Equity | 9. Equity Common Stock The Company had shares of common stock reserved for future issuance as follows (in thousands): October 31, 2024 January 31, 2024 Class A and Class B common stock Options issued and outstanding 6,617 8,503 Shares available for issuance under Equity Incentive Plans 29,641 24,868 RSUs and PSUs issued and outstanding 11,820 10,930 Shares reserved for issuance to charitable organizations 1,231 1,404 ESPP 6,722 5,398 Total 56,031 51,103 Equity Incentive Plans In September 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”) as a successor of the Company’s 2015 Equity Incentive Plan (together the “Plans”). The awards available for grant under the above Plans for the periods presented were as follows (in thousands): October 31, 2024 January 31, 2024 Available at beginning of period 24,868 21,483 Awards authorized 7,878 7,557 RSUs and PSUs granted (4,743) (6,258) RSUs and PSUs canceled and forfeited 1,530 1,292 Options canceled and forfeited 108 777 Options repurchased — 17 Available at end of period 29,641 24,868 In the event that shares previously issued u nder the above Plans are reacquire d by the Company, such shares shall be added to the number of shares then available for issuance under the 2021 Plan. In the event that an outstanding stock option for any reason expires or is canceled, the shares allocable to the unexercised portion of su ch stock option will be added to the number of shares then available for issuance under the 2021 Plan. Both Plans allow the grantees to early exercise stock options. Stock Options, RSUs and PSUs The following table summarizes options activity under the Plans, and related information: Number of Stock Options Outstanding (in thousands) Weighted Average Exercise Price Weighted Average Remaining Years Aggregate Intrinsic value (in millions) Balances at January 31, 2024 8,503 $ 13.03 5.85 $ 499.2 Options granted — — — Options exercised (1,778) 10.07 — Options canceled (11) 13.95 — Options forfeited (97) 18.36 — Balances at October 31, 2024 6,617 $ 13.66 5.41 $ 265.3 Options vested at October 31, 2024 5,749 $ 12.91 5.25 $ 234.8 Options vested and expected to vest at October 31, 2024 6,617 $ 13.66 5.41 $ 265.3 During the three and nine months ended October 31, 2024, the Company recorded $3.1 million and $10.0 million stock-based compensation expense related to options, respectively. During the three and nine months ended October 31, 2023, the Company recorded $4.3 million and $13.8 million stock-based compensation expense related to options, respectively. As of October 31, 2024, approx imately $9.6 million of total unrecognized compensation cost was related to stock options granted, that is expected to be recognized over a weighted-average period of 1.1 years. The expected stock compensation expense remaining to be recognized reflects only outstanding stock awards as of the periods presented, and assumes no forfeitures. The following table summarizes the Company’s RSU activity: Number of Shares (in thousands) (1) Weighted- Balances at January 31, 2024 7,701 $ 47.20 Granted 4,743 53.38 Vested (2,323) 49.15 Canceled/forfeited (1,530) 49.28 Balances at October 31, 2024 8,591 $ 49.69 (1) The table above does not include 3 million RSUs granted to the Company’s founder and the Chief Executive Officer (“CEO”) described below. These RSUs are grants of shares of the Company’s Class A common stock, the vesting of which is based on the requisite service requirement. Generally, the Company’s RSUs are subject to forfeiture and are expected to vest over two three and nine months ended October 31, 2023, the Company recorded $31.7 million and $84.9 million stock-based compensation expense related to RSUs, respectively. As of October 31, 2024 , approximately $401.7 million of total unrecognized compensation cost was related to RSUs granted to team members other than the CEO, that is expected to be recognized over a weighted-average period of 2.7 years. The expected stock compensation expense remaining to be recognized reflects only outstanding stock awards as of the periods presented, and assumes no forfeitures. In June 2022, the Company granted 0.4 million PSUs to senior members of its management team subject to revenue performance condition and service conditions. The number of awards granted represents 100% of the target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the original grant. The performance c ondition is set to be achieved in fiscal year 2025 and the service condition in