Cover Page
Cover Page - shares | 9 Months Ended | |
Oct. 31, 2022 | Nov. 28, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38044 | |
Entity Registrant Name | Okta, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 100 First Street, Suite 600 | |
Entity Tax Identification Number | 26-4175727 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 888 | |
Local Phone Number | 722-7871 | |
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | OKTA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001660134 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 152,756,525 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,426,641 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 249,624 | $ 260,134 |
Short-term investments | 2,223,538 | 2,241,657 |
Accounts receivable, net of allowances of $7,609 and $4,359 | 380,754 | 397,509 |
Deferred commissions | 84,454 | 74,728 |
Prepaid expenses and other current assets | 68,567 | 66,605 |
Total current assets | 3,006,937 | 3,040,633 |
Property and equipment, net | 60,884 | 65,488 |
Operating lease right-of-use assets | 125,207 | 147,940 |
Deferred commissions, noncurrent | 195,146 | 191,029 |
Intangible assets, net | 261,825 | 316,968 |
Goodwill | 5,400,275 | 5,401,343 |
Other assets | 43,462 | 42,294 |
Total assets | 9,093,736 | 9,205,695 |
Current liabilities: | ||
Accounts payable | 49,122 | 20,203 |
Accrued expenses and other current liabilities | 100,086 | 89,315 |
Accrued compensation | 110,399 | 143,805 |
Convertible senior notes, net | 5,217 | 16,194 |
Deferred revenue | 1,044,622 | 973,289 |
Total current liabilities | 1,309,446 | 1,242,806 |
Convertible senior notes, net, noncurrent | 2,191,547 | 1,815,714 |
Operating lease liabilities, noncurrent | 148,906 | 170,611 |
Deferred revenue, noncurrent | 17,833 | 22,933 |
Other liabilities, noncurrent | 18,392 | 31,775 |
Total liabilities | 3,686,124 | 3,283,839 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.0001 per share; 100,000 shares authorized; no shares issued and outstanding as of October 31, 2022 and January 31, 2022 | 0 | 0 |
Additional paid-in capital | 7,785,753 | 7,749,716 |
Accumulated other comprehensive loss | (56,064) | (12,009) |
Accumulated deficit | (2,322,093) | (1,815,867) |
Total stockholders’ equity | 5,407,612 | 5,921,856 |
Total liabilities and stockholders' equity | 9,093,736 | 9,205,695 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 15 | 15 |
Class B Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 1 | $ 1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 |
Allowance for accounts receivable | $ 7,609 | $ 4,359 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 152,744,000 | 149,624,000 |
Common stock, shares outstanding (in shares) | 152,744,000 | 149,624,000 |
Class B Common Stock | ||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 7,393,000 | 6,978,000 |
Common stock, shares outstanding (in shares) | 7,393,000 | 6,978,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Revenue: | ||||
Total revenue | $ 481,042 | $ 350,680 | $ 1,347,792 | $ 917,186 |
Cost of revenue: | ||||
Total cost of revenue | 137,653 | 109,674 | 406,512 | 276,903 |
Gross profit | 343,389 | 241,006 | 941,280 | 640,283 |
Operating expenses: | ||||
Research and development | 148,484 | 130,535 | 465,971 | 321,805 |
Sales and marketing | 289,984 | 203,878 | 807,110 | 548,749 |
General and administrative | 111,520 | 105,149 | 322,549 | 322,406 |
Total operating expenses | 549,988 | 439,562 | 1,595,630 | 1,192,960 |
Operating loss | (206,599) | (198,556) | (654,350) | (552,677) |
Interest expense | (2,805) | (23,144) | (8,588) | (68,776) |
Interest income and other, net | 4,235 | 1,056 | 10,660 | 7,622 |
Loss on conversion of debt | 0 | 0 | 0 | (179) |
Interest and other, net | 1,430 | (22,088) | 2,072 | (61,333) |
Loss before provision for (benefit from) income taxes | (205,169) | (220,644) | (652,278) | (614,010) |
Provision for (benefit from) income taxes | 3,728 | 667 | 9,804 | (6,785) |
Net loss | $ (208,897) | $ (221,311) | $ (662,082) | $ (607,225) |
Net loss per share, basic (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Net loss per share, diluted (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Weighted-average shares outstanding, basic (in shares) | 158,708 | 153,756 | 157,344 | 145,782 |
Weighted-average shares outstanding, diluted (in shares) | 158,708 | 153,756 | 157,344 | 145,782 |
Subscription | ||||
Revenue: | ||||
Total revenue | $ 465,856 | $ 336,702 | $ 1,299,181 | $ 879,881 |
Cost of revenue: | ||||
Total cost of revenue | 117,306 | 91,048 | 344,524 | 227,903 |
Professional services and other | ||||
Revenue: | ||||
Total revenue | 15,186 | 13,978 | 48,611 | 37,305 |
Cost of revenue: | ||||
Total cost of revenue | $ 20,347 | $ 18,626 | $ 61,988 | $ 49,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (208,897) | $ (221,311) | $ (662,082) | $ (607,225) |
Other comprehensive loss: | ||||
Net change in unrealized gains or losses on available-for-sale securities | (7,896) | (2,998) | (26,595) | (4,164) |
Foreign currency translation adjustments | (6,982) | (973) | (17,460) | (822) |
Other comprehensive loss | (14,878) | (3,971) | (44,055) | (4,986) |
Comprehensive loss | $ (223,775) | $ (225,282) | $ (706,137) | $ (612,211) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common stock and additional paid-in capital | Common stock and additional paid-in capital Adjustment | Accumulated deficit | Accumulated deficit Adjustment | Accumulated other comprehensive income |
Beginning balance at Jan. 31, 2021 | $ 1,656,109 | $ (967,456) | $ 5,390 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock and value of equity awards assumed in connection with business combination | 5,409,344 | |||||
Issuance of common stock upon exercise of stock options and other activity, net | 64,119 | |||||
Stock-based compensation | 408,482 | |||||
Settlement of convertible senior notes | 20,776 | |||||
Proceeds from hedges related to convertible senior notes | 2 | |||||
Net loss | $ (607,225) | (607,225) | ||||
Other comprehensive loss | (4,986) | |||||
Ending balance at Oct. 31, 2021 | 5,984,555 | 7,558,832 | (1,574,681) | 404 | ||
Beginning balance at Jan. 31, 2021 | 1,656,109 | (967,456) | 5,390 | |||
Ending balance at Jan. 31, 2022 | $ 5,921,856 | 7,749,732 | $ (527,444) | (1,815,867) | $ 155,856 | (12,009) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 [Member] | |||||
Beginning balance at Jul. 31, 2021 | 7,391,185 | (1,353,370) | 4,375 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options and other activity, net | 11,208 | |||||
Stock-based compensation | 156,447 | |||||
Settlement of convertible senior notes | (8) | |||||
Net loss | $ (221,311) | (221,311) | ||||
Other comprehensive loss | (3,971) | |||||
Ending balance at Oct. 31, 2021 | 5,984,555 | 7,558,832 | (1,574,681) | 404 | ||
Beginning balance at Jan. 31, 2022 | 5,921,856 | 7,749,732 | $ (527,444) | (1,815,867) | $ 155,856 | (12,009) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options and other activity, net | 36,039 | |||||
Stock-based compensation | 515,507 | |||||
Settlement of convertible senior notes | 11,934 | |||||
Proceeds from hedges related to convertible senior notes | 1 | |||||
Net loss | (662,082) | (662,082) | ||||
Other comprehensive loss | (44,055) | |||||
Ending balance at Oct. 31, 2022 | 5,407,612 | 7,785,769 | (2,322,093) | (56,064) | ||
Beginning balance at Jul. 31, 2022 | 7,607,398 | (2,113,196) | (41,186) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock upon exercise of stock options and other activity, net | 6,088 | |||||
Stock-based compensation | 172,283 | |||||
Settlement of convertible senior notes | 0 | |||||
Net loss | (208,897) | (208,897) | ||||
Other comprehensive loss | (14,878) | |||||
Ending balance at Oct. 31, 2022 | $ 5,407,612 | $ 7,785,769 | $ (2,322,093) | $ (56,064) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (662,082) | $ (607,225) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Stock-based compensation | 511,687 | 407,611 |
Depreciation, amortization and accretion | 87,999 | 76,631 |
Amortization of debt discount and issuance costs | 4,340 | 64,478 |
Amortization of deferred commissions | 60,791 | 40,041 |
Deferred income taxes | 3,383 | (13,606) |
Non-cash charitable contributions | 2,469 | 5,649 |
Lease impairment charges | 14,461 | 0 |
Loss on conversion of debt | 0 | 179 |
Net gain on strategic investments | (1,873) | (5,665) |
Other, net | 1,872 | (267) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 14,968 | (29,561) |
Deferred commissions | (82,589) | (92,183) |
Prepaid expenses and other assets | (3,989) | 5,356 |
Operating lease right-of-use assets | 20,659 | 16,564 |
Accounts payable | 29,794 | (195) |
Accrued compensation | (30,629) | 19,488 |
Accrued expenses and other liabilities | (5,950) | 22,537 |
Operating lease liabilities | (21,782) | (17,280) |
Deferred revenue | 66,233 | 198,035 |
Net cash provided by operating activities | 9,762 | 90,587 |
Cash flows from investing activities: | ||
Capitalization of internal-use software costs | (7,773) | (2,348) |
Purchases of property and equipment | (9,377) | (5,800) |
Purchases of securities available for sale and other | (872,035) | (1,333,504) |
Proceeds from maturities and redemption of securities available for sale | 848,519 | 1,118,448 |
Proceeds from sales of securities available for sale and other | 0 | 228,344 |
Purchases of intangible assets | (2,497) | (113) |
Payments for business acquisitions, net of cash acquired | (4,060) | (215,129) |
Net cash used in investing activities | (47,223) | (210,102) |
Cash flows from financing activities: | ||
Payments for conversions of convertible senior notes | (6) | (26) |
Proceeds from hedges related to convertible senior notes | 1 | 2 |
Proceeds from stock option exercises | 14,610 | 41,054 |
Proceeds from shares issued in connection with employee stock purchase plan | 18,960 | 17,417 |
Net cash provided by financing activities | 33,565 | 58,447 |
Effects of changes in foreign currency exchange rates on cash, cash equivalents and restricted cash | (9,747) | (494) |
Net decrease in cash, cash equivalents and restricted cash | (13,643) | (61,562) |
Cash, cash equivalents and restricted cash at beginning of period | 272,656 | 448,630 |
Cash, cash equivalents and restricted cash at end of period | 259,013 | 387,068 |
Cash paid during the period for: | ||
Interest | 3,509 | 3,548 |
Income taxes | 5,445 | 2,550 |
Non-cash activities: | ||
Issuance of common stock and value of equity awards assumed in connection with business combination | 0 | 5,409,344 |
Issuance of common stock for conversions of convertible senior notes | 39,564 | 126,144 |
Benefit from exercise of hedges related to convertible senior notes | 17,502 | 92,097 |
Operating lease right-of-use assets exchanged for lease liabilities | 8,442 | 21,518 |
Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above: | ||
Cash and cash equivalents | 249,624 | 372,372 |
Restricted cash, current included in prepaid expenses and other current assets | 2,204 | 5,136 |
Restricted cash, noncurrent included in other assets | 7,185 | 9,560 |
Total cash, cash equivalents and restricted cash | $ 259,013 | $ 387,068 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Oct. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Description of Business Okta, Inc. (the “Company”) is the leading independent identity provider. The Okta Workforce Identity and Customer Identity Clouds enable the Company’s customers to securely connect the right people to the right technologies and services at the right time. The Company was incorporated in January 2009 as Saasure Inc., a California corporation, and was later reincorporated in April 2010 under the name Okta, Inc. as a Delaware corporation. The Company is headquartered in San Francisco, California. Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim periods. Accordingly, they do not include all of the financial information and footnotes required by GAAP for complete financial statements. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of January 31, 2022, included herein, was derived from the audited financial statements as of that date. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair statement of the results of operations for the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year ending January 31, 2023 or any future period. The Company’s fiscal year ends on January 31. References to fiscal 2023, for example, refer to the fiscal year ending January 31, 2023. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2022. Certain reclassifications of components of prior period investing cash flows have been made in the condensed consolidated statements of cash flows to conform to the current period presentation. These reclassifications had no impact on the aggregate cash flow classifications as previously reported. Use of Estimates |
Accounting Standards and Signif
Accounting Standards and Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
