Company: CSTL
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001447362-25-000097
Chunk: 29

Company: CASTLE BIOSCIENCES INC
Filing Date: 2025-08-04
Form: 10-Q
Item: Item 1
Chunk 29
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 respectively. 

23

Table of ContentsCASTLE BIOSCIENCES, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)(UNAUDITED)

Stock-Based Compensation ExpenseStock-based compensation expense is included in the unaudited condensed consolidated statements of operations as follows (in thousands): Three Months EndedJune 30,Six Months EndedJune 30, 2025202420252024Cost of sales (exclusive of amortization of acquired intangible assets)$1,422 $1,401 $2,878 $2,715 Research and development1,962 2,637 3,857 5,266 Selling, general and administrative7,824 9,141 15,652 17,873 Total stock-based compensation expense$11,208 $13,179 $22,387 $25,854 Retirement Policy In January 2023, our board of directors approved a retirement policy (the “Retirement Policy”) that provides for acceleration of a portion of unvested awards granted to and held by certain eligible employees upon meeting age, service and notice requirements. Pursuant to the Retirement Policy, we accelerated the recognition of compensation expense of $0.2 million and $0.4 million during the three months ended June 30, 2025, and 2024, respectively, and accelerated the recognition of compensation expense of $0.5 million and $0.6 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, the total unrecognized stock-based compensation cost related to outstanding awards was $80.5 million, which is expected to be recognized over a weighted-average period of 2.5 years. The total unrecognized compensation cost will be adjusted for forfeitures in future periods as they occur. 

14. Income Taxes

During the three and six months ended June 30, 2025, we recognized income tax benefit of $4.7 million and $5.1 million, respectively, primarily from the reduction of the valuation allowance on deferred tax assets, recorded as a discrete benefit in the quarter ended June 30, 2025. This release was primarily driven by the acquisition of Capsulomics, which resulted in deferred tax liabilities related to acquired intangible assets. The deferred tax assets previously reserved are now expected to be realizable against those liabilities. This release is non‑recurring and materially impacted