XML 36 R20.htm IDEA: XBRL DOCUMENT
v3.23.1

Equity | 12 Months Ended
--- | ---
Mar. 31, 2023
Equity [Abstract] |
Equity | Equity Preferred Stock In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 100,000,000 shares of undesignated preferred stock with a par value of $0.001 per share with rights and preferences, including voting rights, designated from time to time by the board of directors. As of March 31, 2023 and 2022, there were no shares of preferred stock issued and outstanding. Common Stock and Creation of Dual-Class Structure The Company has two classes of common stock authorized: Class A common stock and Class B common stock, and are collectively referred to as common stock throughout the notes to the consolidated financial statements, unless otherwise noted. On June 8, 2021, the Company’s board of directors and stockholders approved an amendment to the Company’s amended and restated certificate of incorporation which authorized 1,000,000,000 shares of Class A common stock with par value of $0.001 and one vote per share, and 500,000,000 shares of Class B common stock with par value of $0.001 and ten votes per share. The holders of common stock are entitled to receive dividends, as may be declared by the board of directors. Each of the Company’s 85,523,836 shares of then-existing common stock outstanding was reclassified into Class B common stock. Each outstanding share of Class B common stock may be converted at any time at the option of the holder into one share of Class A common stock. As of March 31, 2023, there were 120,682,472 shares of Class A common stock, and 73,258,344 shares of Class B common stock outstanding. Stock Repurchase Program On May 12, 2022, the Company’s board of directors authorized a program to repurchase up to $70 million of the Company’s Class A common stock. As of September 30, 2022, the Company repurchased and retired 2,150,982 shares of Class A common stock for an aggregate purchase price of $70 million, thereby completing this share repurchase program. On October 28, 2022, the Company’s board of directors authorized an additional program to repurchase up to $70 million of the Company’s Class A common stock. The repurchases may be executed from time to time over the next 12 months, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. Immediately upon the repurchase of any shares of Class A common stock, such shares shall be retired by the Company and shall automatically return to the status of authorized but unissued shares of Class A common stock. As of March 31, 2023, the Company repurchased and retired 523,647 shares of Class A common stock for an aggregate purchase price of $16.0 million, and $54.0 million remained available and authorized for repurchases under this program. Common Stock Warrants In March 2017, the Company issued a warrant to purchase 250,000 shares of common stock at an exercise price of $0.72 per share in connection with a contract signed between the Company and U.S. News & World Report, L.P., or U.S. News. The warrant expires 10 years from the date of grant. As of March 31, 2023, the warrant was fully vested. During the fiscal year ended March 31, 2023, the warrant for 125,000 shares were exercised with an intrinsic value of $4.0 million. The remaining warrant for 125,000 shares was outstanding as of March 31, 2023. In October 2021, the Company issued a warrant to U.S. News (the “U.S. News Warrant”) to purchase 516,000 shares of Class A common stock with an exercise price of $12.56 per share in connection with the execution of a commercial agreement with the U.S. News (the “Commercial Agreement”). The U.S. News Warrant expires 10 years from the date of grant. The first tranche of the U.S. News Warrant vested on May 1, 2022 and the remainder will vest on a monthly basis over approximately 6 years. The grant-date fair value of the U.S. News Warrant was $34.7 million, which was determined using the Black-Scholes option-pricing model on the date of grant using the following assumptions: fair value of common stock of $76.50, volatility of 46.9%, risk-free interest rate of 1.61%, contractual term of 10 years, and an expected dividend of 0%. The fair value of the warrant is recognized as expense in cost of revenue in the consolidated statements of operations on a straight-line basis over its vesting term of 6.48 years. During the fiscal years ended March 31, 2023 and 2022, $5.4 million and $2.6 million were recognized as stock-based compensation expense relating to the U.S. News Warrant, respectively. As of March 31, 2023, unamortized compensation expense, net of estimated forfeitures, related to the unvested warrants was $26.8 million, which is expected to be recognized over the remaining vesting period of 5.0 years. Equity Incentive Plans 2010 Equity Incentive Plan In April 2010, the Company’s board of directors and stockholders approved the adoption of the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan provides for the granting of incentive stock options, nonstatutory stock options, restricted stock units, and restricted stock awards to employees, non-employee directors, and consultants of the Company. Options may be granted at a price per share not less than 100% of the fair market value at date of grant. If the incentive stock option is granted to a 10% stockholder, then the purchase or exercise price per share shall not be less than 110% of the fair market value per share of common stock on the grant date. Options granted under the 2010 Plan continue to vest until the last day of employment and generally vest over four years and expire 10 years from the date of grant. Stock awards may also be granted for services performed by external consultants and vest according to an award-specific schedule as approved by the board of directors. 