Stockholders' Equity

9 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Stock Options

As of March 31, 2023, the total unamortized stock-based compensation expense related to the unvested stock options was $26.7 million, which the Company expects to recognize over a weighted-average period of 1.5 years.

Restricted Stock Units (RSUs)

During the nine months ended March 31, 2023, the Company granted an aggregate of approximately 2.7 million RSUs with a weighted grant-date fair value of $123.52 per unit. The fair value of the RSUs was estimated based upon the market closing price of the Company’s common stock on the date of grant. The RSUs vest over the requisite service period, which generally range between 1 year and 4 years from the date of grant, subject to the continued employment of the employees and services of the nonemployee board members.

As of March 31, 2023, the total unamortized stock-based compensation expense related to the unvested RSUs options was $446.9 million, which the Company expects to recognize over a weighted-average period of 2.9 years.

Performance-based RSUs

During the nine months ended March 31, 2023, the Company granted approximately 150,000 RSUs to certain executive employees that vest based upon the achievement of designated financial metrics and continued employment over a period of three years. The weighted-average grant date fair value of these performance-based RSUs was $133.48 per unit. The Company recognizes expense for performance-based RSUs over the requisite service period based on management's estimate of the number of performance-based RSUs expected to vest. For any change in the estimate of the number of performance-based RSUs that are probable of vesting, the Company will cumulatively adjust compensation expense in the period that the change in estimate is made.

As of March 31, 2023, the total unrecognized compensation expense related to the performance-based RSUs was $7.3 million, which is expected to be recognized over a weighted-average period of 1.3 years.

Stock Based Compensation Cost

Stock-based compensation cost by award type (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Stock options	$	8,328	$	14,289	$	33,239	$	42,191
RSUs(1)	49,473		36,255		206,409		93,487
Performance-based awards	4,969		—		11,416		—
Market-based RSUs	990		1,164		3,497		1,394
Employee stock purchase plan	2,561		2,195		8,344		6,359
Total stock-based compensation cost	$	66,321	$	53,903	$	262,905	$	143,431

Stock-based compensation cost was included in the following line items in the accompanying condensed consolidated statements of operations and condensed consolidated balance sheets (in thousands):

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
Cost of revenue	$	2,421	$	1,262	$	6,720	$	3,674
Research and development	22,319		13,912		70,151		38,752
Sales and marketing(1)	18,162		17,758		116,941		36,911
General and administrative	20,888		19,878		62,040		61,044
Total amount charged to expense	63,790		52,810		255,852		140,381
Property and equipment (capitalized internal-use software)	2,531		1,093		7,053		3,050
Total stock-based compensation cost	$	66,321	$	53,903	$	262,905	$	143,431

(1) In October 2022, the Company entered into separation and advisory agreements with its former Chief Revenue Officer (the CRO Agreements). Pursuant to the CRO Agreements, the former CRO will serve the Company as an advisor through September 2024. Upon execution of the CRO Agreements, the Company recognized $52.2 million of stock-based compensation expense related to the former CRO's RSUs.

Share Repurchase Program

In January 2023, the Board of Directors authorized the repurchase of up to $300 million of the Company's outstanding shares of common stock (the Share Repurchase Program). The Company may repurchase shares of common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans, intended to qualify under Rule 10b5-1 under Securities Exchange Act of 1934, as amended. The timing and total amount of share repurchases will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The Share Repurchase Program has a term of 12 months, may be suspended or discontinued at any time, and does not obligate the Company to acquire any amount of common stock.

During the three and nine months period March 31, 2023, the Company repurchased and subsequently retired 358,947 shares for $27 million under the Share Repurchase Program. The total price of the shares

repurchased and related transaction costs are reflected as a reduction of common stock and accumulated deficit on the Company's condensed consolidated balance sheets. As of March 31, 2023, $273 million remained available for future share repurchases under the Share Repurchase Program.