Accounting Standards and Significant Accounting Policies | Accounting Standards and Significant Accounting Policies Significant Accounting Policies The Company’s significant accounting policies are discussed in “Note 2. Summary of Significant Accounting Policies” in Item 8. Financial Statements and Supplementary Data of its Form 10-K for the fiscal year ended January 31, 2022. The Company no longer considers the accounting policy for its convertible senior notes to be a significant accounting policy due to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2020-06 effective February 1, 2022, which simplified the accounting for convertible instruments. Recently Adopted Accounting Pronouncements ASU No. 2020-06 The Company adopted the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), effective February 1, 2022, using the modified retrospective method. The prior period condensed consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes from GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, no longer requires separately presenting in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature is no longer amortized into income as interest expense over the life of the instrument. Instead, the convertible debt instrument is accounted for wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, which is consistent with the Company’s accounting treatment prior to the adoption of ASU 2020-06. The Company recognized a cumulative effect of initially applying the ASU as an adjustment to the February 1, 2022 opening balance of accumulated deficit. Due to the elimination of the equity conversion component of the Company’s convertible senior notes outstanding as of February 1, 2022, additional paid-in capital was reduced. The elimination of the equity conversion component had the effect of increasing the Company’s net debt balance. The reduction of other liabilities is related to changes to the Company’s deferred tax liabilities. The adoption of ASU 2020-06 resulted in the following changes to the Company’s condensed consolidated balance sheet as of February 1, 2022: Balance at Adjustments from Adoption of ASU 2020-06 Balance at (dollars in thousands) Liabilities Convertible senior notes, net $ 16,194 $ 927 $ 17,121 Convertible senior notes, net, noncurrent 1,815,714 371,527 2,187,241 Other liabilities, noncurrent 31,775 (866) 30,909 Stockholders’ equity Additional paid-in capital 7,749,716 (527,444) 7,222,272 Accumulated deficit (1,815,867) 155,856 (1,660,011) In addition, the adoption of ASU 2020-06 resulted in a decrease in reported net interest expense of approximately $21.2 million and $63.0 million and a decrease in basic and diluted net loss per share of $0.13 and $0.40, for the three and nine months ended October 31, 2022, respectively. ASU No. 2021-08 The Company adopted the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), effective February 1, 2022, on a prospective basis. The update requires contract assets and contract liabilities acquired in a business combination be recognized and measured in accordance with ASC Topic 606, Revenue from Contracts with Customers. The adoption of ASU 2021-08 did not have a material impact on the Company’s condensed consolidated financial statements. ASU No. 2021-04 The Company adopted the FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”), effective February 1, 2022, on a prospective basis. ASU 2021-04 addresses specific guidance related to modifications or exchanges of freestanding equity-classified written call options (such as warrants) by specifying the accounting for various modification scenarios. The adoption of ASU 2021-04 did not have a material impact on the Company’s condensed consolidated financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Oct. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Acquisition of Auth0 On May 3, 2021, the Company acquired all outstanding shares of privately-held Auth0, Inc. (“Auth0”), an Identity-as-a-Service company. Total consideration transferred for Auth0 was $5,671.0 million, including approximately 19.2 million shares of common stock valued at $5,175.6 million, cash of $257.0 million, and assumed outstanding equity awards with vested fair value of $238.4 million. Cash consideration of $3.8 million and approximately 1.1 million shares valued at $294.6 million were held back as partial security for post-closing true-up adjustments as well as any indemnification claims made within one year of the acquisition date. The consideration held back was paid in full during the nine months ended October 31, 2022. The Company incurred $29.0 million of acquisition-related costs, which were recorded as general and administrative expenses in its condensed consolidated statement of operations for the nine months ended October 31, 2021. The transaction was accounted for as a business combination. The total purchase price of $5,671.0 million was allocated to the tangible and identifiable intangible assets and liabilities based on their estimated fair values. The excess of purchase consideration over the fair value of the net tangible assets and identifiable intangible assets acquired was $5,290.1 million and was recorded as goodwill. Acquisition of atSpoke On August 2, 2021, the Company acquired all issued and outstanding capital stock of privately-held Townsend Street Labs, Inc. (“atSpoke”), a modern workplace operations platform. The acquisition date cash consideration for atSpoke was approximately $79.3 million, of which $13.4 million of consideration was held back as partial security for any adjustments and indemnification obligations and will be paid within 18 months of the closing date. |
Cash Equivalents and Investment
Cash Equivalents and Investments | 9 Months Ended |
Oct. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash Equivalents and Investments | Cash Equivalents and Investments Cash Equivalents and Short-term Investments The following tables present the amortized cost, unrealized gain (loss) and estimated fair value of cash equivalents and short-term investments: As of October 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Cash equivalents: Money market funds $ 91,598 $ — $ — $ 91,598 Total cash equivalents 91,598 — — 91,598 Short-term investments: U.S. treasury securities 2,032,380 — (34,840) 1,997,540 Corporate debt securities 229,491 — (3,493) 225,998 Total short-term investments 2,261,871 — (38,333) 2,223,538 Total $ 2,353,469 $ — $ (38,333) $ 2,315,136 As of January 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Cash equivalents: Money market funds $ 152,223 $ — $ — $ 152,223 Total cash equivalents 152,223 — — 152,223 Short-term investments: U.S. treasury securities 1,922,344 10 (10,166) 1,912,188 Corporate debt securities 331,050 — (1,581) 329,469 Total short-term investments 2,253,394 10 (11,747) 2,241,657 Total $ 2,405,617 $ 10 $ (11,747) $ 2,393,880 All short-term investments were designated as available-for-sale securities as of October 31, 2022 and January 31, 2022. The following table presents the contractual maturities of the Company’s short-term investments: As of October 31, 2022 Amortized Cost Estimated Fair Value (dollars in thousands) Due within one year $ 1,925,930 $ 1,896,477 Due between one to five years 335,941 327,061 Total $ 2,261,871 $ 2,223,538 Interest receivable of $8.9 million and $6.0 million is included in Prepaid expenses and other current assets on the condensed consolidated balance sheets as of October 31, 2022 and January 31, 2022, respectively. The following table presents the fair values and unrealized losses related to the Company’s investments in available-for-sale debt securities classified by length of time that the securities have been in a continuous unrealized loss position as of October 31, 2022: Less Than 12 Months More Than 12 Months Total Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses (dollars in thousands) U.S. treasury securities $ 1,129,711 $ (19,305) $ 867,829 $ (15,535) $ 1,997,540 $ (34,840) Corporate debt securities 66,040 (1,035) 159,958 (2,458) 225,998 (3,493) Total $ 1,195,751 $ (20,340) $ 1,027,787 $ (17,993) $ 2,223,538 $ (38,333) The Company had 189 and 193 short-term investments in unrealized loss positions as of October 31, 2022 and January 31, 2022, respectively. For available-for-sale debt securities that have unrealized losses, the Company evaluates whether (i) the Company has the intention to sell any of these investments, (ii) it is not more likely than not that the Company will be required to sell any of these available-for-sale debt securities before recovery of the entire amortized cost basis and (iii) the decline in the fair value of the investment is due to credit or non-credit related factors. Based on this evaluation, the Company determined that for short-term investments, there were no material credit or non-credit related impairments as of October 31, 2022 and January 31, 2022. Strategic Investments |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company measures its financial assets at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure as follows: Level 1—Valuations based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets. Level 2—Valuations based on other inputs that are directly or indirectly observable in the marketplace. Level 3—Valuations based on unobservable inputs that are supported by little or no market activity. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present information about the Company’s financial assets that were measured at fair value on a recurring basis using the above input categories: As of October 31, 2022 Level 1 Level 2 Level 3 Total (dollars in thousands) Assets: Cash equivalents: Money market funds $ 91,598 $ — $ — $ 91,598 Total cash equivalents 91,598 — — 91,598 Short-term investments: U.S. treasury securities — 1,997,540 — 1,997,540 Corporate debt securities — 225,998 — 225,998 Total short-term investments — 2,223,538 — 2,223,538 Total cash equivalents and short-term investments $ 91,598 $ 2,223,538 $ — $ 2,315,136 As of January 31, 2022 Level 1 Level 2 Level 3 Total (dollars in thousands) Assets: Cash equivalents: Money market funds $ 152,223 $ — $ — $ 152,223 Total cash equivalents 152,223 — — 152,223 Short-term investments: U.S. treasury securities — 1,912,188 — 1,912,188 Corporate debt securities — 329,469 — 329,469 Total short-term investments — 2,241,657 — 2,241,657 Total cash equivalents and short-term investments $ 152,223 $ 2,241,657 $ — $ 2,393,880 The carrying amounts of certain financial instruments, including cash held in banks, accounts receivable and accounts payable, approximate fair value due to their short-term maturities and are excluded from the fair value tables above. Fair Value Measurements of Other Financial Instruments The following table presents the principal amounts and estimated fair values of the Company’s financial instruments that are not recorded at fair value on the condensed consolidated balance sheets: As of October 31, 2022 Principal Amount Estimated Fair Value (dollars in thousands) 2023 convertible senior notes $ 5,226 $ 6,001 2025 convertible senior notes 1,059,997 887,747 2026 convertible senior notes 1,150,000 925,635 The 2023 convertible senior notes (“2023 Notes”), the 2025 convertible senior notes (“2025 Notes”), and the 2026 convertible senior notes (“2026 Notes”, and together with the 2023 Notes and 2025 Notes, the “Notes”) are recorded at face value less unamortized debt issuance costs (See Note 9 for additional details). The estimated fair |
Deferred Commissions
Deferred Commissions | 9 Months Ended |
Oct. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Commissions | Deferred CommissionsSales commissions capitalized as contract costs totaled $32.5 million and $35.7 million in the three months ended October 31, 2022 and 2021, respectively, and $81.9 million and $90.6 million in the nine months ended October 31, 2022 and 2021, respectively. Amortization of contract costs was $21.3 million and $14.9 million for the three months ended October 31, 2022 and 2021, respectively, and $60.8 million and $40.0 million for the nine months ended October 31, 2022 and 2021, respectively. Deferred Revenue and Performance Obligations Deferred Revenue Deferred revenue, which is a contract liability, consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company’s contracts with customers and is recognized as the revenue recognition criteria are met. Subscription revenue recognized during the three months ended October 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the respective periods was $417.8 million and $299.9 million, respectively, and $858.0 million and $459.4 million in the nine months ended October 31, 2022 and 2021, respectively. Professional services and other revenue recognized during the three months ended October 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the respective periods was $5.9 million and $4.5 million, respectively, and $12.9 million and $5.9 million in the nine months ended October 31, 2022 and 2021, respectively. Transaction Price Allocated to the Remaining Performance Obligations Transaction price allocated to the remaining performance obligations (“RPO”) represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. As of October 31, 2022, total remaining non-cancelable performance obligations under the Company’s subscription contracts with customers was approximately $2,852.8 million . Of this amount, the Company expects to recognize revenue of approximately $1,579.4 million, or 55%, over the next 12 months, with the balance to be recognized as revenue thereafter. Remaining performance obligations for professional services and other contracts as of October 31, 2022 were not material. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 9 Months Ended |
