We maintain two equity incentive plans: the 2009 Equity Incentive Plan (the 2009 Plan) and the 2015 Equity Incentive Plan (the 2015 Plan). The 2015 Plan serves as the successor to our 2009 Plan and provides for grants of incentive stock options to our employees and non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance-based stock and cash awards, market-based stock awards, and other forms of stock awards to our employees, directors and consultants. Our equity awards generally vest over a two to four year period and expire no later than ten years from the date of grant.

We initially reserved 27.0 million shares of our common stock for issuance under our 2015 Plan. The number of shares reserved for issuance under our 2015 Plan increases automatically on the first day of each fiscal year, for a period of not more than ten years, commencing on February 1, 2016, in an amount equal to 5% of the total number of shares of our capital stock outstanding as of the immediately preceding January 31 (the Evergreen Increase). In March 2022, our Board of Directors approved an amendment and restatement of the 2015 Plan to clarify the effect of our change to a 52/53 week fiscal year in September 2019 on the Evergreen Increase.

We net-share settle equity awards held by certain employees by withholding shares upon vesting to satisfy tax withholding obligations. The shares withheld to satisfy employee tax withholding obligations are returned to our 2015 Plan and will be available for future issuance. Payments for employees’ tax obligations to the tax authorities are recognized as a reduction to additional paid-in capital and reflected as a financing activity in our consolidated statements of cash flows.

Our 2015 Employee Stock Purchase Plan was amended and restated in fiscal 2020 (2015 ESPP). A total of 3.5 million shares of common stock was initially reserved for issuance under the 2015 ESPP and an additional 5.0 million shares of common stock were added in connection with the amendment and restatement. The number of shares reserved for issuance under our 2015 ESPP increases automatically on the first day of February of each of 2016 through 2025, in an amount equal to the lesser of (i) 1% of the total number of shares of our capital stock outstanding as of the immediately preceding January 31, and (ii) 3.5 million shares of common stock.

Our Board of Directors (or a committee thereof) has the authority to establish the length and terms of the offering periods and purchase periods and the purchase price of the shares of common stock which may be purchased under the plan. The current offering terms allow eligible employees to purchase shares of our common stock at a discount through payroll deductions of up to 30% of their eligible compensation, subject to a cap of 3,000 shares on any purchase date, a dollar cap of $7,500 per purchase period, or $25,000 in any calendar year (as determined under applicable tax rules). The current terms also allow for a 24-month offering period beginning March 16th and September 16th of each year, with each offering period consisting of four 6 month purchase periods, subject to a reset provision. Further, currently, on each purchase date, eligible employees may purchase our common stock at a price per share equal to 85% of the lesser of the fair market value of our common stock (1) on the first trading day of the applicable offering period or (2) the purchase date.

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 offering would automatically be enrolled in the new offering (ESPP reset), resulting in a modification charge to be recognized over the new offering period. During fiscal 2023 and 2024, ESPP resets resulted in total modification charges of $10.4 million and $16.7 million, respectively, to be recognized over their new offering periods. There was no ESPP reset during fiscal 2022.

During fiscal 2022, 2023 and 2024, we recognized $35.4 million, $22.9 million and $27.4 million, of stock-based compensation expense related to our 2015 ESPP. At the end of fiscal 2024, total unrecognized stock-based compensation cost related to our 2015 ESPP was $34.2 million, which is expected to be recognized over a weighted-average period of approximately 1.2 years.

The fair value of employees' purchase rights under ESPP is estimated on the grant date using the Black-Scholes option pricing model. This valuation model for stock-based compensation expense requires us to make assumptions and judgments about the variables used in the calculation including the fair value of the underlying common stock, expected term, the expected volatility of the common stock, a risk-free interest rate and expected dividend yield. The assumptions used for the periods presented are as follows:


	Fiscal Year Ended
	2022	2023	2024

Expected term (in years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0
Expected volatility	44% - 61%	45% - 54%	38% - 44%
Risk-free interest rate	0.1% - 0.2%	0.9% - 4.0%	4.1% - 5.5%
Dividend rate	—	—	—
Fair value of common stock	$23.63 - $26.69	$28.73 - $31.68	$24.12 - $35.91


	Options Outstanding
	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)
Balance at the end of fiscal 2023	9,268,498	$	10.90	2.7	$	176,674

Options exercised	(4,770,168)	8.33
Options forfeited	(4,396)	1.93
Balance at the end of fiscal 2024	4,493,934	$	13.63	2.3	$	129,065
Vested and exercisable at the end of fiscal 2024	4,474,328	$	13.58	2.3	$	128,275

The aggregate intrinsic value of options vested and exercisable at the end of fiscal 2024 is calculated based on the difference between the exercise price and the closing price of $42.25 of our common stock on the last day of fiscal 2024. The aggregate intrinsic value of options exercised during fiscal 2022, 2023 and 2024 was $105.1 million, $63.5 million and $124.0 million.