calendar year 2025. The Company recorded $0.9 million and $1.8 million of stock-based compensation expense related to PSUs during the three and nine months ended October 31, 2024 , respectively. The Company recorded a $0.4 million and $0.7 million of stock-based compensation related to PSUs during the three and nine months ended October 31, 2023, respectively. As of October 31, 2024, unrecognized stock-based compensation expense related to these PSUs was $1.4 million to be recognized over a period of 1.1 years. CEO Performance Award In May 2021, the Company granted 3 million RSUs tied to its Class B common stock to Sytse Sijbrandij, the Company’s co-founder and CEO, with an estimated aggregate grant date fair value of $8.8 million. During the three and nine months ended October 31, 2024, the Company recorded $0.3 million and $1.0 million of stock-based compensation expense related to the CEO RSU, respectively. During the three and nine months ended October 31, 2023, the Company recorded $0.4 million and $1.2 million of stock-based compensation expense related to the CEO RSU, respectively. As measured from the grant date, the derived service period of the respective tranches ranges from 3 to 7 years . As of October 31, 2024, unrecognized stock-based compensation expense related to these RSUs was $3.3 million which will be recognized over 4.1 years. 2021 Employee Stock Purchase Plan (“ESPP”) In September 2021, the Company’s board of directors and its stockholders approved the ESPP and participation of eligible team members. The Company recorded $2.5 million and $8.6 million of stock-based compensation expense related to the ESPP during the three and nine months ended October 31, 2024, respectively. The Company recorded $4.0 million and $15.2 million of stock-based compensation expense related to the ESPP during the three and nine months ended October 31, 2023, respectively. As of October 31, 2024, approximately $8.5 million of total unrecognized compensation cost was related to the ESPP that is expected to be recognized over 1.6 years. Stock-Based Compensation Expense The Company recognized stock-based compensation expense as follows (in thousands): Three Months Ended October 31, Nine Months Ended October 31, 2024 2023 2024 2023 Cost of revenue $ 1,993 $ 1,648 $ 5,924 $ 4,760 Sales and marketing 17,012 16,523 54,290 51,582 Research and development 14,384 12,738 42,834 36,917 General and administrative 14,653 10,425 36,215 26,773 Total stock-based compensation expense (1) $ 48,042 $ 41,334 $ 139,263 $ 120,032 (1) The table above includes stock-based compensation of JiHu. Refer to “Note 11. Joint Venture and Equity Method Investment” for further discussion. The corporate income tax benefit recognized in the condensed consolidated statements of operations for stock-based compensation expense was zero for both the three and nine months ended October 31, 2024 , and 2023, respectively . Charitable Donation of Common Stock In September 2021, the C ompany’s board of directors approved the reservation of up to 1,635,545 shares of Class A common stock for issuance to charitable organizations. In March 2024 and 2023, the Company’s board of directors approved the donation of $11.8 million and $10.7 million aggregate principal amount of shares of Class A common stock to the GitLab Foundation (the “Foundation”), a California nonprofit public benefit corporation, respectively. The Foundation is also a related party as certain of the Company’s officers serve as directors of the Foundation. These donations shall occur in four equal quarterly distributions. During the three and nine months ended October 31, 2024, the Company donated 52,940 shares and 173,181 shares of Class A common stock at fair value to the Foundation, respectively. During the three and nine months ended October 31, 2023, the Company donated 53,510 shares and 186,899 shares of Class A common stock at fair value to the Foundation, respectively. The fair value of the common stock was determined based on the quoted market price on the grant date. The donation expense of $3.0 million and $8.9 million was recorded in general and administrative expense in the condensed consolidated statements of operations for the three and nine months ended October 31, 2024, respectively. The donation expense of $2.7 million and $8.0 million was recorded in general and administrative expense in the condensed consolidated statements of operations for the three and nine months ended October 31, 2023, respectively. |