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Stock-Based Compensation | 6 Months Ended
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Jul. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation 2008 Equity Incentive Plan The Company's 2008 Equity Incentive Plan (the "2008 Plan"), as amended on March 10, 2016, allowed for the issuance of up to 25,912,531 shares of common stock. Awards granted under the 2008 Plan may be incentive stock options ("ISOs"), nonqualified stock options ("NQSOs"), restricted stock and restricted stock units. The 2008 Plan is administered by the Company's Board of Directors, which determines the terms of the options granted, the exercise price, the number of shares subject to option and the option vesting period. No ISO or NQSO is exercisable after 10 years from the date of grant, and option awards will typically vest over a four-year period. The 2008 Plan was terminated in connection with the adoption of the Company's 2016 Equity Incentive Plan (the "2016 Plan") in December 2016, and since the 2008 Plan termination the Company has not granted and will not grant any additional awards under the 2008 Plan. However, the 2008 Plan will continue to govern the terms and conditions of the outstanding awards previously granted thereunder. 2016 Equity Incentive Plan In December 2016, the Company's Board of Directors adopted, and its stockholders approved, the 2016 Plan. The number of shares reserved for issuance under the 2016 Plan will increase on the first day of each fiscal year during the term of the 2016 Plan by the lesser of: (i) 10,000,000 shares, (ii) 4% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the Company's Board of Directors may determine. On February 1, 2022, the number of shares of common stock available for issuance under the 2016 Plan was automatically increased according to its terms by 5,246,279 shares. In addition, the shares reserved for issuance under the 2016 Plan also include shares returned to the 2008 Plan as the result of expiration or termination of options or other awards. As of July 31, 2022, the number of shares available for future award under the 2016 Plan is 4,035,756. Stock Options The following table summarizes the activity related to the Company's stock options:
| Outstanding Stock Options |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Life (in years) |  | Aggregate Intrinsic Value (in thousands)
Balance, January 31, 2022 | 6,620,701 |  |  | $ | 7.28 |  |  | 4.32 |  | $ | 11,723 |
Granted | — |  |  | $ | — |  |  |  |  |
Exercised | (197,241) |  |  | $ | 2.54 |  |  |  |  |
Forfeited or canceled | (1,676,615) |  |  | $ | 10.25 |  |  |  |  |
Balance, July 31, 2022 | 4,746,845 |  |  | $ | 6.43 |  |  | 3.60 |  | $ | 1,059 |
Vested and expected to vest | 4,746,845 |  |  | $ | 6.43 |  |  | 3.60 |  | $ | 1,059 |
Exercisable at July 31, 2022 | 4,746,845 |  |  | $ | 6.43 |  |  | 3.60 |  | $ | 1,059 |
The aggregate intrinsic value of options vested and expected to vest and exercisable is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of July 31, 2022. The fair value of the common stock is the Company’s closing stock price as reported on the New York Stock Exchange. The aggregate intrinsic value of exercised options was $0.7 million and $9.7 million for the six months ended July 31, 2022 and 2021, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date. Restricted Stock and Restricted Stock Units The following table summarizes the activity related to the Company's restricted stock and restricted stock units:
| Outstanding |  | Weighted-Average Grant Date Fair Value
Balance as of January 31, 2022 | 10,184,214 |  |  | $ | 14.38 |
Granted | 6,601,355 |  |  | $ | 6.43 |
Vested and converted to shares | (2,266,302) |  |  | $ | 14.80 |
Forfeited or canceled | (2,288,431) |  |  | $ | 13.88 |
Balance as of July 31, 2022 | 12,230,836 |  |  | $ | 9.75 |
The estimated weighted-average grant date fair value of restricted stock and restricted stock units granted was $6.43 and $13.51 per share for the six months ended July 31, 2022 and 2021, respectively. The fair value of the common stock is the Company’s closing stock price as reported on the New York Stock Exchange. Employee Stock Purchase Plan In March 2017, the Company's Board of Directors adopted, and its stockholders approved, the 2017 Employee Stock Purchase Plan ("ESPP"), which became effective on the date it was adopted. The number of shares of the Company's common stock that will be available for sale to employees under the ESPP increases annually on the first day of each fiscal year in an amount equal to the lesser of: (i) 2,500,000 shares; (ii) 1% of the outstanding shares of the Company's common stock as of the last day of the immediately preceding fiscal year; or (iii) such other amount as the administrator may determine. On February 1, 2022, the number of shares of common stock available for issuance under the ESPP was automatically increased according to its terms by 1,311,569 shares. As of July 31, 2022, a