Stockholders' Equity and Equity Incentive Plans | Stockholders’ Equity and Equity Incentive Plans Redeemable Convertible Preferred Stock Upon the closing of the Company’s IPO, all 63,761,950 shares of redeemable convertible preferred stock were automatically converted into shares of common stock on a one-to-one basis, and the carrying value of $340.2 million was reclassified into common stock and additional paid-in-capital. As of July 31, 2021, there were no shares of redeemable convertible preferred stock issued and outstanding. Common Stock The Company’s Amended and Restated Certificate of Incorporation authorized the Company to issue 1,000.0 million shares of common stock at a par value of $0.0001 as of July 31, 2021 and January 31, 2021. As of July 31, 2021 and January 31, 2021, approximately 110.1 million and 102.5 million shares of common stock were issued and outstanding, respectively. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. As of July 31, 2021 and January 31, 2021, no dividends had been declared. Stock Plans The Company has two equity incentive plans: the 2010 Stock Plan (the “2010 Plan”) and the 2020 Equity Incentive Plan (the “2020 Plan”). In connection with the Company’s IPO in September 2020, the 2010 Plan was terminated and replaced by the 2020 Plan and all shares that remained available for issuance under the 2010 Plan at that time were reserved for issuance under the 2020 Plan. The number of shares of common stock available for issuance under the 2020 Plan will be increased by any shares of common stock subject to awards outstanding under the 2010 Plan that expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by the Company for payment of an exercise price or for satisfying tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest . The Company has issued stock options and restricted stock units (“RSUs”) to employees, directors, consultants, and advisors pursuant to both the 2010 Plan and 2020 Plan. Employee stock options are granted with an exercise price no less than the fair value of the underlying common stock on the grant date, in general vest based on continuous service over four years, and expire 10 years from the date of grant. The value of RSUs is measured based on the grant date fair value of the awards and in general vest based on satisfying a service-based condition based on continuous service over four years. As of July 31, 2021, there were 15.3 million shares available for grant under the 2020 Plan. The 2020 Plan provides that the number of shares reserved will automatically increase on the first day of each fiscal year, beginning on February 1, 2021, by an amount equal to the least of (i) 12,500,000 shares, (ii) 5% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as the administrator of the 2020 Plan may determine. Stock Options The following table is a summary of option activity during the six months ended July 31, 2021: Number of Weighted Average Weighted Average Remaining Contractual Term Aggregate (in thousands) (years) (in thousands) Balance at January 31, 2021 24,768 $ 4.16 6.7 $ 749,111 Options granted — $ — Options exercised (4,458) $ 2.95 Options cancelled (684) $ 8.60 Balance at July 31, 2021 19,626 $ 4.29 6.4 $ 321,291 Options exercisable at July 31, 2021 14,547 $ 3.29 5.9 $ 252,538 No stock options were granted during the three months ended July 31, 2021. Stock options granted during the three months ended July 31, 2020 had a weighted-average grant-date fair value $7.50 per share. The aggregate intrinsic value of options exercised during the three months ended July 31, 2021 and 2020 was $28.7 million and $6.4 million, respectively. No stock options were granted during the six months ended July 31, 2021. Stock options granted during the six months ended July 31, 2020 had a weighted-average grant-date fair value $6.10 per share. The aggregate intrinsic value of options exercised during the six months ended July 31, 2021 and 2020 was $80.1 million and $9.0 million, respectively. No income tax benefits have been recognized for stock-based compensation arrangements. As of July 31, 2021, there was $24.3 million of total unrecognized compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 2.0 years. Early Exercise of Employee Options As of July 31, 2021 and January 31, 2021, the Company had a liability of $0.1 million and $0.2 million for 43,000 and 75,250 shares, respectively, of common stock that were unvested and early exercised by employees. Restricted Stock Units The following table is a summary of RSU activity for the six months ended July 31, 2021: Number of Weighted Average Grant Date Fair Value per Share (in thousands) Balance at January 31, 2021 3,757 $ 15.07 Granted (a)(b) 3,846 $ 21.31 Released (1,197) $ 13.39 Forfeited (378) $ 20.07 Balance at July 31, 2021 6,028 $ 19.07 RSUs expected to vest at July 31, 2021 6,028 $ 19.07 ______________ (a) During the six months ended July 31, 2021, of the 3.8 million RSUs granted, 0.1 million awards were subject to both service-based and performance-based vesting conditions. (b) In connection with the acquisitions, the Company agreed to grant 0.4 million RSUs to employees of the acquired companies. As of July 31, 2021, there was $95.2 million of total unrecognized compensation expense related to unvested employee and director RSUs, of which $2.3 million is for the RSUs subject to certain other performance metrics. Total unrecognized compensation expense related to unvested RSUs is expected to be recognized over a weighted-average period of 3.4 years. Sensu Plans In connection with the acquisition of Sensu, the Company assumed 33,267 options to purchase shares of common stock, granted under the Sensu, Inc. Amended and Restated 2017 Equity Incentive Plan, at a weighted-average exercise price of $4.88 per share and weighted-average fair value of $17.19 per share, of which 33,267 remained outstanding as of July 31, 2021. As of July 31, 2021, 2,625 options were vested and exercisable with a weighted-average exercise price of $4.83, and the total unrecognized compensation expense related to these awards was $0.5 million. During the six months ended