Equity-based compensation
A summary of equity-based compensation expense during the years ended December 31, 2025, 2024, and 2023 is as follows (in thousands):
Year Ended December 31,
202520242023
Stock options$23,375 $27,971 $23,989 
Equity-based compensation expense$23,375 $27,971 $23,989 
Stock options
The Company granted additional stock options of 0.6 million, 0.8 million, and 0.9 million to its Board of Directors and certain key employees in 2025, 2024, and 2023, respectively. Board of Directors stock option awards have a three-year service period and vest in 12 equal quarterly installments over the service period. Employee stock options awards granted in 2021 have a four-year service period and vest in three equal annual installments, beginning at the end of the second year of service. Employee awards granted beginning in 2022 have a three-year service period and vest in equal annual installments beginning at the end of the first year of service. Both Board of Director and employee stock option awards have a maximum contract term of ten years from the grant date. Upon exercise of an option, the Company issues a new share of stock.
The Company determines the grant date fair value of its stock option awards using the Black-Scholes valuation model and has elected to recognize forfeitures as they occur. A summary of the weighted average assumptions used for valuing stock options granted in the periods 2025, 2024, and 2023 are as follows:
Year Ended December 31,
202520242023
Expected volatility55%
55%
60% - 65%
Expected dividend yield%%%
Expected term (in years)
2.69 - 4.75
2.75 - 4.75
2.75 - 4.75
Risk-free interest rate
3.44% - 4.27%
3.46%- 4.58%
3.44% - 4.06%

A summary of stock option activity for the year ended December 31, 2025 is as follows (in thousands except per-share amounts):
Stock OptionsWeighted-average Exercise PriceAggregate Intrinsic ValueWeighted-average Remaining Contractual Life (Years)
Outstanding as of December 31, 2024
3,263 $68.50 
Granted637 106.42 
Exercised(309)43.75 
Forfeited(56)68.02 
Expired(100)125.79 
Outstanding as of December 31, 2025
3,436 $76.11 $51,810 6.88
Options vested and exercisable as of December 31, 2025
2,091 $71.09 $42,923 5.90
Options unvested as of December 31, 2025
1,344 $83.93 $8,887 8.40

A summary of stock option activity for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands except per-share amounts):
Year Ended December 31,
202520242023
Weighted-average grant-date fair value of options granted$46.36 $32.41 $19.08 
Total intrinsic value of options exercised$21,435 $27,106 $16,424 
Total fair value of shares vested during the year$28,555 $24,645 $23,269 

A summary of unvested stock option activity for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands except per-share amounts):
Stock OptionsWeighted Average Grant Date Fair Value
Unvested as of December 31, 2024
1,657 $30.10 
Vested(894)31.94 
Granted637 46.36 
Forfeited(56)31.86 
Unvested as of December 31, 2025
1,344 $36.51 
As of December 31, 2025, total unrecognized compensation expense related to unvested stock options was $29.7 million, which is expected to be recognized over a weighted average period of 1.81 years. Cash received from stock option exercises during the year ended December 31, 2025 was $13.6 million.

Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Mar 3, 2025
2023Feb 22, 2024
2022Feb 27, 2023
2021Feb 28, 2022
2019Mar 16, 2020

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.