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Equity Incentive Plans and Stock-Based Compensation
 12 Months Ended
Jan. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Equity Incentive Plans and Stock-Based Compensation
13Equity Incentive Plans and Stock-Based Compensation
2021 Stock Plan
In April 2021, prior to and in connection with the IPO, we adopted the 2021 Plan, which provides for grants of incentive stock options, nonstatutory stock options, stock appreciation rights, RSAs, RSUs, PSUs, and other forms of awards. As of January 31, 2024, we have reserved 173.7 million shares of our Class A common stock to be issued under the 2021 Plan. The number of shares of our Class A common stock reserved for issuance under the 2021 Plan will automatically increase on February 1 of each year for a period of ten years, which began on February 1, 2022 and continues through February 1, 2031, in an amount equal to (1) 5% of the total number of shares of our
common stock (both Class A and Class B) outstanding on the preceding January 31, or (2) a lesser number of shares determined by our board of directors no later than the February 1 increase.
2021 Employee Stock Purchase Plan
In April 2021, prior to and in connection with the IPO, we adopted the ESPP. As of January 31, 2024, the ESPP authorizes the issuance of 21.5 million shares of our Class A common stock under purchase rights granted to our employees. The number of shares of our Class A common stock reserved for issuance will automatically increase on February 1 of each year for a period of 10 years, which began on February 1, 2022 and continues through February 1, 2031, by the lesser of (1) 1% of the total number of shares of our common stock (both Class A and Class B) outstanding on the preceding January 31; and (2) 15.5 million shares, except that before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth by (1) and (2) above. The ESPP allows participants to purchase shares at the lesser of (a) 85% of the fair market value our Class A common stock as of the commencement of the offering period, and (b) 85% of the fair market value of our Class A common stock on the corresponding purchase date.
Prior Stock Plans
In June 2015, we adopted the 2015 Plan. The 2015 Plan was terminated in June 2018 in connection with the adoption of the 2018 Plan. Accordingly, no shares are available for future issuance under the 2015 Plan following the adoption of the 2018 Plan.
In June 2018, we adopted the 2018 Plan, which provided for grants of stock-based awards, including RSUs, RSAs, and stock options. The 2018 Plan was terminated in April 2021 in connection with the adoption of the 2021 Plan. Accordingly, no shares are available for future issuance under the 2018 Plan following the adoption of the 2021 Plan.
Outstanding Equity Awards
Stock Options
Stock options generally vest over three to four years and expire ten years from the date of grant. Vested stock options generally expire three months after termination of employment. Stock option activity during fiscal year 2024 was as follows:
Options Outstanding
Stock Options (in thousands)Weighted-Average
Exercise Price
Weighted-Average
Remaining Contractual
Life (years)
Aggregate Intrinsic
Value (in thousands)
Balance as of January 31, 2023
13,898 $3.32 7.7$169,324 
Granted2,995 $0.10 
Exercised(5,221)$1.29 
Forfeited(592)$1.80 
Expired— $— 
Balance as of January 31, 2024
11,080 $3.49 7.8$216,010 
Vested and exercisable as of January 31, 2024
4,990 $4.59 6.6$91,793 
The weighted-average grant date fair value of stock options granted during fiscal years 2024, 2023, and 2022 was $16.84, $12.23 and $45.78 per share, respectively. The intrinsic value of stock options exercised during fiscal years 2024, 2023, and 2022 was $93.2 million, $83.6 million, and $557.5 million, respectively.
As of January 31, 2024, unrecognized compensation expense associated with unvested stock options granted and outstanding was $102.5 million, to be recognized over a weighted-average remaining period of 2.1 years.
Fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended January 31,
202420232022
Expected term (years)5.95.9
6.1
Expected volatility65.2%60.6%
57.2%
Risk-free interest rate3.6%3.5%
1.4%
Expected dividend yield0.0%0.0%0.0%
During fiscal years 2023 and 2022, our compensation committee approved modifications to allow acceleration of the service-based vesting condition of certain employee stock options upon termination. These modifications, which were considered improbable-to-probable (Type 3) modifications under ASC 718, resulted in accelerated vesting of 0.3 million and 0.2 million shares, respectively, of Class A common stock subject to outstanding stock options, and incremental compensation expense of $2.8 million and $2.9 million was recognized during fiscal years 2023 and 2022, respectively.
