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Equity | 6 Months Ended
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Jul. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Equity | EquityPreferred Stock—In connection with its Initial Public Offering (IPO), the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 200.0 million shares of undesignated preferred stock with a par value of $0.0001 per share and with rights and preferences, including voting rights, designated from time to time by the board of directors. Common Stock and Elimination of Dual-Class Structure—The Company has two classes of common stock authorized: Class A common stock and Class B common stock. In connection with the IPO, the Company’s amended and restated certificate of incorporation authorized the issuance of 2,500.0 million shares of Class A common stock and 355.0 million shares of Class B common stock. On March 1, 2021, all 169.5 million shares of the Company's then-outstanding Class B common stock, par value $0.0001 per share, were automatically converted into the same number of shares of Class A common stock, par value $0.0001 per share, pursuant to the terms of the Company’s amended and restated certificate of incorporation. No additional shares of Class B common stock will be issued following such conversion. The shares of Class A common stock and Class B common stock were identical prior to the conversion, except with respect to voting, converting, and transfer rights. Prior to the conversion, each share of Class B common stock was entitled to cast ten votes per share on any matter submitted to a vote of the Company’s stockholders. As a result of the conversion, all former holders of shares of Class B common stock are now holders of shares of Class A common stock, which is entitled to only one vote per share on all matters subject to a stockholder vote. Class A and Class B common stock are referred to as common stock throughout the notes to the condensed consolidated financial statements, unless otherwise indicated. Holders of common stock are entitled to receive any dividends as may be declared from time to time by the board of directors. Prior to the conversion, shares of Class B common stock were convertible to Class A common stock at any time at the option of the stockholder, and shares of Class B common stock would automatically convert to Class A common stock upon the following: (i) sale or transfer of such share of Class B common stock; (ii) the death of the Class B common stockholder (or nine months after the date of death if the stockholder is one of the Company’s founders); and (iii) on the final conversion date, defined as the earlier to occur following an IPO of (a) the first trading day on or after the date on which the outstanding shares of Class B common stock represented less than 10% of the then outstanding Class A and Class B common stock; (b) September 15, 2027, which is the seventh anniversary of the effectiveness of the registration statement filed in connection with the IPO; or (c) the date specified by a vote of the holders of a majority of the outstanding shares of Class B common stock, voting as a single class. In addition, on March 3, 2021, the Company filed a certificate with the Secretary of State of the State of Delaware effecting the retirement of the shares of Class B common stock that were issued but no longer outstanding following the conversion. Upon the effectiveness of the certificate, the Company’s total number of authorized shares of capital stock was reduced by the retirement of 169.5 million shares of Class B common stock. The Company had reserved shares of common stock for future issuance as follows (in thousands):
| July 31, 2022 |  | January 31, 2022
2012 Equity Incentive Plan: |  |  |
Options outstanding | 37,521 |  |  | 42,043 |
Restricted stock units outstanding | 3,493 |  |  | 4,530 |
2020 Equity Incentive Plan: |  |  |
Options outstanding | 642 |  |  | — |
Restricted stock units outstanding | 10,844 |  |  | 5,082 |
Shares available for future grants | 55,207 |  |  | 45,446 |
2020 Employee Stock Purchase Plan: |  |  |
Shares available for future grants | 11,148 |  |  | 8,209 |
Total shares of common stock reserved for future issuance | 118,855 |  |  | 105,310 |
Equity Incentive Plans—The Company’s 2020 Equity Incentive Plan (2020 Plan), which became effective in connection with the IPO, provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards (RSUs), performance awards and other forms of equity compensation (collectively, equity awards). All shares that remain available for future grants are under the 2020 Plan. The Company’s 2012 Equity Incentive Plan (2012 Plan) provided for the grant of equity awards to employees, non-employee directors, and other service providers of the Company. The 2012 Plan was terminated in September 2020 in connection with the IPO but continues to govern the terms of outstanding awards that were granted prior to the termination of the 2012 Plan. Upon the expiration, forfeiture, cancellation, or reacquisition of any shares of common stock underlying outstanding equity awards granted under the 2012 Plan, an equal number of shares of Class A common stock will become available for grant under the 2020 Plan. No further equity awards will be granted under the 2012 Plan. The Company’s 2020 Employee Stock Purchase Plan (2020 ESPP), which became effective in connection with the IPO, authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. Offering periods are generally six months long