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Stockholders' Equity (Deficit) and Employee Incentive Plans | 6 Months Ended
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Jul. 31, 2022
Equity And Compensation Related Costs Share Based Payments [Abstract] |
Stockholders' Equity (Deficit) and Employee Incentive Plans | Stockholders’ Equity (Deficit) and Employee Incentive Plans Redeemable Convertible Preferred Stock Upon the closing of the Company’s IPO, all 26,710,600 shares of redeemable convertible preferred stock were automatically converted into shares of common stock, which includes an additional 640,387 shares of redeemable convertible preferred stock. The additional shares of redeemable convertible preferred stock consisted of 162,032 shares for the Series E conversion feature and 478,355 shares for the Series G dividends. The carrying value of $259.8 million was reclassified into common stock and additional paid-in-capital. As of July 31, 2022, there were no shares of redeemable convertible preferred stock issued and outstanding. In connection with the IPO, the Company’s amended and restated certificate of incorporation became effective, which authorized the issuance of 200,000,000 shares of undesignated preferred stock with a par value of $0.00001 per share with rights and preferences, including voting rights, designated from time to time by the board of directors. Common Stock The Company’s Amended and Restated Certificate of Incorporation authorized the Company to issue 1,000,000,000 shares of common stock at a par value of $0.00001 as of July 31, 2022 and January 31, 2022. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. As of July 31, 2022 and January 31, 2022, no dividends had been declared. As of July 31, 2022, the Company has reserved common stock for future issuance as follows:
| Number of Shares
Stock options outstanding | 8,297,260 |
Restricted stock units issued and outstanding | 4,494,972 |
Remaining shares available for issuance under the 2021 Plan | 2,177,442 |
ESPP | 1,030,975 |
Common stock warrants | 105,350 |
Total | 16,105,999 |
Stock Plans The Company has three equity incentive plans: the 2008 Equity Incentive Plan (the “2008 Plan”), 2018 Equity Incentive Plan (the “2018 Plan”) and 2021 Equity Incentive Plan (the “2021 Plan”), collectively (the “Stock Plans”). In connection with the Company’s IPO in July 2021, the 2008 Plan and the 2018 Plan were terminated and replaced by the 2021 Plan and all shares that remained available for issuance under the 2018 Plan at that time were reserved for issuance under the 2021 Plan. The number of shares of common stock available for issuance under the 2021 Plan will be increased by any shares of common stock subject to awards outstanding under the 2008 Plan and the 2018 Plan that expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by the Company for payment of an exercise price or for satisfying tax withholding obligations or are forfeited to or repurchased by the Company due to failure to vest. The Company has issued stock options to employees, directors, consultants and advisors pursuant to the 2018 Plan and restricted stock units (“RSUs”) under the 2021 Plan. Equity awards permitted under the 2021 Plan may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares. Stock option grants may be either Incentive Stock Options (“ISO”) or Non-Qualified Stock Options (“NSO”). ISO may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees, consultants, and nonemployee directors. Employee stock options are granted with an exercise price no less than the fair value of the underlying common stock on the grant date. Options granted under the 2021 Plan expire ten years from the date of grant and generally vest over four years at a rate of 25% upon the first anniversary of the issuance date and 1/48 per month thereafter. As of July 31, 2022, there were 2.2 million shares available for grant under the 2021 Plan. The 2021 Plan provides that the number of shares reserved will automatically increase on the first day of each fiscal year, beginning on February 1, 2022, by an amount equal to the least of (i) 4,120,000 shares, (ii) five-percent (5%) of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the administrator of the 2021 Plan no later than the last day of the immediately preceding Fiscal Year. Employee Stock Purchase Plan In July 2021, the Company established an Employee Stock Purchase Plan (“ESPP”) in which eligible employees may contribute up to 15% of their base compensation to purchase shares of common stock at a price equal to 85% of the lower of (1) the fair market value of a share of the Company’s common stock at the beginning of the offering period and (2) the fair market value of a share of the Company’s common stock on the purchase date. A participant will be permitted to purchase a maximum of shares during each offering period and no participant may purchase more than 1,000 shares during any offering period. Except for the initial offering period, the ESPP provides for 24-month offering periods beginning March 21 