How Much DTC Brands Pay in Stock-Based Comp: 2026 Public Data

Most operators look at stock-based compensation like dental insurance: a line they don't think about until something breaks. That works when you are private and it costs you nothing. It stops working the moment a sophisticated buyer opens your cap table and prices what equity grants actually cost.

This is the public DTC and CPG benchmark page for stock-based compensation (SBC) as a percentage of revenue. We pulled 10-K filings for 15 public direct-to-consumer and CPG brands via SEC EDGAR. Median 2.63%. Mean 4.22%. Range from Lululemon at 0.56% to FIGS at 19.34%. That spread is the single most important thing to understand about this metric. SBC is a stage variable, not a strategy variable, and how you handle it at $30M revenue is very different from how a public operator handles it at $1.3B.

The honest version of the SBC conversation: it is a real cost. Existing shareholders pay for it through permanent dilution. Adjusted EBITDA that strips it out is fine for operating performance — it is not fine for valuation. Across 35+ brands, the times I've seen this go sideways are when founders treated SBC as Monopoly money during cash-tight years and then tried to recapitalize at exit. By then you cannot fix it without a major dilutive round or a haircut on the deal.

What does the SBC benchmark actually look like across public DTC?

Here is the full sample sorted descending. All figures sourced from each company's most recent 10-K via SEC EDGAR. Revenue is fiscal-year revenue from the corresponding filing. SBC is the stock-based compensation expense reported in the cash flow statement or footnotes.

Company	Category	FY	Revenue (USD)	SBC % Rev
FIGS	Apparel DTC	2021	$419.6M	19.34%
Beyond Meat	Food CPG	2025	$275.5M	11.25%
e.l.f. Beauty	Beauty CPG	2025	$1.31B	5.47%
Beauty Health	Beauty CPG	2025	$300.8M	4.93%
Warby Parker	Eyewear DTC	2025	$871.9M	3.96%
Olaplex	Haircare CPG	2025	$423.0M	3.14%
Honest Co	Personal care DTC	2025	$371.3M	2.83%
Bark Inc.	Pet DTC	2025	$484.2M	2.63% (median)
Yeti	Outdoor DTC	2026	$1.87B	2.55%
Vital Farms	Food CPG	2025	$759.4M	1.63%
Celsius Holdings	Beverage CPG	2023	$1.32B	1.61%
Funko	Collectibles DTC	2025	$908.2M	1.27%
Stitch Fix	Apparel DTC	2018	$1.23B	1.26%
Revolve	Apparel DTC	2025	$1.23B	0.86%
Lululemon	Apparel DTC+retail	2026	$11.10B	0.56%

Summary statistics for n=15: median 2.63%, mean 4.22%, P25 1.27%, P75 3.96%, min 0.56%, max 19.34%. The distribution is right-skewed — most of the sample sits in a tight band between 1% and 4%, with a small handful of outliers above 5% pulling the mean upward.

Why are FIGS and Beyond Meat so high?

FIGS at 19.34% is a 2021 IPO-vintage data point. The company went public in May 2021 and the 10-K captures its first full fiscal year as a public company — pre-IPO grants vesting, IPO-triggered performance awards, and founder-CEO equity all hitting one fiscal year on a $420M revenue base. It is not "normal" operating SBC; it is years of equity grants compressed into a 12-month window because the IPO triggered recognition. By FY2024 FIGS had normalized closer to 6-8%.

Beyond Meat at 11.25% tells a different story. Revenue shrank — $275.5M in FY2025 vs. ~$407M at peak in 2021 — while equity comp expense did not shrink at the same rate. Underwater RSU repricings, retention grants for executives staying through a turnaround, and ongoing board grants all stack against a smaller denominator and the ratio balloons. This is "SBC as a function of stage" on the way down: declining revenue, sticky equity comp, ratio explodes.

e.l.f. Beauty at 5.47% is more interesting. Profitable, growing fast, $1.3B in revenue. Why above the median? Because they are still using equity aggressively to retain talent against incumbents like L'Oréal and Estée Lauder, and grants are being made on a stock that has been one of the best-performing CPG names of the last three years. Strong stock price + aggressive grants = elevated SBC even at scale. The "equity as a weapon" model works — until the stock corrects, at which point recognized expense lags the value drop.

