
	Three Months Ended October 31,				Nine Months Ended October 31,
	2022		2021		2022		2021
	(in thousands)
Cost of revenue	$	1,145	$	885	$	3,271	$	3,073
Research and development	10,200		5,840		27,598		20,198
Sales and marketing	4,962		2,251		12,793		7,018
General and administrative	9,391		7,046		23,982		21,604
Total stock-based compensation expense	$	25,698	$	16,022	$	67,644	$	51,893


	Three Months Ended October 31,				Nine Months Ended October 31,
	2022		2021		2022		2021
	(in thousands)
Stock Options	$	4,145	$	4,411	$	12,491	$	16,429
RSUs	17,074		11,290		45,287		35,143
PRSUs	2,696		—		4,649		—
ESPP	1,783		321		5,217		321
Total stock-based compensation expense	$	25,698	$	16,022	$	67,644	$	51,893


	October 31, 2022
	Unrecognized Stock-Based Compensation Expense		Weighted-Average Period
	(in thousands, except period in years)
Stock Options	$	19,882	1.13
RSUs	158,662		3.32
PRSUs	19,498		2.67
ESPP	8,896		1.86
Total unrecognized stock-based compensation expense	$	206,938

On February 25, 2021, the stockholders of the Company approved the 2021 Employee Stock Purchase Plan (“2021 ESPP”). The 2021 ESPP permits participants to purchase shares of the Company’s Common Stock, up to the IRS allowable limit, through contributions (in the form of payroll deductions or otherwise to the extent permitted by the administrator) of up to 15% of their eligible compensation. The 2021 ESPP provides for consecutive, overlapping 24-month offering periods, subject to certain rollover and reset mechanisms as defined in the ESPP. Participants are permitted to purchase shares of the Company’s Common Stock at the end of each 6-month purchase period at 85% of the lower of the fair market value of the Company’s Common Stock on the first trading day of an offering period or on the last trading date in each purchase period. A participant may purchase a maximum of 10,000 shares of the Company’s Common Stock during a purchase period. Participants may end

their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with the Company. The initial offering period is from October 1, 2021 through September 9, 2023. The 2021 ESPP allows for up to one increase in contribution during each purchase period. The pre- and post-modification fair values are calculated on the date of the modification. The 2021 ESPP offers a rollover feature that provides for an offering period to be rolled over to a new lower-priced offering if the offering price of the new offering period is less than that of the current offering period. The 2021 ESPP rollover occurred when the Company’s closing stock price on March 10, 2022 was below the closing stock price on October 1, 2021, which triggered a new 24-month offering period through March 9, 2024. If an employee elects to increase his or her contribution, or the offering price resets an accounting modification occurs. The incremental expense as a result of such modifications was immaterial for the each of the three and nine months ended October 31, 2022.

Further, on the first day of each March during the term of the 2021 ESPP, commencing on March 1, 2021 and ending on (and including) March 1, 2040, the aggregate number of shares of Common Stock that may be issued under the 2021 ESPP shall automatically increase by a number equal to the lesser of (i) one percent (1%) of the total number of shares of Common Stock issued and outstanding on the last day of the preceding month, (ii) 5,400,000 shares of Common Stock (subject to standard anti-dilution adjustments), or (iii) a number of shares of Common Stock determined by the Company’s Board of Directors. As of October 31, 2022, 10,919,906 shares of Common Stock were available under the 2021 ESPP.

On February 25, 2021, the stockholders of the Company approved the 2021 Equity Incentive Plan (“2021 EIP”). Under the 2021 EIP, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”), and certain other awards which are settled in the form of shares of Common Stock issued under this 2021 EIP. On the first day of each March, beginning on March 1, 2021 and continuing through March 1, 2030, the 2021 EIP reserve will automatically increase by a number equal to the lesser of (a) 5% of the total number of shares of Common Stock actually issued and outstanding on the last day of the preceding month and (b) a number of shares of Common Stock determined by the Company’s Board of Directors. As of October 31, 2022, 40,060,867 shares of Common Stock were available under the 2021 EIP.

