Navitas Semiconductor CorpNVTS
Navitas Semiconductor Corp Stock Compensation Disclosure
STOCK-BASED COMPENSATION
Equity Incentive Plans
The Navitas Semiconductor Limited 2020 Equity Incentive Plan, initially adopted by the Company’s board of directors on August 5, 2020 as an amendment and restatement of the 2013 Equity Incentive Plan (“2013 Plan”), was amended and restated as the Amended and Restated Navitas Semiconductor Limited 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, RSU awards, stock appreciation rights, and other stock awards to employees, directors and consultants. Pursuant to the 2020 Plan, the exercise price for incentive stock options and non-statutory stock options is generally at least 100% of the fair market value of the underlying shares on the date of grant. Options generally vest over 48 months measured from the date of grant. Options generally expire no later than ten years after the date of grant, subject to earlier termination upon an optionee’s cessation of employment or service.
Under the terms of the 2020 Plan, the Company is authorized to issue 18,899,285 shares of common stock pursuant to awards under the 2020 Plan. As of October 19, 2021, the Company issued an aggregate of 11,276,706 stock options and non-statutory options to its employees and consultants and 4,525,344 shares of restricted stock to employees, directors and consultants under the 2020 Plan. No awards have or will be issued under the 2020 Plan after October 19, 2021. Shares of common stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021 will become authorized for issuance pursuant to awards under the 2021 Plan (as defined below).
The Navitas Semiconductor Corporation 2021 Equity Incentive Plan (the “2021 Plan”) was adopted by the Company’s board of directors on August 17, 2021 and adopted and approved by the Company’s stockholders at the Special Meeting on October 12, 2021. Under the terms of the 2021 Plan, the Company is authorized to issue, pursuant to awards granted under the 2021 Plan, (a) up to 16,334,527 shares of common stock; plus (b) up to 15,802,050 shares of common stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021; plus (c) an annual increase, effective as of the first day of each fiscal year up to and including January 1, 2031, equal to the lesser of (i) 4% of the number of shares of common stock outstanding as of the conclusion of the Company’s immediately preceding fiscal year, or (ii) such amount, if any, as the board of directors may determine. If the Company modifies stock-based awards, the modification may result in incremental compensation costs or a reversal of previously recorded accruals. Incremental compensation costs, or reductions in previously recognized costs, are measured in accordance with ASC 718-10-50-2 and are recorded in the consolidated statements of operations over the remaining service period of the awards. As of December 31, 2025, the Company has no non-statutory stock options under the 2021 Plan.
Stock-Based Compensation
The Company recognizes the fair value of stock-based compensation in its financial statements over the requisite service period of the individual grants, which generally equals a four-year vesting period, except for Long-Term Incentive Plan Stock Options discussed below. The Company uses estimates of volatility, expected term, risk-free interest rate and dividend yield in determining the fair value of these awards and the amount of compensation expense to recognize. The Company uses the straight-line method to amortize stock awards granted over the requisite service period of the award, which may be explicit or derived, unless market or performance conditions result in a graded attribution.
The following table summarizes the stock-based compensation expense recognized for the years ended December 31, 2025 and 2024 (in thousands):
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cost of goods sold | $ | 230 | $ | 328 | |||||||
| Research and development | 12,781 | 23,472 | |||||||||
| Selling, general and administrative | 1,473 | 19,231 | |||||||||
| Total stock-based compensation expense | $ | 14,484 | $ | 43,031 | |||||||
Stock Options
Generally, stock options granted under the Plans have ten year terms and vest 1/4th on the anniversary of the vesting commencement date and 1/48th monthly thereafter. Stock options with performance vesting conditions begin to vest upon achievement of the performance condition. Expense is recognized beginning in the period in which performance is considered probable. The fair value of incentive stock options and non-statutory stock options issued was estimated using the Black-Scholes model.
