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Equity
 12 Months Ended
Jan. 31, 2024
Equity [Abstract]  
Equity
10. Equity
In connection with the Company’s initial public offering (the “IPO”), on October 18, 2021, the Company filed a restated certificate of incorporation that authorized the issuance of 1,500,000,000 shares of Class A common stock, 250,000,000 shares of Class B common stock, and 50,000,000 shares of preferred stock at $0.0000025 par value for each class of shares. Common stockholders are entitled to
dividends when and if declared by the board of directors. No dividends have been declared to date. The holder of each share of Class A common stock is entitled to one vote and the holder of each share of Class B common stock is entitled to ten votes.
Common Stock
The Company had shares of common stock reserved for future issuance as follows (in thousands):
January 31, 2024January 31, 2023
Class A and Class B common stock
Options issued and outstanding8,503 12,686 
Shares available for issuance under Equity Incentive Plans24,868 21,483 
RSUs and PSUs issued and outstanding10,930 8,336 
Shares reserved for issuance to charitable organizations1,404 1,636 
ESPP 5,398 4,303 
Total51,103 48,444 
Early Exercised Options (subject to a repurchase right)
Certain stock option holders have the right to exercise unvested options, subject to a repurchase right held by the Company at the original exercise price, in the event of voluntary or involuntary termination of employment of the holder. As of January 31, 2024 and January 31, 2023, there were 22,278 and 194,304 shares, respectively, of unvested options that had been early exercised and were subject to repurchase for a total liability of $0.4 million and $1.8 million, respectively. The liability associated with early exercised options is included in other non-current liabilities in the consolidated balance sheets.
For accounting purposes, issuance of shares will be recognized only on vesting. However, shares issued for the early exercise of options are included in issued and outstanding shares as they are legally issued and outstanding.
Convertible Preferred Stock
Upon the closing of the IPO, all $79.6 million shares of the Company’s convertible preferred stock outstanding were automatically converted into an equal number of shares of Class B common stock and their carrying value of $424.9 million was reclassified into stockholders’ equity. As of January 31, 2024 and January 31, 2023, there were no shares of convertible preferred stock issued and outstanding.
Equity Incentive Plans
In 2015, the Company adopted the 2015 Equity Incentive Plan (the “2015 Plan”), in which shares of common stock of the Company are reserved for issuance of stock options to team members, directors, or consultants. The options generally vest 25% upon completion of one year and then ratably over 36 months. Options generally expire ten years from the date of grant. All these options qualify as equity settled awards and contain no performance conditions.
In September 2021, in connection with the IPO, the board of directors and stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”) as a successor to the Company’s 2015 Plan (together the “Plans”). The 2021 Plan authorizes the award of both stock options, which are intended to qualify for tax treatment under Section 422 of the Internal Revenue Code, and nonqualified stock options, as well for the award of restricted stock awards (“RSAs”), stock appreciation rights (“SARs”), restricted stock units (“RSUs”), performance stock units (“PSUs”) and stock bonus awards. Pursuant to the 2021 Plan, incentive stock options may be granted only to the Company’s team members. The Company may grant all other types of awards to its team members, directors, and consultants. The Company initially reserved 13,032,289 shares of its Class A common stock, plus any reserved shares of Class B common stock not
issued or subject to outstanding grants under the 2015 Plan on the effective date of the 2021 Plan, for issuance as Class A common stock pursuant to awards granted under the 2021 Plan. The number of shares reserved for issuance under the 2021 Plan increases automatically on February 1 of each of the years from 2022 through 2031.
The awards available for grant under the above Plans for the periods presented were as follows (in thousands):
January 31, 2024January 31, 2023
Available at beginning of period
21,483 18,248 
Awards authorized7,557 7,673 
RSUs and PSUs granted(6,258)(6,651)
RSUs and PSUs canceled and forfeited1,292 657 
Options canceled and forfeited777 1,496 
Options repurchased17 60 
Available at end of period
24,868 21,483 
In the event that shares previously issued under the above Plans are reacquired by the Company, such shares shall be added to the number of shares then available for issuance under the 2021 Plan. In the event that an outstanding stock option for any reason expires or is canceled, the shares allocable to the unexercised portion of such stock option will be added to the number of shares then available for issuance under the 2021 Plan.