Oct. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net Goodwill As of October 31, 2022 and January 31, 2022, goodwill was $5,400.3 million and $5,401.3 million, respectively. No goodwill impairments were recorded during the three and nine months ended October 31, 2022 and 2021. Intangible Assets, net Intangible assets consisted of the following: As of October 31, 2022 Gross Accumulated Amortization Net (dollars in thousands) Capitalized internal-use software costs $ 48,016 $ (28,607) $ 19,409 Purchased developed technology 219,800 (81,187) 138,613 Customer relationships 140,900 (52,798) 88,102 Trade name 21,400 (6,420) 14,980 Software licenses 1,797 (1,076) 721 $ 431,913 $ (170,088) $ 261,825 As of January 31, 2022 Gross Accumulated Amortization Net (dollars in thousands) Capitalized internal-use software costs $ 36,319 $ (24,170) $ 12,149 Purchased developed technology 219,100 (47,085) 172,015 Customer relationships 140,900 (26,399) 114,501 Trade name 21,400 (3,210) 18,190 Software licenses 116 (3) 113 $ 417,835 $ (100,867) $ 316,968 The weighted-average remaining useful lives of the Company’s acquired intangible assets are as follows: Weighted-Average Remaining Useful Life As of October 31, 2022 As of January 31, 2022 Purchased developed technology 3.3 years 4.0 years Customer relationships 3.5 years 4.0 years Trade name 3.5 years 4.3 years Amortization expense of intangible assets for the three months ended October 31, 2022 and 2021 was $23.3 million and $22.4 million, respectively, and $69.2 million and $46.6 million for the nine months ended October 31, 2022 and 2021, respectively. |
Deferred Revenue and Performanc
Deferred Revenue and Performance Obligations | 9 Months Ended |
Oct. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Performance Obligations | Deferred CommissionsSales commissions capitalized as contract costs totaled $32.5 million and $35.7 million in the three months ended October 31, 2022 and 2021, respectively, and $81.9 million and $90.6 million in the nine months ended October 31, 2022 and 2021, respectively. Amortization of contract costs was $21.3 million and $14.9 million for the three months ended October 31, 2022 and 2021, respectively, and $60.8 million and $40.0 million for the nine months ended October 31, 2022 and 2021, respectively. Deferred Revenue and Performance Obligations Deferred Revenue Deferred revenue, which is a contract liability, consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company’s contracts with customers and is recognized as the revenue recognition criteria are met. Subscription revenue recognized during the three months ended October 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the respective periods was $417.8 million and $299.9 million, respectively, and $858.0 million and $459.4 million in the nine months ended October 31, 2022 and 2021, respectively. Professional services and other revenue recognized during the three months ended October 31, 2022 and 2021 that was included in the deferred revenue balances at the beginning of the respective periods was $5.9 million and $4.5 million, respectively, and $12.9 million and $5.9 million in the nine months ended October 31, 2022 and 2021, respectively. Transaction Price Allocated to the Remaining Performance Obligations Transaction price allocated to the remaining performance obligations (“RPO”) represents all future, non-cancelable contracted revenue that has not yet been recognized, inclusive of deferred revenue that has been invoiced and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. As of October 31, 2022, total remaining non-cancelable performance obligations under the Company’s subscription contracts with customers was approximately $2,852.8 million . Of this amount, the Company expects to recognize revenue of approximately $1,579.4 million, or 55%, over the next 12 months, with the balance to be recognized as revenue thereafter. Remaining performance obligations for professional services and other contracts as of October 31, 2022 were not material. |
Convertible Senior Notes, Net
Convertible Senior Notes, Net | 9 Months Ended |
Oct. 31, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes, Net | Convertible Senior Notes, Net 2023 Convertible Senior Notes The 2023 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 0.25% per year. Interest is payable in cash semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2018. The 2023 Notes mature on February 15, 2023 unless earlier repurchased or converted. The Company may not redeem the 2023 Notes prior to maturity. There have been no changes to the terms of the 2023 Notes, Note Hedges (as defined below), or Warrants (as defined below) from those disclosed in the Company’s Form 10-K for the fiscal year ended January 31, 2022. The 2023 Notes are currently convertible at the option of the holders, in whole or in part, as of October 15, 2022 until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the conversion conditions. The 2023 Notes are classified as current liabilities on the condensed consolidated balance sheet as of October 31, 2022. As of October 31, 2022, $5.2 million of principal remained outstanding on the 2023 Notes. During the three months ended October 31, 2022, the Company did not settle any of the 2023 Notes and during the nine months ended October 31, 2022, the Company issued approximately 0.2 million shares of Class A common stock and paid an immaterial amount in cash to settle approximately $12.0 million principal amount of 2023 Notes. During the year ended January 31, 2022, the Company issued approximately 0.5 million shares of Class A common stock and paid an immaterial amount in cash to settle approximately $23.0 million principal amount of 2023 Notes. As of October 31, 2022, the effective interest rate on the 2023 Notes was 0.85%. As of October 31, 2021, prior to the adoption of ASU 2020-06, the effective interest rate on the liability component of the 2023 Notes was 5.68%. The following table sets forth total interest expense recognized related to the 2023 Notes: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Contractual interest expense $ 3 $ 9 $ 14 $ 43 Amortization of debt issuance costs 8 22 35 84 Amortization of debt discount (1) — 213 — 837 Total $ 11 $ 244 $ 49 $ 964 (1) Not applicable subsequent to adoption of ASU 2020-06. The net carrying amount of the 2023 Notes consisted of the following: As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Liability component: Principal $ 5,226 $ 17,228 Less: unamortized debt issuance costs and debt discount (1) (9) (1,034) Net carrying amount $ 5,217 $ 16,194 As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Equity component: (1) 2023 Notes $ — $ 3,993 Less: issuance costs — (116) Carrying amount of the equity component (2) $ — $ 3,877 (1) Subsequent to the adoption of ASU 2020-06 under the modified retrospective method, the equity component and debt discount are eliminated. (2) Included in the January 31, 2022 condensed consolidated balance sheet within Additional paid-in capital. Note Hedges In connection with the pricing of the 2023 Notes, the Company entered into convertible note hedges with respect to its Class A common stock (the “Note Hedges”). The Note Hedges are purchased call options that give the Company the option to purchase shares, subject to anti-dilution adjustments substantially identical to those in the 2023 Notes, of its Class A common stock for approximately $48.36 per share (subject to adjustment), corresponding to the approximate initial conversion price of the 2023 Notes, exercisable upon conversion of the 2023 Notes. The Note Hedges will expire in 2023, if not exercised earlier. The Note Hedges are separate transactions and are not part of the terms of the 2023 Notes. During the three months ended October 31, 2022, the Company did not settle any Note Hedges and during the nine months ended October 31, 2022, the Company exercised and net-share-settled Note Hedges corresponding to approximately $12.0 million principal amount of 2023 Notes and received approximately 0.1 million shares of Class A common stock and an immaterial cash payment. As of October 31, 2022, Note Hedges giving the Company the option to purchase approximately 0.1 million shares (subject to adjustment) remained outstanding. Warrants In connection with the issuance of the 2023 Notes, the Company entered into separate warrant transactions pursuant to which it sold net-share-settled (or, at the Company’s election subject to certain conditions, cash-settled) warrants (the “Warrants”) to acquire shares, subject to anti-dilution adjustments, over 80 scheduled trading days beginning in May 2023 of the Company’s Class A common stock at an initial exercise price of approximately $68.06 per share (subject to adjustment). The Warrants are separate transactions and are not part of the terms of the 2023 Notes or the Note Hedges. As of October 31, 2022, Warrants to acquire up to approximately 1.0 million shares (subject to adjustment) remained outstanding. 2025 Convertible Senior Notes The 2025 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 0.125% per year. Interest is payable in cash semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2020. The 2025 Notes mature on September 1, 2025 unless earlier redeemed, repurchased or converted. There have been no changes to the terms of the 2025 Notes or 2025 Capped Calls (as defined below) from those disclosed in the Company’s Form 10-K for the fiscal year ended January 31, 2022. As of October 31, 2022, the conditions allowing holders of the 2025 Notes to convert were not met, and as a result, the 2025 Notes were classified as noncurrent liabilities on the condensed consolidated balance sheet. As of October 31, 2022, the effective interest rate on the 2025 Notes was 0.43%. As of October 31, 2021, prior to the adoption of ASU 2020-06, the effective interest rate on the liability component of the 2025 Notes was 4.10%. The following table sets forth total interest expense recognized related to the 2025 Notes: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Contractual interest expense $ 332 $ 332 $ 994 $ 994 Amortization of debt issuance costs 809 581 2,424 1,705 Amortization of debt discount (1) — 8,878 — 26,368 Total $ 1,141 $ 9,791 $ 3,418 $ 29,067 (1) Not applicable subsequent to adoption of ASU 2020-06. The net carrying amount of the 2025 Notes consisted of the following: As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Liability component: Principal $ 1,059,997 $ 1,059,997 Less: unamortized debt issuance costs and debt discount (1) (9,239) (149,333) Net carrying amount $ 1,050,758 $ 910,664 As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Equity component: (1) 2025 Notes $ — $ 221,387 Less: issuance costs — (4,040) Carrying amount of the equity component (2) $ — $ 217,347 (1) Subsequent to the adoption of ASU 2020-06 under the modified retrospective method, the equity component and debt discount are eliminated. (2) Included in the January 31, 2022 condensed consolidated balance sheet within Additional paid-in capital. 2025 Capped Calls In connection with the pricing of the 2025 Notes, the Company entered into capped call transactions with respect to its Class A common stock (the “2025 Capped Calls”). The 2025 Capped Calls are purchased call options that give the Company the option to purchase approximately 5.6 million shares, subject to anti-dilution adjustments substantially identical to those in the 2025 Notes, of its Class A common stock for approximately $188.71 per share (subject to adjustment), corresponding to the approximate initial conversion price of the 2025 Notes, exercisable upon conversion of the 2025 Notes. The 2025 Capped Calls have initial cap prices of $255.88 per share (subject to adjustment) and will expire in 2025, if not exercised earlier. The 2025 Capped Calls are separate transactions and are not part of the terms of the 2025 Notes. 