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STOCK-BASED AWARDS | 9 Months Ended
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Sep. 30, 2025
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED AWARDS | 12. STOCK-BASED AWARDS The Company has equity incentive and compensatory plans that provide for the grant of stock-based awards, including restricted stock and performance shares to employees and board members, and provide employees the ability to purchase shares of its common stock through an employee stock purchase plan. Employee accounting applies to equity incentives and compensation granted by the Company to its own employees. When an award is forfeited prior to the vesting date, the Company recognizes an adjustment for the previously recognized expense in the period of the forfeiture. Stock-based compensation expense is classified within the corresponding operating expense categories on the consolidated statements of operations as follows (in thousands):
| Three months ended September 30, |  | Nine months ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cost of goods sold | $ | 2 |  |  | $ | 3 |  |  | $ | 4 |  |  | $ | 6 |
Sales and marketing | 112 |  |  | 414 |  |  | 257 |  |  | 909 |
Technology | 690 |  |  | 1,801 |  |  | 1,409 |  |  | 5,809 |
General and administrative | 2,718 |  |  | 4,131 |  |  | 6,332 |  |  | 9,660 |
Total stock-based compensation | $ | 3,522 |  |  | $ | 6,349 |  |  | $ | 8,002 |  |  | $ | 16,384 |
Bed Bath & Beyond restricted stock unit awards The Company's Amended and Restated 2005 Equity Incentive Plan provides for the grant of restricted stock units and other types of equity awards to employees and directors of the Company. The Compensation Committee of the Board of Directors approves grants of restricted stock unit awards to the Company's officers, board members, and employees. These restricted stock unit awards generally vest over three years at 33.3% at the end of the first year, 33.3% at the end of the second year and 33.4% at the end of the third year, subject to the recipient's continuing service to us. In addition to the Company's traditional equity awards, in fiscal year 2024, the Company changed its vesting schedule for restricted stock units from three years to four years for all restricted stock units granted to employees. These restricted stock unit awards will vest at 25% each year. In the first quarter of fiscal year 2025, the Company adjusted back to the prior vesting schedule of a three-year vesting schedule. The cost of restricted stock units is determined using the fair value of the Company's common stock on the date of the grant and compensation expense is either recognized on a straight-line basis over the vesting schedule or on an accelerated schedule when vesting of restricted stock awards exceeds a straight-line basis. The cumulative amount of compensation expense recognized at any point in time is at least equal to the portion of the grant date fair value of the award that is vested at that date. Performance Shares During the nine months ended September 30, 2025, the Company granted 803,953 performance-based shares ("PSUs") to its executive management team under the 2025 performance share award agreement. Each grant of PSUs is eligible to vest based on achieving three performance metrics, with 50% of the target number of PSUs multiplied by the Adjusted EBITDA Performance Multiplier, 25% of the target number of PSUs multiplied by the Gross Margin Performance Multiplier, and 25% of the target number of PSUs multiplied by the Contribution Margin Performance Multiplier, with the potential weighted average maximum payout of 135% of the "Target" number of PSUs. To the extent any of the PSUs become earned based on the Company's achievement of the three aforementioned performance metrics, such earned PSUs will vest as to one-third of the earned PSUs on each of the first, second, and third anniversaries of the grant date, subject to the recipient’s continued service through the vesting date. To be eligible to vest in any tranche of the PSUs, the Company must meet the threshold performance metrics established for the performance period. Expense is recognized as compensation cost based on the fair value on the date of grant over the performance period, taking into account the probability that the Company will satisfy the performance goals. Stock-based compensation related to the PSUs is included in the stock-based compensation expense table above combined with the expense associated with the Company's restricted stock units, performance share options, and employee stock purchase plan. Stock-based compensation related to the PSUs was $1.0 million and $2.4 million for the three months ended September 30, 2025 and 2024, respectively, and a credit of $363,000 due to staff related reductions and $5.7 million, for the nine months ended September 30, 2025 and 2024, respectively. Performance Share Options Stock-based compensation related to the Performance Share Option is included in stock-based compensation expense table above combined with the expense associated with the Company's restricted stock units, PSUs, and employee stock purchase plan. Stock-based compensation related to the performance share options was $734,000 and $1.0 million for the three months ended September 30, 2025 and 2024, respectively, and $2.5 million and $1.4 million for the nine months ended September 30, 2025 and 2024, respectively. The following table summarizes restricted stock unit, performance-based share units, and Performance Share Option award activity (in thousands, except per share data):
| Nine months ended September 30, 2025
| Units |  | Weighted Average Grant Date Fair Value
Outstanding—beginning of year | 3,564 |  |  | $ | 20.98 |
Granted at fair value | 2,581 |  |  | 6.29 |
Vested | (341) |  |  | 24.55 |
Forfeited | (755) |  |  | 14.59 |
Outstanding—end of period | 5,049 |  |  | $ | 6.33 |
Employee Stock Purchase Plan Purchases under the 2021 Employee Stock Purchase Plan (the "ESPP") during the nine months ended September 30, 2025 and 2024 were 137,966 shares and 119,425 shares, respectively, at an average purchase price per share of $5.32 and $12.23, respectively. At September 30, 2025, approximately 2.5 million shares of common stock remained available under the ESPP. Stock-based compensation related to the ESPP is included in the stock-based compensation expense table above combined with the expense associated with the Company's restricted stock units, PSUs, and performance share options. Stock-based compensation related to the ESPP was $154,000 and $271,000 for the three months ended September 30, 2025 and 2024, respectively, and $550,000 and $922,000 for the nine months ended September 30, 2025 and 2024, respectively.

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