Stockholders' Equity and Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Assumptions Used in the Black-Scholes Model to Value Options Granted

The following summarizes the assumptions used in the Black-Scholes model to value options granted during the years ended December 31:

2025

2024

2023

Risk-free interest rate

3.8 – 4.3%

4.0 – 4.5%

4.6 – 4.7%

Weighted average volatility

30.6%

33.0% – 36.1%

32.7% – 35.7%

Dividend yield

0.4% – 0.5%

—%

Expected years until exercise

5 – 7

Schedule of Option Activity Under the Company's Stock Plans

The following summarizes option activity under the Company’s stock plans:


(in millions, except weighted average exercise price and number of years)	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Balance, January 1, 2023	—	$	—
Awards converted from Former Parent Plan	5.7	58.22
Granted	0.1	77.53
Exercised	(0.1)	31.81
Cancelled/forfeited	(0.1)	78.05
Outstanding as of December 31, 2023	5.6	$	58.93	6.3	$	141

Granted	0.9	89.15
Exercised	(0.8)	41.36
Cancelled/forfeited	(0.3)	81.69
Outstanding as of December 31, 2024	5.4	65.52		6.0	$	199

Granted	0.9	99.84
Exercised	(0.8)	50.10
Cancelled/forfeited	(0.2)	87.86
Outstanding as of December 31, 2025	5.3	$	72.66	5.0	$	148
Vested and expected to vest as of December 31, 2025 (a)	5.4	$	72.36	5.0	$	148
Vested as of December 31, 2025	3.2	$	59.80	4.0	$	127

(a) The “expected to vest” options are the net unvested options that remain after applying the forfeiture rate assumption to total unvested options.

Schedule of Options Outstanding

Options outstanding as of December 31, 2025 are summarized below:


(in millions, except price per share and number of years)	Outstanding				Exercisable
Exercise Price	Shares	Average Exercise Price		Average Remaining Life (in years)	Shares	Average Exercise Price
$22.04 to $43.78	1.1	$	32.87	2	1.1	$	32.87
$43.79 to $75.81	1.1	62.22		4	1.0	60.46
$75.82 to $86.70	1.0	82.26		6	0.4	82.27
$86.71 to $98.00	1.1	88.54		6	0.5	89.83
$98.01 to $102.68	1.1	99.98		8	0.2	100.27

Schedule of RSU Activity

The following summarizes information on unvested RSU activity:


(in millions, except weighted average grant-date fair value)	Number of RSUs	Weighted Average Grant-Date Fair Value
Unvested as of January 1, 2023	—	$	—
Awards from Former Parent plan	1.0	76.38
Granted	0.1	76.19
Vested	(0.1)	80.20
Forfeited	—	77.93
Unvested as of December 31, 2023	1.0	$	76.23

Granted	0.5	95.60
Vested	(0.4)	71.07
Forfeited	(0.1)	81.19
Unvested as of December 31, 2024	1.0	$	86.45

Granted	0.6	107.71
Vested	(0.3)	79.46
Forfeited	(0.1)	88.73
Unvested as of December 31, 2025	1.2	$	97.38

Schedule of Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) by component are summarized below.


($ in millions)	Foreign Currency Translation Adjustments		Net Investment Hedges		Pension and Postretirement Plan Benefit Adjustments			Accumulated Comprehensive Income (Loss)
Balance, January 1, 2023	$	(968)	$	—	$	14		$	(954)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	29		(19)		(18)			(8)
Income tax impact	—		5		2			7
Other comprehensive income (loss) before reclassifications, net of income taxes	29		(14)		(16)			(1)
Reclassification adjustments
Increase	—		—		1		(a)	1
Income tax impact	—		—		—			—
Reclassification adjustments, net of income taxes	—		—		1			1
Net other comprehensive income (loss), net of income taxes	29		(14)		(15)			—
Balance, December 31, 2023	(939)		(14)		(1)			(954)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	(139)		34		—			(105)
Income tax impact	—		(8)		—			(8)
Other comprehensive income (loss) before reclassifications, net of income taxes	(139)		26		—			(113)
Reclassification adjustments
Increase (decrease)	—		—		(5)		(a)	(5)
Income tax impact	—		—		1			1
Reclassification adjustments, net of income taxes	—		—		(4)			(4)
Net other comprehensive income (loss), net of income taxes	(139)		26		(4)			(117)
Balance, December 31, 2024	(1,078)		12		(5)			(1,071)
Other comprehensive income (loss) before reclassifications:
Increase (decrease)	220		(79)		(3)			138
Income tax impact	—		19		—			19
Other comprehensive income (loss) before reclassifications, net of income taxes	220		(60)		(3)			157
Reclassification adjustments
Increase (decrease)	—		—		1		(a)	1
Income tax impact	—		—		—			—
Reclassification adjustments, net of income taxes	—		—		1			1
Net other comprehensive income (loss), net of income taxes	220		(60)		(2)			158
Balance, December 31, 2025	$	(858)	$	(48)	$	(7)		$	(913)

(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension and postretirement cost (refer to Note 14 for additional details).

Veralto Corp 10-K