2026 Convertible Senior Notes The 2026 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 0.375% per year. Interest is payable in cash semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The 2026 Notes mature on June 15, 2026 unless earlier redeemed, repurchased or converted. There have been no changes to the terms of the 2026 Notes or 2026 Capped Calls (as defined below) from those disclosed in the Company’s Form 10-K for the fiscal year ended January 31, 2022. As of October 31, 2022, the conditions allowing holders of the 2026 Notes to convert were not met, and as a result, the 2026 Notes were classified as noncurrent liabilities on the condensed consolidated balance sheet. As of October 31, 2022, the effective interest rate on the 2026 Notes was 0.60%. As of October 31, 2021, prior to the adoption of ASU 2020-06, the effective interest rate on the liability component of the 2026 Notes was 5.75%. The following table sets forth total interest expense recognized related to the 2026 Notes: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Contractual interest expense $ 1,078 $ 1,078 $ 3,234 $ 3,234 Amortization of debt issuance costs 628 364 1,881 1,056 Amortization of debt discount (1) — 11,640 — 34,428 Total $ 1,706 $ 13,082 $ 5,115 $ 38,718 (1) Not applicable subsequent to adoption of ASU 2020-06. The net carrying amount of the 2026 Notes consisted of the following: As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Liability component: Principal $ 1,150,000 $ 1,150,000 Less: unamortized debt issuance costs and debt discount (1) (9,211) (244,950) Net carrying amount $ 1,140,789 $ 905,050 As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Equity component: (1) 2026 Notes $ — $ 310,311 Less: issuance costs — (4,090) Carrying amount of the equity component (2) $ — $ 306,221 (1) Subsequent to the adoption of ASU 2020-06 under the modified retrospective method, the equity component and debt discount are eliminated. (2) Included in the January 31, 2022 condensed consolidated balance sheet within Additional paid-in capital. 2026 Capped Calls In connection with the pricing of the 2026 Notes, the Company entered into capped call transactions with respect to its Class A common stock (the “2026 Capped Calls”). The 2026 Capped Calls are purchased call options that give the Company the option to purchase approximately 4.8 million shares, subject to anti-dilution adjustments substantially identical to those in the 2026 Notes, of its Class A common stock for approximately $238.60 per share (subject to adjustment), corresponding to the approximate initial conversion price of the 2026 Notes, exercisable upon conversion of the 2026 Notes. The 2026 Capped Calls have initial cap prices of $360.14 per share (subject to adjustment) and will expire in 2026, if not exercised earlier. The 2026 Capped Calls are separate transactions and are not part of the terms of the 2026 Notes. |
Leases
Leases | 9 Months Ended |
Oct. 31, 2022 | |
Leases [Abstract] | |
Leases | LeasesThe Company has entered into various non-cancelable office space operating leases with original lease periods expiring between 2022 and 2029. These leases do not contain material variable rent payments, residual value guarantees, financial covenants or other restrictions. Operating lease costs were as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Operating lease cost (1) $ 10,218 $ 9,677 $ 30,954 $ 28,135 (1) Amounts are presented exclusive of sublease income and include leases with an original term of 12 months or less (short-term leases), which are immaterial. The weighted-average remaining term of the Company’s operating leases was 5.3 years and 5.9 years as of October 31, 2022 and January 31, 2022, respectively, and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 5.3% and 5.5%, respectively. Maturities of the Company’s operating lease liabilities, which do not include short-term leases, are as follows: As of October 31, 2022 Fiscal Year Ending January 31: (dollars in thousands) 2023 (remaining three months) $ 11,367 2024 44,971 2025 41,540 2026 31,309 2027 30,500 Thereafter 53,608 Total lease payments 213,295 Less imputed interest (27,876) Less tenant improvement allowances not yet recognized (1,979) Total operating lease liabilities $ 183,440 Cash payments made related to operating lease liabilities were $11.3 million and $10.3 million in the three months ended October 31, 2022 and 2021, respectively, and $29.5 million and $29.4 million in the nine months ended October 31, 2022 and 2021, respectively. During the three months ended October 31, 2022, the Company announced a real estate optimization plan which provided for closing duplicative sites and decommissioning underutilized offices and floors. As a result, the Company recognized $14.2 million of non-cash lease impairment charges included in general and administrative expenses on the condensed consolidated statement of operations for the three months ended October 31, 2022. The non-cash lease impairment charges represent the amount that the carrying value of the asset groups exceeded their estimated fair values. The asset groups primarily include operating lease right-of-use assets, leasehold improvements, and related property and equipment. To estimate the fair value of the asset group, the Company utilized a discounted cash flow approach using market participant assumptions of the expected cash flows and discount rate. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Letters of Credit In conjunction with the execution of certain office space operating leases, letters of credit in the aggregate amount of $8.5 million and $8.6 million were issued and outstanding as of October 31, 2022 and January 31, 2022, respectively. No draws have been made under such letters of credit. Noncurrent restricted cash of $6.3 million and $6.4 million associated with these letters of credit is included in Other assets on the condensed consolidated balance sheets as of October 31, 2022 and January 31, 2022, respectively. Purchase Obligations Except as discussed below, there were no significant changes in future minimum purchase obligations as disclosed in the Company’s audited consolidated financial statements for the year ended January 31, 2022. Effective July 2022, the Company terminated its existing agreement and entered into a new agreement with a cloud services provider with a total obligation of $450.0 million over a four-year period. Legal Matters From time to time in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. There were no such material matters as of October 31, 2022. Warranties and Indemnification To date, the Company has not incurred significant costs and has not accrued any material liabilities in the accompanying condensed consolidated financial statements as a result of its warranty and indemnification obligations. |
Employee Incentive Plans
Employee Incentive Plans | 9 Months Ended |
Oct. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Employee Incentive Plans | Employee Incentive Plans The Company’s equity incentive plans provide for granting stock options, restricted stock units (“RSUs”), restricted stock awards to employees, consultants, officers and directors and restricted stock units with market-based vesting conditions to certain executives. In addition, the Company offers an Employee Stock Purchase Plan (“ESPP”) to eligible employees. Stock-based compensation expense was recorded in the following cost and expense categories in the Company’s condensed consolidated statements of operations: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Cost of revenue Subscription $ 17,106 $ 13,455 $ 51,509 $ 33,843 Professional services and other 3,563 3,376 11,016 8,879 Research and development 69,208 56,573 208,330 129,998 Sales and marketing 41,515 39,248 120,299 101,602 General and administrative 39,593 43,133 120,533 133,289 Total $ 170,985 $ 155,785 $ 511,687 $ 407,611 Equity Incentive Plans The Company has two equity incentive plans: the 2009 Stock Plan and the 2017 Equity Incentive Plan (“2017 Plan”). In addition, the Company assumed Auth0 equity incentive plans. All shares that remain available for future grants are under the 2017 Plan. As of October 31, 2022, options to purchase 1,841,836 shares of Class A common stock and 4,787,688 shares of Class B common stock remained outstanding. Shares of common stock reserved for future issuance are as follows: As of October 31, 2022 Stock options and unvested RSUs outstanding 15,807,738 Available for future stock option and RSU grants 26,022,656 Available for ESPP 7,053,433 48,883,827 Stock Options A summary of the Company’s stock option activity and related information is as follows: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding as of January 31, 2022 7,984,078 $ 39.59 5.2 $ 1,314,031 Granted — — Exercised (1,177,880) 12.41 Expired (24,833) 195.71 Forfeited (151,841) 62.73 Outstanding as of October 31, 2022 6,629,524 $ 43.30 4.6 $ 249,207 As of October 31, 2022 Vested and exercisable 5,855,640 $ 27.07 4.1 $ 242,916 As of October 31, 2022, there was a total of $112.5 million of unrecognized stock-based compensation expense related to options, which is being recognized over a weighted-average period of 1.9 years. Restricted Stock Units A summary of the Company’s RSU activity (inclusive of market-based RSUs) and related information is as follows: Number of Weighted- Outstanding as of January 31, 2022 6,225,747 $ 207.26 Granted 6,087,249 121.08 Vested (1,956,194) 177.54 Forfeited (1,178,588) 195.91 Outstanding as of October 31, 2022 9,178,214 $ 157.90 As of October 31, 2022, there was $1,304.0 million of unrecognized stock-based compensation expense related to unvested RSUs, which is being recognized over a weighted-average period of 3.1 years based on vesting under the award service conditions. Market-based Restricted Stock Units In March 2022, the Company granted market-based RSUs to certain members of management. The target number of market-based RSUs granted was 58,150. One-third of these market-based RSUs vest over each of a one-, two- and three-year performance period, each starting on February 1, 2022. The number of shares that can be earned ranges from 0% to 200% of the target number of shares based on the relative performance of the per share price of the Company’s common stock as compared to the Nasdaq Composite Index over the respective performance periods and subject to continuous employment through the vesting dates. The $244.73 grant date fair value per target market-based RSU was determined using a Monte Carlo simulation approach. Compensation expense for awards with market conditions is recognized over the service period using the accelerated attribution method and is not reversed if the market condition is not met. Restricted Stock Awards Issued in Connection with Business Combinations In fiscal year 2022, the Company entered into revesting agreements with the founders of the acquired businesses pursuant to which 1,269,008 restricted shares of Okta’s Class A common stock with a weighted-average fair value per share of $268.98 issued as of the respective closing dates will vest over 3 years. In connection with the business combinations, as of October 31, 2022, there was $172.4 million of unrecognized stock-based compensation expense related to unvested restricted shares, which is being recognized over a weighted-average period of 1.5 years based on vesting under the award service conditions. Employee Stock Purchase Plan The ESPP provides for 12-month offering periods beginning June 21 and December 21 of each year, and each offering period consists of up to two six-month purchase periods. The ESPP contains a reset provision under which the offering period resets if the fair market value of the Company’s common stock on the purchase date is less than the fair market value on the offering date. The Company estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Expected volatility —%- —% —% - —% 63% - 78% 47% - 48% Expected term (in years) 0 - 0 0 - 0 0.5 - 1.0 0.5 - 1.0 Risk-free interest rate —% - —% —% - —% 2.46% - 2.92% 0.06% - 0.09% Expected dividend yield — — — — During the nine months ended October 31, 2022, the Company’s employees purchased 269,814 shares of its Class A common stock under the ESPP. The shares were purchased at a weighted-average purchase price of $70.27 per share, with total proceeds of $19.0 million. As of October 31, 2022, there was $15.2 million of unrecognized stock-based compensation expense related to the ESPP that is expected to be recognized over a weighted-average vesting period of 0.6 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three and nine months ended October 31, 2022, the Company recorded a tax provision of $3.7 million and $9.8 million on pretax losses of $205.2 million and $652.3 million, respectively. The effective tax rate for the three and nine months ended October 31, 2022 was approximately (1.8)% and (1.5)%, respectively. The effective tax rate differs from the statutory rate primarily as a result of not recognizing the tax benefit for U.S. losses due to a full valuation allowance against U.S. deferred tax assets, the tax effect of foreign operations, U.S. state taxes, and stock-based compensation shortfalls in the United Kingdom. The Tax Cuts and Jobs Act enacted on December 22, 2017 amended Internal Revenue Code Section 174 to require that specific research and experimental (“R&E”) expenditures be capitalized and amortized over five years (U.S. R&E) or fifteen years (non-U.S. R&E) beginning in the Company's fiscal 2023. Although Congress has considered legislation that would defer, modify or repeal the capitalization and amortization requirement, to date the provision has not been deferred, repealed or otherwise modified. As a result, the Company may be required to utilize some of its federal and state tax attributes and there may be increases to cash taxes or tax expense. For the three and nine months ended October 31, 2021, the Company recorded a tax provision of $0.7 million and a tax benefit of $6.8 million on pretax losses of $220.6 million and $614.0 million, respectively. The effective tax rate for the three and nine months ended October 31, 2021 was approximately (0.3)% and 1.1%, respectively. The effective tax rate differs from the statutory rate primarily as a result of not recognizing deferred tax assets for U.S. losses due to a full valuation allowance against U.S. deferred tax assets, release of the valuation allowance in the United States in connection with the acquired businesses, a remeasurement of deferred tax assets in connection with a tax rate change in the United Kingdom, and excess tax benefits from stock-based compensation in the United |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Oct. