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Stock-Based Compensation
 6 Months Ended
Jan. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Equity Incentive Plans
We adopted the Fiscal Year 2018 Equity Incentive Plan (the "2018 Plan") in fiscal 2018 and the 2007 Stock Plan (the "2007 Plan") in fiscal 2008, collectively referred to as the "Plans." Equity incentive awards which may be granted to eligible participants under the Plans include restricted stock units, restricted stock, stock options, nonstatutory stock options, stock appreciation rights, performance units and performance shares. With the establishment of the 2018 Plan, we no longer grant stock-based awards under the 2007 Plan and any shares underlying stock options that expire or terminate or are forfeited or repurchased by us under the 2007 Plan are automatically transferred to the 2018 Plan.
Stock Options
As of January 31, 2020, a total of 25.1 million shares of common stock have been reserved for the issuance of equity awards under the 2018 Plan, of which 20.6 million shares were available for grant. The number of shares of common stock available for issuance under the 2018 Plan also includes an annual increase on the first day of each fiscal year pursuant to its automatic annual increase provision.
The stock option activity consisted of the following for the six months ended January 31, 2020:
Outstanding
Stock
Options		Weighted-Average
Exercise
Price		Weighted-Average
Remaining
Contractual Term
(in years)		Aggregate
Intrinsic
Value
(in thousands, except per share amounts)
Balance as of July 31, 20198,861  $7.16  4.6$683,294  
Granted150  49.59  
Exercised(1,220) 5.54  62,182  
Canceled, forfeited or expired(297) 8.14  
Balance as of January 31, 20207,494  $8.24  4.3$358,629  
Exercisable and expected to vest as of July 31, 20193,311  $5.60  4.0$260,479  
Exercisable and expected to vest as of January 31, 20203,469  $6.06  3.8$173,540  
The aggregate intrinsic value of the options exercised represents the difference between the estimated fair value of our common stock on the date of exercise and their exercise price. The total intrinsic value of options exercised for the six months ended January 31, 2020 and 2019 was $62.2 million and $129.6 million, respectively. The weighted-average grant-
date fair value per share of stock options granted for the six months ended January 31, 2020 was $22.76. There were no stock options granted during the six months ended January 31, 2019.
We estimated the fair value of stock options using the Black-Scholes option pricing model with the following assumptions:
Six Months Ended January 31, 2020
Expected term (in years)
6.1
Expected stock price volatility
46.1%  
Risk-free interest rate
1.7%  
Dividend yield
0.0%  
Restricted Stock Units and Performance Stock Units
The 2018 Plan allows for the grant of restricted stock units ("RSUs"). Generally, RSUs are subject to a four-year vesting period, with 25% of the shares vesting approximately one year from the vesting commencing date and quarterly thereafter over the remaining vesting term.
The 2018 Plan allows for the grant of performance stock units ("PSUs"). The right to earn the PSUs is subject to achievement of the defined performance metrics and continuous employment service. The performance metrics are defined and approved by the compensation committee of our board of directors. Generally, earned PSUs are subject to additional time-based vesting in accordance with the respective award agreement. As of January 31, 2020, there were 0.4 million outstanding PSUs for which the performance metrics have not been defined or approved by the compensation committee. Accordingly, such awards are not considered granted for accounting purposes as of January 31, 2020 and have been excluded from the below table.
The RSU and PSU activity consisted of the following for the six months ended January 31, 2020:
Underlying SharesWeighted-Average Grant Date Fair ValueAggregate
Intrinsic Value
(in thousands, except per share data) 
Balance as of July 31, 20194,152  $48.51  $349,872  
Granted2,106  48.63  
Vested(509) 39.20  23,987  
Canceled or forfeited(318) 53.77  
Balance as of January 31, 20205,431  $49.12  $304,659  
Employee Stock Purchase Plan
We adopted the Fiscal Year 2018 Employee Stock Purchase Plan (the "ESPP") in the third quarter of fiscal 2018. As of January 31, 2020, a total of 4.7 million shares of common stock have been reserved for issuance under the ESPP, of which 3.3 million shares were available for grant. The number of shares reserved includes an annual increase on the first day of each fiscal year pursuant to its automatic annual increase provision. The ESPP provides for consecutive offering periods that will typically have a duration of approximately 24 months in length and is comprised of four purchase periods of approximately six months in length. The offering periods are scheduled to start on the first trading day on or after June 15 and December 15 of each year. During the quarter ended January 31, 2020, employees purchased approximately 0.3 million shares of our common stock under our employee stock purchase plan at an average purchase price of $18.80 per share, resulting in total cash proceeds of $5.3 million.
ESPP employee payroll contributions accrued at January 31, 2020 and July 31, 2019 were $2.6 million and $2.1 million, respectively, and are included within accrued compensation in the condensed consolidated balance sheets. Payroll contributions accrued as of January 31, 2020 will be used to purchase shares at the end of the current ESPP purchase period ending on June 15, 2020. Payroll contributions ultimately used to purchase shares will be reclassified to stockholders' equity on the purchase date.
The fair value of the purchase right for the ESPP is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Six Months Ended January 31, 2020Six Months Ended January 31, 2019
Expected Term in Years
0.5 - 2.0
0.5 - 2.0
Expected stock price volatility
53.6% - 57.6%
44.0% - 61.9%
Risk-free interest rate
1.5% - 1.7%
2.5% - 2.7%
Dividend Yield0.0%  0.0%  
Early Exercised Stock Options
During the six months ended January 31, 2020 and 2019, we reclassified to additional paid-in capital $0.3 million and $0.6 million, respectively, related to common stock issued upon early exercise of stock options which vested during these periods. As of January 31, 2020 and July 31, 2019, the number of shares of early exercised common stock subject to repurchase was approximately 63,000 shares and 122,000 shares with an aggregate exercise price of $0.3 million and $0.6 million, respectively. The liability for early exercised stock options is included within accrued expenses and other current liabilities in the condensed consolidated balance sheets.
Notes Receivable from Stockholders
Prior to fiscal 2017, we entered into notes receivable agreements with certain of our current and former executives and employees in connection with the exercise of their stock options. During the six months ended January 31, 2019, the outstanding principal amount of $1.9 million and accrued interest of $0.2 million were fully repaid.
Stock-based Compensation Expense
The components of stock-based compensation expense recognized in the condensed consolidated statements of operations consisted of the following:
Three Months Ended January 31,Six Months Ended January 31,
2020201920202019
(in thousands)
Cost of revenue$1,580  $619  $2,961  $1,122  
Sales and marketing11,943  5,517  21,982  8,318  
Research and development6,077  4,398  10,951  7,193  
General and administrative4,266  2,693  6,348  4,180  
Total$23,866  $13,227  $42,242  $20,813  
As of January 31, 2020, the unrecognized stock-based compensation cost related to outstanding equity-based awards was $239.7 million, which we expect to be amortized over a weighted-average period of 2.9 years.
During the three and six months ended January 31, 2020, we capitalized $1.2 million and $2.0 million, respectively of stock-based compensation associated with the development of software for internal-use. Stock-based compensation related to projects capitalized in the prior comparative period was immaterial.