Financial health
Stock-based compensation
SBC
What it is
The share of pay delivered in stock or options rather than cash. Very common in technology.
How to read it
Since no cash leaves, it's added back in the cash flow statement. But it does have a cost: it creates new shares, diluting every existing shareholder's stake.
What it does not tell you
🪤 A major point of debate. Many companies present it as a "non-recurring" charge to ignore — yet it recurs every year and dilutes every year. Comparing it to revenue gives a sense of its real scale.
Other measures — Financial health
Educational content. Polaris is not a registered investment adviser and makes no recommendation.