For the better part of a decade, the SaaS industry operated under a convenient assumption: stock-based compensation wasn't a *real* cost. It was a non-cash expense, an accounting adjustment to be added back on the way to "adjusted" EBITDA. Investors largely accepted this framing. So did boards. So did the executives who designed the comp plans and then excluded them from the metrics they used to measure performance. That assumption is now being tested in the most unforgiving way possible. The uncomfortable truth is that RSUs have always been a cash equivalent. Employees understand this intuitively — they sell on vest, consistently, and budget their RSU income the same way they budget their salary. When a company grants an employee $200,000 in RSUs, that employee expects $200,000 in real, spendable dollars. There is little ownership mentality or long-term alignment baked into the instrument. It is compensation that happens to route through a brokerage account. The reporting frameworks, meanwhile, were built around a different premise. Adjusted EBITDA, adjusted operating income, adjusted free cash flow — all stripped of SBC as though diluting shareholders by 5-8% per year were a footnote rather than a core feature of the cost structure. Because the expense was "non-cash," it was treated as non-economic. But the dilution was always real. The selling pressure on every vesting date was always real. The cost of talent was always real. Now the AI disruption of 2026 is forcing the issue. The SaaS universe has been repriced — sharply and broadly — as the market recalibrates what recurring software revenue is worth in a world where AI is compressing development cycles, automating workflows, and threatening to commoditize features that once commanded premium pricing. Companies that were valued on the assumption of durable competitive moats are now facing questions about whether those moats still hold. Stock prices reflect that uncertainty. For employees, this means vesting tranches worth a fraction of what they expected when they accepted their offer letters or negotiated their last refresh. And because they've always treated RSUs as cash, they don't experience this as an investment that didn't pan out. They experience it as a pay cut. That leaves companies with an impossible choice. They can grant more shares to make employees whole and keep them from walking to competitors — but the math is brutal. If your stock is down 50%, you need twice as many shares to deliver the same compensation value, and that dilution compounds when the stock eventually recovers. Or they can hold the line on share grants and risk losing the engineers, product managers, and salespeople who *are* the business. In a capital-light, talent-heavy model, there is no version of this that doesn't hurt. The companies most exposed are the ones that never reached genuine, SBC-inclusive profitability. Where equity grants were quietly subsidizing a cost structure that couldn't stand on its own, the subsidy has now gotten dramatically more expensive — right at the moment when the business model itself is under pressure. None of this means the SaaS model is broken. Recurring revenue, high gross margins, and scalable delivery are still powerful attributes. But the current environment is revealing a cost that was always there, hidden in plain sight behind an add-back. The companies that navigate this well will be the ones that start doing the honest accounting — treating SBC as what it always was: compensation, denominated in cash, paid for by shareholders. Consumer Internet companies learned this lesson years ago.