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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 | NOTE 8. STOCK-BASED COMPENSATION 2018 Stock Plan Legacy SmartRent’s board of directors adopted, and its stockholders approved, the SmartRent.com, Inc. 2018 Stock Plan (the “2018 Stock Plan”), effective March 2018. The purpose of the 2018 Stock Plan was to advance the interests of Legacy SmartRent and its stockholders by providing an incentive to attract, retain and reward persons performing services for Legacy SmartRent and by motivating such persons to contribute to the growth and profitability of Legacy SmartRent. The 2018 Stock Plan sought to achieve this purpose by providing awards in the form of stock options and restricted stock purchase rights. Awards granted as stock options under the 2018 Stock Plan generally expire no later than ten years from the date of grant and become vested and exercisable over a four-year period. All options are subject to certain provisions that may impact these vesting schedules. Amendment to the 2018 Stock Plan In April 2021, the board of directors of Legacy SmartRent executed a unanimous written consent to provide an additional incentive to certain employees of Legacy SmartRent by amending the 2018 Stock Plan to allow for the issuance of RSUs and granted a total of 1,533 RSUs to certain employees which vest over four years. The estimated fair value for each RSU issue d was approximately $21.55 per share and the total stock-based compensation expense to be amortized over the vesting period is $33,033. Effective upon the Business Combination in August 2021, the 2018 Stock Plan was replaced by the 2021 Plan. The 2018 Stock Plan continues to govern the terms and conditions of the outstanding awards previously granted thereunder. No new awards will be granted out of the 2018 Stock Plan. 2021 Equity Incentive Plan In connection with the Business Combination, the Board approved and implemented the SmartRent, Inc. 2021 Plan (the "2021 Plan"). The purpose of the 2021 Plan is to enhance the Company's ability to attract, retain and motivate persons who make, or are expected to make, important contributions to the Company by providing these individuals with equity ownership opportunities and equity-linked compensation opportunities. The 2021 Plan authorizes the administrator of the 2021 Plan (generally, the Board or its compensation committee) to provide incentive compensation in the form of stock options, restricted stock and stock units, performance shares and units, other stock-based awards and cash-based awards. Under the 2021 Plan, the Company is authorized to issue up to 15,500 shares of Class A common stock. On May 14, 2024, the Company's stockholders approved the 2021 Plan, as amended and restated, which increased the number of shares reserved for issuance thereunder by 8,900 shares of Class A common stock. The Company is authorized to issue up to a total of 24,400 shares of Class A common stock under the 2021 Plan, as amended and restated. Non-employee board member RSUs generally will vest either over one year or three years, subject to the recipient’s continued service through the applicable vesting date or dates. The RSUs and options granted to employees are generally subject to a four-year vesting schedule and all vesting generally shall be subject to the recipient’s continued service with the Company or its subsidiaries through the applicable vesting dates. The table below summarizes the activity pursuant to the 2021 Plan, for the six months ended June 30, 2025, and the shares available for future issuances as of June 30, 2025 and December 31, 2024.
| Shares Available for Future Issuance |
Shares available as of December 31, 2024 |  | 16,856 |
RSUs issued, net |  | (5,097 | )
Shares available as of March 31, 2025 |  | 11,759 |
Stock options forfeited |  | 427 |
RSUs issued, net |  | (3,713 | )
Shares available as of June 30, 2025 |  | 8,473 |
The table below summarizes the activity related to stock options, pursuant to the 2018 Stock Plan and 2021 Plan, for the six months ended June 30, 2025.