2021 Stock Option and Incentive Plan In June 2021, the Company’s board of directors approved the adoption of the 2021 Stock Option and Incentive Plan (the “2021 Plan”), which became effective upon the Company’s initial public offering and supersedes the 2010 Plan. The 2010 Plan continues to govern the terms of outstanding awards that were granted under the 2010 Plan. The 2021 Plan provides for the granting of incentive stock options, nonstatutory stock options, restricted stock units, and restricted stock awards to employees, non-employee directors, and consultants of the Company. A total of 22,500,000 shares of Class A common stock was initially reserved for the 2021 Plan. The number of shares reserved and available for issuance for the 2021 Plan will automatically increase each April 1, beginning on April 1, 2022, by the lesser of 5% of the outstanding number of shares of the Class A and Class B common stock on the immediately preceding March 31, or such lesser number of shares as determined by the Company’s compensation committee. Any shares of Class B common stock that would have otherwise been returned to the Company’s 2010 Plan as a result of forfeiture, expiration, cancellation, termination or net issuances of awards thereunder shall be returned to the share reserve under the 2021 Plan after being automatically converted from shares of Class B common stock to Class A common stock. The 2010 Plan and the 2021 Plan are collectively referred to as the “Plans” in the notes to the consolidated financial statements, unless otherwise noted. 2021 Employee Stock Purchase Plan The Company’s board of directors approved the adoption of the ESPP, which became effective upon the Company’s initial public offering. A total of 4,500,000 shares of Class A common stock was initially reserved for the ESPP. The number of shares reserved and available for issuance for the ESPP will automatically increase each April 1, beginning on April 1, 2022 and continuing through April 1, 2031, by the lesser of 6,750,000 shares of Class A common stock, 1% of the outstanding number of shares of the Class A and Class B common stock on the immediately preceding March 31, or such lesser number of shares as determined by the Company’s compensation committee. The Company granted stock options under the terms of the Plans and outside of the Plans, as approved by the board of directors. During fiscal 2018, the Company granted 4,682,582 options outside of the Plans, of which 2,027,917 options were exercised and 2,654,665 were outstanding as of March 31, 2023. The Company has shares of common stock reserved for issuance as follows (in thousands):
| March 31, 2023 |  |
Common stock warrants | 641 |  |  |
2010 Plan |  |  |
Options outstanding | 19,752 |  |  |
2021 Plan |  |  |
Awards outstanding | 2,157 |  |  |
Shares available for future grant | 31,112 |  |  |
2021 ESPP | 6,243 |  |  |
Options outstanding outside the Plans | 2,655 |  |  |
Total | 62,560 |  |  |
Stock Options Stock options granted generally vest over four years with service-based, performance-based, and/or market-based conditions and expire ten years from the date of grant. Stock option activities within the Plans as well as outside of the Plans were as follows:
| Number of Shares (in thousands) |  | Weighted-Average Exercise Price |  | Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Balance, March 31, 2022 | 26,983 |  |  | $ | 4.15 |  |  | 7.63 |  | $ | 1,293,545 |
Options exercised | (3,717) |  |  | 2.65 |  |  |  |  |
Options forfeited or expired | (859) |  |  | 4.48 |  |  |  |  |
Balance, March 31, 2023 | 22,407 |  |  | 4.39 |  |  | 6.56 |  | 627,187 |
Vested and exercisable as of March 31, 2023 | 11,897 |  |  | 2.58 |  |  | 5.62 |  | 354,546 |
Vested and expected to vest as of March 31, 2023 | 21,472 |  |  | 4.29 |  |  | 6.51 |  | 603,118 |
The aggregate intrinsic value of options exercised during the fiscal years ended March 31, 2023, 2022, and 2021 was $118.4 million, $521.6 million, and $52.6 million respectively. The weighted-average grant-date fair value of options granted for the fiscal years ended March 31, 2022 and 2021 was $10.73 and $3.18 respectively. The Company has not granted any stock options since the first quarter of fiscal 2022. As of March 31, 2023, unamortized stock-based compensation expense, net of estimated forfeitures, related to unvested stock options was $37.0 million, which is expected to be recognized over a weighted-average period of 2.92 years. The fair value of each option on the date of grant was determined using the Black-Scholes option-pricing model with the assumptions set forth in the following table:
