Convertible Preferred Stock, Stockholders’ Equity (Deficit) and Equity Incentive Plan | Convertible Preferred Stock, Stockholders’ Equity (Deficit) and Equity Incentive Plan Convertible Preferred Stock Upon completion of the IPO, all shares of convertible preferred stock outstanding, totaling 152,665,804 shares, were automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis and their carrying value of $159.6 million was reclassified into stockholders’ equity. As of July 31, 2019, there were no shares of convertible preferred stock issued and outstanding. In connection with the IPO, our Amended and Restated Certificate of Incorporation (COI) became effective, which authorized the issuance of 200,000,000 shares of undesignated preferred stock with a par value of $0.001 with rights and preferences, including voting rights, designated from time to time by our board of directors. Common Stock Our Amended and Restated COI also authorized the issuance of 2,000,000,000 shares of Class A common stock, $0.001 par value per share and 300,000,000 shares of Class B common stock, $0.001 par value per share. Class A and Class B common stock are referred to as common stock throughout the notes to the condensed consolidated financial statements, unless otherwise noted. Equity Incentive Plans In 2011, we adopted the 2011 Global Share Plan (2011 Plan), under which officers, employees, and consultants may be granted various forms of equity incentive compensation at the discretion of the board of directors, including stock options and restricted stock awards. The awards have varying terms, but generally vest over four In April 2019, we adopted the 2019 Plan, which is a successor to and continuation of our 2011 Plan. Our 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other forms of awards. The maximum number of shares of our Class A common stock that may be issued under our 2019 Plan will not exceed 58,300,889 shares of our Class A common stock, which is the sum of (1) 34,000,000 new shares, plus (2) an additional number of shares not to exceed 24,300,889, consisting of (A) shares that remain available for the issuance of awards under our 2011 Plan as of immediately prior to the time our 2019 Plan becomes effective and (B) shares of Class B common stock subject to outstanding stock options or other stock awards granted under our 2011 Plan that, on or after the 2019 Plan becomes effective, terminate or expire prior to exercise or settlement; are not issued because the award is settled in cash; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, if any, as such shares become available from time to time. In addition, the number of shares of our Class A common stock reserved for issuance under our 2019 Plan will automatically increase on February 1 of each calendar year, starting on February 1, 2020 through February 1, 2029, in an amount equal to (i) 5% of the total number of shares of our common stock (both Class A and Class B) outstanding on January 31 of the fiscal year before the date of each automatic increase, or (ii) a lesser number of shares determined by our board of directors prior to the applicable February 1. Stock Options A summary of stock option activity under our equity incentive plan and related information is as follows: Options Outstanding Outstanding Weighted- Weighted- Aggregate (in thousands, except share, life, and per share data) Outstanding as of January 31, 2019 35,064,465 $ 1.48 6.8 $ 534,572 Granted 1,537,900 36.77 Exercised (14,272,059) 0.16 Canceled/forfeited/expired (284,118) 6.11 Outstanding as of July 31, 2019 22,046,188 $ 4.73 8.0 $ 2,001,410 Vested as of July 31, 2019 8,692,345 $ 1.02 7.1 $ 821,380 As of July 31, 2019, unrecognized stock-based compensation expense related to outstanding unvested stock options was $94.3 million, which is expected to be recognized over a weighted-average period of 3.3 years. Restricted Stock Units A summary of restricted stock units (RSUs) activity under our equity incentive plan and related information is as follows: RSUs Outstanding Outstanding Weighted- Outstanding as of January 31, 2019 — $ — Granted 376,786 93.89 Canceled/forfeited (5,926) 94.52 Outstanding as of July 31, 2019 370,860 $ 93.88 As of July 31, 2019, unrecognized stock-based compensation expense related to outstanding unvested RSUs was $33.9 million, which is expected to be recognized over a weighted-average period of 3.9 years. 