QuidelOrtho CorpQDEL
QuidelOrtho Corp Stock Compensation Disclosure
Stock-based Compensation
Stock-based compensation expense was as follows:
| Fiscal Year Ended | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Cost of sales, excluding amortization of intangibles | $ | 5.9 | $ | 5.5 | $ | 4.3 | |||||||||||
| Selling, marketing and administrative | 32.9 | 26.0 | 37.7 | ||||||||||||||
| Research and development | 2.9 | 3.4 | 4.9 | ||||||||||||||
| 3.8 | 7.5 | 16.9 | |||||||||||||||
| Total stock-based compensation expense | $ | 45.5 | $ | 42.4 | $ | 63.8 | |||||||||||
| Income tax (expense) benefit | $ | (1.7) | $ | (7.1) | $ | 1.7 | |||||||||||
The table above includes $12.2 million of compensation expense related to liability-classified awards for fiscal year ended 2023, which has been settled in cash. These awards primarily represent the $7.14 per share cash settled portion of the replacement awards issued in connection with the Combinations. Cash paid to settle liability-classified awards was $7.3 million for fiscal year ended 2023. Amounts related to fiscal years ended 2025 and 2024 were not material.
For fiscal years ended 2025, 2024 and 2023, the Company recorded $0.6 million, $0.6 million and $1.5 million in stock-based compensation expense, respectively, associated with the Employee Deferred Compensation Plan described in “—Note 11. Stockholders’ Equity.”
Stock Options
A summary of the status of stock option activity for fiscal year ended 2025 is as follows:
(In thousands, except price data) | Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Term (In Years) | Aggregate Intrinsic Value | |||||||||||||||||||
| Outstanding at December 29, 2024 | 1,099 | $ | 87.22 | ||||||||||||||||||||
| Granted | 273 | 32.52 | |||||||||||||||||||||
| Exercised | (70) | 22.05 | |||||||||||||||||||||
| Cancellations | (521) | 96.45 | |||||||||||||||||||||
| Outstanding at December 28, 2025 | 781 | $ | 67.79 | 6.99 | $ | 179 | |||||||||||||||||
| Vested and expected to vest at December 28, 2025 | 759 | $ | 68.77 | 6.93 | $ | 179 | |||||||||||||||||
| Exercisable at December 28, 2025 | 384 | $ | 96.09 | 5.01 | $ | 179 | |||||||||||||||||
Compensation expense related to stock options granted is recognized ratably over the service vesting period for the entire option award. The estimated fair value of each stock option was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for the option grants:
| Fiscal Year Ended | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 3.94 | % | 4.60 | % | 3.52 | % | |||||||||||
| Expected option life (in years) | 5.03 | 5.69 | 5.53 | ||||||||||||||
| Volatility rate | 60 | % | 59 | % | 57 | % | |||||||||||
| Dividend rate | 0 | % | 0 | % | 0 | % | |||||||||||
| Weighted-average grant date fair value | $17.83 | $24.37 | $48.17 | ||||||||||||||
The computation of the expected option life is based on a weighted-average calculation combining the average life of options that have already been exercised and post-vest cancellations with the estimated life of the remaining vested and unexercised options. The expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate
is based on the U.S. Treasury yield curve over the expected term of the option. The Company has never paid any cash dividends on its common stock, and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes option valuation model. The Company’s estimated forfeiture rate is based on its historical experience and future expectations.
The Company’s determination of fair value is affected by the Company’s stock price, as well as a number of assumptions that require judgment. The total intrinsic value was $1.4 million, $2.1 million and $4.4 million for options exercised during fiscal years ended 2025, 2024 and 2023, respectively.
In January 2023, the Compensation Committee of the Board approved a modification to the vesting terms of certain stock options that were previously granted by Ortho to certain Ortho employees, such that the stock options vested on December 31, 2023. The modification resulted in an additional $11.1 million of stock-based compensation expense recognized during fiscal year ended 2023.
As of December 28, 2025, total unrecognized compensation expense related to stock options was approximately $5.7 million and the related weighted-average period over which it is expected to be recognized is approximately 1.9 years. The maximum contractual term of the Company’s stock options is ten years.
RSUs
A summary of the status of RSU activity for fiscal year ended 2025 is as follows:
(In thousands, except price data) | Shares | Weighted-Average Grant Date Fair Value | |||||||||
| Non-vested at December 29, 2024 | 1,382 | $ | 59.42 | ||||||||
| Granted | 1,172 | 35.53 | |||||||||
| Vested | (587) | 63.05 | |||||||||
| Forfeited | (120) | 51.57 | |||||||||
| Non-vested at December 28, 2025 | 1,847 | $ | 43.62 | ||||||||
The total amount of unrecognized compensation expense related to non-vested RSUs as of December 28, 2025 was approximately $48.5 million, which is expected to be recognized over a weighted-average period of approximately 1.8 years.
The fair value of RSUs is determined based on the closing market price of the Company’s common stock on the grant date. The weighted-average fair value of RSUs granted during the fiscal years ended December 29, 2024 and December 31, 2023 was $50.05 and $86.49, respectively.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
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.