and begin on March 15 and September 15 of each year, except for the first two offering periods. The initial offering period began on September 15, 2020 and ended on February 26, 2021. The second offering period began on March 1, 2021 and ended on September 14, 2021. On February 1, 2022, the shares available for grant under the 2020 Plan and the 2020 ESPP were automatically increased by 15.6 million shares and 3.1 million shares, respectively, pursuant to the annual evergreen increase provisions under the 2020 Plan and the 2020 ESPP. Stock Options—Stock options granted under the 2012 Plan and the 2020 Plan (collectively, the Plans) generally vest based on continued service over four years and expire ten years from the date of grant. Certain stock options granted under the 2012 Plan are exercisable at any time following the date of grant and expire ten years from the date of grant. A summary of stock option activity and activity regarding shares available for grant under the Plans during the six months ended July 31, 2022 is as follows:
| Shares Available for Grant (in thousands) |  | Number of Options Outstanding (in thousands) |  | Weighted- Average Exercise Price |  | Weighted-Average Remaining Contractual Life (in years) |  | Aggregate Intrinsic Value (in thousands)
Balance—January 31, 2022 | 45,446 |  |  | 42,043 |  |  | $ | 7.53 |  |  | 6.9 |  | $ | 11,283,299 |
Shares authorized | 15,619 |  |  | — |  |  | $ | — |  |  |  |  |
Options granted | (642) |  |  | 642 |  |  | $ | 207.56 |  |  |  |  |
Options exercised | — |  |  | (2,448) |  |  | $ | 6.18 |  |  |  |  |
Options canceled | 400 |  |  | (400) |  |  | $ | 6.98 |  |  |  |  |
RSUs granted | (5,763) |  |  | — |  |  |  |  |  |  |
Shares withheld related to net share settlement of RSUs | 292 |  |  | — |  |  |  |  |  |  |
RSUs forfeited | 327 |  |  | — |  |  |  |  |  |  |
Balance—April 30, 2022 | 55,679 |  |  | 39,837 |  |  | $ | 10.84 |  |  | 6.7 |  | $ | 6,421,133 |
Options exercised | — |  |  | (1,494) |  |  | $ | 5.65 |  |  |  |  |
Options canceled | 180 |  |  | (180) |  |  | $ | 7.32 |  |  |  |  |
RSUs granted | (1,374) |  |  | — |  |  |  |  |  |  |
Shares withheld related to net share settlement of RSUs | 260 |  |  | — |  |  |  |  |  |  |
RSUs forfeited | 462 |  |  | — |  |  |  |  |  |  |
Balance—July 31, 2022 | 55,207 |  |  | 38,163 |  |  | $ | 11.06 |  |  | 6.5 |  | $ | 5,336,155 |
Vested and exercisable as of July 31, 2022 |  |  | 26,233 |  |  | $ | 7.39 |  |  | 6.2 |  | $ | 3,741,879 |
The weighted-average grant-date fair value of options granted during the six months ended July 31, 2022 was $101.66 per share. No options were granted during the six months ended July 31, 2021. The intrinsic value of options exercised in the six months ended July 31, 2022 and 2021 was $704.6 million and $2.6 billion, respectively. The aggregate grant-date fair value of options that vested during the six months ended July 31, 2022 and 2021 was $41.3 million and $44.1 million, respectively. RSUs—RSUs granted prior to the IPO had both service-based and performance-based vesting conditions, of which the performance-based vesting condition was satisfied upon the effectiveness of the IPO in September 2020. The service-based vesting condition for these awards is typically satisfied over four years with a cliff vesting period of one year and continued vesting quarterly thereafter. Stock-based compensation associated with RSUs granted prior to the IPO was recognized using an accelerated attribution method from the time it was deemed probable that the vesting condition was met through the time the service-based vesting condition had been achieved. RSUs granted after the IPO only contain the service-based vesting condition and the related stock-based compensation for such RSUs is recognized on a straight-line basis over the requisite service period. During the six months ended July 31, 2022, the Company began funding withholding taxes due upon the vesting of employee RSUs in certain jurisdictions by net share settlement, rather than its previous approach of selling shares of the Company’s common stock. The amount of withholding taxes related to net share settlement of employee RSUs is reflected as (i) a reduction to additional paid-in-capital, and (ii) cash outflows for financing activities when the payments are made. The shares withheld by the Company as a result of the net share settlement of RSUs are not considered issued and outstanding, and do not impact the calculation of basic net income (loss) per share attributable to common stockholders. A summary of RSU activity during the six months ended July 31, 2022 is as follows:
| Number of Shares (in thousands) |  | Weighted-Average Grant Date Fair Value per Share
Unvested Balance—January 31, 2022 | 9,612 |  |  | $ | 180.08 |
Granted | 5,763 |  |  | $ | 201.89 |
Vested | (848) |  |  | $ | 161.90 |
Forfeited | (327) |  |  | $ | 202.80 |
Unvested Balance—April 30, 2022 | 14,200 |  |  | $ | 189.50 |
Granted | 1,374 |  |  | $ | 145.19 |
Vested | (775) |  |  | $ | 156.97 |
Forfeited | (462) |  |  | $ | 196.87 |
Unvested Balance—July 31, 2022 | 14,337 |  |  | $ | 186.77 |
