Note 8.

Stockholders’ Equity

Common Stock

As of October 31, 2014, we had 58,475,649 shares of Class A common stock and 71,933,469 shares of Class B common stock outstanding, of which 559,437 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 October 31, 2014 and January 31, 2014, there were unvested shares in the amount of 559,437 and 1,824,457, respectively, which were subject to repurchase at an aggregate price of approximately $0.1 million and $0.5 million, respectively.

Stock Option Activity

A summary of stock option activity for the nine months ended October 31, 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		526,667			26.64
Options exercised		(3,832,160	)		1.13			$	88,592,429
Options forfeited/cancelled		(1,140,985	)		4.63
Options outstanding at October 31, 2014		20,977,959		$	4.12		8.0	$	539,507,766
Options vested and exercisable at October 31, 2014		3,649,536		$	2.16		6.8	$	100,957,561
Options vested and exercisable at October 31, 2014 and expected to vest thereafter		19,694,277		$	4.09		8.0	$	507,063,583

The weighted average grant-date fair value of options granted during the three and nine months ended October 31, 2014 was $14.19 and $13.85, respectively, per share. The weighted average grant-date fair value of options granted during the three and nine months ended October 31, 2013 was $6.98 and $2.72, respectively, per share.

As of October 31, 2014, there was $37.3 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 4.6 years.

As of October 31, 2014, we had authorized and unissued shares of common stock sufficient to satisfy exercises of stock options.

Our closing stock price as reported on the New York Stock Exchange as of October 31, 2014 was $29.78. The total intrinsic value of options exercised was approximately $26.1 million and $88.6 million for the three and nine months ended October 31, 2014.

Restricted Stock Units

A summary of restricted stock unit (RSU) activity for the nine months ended October 31, 2014 is as follows:

				Weighted
	Unreleased			average
	Restricted			grant date
	Stock Units			fair value
Balance at January 31, 2014		156,050		$	36.52
RSUs granted		719,835			25.16
RSUs vested		(62,021	)		30.04
RSUs forfeited/cancelled		(38,882	)		31.52
Balance at October 31, 2014		774,982		$	26.74

During the three and nine months ended October 31, 2014, we issued RSUs under the 2013 EIP with a weighted-average grant date fair value of $26.21 and $25.16.

As of October 31, 2014, there was a total of $19.7 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 3.6 years. We did not grant RSUs during the three and nine months ended October 31, 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 October 31,			Nine Months Ended October 31,
	2014		2013	2014	2013
Volatility		49%	48% – 49%	48% – 50%	42% – 50%
Expected life (in years)	6.00		6.32 – 6.53	6.00 – 6.32	6.32 – 8.23
Risk-free interest rate	1.90%		1.73% – 2.09%	1.85% – 1.94%	1.03% – 2.09%
Dividend yield	—%		—%	—%	—%

Employee Stock Purchase Plan

The initial offering period for our Employee Stock Purchase Plan (ESPP) commenced on the date of our initial public offering and ended on June 15, 2014. During our initial ESPP offering period 350,059 shares of Class A Common Stock were purchased. We do not currently offer employees the ability to participate in our ESPP.

During active offering periods, our 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.

The following table presents the weighted-average assumptions used to calculate our stock-based compensation for the stock purchases under the ESPP:

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 and nine months ended October 31, 2014 and 2013 were immaterial.