Company: CSTL
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001447362-25-000097
Chunk: 125

Company: CASTLE BIOSCIENCES INC
Filing Date: 2025-08-04
Form: 10-Q
Item: Item 8
Chunk 125
---
 the ESPP.Determining Fair Value - Summary of AssumptionsWe use the Black-Scholes valuation model to estimate the fair value of the purchase rights issued under the ESPP at the date of grant, start of the offering or other relevant measurement date. The following table sets forth assumptions used under the ESPP: Six Months EndedJune 30,20252024Average expected term (years)1.21.3Expected stock price volatility 56.55% - 85.21%72.04% - 130.95%Risk-free interest rate 3.88% - 4.22%4.43% - 5.33%Dividend yield—%—%Fair ValueThere were no stock options granted for the six months ended June 30, 2025 and 2024. For the six months ended June 30, 2025 and 2024, the weighted-average grant date fair value of the purchase rights granted under the ESPP was $9.43 and $11.17 per share, 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