In fiscal year 2022, the Company terminated its 2017 Stock Option Plan (the “2017 Plan”) and 2007 Stock Option Plan (the “2007 Plan”). As of October 31, 2022, 16,564,913 shares and 2,220,803 shares of Common Stock remained reserved for outstanding awards issued under the 2017 Plan and 2007 Plan, respectively. Stock-based awards forfeited, cancelled or repurchased from the above plans generally are returned to the pool of shares of Common Stock available for issuance under the 2021 EIP.


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Outstanding as of January 31, 2022	4,033,418	$	26.27
RSU granted	11,860,870	$	12.82
RSU vested	(2,152,624)	$	19.80
RSU forfeited	(711,405)	$	18.02
Outstanding as of October 31, 2022	13,030,259	$	15.55

On June 1, 2022, pursuant to the 2021 EIP, the Company granted PRSUs to certain officers including the Company’s Chief Executive Officer. Subsequently, on September 1, 2022, the Company granted additional PRSUs to one of its newly hired officers. Vesting of the PRSUs is dependent upon the satisfaction of both market- and service-based conditions. The market-based condition is achieved if the closing price of the Company’s Common Stock is greater than or equal to the applicable stock price appreciation target for at least 20 consecutive trading days at any time during the period beginning the date of the grant and ending on the expiration date. There are three stock appreciation targets applicable to each PRSU award, the achievement of which will cause the market-based condition to be satisfied with respect to the following percentage of each award (each of which is called a tranche): $17 per share/25% of the total PRSUs, $22 per share/35% of the total PRSUs and $30 per share/40% of the total PRSUs.

For officers other than the Company’s Chief Executive Officer, the service-based conditions applicable to 1/20th of the PRSUs subject to each tranche will be satisfied if such officer remains in continuous service from the date of the grant until each PRSU vesting date occurring after June 20, 2022 or, if later, until the first PRSU vesting date after the applicable stock price appreciation target is achieved. The PRSUs vesting dates are each March 20th, June 20th, September 20th, and December 20th. For the Company’s Chief Executive Officer, the service-based conditions applicable to 1/12th of the PRSUs subject to each tranche will be satisfied if he remains in continuous service from the date of the grant until each PRSU vesting date occurring after June 20, 2024 or, if later, until the first PRSU vesting date after the applicable stock price appreciation target is achieved.

The Company records stock-based compensation based on the fair value of the PRSUs on grant date using the Monte-Carlo valuation. The weighted-average assumptions in the Monte-Carlo valuation used to determine the fair value of the PRSUs granted were as follows:

Risk-free interest rate: the risk-free interest rate is based on the U.S. Treasury Constant Maturities yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the options.

Expected term: the expected term input for the award with a market condition is based upon the derived service period (“DSP”). The DSP represents the duration of the median of the distribution of stock-price paths on which the market condition is satisfied.


	Number of Stock Option Awards	Weighted Average Exercise Price		Weighted Average Remaining Contractual term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 31, 2022	22,200,869	$	0.68	6.6	$	292,362
Options exercised	(3,061,363)	$	0.59
Options cancelled	(353,790)	$	0.76

Outstanding as of October 31, 2022	18,785,716	$	0.69	6.0	$	249,585
Options vested and expected to vest as of October 31, 2022	18,743,799	$	0.69	6.0	$	249,031
Exercisable as of October 31, 2022	14,877,966	$	0.68	5.7	$	197,925

The options outstanding as of October 31, 2022, include the June 2020 grant of a stock option under the 2017 Plan to the Company’s Chief Executive Officer to purchase a total of 1.5 million shares of Common Stock (“CEO Award”) originally subject to both service and performance-based vesting conditions. No stock-based compensation expense had been recorded prior to the Merger,as the CEO Award was improbable of vesting before and after two modifications in each of September 2020 and December 2020, because the performance-based vesting condition was contingent upon the closing of the Merger. Accordingly, the Company commenced recognition of stock-based compensation expense for the CEO Award following the Merger in February 2021 when the only remaining vesting condition applicable to the CEO Award was service-based. As of October 31, 2022, the total unrecognized compensation expense related to the unvested portion of the CEO Award was $17.6 million, which is expected to be recognized over a period of 1.25 years.