Stock-Based Compensation |
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| Stock-Based Compensation | Stock-Based Compensation 2020 Equity Incentive Plan of Digital Turbine, Inc.
On September 15, 2020, the Company’s stockholders approved the 2020 Equity Incentive Plan of Digital Turbine, Inc. (the “2020 Plan”), pursuant to which the Company may grant equity incentive awards to directors, employees, and other eligible participants. The 2020 Plan became effective on September 15, 2020, and has a term of ten years. A total of 12,000,000 shares of common stock were reserved for grant under the 2020 Plan. The types of awards that may be granted under the 2020 Plan include incentive and non-qualified stock options, stock appreciation rights, restricted stock, and restricted stock units. Stock options may be either incentive stock options, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified stock options.
Our stockholders approved amendments to the 2020 Plan on August 27, 2024 and August 25, 2026 to increase the number of shares of common stock reserved for issuance by 8,560,000 and 10,630,000 shares, respectively. Following the 2026 amendment, the total number of shares reserved for issuance under the 2020 Plan increased to 31,190,000 shares, in addition to certain other changes. As of September 30, 2026, 11,498,025 shares of common stock were available for issuance as future awards under the 2020 Plan.
Stock Options
Stock options are granted with an exercise price no lower than the fair market value at the grant date. They typically encompass a vesting period of to three years and a contractual term of ten years. Share-based compensation expense for stock options is recognized on a straight-line basis over the requisite vesting period, determined by the grant-date fair value for the portion of the award expected to vest. The Company employs the Black-Scholes options pricing model to estimate the fair value of its stock options. The Company may issue either
new shares or treasury shares upon exercise of these awards.
The following table summarizes stock option activity for the six months ended September 30, 2026:
At September 30, 2026, total unrecognized stock-based compensation expense related to unvested stock options, net of estimated forfeitures, was $2.1 million, with an expected remaining weighted-average recognition period of 1.56 years.
Restricted Stock
Awards of restricted stock units are grants of time-based restricted stock units (“RSUs”) that are issued at no cost to the recipient. The stock-based compensation expense for these awards is determined using the fair market value of the Company’s common stock on the date of the grant. No capital transaction occurs until the units vest, at which time they are converted to restricted or unrestricted stock. Compensation expense for RSUs with a time condition is recognized on a straight-line basis over the requisite service period.
Restricted stock awards (“RSAs”) are awards of common stock that are legally issued and outstanding. RSAs are subject to time-based restrictions on transfer and unvested portions are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the lapse of the restrictions. The stock-based compensation expense for these awards is determined using the fair market value of the Company’s common stock on the date of the grant. The RSAs have time conditions and in some cases, once the stock vests, the individual is restricted from selling the shares of stock for a certain defined period, from three months to one year, depending on the terms of the RSA.
The following table summarizes RSU and RSA activity for the six months ended September 30, 2026:
At September 30, 2026, total unrecognized stock-based compensation expense related to RSUs and RSAs was $18.1 million, with an expected remaining weighted-average recognition period of 2.27 years.
Performance-Based Stock Units
The Company periodically grants PSUs, at no cost to the recipient, to certain key employees that are subject to the achievement of specified internal performance metrics over a specified performance period. The terms and conditions of the PSUs generally allow for vesting of the awards ranging between forfeiture and up to 200% of target. Stock-based compensation expense for PSUs with a performance condition is determined using the
fair market value of the Company’s common stock on the date of the grant and recognized on a straight-line basis based on the most likely attainment scenario over the performance period. The most likely attainment scenario is reevaluated each period.
During the three months ended September 30, 2026, the Company granted 191,716 PSUs subject to both a market condition and service condition requiring continued employment through June 15, 2029. The market condition is based on the Company’s total shareholder return (“TSR”) relative to the TSR of a defined peer group over the measurement period, with vesting ranging from 0% to 150% of the target number of shares depending on the Company’s relative TSR ranking. The grant-date fair value of these awards was estimated using a Monte Carlo simulation model.
The following table summarizes the assumptions and related grant-date fair value of the PSUs subject to market conditions granted during the three months ended September 30, 2026:
The following table summarizes the PSU activity for the six months ended September 30, 2026:
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(1) Includes 191,716 of PSUs with a market condition valued using a Monte Carlo simulation, with an average grant-date fair value of $12.04 per share.
At September 30, 2026, total unrecognized stock-based compensation expense related to PSUs was $5.2 million, with an expected remaining weighted-average recognition period of 2.46 years. This amount excludes $1.3 million of unrecognized compensation cost related to 328,981 unvested shares for which the performance conditions are not considered probable of achievement.
Shares Withheld for Tax Purposes
For RSUs, RSAs and PSUs, the number of shares issued on the date of vesting is generally net of statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. For the six months ended September 30, 2026 and 2025, we withheld and retired approximately 55,632 and 72,600 shares to satisfy $0.4 million and $0.3 million of employees’ tax obligations, respectively. These shares are treated as common stock repurchases in our condensed consolidated financial statements.
Stock-Based Compensation Expense
Stock-based compensation expense, within general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss), was as follows:
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