| Options Outstanding |
| Number of Options |  |  | Weighted- Average Exercise Price ($ per share) |  |  | Weighted Average Remaining Contractual Life (years) |  |  | Aggregate Intrinsic Value |
December 31, 2024 |  | 4,165 |  |  | $ | 1.90 |  |  |  | 6.74 |  |  | $ | 2,445 |
<no activity> |  | - |  |  | $ | - |  |  |  |  |  |  |
March 31, 2025 |  | 4,165 |  |  | $ | 1.90 |  |  |  | 6.50 |  |  | $ | 1,414 |
Forfeited |  | (427 | ) |  | $ | 3.07 |  |  |  |  |  |  |
June 30, 2025 |  | 3,738 |  |  | $ | 1.77 |  |  |  | 6.16 |  |  | $ | 993 |
Exercisable options as of June 30, 2025 |  | 2,692 |  |  | $ | 1.22 |  |  |  | 4.90 |  |  | $ | 993 |
During the three months ended June 30, 2025 and 2024, stock-based compensation expense of $213 and $674, respectively, was recognized in connection with the outstanding options. During the six months ended June 30, 2025 and 2024, stock-based compensation expense of $508 and $1,366, respectively, was recognized in connection with the outstanding options. As of June 30, 2025, there is $2,192 of unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted-average period of 2.3 years. The table below summarizes the activity related to RSUs, pursuant to the 2018 Stock Plan and 2021 Plan, for the six months ended June 30, 2025.
| Restricted Stock Units
| Number of Restricted Stock Units |  |  | Weighted Average Grant Date Fair Value (per share) |  |
December 31, 2024 |  | 5,310 |  |  | $ | 2.69 |  |
Granted |  | 6,760 |  |  | $ | 1.49 |  |
Vested or distributed |  | (906 | ) |  | $ | 3.52 |  |
Forfeited |  | (563 | ) |  | $ | 1.93 |  |
March 31, 2025 |  | 10,601 |  |  | $ | 1.90 |  |
Granted |  | 6,034 |  |  | $ | 0.85 |  |
Vested or distributed |  | (438 | ) |  | $ | 3.19 |  |
Forfeited |  | (2,869 | ) |  | $ | 1.35 |  |
June 30, 2025 |  | 13,328 |  |  | $ | 1.53 |  |
No right to any Class A Common Stock is earned or accrued until such time that vesting occurs, nor does the grant of the RSU award confer any right to continue vesting or employment or other service. Compensation expense associated with the unvested RSUs is recognized on a straight-line basis over the vesting period. In June 2025, the Company granted RSU awards under the 2021 Plan to Frank Martell, the Company's President and Chief Executive Officer. Mr. Martell’s grant consisted of time-based RSUs covering 1,800 shares of the Company's Class A common stock. The RSUs will vest in four substantially equal quarterly installments, such that 100% of the RSUs subject to the grant will be vested as of June 30, 2026, subject to the terms of Mr. Martell’s award agreement. During the three months ended June 30, 2025 and 2024, stock-based compensation expense of $1,935 and $2,576, respectively, was recognized in connection with the vesting of all RSUs. During the six months ended June 30, 2025 and 2024, stock-based compensation expense of $4,479 and $5,142, respectively, was recognized in connection with the vesting of all RSUs. As of June 30, 2025, there is $17,258 of unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a weighted-average period of 2.5 years. 2025 Inducement Equity Incentive Plan In January 2025, the Board adopted the SmartRent, Inc. 2025 Inducement Equity Incentive Plan (the “Inducement Plan”), pursuant to which the Company may grant equity awards that are intended to qualify as employment inducement awards under the New York Stock Exchange Listed Company Manual Rule 303A.08 and any applicable interpretive material and other guidance issued under such rule (together, the “Inducement Listing Rule”), from time to time as determined by the Committee (as defined in the Inducement Plan), the Board’s Compensation Committee, or a majority of the Company’s “Independent Directors” (as defined under the applicable rules of the New York Stock Exchange). Upon adoption of the Inducement Plan, and subject to the adjustment provisions therein, the Company reserved 6,500 shares of Common Stock for issuance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan provides for the grant of equity-based awards, including options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. Such equity-based awards may be granted under the Inducement Plan only to employees of the Company, so long as the following requirements are met: (i) the employee was not previously an employee or director, or the employee is to become employed by the Participating Company Group (as defined in the Inducement Plan) following a bona fide period of non-employment (within the meaning of the Inducement Listing Rule), and (ii) the grant of the award or awards is an inducement material to the