and September 21 of each year, and each offering period will consist of four six-month purchase periods. The initial offering period began on July 22, 2021 and will end on September 20, 2023. The initial offering period consists of four purchase periods with the first purchase date on March 21, 2022, and the final purchase period ending on September 20, 2023. The Company recognized stock-based compensation expense related to the ESPP of $0.5 million and $1.3 million during the three and six months ended July 31, 2022, respectively. As of July 31, 2022, accrued ESPP employee payroll contributions of $1.3 million are included within accrued compensation and benefits in the consolidated balance sheet. ESPP payroll contributions used to purchase shares are reclassified to stockholders’ equity on the purchase date. As of July 31, 2022, $1.3 million of unrecognized stock-based compensation expense related to the ESPP is expected to be recognized over a weighted-average vesting period of 0.7 years. During the six months ended July 31, 2022, 237,499 shares of common stock were issued under the ESPP. Stock Options The following table summarizes stock option activity under the Stock Plans for the six months ended July 31, 2022 (aggregate intrinsic value in thousands):
| Options Outstanding |  | Weighted- Average Contractual Term |  | Aggregate Intrinsic Value
Number of Options |  | Weighted- Average Exercise Price |  |
Balances as of January 31, 2022 | 9,150,821 |  |  | $ | 9.76 |  |  | 6.53 |  | $ | 126,368 |
Options exercised | (544,257) |  |  | $ | 6.02 |  |  |  |  |
Options granted | — |  |  | $ | — |  |  |  |  |
Options cancelled | (309,304) |  |  | $ | 13.24 |  |  |  |  |
Balances as of July 31, 2022 | 8,297,260 |  |  | $ | 9.87 |  |  | 5.95 |  | $ | 57,061 |
Options vested and expected to vest as of July 31, 2022 | 8,297,260 |  |  | $ | 9.87 |  |  | 5.95 |  | $ | 57,061 |
Options vested and exercisable as of July 31, 2022 | 6,290,244 |  |  | $ | 7.84 |  |  | 5.22 |  | $ | 50,815 |
No stock options were granted during the three and six months ended July 31, 2022. Stock options granted during the three months ended July 31, 2021 had a weighted-average grant-date fair value of $11.31 per share. Stock options granted during the six months ended July 31, 2021 had a weighted-average grant-date fair value of $9.30 per share. The aggregate intrinsic value of options exercised during the three months ended July 31, 2022 and 2021 was $1.0 million and $10.6 million, respectively. The aggregate intrinsic value of options exercised during the six months ended July 31, 2022 and 2021 was $7.7 million and $14.4 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock. The Company recognized stock-based compensation expense related to stock options of $1.7 million and $3.4 million during the three and six months ended July 31, 2022, respectively. As of July 31, 2022 and January 31, 2022, there was $12.9 million and $17.7 million, respectively, of unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.1 years and 2.5 years, for each period. During the year ended January 31, 2018, in connection with services provided for recruitment, the Company granted 40,646 stock options outside of the Stock Plans to a third party. During the six months ended July 31, 2022, the recipient exercised 16,674 stock options and as of July 31, 2022, the recipient had exercised all 40,646 stock options. Service-Based RSUs During the year ended January 31, 2022, the Company began granting RSUs to its employees. RSUs granted had service-based vesting conditions. The service-based vesting condition for these awards is generally satisfied by rendering continuous service for four years, during which time the grants will vest quarterly. The following table is a summary of service-based RSU activity for the six months ended July 31, 2022:
| RSUs Outstanding
Number of RSUs |  | Weighted Average Grant Date Fair Value Per Share
Balances as of January 31, 2022 | 283,558 |  |  | $ | 43.76 |
RSUs granted | 3,451,192 |  |  | $ | 18.63 |
RSUs vested | (125,803) |  |  | $ | 19.87 |
RSUs forfeited | (271,975) |  |  | $ | 23.04 |
Balances as of July 31, 2022 | 3,336,972 |  |  | $ | 20.36 |
The aggregate fair value of the RSU awards granted was $14.6 million and $64.3 million during the three and six months ended July 31, 2022, which represents the fair value of the common stock on the date the service-based vesting awards were granted. We recognized $4.0 million and $6.4 million in stock-based compensation expense related to service vesting-based RSUs during the three and six months ended July 31, 2022. As of July 31, 2022, there was $62.9 million of unrecognized compensation expense related to service-based RSUs expected to be recognized over a weighted-average vesting period of 3.6 years. Market-Based RSUs The following table is a summary of market-based RSU activity for the six months ended July 31, 2022:
| RSUs Outstanding
Number of RSUs |  | Weighted Average Grant Date Fair Value Per Share
Balances as of January 31, 2022 | 1,214,000 |  |  | $ | 6.48 |
