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Stock Based Compensation
 12 Months Ended
Jan. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
We maintain two stock-based compensation plans: the 2017 Equity Incentive Plan (2017 Plan), and the 2008 Equity Incentive Plan (2008 Plan), collectively referred to as the Stock Plans. We do not expect to grant any additional awards under the 2008 Plan. Outstanding awards under the 2008 Plan continue to be subject to the terms and conditions of the 2008 Plan.
When we adopted the 2017 Plan in March 2017, we reserved 30,000,000 shares of our common stock for issuance, plus an additional number of shares of common stock equal to any shares reserved but not issued or subject to outstanding awards under our 2008 Plan on the effective date of our 2017 Plan, plus, on and after the effective date of our 2017 Plan, (i) shares that are subject to outstanding awards under the 2008 Plan which cease to be subject to such awards, (ii) shares issued under the 2008 Plan which are forfeited or repurchased at their original issue price, and (iii) shares subject to awards under the 2008 Plan that are used to pay the exercise price of an option or withheld
to satisfy the tax withholding obligations related to any award. The number of shares reserved for issuance under our 2017 Plan will increase automatically on the first day of February of each calendar year during the term of the 2017 Plan by a number of shares of common stock equal to the lesser of (i) 5% of the total outstanding shares of our common stock as of the immediately preceding January 31 or (ii) a number of shares determined by our board of directors. On February 1, 2020, 14,758,388 additional shares were authorized for issuance by the board of directors. As of January 31, 2020, there were 13,269,006 shares of common stock reserved and available for future issuance under the Stock Plans.
As a result of the Hortonworks merger, a total fair value of the stock-based awards assumed was $63.5 million, which is being recognized as stock-based compensation expense over a weighted-average period of 1.5 years from the Closing Date. Additionally, we recognized $13.1 million of stock-based compensation expense during the year ended January 31, 2019 due to the acceleration and modification of certain employee awards assumed as part of the Hortonworks merger.
During the years ended January 31, 2020 and 2019, we incurred approximately $20.9 million and $6.2 million, respectively, of additional stock-based compensation expense related to the acceleration and modification of stock awards held by certain former employees and former board members.
Stock Options
Stock options granted generally have a maximum term of ten years from the grant date, are exercisable upon vesting unless otherwise designated for early exercise by the board of directors at the time of grant, and generally vest over a period of three to four years, with 25% vesting after one year and then ratably on a monthly basis for the remaining two to three years.
The following table summarizes stock option activity and related information under the Stock Plans:
Options Outstanding
Options
Outstanding		Weighted-
Average
Exercise
Price		Weighted-Average Remaining
Contractual
Term
(Years)		Aggregate
Intrinsic
Value
(in thousands)
Balance — January 31, 2019
19,117,696  $5.83  4.3$154,431  
Exercised
(4,395,673) 2.88  —  —  
Canceled
(1,191,660) 15.25  —  —  
Balance — January 31, 2020
13,530,363  $5.96  2.1$70,057  
Exercisable— January 31, 2020
13,478,227  $5.91  2.0$70,057  
Vested and Expected to Vest — January 31, 2020
13,530,363  $5.96  2.1$70,057  

The total intrinsic value of options exercised during the years ended January 31, 2020, 2019 and 2018 was $26.2 million, $31.2 million and $64.1 million, respectively. The intrinsic value is the difference between the current fair market value of the stock for accounting purposes at the time of exercise and the exercise price of the stock option. As we have accumulated net operating losses, no future tax benefit related to option exercises has been recognized.
The total grant-date fair value of stock options vested during the years ended January 31, 2020, 2019 and 2018 was $1.6 million, $27.9 million and $15.2 million, respectively. The weighted-average grant-date fair value of
employee options granted during the years ended January 31, 2019 and 2018 was $4.58 and $8.67 per share, respectively. There were no options granted during the year ended January 31, 2020.
The fair value of each stock option grant was estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:
Years Ended January 31,
20192018
Volatility 45.0%  45.3%  
Risk-free interest rate 2.5%  2.0%  
Expected term (in years) 5.0 years6.1 years
Expected dividends —%  —%  
The unamortized stock-based compensation expense for options of $0.3 million at January 31, 2020 will be recognized over the average remaining vesting period of 0.80 years.
