Stock Based Compensation

9 Months Ended

Apr. 30, 2022

Share-based Payment Arrangement [Abstract]

2011 Equity Incentive Plan

In 2011, we adopted the 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan provided for the grant of stock-based awards to employees, directors, and nonemployees under terms and provisions established by the Board of Directors.

The 2011 Plan allowed for the grant of incentive stock options or nonqualified stock options as well as restricted stock units, restricted stock, and stock appreciation rights. Only incentive and nonqualified stock options were granted under the 2011 Plan. Employee stock option awards generally vest 25% on the first anniversary of the grant date with the remaining shares subject to the option vesting ratably over the next three years subject to the employee’s continued service with the Company. Options generally expire after 10 years. Effective upon our initial public offering in 2017, the 2011 Plan was replaced by the 2017 Incentive Plan.

2017 Incentive Plan

In November 2017, our Board of Directors and stockholders adopted our 2017 Incentive Plan (the “2017 Plan”). The remaining shares available for issuance under our 2011 Plan became reserved for issuance under the 2017 Plan. Our 2017 Plan provides for the grant of Class A incentive stock options to employees, including employees of our subsidiaries, and for the grant of nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards (“RSU”), performance stock awards, performance cash awards, and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our subsidiaries. Employee stock option awards generally vest 25% on the first anniversary of the grant date with the remaining shares subject to the option vesting ratably over the next three years subject to the employee’s continued service with the Company. Options generally expire after 10 years. RSU awards made to employees generally vest ratably on a quarterly basis subject to the employee’s continued service with the Company. The number of shares authorized for issuance under the 2017 Plan was 32,793,232 shares of Class A common stock as of April 30, 2022.

2019 Inducement Plan

In October 2019, our Board of Directors adopted our 2019 Inducement Plan (the “2019 Plan”). Our 2019 Plan provides for the grant of Class A nonqualified stock options and RSU awards to individuals who satisfy the standards for inducement grants under the relevant Nasdaq Stock Market rules. On April 7, 2022, the Board of Directors approved a 6,000,000 increase in the number of shares authorized for issuance under the 2019 Plan. The number of shares authorized for issuance under the 2019 Plan was 10,750,000 shares of Class A common stock as of April 30, 2022.

Stock option activity under the 2011 Plan, 2017 Plan, and 2019 Plan is as follows:


	Options Outstanding
	Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (in thousands)
Balance – July 31, 2021	3,650,482	$	25.47	7.40	$	106,490

Granted	1,201,877	14.54
Exercised	(171,996)	8.95
Cancelled	(279,869)	32.62
Balance – April 30, 2022	4,400,494	$	22.67	7.52	$	1,501

The aggregate intrinsic value is the difference between the current fair value of the underlying common stock and the exercise price for in-the-money stock options.

The following table summarizes the RSU award activity under the 2017 Plan and 2019 Plan:


	Unvested RSUs
	Class A Common Stock	Weighted- Average Grant Date Fair Value
Unvested at July 31, 2021	10,264,925	$	31.35
Granted	13,186,611	16.34
Vested	(2,344,882)	27.57
Forfeited	(4,227,978)	29.03
Unvested at April 30, 2022	16,878,676	$	20.73

Stock-Based Compensation Expense

Stock-based compensation expense for employees was $31.6 million and $96.3 million for the three and nine months ended April 30, 2022 and $28.8 million and $73.5 million for the three and nine months ended May 1, 2021. Stock-based compensation expense is included in selling, general, and administrative expenses in our condensed consolidated statements of operations and comprehensive income.

As of April 30, 2022, the total unrecognized compensation expense related to unvested options and RSUs, net of estimated forfeitures, was $332.3 million, which we expect to recognize over an estimated weighted average period of 2.7 years. The weighted-average grant date fair value of options granted during the nine months ended April 30, 2022, was $7.16 per share. The weighted-average grant date fair value of options granted during the nine months ended May 1, 2021, was $27.74 per share.

We record stock-based compensation of stock options granted to employees by estimating the fair value of stock-based awards using the Black-Scholes option pricing model and amortizing the fair value of the stock-based awards granted over the applicable vesting period of the awards on a straight-line basis. The fair value of stock options granted to employees was estimated at the grant date using the Black-Scholes option-pricing model with the following assumptions:


	For the Three Months Ended				For the Nine Months Ended
	April 30, 2022		May 1, 2021		April 30, 2022		May 1, 2021
Expected term (in years)	3.1 - 3.7		5.8		3.1 - 5.5		5.3 - 6.3
Volatility	67.0%		55.5%		62.1% - 67.0%		55.5% - 55.9%
Risk free interest rate	1.4% - 1.5%		0.6%		0.8% -1.5%		0.3% - 0.6%
Dividend yield	—	%	—	%	—	%	—	%