Stock-Based Compensation

6 Months Ended

Oct. 31, 2021

Share-based Payment Arrangement [Abstract]

On June 29, 2012, the Company adopted the 2012 Incentive Plan. The 2012 Incentive Plan provided for the grant of stock-based awards to employees, non-employee directors, and other service providers of the Company. The 2012 Incentive Plan was terminated in December 2020 in connection with the IPO but continues to govern the terms of outstanding awards that were granted prior to the termination of the 2012 Incentive Plan. No further equity awards will be granted under the 2012 Incentive Plan. With the establishment of the 2020 Incentive Plan as further discussed below, upon the expiration, forfeiture, cancellation, or reacquisition of any shares of Class A common stock underlying outstanding stock-based awards granted under the 2012 Incentive Plan, an equal number of shares of Class A common stock will become available for grant under the 2020 Plan.

On November 27, 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 Incentive Plan, which became effective in connection with the IPO. The 2020 Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSU”) awards, performance awards and other equity awards. The number of shares of Class A common stock reserved for issuance under the 2020 Incentive Plan is subject to automatic evergreen increases annually through (and including) May 1, 2030 pursuant to the terms of the 2020 Incentive Plan. There was an automatic annual increase on May 1, 2021 in the number of shares reserved for future issuance pursuant to the 2020 Incentive Plan in an amount equal to five percent (5%) of the total number of shares of the Company’s Class A common stock and Class B common stock outstanding on April 30, 2021.

On November 27, 2020, the Company’s board of directors also adopted, and its stockholders also approved, the 2020 Employee Stock Purchase Plan (the “2020 ESPP”), which became effective immediately prior to the IPO. The 2020 ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to employees. A total of 3,000,000 shares of Class A common stock were initially reserved for future issuance under the 2020 ESPP. The number of shares of Class A common stock reserved for issuance under the 2020 ESPP is subject to automatic evergreen increases annually through (and including) May 1, 2030 pursuant to the terms of the 2020 ESPP. There was an automatic annual increase

on May 1, 2021 in the number of shares reserved for future issuance pursuant to the 2020 ESPP in an amount equal to one percent (1%) of the total number of shares of the Company’s Class A common stock and Class B common stock outstanding on April 30, 2021. The 2020 ESPP permits participants to purchase shares of Class A common stock in an amount not exceeding 15% of their earnings during the relevant offering period. The offering dates and purchase dates for the 2020 ESPP are determined at the discretion of the Company’s board of directors. As of October 31, 2021, the Company had not yet launched its 2020 ESPP.

Stock Options to Acquire Class A Common Stock

These stock options generally expire 10 years from the date of grant, or earlier if services are terminated. Generally, each stock option for common stock is subject to a vesting schedule such that one fifth of the award vests after the first-year anniversary and one-sixtieth of the award vests each month thereafter over the remaining four years, subject to continuous service.

A summary of the Company’s option activity during the six months ended October 31, 2021 is as follows:


	Options Outstanding
	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value
	(in thousands)				(in thousands)
Balance as of April 30, 2021	38,487	$	6.39	7.98	$	2,304,714
Options granted	3,412	55.82
Options exercised	(2,735)	4.22
Options cancelled	(1,960)	10.48
Balance as of October 31, 2021	37,204	$	10.86	7.60	$	1,274,594
Vested and exercisable as of October 31, 2021	14,843	$	4.48	6.43	$	603,201
Vested and expected to vest as of October 31, 2021(1)	37,825	$	10.86	7.60	$	1,295,871

(1) The number of options vested and expected to vest as of October 31, 2021 includes early exercised, unvested Class A common stock. Refer to Note 8. Stockholders’ Equity for more information.

As of October 31, 2021, there was $147.1 million of unrecognized compensation cost related to stock options which are expected to be recognized over an estimated weighted-average period of 3.4 years.

The grant-date fair value of the options issued for the six months ended October 31, 2021 is estimated on the date of grant using the Black-Scholes-Merton option pricing model. The weighted average assumptions underlying the fair value estimation are provided in the following table:


	Six Months Ended October 31,
	2021		2020
Valuation assumptions:
Expected dividend yield	—	%	—	%
Expected volatility	43.9	%	43.7	%
Expected term (years)	6.5		6.3
Risk-free interest rate	1.0	%	0.4	%

Restricted Stock Units

During the fourth quarter of the fiscal year ended April 30, 2021, the Company began granting RSUs to its employees. No RSUs were granted prior to the IPO. The RSUs are typically subject to service-based vesting conditions satisfied over five years with one-fifth of the award vesting after the first-year anniversary and one-twenty-fifth of the award vesting quarterly thereafter. The related stock-based compensation is recognized on a straight-line basis over the requisite service period.

A summary of the Company’s RSU activity during the six months ended October 31, 2021 is as follows:


	RSUs Outstanding
	Number of RSUs	Weighted Average Grant Date Fair Value Per Share
	(in thousands)
Unvested Balance as of April 30, 2021	447	$	74.52
RSUs granted	6,080	54.32
RSUs vested	(37)	70.07
RSUs forfeited	(448)	58.15
Unvested Balance as of October 31, 2021	6,042	$	55.43

As of October 31, 2021, there was $332.8 million of unrecognized stock-based compensation expense related to outstanding RSUs granted to employees that is expected to be recognized over a weighted-average period of 3.8 years.

Stock-based Compensation Expense

The following table summarizes the effects of stock-based compensation on the Company’s condensed consolidated statements of operations (in thousands):


	Three Months Ended October 31,				Six Months Ended October 31,
	2021		2020		2021		2020
Cost of subscription	$	2,364	$	159	$	3,185	$	343
Cost of professional services	685		89		1,287		137
Sales and marketing	13,555		2,190		19,690		3,045
Research and development	10,256		648		13,014		1,106
General and administrative	5,680		2,115		9,276		3,050
Total stock-based compensation expense	$	32,540	$	5,201	$	46,452	$	7,681

Shareholder Loan

In January 2018, in connection with the Series F preferred stock financing, the Company issued 1,251,921 shares of Series F preferred stock in exchange for a note receivable of $24.5 million from its chief executive officer (“CEO”). Prior to the automatic conversion of all Series F preferred stock outstanding into Class A common stock upon the completion of the IPO, the underlying shares of Series F preferred stock were legally outstanding though were not included in the carrying amounts of preferred stock as the note receivable is treated as an equity classified stock-based option grant. In September 2020, the Company’s CEO paid the outstanding full recourse promissory note and accrued interest in the amount of $26.0 million. No interest income was recorded for the note. Refer to Note 12. Related Party Transactions for more information.