Common Stock and Stockholders' Equity | Common Stock and Stockholders’ Equity Common Stock Repurchases In October 2023, the Company repurchased a total of 2,331,002 shares of the Company’s common stock through open market purchases at an average per share price of $21.45 for a total repurchase price of $50.0 million. During the nine months ended October 31, 2024, these shares were retired. In May 2024, the Company’s Board of Directors authorized a share repurchase program to repurchase up to $100.0 million of the Company’s common stock (the “2024 Share Repurchase Program”). The 2024 Share Repurchase Program does not obligate the Company to acquire a specified number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The repurchases are expected to be executed from time to time through May 2026, subject to general business and market conditions and other investment opportunities, through open market purchases or other legally permissible means, including through Rule 10b5-1 plans. During the three and nine months ended October 31, 2024, the Company repurchased a total of 3,830,761 and 5,144,009 shares, respectively, and subsequently retired 3,848,109 and 5,082,593 shares, respectively. The total shares retired during the three months ended October 31, 2024 includes a portion of shares that were in transit as of the prior quarter end. The cost of the remaining 61,416 shares is recorded as treasury stock in the condensed consolidated balance sheets. As of October 31, 2024, $1.5 million of the total amount authorized to be repurchased remained available. Equity Incentive Plan In 2019, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”). As of October 31, 2024 and January 31, 2024, the Company was authorized to grant up to 36,096,724 shares and 31,519,553 shares of common stock, respectively, under the 2019 Plan. The Company currently uses authorized and unissued shares to satisfy stock award exercises and settlement of restricted stock units (“RSUs”) and performance stock units (“PSUs”). As of October 31, 2024 and January 31, 2024, there were 19,799,837 shares and 17,178,454 shares, respectively, available for future issuance under the 2019 Plan. Shares of common stock reserved for future issuance as of the end of the period noted are as follows: October 31, 2024 Outstanding stock options and unvested RSUs and PSUs 14,042,039 Available for future stock option, RSU, and PSU grants 19,799,837 Available for Employee Stock Purchase Plan (“ESPP”) 3,984,879 Total common stock reserved for future issuance 37,826,755 Stock Options As of October 31, 2024, there was approximately $0.8 million of total unrecognized compensation cost related to unvested stock options granted under the 2019 Plan, which will be recognized over a weighted average period of 1.2 years. Restricted Stock Units A summary of the Company’s RSU activity and related information is as follows: Number of RSUs Weighted Outstanding at January 31, 2024 7,412,056 $ 31.08 Granted 4,410,881 $ 20.97 Vested (2,988,987) $ 30.82 Forfeited or canceled (946,330) $ 30.42 Outstanding at October 31, 2024 7,887,620 $ 25.62 The fair value of the Company’s RSUs is expensed ratably over the vesting period, and is based on the fair value of the underlying shares on the date of grant. The Company accounts for forfeitures as they occur. As of October 31, 2024, there was $193.0 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.2 years based on vesting under the award service conditions. Performance Stock Units The Company grants PSUs to certain employees of the Company, which, in the current fiscal year, are to vest based on the level of achievement of certain targets related to the Company’s operating plan over the one-year performance period. In prior periods, PSUs vested based on both the level of achievement of certain targets related to the Company’s operating plan and the relative growth of the per share price of the Company’s common stock as compared to the S&P Software & Services Select Index over the one-year performance period. The PSUs vest over a three In the nine months ended October 31, 2024, the Compensation Committee of the Company’s Board of Directors certified the results of the Company’s operating plan and relative growth of the per share price of the Company’s common stock as compared to the S&P Software & Services Select Index for the fiscal year ended January 31, 2024. Based on the results, the PSUs granted in April 2023 (“2023 PSU Awards”) were cancelled as the target was not met. A summary of the Company’s PSU activity and related information is as follows: Number of PSUs Weighted Outstanding at January 31, 2024 541,992 $ 35.08 Granted (1) 781,813 $ 21.62 Vested (9,050) $ 41.17 Forfeited or canceled (45,108) $ 39.02 Performance adjustment for 2023 PSU Awards (487,834) $ 34.98 Outstanding at October 31, 2024 781,813 $ 27.73 (1) This amount represents awards granted at 100% attainment. During the three and nine months ended October 31, 2024, the Company recorded stock-based compensation expense for the number of PSUs considered probable of vesting based on the attainment of the performance targets. As of October 31, 2024, total unrecognized stock-based compensation cost related to PSUs was $9.0 million. This unrecognized stock-based compensation cost is expected to be recognized using the accelerated attribution method over a weighted-average period of approximately 1.3 years. Employee Stock Purchase Plan The Company’s ESPP generally provides for 24-month offering periods beginning June 15 and December 15 of each year, with each offering period consisting of four six-month purchase periods. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of: (i) the fair market value of the Company’s stock as of the beginning of the offering period; or (ii) the fair market value of the Company’s stock on the purchase date, as defined in the ESPP. During the three months ended October 31, 2024 and 2023, the Company recognized $1.1 million and $1.3 million, respectively, of stock-based compensation expense related to the ESPP. During the nine months ended October 31, 2024 and 2023, the Company recognized $3.7 million and $4.7 million, respectively, of stock-based compensation expense related to the ESPP. During the three months ended October 31, 2024 and 2023, the Company withheld $2.6 million and $2.0 million, respectively, in contributions from employees. During the nine months ended October 31, 2024 and 2023, the Company withheld $7.7 million and $7.8 million, respectively, in contributions from employees. During the nine months ended October 31, 2024, 312,660 shares of common stock were issued under the ESPP at a weighted average purchase price of $18.34 per share. During the nine months ended October 31, 2023, 325,983 shares of common stock were issued under the ESPP at a weighted average purchase price of $19.30 per share. Stock-Based Compensation Stock-based compensation expense included in the Company’s condensed consolidated statements of operations was as follows for the periods indicated (in thousands): Three months ended October 31, Nine months ended October 31, 2024 2023 2024 2023 Cost of revenue $ 1,432 $ 1,820 $ 4,696 $ 5,860 Research and development 11,576 11,128 34,640 34,002 Sales and marketing 7,639 8,094 23,702 22,362 General and administrative 11,126 10,786 34,041 32,686 Total stock-based compensation expense $ 31,773 $ 31,828 $ 97,079 $ 94,910 |