Plan your Lambda NSO exercise

Calculator · free · no signup · pre-IPO

Lambda is pre-IPO. Plan your NSO exercise tax (federal, state, FICA) at any expected valuation.

Beta · invite-only · AlphaLatitude Inc. · Free Tools

Your grant

Seeded from secondary-market data, as of Jun 16, 2026

Tax inputs

Hold strategy

1 yr
20%
20%
10.0%
Pre-IPO assumption: Expected sale price assumes a liquid market at year N. In reality, pre-IPO shares clear via tender offers (priced at a discount to the 409A or last preferred round, on the company's calendar) or at IPO (subject to lockups). Use the haircut to reflect that uncertainty.

Best after-tax payout — at year 1

$149,637

Hold 1 yr wins by $34,340 over Sell + invest.

Estimates only. Not financial advice.

Your NSO exercise pushes your top federal rate from 24% to 35%. Hover the Federal value below for the bracket-by-bracket slicing.

Sell + invest

Bargain element (sale − strike)$198,700
Federal
State
Medicare$2,881
Additional Medicare$1,788
Market gain over 1 yr at 10.0%$10,756
LTCG on diversified gain (fed + state + NIIT)$3,023
Net at year 1$115,297

Sell every share immediately; invest the after-tax cash at the market return for 1 yr, then liquidate. Diversified — no single-stock concentration risk.

Exercise + hold 1 yr

Best payout
Sale proceeds (year 1)
LTCG tax (federal + state + NIIT)$16,443
Net at year 1$149,637

Sold 2,837 shares at exercise to cover strike + tax; 2,163 shares held 1 yr for LTCG.

Social Security + Medicare are payroll taxes (collectively called FICA) — they apply because you're exercising as a current employee.

Both columns are stated in year-1 dollars: sell-now proceeds compound at the market return and pay LTCG on the gain at year 1; any cash paid out of pocket on the hold side carries the same opportunity cost.

Net at year N — by hold period

Sell + investExercise + hold
$0$31K$62K$94K$125KYr 1Yr 2

Estimates only. Excludes AMT (NSOs do not trigger AMT), state-AMT, multi-state moves, and disqualifying-disposition edge cases. Not financial advice.

You calculated one NSO decision. The beta plans NSOs alongside RSUs and ISOs in a single multi-year tax plan.

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About Lambda

Lambda is a privately held Cloud/SaaS company, incorporated in Delaware and headquartered in San Francisco, CA.

Last reported secondary-market price: $49.74 per share (as of 2026-06-16). Your own 409A may differ.

GPU cloud.

Equity grants at Lambda typically include incentive stock options (ISOs) and non-qualified stock options (NSOs).

Lambda operates on-demand GPU cloud infrastructure for AI training and inference, holding NVIDIA Exemplar Cloud status and a multibillion-dollar dedicated capacity agreement with Microsoft. Twin brothers Stephen Balaban (CEO) and Michael Balaban (CTO) founded the company in San Francisco in 2012, initially building deep learning hardware, then pivoting fully to cloud services as GPU demand for AI workloads surged. Lambda serves more than 200,000 developers and teams. The company has raised $2.44 billion across ten rounds, most recently a $1.5 billion Series E in 2025 led by TWG Global.

Sources: lambda.ai · research.contrary.com

OptionsAhoy is an independent tool and is not affiliated with, endorsed by, or sponsored by Lambda.

Lambda NSO exercise creates ordinary income on the bargain element (federal, state, and FICA) at the price on the day you exercise. The calculator works at any valuation, so you can model your exercise cost at the current 409A FMV, an expected IPO price, or post-IPO scenarios.

Example: at Lambda's last reported price of $49.74, exercising 5,000 NSOs with a $14.92 strike creates a $174,100 bargain element, taxed as ordinary income on the day you exercise. Combined federal + state + FICA on that bargain typically lands between $47,007 and $78,345 depending on your bracket and state. The calculator above computes the exact figure for your situation and compares selling now vs. holding through the long-term capital-gains threshold.

All Lambda tools → · Use the generic NSO Exercise Calculator for any company.

Lambda equity questions

How is a Lambda NSO exercise taxed?
Exercising a non-qualified stock option (NSO) creates ordinary income on the bargain element (the price on the day you exercise minus your strike), subject to federal income tax, state income tax, and FICA. The calculator above computes that tax for your Lambda grant and compares selling the shares now against holding past the one-year mark for long-term capital-gains treatment.
Does Lambda grant ISOs, NSOs, or RSUs?
Equity compensation at Lambda typically takes the form of incentive stock options (ISOs) and non-qualified stock options (NSOs). Incentive stock options can trigger the alternative minimum tax (AMT) when you exercise.
Are Lambda shares eligible for QSBS?
They might be. Qualified small business stock (QSBS) under Internal Revenue Code Section 1202 can exclude federal tax on much of the gain when shares were acquired at original issuance from a C-corporation while its gross assets were under $50 million, and held at least five years. Whether your Lambda shares qualify turns on when you acquired them and the company's asset size at that time.
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