A summary of stock options outstanding as of December 31, 2025, and activity during the two years then ended, is presented below:
| Stock Options | Shares (In thousands) | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (In years) | ||||||||||||||
| Outstanding at December 31, 2023 | 2,657 | $ | 0.72 | 5.7 | |||||||||||||
| Exercised | (1,142) | 0.71 | |||||||||||||||
| Forfeited or expired | (16) | 1.06 | |||||||||||||||
| Outstanding at December 31, 2024 | 1,499 | $ | 0.74 | 4.7 | |||||||||||||
| Exercised | (1,399) | 0.74 | |||||||||||||||
| Outstanding at December 31, 2025 | 100 | $ | 0.72 | 3.5 | |||||||||||||
| Vested and exercisable at December 31, 2025 | 100 | $ | 0.72 | 3.5 | |||||||||||||
During the year ended December 31, 2025, the Company recognized an immaterial amount of stock-based compensation expense for the vesting of outstanding stock options. For the year ended December 31, 2024, the Company recognized $0.1 million of stock-based compensation expense for the vesting of outstanding stock options.
Long-term Incentive Plan Stock Options
The Company awarded a total of 6,500,000 performance stock options (“2021 LTIP Options”) to certain members of senior management on December 29, 2021, pursuant to the 2021 Plan. These non-statutory options were intended to be the only equity awards for the recipients over the duration of the performance period. The options vested in increments subject to achieving certain market and performance conditions, including ten share price hurdles ranging from $15 to $60 per
share, coupled with revenue and EBITDA targets, measured over a seven year performance period and expire on the tenth anniversary of the grant date. The options had an exercise price of $15.51 per share and the average fair value on the grant date was $9.14 based on the Black-Scholes model and a Monte Carlo simulation incorporating 500,000 scenarios. The weighted average contractual period remaining is 6.0 years. The Company utilized the services of a professional valuation firm to finalize these assumptions during the fiscal year ended December 31, 2023. The valuation model utilized the following assumptions:
Risk-free interest rate | 1.47 | % | |||
Expected volatility rates | 67.33 | % | |||
Expected dividend yield | — | ||||
| Cost of equity (for derived service period) | 11.77 | % | |||
Weighted-average grant date fair value of options | $9.14 | ||||
On a quarterly basis, management reviewed the probable achievement for each of the tranches in the 2021 LTIP Options in regards to revenue and EBITDA, which included assumptions for forecasted revenue and EBITDA. During the year ended December 31, 2025, the members of senior management who were recipients of the “2021 LTIP Options” left the Company. Therefore, the Company recognized a reversal of previously recorded stock-based compensation expense of $16.5 million for the year ended December 31, 2025. As there are no remaining recipients of the 2021 LTIP Options, the Company does not expect to recognize any further compensation expense associated with the award. The Company recognized $4.0 million of stock-based compensation expense for the year ended December 31, 2024 associated with the award.
The Company awarded a total of 3,250,000 performance stock options (“2022 LTIP Options”) to a member of senior management on August 15, 2022 pursuant to the 2021 Plan. The options vested in increments subject to achieving certain market and performance conditions, including ten share price hurdles ranging from $15 to $60 per share, coupled with revenue and EBITDA targets, measured over a seven year performance period and expire on the tenth anniversary of the grant date. The options had an exercise price of $10.00 per share and the average fair value on the grant date was $2.89. The Company utilized the services of a professional valuation firm to finalize these assumptions during the fiscal year ended December 31, 2023. The valuation model utilized the following assumptions:
| Risk-free interest rates | 2.82 | % | |||
| Expected volatility rates | 68.48 | % | |||
| Expected dividend yield | — | ||||
| Cost of equity (for derived service period) | 14.64 | % | |||
| Weighted-average grant date fair value of options | $2.89 | ||||
In relation to the 2022 LTIP Options, a member of senior management departed the Company prior to December 31, 2024, failing to meet the service requirement for the options. As a result, such options were forfeited and no expense was recognized for the year ended December 31, 2025. As of December 31, 2025, there were no 2022 LTIP Options remaining as the participants have left the Company.
The Company recognized $0.6 million of stock-based compensation through the date of forfeiture in 2024 and reversed the cumulative $2.1 million of stock-based compensation for the year ended December 31, 2024.