Early Exercised Options
Certain stock option holders have the right to exercise unvested options, subject to a repurchase right held by us at the original exercise price in the event of voluntary or involuntary termination of employment of the option holders, until the options are fully vested. During fiscal year 2024, we did not repurchase any unvested early exercised options. During fiscal year 2023, we repurchased $0.4 million unvested early exercised options in the amount of $1.5 million.
Cash proceeds associated with early exercises are recorded within accrued expenses and other current liabilities and other liabilities, non-current in our consolidated balance sheets, depending on the future vesting dates of the associated options. Such accrued amounts were not material as of January 31, 2024 and 2023. Proceeds are transferred to additional paid-in capital at the time of option vesting.
Restricted Stock Units
RSUs granted under the 2021 Plan generally vest over three to four years. RSUs are forfeited in case of termination of employment or service before the satisfaction of service-based vesting conditions.
RSU activity during fiscal year 2024 was as follows:
RSUs (in thousands)Weighted-Average Grant
Date Fair Value Per Share
Unvested as of January 31, 2023
36,785 $22.48 
Granted19,274 $16.95 
Vested(17,556)$20.64 
Forfeited(7,231)$23.39 
Unvested as of January 31, 2024
31,272 $19.89 
The fair value of RSUs released during fiscal years 2024, 2023, and 2022 was $329.6 million, $228.8 million, and $1.4 billion, respectively.
Prior to the IPO, we granted RSUs under the 2018 Plan that vested upon the satisfaction of both a service-based condition (generally four years) and a performance-based condition. The performance-based vesting condition was deemed satisfied on April 23, 2021, the date that our IPO was completed. At that time (during fiscal year 2022), we recognized $233.0 million of cumulative stock-based compensation expense for the portion of these RSUs for which the service-based vesting condition had been fully or partially satisfied.
As of January 31, 2024, unrecognized compensation expense associated with unvested RSUs was approximately $560.5 million, to be recognized over a weighted-average remaining period of 2.3 years.
During fiscal year 2023, our compensation committee approved modifications to allow accelerated vesting of approximately 0.5 million RSUs upon employee terminations. The modifications, which were considered improbable-to-probable (Type 3) modifications under ASC 718, resulted in a net reduction of $7.4 million in the fair value of the modified awards due to the decrease in our stock price between the grant and modification dates. During fiscal year 2022, our compensation committee approved modifications to allow accelerated vesting of approximately 0.2 million RSUs upon employee terminations, resulting in the recognition of $10.9 million of incremental expense.
Performance Stock Units
In July 2023, we granted approximately 0.1 million PSUs at a grant date fair value of $18.08 per share. The PSUs were subject to performance conditions related to the achievement of certain individual and company targets for fiscal year 2024, which were not met. As a result, the PSUs have been cancelled and no expense was recognized during fiscal year 2024.
Employee Stock Purchase Plan Awards
The fair value of ESPP awards was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:
Year Ended January 31,
202420232022
Expected term (years)0.50.50.6
Expected volatility67.4%69.0%55.7%
Risk-free interest rate5.02%1.86%0.05%
Expected dividend yield0.0%0.0%0.0%
During the fiscal year ended January 31, 2024, 1.4 million shares were purchased under the ESPP at a weighted average purchase price of $12.69 per share.
As of January 31, 2024, unrecognized compensation expense related to the ESPP was approximately $3.0 million, to be recognized over a weighted-average remaining period of 0.4 years.
Stock-Based Compensation Associated with Business Acquisition
At the closing of the acquisition of Re:infer on July 29, 2022, we issued 0.4 million shares of Class A common stock (outside of the 2021 Plan) to be released to certain employee sellers in equal installments on the first, second, and third anniversaries of the closing date, subject to employment-related clawback provisions. As of January 31, 2024, total unrecognized compensation expense related to these shares was $3.8 million, which is to be recognized over a weighted-average remaining period of 1.5 years.
Stock-Based Compensation Expense
Stock-based compensation expense is classified in the consolidated statements of operations as follows (in thousands):
Year Ended January 31,
20242023
2022 (1)
Cost of subscription services revenue$14,750 $11,894 $12,232 
Cost of professional services and other revenue10,958 11,855 29,849 
Sales and marketing144,863 154,922 237,975 
Research and development117,965 102,546 135,713 
General and administrative83,419 88,623 99,814 
Total$371,955 $369,840 $515,583 
(1) Presented net of capitalized stock-based compensation relating to software development costs of $4.5 million.