July 31, 2021, no options were exercised. Jask Labs Plans In connection with the acquisition of Jask Labs, the Company assumed 265,075 options to purchase shares of common stock, granted under the Jask Labs 2015 Stock Option and Grant Plan and the Jask Labs 2018 Equity Incentive Plan (together, the “Jask Plans”), at a weighted-average exercise price of $9.86 per share and weighted-average fair value of $6.39 per share, of which 117,582 and 140,348 remained outstanding as of July 31, 2021 and January 31, 2021, respectively. As of July 31, 2021, 94,764 options were vested and exercisable with a weighted-average exercise price of $10.54, and the total unrecognized compensation expense related to these awards was $0.1 million. During the six months ended July 31, 2021, 22,038 options were exercised. Employee Stock Purchase Plan In September 2020, the board of directors adopted and the stockholders of the Company approved the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective on September 17, 2020. The ESPP initially reserved and authorized the issuance of up to a total of 2,000,000 shares of common stock to participating employees. The number of shares reserved under the ESPP will automatically increase on the first day of each fiscal year, starting on February 1, 2021, in an amount equal to the least of (i) 2,500,000 shares, (ii) 1% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as the administrator of the ESPP may determine. The 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 (1) the fair market value of the Company’s common stock as of the beginning of the offering period or (2) the fair market value of the Company’s common stock on the purchase date, as defined in the ESPP. Under the reset provision currently authorized, if the closing stock price on the offering date of a new offering falls below the closing stock price on the offering date of an ongoing offering, the ongoing offering would terminate immediately following the purchase of ESPP shares on the purchase date immediately preceding the new offering and participants in the terminated ongoing offering would automatically be enrolled in the new offering (“ESPP reset”), resulting in a modification charge to be recognized over the new offering period. The Company recognized stock-based compensation expense related to the ESPP of $1.7 million and $2.5 million during the three and six months ended July 31, 2021, respectively. As of July 31, 2021 and January 31, 2021, $1.1 million and $2.5 million has been withheld on behalf of employees for a future purchase under the ESPP due to the timing of payroll deductions, respectively. As of July 31, 2021, there was $8.6 million of unrecognized stock-based compensation expense related to the ESPP that is expected to be recognized over an average vesting period of 1.3 years. During the three and six months ended July 31, 2021, 279,600 shares of common stock were issued under the ESPP at a purchase price of $16.90. Stock-Based Compensation Expense The following table presents total stock-based compensation expense included in the condensed consolidated statements of operations (in thousands): Three Months Ended July 31, Six Months Ended July 31, 2021 2020 2021 2020 Cost of revenue $ 156 $ 39 $ 329 $ 101 Research and development (a) 5,969 1,849 10,516 3,878 Sales and marketing 4,172 1,589 7,644 3,116 General and administrative 3,760 1,179 7,701 2,628 Total stock-based compensation expense $ 14,057 $ 4,656 $ 26,190 $ 9,723 ________________ (a) During the six months ended July 31, 2021, the Company did not capitalize any stock-based compensation related to internal-use software development costs. During the three and six months ended July 31, 2020, the Company capitalized stock-based compensation of $0.1 million and $0.2 million related to internal-use software development costs, respectively. The research and development stock-based compensation amounts are presented net of the capitalized costs. In connection with the acquisition of Jask Labs, the Company granted 130,180 shares of restricted common stock, with a fair value of $12.11683 per share at the time of grant, that vest over a period of two years. The Company recorded $0.2 million in stock-based compensation expense related to the vesting of the restricted common stock during the three months ended July 31, 2021 and 2020 and $0.4 million during the six months ended July 31, 2021 and 2020. As of July 31, 2021, the remaining unrecognized stock-based compensation expense of $0.2 million will be recognized over the remaining vesting period. The RSUs granted under the 2010 Plan were subject to service-based and performance-based vesting conditions, which included a liquidity event condition. In certain cases the RSUs are also subject to certain other performance metrics. The liquidity event performance-based vesting condition was deemed probable of occurring up on the completion of the IPO. On that date the Company recorded cumulative stock-based compensation expense of $10.9 million using the accelerated attribution method. The remaining unrecognized stock-based compensation expense will be recorded over the RSUs remaining requisite service periods. Included within these amounts was $1.4 million for the RSUs subject to both the occurrence of a liquidity event and certain other performance metrics. Common Stock Transfers During the six months ended July 31, 2020, certain of the Company’s existing investors acquired outstanding common stock from former employees of the Company, for a purchase price greater than the fair value of the common stock at the time of the transaction. In connection with these stock transfers, the Company waived its right of first refusal and other transfer restrictions applicable to such shares. As a result, the Company recorded stock-based compensation of $0.3 million for the six months ended July 31, 2020, in general and administrative expenses in the condensed consolidated statements of operations. The amount recorded as stock-based compensation represents the difference between the price paid and the estimated fair value at the date of the transaction. |