Beginning in the fiscal quarter ended April 30, 2019, we implemented a new equity compensation program applicable to the vast majority of our employees but not applicable to our Chief Executive Officer (CEO). Prior to the adoption of the new equity compensation program, at the time of hire, our employees received a grant of RSUs that vested quarterly over four years and received additional equity from time to time thereafter. Under the new equity compensation program, the vast majority of our employees are granted both RSUs, which typically vest over a one-year period or less, and stock options, which typically vest over a four-year period.



	Number of shares		Weighted average exercise price		Weighted average remaining contractual term (in years)	Aggregate intrinsic value
Options outstanding at January 31, 2019	12,961,397		$	19.43	5.4	$	1,161,695,032
Options granted	1,355,345		134.98
Options exercised	(1,014,592	)	6.81
Options forfeited/cancelled	(196,824	)	53.45
Options outstanding at July 31, 2019	13,105,326		$	31.85	5.4	$	1,756,820,772
Options vested and exercisable at July 31, 2019	6,478,882		$	5.83	3.6	$	1,037,073,153
Options vested and exercisable at July 31, 2019 and expected to vest thereafter	13,105,326		$	31.85	5.4	$	1,756,820,772

During the three and six months ended July 31, 2019, we granted 40,970 and 1,355,345 stock options, respectively, under the 2013 Equity Incentive Plan (2013 EIP). The options granted during the six months ended July 31, 2019 reflects grants predominantly made in connection with our annual performance review cycle. The weighted average grant-date fair value of options granted was $66.63 and $58.55 for the three and six months ended July 31, 2019, respectively.

As of July 31, 2019, there was $152.4 million in unrecognized compensation cost related to unvested stock options granted under the 2007 Stock Plan, 2012 Equity Incentive Plan and 2013 EIP. This cost is expected to be recognized over a weighted average period of 3.8 years.

The total intrinsic value of options exercised was approximately $75.0 million and $135.8 million for the three and six months ended July 31, 2019, respectively.



	Unreleased restricted stock units		Weighted average grant date fair value
Balance at January 31, 2019	2,359,132		$	54.73
RSUs granted	226,058		135.39
RSUs vested	(644,003	)	50.78
RSUs forfeited/cancelled	(129,887	)	58.32
Balance at July 31, 2019	1,811,300		$	65.94

During the three months ended July 31, 2019, we granted 32,285 RSUs under the 2013 EIP with a weighted-average grant date fair value of $160.14. During the six months ended July 31, 2019, we granted 226,058 RSUs under the 2013 EIP with a weighted-average grant date fair value of $135.39.

As of July 31, 2019, there was a total of $108.9 million in unrecognized compensation cost related to unvested RSUs. This cost is expected to be recognized over a weighted-average period of approximately 1.9 years. The total intrinsic value of RSUs vested was $50.3 million and $88.0 million for the three and six months ended July 31, 2019, respectively.

Compensation expense related to share-based transactions, including equity awards to employees and non-employee directors, is measured and recognized in the condensed consolidated financial statements based on fair value. The grant date fair value of each option award is estimated on the grant date using the Monte Carlo simulation or Black-Scholes option-pricing model. The stock-based compensation expense is recognized using a straight-line basis over the requisite service periods of the awards, which is generally four to nine years. For RSUs, the grant date fair value is based on the closing price of our common stock on the grant date.

Our option-pricing model requires the input of subjective assumptions, including the fair value of the underlying common stock, the expected term of the option, the expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock. The assumptions used in our option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

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



	Three months ended July 31,		Six months ended July 31,
	2019	2018	2019	2018
Volatility	41%	—%	41%	41%
Expected term (in years)	6.25	—	5.75 - 6.35	6.35
Risk-free interest rate	1.81% - 2.23%	—%	1.81% - 2.52%	2.73%
Dividend yield	—%	—%	—%	—%

During the fiscal year ended January 31, 2018, we granted 2,838,635 stock options to our CEO. The stock option award is made up of five separate tranches. The first tranche vests over time, while the remaining four tranches vest based on certain stock price targets (market conditions). The grant date fair values of each tranche were calculated using a Monte Carlo simulation model. We have based our expected term on the historical stock activity behavior of our CEO. The following table provides the assumptions used in the Monte Carlo simulation for each tranche granted:

For the periods presented, we capitalized an immaterial amount of stock-based compensation as part of our internal-use software capitalization.