2019 Employee Stock Purchase Plan In April 2019, we adopted the 2019 Employee Stock Purchase Plan (ESPP), which became effective in connection with the IPO. A total of 9,000,000 shares of our Class A common stock were initially reserved for issuance under the ESPP. The number of shares of our Class A common stock reserved for issuance will automatically increase on February 1 of each calendar year, beginning on February 1, 2020 through February 1, 2029, by the lesser of (1) 1% of the total number of shares of our common stock (both Class A and Class B) outstanding on the last day of the fiscal year before the date of the automatic increase, and (2) 7,500,000 shares; provided that before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (1) and (2). Generally, all regular employees, including executive officers, employed by us or by any of our designated affiliates, except for those holding 5% or more of the total combined voting power or value of all classes of our stock, may participate in the ESPP and may contribute, normally through payroll deductions, up to 20% of their earnings (as defined in the ESPP) for the purchase of our Class A common stock under the ESPP. Unless otherwise determined by our board of directors, Class A common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is at least the lesser of (1) 85% of the fair market value of a share of our Class A common stock on the first date of an offering, or (2) 85% of the fair market value of a share of our Class A common stock on the date of purchase. No employee may purchase shares under the ESPP at a rate in excess of $25,000 worth of our Class A common stock based on the fair market value per share of our Class A common stock at the beginning of an offering for each calendar year such purchase right is outstanding or 3,000 shares. The 2019 ESPP provides for, at maximum, 27 months offering periods with four offering dates, generally in June and December of each year. The first offering period began on April 18, 2019. As of July 31, 2019, no shares of our Class A common stock have been purchased under the ESPP. As of July 31, 2019, unrecognized stock-based compensation expense related to the ESPP was $78.5 million, which is expected to be recognized over a weighted-average period of 1.9 years. No stock-based compensation expense related to the ESPP was recognized during the three months ended April 30, 2019 as the grant dates of the ESPP offerings were in May and June 2019. We estimated the fair value of ESPP purchase rights using a Black-Scholes option-pricing model with the following assumptions: Three Months Ended Expected purchase price $30.60 - $83.39 Expected volatility 46.1% - 56.2% Expected term (years) 0.5 - 2.1 Risk-free interest rate 1.9% - 2.5% Expected dividend yield — Early Exercise of Common Stock Options Our board of directors authorized certain stock option holders to exercise unvested options to purchase shares of common stock. Shares received from such early exercises are subject to repurchase in the event of the optionee’s termination of service, at the original issuance price, until the options are fully vested. As of July 31, 2019 and January 31, 2019, 663,826 and 1,261,230 shares of Class B common stock, respectively, were subject to repurchase at a weighted-average price of $2.71 and $1.41 per share, respectively. The cash proceeds received for unvested shares of common stock recorded within accrued expenses and other current liabilities in the condensed consolidated balance sheets was $1.8 million as of July 31, 2019 and January 31, 2019. Restricted Stock Award In October 2015, we issued 1,202,720 shares of common stock to a member of our board of directors under a restricted stock agreement at a grant date fair value of $0.14 per share, totaling $0.2 million. Of the total shares issued, 481,088 shares vested on the grant date and the remaining shares vest over four Shares Reserved for Charitable Donations During the three months ended July 31, 2019, our board of directors approved the issuance of 500,000 shares of Class A common stock for the sole purpose of being transferred to a nonprofit organization to be formed or identified by us at a future time. As of July 31, 2019, no shares have been transferred to a nonprofit organization. As a result, no expense has been recognized to date. Stock-Based Compensation The stock-based compensation expense by line item in the accompanying condensed consolidated statements of operations is summarized as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 (in thousands) Cost of revenue $ 1,902 $ 130 $ 2,732 $ 225 Research and development 2,510 193 3,674 322 Sales and marketing 10,439 492 13,066 888 General and administrative 3,224 311 5,265 540 Total stock-based compensation expense $ 18,075 $ 1,126 $ 24,737 $ 1,975 |