OmniAb, Inc.OABI
OmniAb, Inc. Stock Compensation Disclosure
9. Share-Based Compensation
Share-Based Compensation Expense
The Company recognized share-based compensation expense by function as follows:
Year Ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
General and administrative | $ | 9,649 | $ | 10,911 | ||||||||||
Research and development | 6,175 | 10,588 | ||||||||||||
| Total share-based compensation expense | $ | 15,824 | $ | 21,499 | ||||||||||
The Company recognized share-based compensation expense by award type as follows:
Year Ended December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Stock options | $ | 11,619 | $ | 14,654 | ||||||||||
| Restricted stock units | 3,594 | 5,746 | ||||||||||||
| Employee share purchase plan | 611 | 485 | ||||||||||||
| Performance restricted stock units | — | 614 | ||||||||||||
| Total share-based compensation expense | $ | 15,824 | $ | 21,499 | ||||||||||
Stock Options
Stock options granted under the 2022 Plan typically vest 1/8 on the 6-month anniversary of the date of grant, and 1/48 each month thereafter for 42 months. All option awards generally expire ten years from the date of grant.
The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted. The model assumptions include expected volatility, term, dividends, and the risk-free interest rate.
•Expected volatility: Due to the Company’s limited trading history for its common stock, the Company lacks sufficient historical data to support its expected stock price volatility. As such, the Company utilized a weighted approach by blending its own limited historical data with the volatilities of publicly traded biotechnology peers. The Company will continue to apply this approach until it has enough historical data to solely support its expected volatility.
•Expected term: The expected term represents the period of time that options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determines the expected life assumption using the simplified method which is an average of the contractual term of the option and its vesting period.
•Dividend yield: The Company bases the expected dividend yield assumption on the fact that it has never paid cash dividends and has no present intention to pay cash dividends and, therefore, used an expected dividend yield of zero.
•Risk-free interest rate: The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards.
The fair value of each option issued was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Risk-free interest rate | 4.4 | % | 4.3 | % | |||||||
| Expected volatility | 52.7 | % | 54.5 | % | |||||||
| Expected term (years) | 6.0 | 6.0 | |||||||||
| Dividend yield | — | % | — | % | |||||||
The following table summarizes stock option activity under the Company’s equity award plans:
| Shares | Weighted-average exercise price per share | Weighted-average remaining contractual life (in years) | Aggregate intrinsic value (in thousands)(1) | ||||||||||||||||||||
Outstanding at January 1, 2025 | 16,880,628 | $ | 6.40 | ||||||||||||||||||||
| Granted | 4,182,888 | $ | 3.40 | ||||||||||||||||||||
| Exercised | (11,983) | $ | 3.69 | ||||||||||||||||||||
| Cancelled/Expired | (3,100,409) | $ | 6.44 | ||||||||||||||||||||
Outstanding at December 31, 2025 | 17,951,124 | $ | 5.70 | 7.0 | $ | 87 | |||||||||||||||||
Exercisable at December 31, 2025 | 11,240,823 | $ | 6.67 | 6.2 | $ | 5 | |||||||||||||||||
_____________
(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for in the money options at December 31, 2025.
As of December 31, 2025, unrecognized stock-based compensation expense related to OmniAb options was $13.9 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.14 years. As of December 31, 2025, there was no unrecognized stock-based compensation expense related to Ligand options.
The aggregate intrinsic value of OmniAb options exercised by OmniAb service providers during the year ended December 31, 2025 was negligible. Cash received from OmniAb options exercised by OmniAb service providers during the year ended December 31, 2025 was also negligible.
There were no OmniAb options exercised by Ligand service providers during the year ended December 31, 2025.
Restricted Stock Units
RSUs generally represent the right to receive a certain number of shares of common stock subject to certain vesting conditions and other restrictions. RSUs generally vest over three years. The fair value of restricted stock is determined by the closing market price on the grant date.
The following table summarizes RSU activity during the year ended December 31, 2025 under the Company’s equity awards plans:
| Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested balance at January 1, 2025 | 1,761,208 | $ | 5.23 | ||||||||
| Granted | 1,133,951 | $ | 3.30 | ||||||||
| Vested | (894,362) | $ | 5.41 | ||||||||
| Forfeited | (371,403) | $ | 4.67 | ||||||||
Unvested balance at December 31, 2025 | 1,629,394 | $ | 3.91 | ||||||||
As of December 31, 2025, unrecognized stock-based compensation expense related to OmniAb RSUs was $3.9 million, which is expected to be recognized over a remaining weighted-average period of approximately 1.28 years.
The aggregate intrinsic value of OmniAb RSUs vested for OmniAb service providers during the year ended December 31, 2025 was $2.4 million.
Performance Restricted Stock Units
PRSUs generally represent the right to receive a certain number of shares of common stock based on the achievement of certain corporate performance or market goals and continued employment during the vesting period.
The Company’s PRSUs contain a market condition dependent upon the Company’s relative and absolute total stockholder return over a three-year period, with a payout range of 0% to 200% of the target shares granted. Share-based compensation expense for these PRSUs is measured using the Monte-Carlo valuation model and is not adjusted for the achievement, or lack thereof, of the market conditions.
During the year ended December 31, 2025, the PRSUs were achieved at a 158% achievement level.
The following table summarizes the PRSU activity during the year ended December 31, 2025, under the Company’s equity awards plans:
Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested balance at January 1, 2025 | 94,749 | $ | 16.11 | ||||||||
| Granted | — | $ | — | ||||||||
| Vested | (149,882) | $ | 16.11 | ||||||||
| Change in units based on performance achievement | 55,133 | $ | 16.11 | ||||||||
| Forfeited | — | $ | — | ||||||||
Unvested balance at December 31, 2025 | — | $ | — | ||||||||
As of December 31, 2025, there is no unrecognized stock-based compensation expense related to PRSUs.
Employee Stock Purchase Plan
Under the Company’s 2022 Employee Stock Purchase Plan (the “ESPP”), eligible employees are entitled to purchase shares of common stock at a discount with accumulated payroll deductions. The ESPP provides for a series of overlapping 24-month offering periods comprising four six-month purchase periods. The initial offering period under the 2022 ESPP is longer than 24 months, commencing November 1, 2022 and ending on November 29, 2024. The purchase price for shares of common stock purchased under the ESPP is equal to 85% of the lesser of the fair market value of the Company’s common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of each six month purchase period in the applicable offering period.
As of December 31, 2025, the aggregate number of shares of our common stock that may be issued pursuant to rights granted under the ESPP was 3,644,448 shares of our common stock. In addition, on the first day of each calendar year beginning on January 1, 2023 and ending on (and including) January 1, 2032, the number of shares available for issuance under the ESPP will be increased by a number of shares equal to the lesser of (i) 1% of the fully diluted shares outstanding on the final day of the immediately preceding calendar year, and (ii) such smaller number of shares as determined by the board of directors.
The fair value of ESPP shares issued to employees was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Risk-free interest rate | 3.8 | % | 4.3 | % | |||||||
| Expected volatility | 59.7 | % | 55.1 | % | |||||||
| Expected term (years) | 1.4 | 1.3 | |||||||||
| Dividend yield | — | % | — | % | |||||||
As of December 31, 2025, there was $0.4 million of unrecognized compensation expense associated with the ESPP, which is expected to be recognized over an estimated weighted-average period of 1.00 year.
During the year ended December 31, 2025, there were 398,562 shares issued pursuant to the ESPP.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 4, 2026 | Showing above |
| 2024 | Mar 18, 2025 | |
| 2023 | Mar 25, 2024 | |
| 2022 | Mar 30, 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.