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Share-based Compensation | 12 Months Ended
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Mar. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Share-based Compensation | Share-based Compensation Amended and Restated 2019 Equity Incentive Plan In July 2019, the Company’s board of directors (the “Board”), upon the recommendation of the compensation committee of the board of directors, adopted the 2019 Equity Incentive Plan (the “2019 Plan”) which was subsequently approved by the Company’s stockholders and was later amended and restated by the Board in January 2021. The Company initially reserved 52,000,000 shares of common stock for the issuance of awards under the 2019 Plan. The 2019 Plan provides that the number of shares reserved and available for issuance under the plan automatically increases each April 1 by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31 or such lesser number determined by the compensation committee. This number is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of March 31, 2024, 49,844,520 shares of common stock were available for future issuance under the 2019 Plan. The awards granted under the 2019 Plan have varying terms but generally vest over a three- or four-year period, upon satisfaction of a service-based vesting condition, with 33% and 25% vesting one year after the grant date and the remaining vesting ratably on a quarterly basis over two and three years for three-year and four-year grants, respectively. From time to time, the Company also grants performance-based awards to certain key employees that generally vest over a three- or four-year period upon satisfaction of certain financial performance targets established and approved by the Company’s board of directors for each fiscal year. The following table summarizes the components of total share-based compensation expense included in the consolidated statements of operations for each period presented (in thousands):
| Fiscal Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Cost of revenue | $ | 26,622 |  |  | $ | 18,383 |  |  | $ | 12,863 |
Research and development | 69,543 |  |  | 41,406 |  |  | 21,316 |
Sales and marketing | 65,762 |  |  | 51,147 |  |  | 35,957 |
General and administrative | 46,969 |  |  | 35,938 |  |  | 29,400 |
Total share-based compensation expense | $ | 208,896 |  |  | $ | 146,874 |  |  | $ | 99,536 |
The total income tax benefit recognized in the consolidated statements of operations for share-based compensation arrangements was $64.1 million, $38.1 million, and $43.1 million for the years ended March 31, 2024, 2023, and 2022, respectively. Stock options The following table summarizes activity for stock options during the period ended March 31, 2024:
| Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
| (in thousands) |  | (per share) |  | (years) |  | (in thousands)
Balance, March 31, 2023 | 4,636 |  |  | $ | 22.25 |  |  | 6.5 |  | $ | 94,565 |
Exercised | (1,500) |  |  | 20.79 |  |  |  |  |
Forfeited or expired | (73) |  |  | 39.64 |  |  |  |  |
Balance, March 31, 2024 | 3,063 |  |  | $ | 22.56 |  |  | 5.6 |  | $ | 73,903 |
Options vested and expected to vest at March 31, 2024 | 3,063 |  |  | $ | 22.56 |  |  | 5.6 |  | $ | 73,903 |
Options vested and exercisable at March 31, 2024 | 2,936 |  |  | $ | 21.82 |  |  | 5.6 |  | $ | 72,848 |
The weighted average grant date fair value of options granted during fiscal 2022 was $20.90. There were no options granted during fiscal 2024 and 2023. The aggregate intrinsic value of options exercised during fiscal 2024, 2023, and 2022 was $46.1 million, $37.9 million, and $52.6 million, respectively. The grant date fair value of options vested during fiscal 2024, 2023, and 2022 was $9.1 million, $16.7 million, and $23.1 million, respectively. As of March 31, 2024, the total unrecognized compensation expense related to non-vested stock options was $1.4 million and is expected to be recognized over a weighted average period of 0.5 years. The fair value for the Company’s stock options granted during the year ended March 31, 2022 was estimated at the date of grant using a Black-Scholes option-pricing model using the following assumptions:
Expected dividend yield | — |
Expected volatility | 39.5% - 39.8%
Expected term (years) | 6.1
Risk-free interest rate | 0.9% - 1.1%
The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero. The computation of expected volatility is based on a calculation using the historical volatility of a group of publicly traded peer companies. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of the Company’s traded stock price. The computation of expected term was based on the average period the stock options are expected to remain outstanding, generally calculated as the midpoint of the stock options’ remaining vesting term and contractual expiration period, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the award. Restricted shares and units The following table provides a summary of the changes in the number of RSAs and RSUs for the year ended March 31, 2024:
