Equity Incentive Plans | Equity Incentive Plans In April 2011, the Company established the 2011 Equity Incentive Plan (2011 Plan), which was amended in September 2011 to provide for the issuance of stock options and other stock-based awards. In June 2018, the Company adopted the 2018 Equity Incentive Plan (2018 Plan). The 2018 Plan provides for the grant of incentive and nonstatutory stock options, restricted stock, RSUs, stock appreciation rights, performance units, and performance shares to employees, consultants, and members of the Company's board of directors. The number of shares available for issuance under the 2018 Plan includes an annual increase on the first day of each fiscal year equal to the least of: (1) 3,500,000 shares; (2) 5% of the outstanding shares of Class A and Class B common stock as of the last day of the immediately preceding fiscal year; and (3) such other amount as the Company's board of directors may determine no later than the last day of the immediately preceding year. During the six months ended July 31, 2022, the number of shares available for grant under the 2018 Plan was increased by 1,649,674 shares. As of July 31, 2022, there were 3,955,951 shares available for grant under the 2018 Plan. In connection with the IPO, the 2011 Plan was terminated. With the establishment of the 2018 Plan, the Company no longer grants equity-based awards under the 2011 Plan and any shares that expire, terminate, are forfeited or repurchased by the Company, or are withheld by the Company to cover tax withholding obligations, under the 2011 Plan, will become available for future grant under the 2018 Plan. The Company recognized stock-based compensation expense related to its equity incentive plans as follows (in thousands): Three Months Ended July 31, Six Months Ended July 31, 2021 2022 2021 2022 Cost of revenue: Subscription $ 549 $ 778 $ 968 $ 1,509 Professional services and other 271 563 605 1,031 Sales and marketing 4,747 7,873 8,474 15,948 Research and development 2,751 6,283 5,240 13,287 General and administrative 4,137 4,707 7,053 13,512 Interest expense 171 189 348 370 Total $ 12,626 $ 20,393 $ 22,688 $ 45,657 Stock Options Stock options typically vest over a four-year period and have a term of ten years from the date of grant. No stock options were granted during the three and six months ended July 31, 2021 and the three and six months ended July 31, 2022. The following table sets forth the outstanding common stock options and related activity for the six months ended July 31, 2022: Shares Weighted- Average Exercise Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding as of January 31, 2022 963,288 $ 26.16 2.9 $ 20,166 Exercised (42,332) 19.01 Expired (5,037) 45.01 Outstanding as of July 31, 2022 915,919 $ 26.39 2.4 $ 2,211 Vested and exercisable at July 31, 2022 911,752 $ 26.37 2.4 $ 2,211 The aggregate intrinsic value of options exercised was $5.8 million and $0.1 million for the three months ended July 31, 2021 and 2022, respectively, and $7.2 million and $1.4 million for the six months ended July 31, 2021 and 2022, respectively. The intrinsic value represents the excess of the market closing price of the Company's common stock on the date of exercise over the exercise price of each option. The intrinsic value of options as of July 31, 2022 is based on the market closing price of the Company's Class B common stock on that date. As of July 31, 2022, there was $0.1 million of unrecognized stock-based compensation expense related to outstanding stock options which is expected to be recognized over a weighted-average period of 0.3 years. Restricted Stock Units Restricted stock units (RSUs) granted under the Plan primarily vest and settle upon the satisfaction of a service-based condition. The service-based condition for these awards is generally satisfied over three one During the three months ended April 30, 2022 the Company granted 71,667 PSUs with both a market and service-based condition. The PSUs are eligible to vest in three granted were $36.07 per share, $33.98 per share, and $30.26 per share, respectively, as determined by a Monte Carlo simulation model. The following table sets forth the outstanding RSUs and related activity for the six months ended July 31, 2022: Number of Shares Weighted- Average Grant Date Fair Value Outstanding as of January 31, 2022 4,338,619 $ 55.40 Granted 1,934,653 44.03 Vested (1,060,657) 53.02 Canceled (864,978) 52.20 Outstanding as of July 31, 2022 4,347,637 $ 51.55 As of July 31, 2022, there was $204.6 million of unrecognized stock-based compensation expense related to outstanding RSUs which is expected to be recognized over a weighted-average period of 2.9 years. In March 2022, the Company paid out certain fiscal 2022 bonuses in the form of vested RSUs instead of cash, resulting in the issuance of approximately 90,000 shares of the Company's Class B common stock. The Company recognized $3.6 million of stock-based compensation related to these bonuses during the three months ended April 30, 2022. In April 2022, the Company modified and accelerated the vesting of awards for certain employees, resulting in the issuance of approximately 56,000 shares of the Company's Class B common stock. The Company recognized $2.6 million of stock-based compensation related to these modifications during the three months ended April 30, 2022. Employee Stock Purchase Plan In June 2018, the Company's board of directors adopted the ESPP. The number of shares of Class B common stock available for issuance under the ESPP increases on the first day of each fiscal year equal to the least of: (1) 1,050,000 shares of Class B common stock, (2) 1.5% of the outstanding shares of Class A and Class B common stock of the Company on the last day of the immediately preceding fiscal year, and (3) such other amount as the administrator of the ESPP may determine on or before the last day of the immediately preceding year. During the six months ended July 31, 2022, the number of shares available under the ESPP was increased by 164,967 shares. As of July 31, 2022, there were 307 shares available under the ESPP. The ESPP generally provides for consecutive overlapping 24-month offering periods comprising of four six-month purchase periods; provided, however, that the first purchase period in the first offering period will have a duration of approximately nine months. The offering periods are scheduled to start on the first trading day on or after April 1 and October 1 of each year. The ESPP is intended to qualify as a tax-qualified plan under Section 423 of the Internal Revenue Code and permits participants to elect to purchase shares of Class B common stock through payroll deductions of up to 15% of their eligible compensation. A participant may purchase a maximum of 2,000 shares during each purchase period. In September 2020, the ESPP was amended for all offering periods beginning on or after September 18, 2020. The amended ESPP provides for consecutive overlapping 12-month offering periods comprising two six-month purchase periods. The offering periods are scheduled to start on the first trading day on or after April 1 and October 1 of each year. The amended ESPP is intended to qualify as a tax-qualified plan under Section 423 of the Internal Revenue Code and permits participants to elect to purchase shares of Class B common stock through payroll deductions of up to 25% of their eligible compensation. Under the amended ESPP, a participant may purchase a maximum of 300 shares during each purchase period. Amounts deducted and accumulated by the participant will be used to purchase shares of Class B common stock at the end of each purchase period. The purchase price of the shares will be 85% of the lower of the fair market value of Class B common stock on the first trading day of each offering period or the fair market value of Class B common stock on the applicable exercise date. If the fair market value of a share of Class B common stock on the exercise date of an offering period is less than it was on the first trading day of that offering period, participants automatically will be withdrawn from that offering period following their purchase of shares on the exercise date and will be re-enrolled in a new offering period. Participants may end their participation at any time during an offering period and will be paid their accrued contributions that have not yet been used to purchase shares of Class B common stock. Participation ends automatically upon termination of employment. As of July 31, 2022, a total of approximately 118,091 shares were issuable to employees based on estimated shares available and contribution elections made under the ESPP. Shares available were estimated assuming that the plan will be increased by an amount approximating 1.5% of shares outstanding as of January 31, 2023. As of July 31, 2022, total unrecognized stock-based compensation related to the ESPP was $1.6 million, which is expected to be recognized over a weighted-average period of 0.7 years. |