Restricted Stock Units
The Company regularly grants RSUs to employees as a component of their compensation. A summary of RSUs outstanding as of December 31, 2025, and activity during the year then ended, is presented below:
| Restricted Stock Unit Awards | Shares (In thousands) | Weighted-Average Grant Date Fair Value Per Share | |||||||||
| Outstanding at December 31, 2023 | 12,872 | $ | 6.70 | ||||||||
| Granted | 5,556 | 5.21 | |||||||||
| Vested | (7,005) | 5.68 | |||||||||
| Forfeited | (1,871) | 6.48 | |||||||||
| Outstanding at December 31, 2024 | 9,552 | $ | 6.63 | ||||||||
Granted | 8,241 | 5.38 | |||||||||
Vested | (5,701) | 5.96 | |||||||||
Forfeited | (3,390) | 6.25 | |||||||||
| Outstanding at December 31, 2025 | 8,702 | $ | 6.04 | ||||||||
During the years ended December 31, 2025 and 2024, the Company recognized $29.7 million and $34.0 million, respectively, of stock-based compensation expense for the vesting of RSUs. At December 31, 2025, unrecognized compensation cost related to unvested RSU awards totaled $36.1 million. The weighted-average period over which this remaining compensation cost is expected to be recognized is 2.0 years.
The Company implemented a yearly stock-based bonus plan in 2021 and plans to settle accrued bonus liabilities of $0.5 million related to fiscal year 2025 (included in Accrued compensation expenses on the Consolidated Balance Sheets), by issuing a variable number of fully-vested restricted stock units to its employees in 2025. Based on the closing share price of the Company’s Class A common stock of $7.14 on December 31, 2025, approximately 0.1 million shares would be issued; however the actual number of shares will be based on the share price at the date of settlement.
2022 Employee Stock Purchase Plan
In August 2022, the Company’s board of directors adopted the Company’s 2022 Employee Stock Purchase Plan (the “2022 ESPP”), subject to stockholder approval. The 2022 ESPP was approved by stockholders at the Company’s annual stockholders meeting held November 10, 2022. The Company authorized the issuance of 3,000,000 shares of common stock under the 2022 ESPP.
Under the 2022 ESPP, eligible employees are granted the right to purchase shares of common stock at the lower of 85% of the fair value at the time of offering or 85% of the fair value at the time of purchase, generally over a six-month period. The first offering period under the 2022 ESPP commenced in February 2023 and the second offering in September 2023. For the years ended December 31, 2025 and 2024, employees who elected to participate in the ESPP purchased 698,105 and 801,465 shares of common stock under the 2022 ESPP, respectively, resulting in cash proceeds to the Company of $1.5 million and $2.7 million, respectively. The purchase price was $2.07 and $2.24, each representing a 15% discount to the fair market value in March 2025 and September 2025, respectively. As of December 31, 2025, the Company had 1,242,467 remaining authorized shares available for purchase. During the year ended December 31, 2025 and 2024, the Company recognized $1.1 million and $1.8 million of stock-based compensation expense for the ESPP, respectively.
Other Share Awards
On June 10, 2022, the Company’s wholly owned subsidiary, Navitas Semiconductor Limited, acquired all of the stock of VDDTECH srl, a private Belgian company (“VDDTech”) for approximately $1.9 million in cash and stock. Among shares issued in the transaction, the Company issued approximately 113,000 restricted shares that are subject to time based vesting and issued approximately 151,000 restricted shares that are subject to time and performance based
vesting over the next and three years, respectively. These restricted shares are subject to certain individuals maintaining employment with the Company and, therefore, are accounted for under ASC 718. During the year ended December 31, 2025, the Company recorded $0.2 million of stock-based compensation expense related to 150,622 shares that vested upon employee separation. No additional compensation cost was recognized beyond the second quarter of 2025. The Company recognized $0.6 million of stock-based compensation expense related to the vesting of these shares during the year ended December 31, 2024.
Unvested Earnout Shares
A portion of the earnout shares may be issued to individuals with unvested equity awards. While the release of these shares require achievement of the earnout milestones, the individuals are required to complete the remaining service period associated with these unvested equity awards to be eligible to receive the earnout shares. These unvested earn-out shares are equity-classified awards and have an aggregated grant date fair value of $19.1 million (or $11.52 per share). During the year ended December 31, 2025 and 2024, the Company recognized $0.1 million and $0.2 million of stock-based compensation expense related to the forfeitures of earnout shares. At December 31, 2025 and 2024, there was no remaining compensation cost related to unvested earnout shares, except for forfeitures. Refer to Note 11 - “Earnout Liability”.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2022 | Apr 3, 2023 | |
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.