Restricted Stock Units
We issue RSUs to employees and directors under the Stock Plans. Prior to our IPO in May 2017, the employee RSUs vested upon the satisfaction of both a service-based vesting condition and a liquidity event-related performance vesting condition. RSUs granted subsequent to our IPO vest upon the satisfaction of a service-based vesting condition only. The service-based condition for the majority of these awards is generally satisfied pro-rata over four years. For new employee grants, the RSUs generally meet the service-based condition over a four-year period, with 25% met after one year and then ratably on a quarterly basis for the remaining three years. For continuing employee grants, the RSUs generally meet the service-based condition pro-rata quarterly over a period of three to four years.
The liquidity event-related performance condition is satisfied upon the occurrence of a qualifying liquidity event, such as the effective date of an IPO, or six months following the effective date of an IPO. During the quarter ended April 30, 2017, the majority of RSUs were modified such that the liquidity event-related performance condition is satisfied upon the effective date of an IPO, rather than six months following an IPO. The modification established a new measurement date for these modified RSUs. The liquidity event-related performance condition is viewed as a performance-based criterion for which the achievement of such liquidity event is not deemed probable for accounting purposes until the event occurs. The liquidity event-related performance condition was achieved for the majority of our RSUs and became probable of being achieved for the remaining RSUs on April 27, 2017, the effective date of our IPO. We recognized stock-based compensation expense using the accelerated attribution method with a cumulative catch-up of stock-based compensation expense in the amount of $181.5 million in fiscal 2018, attributable to service prior to such effective date.
The following table summarizes RSU activity and related information under the Stock Plans:
RSUs Outstanding
Number of RSUsWeighted-Average Grant Date Fair Value Per Share
Balance —January 31, 201935,058,103  $13.25  
Granted36,075,434  8.96  
Canceled(9,276,310) 12.49  
Vested and converted to shares(23,273,233) 11.15  
Balance —January 31, 202038,583,994  $10.85  
The weighted-average grant date fair value of RSUs granted during the years ended January 31, 2020, 2019 and 2018 was $8.96, $12.08 and $16.93 per share, respectively. The total fair value of RSUs vested during the years ended January 31, 2020, 2019 and 2018 was $218.3 million, $128.7 million, and $166.7 million, respectively.
The unamortized stock-based compensation expense for RSUs was $366.6 million as of January 31, 2020 and will be recognized over the average remaining vesting period of 2.2 years.
Employee Stock Purchase Plan
Our ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the United States Internal Revenue Code of 1986, as amended (Code). Purchases will be accomplished through participation in discrete offering periods. Each offering period consists of a six-month purchase period (commencing each June 21 and December 21).
Under our ESPP, eligible employees will be able to acquire shares of our common stock by accumulating funds through payroll deductions. Our employees generally are eligible to participate in our ESPP if they are employed by us for at least 20 hours per week and more than five months in a calendar year. Employees who are 5% stockholders or would become 5% stockholders as a result of their participation in our ESPP, are ineligible to participate in our ESPP. We may impose additional restrictions on eligibility. Our eligible employees are able to select a rate of payroll deduction between 1% and 15% of their base cash compensation. The purchase price for shares of our common stock purchased under our ESPP is 85% of the lesser of the fair market value of our common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the applicable offering period. No participant has the right to purchase shares of our common stock in an amount, when aggregated with purchase rights under all our employee stock purchase plans that are also in effect in the same calendar year(s), that has a fair market value of more than $25,000, determined as of the first day of the applicable purchase period, for each calendar year in which that right is outstanding. In addition, no participant is permitted to purchase more than 2,500 shares during any one purchase period or such lesser amount determined by our compensation committee or our board of directors. Once an employee is enrolled in our ESPP, participation will be automatic in subsequent offering periods. An employee’s participation automatically ends upon termination of employment for any reason.
We initially reserved 3,000,000 shares of our common stock for issuance under our ESPP. The number of shares reserved for issuance under our ESPP increases automatically on February 1 of each of the first 10 calendar years following the first offering date by the number of shares equal to the lesser of (i) 1% of the total outstanding shares of our common stock as of the immediately preceding January 31 (rounded to the nearest whole share) or (ii) a number of shares of our common stock determined by our board of directors. On February 1, 2020, 2,951,677 additional shares were authorized for issuance by the board of directors. As of January 31, 2020, the total number of shares available for grant under the ESPP was 2,905,694 shares.
As of January 31, 2020, $2.7 million was withheld on behalf of employees for a future purchase under the ESPP and is recorded in accrued compensation in our consolidated balance sheets. See Note 7 for additional information.
The fair value of each ESPP grant was estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:
Years Ended January 31,
202020192018
Volatility
31.9%  38.8%  32.9%  
Risk-free interest rate
1.9%  2.4%  1.2%  
Expected term (in years)
0.5 years0.5 years0.6 years
Expected dividends
—%  —%  —%