Employee Stock Plans | Note 16. Employee Stock Plans Equity Incentive Plans In March 2018, our Board of Directors adopted and our stockholders approved the 2018 Equity Incentive Plan (2018 Plan). The 2018 Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, restricted stock units (RSUs), performance awards, and stock bonuses. As of July 31, 2021, approximately 25.8 million shares of Class A common stock were reserved and available for issuance under the 2018 Plan. In addition, as of July 31, 2021, 5.9 million stock options and RSUs exercisable or settleable for Class B common stock were outstanding in the aggregate under our 2006 Stock Plan (2006 Plan) and 2015 Equity Incentive Plan (2015 Plan), which plans were terminated in May 2015 and April 2018, respectively. The 2006 Plan and 2015 Plan continue to govern outstanding equity awards granted thereunder. Stock Options The following tables summarize stock option activity and related information (in thousands, except weighted-average exercise price, weighted-average grant date fair value and average remaining contractual term): Shares Weighted-Average Average Aggregate Balance, January 31, 2021 11,812 $ 8.54 6.6 $ 80,212 Granted 655 15.65 Exercised (1,517) 6.71 Forfeited (808) 12.75 Balance, July 31, 2021 10,142 8.94 6.1 88,525 Exercisable as of July 31, 2021 6,628 5.56 4.8 77,731 Vested and expected to vest as of July 31, 2021 9,783 8.75 6.0 87,198 Three Months Ended July 31, Six Months Ended July 31, 2021 2020 2021 2020 Weighted-average grant date fair value per share of options granted during each respective period $ 6.54 $ 4.59 $ 6.54 $ 4.57 Aggregate intrinsic value of options exercised during each respective period $ 8,147 $ 8,821 $ 14,738 $ 16,319 We used the Black-Scholes option-pricing model to estimate the fair value of our stock options granted during each respective period using the following assumptions: Three Months Ended July 31, Six Months Ended July 31, 2021 2020 2021 2020 Fair value of common stock $15.64 - $15.87 $11.53 - $12.04 $15.64 - $15.87 $10.57 - $12.04 Expected volatility 42.6% - 42.7% 41.4% - 41.8% 42.3% - 42.7% 41.4% - 41.8% Expected term (years) 6.0 6.0 6.0 - 6.1 6.0 - 6.1 Risk-free interest rate 1.0% - 1.1% 0.4% - 0.5% 1.0%- 1.1% 0.4% - 0.5% Expected dividend yield — — — — RSUs The following table summarizes RSU activity and related information (in thousands, except weighted-average grant date fair value): Number of RSUs Outstanding Weighted-Average Grant Date Fair Value Balance, January 31, 2021 8,278 $ 13.54 Granted 7,524 15.96 Vested (1,565) 14.55 Forfeited (1,392) 14.25 Balance, July 31, 2021 12,845 14.75 2018 Employee Stock Purchase Plan In March 2018, our Board of Directors adopted and our stockholders approved the 2018 Employee Stock Purchase Plan (ESPP). A total of 4.1 million shares of Class A common stock were reserved and available for issuance under the ESPP as of July 31, 2021. The ESPP provides for 24-month offering periods beginning June 15 and December 15 of each year, and each offering period contains four six-month purchase periods. On each purchase date, ESPP participants will purchase shares of our Class A common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Class A common stock on the offering date or (2) the fair market value of the Class A common stock on the purchase date. We estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: Three and Six Months Ended July 31, 2021 Three and Six Months Ended July 31, 2020 Fair value of common stock $ 16.07 $ 13.50 Expected volatility 41.8% - 53.2% 50.7% - 69.1% Expected term (years) 0.5 - 2.0 0.5 - 2.0 Risk-free interest rate 0.1% - 0.2% 0.2 % Expected dividend yield — — Stock-Based Compensation Expense Stock-based compensation expense was recorded in the following cost and expense categories in the accompanying unaudited condensed consolidated statements of comprehensive loss (in thousands): Three Months Ended July 31, Six Months Ended July 31, 2021 2020 2021 2020 Cost of subscription revenue $ 1,534 $ 1,465 $ 2,577 $ 2,317 Cost of professional services revenue 2,664 3,132 4,665 4,782 Research and development 5,243 5,945 9,772 9,487 Sales and marketing 5,615 4,848 9,695 7,853 General and administrative 3,013 2,886 5,157 4,721 Total stock-based compensation expense $ 18,069 $ 18,276 $ 31,866 $ 29,160 As of July 31, 2021, unrecognized compensation costs related to unvested equity awards and the weighted-average remaining period over which those costs are expected to be realized were as follows (dollars in thousands): Stock Options RSUs ESPP Unrecognized compensation costs $ 15,977 $ 157,325 $ 6,152 Weighted-average remaining recognition period 2.7 years 3.1 years 1.0 years |