Stock-Based Compensation

9 Months Ended

Jul. 31, 2023

Share-Based Payment Arrangement [Abstract]

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


	Three Months Ended July 31,				Nine Months Ended July 31,
	2023		2022		2023		2022
	(in thousands)
Cost of products	$	16,732	$	15,318	$	49,656	$	39,603
Cost of maintenance and service	7,765		6,859		22,451		17,335
Research and development expense	75,754		68,243		220,340		175,892
Sales and marketing expense	27,723		22,998		79,567		60,090
General and administrative expense	16,490		14,187		49,935		40,517
Stock-based compensation expense before taxes	144,464		127,605		421,949		333,437
Income tax benefit	(23,172)		(20,940)		(67,681)		(54,717)
Stock-based compensation expense after taxes	$	121,292	$	106,665	$	354,268	$	278,720

During the three and nine months ended July 31, 2023, we recognized stock-based compensation expense relating to restricted stock units (RSUs) granted to senior executives with certain market, performance and service conditions (market-based RSUs). The grant date fair value of the market-based RSUs and the assumptions used in the Monte Carlo simulation model to determine the grant date fair value during the periods were as follows:


	Three Months Ended July 31,				Nine Months Ended July 31,
	2023	2022			2023	2022
Expected life (in years)	—	1.41 years			0.90 years - 2.70 years	1.41 years - 1.69 years
Risk-free interest rate	—	2.25		%	4.36% - 4.63%	1.33% - 2.25%
Volatility	—	37.27		%	35.84% - 42.86%	33.01% - 37.27%
Grant date fair value	—	$	355.41		$357.29 - $408.55	$280.82 - $355.41

As of July 31, 2023, we had $1.1 billion of total unrecognized stock-based compensation expense relating to options, RSUs and restricted stock awards, which is expected to be recognized over a weighted-average period of 2.4 years. As of July 31, 2023, we had $48.5 million of unrecognized stock-based compensation expense relating to our Employee Stock Purchase Plan, which is expected to be recognized over a period of approximately 2.0 years.

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


	Three Months Ended July 31,				Nine Months Ended July 31,
	2023		2022		2023		2022
	(in thousands)
Intrinsic value of awards exercised	$	94,116	$	86,080	$	212,339	$	245,468