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Stock-based compensation | 9 Months Ended
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Sep. 30, 2025
Share-Based Payment Arrangement [Abstract] |
Stock-based compensation | Stock-based compensation Service-based vesting stock options The following is a summary of service-based vesting stock option activity for the nine months ended September 30, 2025, and the status of service-based vesting stock options outstanding as of September 30, 2025:
| Nine Months Ended September 30, 2025
| Options |  | Wtd. Avg. Exercise Price
Outstanding as of beginning of period | 127,000 |  |  | $ | 2.19 |
Exercised | (10,000) |  |  | 1.83 |
Outstanding as of September 30, 2025 | 117,000 |  |  | $ | 2.22 |
Stock options exercisable as of September 30, 2025 | 117,000 |  |  | $ | 2.22 |
As of September 30, 2025, there was $2.6 million of aggregate intrinsic value of outstanding and exercisable service-based vesting stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of the reporting period and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on September 30, 2025 and September 30, 2024. This amount will change based on the fair market value of the Company’s stock. We did not recognize stock compensation expense related to service-based options during the three and nine months ended September 30, 2025. The intrinsic value of service vesting-based awards exercised was $0.2 million during the three and nine months ended September 30, 2025, and $0.5 million and $1.1 million during the three and nine months ended September 30, 2024, respectively. There were no service-based vesting options granted during the three and nine months ended September 30, 2025 and September 30, 2024. The weighted average remaining contractual life of service-based vesting stock options outstanding and exercisable as of September 30, 2025 is 0.7 years. There were no unrecognized compensation costs for service-based vesting stock options as of September 30, 2025. Restricted stock Service-based vesting restricted stock The following is a summary of service-based vesting restricted stock activity for the nine months ended September 30, 2025, and the status of unvested service-based vesting restricted stock outstanding as of September 30, 2025:
| Nine Months Ended September 30, 2025
| Shares |  | Wtd. Avg. Grant Date Fair Value
Outstanding as of beginning of period | 1,295,640 |  |  | $ | 16.00 |
Granted | 470,824 |  |  | 24.19 |
Vested | (366,181) |  |  | 19.38 |
Forfeited | (33,135) |  |  | 16.14 |
Non-vested as of September 30, 2025 | 1,367,148 |  |  | $ | 17.91 |
The aggregate fair value of the service-based vesting awards that vested was $2.4 million and $7.1 million during the three and nine months ended September 30, 2025, respectively, and $1.7 million and $7.1 million during the three and nine months ended September 30, 2024, respectively. We recognized stock compensation expense related to service-based vesting awards of $2.8 million and $8.3 million during the three and nine months ended September 30, 2025, respectively, and $2.7 million and $7.9 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, there was $20.6 million in unrecognized compensation costs related to service-based vesting awards. The weighted average remaining recognition period over which these service-based vesting awards will be expensed is approximately 2.7 years. Performance-based restricted stock On March 8, 2024, the Company granted a performance-based restricted stock award ("PSA") for 109,512 shares to an executive. The shares granted contain performance conditions based on Company metrics related to future performance. The shares will vest as to between 0% and 200% of the number of restricted shares granted to the recipient based on performance conditions during the period beginning on January 1, 2024 through December 31, 2025. The grant date fair value of this award was $17.36 per share. The fair value of this award is being expensed on a straight-line basis over the requisite service period ending on December 31, 2025. The PSA has since been modified as follows:
(in millions) | Fair Value
Fair value of PSA as of grant date | $ | 1.9 |
Q4 2024 change in estimated achievement probability | 0.8 |
Q1 2025 modification | 1.6 |
Stock compensation expense related to PSA as of September 30, 2025 | (3.4) |
Remaining unrecognized non-cash compensation costs related to PSA | $ | 0.9 |
During the fourth quarter of the year ended December 31, 2024, it was determined the probability of attainment of the performance condition increased to greater than 100% of shares granted. In accordance with ASC 718, we recognized a cumulative catch up in stock compensation expense to reflect the increased probability the PSA would vest in excess of the shares originally granted. The fair value of this award is being expensed on a straight-line basis in accordance with the estimated quantity of shares expected to vest over the requisite service period ending on December 31, 2025. During the three months ended March 31, 2025, the Board approved a modification to the metrics underlying the PSA to give effect to the adjusted operating results of the Company following the divestitures that occurred during the year ended December 31, 2024. The modification increased the probability that the performance-based award would vest in excess of the shares originally granted to its maximum amount of 200%. In accordance with ASC 718, this modification resulted in an incremental compensation cost of $1.6 million, which will be recognized over the remainder of the service period of the award. We recognized stock compensation expense related to the PSA of $0.9 million and $2.2 million for the three and nine months ended September 30, 2025, and $0.2 million and $0.7 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, there was $0.9 million in unrecognized non-cash compensation costs related to the PSA expected to vest. We expect to recognize those costs over 0.2 years. Non-cash compensation costs are expensed over the period for which performance was measured. There were no performance-based restricted stock awards granted or vested during the three and nine months ended September 30, 2025. Market-based restricted stock The following is a summary of market-based restricted stock activity under our stock option plans for the nine months ended September 30, 2025 and the status of market-based restricted stock outstanding as of September 30, 2025:
