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Equity | 12 Months Ended
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Feb. 01, 2025
Equity [Abstract] |
Equity | Equity Preferred Stock—In December 2021, in connection with the IPO, the Company filed its Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”), which authorized the issuance of up to 400,000,000 shares of preferred stock with a par value of $0.0001 per share. Common Stock—In December 2021, in connection with the IPO, the Company’s Certificate of Incorporation authorized the issuance of up to 5,800,000,000 shares of common stock with a par value of $0.0001 per share, consisting of 4,000,000,000 shares of Class A common stock, 600,000,000 shares of Class B common stock, and 1,200,000,000 shares of Class C common stock. As a result of this amendment, effective upon completion of the IPO on December 17, 2021, the Company has three classes of authorized common stock: Class A common stock, Class B common stock, and Class C common stock. The rights of the holders of Class A common stock, Class B common stock, and Class C common stock are substantially identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and is not convertible into any other shares of the Company’s capital stock. Each share of Class B common stock is entitled to 10 votes per share and is convertible at any time into one share of Class A common stock. All shares of Class B common stock will be converted into shares of Class A common stock following the earliest to occur of (i) the date specified by the affirmative vote or consent of (a) the holders of a majority of the outstanding Class B common stock and (b) each of Mr. Biswas and Mr. Bicket to the extent he (together with his permitted assigns) then holds at least 25% of the Class B common stock held by him and his permitted assigns immediately prior to the completion of the Company’s IPO and is not then deceased or disabled; (ii) nine months following the death or disability of the later to die or become disabled of Messrs. Biswas and Bicket, which period may be extended to 18 months upon the consent of a majority of the independent directors then in office; and (iii) such date fixed by the Company’s Board of Directors following the date that the total number of shares of Class B common stock held by Messrs. Biswas and Bicket (together with their permitted assigns) equals less than 25% of the Class B common stock held by them immediately prior to the completion of the Company’s IPO. Shares of Class C common stock have no voting rights, except as otherwise required by law, and each share will convert into one share of the Company’s Class A common stock, following the conversion or exchange of all outstanding shares of Class B common stock into shares of the Company’s Class A common stock and upon the date or time specified by the holders of a majority of the outstanding shares of Class A common stock, voting as a separate class. Subject to preferences that may apply to any shares of convertible preferred stock outstanding at the time, the holders of Class A common stock, Class B common stock, and Class C common stock are entitled to receive dividends out of funds legally available if the Board of Directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that the Board of Directors may determine. As of February 1, 2025, there were 295,839,286, 269,879,953, and no shares of Class A, Class B, and Class C common stock issued and outstanding, respectively. As of February 3, 2024, there were 200,989,931, 344,983,598, and no shares of Class A, Class B, and Class C common stock issued and outstanding, respectively. The Company had reserved shares of common stock for future issuance as of February 1, 2025 and February 3, 2024, as follows:
| As of
| February 1, 2025 |  | February 3, 2024
2015 Equity Incentive Plan: |  |  |
Options outstanding | 5,632,520 |  |  | 6,165,885 |
RSUs outstanding | 790,123 |  |  | 6,654,559 |
2021 Equity Incentive Plan: |  |  |
RSUs outstanding | 21,520,741 |  |  | 28,716,715 |
Shares available for future grants | 90,518,967 |  |  | 68,321,018 |
2021 Employee Stock Purchase Plan: |  |  |
Shares available for future issuance | 21,284,493 |  |  | 16,875,966 |
Total shares of common stock reserved for future issuance | 139,746,844 |  |  | 126,734,143 |
Employee Compensation Plans The Company currently has two equity incentive plans, the 2015 Equity Incentive Plan (the “2015 Plan”) and the 2021 Equity Incentive Plan (the “2021 Plan”). The 2015 Plan was terminated in connection with the adoption of the 2021 Plan in December 2021 but continues to govern the terms of outstanding stock options and RSUs that were granted prior to the termination of the 2015 Plan. The Company no longer grants equity awards pursuant to the 2015 Plan. 2021 Equity Incentive Plan—In December 2021, the Board of Directors adopted and stockholders approved the 2021 Equity Incentive Plan, which became effective in December 2021 in connection with the Company’s initial public offering (“IPO”). A total of 50,600,000 shares of the Company’s Class A common stock initially were reserved for issuance under the 2021 Plan. In addition, the number of shares of the Company’s Class A common stock are increased by (i) any annual automatic evergreen increases in the number of shares of Class