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Stockholders' Equity And Stock-Based Compensation
 6 Months Ended
Jun. 30, 2025
Share-Based Payment Arrangement [Abstract]  
Stockholders' Equity And Stock-Based Compensation

NOTE 10 – STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Equity Incentive Plans

In connection with the Separation and on October 1, 2022, the Company adopted the Xperi Inc. 2022 Equity Incentive Plan (the “2022 EIP”), which allows the Company to grant stock options, RSUs, and performance-based awards to employees, non-employee directors, and consultants. The 2022 EIP includes an automatic annual increase to its share reserve on January 1 of each year as set forth in the plan document.

As of June 30, 2025, there were approximately 4.7 million shares reserved for future grants under the 2022 EIP.

Employee Stock Purchase Plans

In connection with the Separation and on October 1, 2022, the Company adopted the Xperi Inc. 2022 Employee Stock Purchase Plan (as amended in December 2023, the “2022 ESPP”). The 2022 ESPP provides an offering period of 12 months, commencing on each December 1 and June 1 during each period. Additionally, it includes a reset provision which is triggered if the fair market value per share of the Company’s common stock on any purchase date during an offering period is less than the fair market value per share on the start date of any 12-month offering period. Upon occurrence of the reset, the existing offering period will automatically terminate and a new 12-month offering period will begin on the next business day.

Each reset is treated as a modification in accordance with ASC 718—Stock Based Compensation, with the incremental fair value recognized on a straight-line basis over the new offering period. The incremental fair value was not material for the six months ended June 30, 2025, and $2.0 million for the six months ended June 30, 2024.

As of June 30, 2025, there were 2.1 million shares reserved for future issuance under the 2022 ESPP.

The following table summarizes the valuation assumptions used in estimating the fair value of the 2022 ESPP for the offering periods in effect using the Black-Scholes option pricing model:

 

 

Six Months Ended June 30,

 

 

 

 

2025

 

 

2024

 

 

Expected life (years)

 

0.5—1.0

 

 

0.5—1.0

 

 

Risk-free interest rate

 

4.4%—5.1%

 

 

5.1%—5.4%

 

 

Dividend yield

 

 

0.0

%

 

 

0.0

%

 

Expected volatility

 

43.0%—44.1%

 

 

44.4%—45.0%

 

 

Stock Options

The Company did not grant additional stock options during the six months ended June 30, 2025. All outstanding stock options were fully vested and exercisable as of June 30, 2025, but were immaterial for financial statement disclosure purposes.

Restricted Stock Units

Information with respect to outstanding RSUs (including both time-based vesting and performance-based vesting) for the six months ended June 30, 2025 is as follows (in thousands, except per share amounts):

 

 

 

Number of
Shares
Subject to
Time-
based Vesting

 

 

Number of
Shares
Subject to
Performance-
based Vesting

 

 

Total
Number of
Shares

 

 

Weighted
Average
Grant Date
Fair Value
Per Share

 

Balance at December 31, 2024

 

 

5,258

 

 

 

2,147

 

 

 

7,405

 

 

$

13.66

 

Granted

 

 

2,272

 

 

 

712

 

 

 

2,984

 

 

$

8.25

 

Vested / released

 

 

(1,999

)

 

 

(143

)

 

 

(2,142

)

 

$

13.09

 

Canceled / forfeited

 

 

(257

)

 

 

(604

)

 

 

(861

)

 

$

22.03

 

Balance at June 30, 2025

 

 

5,274

 

 

 

2,112

 

 

 

7,386

 

 

$

10.66

 

Performance-Based Awards

From time to time, the Company may grant performance-based restricted stock units (“PSU”) to senior executives, certain employees, and consultants. The value and the vesting of such PSUs are generally linked to one or more performance goals or certain market conditions determined by the Company, in each case on a specified date or dates or over any period or periods determined by the Company, and may range from zero to 200% of the grant. For PSUs subject to market conditions, the fair value per award is fixed at the grant date and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of achievement of the market condition.

The Company uses the closing trading price of its common stock on the date of grant as the fair value of awards or RSUs and PSUs that are based on Company-designated performance targets. For PSUs that are based on market conditions (the “market-based PSUs”), fair value is estimated by using a Monte Carlo simulation on the date of grant.

The following assumptions were used to value the market-based PSUs granted during the period:

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

Expected life (years)

 

 

3.0

 

 

 

3.0

 

Risk-free interest rate

 

 

3.9

%

 

 

4.2

%

Dividend yield

 

 

0.0

%

 

 

0.0

%

Expected volatility

 

 

46.2

%

 

 

43.9

%

Stock-Based Compensation

Total stock-based compensation expense for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Cost of revenue, excluding depreciation and amortization of intangible assets

 

$

844

 

 

$

858

 

 

$

1,888

 

 

$

1,602

 

Research and development

 

 

3,191

 

 

 

5,831

 

 

 

7,614

 

 

 

10,164

 

Selling, general and administrative

 

 

6,292

 

 

 

8,614

 

 

 

12,927

 

 

 

18,294

 

Total stock-based compensation expense

 

$

10,327

 

 

$

15,303

 

 

$

22,429

 

 

$

30,060

 

 

Stock-based compensation expense categorized by award type for the three and six months ended June 30, 2025 and 2024 is summarized in the table below (in thousands):

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

RSUs

 

$

8,266

 

 

$

11,160

 

 

$

18,138

 

 

$

20,345

 

PSUs

 

 

1,954

 

 

 

2,775

 

 

 

2,994

 

 

 

7,029

 

ESPP

 

 

107

 

 

 

1,368

 

 

 

1,297

 

 

 

2,686

 

Total stock-based compensation expense

 

$

10,327

 

 

$

15,303

 

 

$

22,429

 

 

$

30,060

 

As of June 30, 2025, unrecognized stock-based compensation expense related to unvested equity-based awards is as follows (amounts in thousands):

 

 

June 30, 2025

 

 

 

Unrecognized Stock-Based Compensation

 

 

Weighted-Average Period to Recognize Expense
(in years)

 

RSUs

 

$

40,667

 

 

 

1.9

 

PSUs

 

 

9,026

 

 

 

2.0

 

ESPP

 

 

2,165

 

 

 

0.7

 

Total unrecognized stock-based compensation expense

 

$

51,858