Both Plans allow the grantees to early exercise stock options.
Stock Options, RSUs and PSUs
The following table summarizes options activity under the Plans, and related information:
Number of Stock Options Outstanding (in thousands)Weighted Average Exercise PriceWeighted Average Remaining YearsAggregate Intrinsic value (in millions)
Balances at January 31, 202116,043 $6.33 8.39$166.6 
Options granted7,936 18.68 8.50
Options exercised(4,789)5.40 5.07
Options canceled(81)6.20 — 
Options forfeited(1,963)10.47 — 
Balances at January 31, 202217,146 $11.83 8.24$894.8 
Options granted— — — 
Options exercised(2,964)8.49 — 
Options canceled(33)9.46 — 
Options forfeited(1,463)14.52 — 
Balances at January 31, 202312,686 $12.30 7.00$470.8 
Options granted— — — 
Options exercised(3,406)9.53 — 
Options canceled(126)11.23 — 
Options forfeited(651)17.24 — 
Balances at January 31, 2024
8,503 $13.03 5.85$499.2 
Options vested at January 31, 2024
6,323 $11.42 5.52$377.4 
Options vested and expected to vest at January 31, 2024
8,503 $13.03 5.85$499.2 
No options were granted during the years ended January 31, 2024 and 2023 and the aggregate grant-date fair value of options that vested during the years ended January 31, 2024, 2023 and 2022 was $17.9 million, $31.0 million and $10.8 million, respectively. The weighted-average grant-date fair value per share of options granted was $10.81 for the year ended January 31, 2022. The aggregate intrinsic value of options exercised during the years ended January 31, 2024, 2023 and 2022 was $128.8 million, $123.4 million and $280.5 million, respectively. The aggregate intrinsic value represents the difference between the exercise price and the fair value of the underlying common stock on the date of exercise. During the years ended January 31, 2024, 2023 and 2022, the Company recorded $17.6 million, $23.2 million and $22.6 million stock-based compensation expenses related to options, respectively.
As of January 31, 2024, approximately $21.9 million of total unrecognized compensation cost was related to stock options granted, that is expected to be recognized over a weighted-average period of 1.5 years. The expected stock compensation expense remaining to be recognized reflects only outstanding stock awards as of the periods presented, and assumes no forfeitures.
The following table summarizes the Company’s RSU activity (in thousands):
Number of Shares (1)
Weighted-
Average
grant date
fair value
Balances at January 31, 2021— $— 
Granted272 82.11 
Vested— — 
Canceled/forfeited— — 
Balances at January 31, 2022$0.3 $82.11 
Granted6,286 52.52 
Vested(930)55.01 
Canceled/forfeited(610)54.56 
Balances at January 31, 20235,046 $53.33 
Granted6,258 43.42 
Vested(2,372)48.47 
Canceled/forfeited(1,203)50.47 
Balances at January 31, 2024
7,729 $47.20 
(1) The table above does not include 3 million RSUs granted to the Company’s founder and the Chief Executive Officer (“CEO”) described below.
These RSUs are grants of shares of the Company’s common stock, the vesting of which is based on the requisite service requirement. Generally, the Company’s RSUs are subject to forfeiture and are expected to vest over two to four years ratably on a combination of bi-annual and quarterly basis. During the years ended January 31, 2024, 2023 and 2022, the Company recorded $117.6 million, $61.6 million and $0.7 million stock-based compensation expenses related to RSUs, respectively.
As of January 31, 2024, approximately $347.8 million of total unrecognized compensation cost was related to RSUs granted to team members other than the CEO, that is expected to be recognized over a weighted-average period of 3.0 years. The expected stock compensation expense remaining to be recognized reflects only outstanding stock awards as of the periods presented, and assumes no forfeitures.
In June 2022, the Company granted 0.4 million PSUs to senior members of its management team subject to revenue performance condition and service conditions. The number of awards granted represents 100% of the target goal; under the terms of the awards, the recipient may earn between 0% and 200% of the original grant. The performance condition is set to be achieved in fiscal 2025 and the service condition in the calendar year 2025. The Company recorded $1.3 million and $1.6 million of stock-based compensation expense related to PSUs during the years ended January 31, 2024 and 2023, respectively. As of January 31, 2024, unrecognized stock-based compensation expense related to these PSUs was $2.6 million to be recognized over a period of 1.9 years.