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following table presents the calculation of basic and diluted net loss per share: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B (dollars in thousands, except per share data) Numerator: Net loss $ (199,456) $ (9,441) $ (211,176) $ (10,135) $ (632,425) $ (29,657) $ (576,106) $ (31,119) Denominator: Weighted-average shares outstanding, basic and diluted 151,535 7,173 146,715 7,041 150,296 7,048 138,311 7,471 Net loss per share, basic and diluted $ (1.32) $ (1.32) $ (1.44) $ (1.44) $ (4.21) $ (4.21) $ (4.17) $ (4.17) As the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that are not included in the diluted per share calculations because they would be anti-dilutive are as follows: As of October 31, 2022 2021 (in thousands) Issued and outstanding stock options 6,630 8,621 Unvested RSUs issued and outstanding 9,120 5,221 Unvested market-based RSUs issued and outstanding 116 — Unvested restricted stock awards issued and outstanding 743 1,269 Shares committed under the ESPP 597 213 Shares related to the 2023 Notes 108 356 Shares subject to warrants related to the issuance of the 2023 Notes 1,048 1,048 Shares related to the 2025 Notes 5,617 5,617 Shares related to the 2026 Notes 4,820 4,820 28,799 27,165 The Company uses the if-converted method for calculating any potential dilutive effect of the conversion options embedded in the Notes on diluted net income per share, if applicable. The conversion options of the 2023 Notes, 2025 Notes and 2026 Notes are dilutive in periods of net income on a weighted-average basis using an assumed conversion date equal to the later of the beginning of the reporting period and the date of issuance of the respective Notes. The exercise rights of the Warrants will have a dilutive impact on net income per share of common stock under the treasury-stock method when the average market price per share of the Company’s Class A common stock for a given period exceeds the conversion price of $68.06 per share. |
Accounting Standards and Sign_2
Accounting Standards and Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim periods. Accordingly, they do not include all of the financial information and footnotes required by GAAP for complete financial statements. |
Principles of Consolidation | All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of January 31, 2022, included herein, was derived from the audited financial statements as of that date. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair statement of the results of operations for the interim periods presented but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year ending January 31, 2023 or any future period. |
Fiscal Period | The Company’s fiscal year ends on January 31. References to fiscal 2023, for example, refer to the fiscal year ending January 31, 2023. |
Reclassification | Certain reclassifications of components of prior period investing cash flows have been made in the condensed consolidated statements of cash flows to conform to the current period presentation. These reclassifications had no impact on the aggregate cash flow classifications as previously reported. |
Use of Estimates | The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. Actual results could vary from those estimates. The Company’s most significant estimates include the stand-alone selling price (“SSP”) for each distinct performance obligation included in customer contracts with multiple performance obligations, the determination of the period of benefit for deferred commissions, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation of deferred income tax assets, the valuation of goodwill and acquired intangible assets and their useful lives and the valuation of certain equity awards assumed. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements ASU No. 2020-06 The Company adopted the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), effective February 1, 2022, using the modified retrospective method. The prior period condensed consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes from GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, no longer requires separately presenting in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature is no longer amortized into income as interest expense over the life of the instrument. Instead, the convertible debt instrument is accounted for wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative, or (2) a convertible debt instrument was issued at a substantial premium. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, which is consistent with the Company’s accounting treatment prior to the adoption of ASU 2020-06. The Company recognized a cumulative effect of initially applying the ASU as an adjustment to the February 1, 2022 opening balance of accumulated deficit. Due to the elimination of the equity conversion component of the Company’s convertible senior notes outstanding as of February 1, 2022, additional paid-in capital was reduced. The elimination of the equity conversion component had the effect of increasing the Company’s net debt balance. The reduction of other liabilities is related to changes to the Company’s deferred tax liabilities. ASU No. 2021-08 The Company adopted the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), effective February 1, 2022, on a prospective basis. The update requires contract assets and contract liabilities acquired in a business combination be recognized and measured in accordance with ASC Topic 606, Revenue from Contracts with Customers. The adoption of ASU 2021-08 did not have a material impact on the Company’s condensed consolidated financial statements. ASU No. 2021-04 The Company adopted the FASB issued ASU No. 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”), effective February 1, 2022, on a prospective basis. ASU 2021-04 addresses specific guidance related to modifications or exchanges of freestanding equity-classified written call options (such as warrants) by specifying the accounting for various modification scenarios. The adoption of ASU 2021-04 did not have a material impact on the Company’s condensed consolidated financial statements. |
Accounting Standards and Sign_3
Accounting Standards and Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Impact of New Accounting Pronouncements | The adoption of ASU 2020-06 resulted in the following changes to the Company’s condensed consolidated balance sheet as of February 1, 2022: Balance at Adjustments from Adoption of ASU 2020-06 Balance at (dollars in thousands) Liabilities Convertible senior notes, net $ 16,194 $ 927 $ 17,121 Convertible senior notes, net, noncurrent 1,815,714 371,527 2,187,241 Other liabilities, noncurrent 31,775 (866) 30,909 Stockholders’ equity Additional paid-in capital 7,749,716 (527,444) 7,222,272 Accumulated deficit (1,815,867) 155,856 (1,660,011) |
Cash Equivalents and Investme_2
Cash Equivalents and Investments (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Costs, Unrealized Gains and Losses and Estimated Fair Value of Cash Equivalents and Short-term Investments | The following tables present the amortized cost, unrealized gain (loss) and estimated fair value of cash equivalents and short-term investments: As of October 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Cash equivalents: Money market funds $ 91,598 $ — $ — $ 91,598 Total cash equivalents 91,598 — — 91,598 Short-term investments: U.S. treasury securities 2,032,380 — (34,840) 1,997,540 Corporate debt securities 229,491 — (3,493) 225,998 Total short-term investments 2,261,871 — (38,333) 2,223,538 Total $ 2,353,469 $ — $ (38,333) $ 2,315,136 As of January 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Cash equivalents: Money market funds $ 152,223 $ — $ — $ 152,223 Total cash equivalents 152,223 — — 152,223 Short-term investments: U.S. treasury securities 1,922,344 10 (10,166) 1,912,188 Corporate debt securities 331,050 — (1,581) 329,469 Total short-term investments 2,253,394 10 (11,747) 2,241,657 Total $ 2,405,617 $ 10 $ (11,747) $ 2,393,880 |
Schedule of Contractual Maturities of Short-term Investments | The following table presents the contractual maturities of the Company’s short-term investments: As of October 31, 2022 Amortized Cost Estimated Fair Value (dollars in thousands) Due within one year $ 1,925,930 $ 1,896,477 Due between one to five years 335,941 327,061 Total $ 2,261,871 $ 2,223,538 |
Schedule of Unrealized Loss Position and Fair Value of Debt Securities | The following table presents the fair values and unrealized losses related to the Company’s investments in available-for-sale debt securities classified by length of time that the securities have been in a continuous unrealized loss position as of October 31, 2022: Less Than 12 Months More Than 12 Months Total Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses (dollars in thousands) U.S. treasury securities $ 1,129,711 $ (19,305) $ 867,829 $ (15,535) $ 1,997,540 $ (34,840) Corporate debt securities 66,040 (1,035) 159,958 (2,458) 225,998 (3,493) Total $ 1,195,751 $ (20,340) $ 1,027,787 $ (17,993) $ 2,223,538 $ (38,333) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present information about the Company’s financial assets that were measured at fair value on a recurring basis using the above input categories: As of October 31, 2022 Level 1 Level 2 Level 3 Total (dollars in thousands) Assets: Cash equivalents: Money market funds $ 91,598 $ — $ — $ 91,598 Total cash equivalents 91,598 — — 91,598 Short-term investments: U.S. treasury securities — 1,997,540 — 1,997,540 Corporate debt securities — 225,998 — 225,998 Total short-term investments — 2,223,538 — 2,223,538 Total cash equivalents and short-term investments $ 91,598 $ 2,223,538 $ — $ 2,315,136 As of January 31, 2022 Level 1 Level 2 Level 3 Total (dollars in thousands) Assets: Cash equivalents: Money market funds $ 152,223 $ — $ — $ 152,223 Total cash equivalents 152,223 — — 152,223 Short-term investments: U.S. treasury securities — 1,912,188 — 1,912,188 Corporate debt securities — 329,469 — 329,469 Total short-term investments — 2,241,657 — 2,241,657 Total cash equivalents and short-term investments $ 152,223 $ 2,241,657 $ — $ 2,393,880 |
Schedule of Carrying Amounts and Estimated Fair Values of Convertible Note | The following table presents the principal amounts and estimated fair values of the Company’s financial instruments that are not recorded at fair value on the condensed consolidated balance sheets: As of October 31, 2022 Principal Amount Estimated Fair Value (dollars in thousands) 2023 convertible senior notes $ 5,226 $ 6,001 2025 convertible senior notes 1,059,997 887,747 2026 convertible senior notes 1,150,000 925,635 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, net | Intangible assets consisted of the following: As of October 31, 2022 Gross Accumulated Amortization Net (dollars in thousands) Capitalized internal-use software costs $ 48,016 $ (28,607) $ 19,409 Purchased developed technology 219,800 (81,187) 138,613 Customer relationships 140,900 (52,798) 88,102 Trade name 21,400 (6,420) 14,980 Software licenses 1,797 (1,076) 721 $ 431,913 $ (170,088) $ 261,825 As of January 31, 2022 Gross Accumulated Amortization Net (dollars in thousands) Capitalized internal-use software costs $ 36,319 $ (24,170) $ 12,149 Purchased developed technology 219,100 (47,085) 172,015 Customer relationships 140,900 (26,399) 114,501 Trade name 21,400 (3,210) 18,190 Software licenses 116 (3) 113 $ 417,835 $ (100,867) $ 316,968 The weighted-average remaining useful lives of the Company’s acquired intangible assets are as follows: Weighted-Average Remaining Useful Life As of October 31, 2022 As of January 31, 2022 Purchased developed technology 3.3 years 4.0 years Customer relationships 3.5 years 4.0 years Trade name 3.5 years 4.3 years |
