The Company has two equity incentive plans: the 2009 Stock Plan (“2009 Plan”) and the 2017 Equity Incentive Plan (“2017 Plan”). All shares that remain available for future grants are under the 2017 Plan. As of January 31, 2023, options to purchase 1,758,264 shares of Class A common stock and 4,594,675 shares of Class B common stock remained outstanding.

The Company’s equity incentive plans provide for granting stock options, RSUs, restricted stock awards to employees, consultants, officers and directors and RSUs with market-based vesting conditions to certain executives. In addition, the Company offers an ESPP to eligible employees.

Stock-based compensation expense by award type was as follows:


	Year Ended January 31,
		2023		2022		2021
		(dollars in millions)
Stock options		$	82	$	132	$	21
RSUs		464		335		164
ESPP		19		15		10
Restricted stock awards		112		84		—

Total		$	677	$	566	$	195

Stock-based compensation expense was recorded in the following cost and expense categories in the consolidated statements of operations:


	Year Ended January 31,
	2023		2022		2021
	(dollars in millions)
Cost of revenue:
Subscription	$	69	$	49	$	21
Professional services and other	14		12		9
Research and development	275		193		63
Sales and marketing	159		136		53
General and administrative	160		176		49
Total	$	677	$	566	$	195

Options issued under the Plan generally are exercisable for periods not to exceed ten years and generally vest over four years with 25% vesting after one year and with the remainder vesting monthly thereafter in equal installments. Shares offered under the Plan may be: (i) authorized but unissued shares or (ii) treasury shares.

A summary of stock option activity and related information was as follows:


	Number of Options (in thousands)	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
















Outstanding as of January 31, 2022	7,984	$	39.59	5.2	$	1,314

Exercised	(1,416)	11.92
Expired	(26)	189.80
Forfeited	(189)	80.67
Outstanding as of January 31, 2023	6,353	$	43.92	4.3	$	331
As of January 31, 2023
Vested and expected to vest	6,353	$	43.92	4.3	$	331
Vested and exercisable	5,729	$	29.75	3.9	$	323

No options were granted during fiscal 2023. The weighted-average grant-date fair value of options granted was $211.58 and $63.32 during fiscal 2022 and 2021, respectively. The total grant-date fair value of stock options vested was $104 million, $314 million and $20 million during fiscal 2023, 2022 and 2021, respectively. The intrinsic value of the options exercised, which represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option, was $108 million, $545 million and $772 million during fiscal 2023, 2022 and 2021, respectively.

As of January 31, 2023 and January 31, 2022, there was a total of $90 million and $210 million, respectively, of unrecognized stock-based compensation expense related to options, which is being recognized over a weighted-average period of 1.8 years.

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


	Year Ended January 31,
	2023		2022		2021
Expected volatility	—	%	46	%	45	%
Expected term (in years)	0.0		6.3		6.3
Risk-free interest rate	—	%	1.03%		0.37% - 0.44%
Expected dividend yield	—		—		—

A summary of RSU activity (inclusive of market-based RSUs) and related information was as follows:


	Number of RSUs (in thousands)	Weighted- Average Grant Date Fair Value Per Share
Outstanding as of January 31, 2022	6,226	$	207.26
Granted	7,194	111.84
Vested	(2,556)	180.81
Forfeited	(1,489)	191.40
Outstanding as of January 31, 2023	9,375	$	143.77

The Company granted 7,194,187 RSUs with an aggregate fair value of $805 million during fiscal 2023. As of January 31, 2023 and 2022, there was a total of $1,200 million and $1,152 million, respectively, of unrecognized stock-based compensation expense related to unvested RSUs, which is being recognized over a weighted-average period of 3.0 years, based on vesting under the award service conditions. The total fair value of RSUs vested during fiscal 2023, 2022 and 2021 was $229 million, $531 million and $410 million, respectively.

In March 2022, the Company granted market-based RSUs to certain members of management. The target number of market-based RSUs granted was 58,150. One-third of these market-based RSUs vest over each of a one-, two- and three-year performance period, each starting on February 1, 2022. The number of shares that can be earned ranges from 0% to 200% of the target number of shares based on the relative performance of the per share price of the Company’s common stock as compared to the Nasdaq Composite Index over the respective performance periods and subject to continuous employment through the vesting dates. The $244.73 grant date fair value per target market-based RSU was determined using a Monte Carlo simulation approach. Compensation expense for awards with market conditions is recognized over the service period using the accelerated attribution method and is not reversed if the market condition is not met.

In fiscal 2022, the Company entered into revesting agreements with the founders of the acquired businesses pursuant to which 1,269,008 restricted shares of Okta’s Class A common stock with a weighted-average fair value per share of $268.98 issued as of the respective closing dates will vest over 3 years.

In connection with the business combinations, as of January 31, 2023, there was $141 million of unrecognized stock-based compensation expense related to unvested restricted shares, which is being recognized over a weighted-average period of 1.3 years based on vesting under the award service conditions.

The ESPP provides for 12-month offering periods beginning June 21 and December 21 of each year, and each offering period consists of up to two six-month purchase periods. The ESPP contains a reset provision under which the offering period resets if the fair market value of the Company’s common stock on the purchase date is less than the fair market value on the offering date.

The Company estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions:


	Year Ended January 31,
	2023	2022	2021
Expected volatility	63% - 90%	44% - 48%	48% - 54%
Expected term (in years)	0.5 - 1.0	0.5 - 1.0	0.5 - 1.0
Risk-free interest rate	2.46% - 4.67%	0.06% - 0.29%	0.09% - 0.18%
Expected dividend yield	—	—	—

During fiscal 2023, the Company's employees purchased 491,965 shares of its Class A common stock under the ESPP. The shares were purchased at a weighted-average purchase price of $63.97 per share, with proceeds of $31 million. During fiscal 2022, the Company's employees purchased 185,707 shares of its Class A common stock under the ESPP. The shares were purchased at a weighted-average purchase price of $191.54 per share, with proceeds of $36 million.

As of January 31, 2023 and January 31, 2022, there was $26 million and $17 million, respectively, of unrecognized stock-based compensation expense related to the ESPP which is being recognized over a weighted-average vesting period of 0.7 years.

The Company has a qualified defined contribution plan under Section 401(k) of the Internal Revenue Code covering eligible employees. A portion of employee contributions are matched up to a fixed maximum dollar amount per year per employee. The Company began matching contributions in fiscal 2023. Matching contributions to the plan were $21 million during fiscal 2023.