Employee Incentive Plans | Employee Incentive Plans The Company’s equity incentive plans provide for granting stock options, restricted stock units (RSUs) and restricted stock awards to employees, consultants, officers and directors. In addition, the Company offers an Employee Stock Purchase Plan (ESPP) to eligible employees. Stock-based compensation expense was recorded in the following cost and expense categories in the Company’s condensed consolidated statements of operations (in thousands): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 (unaudited) Cost of revenue Subscription $ 3,111 $ 1,901 $ 5,533 $ 3,430 Professional services and other 1,873 1,083 3,392 1,972 Research and development 9,082 5,272 15,428 9,485 Sales and marketing 9,236 5,471 16,022 9,624 General and administrative 7,972 4,495 13,584 7,846 Total $ 31,274 $ 18,222 $ 53,959 $ 32,357 Stock-based compensation expense recorded to research and development in the condensed consolidated statements of operations excludes amounts that were capitalized related to internal-use software for the three and six months ended July 31, 2019 and 2018 . See Note 7 for further details. Equity Incentive Plans The Company has two equity incentive plans: the 2009 Stock Plan (2009 Plan) and the 2017 Equity Incentive Plan (2017 Plan). All shares that remain available for future grants are under the 2017 Plan. As of July 31, 2019 , options to purchase 13,442,997 shares of Class B common stock and 1,144,327 shares of Class A common stock remain outstanding. Shares of common stock reserved for future issuance are as follows: As of July 31, 2019 (unaudited) Stock options and unvested RSUs outstanding 19,988,414 Available for future stock option and RSU grants 16,501,443 Available for ESPP 3,778,949 40,268,806 Stock Options A summary of the Company’s stock option activity and related information is as follows: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding as of January 31, 2019 17,803,794 $ 9.16 7.1 $ 1,304,446 Granted 412,360 82.16 Exercised (3,376,704 ) 8.13 Canceled (252,126 ) 11.67 Outstanding as of July 31, 2019 (unaudited) 14,587,324 $ 11.42 6.6 $ 1,741,854 As of July 31, 2019 Vested and exercisable (unaudited) 9,195,820 $ 7.87 6.1 $ 1,130,712 As of July 31, 2019 , there was a total of $39.4 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of 1.8 years. Restricted Stock Units A summary of the Company’s RSU activity and related information is as follows: Number of Weighted- Outstanding as of January 31, 2019 4,835,536 $ 44.49 Granted 1,895,182 115.86 Vested (1,016,224 ) 43.60 Forfeited (313,404 ) 45.44 Outstanding as of July 31, 2019 (unaudited) 5,401,090 $ 69.65 As of July 31, 2019 , there was $353.1 million of unrecognized stock-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of 3.0 years based on vesting under the award service conditions. Employee Stock Purchase Plan Except for the initial offering period which began April 7, 2017 and ended on June 20, 2018, the ESPP provides for 12-month offering periods beginning June 21 and December 21 of each year, and each offering period consists of up to two six-month purchase periods. The Company estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 (unaudited) Expected volatility 43% - 59% 39% - 40% 43% - 59% 39% - 40% Expected term (in years) 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 0.5 - 1.0 Risk-free interest rate 2.05% - 1.95% 2.12% - 2.34% 2.05% - 1.95% 2.12% - 2.34% Expected dividend yield — — — — During the three and six months ended July 31, 2019 , the Company’s employees purchased 197,703 shares of its Class A common stock under the ESPP. The shares were purchased at a weighted-average purchase price of $45.55 per share, with total proceeds of $9.0 million. As of July 31, 2019 , there was $8.3 million of unrecognized stock-based compensation expense related to the ESPP that is expected to be recognized over an average vesting period of 0.9 years. |