Convertible Senior Notes, Net (
Convertible Senior Notes, Net (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Interest Expense | As of October 31, 2022, the effective interest rate on the 2023 Notes was 0.85%. As of October 31, 2021, prior to the adoption of ASU 2020-06, the effective interest rate on the liability component of the 2023 Notes was 5.68%. The following table sets forth total interest expense recognized related to the 2023 Notes: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Contractual interest expense $ 3 $ 9 $ 14 $ 43 Amortization of debt issuance costs 8 22 35 84 Amortization of debt discount (1) — 213 — 837 Total $ 11 $ 244 $ 49 $ 964 (1) Not applicable subsequent to adoption of ASU 2020-06. As of October 31, 2022, the effective interest rate on the 2025 Notes was 0.43%. As of October 31, 2021, prior to the adoption of ASU 2020-06, the effective interest rate on the liability component of the 2025 Notes was 4.10%. The following table sets forth total interest expense recognized related to the 2025 Notes: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Contractual interest expense $ 332 $ 332 $ 994 $ 994 Amortization of debt issuance costs 809 581 2,424 1,705 Amortization of debt discount (1) — 8,878 — 26,368 Total $ 1,141 $ 9,791 $ 3,418 $ 29,067 (1) Not applicable subsequent to adoption of ASU 2020-06. As of October 31, 2022, the effective interest rate on the 2026 Notes was 0.60%. As of October 31, 2021, prior to the adoption of ASU 2020-06, the effective interest rate on the liability component of the 2026 Notes was 5.75%. The following table sets forth total interest expense recognized related to the 2026 Notes: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Contractual interest expense $ 1,078 $ 1,078 $ 3,234 $ 3,234 Amortization of debt issuance costs 628 364 1,881 1,056 Amortization of debt discount (1) — 11,640 — 34,428 Total $ 1,706 $ 13,082 $ 5,115 $ 38,718 (1) Not applicable subsequent to adoption of ASU 2020-06. |
Schedule of Liability and Equity Component of Notes | The net carrying amount of the 2023 Notes consisted of the following: As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Liability component: Principal $ 5,226 $ 17,228 Less: unamortized debt issuance costs and debt discount (1) (9) (1,034) Net carrying amount $ 5,217 $ 16,194 As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Equity component: (1) 2023 Notes $ — $ 3,993 Less: issuance costs — (116) Carrying amount of the equity component (2) $ — $ 3,877 (1) Subsequent to the adoption of ASU 2020-06 under the modified retrospective method, the equity component and debt discount are eliminated. (2) Included in the January 31, 2022 condensed consolidated balance sheet within Additional paid-in capital. The net carrying amount of the 2025 Notes consisted of the following: As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Liability component: Principal $ 1,059,997 $ 1,059,997 Less: unamortized debt issuance costs and debt discount (1) (9,239) (149,333) Net carrying amount $ 1,050,758 $ 910,664 As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Equity component: (1) 2025 Notes $ — $ 221,387 Less: issuance costs — (4,040) Carrying amount of the equity component (2) $ — $ 217,347 (1) Subsequent to the adoption of ASU 2020-06 under the modified retrospective method, the equity component and debt discount are eliminated. (2) Included in the January 31, 2022 condensed consolidated balance sheet within Additional paid-in capital. The net carrying amount of the 2026 Notes consisted of the following: As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Liability component: Principal $ 1,150,000 $ 1,150,000 Less: unamortized debt issuance costs and debt discount (1) (9,211) (244,950) Net carrying amount $ 1,140,789 $ 905,050 As of October 31, 2022 As of January 31, 2022 (dollars in thousands) Equity component: (1) 2026 Notes $ — $ 310,311 Less: issuance costs — (4,090) Carrying amount of the equity component (2) $ — $ 306,221 (1) Subsequent to the adoption of ASU 2020-06 under the modified retrospective method, the equity component and debt discount are eliminated. (2) Included in the January 31, 2022 condensed consolidated balance sheet within Additional paid-in capital. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Costs | Operating lease costs were as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Operating lease cost (1) $ 10,218 $ 9,677 $ 30,954 $ 28,135 (1) Amounts are presented exclusive of sublease income and include leases with an original term of 12 months or less (short-term leases), which are immaterial. |
Schedule of Maturities of Operating Leases | Maturities of the Company’s operating lease liabilities, which do not include short-term leases, are as follows: As of October 31, 2022 Fiscal Year Ending January 31: (dollars in thousands) 2023 (remaining three months) $ 11,367 2024 44,971 2025 41,540 2026 31,309 2027 30,500 Thereafter 53,608 Total lease payments 213,295 Less imputed interest (27,876) Less tenant improvement allowances not yet recognized (1,979) Total operating lease liabilities $ 183,440 |
Employee Incentive Plans (Table
Employee Incentive Plans (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense by Statement of Operations Location | Stock-based compensation expense was recorded in the following cost and expense categories in the Company’s condensed consolidated statements of operations: Three Months Ended Nine Months Ended 2022 2021 2022 2021 (dollars in thousands) Cost of revenue Subscription $ 17,106 $ 13,455 $ 51,509 $ 33,843 Professional services and other 3,563 3,376 11,016 8,879 Research and development 69,208 56,573 208,330 129,998 Sales and marketing 41,515 39,248 120,299 101,602 General and administrative 39,593 43,133 120,533 133,289 Total $ 170,985 $ 155,785 $ 511,687 $ 407,611 |
Schedule of Shares of Common Stock Reserved for Future Issuance | Shares of common stock reserved for future issuance are as follows: As of October 31, 2022 Stock options and unvested RSUs outstanding 15,807,738 Available for future stock option and RSU grants 26,022,656 Available for ESPP 7,053,433 48,883,827 |
Schedule of Stock Option Activity | A summary of the Company’s stock option activity and related information is as follows: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding as of January 31, 2022 7,984,078 $ 39.59 5.2 $ 1,314,031 Granted — — Exercised (1,177,880) 12.41 Expired (24,833) 195.71 Forfeited (151,841) 62.73 Outstanding as of October 31, 2022 6,629,524 $ 43.30 4.6 $ 249,207 As of October 31, 2022 Vested and exercisable 5,855,640 $ 27.07 4.1 $ 242,916 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the Company’s RSU activity (inclusive of market-based RSUs) and related information is as follows: Number of Weighted- Outstanding as of January 31, 2022 6,225,747 $ 207.26 Granted 6,087,249 121.08 Vested (1,956,194) 177.54 Forfeited (1,178,588) 195.91 Outstanding as of October 31, 2022 9,178,214 $ 157.90 |
Schedule of ESPP Black-Scholes Option Pricing Model Estimated Fair Value Assumptions | The Company estimated the fair value of ESPP purchase rights using a Black-Scholes option pricing model with the following assumptions: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Expected volatility —%- —% —% - —% 63% - 78% 47% - 48% Expected term (in years) 0 - 0 0 - 0 0.5 - 1.0 0.5 - 1.0 Risk-free interest rate —% - —% —% - —% 2.46% - 2.92% 0.06% - 0.09% Expected dividend yield — — — — |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Oct. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Class A Class B Class A Class B Class A Class B Class A Class B (dollars in thousands, except per share data) Numerator: Net loss $ (199,456) $ (9,441) $ (211,176) $ (10,135) $ (632,425) $ (29,657) $ (576,106) $ (31,119) Denominator: Weighted-average shares outstanding, basic and diluted 151,535 7,173 146,715 7,041 150,296 7,048 138,311 7,471 Net loss per share, basic and diluted $ (1.32) $ (1.32) $ (1.44) $ (1.44) $ (4.21) $ (4.21) $ (4.17) $ (4.17) |
Schedule of Potentially Dilutive Securities Excluded from Diluted Per Share Calculation | Potentially dilutive securities that are not included in the diluted per share calculations because they would be anti-dilutive are as follows: As of October 31, 2022 2021 (in thousands) Issued and outstanding stock options 6,630 8,621 Unvested RSUs issued and outstanding 9,120 5,221 Unvested market-based RSUs issued and outstanding 116 — Unvested restricted stock awards issued and outstanding 743 1,269 Shares committed under the ESPP 597 213 Shares related to the 2023 Notes 108 356 Shares subject to warrants related to the issuance of the 2023 Notes 1,048 1,048 Shares related to the 2025 Notes 5,617 5,617 Shares related to the 2026 Notes 4,820 4,820 28,799 27,165 |
Accounting Standards and Sign_4
Accounting Standards and Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Liabilities | |||||
Convertible senior notes, net | $ 5,217 | $ 5,217 | $ 16,194 | ||
Convertible senior notes, net, noncurrent | 2,191,547 | 2,191,547 | 1,815,714 | ||
Other liabilities, noncurrent | 18,392 | 18,392 | 31,775 | ||
Stockholders’ equity: | |||||
Additional paid-in capital | 7,785,753 | 7,785,753 | 7,749,716 | ||
Accumulated deficit | (2,322,093) | (2,322,093) | (1,815,867) | ||
Interest expense decrease | $ (2,805) | $ (23,144) | $ (8,588) | $ (68,776) | |
Net loss per share, basic, decrease (in dollars per share) | $ 1.32 | $ 1.44 | $ 4.21 | $ 4.17 | |
Net loss per share, diluted, decrease (in dollars per share) | $ 1.32 | $ 1.44 | $ 4.21 | $ 4.17 | |
Adjustment | |||||
Liabilities | |||||
Convertible senior notes, net | 927 | ||||
Convertible senior notes, net, noncurrent | 371,527 | ||||
Other liabilities, noncurrent | (866) | ||||
Stockholders’ equity: | |||||
Additional paid-in capital | (527,444) | ||||
Accumulated deficit | 155,856 | ||||
Interest expense decrease | $ 21,200 | $ 63,000 | |||
Net loss per share, basic, decrease (in dollars per share) | $ 0.13 | $ 0.40 | |||
Net loss per share, diluted, decrease (in dollars per share) | $ 0.13 | $ 0.40 | |||
Cumulative Effect, Period of Adoption, Adjusted Balance | |||||
Liabilities | |||||
Convertible senior notes, net | 17,121 | ||||
Convertible senior notes, net, noncurrent | 2,187,241 | ||||
Other liabilities, noncurrent | 30,909 | ||||
Stockholders’ equity: | |||||
Additional paid-in capital | 7,222,272 | ||||
Accumulated deficit | $ (1,660,011) |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands, shares in Millions | 9 Months Ended | ||||
Aug. 02, 2021 | May 03, 2021 | Oct. 31, 2021 | Oct. 31, 2022 | Jan. 31, 2022 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 5,400,275 | $ 5,401,343 | |||
Auth0 | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 5,671,000 | ||||
Equity consideration (in shares) | 19.2 | ||||
Cash consideration | $ 257,000 | ||||
Cash consideration held back | $ 3,800 | ||||
Equity consideration held back (in shares) | 1.1 | ||||
Equity consideration held back | $ 294,600 | ||||
Acquisition related costs | $ 29,000 | ||||
Goodwill | 5,290,100 | ||||
Auth0 | Common stock | |||||
Business Acquisition [Line Items] | |||||
Equity consideration | 5,175,600 | ||||
Auth0 | Stock options | |||||
Business Acquisition [Line Items] | |||||
Equity consideration | $ 238,400 | ||||
atSpoke | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 79,300 | ||||
Cash consideration held back | 13,400 | ||||
Acquisition related costs | $ 900 | ||||
Goodwill | $ 62,200 | ||||
Cash consideration hold back period | 18 months | ||||
atSpoke | Purchased developed technology | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 18,300 | ||||
Useful life of acquired intangible assets | 3 years |
Cash Equivalents and Investme_3
Cash Equivalents and Investments - Schedule of Amortized Costs, Unrealized Gains and Losses and Estimated Fair Value of Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 |
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | $ 2,353,469 | $ 2,405,617 |
Unrealized Gain | 0 | 10 |
Unrealized Loss | (38,333) | (11,747) |
Estimated Fair Value | 2,315,136 | 2,393,880 |
Cash Equivalents | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 91,598 | 152,223 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Estimated Fair Value | 91,598 | 152,223 |
Cash Equivalents | Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 91,598 | 152,223 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Estimated Fair Value | 91,598 | 152,223 |
Short-term Investments | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 2,261,871 | 2,253,394 |
Unrealized Gain | 0 | 10 |
Unrealized Loss | (38,333) | (11,747) |