A common stock reserved for issuance under the 2021 Plan on the first day of each fiscal year, as determined in accordance with the formula set forth in the 2021 Plan and (ii) a number of shares of Class A common stock equal to the number of shares of Class B common stock subject to equity awards granted under the 2015 Plan that expire, terminate without having been exercised or issued in full, are tendered to or withheld for payment of an exercise price or for tax withholding obligations with respect to a 2015 Plan award, or are forfeited to or repurchased by the Company due to failure to vest, such number of shares under this clause (ii) not to exceed 57,631,084. The total number of shares of the Company’s Class A common stock reserved for future grants as of February 1, 2025 includes 27,298,676 shares added on the first day of fiscal year 2025 pursuant to the annual automatic evergreen increase provision of the 2021 Plan. Options—A summary of the stock options activity under the 2015 Plan during the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023 is presented below (the number of options represents shares of common stock exercisable in respect thereof):
| Number of Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (In Years) |  | Aggregate Intrinsic Value (1) (In Thousands)
Balance as of January 29, 2022 | 8,628,071 |  |  | $ | 3.77 |  |  | 6.9 |  | $ | 111,170 |
Granted | — |  |  | $ | — |  |  |  |  |
Exercised | (1,694,436) |  |  | $ | 0.35 |  |  |  |  |
Forfeited, canceled, or expired | (6,095) |  |  | $ | 1.08 |  |  |  |  |
Balance as of January 28, 2023 | 6,927,540 |  |  | $ | 4.61 |  |  | 6.4 |  | $ | 63,351 |
Granted | — |  |  | $ | — |  |  |  |  |
Exercised | (761,655) |  |  | $ | 0.88 |  |  |  |  |
Forfeited, canceled, or expired | — |  |  | $ | — |  |  |  |  |
Balance as of February 3, 2024 | 6,165,885 |  |  | $ | 5.07 |  |  | 5.7 |  | $ | 169,153 |
Granted | — |  |  | $ | — |  |  |  |  |
Exercised | (533,365) |  |  | $ | 1.61 |  |  |  |  |
Forfeited, canceled, or expired | — |  |  | $ | — |  |  |  |  |
Balance as of February 1, 2025 | 5,632,520 |  |  | $ | 5.40 |  |  | 4.9 |  | $ | 259,635 |
Exercisable as of February 1, 2025 | 5,632,520 |  |  | $ | 5.40 |  |  | 4.9 |  | $ | 259,635 |
__________ (1)Aggregate intrinsic value for stock options represents the difference between the exercise price and the per share fair value of the Company’s Class A common stock for each period end presented, multiplied by the number of stock options outstanding or exercisable as of each period end presented. The intrinsic value of stock options exercised was $21.1 million, $18.8 million, and $24.2 million during the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively. The Company recognized a deferred income tax benefit on the consolidated statements of operations and comprehensive loss for stock-based compensation arrangements of $0.2 million, $0.2 million, and $1.0 million during the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively. As of February 1, 2025, the Company had no remaining unrecognized stock-based compensation expense related to outstanding unvested stock options for employees that are expected to vest. RSUs—RSUs granted prior to the IPO had both a service condition and a performance condition (defined under the 2015 Plan as the occurrence of a qualifying liquidity event, which was defined as the earlier of a successful IPO or acquisition). Stock-based compensation expense was only recognized for RSUs for which both the service condition and performance condition have been met. The service condition for these awards is generally satisfied over four years. The performance condition was satisfied upon the IPO. Prior to the IPO, the Company did not record expense on RSUs as a liquidity event upon which vesting is contingent was not probable of occurring. Following the closing of the IPO in December 2021, the Company began recording stock-based compensation expense for these RSUs using the accelerated attribution method, based on the grant-date fair value of the RSUs. RSUs granted after the IPO only have a service condition, and the related stock-based compensation expense is recognized on a straight-line basis over the requisite service period. The service condition for these awards is generally satisfied over four years for RSUs granted through fiscal year 2023 and either three or four years for RSUs granted after fiscal year 2023. A summary of the RSUs activity under the 2015 Plan and 2021 Plan during the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023 is presented below:
| Number of Shares |  | Weighted-Average Grant-Date Fair Value
Balance as of January 29, 2022 | 32,576,098 |  |  | $ | 10.83 |
Granted | 28,915,610 |  |  | $ | 12.82 |
Vested | (15,211,976) |  |  | $ | 10.70 |
Forfeited | (5,483,628) |  |  | $ | 11.49 |
Balance as of January 28, 2023 | 40,796,104 |  |  | $ | 12.20 |
Granted | 20,030,475 |  |  | $ | 18.76 |
Vested | (19,209,260) |  |  | $ | 12.94 |
Forfeited | (6,246,045) |  |  | $ | 14.16 |
Balance as of February 3, 2024 | 35,371,274 |  |  | $ | 15.17 |
Granted | 10,910,858 |  |  | $ | 35.83 |
Vested | (18,161,277) |  |  | $ | 16.91 |
Forfeited | (5,809,991) |  |  | $ | 17.94 |
Balance as of February 1, 2025 | 22,310,864 |  |  | $ | 23.14 |
