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 136,915,067 shares of Class A common stock and 85,489,359 shares of Class B common stock issued and outstanding as of October 31, 2023. There were 128,803,395 shares of Class A common stock and 85,489,359 shares of Class B common stock outstanding as of January 31, 2023. All changes in the number of shares of common stock outstanding for the three and nine months ended October 31, 2023 and 2022, were related to changes in Class A common stock. 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. 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 and increased by 10,714,637 shares of Class A common stock on February 1, 2023 pursuant to the evergreen provisions of the 2020 Plan. There are no outstanding awards under the 2009 Plan, and new issuances under the 2012 Plan terminated upon completion of the Direct Listing. Awards outstanding under the 2012 Plan continue to be outstanding and are governed by the provisions of the 2012 Plan. The 2020 Plan provides for the grant of incentive stock options (“ISOs”), within the meaning of Section 422 of the Code, nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards (“RSUs”), performance-based stock awards, and other forms of equity compensation. 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. Options under the 2020 Plan 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 estimated fair value of the shares on the date of grant as determined by the Company’s board of directors (the “Board of Directors”). 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 outstanding RSU awards issued pursuant to the 2012 Plan and 2020 Plan. RSUs granted generally vest on a predefined rate over a period of four years contingent upon continuous service. Shares of common stock purchased under the 2012 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, 2023 11,941 $ 2.96 5.1 $ 149,738 Options granted — — Options exercised (1,649) 2.34 Options cancelled (50) 5.42 Balances at October 31, 2023 10,242 $ 3.05 4.4 $ 157,956 Vested and exercisable at October 31, 2023 9,978 $ 3.05 4.4 $ 153,882 Vested and expected to vest at October 31, 2023 10,242 $ 3.05 4.4 $ 157,961 The total intrinsic value of options exercised during the periods presented was as follows: Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Aggregate intrinsic value of options exercised (in thousands) $ 4,583 $ 6,531 $ 30,876 $ 47,586 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 96 and 55,351 at October 31, 2023 and 2022, 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, 2023 14,591 $ 27.75 $ 226,145 RSUs granted 11,831 20.18 RSUs vested (5,582) 26.09 RSUs cancelled/forfeited (2,870) 26.12 Unvested RSUs at October 31, 2023 17,970 $ 23.54 $ 331,906 RSUs vested, not yet released at October 31, 2023 856 $ 36.06 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, 2023 2022 2023 2022 Cost of revenues $ 413 $ 461 $ 1,177 $ 1,200 Research and development 29,384 25,030 83,928 70,606 Sales and marketing 15,584 15,018 43,438 43,028 General and administrative 7,485 7,482 22,026 21,000 Total stock-based compensation expense $ 52,866 $ 47,991 $ 150,569 $ 135,834 The stock-based compensation expense related to options granted to non-employees for the three and nine months ended October 31, 2023 and 2022 were not material. Total unrecognized compensation costs related to unvested awards not yet recognized under all equity compensation plans was as follows: October 31, 2023 Unrecognized Expense Weighted-Average Expected Recognition Period Stock options $ 383 3.5 RSUs 389,817 3.0 Total unrecognized stock-based compensation expense $ 390,200 3.0 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, to 5,497,785 on February 1, 2022, and to 7,640,712 on February 1, 2023 pursuant to the evergreen provisions of the ESPP. Subject to any limitations contained therein, the ESPP allows eligible participants to contribute, through payroll deductions, up to 15% of their eligible compensation to purchase shares of the Company’s Class A common stock at a purchase price equal to 85% of the fair market value of the Class A common stock on either the first day of the offering period or the purchase date, whichever fair market value is lower. The ESPP generally provides for consecutive 24-month offering periods, each consisting of four separate consecutive purchase periods of approximately six months in length. The ESPP also includes a two year look back in purchase price, including a reset feature. The reset feature is triggered if the price on the date of purchase is less than the price on the first day of the offering period. The Company recognized stock-based compensation expense related to the ESPP of $4.5 million and $4.3 million during the three months ended October 31, 2023 and 2022, respectively, and $7.8 million and $8.0 million during nine months ended October 31, 2023 and 2022, respectively. As of October 31, 2023 and January 31, 2023, $2.5 million and $6.9 million, respectively, have been withheld in contributions from employees. As of October 31, 2023, total unrecognized compensation cost related to the ESPP was $14.8 million, which will be amortized over a weighted average vesting term of 1.2 years. |