Equity

12 Months Ended

Mar. 31, 2024

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, 2024 and 2023, 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, 2024, there were 124,097,865 shares of Class A common stock, and 62,463,784 shares of Class B common stock outstanding.

Stock Repurchase Program

The Company’s board of directors previously authorized various programs to repurchase up to $340 million of the Company’s Class A common stock. Under these programs, the Company repurchased and retired 13,790,535 shares of Class A common stock. All of these programs were completed as of October 2023.

On October 26, 2023, the Company’s board of directors authorized a program to repurchase up to $70 million of the Company’s Class A common stock over a period of 12 months. The repurchases are subject to general business and market conditions and other investment opportunities and may be executed 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, 2024, the Company repurchased and retired 1,119,014 shares of Class A common stock for an aggregate purchase price of $29.7 million. As of March 31, 2024, $40.3 million remained available and authorized for repurchase.

Effective January 1, 2023, the Company’s share repurchases in excess of allowable share issuances are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. During the fiscal year ended March 31, 2024, the Company incurred excise taxes of $1.5 million, all of which remained unpaid as of March 31, 2024. The Company did not incur any excise taxes during the prior year.

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. 125,000 shares with an intrinsic value of $4.0 million were exercised under the warrant during the fiscal year ended March 31, 2023, while the remaining 125,000 shares with an intrinsic value of $2.7 million were exercised during the fiscal year ended March 31, 2024.

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 U.S. News. 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, 2024, 2023, and 2022 $5.4 million, $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, 2024, unamortized compensation expense related to the unvested warrants was $21.3 million, which is expected to be recognized over the remaining vesting period of 4.0 years.

Equity Incentive Plans

The Company maintains three equity incentive plans: the 2010 Equity Incentive Plan (the “2010 Plan”), the 2021 Stock Option and Incentive Plan (the “2021 Plan”), and the 2021 Employee Stock Purchase Plan (the “ESPP”). In June 2021, the Company’s board of directors approved the adoption of 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 prior to the termination of 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. 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.

The number of shares reserved and available for issuance for the 2021 Plan will automatically increase each April 1st 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.

The number of shares reserved and available for issuance for the ESPP will automatically increase each April 1st 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 31st, 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 2,044,582 options were exercised and 2,638,000 were outstanding as of March 31, 2024.

The Company has shares of common stock reserved for issuance as follows (in thousands):


			March 31, 2024

Common stock warrants			516
2010 Plan
Options outstanding			14,842

2021 Plan
Awards outstanding			2,519
Shares available for future grant			40,823
2021 ESPP			8,002
Options outstanding outside the Plans			2,638
Total			69,340

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, 2023	22,407	$	4.39	6.56	$	627,187

Options exercised	(4,019)	3.19
Options forfeited or expired	(908)	5.60
Balance, March 31, 2024	17,480	4.60		5.72	389,931
Vested and exercisable as of March 31, 2024	11,896	3.26		5.21	281,377
Vested and expected to vest as of March 31, 2024	17,480	4.60		5.72	389,931

The aggregate intrinsic value of options exercised during the fiscal years ended March 31, 2024, 2023, and 2022 was $99.5 million, $118.4 million, and $521.6 million respectively.

The weighted-average grant-date fair value of options granted for the fiscal year ended March 31, 2022 was $10.73. The Company has not granted any stock options since the first quarter of fiscal 2022.

As of March 31, 2024, unamortized stock-based compensation expense related to unvested stock options was $22.4 million, which is expected to be recognized over a weighted-average period of 2.55 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
Fair value of common stock									$18.41 - $21.41
Volatility									46.5% - 47.0%
Risk-free interest rate									0.77% - 1.02%
Expected term (in years)									5.00 - 6.09
Expected dividend									—%

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, 2023	1,951	$	40.08
Granted	1,300	29.72
Vested	(701)	37.96
Forfeited	(457)	41.85
Unvested balance, March 31, 2024	2,093	33.79

The total fair value of RSUs vested during the fiscal years ended March 31, 2024, 2023, and 2022 was $19.9 million, $11.4 million, and $2.5 million respectively.

As of March 31, 2024, unamortized stock-based compensation expense related to unvested RSUs was $64.3 million, and is expected to be recognized over a weighted-average period of approximately 2.71 years.

Performance-Based Restricted Stock Units (“PSUs”)

During the fiscal year ended March 31, 2024, the Company granted 373,494 PSUs that are subject to both service-based and performance-based vesting condition related to certain financial performance targets. During the fiscal year ended March 31, 2024, the performance targets for 65,544 PSUs were met and will vest on August 15, 2024. As of March 31, 2024, the unamortized stock-based compensation expense related to unvested PSUs was $2.3 million. The amount to be recognized will be based on the extent the performance metrics are achieved.

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,
	2024		2023		2022
Cost of revenue	$	9,479	$	9,634	$	4,979
Research and development	11,978		12,583		7,065
Sales and marketing	16,857		16,939		8,108
General and administrative	9,116		8,678		11,290
Restructuring	3,646		—		—
Total stock-based compensation expense	$	51,076	$	47,834	$	31,442