CEO Performance Award
In May 2021, the Company granted 3 million RSUs tied to its Class B common stock to Sytse Sijbrandij, the Company’s co-founder and CEO, with an estimated aggregate grant date fair value of $8.8 million. During the years ended January 31, 2024, 2023 and 2022, the Company recorded $1.7 million, $1.7 million and $1.2 million of stock-based compensation expense related to the CEO RSUs, respectively. As measured from the grant date, the derived service period of the respective tranches ranges from 2 to 7 years. As of January 31, 2024, unrecognized stock-based compensation expense related to these RSUs was $4.3 million which will be recognized over 4.8 years.
2021 Employee Stock Purchase Plan (“ESPP”)
In September 2021, the Company’s board of directors and its stockholders approved the ESPP and participation of eligible team members.
During the quarter ended July 31, 2023, the Company’s stock price on the purchase date, May 31, 2023, was lower than the Company’s stock price on the previously applicable offering date. As a result, the offering in effect was reset with the lower stock price becoming the new offering price and rolled over to a new 24-month offering period. The reset was treated as a modification resulting in incremental expense totaling $9.4 million, which is being recognized over the remaining requisite service period as of the date of reset.
During the quarter ended July 31, 2022, the Company’s stock price on the purchase date, May 31, 2022, was lower than the Company’s stock price on the previously applicable offering date. As a result, the offering in effect was reset with the lower stock price becoming the new offering price and rolled over to a new 24-month offering period. The reset was treated as a modification resulting in incremental expense totaling $9.9 million, which is being recognized over the remaining requisite service period as of the date of reset.
The following table summarizes assumptions used in estimating the fair value of the ESPP for the offering period in effect using the Black-Scholes option-pricing model:
Fiscal Year Ended January 31,
202420232022
Risk-free interest rate
4.22% - 5.30%
1.62% - 4.55%
0.07% - 0.17%
Volatility
40.95% - 65.56%
44.95% - 55.19%
38.47% - 41.75%
Expected term (in years)
0.50 - 2.00
0.50 - 2.00
0.57 - 1.07
Dividend yield—%—%—%
The Company recorded $19.0 million, $25.7 million and $5.1 million of stock-based compensation expense related to the ESPP during the years ended January 31, 2024, 2023 and 2022, respectively. As of January 31, 2024, approximately $13.5 million of total unrecognized compensation cost was related to the ESPP that is expected to be recognized over 1.8 years.
Stock-Based Compensation Expense
The Company recognized stock-based compensation expense as follows (in thousands):
Fiscal Year Ended January 31,
202420232022
Cost of revenue$6,400 $5,078 $1,300 
Sales and marketing68,766 48,001 10,550 
Research and development50,804 36,325 8,305 
General and administrative37,079 33,163 9,854 
Total stock-based compensation expense (1)
$163,049 $122,567 $30,009 
(1) The table above includes stock-based compensation of JiHu. Refer to “Note 12. Joint Venture and Equity Method Investment” for further discussion.
The corporate income tax benefit recognized in the consolidated statements of operations for stock-based compensation expense was zero, $7.7 million and $7.0 million for the years ended January 31, 2024, 2023 and 2022, respectively.
Charitable Donation of Common Stock
In September 2021, the Company’s board of directors approved the reservation of up to 1,635,545 shares of Class A common stock for issuance to charitable organizations. In March 2023, the Company’s
board of directors approved the donation of $10.7 million aggregate principal amount of shares of Class A common stock to the GitLab Foundation (the “Foundation”), a California nonprofit public benefit corporation. The Foundation is also a related party as certain of the Company’s officers serve as directors of the Foundation. This donation shall occur in equal quarterly distributions throughout fiscal 2024.
During the year ended January 31, 2024, the Company donated 231,408 shares of Class A common stock at fair value to the Foundation. The fair value of the common stock was determined based on the quoted market price on the grant date. The donation expense of $10.7 million was recorded in general and administrative expense in the consolidated statements of operations for the year ended January 31, 2024.