| Nine Months Ended September 30, 2025
| Shares |  | Wtd. Avg. Grant
Outstanding as of beginning of period | 495,686 |  |  | $ | 25.69 |
Granted | 451,801 |  |  | 32.91 |
Vested | (470,287) |  |  | 25.19 |
Non-vested as of September 30, 2025 | 477,200 |  |  | $ | 33.02 |
The following is a summary of key inputs to our market-based restricted stock awards as of September 30, 2025:
|  |  |  |  |  |  |  |  |  |  | Fair Value Assumptions |  |  |  |
| Grant Date |  | Target Shares |  | Vesting Range |  | Market Condition Period |  | FV of Award (in millions) |  | Volatility |  | Risk Free Rate |  | Dividend Rate |  | Attainment % |  | Vested Shares
2023 TSR(1) | 1/3/2023 |  | 268,738 |  | —% - 200% |  | 1/1/2023 - 12/31/2024 |  | $ | 6.8 |  |  | 78 | % |  | 4.4 | % |  | — | % |  | 175 | % |  | 470,287
2024 TSR(2) | 3/8/2024 |  | 239,464 |  | —% - 200% |  | 1/1/2024 - 12/31/2025 |  | $ | 6.3 |  |  | 80 | % |  | 4.6 | % |  | — | % |  | N/A |  | N/A
2025 TSR | 3/18/2025 |  | 250,252 |  | —% - 200% |  | 1/1/2025 - 12/31/2026 |  | $ | 9.8 |  |  | 60 | % |  | 4.1 | % |  | — | % |  | N/A |  | N/A
(1) Of the $6.8 million fair value of the 2023 Total Shareholder Return ("TSR") award being expensed on a straight-line basis over the grant date to the vesting date, $1.6 million of expense was recognized in 2023 to reflect accelerations in the vesting period of certain awards. (2) Of the $6.3 million fair value of the 2024 TSR award being expensed on a straight-line basis over the grant date to the vesting date, $0.3 million of expense was recognized in 2024 to reflect accelerations in the vesting period of certain awards. Each of the market-based restricted stock awards outlined above were granted to the Company's executives. These restricted stock awards contain a market condition based on TSR. The market-based restricted stock awards vest at a range determined by the Compensation Committee of the Board in comparison of the Company's TSR to the TSR of a group of the Company's peers. The fair value of these awards is determined using a Monte Carlo simulation with various assumptions. These assumptions include historical volatility, dividend yield, and a risk-free interest rate. The historical volatility is based on the most recent 2-year period for the Company and correlated with the components of the peer group. The stock price projection for the Company and the components of the peer group assumes a 0% dividend yield. This is mathematically equivalent to reinvesting dividends in the issuing entity over the performance period. The risk-free interest rate is based on the yield on the U.S. Treasury Strips as of the measurement date with a maturity consistent with the 2-year term associated with the market condition of these awards. The fair value of these awards is expensed on a straight-line basis over the grant date to the vesting date. When the TSR period for each award has elapsed, the Company determines the TSR attainment percentage to award each recipient based on the targeted amount of shares granted. We recognized stock compensation expense of $2.2 million and $5.4 million related to market-based restricted stock awards for the three and nine months ended September 30, 2025, respectively, and $1.2 million and $3.6 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, there were $7.7 million in unrecognized non-cash compensation costs related to market-based restricted stock awards expected to vest. The weighted average remaining recognition period over which these market-based awards will be expensed is approximately 1.1 years. The aggregate fair value of the market-based awards that vested was $11.8 million and $8.4 million for the nine months ended September 30, 2025 and 2024, respectively. There were no market-based awards that vested during the three months ended September 30, 2025 and 2024. Total stock compensation expense Compensation expense associated with equity-based awards is recognized on a straight-line basis over the requisite service period, with awards generally vesting over a 4-year period, and forfeitures recognized as incurred. In accordance with ASC 350-40, stock compensation expenses allocable to intangible assets for internal use are capitalized. We recorded total stock compensation expense for the three and nine months ended September 30, 2025 and 2024, as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Cost of revenue | $ | 279 |  |  | $ | 327 |  |  | $ | 855 |  |  | $ | 961 |
General and administrative costs | 4,270 |  |  | 2,761 |  |  | 11,497 |  |  | 8,248 |
Sales and marketing costs | 509 |  |  | 460 |  |  | 1,401 |  |  | 1,316 |
Research and development costs | 837 |  |  | 586 |  |  | 2,144 |  |  | 1,708 |
Total(1) | $ | 5,895 |  |  | $ | 4,134 |  |  | $ | 15,897 |  |  | $ | 12,233 |
(1) During the three and nine months ended September 30, 2025, $9 thousand and $19 thousand, respectively, of stock compensation expenses were capitalized to internal use software. During the three and nine months ended September 30, 2024, $5 thousand and $18 thousand, respectively, were capitalized to internal use software.

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