Stock-Based Compensation

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

Note 8—Stock-Based Compensation

Stock-Based Compensation Expense

Stock-based compensation expense recorded in the condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Platform operations	$	7,953	$	7,617	$	26,253	$	20,444
Sales and marketing	28,133		25,294		87,437		70,654
Technology and development	40,197		36,958		123,978		97,441
General and administrative	45,033		58,641		140,786		176,931
Total	$	121,316	$	128,510	$	378,454	$	365,470

On May 27, 2025, the Company’s stockholders approved the 2025 Incentive Award Plan (the “2025 Plan”), which was previously adopted by the Company’s board of directors and is an amendment and restatement of the 2016 Incentive Award Plan (the “2016 Plan”). The changes from the 2016 Plan to the 2025 Plan include removing the ten-year plan expiration date and providing other minor technical and administrative updates. Existing stock-based awards granted under the 2016 Plan are unaffected by the technical and administrative updates in the 2025 Plan. The “evergreen” provision for annual increases in issuable shares will still end on and include January 1, 2026. The Company does not currently expect the new or modified provisions of the 2025 Plan to materially impact its financial statements in the near term.

Stock Options, Excluding the CEO Performance Option

The following summarizes stock option activity:


	Shares Under Options (in thousands)	Weighted- Average Exercise Price
Outstanding as of December 31, 2024	9,813	$	43.31
Granted	4,011	53.33
Exercised	(1,258)	16.53
Expired/Forfeited	(736)	70.93
Outstanding as of September 30, 2025	11,830	$	47.83
Exercisable as of September 30, 2025	6,330	$	36.44

Stock-based compensation expense relating to stock options was $20 million and $19 million for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation expense relating to stock options was $52 million and $47 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to stock options of approximately $172 million, which is expected to be recognized over a weighted-average period of 3.0 years.

CEO Performance Option

In October 2021, the Company granted a market-based performance award to the Company’s Chief Executive Officer (the “CEO Performance Option”) under the 2016 Plan. The CEO Performance Option has an exercise price of $68.29 per share. As of December 31, 2024, the CEO Performance Option had 17.8 million options outstanding. No options under the CEO Performance Option were granted, exercised, forfeited or expired during the three and nine months ended September 30, 2025. As of September 30, 2025, the CEO Performance Option had 17.8 million options outstanding and 3.4 million exercisable options.

Stock-based compensation of $14 million and $30 million for the CEO Performance Option was recorded as a component of general and administrative expense during the three months ended September 30, 2025 and 2024,

respectively. Stock-based compensation of $57 million and $102 million for the CEO Performance Option was recorded as a component of general and administrative expense during the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to the CEO Performance Option of $15 million that is expected to be recognized over a weighted-average period of 0.4 years, assuming no acceleration of vesting.

Restricted Stock

The following summarizes restricted stock activity:


	Shares (in thousands)	Weighted- Average Grant Date Fair Value
Unvested as of December 31, 2024	10,197	$	73.62
Granted	6,820	55.68
Vested	(3,398)	68.45
Forfeited	(1,033)	69.71
Unvested as of September 30, 2025	12,586	$	65.62

Stock-based compensation expense relating to restricted stock was $84 million and $73 million for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation expense relating to restricted stock was $236 million and $197 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $761 million, which is expected to be recognized over a weighted-average period of 2.8 years.

Employee Stock Purchase Plan (“ESPP”)

Stock-based compensation expense relating to the ESPP was $3 million and $7 million for the three months ended September 30, 2025 and 2024, respectively. Stock-based compensation expense relating to the ESPP was $33 million and $20 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had unrecognized stock-based compensation relating to ESPP awards of approximately $5 million, which is expected to be recognized over a weighted-average period of 0.9 years.

Trade Desk, Inc. 10-Q