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Stockholders' Equity And Stock-Based Compensation
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Stockholders' Equity And Stock-Based Compensation

NOTE 13 – STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Equity Incentive Plan

Under the Xperi Inc. 2022 Equity Incentive Plan (the “2022 EIP”), the Company may grant equity-based awards to employees, non-employee directors, and consultants for services rendered to the Company (or any parent or subsidiary) in the form of stock options, restricted stock awards, RSUs, stock appreciation rights, dividend equivalents and performance awards, or any combination thereof. The 2022 EIP includes an automatic annual increase to its shares reserve on January 1 of each year as set forth in the plan document.

The vesting criteria for restricted stock units has historically been the passage of time or meeting certain performance-based objectives, and continued employment through the vesting period over three or four years for time-based awards or three years for performance-based awards.

As of December 31, 2025, there were approximately 5.2 million shares reserved for future grant under the 2022 EIP.

Employee Stock Purchase Plan

In October 2022, the Company adopted the Xperi Inc. 2022 Employee Stock Purchase Plan (as amended, the “2022 ESPP”), which originally provided consecutive overlapping 24-month offering periods, with four purchase periods that were generally six months in length, commencing on each December 1 and June 1 during the term of the 2022 ESPP. The 2022 ESPP was subsequently amended, and commencing December 1, 2023, the length of the offering periods was reduced from 24 months to 12 months and the employee’s maximum participant contribution was reduced from 100% to 15% of the employee’s after-tax base earnings and commissions up to the limit imposed by the Internal Revenue Service.

The change in the term of the offering period (as described above) was accounted for as a modification, where the original options to purchase shares were cancelled and concurrently replaced with new options from the 12-month offering period. There was no incremental compensation expense resulting from the modification. As of December 1, 2023, total compensation expense of $5.9 million was expected to be recognized by the Company, on a straight-line basis, over an accelerated term of 12 months.

The 2022 ESPP also 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.

The 2022 ESPP has experienced a number of offering period resets. 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 12-month offering period. A reset occurred in December 2025 and June 2024, resulting in an incremental fair value of $1.5 million and $2.0 million, respectively.

The following table summarizes information for shares purchased under the 2022 ESPP for the years ended December 31, 2025, 2024, and 2023 (amounts in thousands, except for weighted-average purchase price):

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Shares issued under ESPP

 

 

1,041

 

 

 

1,076

 

 

 

1,337

 

Weighted-average purchase price

 

$

5.74

 

 

$

7.30

 

 

$

8.92

 

Aggregate net proceeds from issuance

 

$

5,974

 

 

$

7,855

 

 

$

11,927

 

As of December 31, 2025, there were approximately 1.5 million shares reserved for future grant 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:

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Expected life (years)

 

0.5 — 1.0

 

 

0.5 — 1.0

 

 

0.5 — 2.0

 

Risk-free interest rate

 

4.3% — 5.1%

 

 

4.3% — 5.4%

 

 

4.3% — 5.4%

 

Dividend yield

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

Expected volatility

 

42.9% — 44.1%

 

 

44.4% — 45.6%

 

 

44.1% — 51.2%

 

The Company uses the Black-Scholes option pricing model to determine the estimated fair value of ESPP shares. The determinations of these assumptions are outlined below:

Expected life—The expected life is derived by the length of time from the grant date to each of the six-month purchase dates on which shares are purchased by the employees over the offering period of one year.

Volatility—Stock price volatility is based on the trading history of the Company’s common stock over the expected life of the ESPP.

Risk-free interest rate—The risk-free interest rate assumption is based on the U.S. Treasury rate for issues, commensurate with the expected life.

Dividend yield—The Company does not expect to pay dividends in the foreseeable future.

Stock Options

The Company did not grant additional stock options during the year ended December 31, 2025. All outstanding stock options were fully vested and exercisable as of December 31, 2025, and 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 year ended December 31, 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

 

 

2,330

 

 

 

712

 

 

 

3,042

 

 

$

8.22

 

Vested / released

 

 

(2,257

)

 

 

(143

)

 

 

(2,400

)

 

$

13.16

 

Canceled / forfeited

 

 

(712

)

 

 

(685

)

 

 

(1,397

)

 

$

17.75

 

Balance at December 31, 2025

 

 

4,619

 

 

 

2,031

 

 

 

6,650

 

 

$

10.50

 

Performance-Based Awards

From time to time, the Company may grant PSUs 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.

In April 2023, the Company modified certain vesting conditions related to market-based PSUs granted in 2022, resulting in a total incremental compensation expense of $2.9 million, which was recognized over the remaining requisite service period through April 2025.

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

The following assumptions were used in the Monte Carlo simulation model to determine the fair value of the PSUs with market conditions that were granted during the period:

 

 

Year Ended December 31,

 

 

2025

 

 

2024

 

 

2023

Expected life (years)

 

 

3.0

 

 

 

3.0

 

 

1.5 — 2.8

Risk-free interest rate

 

3.9%

 

 

4.2%

 

 

4.5% — 5.0%

Dividend yield

 

0.0%

 

 

0.0%

 

 

0.0%

Expected volatility

 

46.2%

 

 

43.9%

 

 

44.1% — 51.2%

Stock Repurchase Programs

In April 2024, the Company’s Board of Directors (the “Board”) authorized the repurchase of up to $100.0 million of its common stock (the “Program”). Under the Program, the Company may make repurchases, from time to time, through open market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions, or other means. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases under the Program. During the year ended December 31, 2024, the Company repurchased a total of approximately 2.2 million shares of common stock, at an average price of $9.23 per share for a total cost of $20.0 million. The shares repurchased were permanently retired. No expiration date has been specified for this Program.

There were no repurchases of common stock during the year ended December 31, 2025. As of December 31, 2025, the total remaining amount available for repurchase was $80.0 million. The Company may continue to execute authorized repurchases from time to time under the Program.

Stock-Based Compensation

Total stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands):

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Cost of revenue, excluding depreciation and amortization of intangible assets

 

$

3,385

 

 

$

3,216

 

 

$

3,466

 

Research and development

 

 

12,768

 

 

 

20,634

 

 

 

25,276

 

Selling, general and administrative

 

 

24,530

 

 

 

36,691

 

 

 

40,789

 

Total stock-based compensation expense

 

$

40,683

 

 

$

60,541

 

 

$

69,531

 

Stock-based compensation expense categorized by award type for the years ended December 31, 2025, 2024 and 2023 is summarized in the table below (in thousands):

 

 

Year Ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

RSUs

 

$

32,654

 

 

$

41,516

 

 

$

45,660

 

PSUs

 

 

5,370

 

 

 

14,283

 

 

 

18,519

 

ESPP

 

 

2,659

 

 

 

4,742

 

 

 

5,352

 

Total stock-based compensation expense

 

$

40,683

 

 

$

60,541

 

 

$

69,531

 

As of December 31, 2025, unrecognized stock-based compensation expense related to unvested equity-based awards is as follows (amounts in thousands):

 

 

December 31, 2025

 

 

 

Unrecognized Stock-Based Compensation

 

 

Weighted-Average Period to Recognize Expense
(in years)

 

RSUs

 

$

24,167

 

 

 

1.7

 

PSUs

 

 

5,932

 

 

 

1.7

 

ESPP

 

 

1,901

 

 

 

0.4

 

Total unrecognized stock-based compensation expense

 

$

32,000