Beauty Health and Honest Co

Beauty Health (Hydrafacial parent) at 4.93% and Honest Co at 2.83% sit in the post-IPO normalization band. Both went public during the 2020-2021 SPAC/IPO wave and have spent the years since working through pre-IPO grant overhangs. Honest was over 8% in 2022. Both are still elevated vs. the mature operators below them on the table.

Why are Lululemon and Revolve so low?

Lululemon at 0.56% on $11.1B of revenue is the floor for scaled DTC. They grant equity, they run an exec comp program with performance-vested RSUs, but the denominator is so large that even hundreds of millions in annual SBC barely registers. The scale flatters the ratio: at $11B in revenue, $62M of SBC is 56 basis points; at $300M, that same dollar amount is over 20%.

Revolve at 0.86% and Stitch Fix at 1.26% are both founder-led, profitable, mature DTCs that never went through a venture-stage equity-spray phase. Revolve runs a tight, founder-controlled cap table — Karanikolas and Mente have not diluted aggressively. Stitch Fix's 1.26% is from their 2018 IPO year, and even then they printed sub-2% because Katrina Lake had built a profitable business before going public rather than burning cash and replacing it with equity comp.

The pattern: founder-controlled, profitable DTCs with disciplined grants produce sub-1.5% SBC ratios at scale. Venture-funded operators that scaled through equity grants produce 5-10x higher ratios at the same revenue level.

Should SBC be added back to EBITDA?

This is the debate that won't die, and it is mostly a debate because the answer is uncomfortable. The sophisticated answer is: it depends on what you are measuring.

• Measuring operating cash performance? Add SBC back. It is non-cash in the period. Adjusted EBITDA without SBC is a fine proxy for operating cash generation.
• Measuring shareholder return? Do not add it back. SBC dilutes existing shareholders permanently. The cash never leaves the company, but the claim on future cash flows is sliced thinner. Net income reflects this honestly. Adjusted EBITDA does not.
• Valuing the business for sale? Account for it through fully diluted share count. Buffett's argument — "if compensation isn't an expense, what is it?" — applies. Sophisticated PE and strategic buyers don't actually fall for adjusted EBITDA that strips SBC out. They run a cash-flow model and capture dilution in the share count, so the add-back doesn't change the deal price; it just changes how the math is presented.

Where it goes wrong: founders and CEOs internalize the adjusted EBITDA narrative because the IR teams and bankers love it, and then they make operating decisions as if SBC were genuinely free. They grant equity aggressively. They use it as a substitute for raises in cash-tight years. They tell themselves they're being "capital efficient." Three years later, fully diluted shares are up 35%, the founder owns less than they thought, and the next round prices them in at a flat or down position because the cap table has run away from the business.

The cleanest way I've seen sophisticated operators handle this: they report adjusted EBITDA externally because the buy-side expects it, but internally they manage to net income and watch fully diluted share growth like a hawk. Public market framing for the public market audience; private market framing for the internal cap-table-management audience. Both can be true.

What changes in 2026 with FASB ASU 2024-03?

FASB's ASU 2024-03 — the Disaggregation of Income Statement Expenses (DISE) rule — kicks in for fiscal years beginning after December 15, 2026. Public companies have to disaggregate income statement line items into specified expense categories, including SBC, in standardized footnote tables. Right now SBC can be buried in COGS, R&D, S&M, or G&A depending on the recipient's function, and pulling it out requires reading footnotes line by line. Post-DISE the data is standardized.

Practical implications:

• SBC outliers become easier to flag. A FIGS-style 19% ratio jumps off the page. Elevated-SBC brands get more analyst questions, faster.
• Add-back tolerance narrows. Less excuse for taking adjusted EBITDA at face value when the standardized SBC line is right there.
• Cross-category comparability improves. Comparing SBC across FIGS (apparel), Beyond Meat (food), and Beauty Health (medical aesthetics) gets easier.

For private DTCs planning IPO or M&A exits in 2027-2030, this matters. The "everyone adds back SBC" defense looks weaker each year.

