Employee Stock Plans

3 Months Ended

Apr. 30, 2020

Share-based Payment Arrangement [Abstract]

Note 17. Employee Stock Plans

Equity Incentive Plans

In March 2018, the Company’s Board of Directors adopted and its stockholders approved the 2018 Equity Incentive Plan (2018 Plan). The 2018 Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, RSUs, performance awards, and stock bonuses. As of April 30, 2020, approximately 22.5 million shares of Class A common stock were reserved and available for issuance under the 2018 Plan. In addition, as of April 30, 2020, 9.5 million stock options and RSUs exercisable or settleable for Class B common stock were outstanding in the aggregate under the Company’s 2006 Stock Plan (2006 Plan) and 2015 Equity Incentive Plan (2015 Plan), which plans were terminated in May 2015 and April 2018, respectively. The 2006 Plan and 2015 Plan continue to govern outstanding equity awards granted thereunder.

Stock Options

The following table summarizes stock option activity and related information (in thousands, except weighted-average exercise price and average remaining contractual term):


	Shares Subject To Outstanding Stock Options	Weighted-Average Exercise Price		Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance as of January 31, 2020	13,701	$	7.64	6.9	$	107,186
Granted	83	10.57
Exercised	(856)	4.70
Forfeited	(351)	9.29
Balance as of April 30, 2020	12,577	7.81		6.6	55,892
Exercisable as of April 30, 2020	9,373	5.94		5.9	55,664
Vested and expected to vest as of April 30, 2020	12,189	7.63		6.5	55,490

The weighted-average grant date fair value per share of options granted during the three months ended April 30, 2020 and 2019 was $4.21 and $9.87, respectively. The aggregate intrinsic value of options exercised during the three months ended April 30, 2020 and 2019 was $7.5 million and $20.7 million, respectively. As of April 30, 2020, there was $24.0 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average of 2.5 years.

The Company used the Black-Scholes option-pricing model to estimate the fair value of its stock options granted with the following assumptions:


	Three Months Ended April 30,
	2020		2019

Expected volatility	41.4	%	39.0	%
Expected term (years)	6.1		6.1
Risk-free interest rate	0.5	%	2.5	%
Expected dividend yield	—		—

Options Subject to Early Exercise

At the discretion of the Company’s Board of Directors, certain options may be exercisable immediately at the date of grant but are subject to a repurchase right, under which the Company may buy back any unvested shares at the lower of their original exercise price or then current fair market value in the event of an employee’s termination prior to vesting. The consideration received for an exercise of an unvested option is considered to be a deposit of the exercise price and the related dollar amount is recorded as a liability. The liabilities are reclassified into equity as the awards vest. As of April 30, 2020 and January 31, 2020, early exercised stock options did not have a material impact on our consolidated financial statements.

RSU and Restricted Stock Award Activity

The following table summarizes RSU and restricted stock award activity and related information for the three months ended April 30, 2020 (in thousands, except weighted-average grant date fair value):


	Number of RSU and Restricted Shares Outstanding	Weighted-Average Grant Date Fair Value
Balance as of January 31, 2020	5,029	$	18.09
Granted	590	12.23
Vested	(405)	17.72
Forfeited	(220)	19.94
Balance as of April 30, 2020	4,994	17.35

As of April 30, 2020, there was $73.4 million of unrecognized compensation cost related to unvested RSUs and restricted stock awards, which is expected to be recognized over a weighted average of 3.1 years.

2018 Employee Stock Purchase Plan

In March 2018, the Company's Board of Directors adopted and its stockholders approved the 2018 Employee Stock Purchase Plan (ESPP). A total of 3.8 million shares of Class A common stock were reserved and available for issuance under the ESPP as of April 30, 2020. The ESPP provides for 24-month offering periods beginning June 15 and December 15 of each year, and each offering period contains four six-month purchase periods. On each purchase date, ESPP participants will purchase shares of the Company’s Class A common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Class A common stock on the offering date or (2) the fair market value of the Class A common stock on the purchase date.

As of April 30, 2020, there was approximately $2.7 million of unrecognized stock-based compensation expense related to the ESPP which is expected to be recognized over a weighted average of 0.9 years.

Stock-Based Compensation Expense

Stock-based compensation expense was recorded in the following cost and expense categories in the accompanying unaudited condensed consolidated statements of comprehensive loss (in thousands):


	Three Months Ended April 30,
	2020		2019
Cost of subscription revenue	$	852	$	493
Cost of professional services revenue	1,650		1,359
Research and development	3,542		3,191
Sales and marketing	3,005		1,852
General and administrative	1,835		1,064
Total stock-based compensation expense	$	10,884	$	7,959