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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2025
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | 9. STOCK-BASED COMPENSATION Stock-based compensation expense related to awards issued under the Company's incentive compensation plans for the three and six months ended June 30, 2025 and 2024 was as follows (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cost of sales | $ | 7.5 |  |  | $ | 7.5 |  |  | $ | 14.8 |  |  | $ | 14.7 |
Selling, general, and administrative expenses | 19.6 |  |  | 20.2 |  |  | 42.4 |  |  | 42.0 |
Research and development expenses | 10.4 |  |  | 9.6 |  |  | 20.4 |  |  | 19.6 |
Total stock-based compensation expense | 37.5 |  |  | 37.3 |  |  | 77.6 |  |  | 76.3 |
Income tax benefit | (6.1) |  |  | (6.0) |  |  | (12.6) |  |  | (11.5) |
Total stock-based compensation expense, net of tax | $ | 31.4 |  |  | $ | 31.3 |  |  | $ | 65.0 |  |  | $ | 64.8 |
At June 30, 2025, the total remaining compensation cost related to nonvested stock options, restricted stock units, market-based restricted stock units, and employee stock purchase plan (“ESPP”) subscription awards amounted to $346.1 million, which will be amortized on a straight-line basis over each award's requisite service period. The weighted-average remaining requisite service period is 33 months. During the six months ended June 30, 2025, the Company granted 1.7 million stock options at a weighted-average exercise price per share of $74.64 and 1.4 million restricted stock units at a weighted-average grant-date fair value per share of $74.67. During the six months ended June 30, 2025, the Company also granted 0.1 million market-based restricted stock units at a weighted-average grant-date fair value per share of $89.94. The market-based restricted stock units granted during the six months ended June 30, 2025 vest based on a combination of certain service and market conditions. The actual number of shares issued will be determined based on the Company's total shareholder return relative to a selected industry peer group over a three-year performance period and may range from 0% to 175% of the target number of shares granted. Fair Value Disclosures The fair value of market-based restricted stock units was determined using a Monte Carlo simulation model, which uses multiple input variables to determine the probability of satisfying the market condition requirements. The weighted-average assumptions used to determine the fair value of the market-based restricted stock units granted during the six months ended June 30, 2025 and 2024 included a risk-free interest rate of 3.8% and 4.5%, respectively, and an expected volatility rate of 37.9% and 32.4%, respectively. The following table includes the weighted-average grant-date fair values of stock options granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model:
Option Awards | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Risk-free interest rate | 4.0% |  | 4.5% |  | 4.0% |  | 4.5%
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 34.1% |  | 30.9% |  | 34.1% |  | 30.9%
Expected term (years) | 5.2 |  | 5.2 |  | 5.2 |  | 5.2
Fair value, per option | $ | 28.17 |  | $ | 31.24 |  | $ | 28.17 |  | $ | 31.26
The following table includes the weighted-average grant-date fair values for ESPP subscriptions granted during the periods indicated and the related weighted-average assumptions used in the Black-Scholes option pricing model:
ESPP | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Risk-free interest rate | 4.2% |  | 5.2% |  | 4.3% |  | 5.2%
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 34.3% |  | 29.3% |  | 30.8% |  | 33.5%
Expected term (years) | 0.7 |  | 0.7 |  | 0.6 |  | 0.6
Fair value, per share | $ | 21.05 |  |  | $ | 23.37 |  |  | $ | 18.81 |  | $ | 25.01 |

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