Quarterly report pursuant to Section 13 or 15(d)

Equity Incentive Plans and Stock-Based Compensation

v3.22.1
Equity Incentive Plans and Stock-Based Compensation
3 Months Ended
Apr. 30, 2022
Share-based Payment Arrangement [Abstract]  
Equity Incentive Plans and Stock-Based Compensation Equity Incentive Plans and Stock-Based Compensation
2021 Stock Plan
In April 2021, prior to and in connection with the IPO, we adopted our 2021 Stock Plan (the "2021 Plan"), which provides for grants of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), performance awards, and other forms of awards. As of April 30, 2022, we have reserved 145.9 million shares of our Class A common stock to be issued under the 2021 Plan. The number of shares of our Class A common stock reserved for issuance under the 2021 Plan will automatically increase on February 1 of each year for a period of ten years, which began on February 1, 2022 and continues through February 1, 2031, in an amount equal to (1) 5% of the total number of shares of our common stock (both Class A and Class B) outstanding on the preceding January 31, or (2) a lesser number of shares determined by our board of directors no later than the February 1 increase.
2021 Employee Stock Purchase Plan
In April 2021, prior to and in connection with the IPO, we adopted our 2021 Employee Stock Purchase Plan (the “ESPP”). As of April 30, 2022, the ESPP authorizes the issuance of 15.9 million shares of our Class A common stock under purchase rights granted to our employees or to employees of any of our designated affiliates. The number of shares of our Class A common stock reserved for issuance will automatically increase on February 1 of each year for a period of ten years, which began on February 1, 2022 and continues through February 1, 2031, by the lesser of (1) 1% of the total number of shares of our common stock (both Class A and Class B) outstanding on the preceding January 31; and (2) 15.5 million shares, except before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth by (1) and (2) above. The ESPP allows participants to purchase shares at the lesser of (1) 85% of the fair market value our Class A common stock as of the commencement of each offering period, and (2) 85% of the fair market value of our Class A common stock on the corresponding purchase date.
Stock Options
Stock option activity during the three months ended April 30, 2022 was as follows:
Stock
Options
(in thousands)
Weighted-
Average Exercise
Price
Weighted-Average
Remaining
Contractual
Life (years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding as of January 31, 2022 14,544  $ 1.64  7.6 $ 507,419 
Granted 118  $ 0.10 
Exercised (1,283) $ 2.09 
Forfeited (182) $ 2.15 
Outstanding as of April 30, 2022 13,197  $ 1.58  7.3 $ 214,498 
Vested and exercisable as of April 30, 2022 7,404  $ 1.47  6.6 $ 121,135 
The weighted-average grant date fair value of stock options granted during the three months ended April 30, 2022 was $25.87 per share.
Unrecognized compensation expense associated with unvested stock options granted and outstanding as of April 30, 2022, was $117.8 million, which is to be recognized over a weighted-average remaining period of 3.0 years.
Early Exercised Options
Certain stock option holders have the right to exercise unvested options, subject to a repurchase right held by us at the original exercise price, in the event of voluntary or involuntary termination of employment of the option holders, until the options are fully vested. As of April 30, 2022, there were 0.5 million shares underlying unvested stock options that had been early exercised. The cash proceeds associated with these early exercises are recorded within accrued expenses and other current liabilities and other liabilities, non-current in our condensed consolidated balance sheets, depending upon the future vesting dates of the associated options. Such accrued amounts totaled $1.5 million and $2.8 million as of April 30, 2022 and January 31, 2022, respectively. Proceeds are transferred to additional paid-in capital at the time of option vesting.
Restricted Stock Units
RSU activity during the three months ended April 30, 2022 was as follows:
RSUs (in thousands) Weighted-Average Grant
Date Fair Value Per Share
Unvested as of January 31, 2022 27,515  $ 35.35 
Granted 3,094  $ 25.23 
Vested (3,501) $ 32.77 
Forfeited (1,218) $ 36.50 
Unvested as of April 30, 2022 25,890  $ 34.43 
The vesting date fair value of RSUs that vested during the three months ended April 30, 2022 was $77.7 million.
Prior to the IPO, we granted RSUs under our 2018 Stock Plan that vested upon the satisfaction of both a service-based condition (generally four years) and a performance-based condition. The performance-based vesting condition was deemed satisfied on April 23, 2021, the date that our IPO was completed. At that time, we recognized $233.0 million of cumulative stock-based compensation expense for the portion of these RSUs for which the service-based vesting condition had been fully or partially satisfied.
As of April 30, 2022, total unrecognized compensation expense related to unvested RSUs was approximately $729.6 million, which is to be recognized over a weighted-average remaining period of 3.2 years.
Restricted Stock Awards
In September 2020, we issued approximately 0.1 million RSAs to a member of our board of directors at a grant date fair value of $33.22 per share, totaling $4.0 million. Such RSAs vest monthly over four years from the grant date. The unvested shares are subject to a repurchase right held by us. As of April 30, 2022, total unrecognized compensation expense related to unvested RSAs was $2.4 million and will be recognized over the remaining vesting period of 2.4 years.
Employee Stock Purchase Plan Awards
No shares were purchased under the ESPP during the three months ended April 30, 2022 and 2021. As of April 30, 2022, total unrecognized compensation expense related to the ESPP was approximately $1.5 million, which is to be recognized over a weighted-average remaining period of 0.1 years.
Stock-based Compensation Expense
Stock-based compensation expense is classified in the condensed consolidated statements of operations as follows (in thousands):
Three Months Ended April 30,
2022 2021
Cost of subscription services revenue $ 3,216  $ 6,214 
Cost of professional services and other revenue 3,874  18,931 
Sales and marketing 50,758  119,293 
Research and development 26,623  65,616 
General and administrative 16,983  40,781 
Total $ 101,454  $ 250,835 
The expense presented in the above table is net of capitalized stock-based compensation relating to software development costs of zero and $2.2 million for the three months ended April 30, 2022 and 2021, respectively.