|  |  | Fiscal Year Ended March 31,
|  |  | 2022 |  | 2021
Fair value of common stock |  |  | $18.41 - $21.41 |  | $2.06 - $10.51
Volatility |  |  | 46.5% - 47.0% |  | 38.1% - 58.3%
Risk-free interest rate |  |  | 0.77% - 1.02% |  | 0.26% - 1.02%
Expected term (in years) |  |  | 5.00 - 6.09 |  | 5.00 - 8.00
Expected dividend |  |  | —% |  | —%
Performance-Based and/or Market-Based Options In March 2018, the board of directors of the Company granted 1,792,000 options to the Chief Executive Officer with an exercise price of $0.97 per share under the 2010 Plan (the “2018 CEO Grant”) with a liquidity-event performance-based vesting condition based on the occurrence of a qualifying liquidity event, including an IPO, as well as stock price target after the consummation of the IPO. In September 2020, the 2018 CEO Grant was modified to extend the stock price target achievement cutoff date. The fair value of the 2018 CEO Grant was determined using a Monte Carlo simulation approach on the modification date. The achievement of the qualifying event was not considered to be probable prior to the Company’s IPO. Upon the Company's IPO, the liquidity-event performance-based condition was met. During the fiscal years ended March 31, 2023 and 2022, $0.2 million and $1.7 million was recognized as stock-based compensation expense relating to the 2018 CEO Grant. As of March 31, 2023, this option was fully vested. As of March 31, 2022, the Company had 480,000 unvested options with performance-based and service-based vesting conditions. The performance conditions are satisfied upon meeting certain financial performance targets. During the fiscal year ended March 31, 2023, 200,000 options vested and 280,000 options were forfeited. There were no unvested options remaining as of March 31, 2023. The stock-based compensation expense related to these performance options was $1.7 million for the fiscal year ended March 31, 2022 and was immaterial for the fiscal years ended March 31, 2023 and 2021. There is no remaining unrecognized compensation expense as of March 31, 2023. Restricted Stock Units (“RSUs”) The RSUs granted by the Company generally vest over four years based on continued service. The following table summarizes RSU activity (in thousands, except per share information):
| Number of Shares |  | Weighted- Average Grant Date Fair Value
Unvested balance, March 31, 2022 | 534 |  |  | $ | 68.23 |
Granted | 1,863 |  |  | 34.27 |
Vested | (324) |  |  | 51.23 |
Forfeited | (122) |  |  | 44.93 |
Unvested balance, March 31, 2023 | 1,951 |  |  | 40.08 |
The total fair value of RSUs vested during the fiscal years ended March 31, 2023 and 2022 was $11.4 million and $2.5 million, respectively. No RSUs were granted before fiscal 2022. As of March 31, 2023, unamortized stock-based compensation expense, net of estimated forfeitures, related to unvested RSUs was $59.3 million, and is expected to be recognized over a weighted-average period of approximately 3.04 years. Performance-Based Restricted Stock Units (“PSUs”) The PSUs have service-based and performance-based vesting conditions that are satisfied upon meeting certain financial performance targets. The following table summarizes PSU activity (in thousands, except per share information):
| Number of Shares |  | Weighted- Average Grant Date Fair Value
Unvested balance, March 31, 2022 | 12 |  |  | $ | 80.00 |
Granted | 213 |  |  | 34.63 |
Vested | (11) |  |  | 80.00 |
Forfeited | (8) |  |  | 38.47 |
Unvested balance, March 31, 2023 | 206 |  |  | 34.68 |
The total fair value of PSUs vested during the fiscal year ended March 31, 2023 $0.4 million. No PSUs vested during the fiscal year ended March 31, 2022 and no PSUs were granted before fiscal 2022. As of March 31, 2023, unamortized stock-based compensation expense, net of estimated forfeitures, related to unvested PSUs that are probable of vesting was $3.0 million, and is expected to be recognized over a weighted-average period of approximately 0.76 years. Stock-Based Compensation Expense Total stock-based compensation expense recognized in the consolidated statement of operations was as follows (in thousands):
| Fiscal Year Ended March 31,
| 2023 |  | 2022 |  | 2021
Cost of revenue | $ | 9,634 |  |  | $ | 4,979 |  |  | $ | 600 |
Research and development | 12,583 |  |  | 7,065 |  |  | 1,975 |
Sales and marketing | 16,939 |  |  | 8,108 |  |  | 1,998 |
General and administrative | 8,678 |  |  | 11,290 |  |  | 2,679 |
Total stock-based compensation expense | $ | 47,834 |  |  | $ | 31,442 |  |  | $ | 7,252 |

X
- References No definition available. + Details
Name: | us-gaap_EquityAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_ShareholdersEquityAndShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration