GeneDx Holdings Corp.WGS
GeneDx Holdings Corp. Stock Compensation Disclosure
Stock-Based Compensation
Stock-Based Compensation Expense
Stock-based compensation expense is included within the consolidated statements of operations and comprehensive loss as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of services | $ | 791 | $ | 431 | $ | (1,217) | |||||||||||
| Research and development | 5,366 | 1,192 | (2,585) | ||||||||||||||
| Selling and marketing | 5,009 | 1,089 | (1,266) | ||||||||||||||
| General and administrative | 20,996 | 6,426 | 4,742 | ||||||||||||||
Total stock-based compensation expense (1)(2) | $ | 32,162 | $ | 9,138 | $ | (326) | |||||||||||
(1)The Company recorded an aggregate reversal of stock-based compensation of $1.7 million, $3.9 million, and $24.7 million during the years ended December 31, 2025, 2024, and 2023, respectively, due to forfeiture activities upon employee terminations.
(2)Includes $1.5 million and $0.6 million of expense related to the 2021 Employee Stock Purchase Plan during year ended December 31, 2025 and 2024, respectively.
Stock Incentive Plans
The Company maintains the Amended and Restated 2021 Equity Incentive Plan (as amended and restated, the “2021 Plan”), which allows for grants of stock-based awards. No awards granted under the 2021 Plan are exercisable after 10 years from the date of grant, and the awards granted under the 2021 Plan generally vest over a four-year period on a graded vesting basis; however, the Company has also granted certain restricted stock units with vesting terms beginning 12 months from the grant date and vesting immediately on the grant date. On January 1 of each year through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 Plan may be increased automatically by the number of shares equal to 5% of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31. In January 2025, the number of Class A common stock reserved for future issuance under the 2021 Plan automatically increased by 1,400,827 shares.
The Company also maintains the 2023 Equity Inducement Plan (the “Equity Inducement Plan”), which allows for grants of equity awards of the Company’s Class A common stock to individuals who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company.
As of December 31, 2025, there was an aggregate of 2,970,065 shares available for grants of stock options or other awards under the 2021 Plan and Equity Inducement Plan. In January 2026, the number of Class A common stock reserved for future issuance under the 2021 Plan automatically increased by 1,462,264 shares.
Stock Options
All stock options granted under the 2021 Plan are accounted for as service-based equity awards. The following summarizes the stock option activity during the year ended December 31, 2025:
Stock Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
| Balance at December 31, 2024 | 341,280 | $ | 44.83 | 5.99 | $ | 12,429 | ||||||||||||||||||||
| Options exercised | (140,847) | $ | 14.49 | |||||||||||||||||||||||
| Options forfeited and canceled | (979) | $ | 55.44 | |||||||||||||||||||||||
| Balance at December 31, 2025 | 199,454 | $ | 65.29 | 6.41 | $ | 14,015 | ||||||||||||||||||||
| Options exercisable at December 31, 2025 | 188,632 | $ | 65.31 | 6.41 | $ | 12,728 | ||||||||||||||||||||
Non-vested options outstanding at the end of the year were 10,822 with weighted average grant-date fair value of $45.37. As of December 31, 2025, unrecognized stock-based compensation cost related to the unvested portion of the Company’s stock options was $0.1 million, which is expected to be recognized on a graded-vesting basis over a weighted-average period of 0.3 years.
The weighted-average grant-date fair value and total fair value of options with tranches vested was $23.30 and $1.8 million for the year ended December 31, 2025, respectively, $34.42 and $0.7 million for the year ended December 31, 2024, respectively, and $25.07 and $1.5 million for the year ended December 31, 2023, respectively.
There were no options granted during the year ended December 31, 2025 or 2024. The fair value of the stock option awards granted during the year ended December 31, 2023 were estimated using the Black-Scholes option pricing model with the following assumptions:
| 2023 | |||||
| Expected volatility | 105.0% | ||||
| Weighted-average expected volatility | 105.0% | ||||
| Expected term (in years) | 5.5 | ||||
| Risk-free interest rate | 4.03% | ||||
| Dividend yield | — | ||||
| Fair value of Class A common stock | $6.35 | ||||
The aggregate intrinsic value of exercised options was $16.4 million, $2.3 million, and $0.3 million in the years ended December 31, 2025, 2024, and 2023, respectively, and is calculated based on the difference between the exercise price and the fair
value of the Company’s common stock as of the exercise date. The weighted-average grant-date fair value of options forfeited and canceled was $55.44, $7.46, and $22.71 for the years ended December 31, 2025, 2024, and 2023, respectively.
Restricted Stock Units
Restricted stock units granted under the 2021 Plan are accounted for as either service-based restricted stock units (“RSUs”) or performance-based restricted stock units (“PRSUs”). Restricted stock units convert to Class A common stock on a one-for-one basis as the awards vest. The Company measures the value of restricted stock units at fair value based on the closing price of the underlying common stock on the grant date. The following table summarizes restricted stock unit activity during the year ended December 31, 2025:
| Restricted Stock Units Outstanding | Weighted Average Grant Date Fair Value Per Unit | ||||||||||
| Balance at December 31, 2024 | 1,869,561 | $ | 12.03 | ||||||||
Restricted Stock Units granted (1) | 625,957 | $ | 95.88 | ||||||||
| Restricted Stock Units vested | (638,339) | $ | 16.15 | ||||||||
| Restricted Stock Units forfeited | (337,446) | $ | 21.89 | ||||||||
| Balance at December 31, 2025 | 1,519,733 | $ | 42.91 | ||||||||
(1)Includes 81,702 PRSUs granted during the year ended December 31, 2025 with a weighted-average grant-date fair value of $97.80.
During the year ended December 31, 2025, the Company approved awards of 81,702 PRSUs to certain executives. The grant date fair value of the PRSUs is based on the fair value of the Company’s Class A common stock on the grant date. The awards have both service-based and performance-based vesting conditions. The actual number of shares earned on vesting ranges from 0% to 200% of the target number of shares granted, depending on the attainment of specified performance goals established for the years ending December 31, 2025 and 2026.
The total fair value of restricted stock units vested for the years ended December 31, 2025, 2024, and 2023 was $10.3 million, $2.1 million, and $6.6 million, respectively. As of December 31, 2025, unrecognized stock-based compensation cost related to the Company’s restricted stock units was $36.8 million, which is expected to be recognized on a graded-vesting basis over a weighted-average period of 1.9 years.
Employee Stock Purchase Plan
The 2021 Employee Stock Purchase Plan (the “2021 ESPP”) authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. On January 1 of each year through 2031, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 ESPP may be increased automatically by the number of shares equal to 1% of the total number of shares of all classes of common stock issued and outstanding immediately preceding December 31. In January 2025, the number of Class A common stock reserved for future issuance under the 2021 ESPP automatically increased by 280,165 shares.
The 2021 ESPP became open for enrollment in April 2024. Under the 2021 ESPP, eligible employees may purchase shares of the Company’s Class A common stock at a discount through payroll deductions during each discrete six-month offering period. The purchase price under each discrete offering period is equal to 85% of the lesser of the fair market value of the Class A common stock on the first and last day of the offering period.
The Company issued 50,615 and 26,773 shares under the 2021 ESPP during the year ended December 31, 2025 and 2024, respectively. A total of 799,381 shares of Class A common stock were reserved for future issuance under the 2021 ESPP as of December 31, 2025. In January 2026, the number of Class A common stock reserved for future issuance under the 2021 ESPP automatically increased by 292,452 shares.
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.