As of February 1, 2025, unrecognized stock-based compensation expense related to outstanding unvested RSUs for employees that are expected to vest was approximately $475.7 million. The remaining unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately 1.2 years. 2021 Employee Stock Purchase Plan—In December 2021, the Board of Directors adopted and stockholders approved the 2021 ESPP, which became effective in December 2021 in connection with the IPO. The 2021 ESPP authorizes the issuance of shares of Class A common stock pursuant to purchase rights granted to eligible employees. A total of 10,200,000 shares of the Company’s Class A common stock have been reserved for future issuance under the 2021 ESPP, in addition to any annual automatic evergreen increases in the number of shares of Class A common stock reserved for issuance under the 2021 ESPP. The total number of shares of the Company’s Class A common stock reserved for future issuance as of February 1, 2025 includes 5,459,735 shares added on the first day of fiscal year 2025 pursuant to the annual automatic evergreen increase provision of the 2021 ESPP. The price at which Class A common stock is purchased under the 2021 ESPP is equal to 85% of the lower of the fair market value of a share of the Company’s Class A common stock on the enrollment date or on the exercise date. The enrollment date means the first trading day of each offering period, and the exercise date means the last trading day of each purchase period. Offering periods are generally 12 months long, commencing on the first trading day on or after June 11 and December 11 of each year and terminating on the last trading day on or before June 10 and December 10 of each year. Purchase periods are generally six months long, commencing on the first trading day after one exercise date and ending with the next exercise date. For the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023, 1,051,208, 1,837,405, and 1,782,993 shares of Class A common stock were purchased under the 2021 ESPP, resulting in net cash proceeds of $27.9 million, $22.5 million, and $17.5 million, respectively. As of February 1, 2025, unrecognized stock-based compensation expense related to the 2021 ESPP was approximately $9.4 million. The remaining unrecognized stock-based compensation expense is expected to be recognized over a weighted-average period of approximately 0.8 years. Employee Stock Purchase Plan Valuation—The Company estimates the fair value of shares to be issued under the 2021 ESPP using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which greatly affect fair value. The weighted-average assumptions used to estimate the fair value of shares to be issued under the 2021 ESPP were as follows:
| Fiscal Year Ended
| February 1, 2025 |  | February 3, 2024 |  | January 28, 2023
Expected volatility | 46.6% – 57.4% |  | 61.5% – 72.5% |  | 75.7% – 97.7%
Expected term (years) | 0.5 – 1.0 |  | 0.5 – 1.0 |  | 0.5 – 1.0
Risk-free interest rate | 4.2% – 5.4% |  | 5.1% – 5.4% |  | 2.3% – 4.8%
Expected dividend yield | —% |  | —% |  | —%
Expected volatility—The expected volatility for the fiscal years ended February 1, 2025 and February 3, 2024 was based on the historical volatility of the Company. The expected volatility for the fiscal year ended January 28, 2023 was based on the historical volatility of the Company and similar companies whose stock or option prices are publicly available, after considering the industry, stage of life cycle, size, market capitalization, and financial leverage of the other companies. Expected term (years)—The expected term is approximately 0.5 years for the first purchase period and approximately 1.0 year for the second purchase period. Risk-free interest rate—The risk-free interest rate assumption is based on observed U.S. Treasury yield curve interest rates in effect at the time of grant appropriate for the expected term of the stock-based award. Expected dividend yield—Because the Company has never paid and has no current intention to pay cash dividends on its common stock, the expected dividend yield is zero. Stock-Based Compensation Expense—Stock-based compensation expense, by grant type, was as follows (in thousands):
|  |  | Fiscal Year Ended
|  |  |  |  | February 1, 2025 |  | February 3, 2024 |  | January 28, 2023
Stock options |  |  |  |  | $ | 2,169 |  |  | $ | 3,185 |  |  | $ | 4,386 |
RSUs |  |  |  |  | 263,161 |  |  | 220,674 |  |  | 160,989 |
Employee stock purchase plan |  |  |  |  | 12,540 |  |  | 13,223 |  |  | 12,098 |
Total stock-based compensation expense |  |  |  |  | $ | 277,870 |  |  | $ | 237,082 |  |  | $ | 177,473 |
Stock-based compensation expense included in the following line items of the Company’s consolidated statements of operations and comprehensive loss was as follows (in thousands):
|  |  | Fiscal Year Ended
|  |  |  |  | February 1, 2025 |  | February 3, 2024 |  | January 28, 2023
Cost of revenue |  |  |  |  | $ | 12,125 |  |  | $ | 11,957 |  |  | $ | 9,182 |
Research and development |  |  |  |  | 100,246 |  |  | 89,753 |  |  | 62,738 |
Sales and marketing |  |  |  |  | 84,407 |  |  | 70,732 |  |  | 53,080 |
General and administrative |  |  |  |  | 81,092 |  |  | 64,640 |  |  | 52,473 |
Total stock-based compensation expense |  |  |  |  | $ | 277,870 |  |  | $ | 237,082 |  |  | $ | 177,473 |

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