Stock-Based Compensation (Tables)

9 Months Ended

Jul. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock Compensation Arrangements

The compensation cost recognized in the unaudited condensed consolidated statements of income for our stock compensation arrangements was as follows:

	Three Months Ended   July 31,				Nine Months Ended   July 31,
	2022		2021		2022		2021
	(in thousands)
Cost of products	$	15,318	$	9,582	$	39,603	$	28,238
Cost of maintenance and service	6,859		3,446		17,335		10,192
Research and development expense	68,243		42,430		175,892		124,231
Sales and marketing expense	22,998		15,330		60,090		45,040
General and administrative expense	14,187		14,374		40,517		40,829
Stock-based compensation expense before taxes(1)	127,605		85,162		333,437		248,530
Income tax benefit	(20,940)		(13,277)		(54,717)		(38,746)
Stock-based compensation expense after taxes	$	106,665	$	71,885	$	278,720	$	209,784

(1) During the three and nine months ended July 31, 2022, we recognized stock-based compensation expense relating to restricted stock units (RSUs), granted to senior executives in February 2022 with certain market, performance and service conditions (market-based RSUs). Under the award agreements, the vesting of the market-based RSUs is contingent on achieving total stockholder return (TSR) relative to a peer index as well as revenue growth metrics. The performance period during which the achievement goals will be measured is fiscal 2022 and fiscal 2023. The maximum potential awards that may be earned are 187.5% of the target number of the initial awards. The awards will vest in equal increments in December 2023 and December 2024 if the TSR target, revenue growth metrics, and service conditions are achieved. The grant date fair value for the market-based RSUs of $280.82 was determined using a Monte Carlo simulation model with the following assumptions: expected volatility of 33.01%, risk-free interest rate of 1.33% and an expected term of 1.69 years.

Schedule of Intrinsic Value of Equity Awards Exercised

The intrinsic values of equity awards exercised during the periods were as follows:

	Three Months Ended   July 31,				Nine Months Ended   July 31,
	2022		2021		2022		2021
	(in thousands)
Intrinsic value of awards exercised	$	86,080	$	30,896	$	245,468	$	143,100