The Company adopted the 2021 Incentive Award Plan (the 2021 Plan) effective October 26, 2021. The 2021 Plan provides for a variety of stock-based compensation awards, including stock options, SARs, restricted stock awards, RSUs, performance bonus awards, performance stock unit awards, dividend equivalents, or other stock or cash based awards.

Following the effectiveness of the 2021 Plan, the Company will not make any further grants under the Arteris, Inc. 2016 Incentive Plan (the 2016 Plan). However, the 2016 Plan will continue to govern the terms and conditions of the outstanding awards granted under this plan. Shares of common stock subject to awards granted under the 2016 Plan that are forfeited or lapse unexercised and withheld to cover taxes which following the effective date of the 2021 Plan are not issued under the 2016 Plan will be available for issuance under the 2021 Plan.

The Company adopted the 2022 Employment Inducement Incentive Plan (the 2022 Inducement Plan) effective November 3, 2022, pursuant to which it reserved 2,000,000 shares of its common stock. The 2022 Inducement Plan provides for a variety of stock-based compensation awards, including stock options, SARs, restricted stock awards, restricted stock unit awards, performance bonus awards, performance stock unit awards, dividend equivalents, and other stock or cash-based awards. Awards under the 2022 Inducement Plan can only be made to newly hired employees.

The aggregate intrinsic value of the options exercised for the six months ended June 30, 2025 and 2024 was $3.1 million and $3.3 million, respectively. The total grant-date fair value of options vested was $0.2 million for both the six months ended June 30, 2025 and 2024.

As of June 30, 2025, there was $2.1 million of unamortized stock-based compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 3.1 years.

The following table summarizes the restricted stock unit activities under the Company’s 2016 Plan, the 2021 Plan and the 2022 Inducement Plan:


	Restricted Stock Units
	Number of Shares	Weighted-Average Grant Date Fair Value

Unvested—December 31, 2024	5,225,948	$	7.00
Granted	1,618,635	$	8.00
Vested	(1,151,761)	$	7.14
Canceled	(104,915)	$	8.10
Unvested—June 30, 2025	5,587,907	$	7.24

The total grant-date fair value of restricted stock units vested was $8.5 million and $8.0 million during the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, there was $34.5 million of unamortized stock-based compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.6 years.

The Company adopted the 2021 Employee Stock Purchase Plan (the 2021 ESPP) effective on October 26, 2021. The 2021 ESPP enables eligible employees of the Company to purchase shares of common stock at a discount to fair market value. The 2021 ESPP provides for six-month offering periods beginning May 22 and November 22 of each year, and each offering period consists of a six-month purchase period. The first offering period began on May 22, 2024 and ended on November 21, 2024. During the six months ended June 30, 2025, 88,668 shares of common stock were purchased under the 2021 ESPP. As of June 30, 2025, 1,882,728 shares of common stock were available for future issuance under the 2021 ESPP.

On each purchase date, eligible employees are entitled to purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of our common stock on the offering date or (2) the fair market value of our common stock on the purchase date.

As of June 30, 2025, there was $0.2 million of unamortized stock-based compensation cost related to ESPP, which is expected to be recognized over a weighted average period of 0.4 years.

The fair value of common stock to be issued under the 2021 ESPP is estimated on the first day of the offering period using the Black-Scholes option-pricing model, which uses (i) a risk-free interest rate based on the U.S. Treasury zero-coupon issues for an expected term equivalent to the offering period; (ii) expected term based on the simplified method; (iii) volatility based on historical volatility of the Company’s common stock; and (iv) an expected dividend yield of zero as the Company has never declared or paid any cash dividend and does not currently plan to pay a cash dividend in the foreseeable future.


	Six Months Ended June 30,
	2025	2024
Expected volatility	72.0%	74.4%
Expected term (in years)	0.5	0.5
Risk-free interest rate	4.3%	5.4%
Expected dividend yield	0%	0%

Stock-based compensation expense is recorded on a departmental basis, based on the classification of the award holder. The following table presents the amount of stock-based compensation related to stock-based awards to employees on the Company’s unaudited condensed consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Cost of revenue	$	232	$	186	$	437	$	375
Research and development	1,926		1,788		3,898		3,396
Sales and marketing	1,048		657		2,017		1,380
General and administrative	1,291		1,129		2,457		2,266
Total stock-based compensation	$	4,497	$	3,760	$	8,809	$	7,417