Redwire Corporation Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Equity-Based Compensation

Equity-Based Compensation

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

Note P – Equity-Based Compensation

Incentive Units

The Company’s former parent, AE Red Holdings, LLC (formerly known as Redwire Holdings, LLC) (“Holdings”) adopted a written compensatory benefit plan (the “Class P Unit Incentive Plan”) to provide incentives to existing or new employees, officers, managers, directors, or other service providers of the Company or its subsidiaries in the form of Holdings’ Class P Units (“Incentive Units”). As amended, the Tranche I and the Tranche III Incentive Units became fully vested in 2021. Holdings also amended the Class P Unit Incentive Plan so that the Tranche II Incentive Units would vest on any liquidation event, as defined in the Class P Unit Incentive Plan, rather than only upon consummation of the sale of Holdings, subject to the market-based condition stipulated in the Class P Unit Incentive Plan prior to its amendment. All compensation expense was recognized during 2021 and 2022 and as of September 30, 2025, Tranches I and III were fully vested and Tranche II is still subject to the market-based vesting condition.

The former parent of Edge Autonomy, Ultimate Holdings, adopted a written compensatory benefit plan (the “Edge Incentive Unit Plan”) to provide incentives to existing or new employees, officers, managers, directors, or other service providers of Edge Autonomy or its subsidiaries in the form of Ultimate Holdings’ Class A and B Units (“Edge Incentive Units”). In June 2025, Ultimate Holdings amended the Edge Incentive Unit Plan which caused the Tranche I Edge Incentive Units to vest as of the amended date, the Tranche II

Edge Incentive Units to vest on the first anniversary of the Edge Autonomy acquisition date, and the Tranche III Edge Incentive Units to vest on the second anniversary of the Edge Autonomy acquisition date. In connection with the amended Edge Incentive Unit Plan, the Company determined the weighted average fair value at the modification date of the Edge Incentive Units as $13.94 per unit using Black-Scholes OPM with the following assumptions:


	June 23, 2025
Strike price	$1.00 to $7.71
Redwire common stock price	$15.36
Time to exit	1.52 to 2.52 years
Expected volatility	94.00% to 89.30%
Risk-free rate of return	3.88% to 3.78%
Expected annual dividend yield	—	%

Both Tranche II and III vesting is subject to the employee’s continued employment with the Company. The fair value determined at the date of the amendment of the Edge Incentive Unit Plan was immediately recognized as compensation expense for Tranche I. Compensation expense for Tranche II and III is being derived over the service period of one and two years, respectively, and recognized on a straight-line basis. As of September 30, 2025, there was approximately $49.9 million of unrecognized compensation cost related to the Tranche II and III Edge Incentive Units expected to be recognized over a weighted-average period of 1.70 years.

2021 Omnibus Incentive Plan

Shares of the Company’s stock reserved for grants under the 2021 Omnibus Incentive Plan (the “Plan”) were 13,126,536 and 11,786,489 as of September 30, 2025 and December 31, 2024, respectively. Incentive stock options may only be granted to employees and officers employed by the Company. The Plan appoints the Board, the Compensation Committee or such other committee consisting of two or more individuals appointed by the Board to administer the Plan.

Stock Options

The Company’s Plan authorizes the grant of stock options (incentive and non-qualified) to purchase shares of the Company’s common stock with a contractual term of 10 years. The options vest over a three-year term as follows: 33.3% on the first anniversary of the grant date, 33.3% on the second anniversary of the grant date, and 33.4% on the third anniversary of the grant date. Vesting is contingent upon continued employment with or service to the Company; both the unexercised vested and unvested portions of an option will be immediately forfeited and canceled if employment or service ceases to the Company. The Company recognizes equity-based compensation expense for the options equal to the fair value of the awards on a straight-line basis over the requisite service period and recognizes forfeitures as they occur. The fair value of options granted under the Plan is estimated on the grant date under the Black-Scholes OPM.

The Company did not grant any options under the Plan and there were no forfeitures or expirations of stock options during the nine months ended September 30, 2025.

The table below presents the outstanding stock options under the Plan:


	Number of Options	Weighted-Average Grant Date Fair Value per Share		Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (Years)




















Outstanding as of December 31,2024	1,742,942	$	2.64	$	6.96	7.04

Exercised	(13,670)	1.80		3.13


Outstanding as of September 30, 2025	1,729,272	$	2.65	$	6.99	6.29

As of September 30, 2025, there was no remaining unrecognized compensation cost related to stock options granted under the Plan. As of September 30, 2025, there were 1,729,272 stock options that were vested and exercisable.

Performance-based Restricted Stock Units

The Plan authorizes the grant of performance-based restricted stock units (“PSUs”). The PSUs generally vest upon completion of a three-year period (“Performance Period”). For awards granted in 2023 and 2024, the number of shares, if any, that are ultimately

awarded is contingent upon the Company’s closing price per share at the end of the Performance Period and continued employment or service to the Company. The PSU award allows the grantee to earn between 0% and 200% of the target award based on the Company’s closing stock price per share at the end of the Performance Period. The performance share payout is based on a market condition, and as such, the awards are valued using a Monte Carlo simulation model on the grant date. The model generates the fair value of the award at the grant date, which is then recognized as compensation expense on a straight-line basis over the requisite service period. The Company recognizes forfeitures as they occur.