Estimated Fair Value | 2,223,538 | 2,241,657 |
Short-term Investments | U.S. treasury securities | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 2,032,380 | 1,922,344 |
Unrealized Gain | 0 | 10 |
Unrealized Loss | (34,840) | (10,166) |
Estimated Fair Value | 1,997,540 | 1,912,188 |
Short-term Investments | Corporate debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 229,491 | 331,050 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (3,493) | (1,581) |
Estimated Fair Value | $ 225,998 | $ 329,469 |
Cash Equivalents and Investme_4
Cash Equivalents and Investments - Schedule of Contractual Maturities of Short-term Investments (Details) - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 |
Amortized Cost | ||
Amortized Cost | $ 2,353,469 | $ 2,405,617 |
Estimated Fair Value | ||
Estimated fair value | 2,315,136 | 2,393,880 |
Short-term Investments | ||
Amortized Cost | ||
Amortized cost, due within one year | 1,925,930 | |
Amortized cost, due between one to five years | 335,941 | |
Amortized Cost | 2,261,871 | 2,253,394 |
Estimated Fair Value | ||
Estimated fair value, due within one year | 1,896,477 | |
Estimated fair value, due between one to five years | 327,061 | |
Estimated fair value | $ 2,223,538 | $ 2,241,657 |
Cash Equivalents and Investme_5
Cash Equivalents and Investments - Narrative (Details) | 9 Months Ended | 12 Months Ended |
Oct. 31, 2022 USD ($) investment | Jan. 31, 2022 USD ($) investment | |
Investments, Debt and Equity Securities [Abstract] | ||
Interest receivable | $ 8,900,000 | $ 6,000,000 |
Number of short-term investments in unrealized loss positions (in investments) | investment | 189 | 193 |
Other-than-temporary impairment short term investment | $ 0 | $ 0 |
Strategic investments without a readily determinable fair value | $ 23,600,000 | $ 15,300,000 |
Cash Equivalents and Investme_6
Cash Equivalents and Investments - Schedule of Unrealized Loss Position and Fair Value of Debt Securities (Details) $ in Thousands | Oct. 31, 2022 USD ($) |
Schedule of Investments [Line Items] | |
Estimated Fair Value, Less Than 12 Months | $ 1,195,751 |
Unrealized Losses, Less Than 12 Months | (20,340) |
Estimated Fair Value, More Than 12 Months | 1,027,787 |
Unrealized Losses, More Than 12 Months | (17,993) |
Estimated Fair Value | 2,223,538 |
Unrealized Losses | (38,333) |
U.S. treasury securities | |
Schedule of Investments [Line Items] | |
Estimated Fair Value, Less Than 12 Months | 1,129,711 |
Unrealized Losses, Less Than 12 Months | (19,305) |
Estimated Fair Value, More Than 12 Months | 867,829 |
Unrealized Losses, More Than 12 Months | (15,535) |
Estimated Fair Value | 1,997,540 |
Unrealized Losses | (34,840) |
Corporate debt securities | |
Schedule of Investments [Line Items] | |
Estimated Fair Value, Less Than 12 Months | 66,040 |
Unrealized Losses, Less Than 12 Months | (1,035) |
Estimated Fair Value, More Than 12 Months | 159,958 |
Unrealized Losses, More Than 12 Months | (2,458) |
Estimated Fair Value | 225,998 |
Unrealized Losses | $ (3,493) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 |
Assets: | ||
Cash equivalents, fair value | $ 91,598 | $ 152,223 |
Short term investments, fair value | 2,223,538 | 2,241,657 |
Total cash equivalents and short-term investments | 2,315,136 | 2,393,880 |
U.S. treasury securities | ||
Assets: | ||
Short term investments, fair value | 1,997,540 | 1,912,188 |
Corporate debt securities | ||
Assets: | ||
Short term investments, fair value | 225,998 | 329,469 |
Money market funds | ||
Assets: | ||
Cash equivalents, fair value | 91,598 | 152,223 |
Level 1 | ||
Assets: | ||
Cash equivalents, fair value | 91,598 | 152,223 |
Short term investments, fair value | 0 | 0 |
Total cash equivalents and short-term investments | 91,598 | 152,223 |
Level 1 | U.S. treasury securities | ||
Assets: | ||
Short term investments, fair value | 0 | 0 |
Level 1 | Corporate debt securities | ||
Assets: | ||
Short term investments, fair value | 0 | 0 |
Level 1 | Money market funds | ||
Assets: | ||
Cash equivalents, fair value | 91,598 | 152,223 |
Level 2 | ||
Assets: | ||
Cash equivalents, fair value | 0 | 0 |
Short term investments, fair value | 2,223,538 | 2,241,657 |
Total cash equivalents and short-term investments | 2,223,538 | 2,241,657 |
Level 2 | U.S. treasury securities | ||
Assets: | ||
Short term investments, fair value | 1,997,540 | 1,912,188 |
Level 2 | Corporate debt securities | ||
Assets: | ||
Short term investments, fair value | 225,998 | 329,469 |
Level 2 | Money market funds | ||
Assets: | ||
Cash equivalents, fair value | 0 | 0 |
Level 3 | ||
Assets: | ||
Cash equivalents, fair value | 0 | 0 |
Short term investments, fair value | 0 | 0 |
Total cash equivalents and short-term investments | 0 | 0 |
Level 3 | U.S. treasury securities | ||
Assets: | ||
Short term investments, fair value | 0 | 0 |
Level 3 | Corporate debt securities | ||
Assets: | ||
Short term investments, fair value | 0 | 0 |
Level 3 | Money market funds | ||
Assets: | ||
Cash equivalents, fair value | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values of Convertible Note (Details) - Senior Notes $ in Thousands | Oct. 31, 2022 USD ($) |
Net Carrying Amount | 2023 convertible senior notes | |
Debt Instrument [Line Items] | |
Convertible senior notes | $ 5,226 |
Net Carrying Amount | 2025 convertible senior notes | |
Debt Instrument [Line Items] | |
Convertible senior notes | 1,059,997 |
Net Carrying Amount | 2026 convertible senior notes | |
Debt Instrument [Line Items] | |
Convertible senior notes | 1,150,000 |
Estimated Fair Value | 2023 convertible senior notes | |
Debt Instrument [Line Items] | |
Convertible senior notes | 6,001 |
Estimated Fair Value | 2025 convertible senior notes | |
Debt Instrument [Line Items] | |
Convertible senior notes | 887,747 |
Estimated Fair Value | 2026 convertible senior notes | |
Debt Instrument [Line Items] | |
Convertible senior notes | $ 925,635 |
Deferred Commissions (Details)
Deferred Commissions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||||
Sales commissions capitalized as contract costs | $ 32.5 | $ 35.7 | $ 81.9 | $ 90.6 |
Amortization of contract costs | $ 21.3 | $ 14.9 | $ 60.8 | $ 40 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 5,400,275,000 | $ 5,400,275,000 | $ 5,401,343,000 | ||
Goodwill impairments | 0 | $ 0 | 0 | $ 0 | |
Intangible amortization expense | $ 23,300,000 | $ 22,400,000 | $ 69,200,000 | $ 46,600,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 31, 2022 | Jan. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 431,913 | $ 417,835 |
Accumulated Amortization | (170,088) | (100,867) |
Net | 261,825 | 316,968 |
Capitalized internal-use software costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 48,016 | 36,319 |
Accumulated Amortization | (28,607) | (24,170) |
Net | 19,409 | 12,149 |
Purchased developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 219,800 | 219,100 |
Accumulated Amortization | (81,187) | (47,085) |
Net | $ 138,613 | $ 172,015 |
Weighted-Average Remaining Useful Life | 3 years 3 months 18 days | 4 years |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 140,900 | $ 140,900 |
Accumulated Amortization | (52,798) | (26,399) |
Net | $ 88,102 | $ 114,501 |
Weighted-Average Remaining Useful Life | 3 years 6 months | 4 years |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 21,400 | $ 21,400 |
Accumulated Amortization | (6,420) | (3,210) |
Net | $ 14,980 | $ 18,190 |
Weighted-Average Remaining Useful Life | 3 years 6 months | 4 years 3 months 18 days |
Software licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 1,797 | $ 116 |
Accumulated Amortization | (1,076) | (3) |
Net | $ 721 | $ 113 |
Deferred Revenue and Performa_2
Deferred Revenue and Performance Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue from remaining performance obligations | $ 2,852.8 | $ 2,852.8 | ||
Subscription | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue recognized that was included in the contract liability balance | 417.8 | $ 299.9 | 858 | $ 459.4 |
Professional services and other | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue recognized that was included in the contract liability balance | 5.9 | $ 4.5 | 12.9 | $ 5.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-11-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Revenue from remaining performance obligations | $ 1,579.4 | $ 1,579.4 | ||
Remaining performance obligation, percentage | 55% | 55% | ||
Performance obligations expected to be satisfied, expected timing | 12 months | 12 months |
Convertible Senior Notes, Net -
Convertible Senior Notes, Net - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2022 USD ($) tradingDay $ / shares shares | Oct. 31, 2022 USD ($) $ / shares shares | Oct. 31, 2021 shares | Jan. 31, 2022 USD ($) shares | Aug. 15, 2018 | |
Debt Instrument [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 28,799 | 27,165 | |||
2023 convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Number of shares available for purchase (in shares) | 100 | 100 | |||
Limitation on sale of common stock due to sale price threshold (in days) | tradingDay | 80 | ||||
Value of shares issuable under warrants granted (in dollars per share) | $ / shares | $ 68.06 | $ 68.06 | |||
Number of warrants issued subject to anti-dilution adjustments (in shares) | 1,000 | 1,000 | |||
2023 convertible senior notes | Shares related to convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 108 | 356 | |||
2025 convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Initial cap price of capped calls (in dollars per share) | $ / shares | $ 255.88 | ||||
2025 convertible senior notes | Shares related to convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,617 | 5,617 | |||
2026 convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Initial cap price of capped calls (in dollars per share) | $ / shares | $ 360.14 | ||||
2026 convertible senior notes | Shares related to convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,820 | 4,820 | |||
Senior Notes | 2023 convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 0.25% | ||||
Aggregate principal amount | $ | $ 5,226 | $ 5,226 | $ 17,228 | ||
Original debt amount | $ | $ 12,000 | 23,000 | |||
Effective interest rate | 0.85% | 0.85% | 5.68% | ||
Conversion price (in dollars per share) | $ / shares | $ 48.36 | $ 48.36 | |||
Hedge exercised and net-share-settled, consideration received on transaction | $ | $ 12,000 | ||||
Senior Notes | 2025 convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 0.125% | 0.125% | |||
Aggregate principal amount | $ | $ 1,059,997 | $ 1,059,997 | 1,059,997 | ||
Effective interest rate | 0.43% | 0.43% | 4.10% | ||
Conversion price (in dollars per share) | $ / shares | $ 188.71 | $ 188.71 | |||
Senior Notes | 2026 convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Fixed interest rate | 0.375% | 0.375% | |||
Aggregate principal amount | $ | $ 1,150,000 | $ 1,150,000 | $ 1,150,000 | ||
Effective interest rate | 0.60% | 0.60% | 5.75% | ||
Conversion price (in dollars per share) | $ / shares | $ 238.60 | $ 238.60 | |||
Class A Common Stock | Senior Notes | 2023 convertible senior notes | |||||
Debt Instrument [Line Items] | |||||
Shares issued during the period | 200 | 500 | |||
Hedge exercised and net-share-settled, consideration received on transaction (in shares) | 100 |
Convertible Senior Notes, Net_2
Convertible Senior Notes, Net - Schedule of Interest Expense (Details) - Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
2023 convertible senior notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 3 | $ 9 | $ 14 | $ 43 |
Amortization of debt issuance costs | 8 | 22 | 35 | 84 |
Amortization of debt discount | 213 | 837 | ||
Total | 11 | 244 | 49 | 964 |
2025 convertible senior notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 332 | 332 | 994 | 994 |
Amortization of debt issuance costs | 809 | 581 | 2,424 | 1,705 |
Amortization of debt discount | 8,878 | 26,368 | ||
Total | 1,141 | 9,791 | 3,418 | 29,067 |
2026 convertible senior notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 1,078 | 1,078 | 3,234 | 3,234 |
Amortization of debt issuance costs | 628 | 364 | 1,881 | 1,056 |
Amortization of debt discount | 11,640 | 34,428 | ||
Total | $ 1,706 | $ 13,082 | $ 5,115 | $ 38,718 |
Convertible Senior Notes, Net_3
Convertible Senior Notes, Net - Schedule of Liability and Equity Component of Notes (Details) - Senior Notes - USD ($) $ in Thousands | Oct. 31, 2022 | Jan. 31, 2022 |
2023 convertible senior notes | ||
Liability component: | ||
Principal | $ 5,226 | $ 17,228 |
Less: unamortized debt issuance costs and debt discount | (9) | (1,034) |
Net carrying amount | 5,217 | 16,194 |
2025 convertible senior notes | ||
Liability component: | ||
Principal | 1,059,997 | 1,059,997 |
Less: unamortized debt issuance costs and debt discount | (9,239) | (149,333) |
Net carrying amount | 1,050,758 | 910,664 |
2026 convertible senior notes | ||
Liability component: | ||
Principal | 1,150,000 | 1,150,000 |
