.
The following table summarizes the unit option activity under the Option Plan:
| Number of options | Weighted average exercise price per option | Weighted average remaining contractual term (years) | |||||||||
Outstanding as of October 1, 2024 | 3,100,158 | $ | 2.45 | 6.51 | |||||||
| Exercised | (885,853) | 2.45 | — | ||||||||
| Forfeited | (2,445) | 2.45 | — | ||||||||
Outstanding and exercisable as of September 30, 2025 | 2,211,860 | $ | 2.45 | 5.37 | |||||||
The total intrinsic value of the stock options outstanding under the Option Plan during the fiscal year ended September 30, 2025 was $18.5 million. As of September 30, 2025, the Option Plan had no unrecognized stock compensation expense.
The total intrinsic value of the stock options issued under the Option Plan that were exercised during the years ended September 30, 2025, 2024 and 2023, was $7.4 million, $40.0 million and $56.3 million, respectively.
Phantom Units
Employees, directors, and consultants were granted compensation under Fluence Energy, LLC’s Phantom Equity Incentive Plan (the “Phantom Incentive Plan”). As of September 30, 2021, the Company determined that achievement of the performance conditions related to awards granted under the Phantom Incentive Plan was not probable and therefore, no expense was recognized for the phantom units during the fiscal year ended September 30, 2021. The completion of the IPO on November 1, 2021 resulted in achievement of the performance condition for the majority of the underlying awards granted under the Phantom Incentive Plan. At the completion of the IPO, a portion of the awards to the Company’s officers were modified, extending out the vesting period. The Company will not make any further awards under the Phantom Incentive Plan. As of September 30, 2025 and 2024, there were no phantom unit awards previously issued outstanding and there is no unrecognized stock compensation expense.
2021 Stock-Based Compensation Plan
During fiscal year 2021, the Company established the 2021 Incentive Award Plan (the “2021 Incentive Plan”) which reserves 9,500,000 shares of Class A common stock of Fluence Energy, Inc. for issuance to management, other employees, consultants, and board members of the Company. The 2021 Incentive Plan governs both equity-based and cash-based awards, including incentive stock options, non-qualified stock options, performance share units (“PSUs”), and restricted stock units (“RSUs”). Stock-based awards currently issued pursuant to the 2021 Incentive Plan that are expected to be settled by issuing shares of Class A common stock are recorded as equity awards. The Company accounts for forfeitures as they occur.
Restricted Stock Units
RSUs granted under the 2021 Incentive Plan vest ratably at one-third annually on the anniversary of the grant date over a three-year period. The Company generally expenses the grant date fair value of the awards on a straight-line basis over each of the separately vesting tranches within a given grant. There is no contractual term on the RSUs granted under the 2021 Incentive Plan. The Company estimated the fair value of the awards using the market value of our Class A common stock. The market value of our Class A common stock is calculated using the closing price of our Class A common stock on the date of grant. The following table summarizes activity under the 2021 Incentive Plan for the fiscal year ended September 30, 2025:
| Number of RSUs | Weighted Average Grant Date Fair Values | |||||||
Outstanding as of October 1, 2024 | 1,760,418 | $ | 20.57 | |||||
| Granted | 1,830,935 | 14.75 | ||||||
Vested | (920,873) | 20.45 | ||||||
| Forfeited | (438,160) | 17.67 | ||||||
Outstanding as of September 30, 2025 | 2,232,320 | $ | 16.41 | |||||
The granted RSUs generally vest in three equal annual installments. Total compensation cost related to non-vested awards not yet recognized as of September 30, 2025, was $15.1 million and is expected to be recognized over a weighted average period of 1.0 years.
Non-Qualified Stock Options
During the fiscal year ended September 30, 2025, the Company granted 310,422 non-qualified stock options to purchase Class A common stock under the 2021 Incentive Plan with a weighted average exercise price of $16.07. Non-qualified stock options under the 2021 Incentive Plan have a contractual term of ten years from the date of grant. The Company estimated the fair value of the awards using the Black-Scholes option-pricing model. The non-qualified stock options granted under the 2021 Incentive Plan vest ratably at one-third annually on the anniversary of the grant date over a three-year period pursuant to the terms of their applicable award agreements. The Company generally expenses the grant date fair value of the awards on a straight-line basis over each of the separately vesting tranches within a given grant.