| Number of RSAs |  | Weighted Average Grant Date Fair Value |  | Number of RSUs |  | Weighted Average Grant Date Fair Value
| (in thousands) |  | (per share) |  | (in thousands) |  | (per share)
Balance, March 31, 2023 | 4 |  |  | $ | 16.00 |  |  | 8,836 |  |  | $ | 41.76 |
Granted | 142 |  | 49.05 |  | 6,193 |  |  | 51.60
Vested | (4) |  |  | 16.00 |  | (4,376) |  |  | 40.69
Forfeited | — |  |  | — |  | (801) |  |  | 44.83
Balance, March 31, 2024 | 142 |  |  | $ | 49.05 |  |  | 9,852 |  |  | $ | 48.17 |
RSUs outstanding as of March 31, 2024 were comprised of 8.9 million RSUs with only service conditions and 0.9 million RSUs with both service and performance conditions (“PSUs”). During the year ended March 31, 2024, the Company granted PSUs to certain key employees that generally vest 33% one year after the grant date and the remaining 67% vest ratably on a quarterly basis over the following two years (the “Annual PSUs”). The number of shares that may be earned pursuant to the Annual PSUs is based on specific company metrics related to the Company’s fiscal year ended March 31, 2024. No PSUs will be earned with respect to any metric if the applicable “threshold” percentage of the specific metric is not achieved, and the overall number of shares that may be earned shall not exceed 200% of the target award. The weighted average grant-date fair value of RSUs granted during fiscal 2023, and 2022 was $40.42 and $50.19, respectively. There were no RSAs granted during the years ended March 31, 2023, and 2022. The aggregate fair value of RSAs vested during fiscal 2024, 2023, and 2022 was $0.2 million, $6.8 million, and $27.7 million, respectively. The aggregate fair value of RSUs vested during fiscal 2024, 2023, and 2022 was $220.3 million, $82.1 million, and $72.2 million, respectively. As of March 31, 2024, the total unrecognized compensation expense related to unvested RSAs is $8.7 million and is expected to be recognized over a weighted average period of 2.9 years. As of March 31, 2024, the total unrecognized compensation expense related to unvested RSUs was $375.4 million and is expected to be recognized over a weighted average period of 2.1 years. Employee Stock Purchase Plan In July 2019, the board of directors adopted, and the Company’s stockholders approved, the 2019 Employee Stock Purchase Plan. The Company offers, sells and issues shares of common stock under this ESPP from time to time based on various factors and conditions, although the Company is under no obligation to sell any shares under this ESPP. The ESPP provides that the number of shares reserved and available for issuance under the plan will automatically increase each April 1 by lesser of (i) 1% of the outstanding number of shares of the Company’s common stock on the immediately preceding March 31, (ii) 3,500,000 shares of common stock, or (iii) such lesser number determined by the compensation committee. The ESPP provides for six-month offering periods and each offering period consists of six-month purchase periods. On each purchase date, eligible employees purchase shares of the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date or (2) the fair market value of the Company’s common stock on the purchase date. For the year ended March 31, 2024, 534,022 shares of common stock were purchased under the ESPP. As of March 31, 2024, 15,865,787 shares of common stock were available for future issuance under the ESPP. As of March 31, 2024, there was approximately $1.2 million of unrecognized share-based compensation related to the ESPP that is expected to be recognized over the remaining term of the current offering period. The Company estimated the fair value of the ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions:
| Fiscal Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Expected dividend yield | — |  |  | — |  |  | — |
Expected volatility | 32.2% - 51.6% |  | 35.4% - 64.3% |  | 35.4% - 40.6%
Expected term (years) | 0.5 |  | 0.5 |  | 0.5
Risk-free interest rate | 4.7% - 5.4% |  | 0.1% - 4.7% |  | 0.04% - 0.1%
The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero. Beginning in May 2022, the expected volatility is based on the historical volatility of the Company’s common stock. Prior to May 2022, the computation of expected volatility was based on a calculation using the historical volatility of a group of publicly traded peer companies. The computation of expected term was based on the offering period, which is six months. The risk-free interest rate is based on the U.S. Treasury yield curve that corresponds with the expected term at the time of grant.

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