Early Exercised Stock Options—Common stock purchased pursuant to an early exercise of stock options is not deemed to be outstanding for accounting purposes until those shares vest. The consideration received for an exercise of an option is considered to be a deposit of the exercise price and the related dollar amount is recorded in other liabilities on the condensed consolidated balance sheets. The shares issued upon the early exercise of these unvested stock option awards, which are reflected as exercises in the stock option activity table above, are considered to be legally issued and outstanding on the date of exercise. Upon termination of service, the Company may repurchase unvested shares acquired through the early exercise of stock options at a price equal to the price per share paid upon the exercise of such options. As of July 31, 2022 and January 31, 2022, shares subject to repurchase as a result of early exercised options were not material. Restricted Common Stock—Restricted common stock is not deemed to be outstanding for accounting purposes until it vests. As discussed in Note 7, during the six months ended July 31, 2022, in connection with the Streamlit business combination, the Company issued to Streamlit’s three founders a total of 0.4 million shares of the Company’s common stock outside of the Plans in exchange for a portion of their Streamlit stock. These shares are subject to vesting agreements pursuant to which the shares will vest over three years, subject to each founder’s continued employment with the Company or its affiliates. The $93.7 million fair value of these shares are accounted for as post-combination stock-based compensation over the requisite service period of three years. As of July 31, 2022, all 0.4 million shares remained unvested. A summary of restricted common stock activity during the six months ended July 31, 2022 is as follows:
| Outside of the Plans
| Number of Shares (in thousands) |  | Weighted-Average Grant Date Fair Value per Share
Unvested Balance—January 31, 2022 | 380 |  |  | $ | 2.11 |
Granted | 409 |  |  | $ | 229.13 |
Vested | (90) |  |  | $ | 2.10 |
Unvested Balance—April 30, 2022 | 699 |  |  | $ | 134.99 |
Vested | (90) |  |  | $ | 2.10 |
Unvested Balance—July 31, 2022 | 609 |  |  | $ | 154.73 |
Stock-Based Compensation—The following table summarizes the assumptions used in estimating the fair value of stock options granted to employees during the six months ended July 31, 2022:
|  |  |  |  | Six Months Ended July 31, 2022
Expected term (in years) |  |  |  |  | 6.0 |  |
Expected volatility |  |  |  |  | 50.0 | % |  |
Risk-free interest rate |  |  |  |  | 1.8 | % |  |
Expected dividend yield |  |  |  |  | — | % |  |
No stock options were granted during the three months ended July 31, 2022 or each of the three and six months ended July 31, 2021. Expected term—For stock options considered to be “plain vanilla” options, the Company estimates the expected term based on the simplified method, which is essentially the weighted average of the vesting period and contractual term, as the Company’s historical option exercise experience does not provide a reasonable basis upon which to estimate the expected term. Expected volatility—Prior to fiscal 2023, the Company performed an analysis of using the average volatility of a peer group of representative public companies with sufficient trading history over the expected term to develop an expected volatility assumption. During the six months ended July 31, 2022, the Company began using the average volatility of its Class A common stock and the stocks of a peer group of representative public companies to develop an expected volatility assumption. Risk-free interest rate—Risk-free rate is estimated based upon quoted market yields for the United States Treasury debt securities for a term consistent with the expected life of the awards in effect at the time of grant. Expected dividend yield—Because the Company has never paid and has no intention to pay cash dividends on common stock, the expected dividend yield is zero. Fair value of underlying common stock—Since the completion of the IPO, the fair value of the Company’s common stock is determined by the closing price, on the date of grant, of its common stock, which is traded on the New York Stock Exchange. The following table summarizes the assumptions used in estimating the fair value of employee stock purchase rights granted under the 2020 ESPP during the three and six months ended July 31, 2022 and 2021:
| Three and Six Months Ended
| 2022 |  | 2021
Expected term (in years) | 0.5 |  | 0.5
Expected volatility | 58.9 | % |  | 49.5 | %
Risk-free interest rate | 0.9 | % |  | 0.1 | %
Expected dividend yield | — | % |  | — | %
Stock-based compensation included in the condensed consolidated statements of operations was as follows (in thousands):
| Three Months Ended July 31, |  | Six Months Ended July 31,
| 2022 |  | 2021 |  | 2022 |  | 2021 |  |
Cost of revenue | $ | 26,070 |  |  | $ | 22,114 |  |  | $ | 48,705 |  |  | $ | 45,217 |  |  |
Sales and marketing | 60,162 |  |  | 52,336 |  |  | 112,631 |  |  | 98,389 |  |  |
Research and development | 96,897 |  |  | 62,827 |  |  | 170,490 |  |  | 118,646 |  |  |
General and administrative | 26,052 |  |  | 26,714 |  |  | 49,848 |  |  | 52,753 |  |  |
Stock-based compensation, net of amounts capitalized | 209,181 |  |  | 163,991 |  |  | 381,674 |  |  | 315,005 |  |  |
Capitalized stock-based compensation | 6,715 |  |  | 6,938 |  |  | 13,210 |  |  | 13,237 |  |  |
Total stock-based compensation | $ | 215,896 |  |  | $ | 170,929 |  |  | $ | 394,884 |  |  | $ | 328,242 |  |  |
As of July 31, 2022, total compensation cost related to unvested stock-based awards not yet recognized was $2.4 billion, which will be recognized over a weighted-average period of 3.2 years.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 + Details
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