Stock-Based Compensation

6 Months Ended

Apr. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The compensation cost recognized in the condensed consolidated statements of income for our stock compensation arrangements was as follows:

	Three Months Ended   April 30,				Six Months Ended   April 30,
	2023		2022		2023		2022
	(in thousands)
Cost of products	$	16,895	$	13,078	$	32,924	$	24,285
Cost of maintenance and service	7,531		5,893		14,686		10,476
Research and development expense	75,355		58,109		144,586		107,649
Sales and marketing expense	26,937		19,291		51,844		37,092
General and administrative expense	16,540		13,690		33,445		26,330
Stock-based compensation expense before taxes	143,258		110,061		277,485		205,832
Income tax benefit	(23,193)		(17,852)		(44,925)		(33,386)
Stock-based compensation expense after taxes	$	120,065	$	92,209	$	232,560	$	172,446

During the three and six months ended April 30, 2023, we recognized stock-based compensation expense relating to restricted stock units (RSUs), granted to senior executives with certain market, performance and service conditions (market-based RSUs). The grant date fair value of the market-based RSUs and the assumptions used in the Monte Carlo simulation model to determine the grant date fair value during the periods were as follows:

	Three Months Ended   April 30,						Six Months Ended   April 30,
	2023			2022			2023	2022
Expected life (in years)	2.70 years			1.69 years			0.90 years - 2.70 years	1.69 years
Risk-free interest rate	4.36		%	1.33		%	4.36% - 4.63%	1.33		%
Volatility	35.84		%	33.01		%	35.84% - 42.86%	33.01		%
Grant date fair value	$	357.29		$	280.82		$357.29 - $408.55	$	280.82

As of April 30, 2023, we had $1.2 billion of total unrecognized stock-based compensation expense relating to options, RSUs and restricted stock awards, which is expected to be recognized over a weighted-average period of 2.5 years. As of April 30, 2023, we had $66.5 million of unrecognized stock-based compensation expense relating to our Employee Stock Purchase Plan, which is expected to be recognized over a period of approximately 2.0 years.

The intrinsic values of equity awards exercised during the periods were as follows:

	Three Months Ended   April 30,				Six Months Ended   April 30,
	2023		2022		2023		2022
	(in thousands)
Intrinsic value of awards exercised	$	63,447	$	46,464	$	118,223	$	159,389