total of 4,397,670 shares of the Company's common stock are available for sale to employees under the ESPP. In connection with the offering period which ended on March 15, 2022, 457,595 shares of common stock were purchased under the ESPP at a purchase price of $5.14 per share for total proceeds of $2.4 million. A new offering period began on March 15, 2022 and will end on September 15, 2022. As of July 31, 2022, 341,970 shares are estimated to be purchased at the end of the offering period and $2.0 million has been withheld on behalf of employees for these future purchases under the ESPP and is included in accounts payable, accrued expenses and other current liabilities. The Black-Scholes option pricing model assumptions estimated at the commencement of the new offering period and used to calculate the fair value of shares to be purchased during an ESPP offering period included expected lives of 0.5 years, expected volatility of 48.87% and 59.24%, and risk-free rates of 0.86% and 0.06%, for the six months ended July 31, 2022 and 2021, respectively. The expected life assumptions were based on each offering period's respective purchase date. The Company estimated the expected volatility assumption based on the historical volatility of its stock price. The risk-free rate assumptions were based on the U.S. treasury yield curve in effect at commencement of the offering period. The dividend yield assumption was zero as the Company has not historically paid any dividends and does not expect to declare or pay any dividends in the foreseeable future. During the three and six months ended July 31, 2022, the Company recorded stock-based compensation expense associated with the ESPP of $0.3 million and $0.7 million, respectively and $0.5 million and $1.1 million for the three and six months ended July 31, 2021, respectively. As of July 31, 2022, total unrecognized compensation cost related to ESPP was $0.1 million, net of estimated forfeitures, which will be amortized over a weighted-average remaining period of 0.13 years. A new offering period commences on the first trading day on or after March 15 th and September 15 th each year, or on such other date as the administrator will determine, and will end on the first trading day, approximately six months later, on or after September 15 th and March 15 th, respectively. Participants may purchase the Company’s common stock through payroll deductions, up to a maximum of 15% of their eligible compensation. Unless changed by the administrator, the purchase price for each share of common stock purchased under the ESPP will be 85% of the lower of the fair market value per share on the first trading day of the applicable offering period or the fair market value per share on the last trading day of the applicable offering period. Performance-based Restricted Stock Units In March 2022, the Company made a grant to an executive in the form of 2,000,000 performance-based restricted stock units. This grant was outside of the Company’s 2016 Equity Incentive Plan. These performance-based restricted stock units are subject to the achievement of certain stock price targets. The Company uses a Monte Carlo simulation model to determine the fair value of this award and recognizes expense using the accelerated attribution method over the requisite service period. Stock-Based Compensation Expense Stock-based compensation represents the cost related to stock-based awards granted in lieu of monetary payment. The Company measures stock-based compensation associated with stock-based awards issued to employees at the grant date, based on the estimated fair value of the award, and recognizes expense, net of estimated forfeitures, over the vesting period of the applicable award generally using the straight-line method. The Company's stock-based compensation expense for the periods presented was as follows:
| Three months ended July 31, |  | Six months ended July 31,
(in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Cost of revenue | $ | 1,341 |  |  | $ | 2,312 |  |  | $ | 2,723 |  |  | $ | 3,757 |
Sales and marketing | 6,149 |  |  | 7,377 |  |  | 12,525 |  |  | 12,878 |
Research and development | 4,202 |  |  | 5,828 |  |  | 8,722 |  |  | 9,816 |
General and administrative | 4,390 |  |  | 4,885 |  |  | 10,198 |  |  | 8,549 |
Total stock-based compensation expense | $ | 16,082 |  |  | $ | 20,402 |  |  | $ | 34,168 |  |  | $ | 35,000 |
During the three and six months ended July 31, 2022, the Company capitalized $0.2 million and $0.3 million, respectively of stock-based compensation related to software development, and $0.3 million and $1.0 million for the three and six months ended July 31, 2021, respectively. As of July 31, 2022, there was approximately $119.0 million of total unrecognized compensation cost related to unvested stock-based awards, which are expected to be recognized over an estimated remaining weighted-average vesting period of approximately 2.74 years.

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