RSUs granted | 14,000 |  |  | $ | 5.30 |
RSUs vested | — |  |  | $ | — |
RSUs forfeited | (70,000) |  |  | $ | 6.48 |
Balances as of July 31, 2022 | 1,158,000 |  |  | $ | 6.47 |
During the year ended January 31, 2022, the Board of Directors granted 1,214,000 restricted stock unit awards with market-based vesting conditions (“market-based RSUs”) to certain executive officers and members of senior management pursuant to the 2021 Plan. The market-based RSUs are comprised of four tranches that vest depending on a consecutive 60-trading day stock price target of the Company’s common stock. The grant fair value of each tranche was calculated using a Monte Carlo simulation model with the following assumptions:
| Year ended January 31, 2022
Expected term (in years) | 5.0
Volatility | 50.0 | %
Risk-free interest rate | 1.7 | %
Dividend yield | — |
The fair value of the market-based RSUs was estimated at $7.9 million. During the quarter ended July 31, 2022, the Board of Directors granted 14,000 market-based RSUs to a member of senior management pursuant to the 2021 Plan. The market-based RSUs are comprised of four tranches that vest depending on a consecutive 60-trading day stock price target of the Company’s common stock. The grant fair value of each tranche was calculated using a Monte Carlo simulation model with the following assumptions:
| Three and Six Months Ended July 31, 2022
Expected term (in years) | 4.7
Volatility | 63.0 | %
Risk-free interest rate | 2.9 | %
Dividend yield | — |
The fair value of the market-based RSUs was estimated at $0.1 million. Stock-based compensation expense related to market-based RSUs was $0.5 million and $1.1 million during the during the three and six months ended July 31, 2022. As of July 31, 2022, there was $6.8 million of unrecognized compensation expense related to market-based RSUs expected to be recognized over an average vesting period of 3.1 years. Determination of Fair Value The Company estimates the fair value of stock options and purchase rights issued to employees under the ESPP using the Black-Scholes option-pricing model, which is dependent upon several variables, such as the fair value of the Company’s common stock, the expected option term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected option term, and expected dividend yield. Expected term—The expected term represents the weighted-average period the stock options are expected to remain outstanding and is calculated using the simplified method, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The simplified method calculates the expected term as the midpoint between the vesting date and the contractual expiration date of the option. Expected volatility—The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company does not have sufficient trading history for the Company’s common stock. Risk-free interest rate—The risk-free rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s awards. Dividend yield—The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. Fair value of underlying common stock— Prior to the Company’s IPO, the fair value was determined by the Board of Directors with input from management and contemporaneous independent third-party valuations. Subsequent to the IPO, the fair value of the Company’s common stock is based on the daily average selling price on the Nasdaq Global Select Market. The fair value of employee stock options was estimated using the following weighted-average assumptions:
| Three Months Ended July 31, |  | Six Months Ended July 31, |  |
2022 |  | 2021 |  | 2022 |  | 2021 |  |  |  |
Stock Option Plans: |  |  |  |  |  |  |  |  |  |  |
Expected term (in years) | * |  | 6.1 |  | * |  | 6.1 |  |  |  |
Expected volatility | * |  | 42.4 | % |  | * |  | 42.0 | % |  |  |  |
Risk-free interest rate | * |  | 1.0 | % |  | * |  | 1.0 | % |  |  |  |
Dividend yield | * |  | — |  |  | * |  | — |  |  |  |  |
*No stock options were granted during the three and six months ended July 31, 2022. The fair value of employee stock purchase rights for the offering period under the 2021 ESPP was determined on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
| Six Months Ended July 31, 2022
Employee Stock Purchase Plan: |
Expected term (in years) | 1.1 - 2.1
Expected volatility | 46.7% - 52.1%
Risk-free interest rate | 0.1% - 0.2%
Dividend yield | —
Stock-Based Compensation Stock-based compensation expense, net of amounts capitalized was as follows (in thousands):
| Three Months Ended July 31, |  | Six Months Ended July 31,
2022 |  | 2021 |  | 2022 |  | 2021
Cost of revenue—subscription | $ | 141 |  |  | $ | 30 |  |  | $ | 263 |  |  | $ | 57 |
Cost of revenue—services | 117 |  |  | 24 |  |  | 211 |  |  | 46 |
Research and development | 2,087 |  |  | 569 |  |  | 3,986 |  |  | 1,139 |
Sales and marketing | 2,463 |  |  | 688 |  |  | 4,450 |  |  | 1,229 |
General and administrative | 1,919 |  |  | 670 |  |  | 3,267 |  |  | 1,339 |
Total stock-based compensation expense | $ | 6,727 |  |  | $ | 1,981 |  |  | $ | 12,177 |  |  | $ | 3,810 |

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