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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2026
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | 10. 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, 2026 and 2025 was as follows (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  | 2025 |  | 2026 |  | 2025
Cost of sales | $ | 8.4 |  |  | $ | 7.5 |  |  | $ | 16.6 |  |  | $ | 14.8 |
Selling, general, and administrative expenses | 23.0 |  |  | 19.6 |  |  | 48.9 |  |  | 42.4 |
Research and development expenses | 10.8 |  |  | 10.4 |  |  | 22.1 |  |  | 20.4 |
Total stock-based compensation expense | 42.2 |  |  | 37.5 |  |  | 87.6 |  |  | 77.6 |
Income tax benefit | (7.0) |  |  | (6.1) |  |  | (14.5) |  |  | (12.6) |
Total stock-based compensation expense, net of tax | $ | 35.2 |  |  | $ | 31.4 |  |  | $ | 73.1 |  |  | $ | 65.0 |
At June 30, 2026, 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 $373.4 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, 2026, the Company granted 1.6 million stock options at a weighted-average exercise price per share of $82.71 and 1.4 million restricted stock units at a weighted-average grant-date fair value per share of $82.28. During the six months ended June 30, 2026, the Company also granted 0.2 million market-based restricted stock units at a weighted-average grant-date fair value per share of $84.77. The market-based restricted stock units granted during the six months ended June 30, 2026 vest based on a combination of certain service, revenue and market conditions. The actual number of shares issued will be determined based on the Company's revenue and total shareholder return relative to a selected industry peer group over a three-year performance period and may range from 0% to 200% 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, 2026 and 2025 included a risk-free interest rate of 3.9% and 3.8%, respectively, and an expected volatility rate of 34.1% and 37.9%, 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,
| 2026 |  | 2025 |  | 2026 |  | 2025
Risk-free interest rate | 4.1% |  | 4.0% |  | 4.1% |  | 4.0%
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 33.5% |  | 34.1% |  | 33.5% |  | 34.1%
Expected term (years) | 5.3 |  | 5.2 |  | 5.3 |  | 5.2
Fair value, per option | $ | 31.53 |  | $ | 28.17 |  | $ | 31.51 |  | $ | 28.17
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,
| 2026 |  | 2025 |  | 2026 |  | 2025
Risk-free interest rate | 3.7% |  | 4.2% |  | 3.6% |  | 4.3%
Expected dividend yield | None |  | None |  | None |  | None
Expected volatility | 28.7% |  | 34.3% |  | 32.6% |  | 30.8%
Expected term (years) | 0.7 |  | 0.7 |  | 0.6 |  | 0.6
Fair value, per share | $ | 19.82 |  |  | $ | 21.05 |  |  | $ | 21.74 |  | $ | 18.81 |

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