During fiscal 2022, 2023 and 2024, we recognized $7.7 million, $4.9 million and $2.3 million of stock-based compensation expense related to stock options. At the end of fiscal 2024, total unrecognized employee stock-based compensation cost related to outstanding options was $0.3 million, which is expected to be recognized over a weighted-average period of 0.4 years.

A summary of the RSU activity under our equity incentive plans and related information is as follows:


	Number of RSUs Outstanding	Weighted-Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Unvested balance at the end of fiscal 2023	24,615,404	$	24.61	$	736,247
Granted	15,421,396	26.41

Vested	(12,259,752)	22.45
Forfeited	(3,433,974)	25.09

Unvested balance at the end of fiscal 2024	24,343,074	$	26.77	$	1,028,495

During fiscal 2022, 2023 and 2024, we recognized $217.2 million, $248.1 million and $268.2 million in stock-based compensation expense related to RSUs. At the end of fiscal 2024, total unrecognized employee compensation cost related to unvested RSUs was $609.2 million, which is expected to be recognized over a weighted-average period of 2.7 years.

The number of shares that could be earned under our PRSU grants ranges from 0% to 150% of the target number granted depending on the achievement of certain performance conditions with any unearned shares canceled. The number of earned shares vest over three years from the date of grant subject to continuous service. A summary of the PRSU activity under our equity incentive plans and related information is as follows:


	Number of PRSUs Outstanding	Weighted-Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Unvested balance at the end of fiscal 2023	2,145,116	$	26.51	$	64,160
Granted (1)	2,169,711	25.79
Vested and earned (2)	(1,778,158)	26.65

Forfeited (3)	(266,072)	27.23
Unvested balance at the end of fiscal 2024	2,270,597	$	25.64	$	95,933

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(1) Includes approximately (i) 1.6 million shares that may be earned at the target percentage of 100% depending on the achievement of fiscal 2024 performance conditions and (ii) an additional 0.6 million shares earned based on the actual achievement of fiscal 2023 performance conditions.

During fiscal 2022, 2023 and 2024, we recognized $24.9 million, $51.6 million and $23.9 million in stock-based compensation expense related to PRSUs. At the end of fiscal 2024, total unrecognized employee compensation cost related to unvested PRSUs was $9.3 million, which is expected to be recognized over a weighted-average period of 1.5 years.

PRSUs granted in fiscal 2024 earned 80 percent of the target number granted as a result of not achieving fiscal 2024 revenue growth targets, following a modification in the first quarter of fiscal 2025 by our Board of Directors. Our revenue growth in fiscal 2024 was impacted by significant Total Contract Value (TCV) sales growth of our consumption based Evergreen//One and Evergreen//Flex offerings, which far exceeded expectations. During the first quarter of fiscal 2025, our Board of Directors took into consideration that fiscal 2024 revenue growth was impacted by strong TCV sales growth of our consumption based offerings, and approved a discretionary adjustment, increasing the earned number of shares to 80 percent of the target. This modification resulted in additional stock-based compensation expense of approximately $40.7 million, the majority of which will be recognized in the first quarter of fiscal 2025 with the remaining amount to be recognized over the remaining vesting period.

•The number of shares earned are contingent upon our market capitalization meeting or exceeding $21 billion that will be measured over an approximate three to five year period, at the end of our fiscal years ending in 2026, 2027 and 2028.


	Number of LTP Awards Outstanding	Weighted-Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)
Unvested balance at the end of fiscal 2023	—	$	—	$	—
Granted (1)	4,209,985	17.56

Forfeited (2)	(203,381)	17.56
Unvested balance at the end of fiscal 2024	4,006,604	$	17.56	$	169,279

The grant date fair value per share was $17.56, determined using a Monte Carlo simulation model that considered the following assumptions: (i) expected volatility of 51.8%, (ii) risk-free interest rate of 3.86%, (iii) total performance period of nearly five years, and (iv) a post-vest holding period discount of 14.9%. Total stock-based compensation expense of $73.9 million for these awards is being recognized over the requisite service period of nearly five years using the accelerated attribution method and is not reversed if the market condition is not ultimately met. During fiscal 2024, we recognized $9.6 million in stock-based compensation expense related to LTP Awards. At the end of fiscal 2024, total unrecognized stock-based compensation cost related to unvested LTP Awards was $60.7 million, which is expected to be recognized over a weighted-average period of 4.1 years.


	Fiscal Year Ended
	2022		2023		2024
Cost of revenue—product	$	6,334	$	10,245	$	9,670
Cost of revenue—subscription services	21,240		22,630		25,412
Research and development	142,264		161,694		167,294
Sales and marketing	71,439		72,507		74,746
General and administrative	45,686		60,541		54,305
Total stock-based compensation expense, net of amounts capitalized (1)	$	286,963	$	327,617	$	331,427