Stockholders' Deficit | Stockholders’ Deficit Common Stock There are two classes of common stock that total 1,500,000,000 authorized shares: 1,000,000,000 authorized shares of Class A common stock and 500,000,000 authorized shares of Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share and is convertible into one share of Class A common stock. There were 127,203,023 shares of Class A common stock and 85,489,359 shares of Class B common stock issued and outstanding as of October 31, 2022. All changes in the number of shares of common stock outstanding for the three and nine months ended October 31, 2022 and 2021, were related to changes in Class A common stock, other than the shares of Class B common stock issued in conversion of the Convertible Notes during the three and six months ended July 31, 2021. Private Placement—Related Party In September 2022, the Company issued and sold 19,273,127 shares of its Class A common stock to the Company’s CEO in a private placement transaction at a purchase price of $18.16 per share, based on the closing trading price of the Company’s Class A common stock on September 2, 2022, for aggregate gross proceeds of approximately $350 million. The Company incurred issuance costs related to the private placement of $2.7 million. The Company recorded the proceeds (net of issuance costs) of $347.3 million as additional paid-in capital within the condensed consolidated statements of stockholders’ equity for the three and nine months ended October 31, 2022. Stock Plans The Company has a 2009 Stock Plan (the “2009 Plan”), a 2012 Amended and Restated Stock Plan (the “2012 Plan”), and a 2020 Equity Incentive Plan (the “2020 Plan”). Each plan was initially established to grant equity awards to employees and consultants of the Company to assist in attracting, retaining, and motivating employees and consultants and to provide incentives to promote the success of the Company’s business. The number of shares reserved for issuance under the 2020 Plan increased by 9,414,923 shares of Class A common stock on February 1, 2022 pursuant to the evergreen provisions of the 2020 Plan. Options granted under each of the plans may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants. Restricted stock units (“RSUs”) may also be granted under the 2012 Plan and the 2020 Plan. Options under the 2012 and 2020 Plans may be granted for periods of up to 10 years. The exercise price of ISOs and NSOs shall not be less than 100% of the fair market value of the shares on the date of grant. Options granted generally vest over four years and vest at a rate of 25% upon the first anniversary of the vesting commencement date and 1/48 per month thereafter. The Company has also issued RSUs pursuant to the 2012 Plan and 2020 Plan. RSUs granted generally vest on a predefined schedule over a period of two Shares of common stock purchased under the 2012 Plan or the 2020 Plan are subject to certain restrictions and repurchase rights. Stock Options Option activity under the Company’s combined stock plans is set forth below (in thousands, except years and per share data): Number of Shares Weighted- Average Exercise Price Weighted- Aggregate Intrinsic Value Balances at January 31, 2022 14,383 $ 3.02 6.1 $ 711,455 Options granted — — Options exercised (1,599) 2.89 Options cancelled (379) 5.34 Balances at October 31, 2022 12,405 $ 2.96 5.3 $ 218,820 Vested and exercisable at October 31, 2022 10,615 $ 2.69 5.1 $ 190,098 Vested and expected to vest at October 31, 2022 12,461 $ 2.96 5.3 $ 219,758 The total intrinsic value of options exercised during the periods presented was as follows: Three Months Ended October 31, Nine Months Ended October 31, 2022 2021 2022 2021 Aggregate intrinsic value of options exercised (in thousands) $ 6,531 $ 137,980 $ 47,586 $ 303,122 Early Exercise of Employee Options The 2009 Plan and 2012 Plan allow for the early exercise of stock options. The consideration received for an early exercise of an option is considered to be a deposit of the exercise price, and the related dollar amount is recorded as a liability and reflected in accrued expenses and other current liabilities and other liabilities in the condensed consolidated balance sheets. This liability is reclassified to additional paid-in capital as the awards vest. If a stock option is early exercised, the unvested shares may be repurchased by the Company in case of employment termination at the price paid by the purchaser for such shares. Shares that were subject to repurchase totaled 55,351 and 286,068 at October 31, 2022 and 2021, respectively. Restricted Stock Units The Company’s RSU activity is set forth below (in thousands, except per share data): Number of Shares Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value Unvested RSUs at January 31, 2022 8,812 $ 47.07 $ 462,426 RSUs granted 7,922 21.20 RSUs vested (3,066) 40.61 RSUs cancelled/forfeited (1,620) 36.80 Unvested RSUs at October 31, 2022 12,048 $ 33.09 $ 248,148 RSUs vested, not yet released at October 31, 2022 766 $ 33.54 Stock-Based Compensation Expense Stock-based compensation for stock-based awards to employees and non-employees in the Company’s condensed consolidated statements of operations for the periods below were as follows (in thousands): Three Months Ended October 31, Nine Months Ended October 31, 2022 2021 2022 2021 Cost of revenues $ 461 $ 192 $ 1,200 $ 462 Research and development 25,030 14,351 70,606 34,741 Sales and marketing 15,018 7,138 43,028 16,641 General and administrative 7,482 4,172 21,000 10,421 Total stock-based compensation expense $ 47,991 $ 25,853 $ 135,834 $ 62,265 The stock-based compensation expense related to options granted to non-employees for the three and nine months ended October 31, 2022 and 2021 were not material. Total unrecognized compensation costs related to unvested awards not yet recognized under all equity compensation plans was as follows: October 31, 2022 Unrecognized Expense Weighted-Average Expected Recognition Period Stock options $ 5,037 1.4 RSUs 362,632 2.9 Total unrecognized stock-based compensation expense $ 367,669 2.8 2020 Employee Stock Purchase Plan In September 2020, the Board of Directors adopted and approved the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective on the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the Direct Listing. The ESPP initially reserved and authorized the issuance of up to a total of 2,000,000 shares of Class A common stock to participating employees. The number of shares reserved under the ESPP was automatically increased on February 1, 2021 to 3,614,801 shares of Class A common stock and to 5,497,785 on February 1, 2022 pursuant to the evergreen provisions of the ESPP. The ESPP provides for 24-month offering periods beginning September 16 and March 16 of each year, with each offering period consisting of four six-month purchase periods (except for the initial offering period which began on September 30, 2020 and ended on September 15, 2022), with purchase dates annually on March 15 and September 15. The purchase price of shares of Class A common stock in an offering will be the lesser of: (i) 85% of the fair market value of such shares of Class A common stock on the offering date, and (ii) 85% of the fair market value of such shares of Class A common stock on the applicable purchase date. Current employees who purchase shares under the ESPP may not sell such shares prior to the first anniversary of such purchase date and such shares will be designated with an applicable resale restriction. The Company recognized stock-based compensation expense related to the ESPP of $4.3 million and $1.6 million during the three months ended October 31, 2022 and 2021, respectively, and $8.0 million and $6.0 million during the nine months ended October 31, 2022 and 2021, respectively. As of October 31, 2022 and January 31, 2022, $2.8 million and $7.2 million, respectively, has been withheld in contributions from employees. As of October 31, 2022, total unrecognized compensation costs related to the ESPP was $19.7 million, which will be amortized over a weighted average vesting term of 1.2 years. |