employee’s entering into employment with the Participating Company Group in accordance with the Inducement Listing Rule. In March 2025, the Company granted inducement awards under the Inducement Plan to Michael Shane Paladin, the Company's then President and Chief Executive Officer, as inducement awards in connection with the Start Date. Mr. Paladin’s grant consisted of time-based RSUs covering 1,791 shares of the Company's Class A common stock and performance stock units ("PSUs") covering a target of 2,320 shares of the Company's Class A common stock. The RSUs vest at a rate of one-third of the RSUs annually on each anniversary of the Start Date, subject in each case to Mr. Paladin’s continued employment through the applicable vesting date. While the target number of PSUs granted is 2,320, the actual number of shares of Class A common stock earned pursuant to the PSUs, if any, are determined based on the achievement of performance goals relating to Company stock price during a five-year performance period from the Start Date, and vest based on Mr. Paladin’s continued employment, with 50% of any shares achieved vesting on the four-year anniversary of the Start Date, and 100% of any shares achieved but not yet paid vesting on the five-year anniversary of the Start Date. The maximum number of shares that may vest under the PSUs is 200% of the target number of shares subject to such award. In April 2025, the Company announced the departure of Mr. Paladin effective as of the End Date. As of the End Date, no shares had vested and all inducement awards granted were forfeited and returned to the Inducement Plan. Employee Stock Purchase Plan The Company has the ability to initially issue up to 2,000 shares of Class A Common Stock under the ESPP, subject to annual increases effective as of January 1, 2022, and each subsequent January 1 through and including January 1, 2030, in an amount equal to the smallest of (i) 1% of the number of shares of the Class A Common Stock outstanding as of the immediately preceding December 31, (ii) 2,000 shares or (iii) such amount, if any, as the Board may determine. The ESPP allows employees to purchase shares of the Company's Class A Common Stock approximately every six months at a per share purchase price equal to 85 percent of the quoted market price of a share of the Company’s Class A Common Stock on (i) the first day of the offering period or (ii) the applicable purchase date of such offering period, whichever quoted market price is lower. During the three months ended June 30, 2025 and 2024, stock-based compensation expense of $13 and $34, respectively, was recognized in connection with the ESPP. During the six months ended June 30, 2025 and 2024, stock-based compensation expense of $10 and $57, respectively, was recognized in connection with the ESPP. The table below summarizes the activity related to the ESPP for the six months ended June 30, 2025.
ESPP Activity | Shares Available for Sale |
December 31, 2024 |  | 7,109 |
Annual additions to the plan |  | 1,920 |
Shares purchased |  | (140 | )
March 31, 2025 |  | 8,889 |
<no activity> |  | - |
June 30, 2025 |  | 8,889 |
Stock-Based Compensation During the six months ended June 30, 2024, there were options granted covering 2,527 shares. There were no such options granted during the three months ended June 30, 2024 or the three and six months ended June 30, 2025. The fair value of stock option grants is estimated by the Company on the date of grant using the Black Scholes option pricing model with the following weighted-average assumptions for the six months ended June 30, 2025 and 2024.
| For the six months ended June 30, |
| 2025(1) |  | 2024 |
Risk free interest | - |  | 4.09% |
Dividend yield | - |  | 0.00% |
Expected volatility | - |  | 75.00% |
Expected life (years) | - |  |  | 6.25 |
(1) 2025 assumptions are not applicable as no options were granted during the six months ended June 30, 2025. The Company recorded stock-based compensation expense as follows.
| For the three months ended June 30, |  |  | For the six months ended June 30,
| 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |  |
Cost of revenue | $ | 126 |  |  | $ | 292 |  |  | $ | 419 |  |  | $ | 590 |  |
Research and development |  | 770 |  |  |  | 953 |  |  |  | 1,942 |  |  |  | 1,914 |  |
Sales and marketing |  | 181 |  |  |  | 165 |  |  |  | 409 |  |  |  | 296 |  |
General and administrative |  | 1,084 |  |  |  | 1,874 |  |  |  | 2,227 |  |  |  | 3,765 |  |
Total | $ | 2,161 |  |  | $ | 3,284 |  |  | $ | 4,997 |  |  | $ | 6,565 |  |

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