What is the real cost vs. the accounting cost?

Accounting cost: the stock-based compensation expense recognized in the period, typically the grant-date fair value of awards vesting during that period using a Black-Scholes or Monte Carlo model.

Real cost: the percentage of the company's future cash flows that has been transferred from existing shareholders to employees, minus whatever incremental value those employees create that wouldn't have existed otherwise.

The two are not the same number and sometimes are not even close. A grant priced at the 2021 stock peak that vests through 2025 carries accounting expense based on 2021 fair value. The real cost — what the existing shareholder gave up — is the present value of the dilution claim against today's much-lower stock price. For Beyond Meat, Honest Co, and Beauty Health, accounting SBC is materially higher than economic cost because grants were priced into peak-cycle valuations. For e.l.f., accounting SBC is materially lower than economic cost because grants were priced before a 5-7x stock run. The accountants record the math; the cap table records the truth.

The framing I use with founders

When modeling this, I run two numbers in parallel. Accounting SBC tells you what hits the P&L. The dilution path — fully diluted shares year-over-year — tells you what your ownership actually does. When the two diverge (typically when the stock has run up or down hard), the dilution path is more honest. SBC as % of revenue is a useful comparable benchmark; dilution % per year is the metric that tells you whether you can still sell the company to yourself.

What is healthy SBC structure for a private DTC brand?

Public benchmarks are useful only if you can translate them. Here's the translation for the $5M-$150M private DTC and CPG brands we work with:

• Target SBC under 2% of revenue. Below the public median because you do not yet have the talent-retention pressures that come with being public. If you are running 5%+ SBC at a private brand, you are probably overgranting because cash is tight and equity feels free. It is not free.
• Target annual dilution under 1.5%. This is the metric that actually matters at the cap-table level. Translate option grants into expected fully-diluted share growth and watch this number, not the accounting line.
• Concentrate grants at the top of the org chart. Senior leadership team (5-10 people) should hold meaningful equity. Spraying RSUs across the bottom of the org chart in lieu of competitive cash comp is the cap-table mistake that compounds.
• Use performance-vested grants where you can. Time-vesting alone rewards staying. Performance-vesting rewards results. The latter is what investors and acquirers want to see in a mature comp program.
• Refresh the option pool annually with a small top-up (0.5-1% of fully diluted), not in big bursts. Big once-every-three-years pool expansions create cap-table cliff dilutions that look bad in diligence. Annual top-ups smooth the curve.

The structure that works: small annual top-ups, concentrated at the top of the org chart, performance-vested where possible, with founders and early employees retaining meaningful ownership through the journey. The structure that doesn't work: spraying grants across the org as comp substitutes because cash is tight. That is borrowing from your future cap table to pay current operating costs. It always shows up later.

How do investors and buyers actually treat SBC in 2026?

Three buyer types, three different treatments:

Strategic acquirers (PE-backed or corporate)

Run a present-value-of-future-cash-flows model. SBC is captured through the fully diluted share count and dilution path baked into projections. They do not care whether you report it in adjusted EBITDA — they adjust on their side. What they care about is cap-table cleanliness, grant cadence, and whether your equity comp program is sustainable post-acquisition.

Multiples-based buyers (rollups, growth equity)

More likely to take adjusted EBITDA at face value, especially in deal heat. This is where the add-back materially helps valuation — until the diligence team works the math. Expect more sophisticated diligence in 2026 as DISE-disaggregated data flows through.

Public market investors

Split. Long-only fundamental investors penalize aggressive SBC. Quant and momentum investors barely look at it. Consensus: SBC at 5-10% is "fine" if growth justifies it, above 15% draws scrutiny regardless of growth.

Frequently Asked Questions

What is the median stock-based compensation as a percentage of revenue for public DTC brands in 2026?

Across 15 public DTC and CPG brands sourced from SEC EDGAR 10-K filings, the median stock-based compensation as a percentage of revenue is 2.63%. The mean is higher at 4.22% because of right-skew from outliers like FIGS at 19.34% and Beyond Meat at 11.25%. The 25th-75th percentile band is 1.27% to 3.96%. Lululemon at $11.1B revenue prints 0.56% — the floor for scaled DTC. The takeaway: 2-4% of revenue is the normal SBC band for a healthy public DTC, and anything above 8% is venture-stage equity intensity that does not survive the scale-up transition.