Number of Options | Weighted average exercise price per share | Weighted average remaining contractual term (years) | |||||||||
Outstanding as of October 1, 2024 | 187,379 | $ | 21.70 | 9.29 | |||||||
| Granted | 310,422 | 16.07 | 9.22 | ||||||||
Vested | — | — | — | ||||||||
| Forfeited | (27,908) | 19.28 | — | ||||||||
Outstanding as of September 30, 2025 | 469,893 | 18.12 | 8.88 | ||||||||
The total intrinsic value of the non-qualified stock options outstanding during the fiscal year ended September 30, 2025 was $0.0 million. Total compensation cost related to non-vested awards not yet recognized as of September 30, 2025 totaled $1.8 million, and is expected to be recognized over a weighted average period of 1.1 years.
There were no non-qualified stock options issued under the 2021 Incentive Plan that are exercisable as of September 30, 2025 and 2024. The number of options expected to vest is equal to the number of options granted, which reflects no expected forfeiture.
Performance Share Units
During the fiscal year ended September 30, 2025, the Company granted 690,147 PSUs redeemable for Class A common stock under the 2021 Incentive Plan. The Company has issued two rounds of PSU grants under the 2021 Incentive Plan, the first commencing at the start of fiscal year 2024 and the second commencing at the start of fiscal year 2025. The PSUs for the 2024-2026 performance cycle and the 2025-2027 performance cycle are both earned based on (i) the achievement of two financial performance metrics: cumulative Adjusted EBITDA (65% weight) and cumulative revenue (35% weight), over a two-year performance period beginning October 1st in the year of grant through September 30th in the second year after grant, and (ii) service-based vesting based on continued employment from the date of grant through September 30th in the third year after grant. The performance targets for cumulative revenue and cumulative Adjusted EBITDA are set by the Compensation and Human Resources Committee of the Company’s Board of Directors. PSUs are considered fully vested when both the performance and service based requirements are met in accordance with the vesting requirements and will be settled in Class A common stock no more than 60 days after the end of the third fiscal year. The awards can be paid out in a range of 50% to 200%, with 0% paid out for below-threshold performance, based on the achievement of the performance criteria and upon continued service through the performance period. The Company estimated the fair value of the awards using the market value of our Class A common stock. The market value is calculated using the closing price of our Class A common stock on the date of grant. The Company monitors the achievement of the performance criteria and expenses ratably the grant date fair value of the awards probable to vest over the requisite service period. If there are changes to the amount of probable awards to vest based on achievement of performance criteria, the related stock-based compensation expense may be significantly increased or reduced in the period that our estimate changes.
Number of Units | Weighted Average Grant Date Fair Values | |||||||
| Outstanding as of October 1, 2024 | 391,032 | $ | 21.61 | |||||
| Granted | 690,147 | 15.69 | ||||||
Vested | — | — | ||||||
| Forfeited | (179,663) | 18.17 | ||||||
| Outstanding as of September 30, 2025 | 901,516 | $ | 17.77 | |||||
As of September 30, 2025, 901,516 PSUs previously issued remained outstanding with estimated unrecognized stock compensation expense of $0.0 million.
Other
In connection with the acquisition of Nispera AG in 2022, Fluence issued 531,202 shares of restricted stock to Nispera’s management team. The post combination expense to the Company as a result of the business combination was approximately $6.9 million which was recognized on a straight-line basis over the remaining service period that was stipulated in each holder’s original restricted stock agreement.
Stock-based compensation expense
The stock-based compensation expense was recorded as follows (in thousands):
Fiscal Year Ended September 30, | |||||||||||||||||
in thousands (a) | 2025 | 2024 | 2023 | ||||||||||||||
| Cost of goods and services | $ | 2,597 | $ | 4,079 | $ | 4,164 | |||||||||||
| Research and development | 972 | 2,309 | 5,062 | ||||||||||||||
| Sales and marketing | 1,792 | 1,486 | 2,024 | ||||||||||||||
| General and administrative | 14,289 | 16,001 | 15,670 | ||||||||||||||
| Total stock-based compensation expense | $ | 19,650 | $ | 23,875 | $ | 26,920 | |||||||||||
(a) Includes incentive awards that will be settled in shares and incentive awards that will be settled in cash.
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.