During the three months ended September 30, 2025, the Company granted 346,240 PSUs to certain officers, managers and other eligible employees pursuant to the Plan. The PSU award allows the grantee to earn between 0% and 200% of the target award based on the Company’s share performance compared to the Russell Index 2000 Total Return for the period of January 1, 2025 through December 31, 2027 and is contingent on the continued employment with or service to the Company. The grant date fair value of these awards was $26.02 per share.

The fair value of PSUs granted under the Plan was estimated on the grant date using a Monte Carlo simulation model with the following assumptions:


	2025 Grants
Valuation date stock price	$	17.50
Remaining term of performance period	2.46 years
Expected volatility	88.80		%
Risk-free rate of return	3.83		%
Expected annual dividend yield	—		%

The table below presents the outstanding PSUs under the Plan:


	Number of PSUs	Weighted-Average Grant Date Fair Value per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value








Outstanding as of December 31, 2024	1,459,962	$	8.48	1.6	$	24,031
Granted	346,240	26.02


Outstanding as of September 30, 2025	1,806,202	$	11.84	1.1	$	16,238

As of September 30, 2025, total unrecognized compensation cost related to unvested PSUs granted under the Plan was $13.7 million and is expected to be recognized over a weighted-average period of 1.1 years.

Restricted Stock Units

Restricted stock units (“RSUs”) awarded under the Plan follow the same vesting conditions as the options described above and are generally subject to forfeiture in the event of termination of employment prior to vesting dates. The Company recognizes equity-based compensation expense for the RSUs equal to the grant date fair value of the awards on a straight-line basis over the requisite service period and recognizes forfeitures as they occur.

During May and July 2025, the Company granted RSUs under the Plan to non-employee directors. These RSUs vest over one year and the weighted average grant date fair value of these awards was $13.46 per share. During three months ended September 30, 2025, the Company granted 935,935 RSUs to certain officers, managers and other eligible employees. The RSUs follow the same vesting conditions as the options described above. The weighted average grant date fair value of these awards was $15.97 per share based on the closing price of the Company’s common stock on the grant date.

The table below presents the activity of RSUs under the Plan:


	Number of RSUs	Weighted-Average Grant Date Fair Value per Share		Weighted-Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
















Unvested as of December 31, 2024	2,441,971	$	4.93	1.1	$	40,195
Granted	1,025,085	15.75
Vested	(1,326,773)	4.56
Forfeited	(60,771)	3.17
Unvested as of September 30, 2025	2,079,512	$	10.56	1.4	$	18,695

As of September 30, 2025, total unrecognized compensation cost related to unvested RSUs granted under the Plan was $19.8 million and is expected to be recognized over a weighted-average period of 2.0 years.

Employee Stock Purchase Plan

On September 2, 2021, the Company’s Board adopted the Redwire Corporation 2021 Employee Stock Purchase Plan (the “ESPP”) which authorizes the grant of rights to purchase common stock of the Company to employees, officers and directors (if they are otherwise employees) of the Company. Shares of the Company’s common stock reserved for grants under the ESPP were 3,351,023 and 2,680,999 as of September 30, 2025 and December 31, 2024, respectively. The ESPP appoints the Compensation Committee to administer the ESPP. Under the ESPP, each offering has an enrollment period during which each eligible employee has the option to enroll allowing the eligible employee to purchase shares of the Company’s common stock at the end of the offering period. Each offering period under the ESPP is generally for five months, which can be modified from time to time. Subject to limitations, each participant will be permitted to purchase a number of shares determined by dividing the employee’s accumulated payroll deductions for the offering period by the applicable purchase price. The applicable purchase price is calculated as an amount equal to 85% of the fair market value of the Company’s common stock at either the beginning or end of each offering period, whichever is less. A participant must designate in the enrollment package the percentage (if any) up to 15% of compensation to be deducted during that offering period for the purchase of stock under the ESPP, subject to certain limitations. As of September 30, 2025, the Company had three completed offering periods and one active offering period.

The ESPP is considered a compensatory plan with the related compensation cost expensed over the five-month offering period. The Company utilizes the Black-Scholes OPM to compute the fair market value of shares under the ESPP for each offering period. As of September 30, 2025, an aggregate of 339,835 shares had been purchased and 3,011,188 shares were available for future sales under the ESPP.

The table below presents the equity-based compensation expense recorded for the following periods:



	Three Months Ended				Nine Months Ended
	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Cost of sales
Edge incentive units	$	413	$	—	$	413	$	—
ESPP	159		60		375		130
Stock options	—		1		—		16
Restricted stock units	472		459		1,366		1,576
Performance-based restricted stock units	43		19		86		28
Total cost of sales	$	1,087	$	539	$	2,240	$	1,750

Selling, general and administrative expenses
Edge incentive units	$	6,984	$	—	$	36,611	$	—
ESPP	120		42		211		88
Stock options	1		311		227		1,040
Restricted stock units	1,822		1,588		3,892		3,692
Performance-based restricted stock units	1,979		1,113		4,410		1,476
Total selling, general and administrative expenses	$	10,906	$	3,054	$	45,351	$	6,296

Total equity-based compensation expense	$	11,993	$	3,593	$	47,591	$	8,046