Less: unamortized debt issuance costs and debt discount | (9,211) | (244,950) |
Net carrying amount | $ 1,140,789 | 905,050 |
Additional Paid-in Capital | 2023 convertible senior notes | ||
Equity component: | ||
Equity component | 3,993 | |
Less: issuance costs | (116) | |
Carrying amount of the equity component | 3,877 | |
Additional Paid-in Capital | 2025 convertible senior notes | ||
Equity component: | ||
Equity component | 221,387 | |
Less: issuance costs | (4,040) | |
Carrying amount of the equity component | 217,347 | |
Additional Paid-in Capital | 2026 convertible senior notes | ||
Equity component: | ||
Equity component | 310,311 | |
Less: issuance costs | (4,090) | |
Carrying amount of the equity component | $ 306,221 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Lease cost: | ||||
Operating lease cost | $ 10,218 | $ 9,677 | $ 30,954 | $ 28,135 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2022 | |
Leases [Abstract] | |||||
Weighted average remaining lease term | 5 years 3 months 18 days | 5 years 3 months 18 days | 5 years 10 months 24 days | ||
Weighted average discount rate | 5.30% | 5.30% | 5.50% | ||
Cash payments included in the measurement of operating lease liabilities | $ 11,300 | $ 10,300 | $ 29,500 | $ 29,400 | |
Lease impairment charges | $ 14,200 | $ 14,461 | $ 0 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Leases (Details) $ in Thousands | Oct. 31, 2022 USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2023 (remaining three months) | $ 11,367 |
2024 | 44,971 |
2025 | 41,540 |
2026 | 31,309 |
2027 | 30,500 |
Thereafter | 53,608 |
Total lease payments | 213,295 |
Less imputed interest | (27,876) |
Less tenant improvement allowances not yet recognized | (1,979) |
Total operating lease liabilities | $ 183,440 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 1 Months Ended | ||
Jul. 31, 2022 | Oct. 31, 2022 | Jan. 31, 2022 | |
Other Commitments [Line Items] | |||
Long-term purchase commitment | $ 450,000,000 | ||
Long-term purchase commitment, period | 4 years | ||
Letter of Credit | |||
Other Commitments [Line Items] | |||
Letters of credit issued and outstanding | $ 8,500,000 | $ 8,600,000 | |
Draws on line of credit | 0 | 0 | |
Restricted cash, noncurrent | $ 6,300,000 | $ 6,400,000 |
Employee Incentive Plans - Sche
Employee Incentive Plans - Schedule of Stock-based Compensation Expense by Statement of Operations Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 170,985 | $ 155,785 | $ 511,687 | $ 407,611 |
Subscription | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 17,106 | 13,455 | 51,509 | 33,843 |
Professional services and other | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 3,563 | 3,376 | 11,016 | 8,879 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 69,208 | 56,573 | 208,330 | 129,998 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 41,515 | 39,248 | 120,299 | 101,602 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 39,593 | $ 43,133 | $ 120,533 | $ 133,289 |
Employee Incentive Plans - Narr
Employee Incentive Plans - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2022 $ / shares shares | Oct. 31, 2022 USD ($) numberOfIncentivePlan period $ / shares shares | Jan. 31, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of equity incentive plans (in incentive plans) | numberOfIncentivePlan | 2 | ||
Options to purchase common stock outstanding (in shares) | 6,629,524 | 7,984,078 | |
Unrecognized stock-based compensation expense related to stock options | $ | $ 112.5 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average stock-based compensation recognition period | 1 year 10 months 24 days | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average stock-based compensation recognition period | 3 years 1 month 6 days | ||
Unrecognized compensation costs related to unvested restricted stock units | $ | $ 1,304 | ||
Number of shares granted in period | 6,087,249 | ||
Granted (in dollars per share) | $ / shares | $ 121.08 | ||
Market-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares granted in period | 58,150 | ||
Award vesting period | 3 years | ||
Granted (in dollars per share) | $ / shares | $ 244.73 | ||
Market-based RSUs | Performance period one | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33% | ||
Market-based RSUs | Performance period two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33% | ||
Market-based RSUs | Performance period three | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 33% | ||
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average stock-based compensation recognition period | 7 months 6 days | ||
Unrecognized compensation costs related to unvested restricted stock units | $ | $ 15.2 | ||
Consecutive offering period | 12 months | ||
Number of purchase periods | period | 2 | ||
Purchase period | 6 months | ||
Shares of employee purchased Class A common stock (in shares) | 269,814 | ||
Weighted-average purchase price of employee purchased Class A common stock (in dollars per share) | $ / shares | $ 70.27 | ||
Total proceeds from employee purchase of Class A common stock | $ | $ 19 | ||
Minimum | Market-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Earn rate, percent of shares granted | 0% | ||
Maximum | Market-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Earn rate, percent of shares granted | 200% | ||
Auth0 and atSpoke | Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average stock-based compensation recognition period | 1 year 6 months | ||
Unrecognized compensation costs related to unvested restricted stock units | $ | $ 172.4 | ||
Number of shares granted in period | 1,269,008 | ||
Award vesting period | 3 years | ||
Granted (in dollars per share) | $ / shares | $ 268.98 | ||
2017 Equity Incentive Plan | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options to purchase common stock outstanding (in shares) | 1,841,836 | ||
2017 Equity Incentive Plan | Class B Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options to purchase common stock outstanding (in shares) | 4,787,688 |
Employee Incentive Plans - Sc_2
Employee Incentive Plans - Schedule of Common Stock Reserved for Future Issuance (Details) | Oct. 31, 2022 shares |
Class of Stock [Line Items] | |
Common stock reserved for future issuance and options and unvested RSUs outstanding (in shares) | 48,883,827 |
Stock Options and Restricted Stock Units | |
Class of Stock [Line Items] | |
Stock options and unvested RSUs outstanding (in shares) | 15,807,738 |
Common stock, reserved for future issuance (in shares) | 26,022,656 |
ESPP | |
Class of Stock [Line Items] | |
Common stock, reserved for future issuance (in shares) | 7,053,433 |
Employee Incentive Plans - Sc_3
Employee Incentive Plans - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 31, 2022 | Jan. 31, 2022 | |
Number of Options | ||
Number of options, outstanding beginning of period (in shares) | 7,984,078 | |
Number of options, granted (in shares) | 0 | |
Number of options, exercised (in shares) | (1,177,880) | |
Number of options, expired (in shares) | (24,833) | |
Number of options, forfeited (in shares) | (151,841) | |
Number of options, outstanding end of period (in shares) | 6,629,524 | 7,984,078 |
Vested and exercisable, number of options (in shares) | 5,855,640 | |
Weighted- Average Exercise Price | ||
Options outstanding, weighted average exercise price beginning of period (in dollars per share) | $ 39.59 | |
Options granted, weighted average exercise price (in dollars per share) | 0 | |
Options exercised, weighted average exercise price (in dollars per share) | 12.41 | |
Options expired, weighted average exercise price (in dollars per share) | 195.71 | |
Options forfeited, weighted average exercise price (in dollars per share) | 62.73 | |
Options outstanding, weighted average exercise price end of period (in dollars per share) | 43.30 | $ 39.59 |
Vested and exercisable, weighted average exercise price (in dollars per share) | $ 27.07 | |
Additional Disclosures | ||
Options outstanding, weighted average remaining contractual term | 4 years 7 months 6 days | 5 years 2 months 12 days |
Options outstanding, aggregate intrinsic value | $ 249,207 | $ 1,314,031 |
Vested and exercisable, weighted average remaining contractual term | 4 years 1 month 6 days | |
Vested and exercisable, aggregate intrinsic value | $ 242,916 |
Employee Incentive Plans - Sc_4
Employee Incentive Plans - Schedule of Restricted Stock Unit Activity (Details) - RSUs | 9 Months Ended |
Oct. 31, 2022 $ / shares shares | |
Number of RSUs | |
Beginning balance (in shares) | shares | 6,225,747 |
Granted (in shares) | shares | 6,087,249 |
Vested (in shares) | shares | (1,956,194) |
Forfeited (in shares) | shares | (1,178,588) |
Ending balance (in shares) | shares | 9,178,214 |
Weighted- Average Grant Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 207.26 |
Granted (in dollars per share) | $ / shares | 121.08 |
Vested (in dollars per share) | $ / shares | 177.54 |
Forfeited (in dollars per share) | $ / shares | 195.91 |
Ending balance (in dollars per share) | $ / shares | $ 157.90 |
Employee Incentive Plans - Sc_5
Employee Incentive Plans - Schedule of Estimated Fair Value Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 63% | 47% | ||
Expected term (in years) | 6 months | 6 months | ||
Risk-free interest rate | 2.46% | 0.06% | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 78% | 48% | ||
Expected term (in years) | 1 year | 1 year | ||
Risk-free interest rate | 2.92% | 0.09% | ||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0% | 0% | 0% | 0% |
ESPP | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 0% | 0% | ||
Expected term (in years) | 0 years | 0 years | ||
Risk-free interest rate | 0% | 0% | ||
ESPP | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 0% | 0% | ||
Expected term (in years) | 0 years | 0 years | ||
Risk-free interest rate | 0% | 0% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit from) income taxes | $ 3,728 | $ 667 | $ 9,804 | $ (6,785) |
Pretax losses | $ 205,169 | $ 220,644 | $ 652,278 | $ 614,010 |
Effective income tax rate | (1.80%) | (0.30%) | (1.50%) | 1.10% |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2022 | Oct. 31, 2021 | |
Numerator: | ||||
Net loss | $ (208,897) | $ (221,311) | $ (662,082) | $ (607,225) |
Denominator: | ||||
Weighted-average shares outstanding, basic (in shares) | 158,708 | 153,756 | 157,344 | 145,782 |
Weighted-average shares outstanding, diluted (in shares) | 158,708 | 153,756 | 157,344 | 145,782 |
Net loss per share, basic (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Net loss per share, diluted (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Class A Common Stock | ||||
Numerator: | ||||
Net loss | $ (199,456) | $ (211,176) | $ (632,425) | $ (576,106) |
Denominator: | ||||
Weighted-average shares outstanding, basic (in shares) | 151,535 | 146,715 | 150,296 | 138,311 |
Weighted-average shares outstanding, diluted (in shares) | 151,535 | 146,715 | 150,296 | 138,311 |
Net loss per share, basic (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Net loss per share, diluted (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Class B Common Stock | ||||
Numerator: | ||||
Net loss | $ (9,441) | $ (10,135) | $ (29,657) | $ (31,119) |
Denominator: | ||||
Weighted-average shares outstanding, basic (in shares) | 7,173 | 7,041 | 7,048 | 7,471 |
Weighted-average shares outstanding, diluted (in shares) | 7,173 | 7,041 | 7,048 | 7,471 |
Net loss per share, basic (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Net loss per share, diluted (in dollars per share) | $ (1.32) | $ (1.44) | $ (4.21) | $ (4.17) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Per Share (Details) - shares shares in Thousands | 9 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 28,799 | 27,165 |
Issued and outstanding stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 6,630 | 8,621 |
Unvested RSUs issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 9,120 | 5,221 |
Unvested market-based RSUs issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 116 | 0 |
Unvested restricted stock awards issued and outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 743 | 1,269 |
Shares committed under the ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 597 | 213 |
Shares related to convertible senior notes | 2023 convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 108 | 356 |
Shares related to convertible senior notes | 2025 convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,617 | 5,617 |
Shares related to convertible senior notes | 2026 convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,820 | 4,820 |
Shares subject to warrants related to the issuance of the 2023 Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,048 | 1,048 |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) | Oct. 31, 2022 $ / shares |
2023 convertible senior notes | |
Debt Instrument [Line Items] | |
Value of shares issuable under warrants granted (in dollars per share) | $ 68.06 |