Should stock-based compensation be added back to EBITDA?

Sometimes. The honest answer: SBC is a real cost — it dilutes existing shareholders, the dilution is permanent, and treating it as "non-cash" on a slide deck does not make it free. Buffett expenses it. Most fairness opinions expense it. But if you are valuing a private DTC where the founder owns 80%+ and grants are minimal, the SBC line on the P&L is largely irrelevant and adjusted EBITDA without it is a more useful operating cash proxy. The add-back debate matters most for SaaS and high-equity-intensity DTC where SBC runs 10-20% of revenue. Below 3% it is rounding noise. Above 8% it is materially distorting your operating picture.

Why does FIGS have 19.34% SBC and Lululemon only 0.56%?

FIGS at 19.34% reflects 2021 IPO-vintage SBC — pre-IPO grants vesting plus IPO-triggered performance awards all hitting one fiscal year on a relatively small revenue base ($420M). It is not normal operating SBC. Lululemon at 0.56% reflects a $11.1B-revenue mature operator where equity grants are denominator-dwarfed by revenue scale. The two companies tell you the same thing: SBC as % of revenue is a function of stage, not strategy. Venture-stage and IPO-vintage DTCs run 8-20%. Mature operators run 0.5-2%. The middle of the curve at 2-4% is where most public DTCs live in steady state.

Do investors discount adjusted EBITDA that excludes SBC?

Sophisticated investors do, junior ones do not. PE firms and strategic acquirers running a present-value-of-future-cash-flows model account for SBC through the share count — they pay attention to fully diluted shares and the dilution path, so adding it back does not actually fool them. Multiples-based buyers and retail investors often take adjusted EBITDA at face value, which is exactly why companies report it. As of 2026, FASB's ASU 2024-03 (DISE) tightens income statement disaggregation rules, which makes SBC outliers easier to flag and reduces tolerance for aggressive add-backs. Expect the gap between adjusted-EBITDA-friendly venues and SBC-aware buyers to widen further.

What is a healthy SBC structure for a private DTC brand?

For a private DTC brand $5M-$150M, SBC under 2% of revenue with annual dilution under 1.5% is healthy. Above 5% of revenue or 3% annual dilution starts to look like a venture-stage cap table that has not adjusted to a profitable-growth thesis. The structure that works: small annual option pool top-ups (0.5-1% of fully diluted shares) directed at the senior leadership team, performance-vested where possible, with a clear sense that founders and early employees retain meaningful ownership. The structure that does not work: spraying RSUs across 200 employees as compensation substitutes because cash is tight. That is borrowing from your future cap table to pay current operating costs, and it shows up later as a dilution problem you cannot fix without a recap.

Sources and methodology

Data sourced from each company's most recent 10-K filing via SEC EDGAR. Stock-based compensation is taken from each company's cash flow statement (non-cash adjustment to net income) or footnote disclosure where unavailable in the cash flow line. Revenue is fiscal-year revenue from the corresponding filing. SBC % of revenue calculated as SBC expense divided by total revenue.

Sample size: n=15 public DTC and CPG brands. Statistics: median 2.63%, mean 4.22%, P25 1.27%, P75 3.96%, min 0.56% (Lululemon), max 19.34% (FIGS). Fiscal years range from 2018 (Stitch Fix) to 2026 (Lululemon, Yeti) depending on each company's reporting calendar; most data points are from 2025 fiscal-year filings. Where companies report mid-year fiscal calendars (e.g., Lululemon's January year-end, Yeti's January year-end), the most recent annual filing is used.

Additional context on the FASB DISE rule (ASU 2024-03): Equity Methods, "Our Take on What's Ahead in Stock Compensation for 2026." On SBC valuation treatment debate: IB Interview Questions, "Stock-Based Compensation Valuation"; Next Big Teng, "Unraveling Stock-Based Compensation"; Fuji Kapital, "Stock-Based Compensation: Is It Real?"