Note 8.

Stockholders’ Equity

Common Stock

As of April 30, 2014, we had 38,301,754 shares of Class A common stock and 89,271,904 shares of Class B common stock outstanding, of which 1,391,915 shares of Class B common stock were unvested, resulting from employees exercising stock options prior to vesting.

As of January 31, 2014, we had 15,044,750 shares of Class A common stock and 109,746,795 shares of Class B common stock outstanding, of which 1,824,457 shares of Class B common stock were unvested, resulting from employees exercising stock options prior to vesting.

Early Exercise of Employee Options

We historically have allowed for the early exercise of options granted under the 2007 Stock Plan (2007 Plan) prior to vesting. The 2007 Plan allows for such exercises by means of cash payment, surrender of already outstanding common stock, a same day broker assisted sale or through any other form or method consistent with applicable laws, regulations and rules. Historically, all exercises have been through cash payment. The unvested shares are subject to our repurchase right at the original purchase price. The proceeds initially are recorded as an accrued liability from the early exercise of stock options, and reclassified to common stock as our repurchase right lapses. At April 30, 2014 and January 31, 2014, there were unvested shares in the amount of 1,391,915 and 1,824,457, respectively, which were subject to repurchase at an aggregate price of approximately $0.4 million and $0.5 million, respectively.

Stock Option Activity

A summary of stock option activity for the three months ended April 30, 2014 is as follows:


						Weighted
				Weighted		average
				average		remaining		Aggregate
	Number			exercise		contractual		intrinsic
	of shares			price		term (in years)		value
Options outstanding at January 31, 2014		25,424,437		$	3.22		8.5	$	726,649,586
Options Granted		300,000			32.26
Options Exercised		(1,392,113	)		0.49			$	30,842,309
Options Forfeited/Cancelled		(153,950	)		5.48

Options outstanding at April 30, 2014		24,178,374		$	3.73		8.1	$	379,453,926

Options vested and exercisable at April 30, 2014		4,362,659		$	0.80		6.5	$	80,302,465
Options vested and exercisable at April 30, 2014 and expected to vest thereafter		22,566,905		$	3.67		8.1	$	355,302,503

The weighted average grant-date fair value of options granted during the three months ended April 30, 2014 and 2013 was $15.47 and $2.38, respectively, per share.

As of April 30, 2014, there was $40.0 million in unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options granted under the 2007 Plan, 2012 EIP and 2013 EIP. This cost is expected to be recognized over a weighted average period of 5.0 years.

As of April 30, 2014, we had authorized and unissued shares of common stock to satisfy exercises of stock options.

Our closing stock price as reported on the New York Stock Exchange as of April 30, 2014 was $19.21. The total intrinsic value of options exercised was approximately $30.8 million for the three months ended April 30, 2014.

Restricted Stock Units

A summary of restricted stock unit (RSU) activity for the three months ended April 30, 2014 is as follows:


				Weighted
	Unreleased			average
	Restricted			grant date
	Stock Units			fair value
Unreleased RSUs at January 31, 2014		156,050		$	36.52
RSUs Granted		183,775			27.17
RSUs Forfeited		(5,400	)		34.98

Unreleased RSUs at April 30, 2014		334,425		$	31.41

During the three months ended April 30, 2014, we issued RSUs under the 2013 EIP with a weighted-average grant date fair value of $27.17.

As of April 30, 2014, there was a total of $9.5 million in unrecognized compensation cost, net of estimated forfeitures, related to unvested RSUs. This cost is expected to be recognized over a weighted-average period of approximately 3.7 years. We did not grant RSUs for the three months ended April 30, 2013.

Stock-Based Compensation

The following table presents the weighted-average assumptions used to estimate the fair value of options granted during the periods presented:


	Three Months Ended April 30,
	2014			2013
Volatility		48	%		42	%
Expected life (in years)		6.27			6.32 – 8.23
Risk-free interest rate		1.85	%		1.03% – 1.65	%
Dividend yield		—	%		—	%

Employee Stock Purchase Plan

Our Employee Stock Purchase Plan (ESPP) permits eligible employees to acquire shares of our common stock at 85% of the lower of the fair market value of our Class A common stock on the first day of the applicable offering period or the fair market value of our Class A common stock on the purchase date. Participants may purchase shares of common stock through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. No shares were purchased under the ESPP as of April 30, 2014.

The following table presents the weighted-average assumptions used to calculate out stock-based compensation for each stock purchase under the ESPP:


	Three Months Ended
	April 30, 2014
Volatility		44	%
Expected life (in years)		0.58
Risk-free interest rate		0.10	%
Dividend yield		—	%

The amounts of stock-based compensation capitalized for internal-use software in the three months ended April 30, 2014 and 2013 were immaterial.