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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2020
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from               to               
Commission File Number 001-39502               
Sumo Logic, Inc.
(Exact name of registrant as specified in its charter)
Delaware
27-2234444
(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)
305 Main Street
Redwood City, California
94063
(Address of principal executive offices)(Zip Code)
(650) 810-8700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.0001 per shareSUMONasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐   No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).  Yes    No ☒
As of November 30, 2020, the number of outstanding shares of the registrant's common stock was 102,318,468 shares of common stock.


Table of Contents
Table of Contents
Page
PART I. FINANCIAL INFORMATION
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 2.
1

Table of Contents
Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions.

Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements about our expectations regarding:

our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, including changes in sales and marketing, research and development, and general and administrative expenses, and key business metrics, and our ability to achieve and maintain future profitability;
the impact of the COVID-19 pandemic and any associated economic downturn on our business and results of operations;
our business model and our ability to effectively manage our growth and associated investments;
our beliefs about and objectives for future operations;
market acceptance of our platform;
our ability to maintain and expand our customer base, including by attracting new customers;
our ability to retain customers and expand their adoption of our platform, particularly our largest customers;
the effects of increased competition in our markets and our ability to compete effectively;
our ability to maintain the security and availability of our platform;
our ability to develop new platform features and functionality, or enhancements to our existing platform features and functionality, and bring them to market in a timely manner;
anticipated trends, growth rates, and challenges in our business and in the markets in which we operate;
our relationships with third parties, including channel and technology partners;
our ability to successfully expand in our existing markets and into new markets, including internationally;
our ability to comply with laws and regulations that currently apply or become applicable to our business both in the United States and internationally, including with respect to privacy and data protection;
our expectations regarding our ability to obtain, maintain, enforce, defend, and enhance our intellectual property rights;
our ability to successfully defend litigation brought against us;
the sufficiency of our cash and cash equivalents to meet our liquidity needs;
our ability to attract and retain employees and key personnel;
future acquisitions or investments; and
economic and industry trends or trend analysis.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

2

Table of Contents
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
3

Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Sumo Logic, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except for per share data)
(unaudited)
October 31,
2020
January 31,
2020
Assets
Current assets:
Cash and cash equivalents$407,469 $101,513 
Accounts receivable, net41,685 27,011 
Prepaid expenses8,581 6,305 
Deferred sales commissions, current11,317 8,884 
Other current assets2,153 1,604 
Total current assets471,205 145,317 
Property and equipment, net3,952 2,993 
Goodwill50,672 50,672 
Acquired intangible assets, net12,298 17,415 
Deferred sales commissions, noncurrent24,605 17,479 
Other noncurrent assets840 3,885 
Total assets$563,572 $237,761 
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
Current liabilities:
Accounts payable$8,678 $6,151 
Accrued expenses and other current liabilities21,334 20,371 
Deferred revenue, current88,612 85,715 
Total current liabilities118,624 112,237 
Deferred revenue, noncurrent1,768 2,970 
Redeemable convertible preferred stock warrant liability 270 
Other noncurrent liabilities4,883 2,691 
Total liabilities125,275 118,168 
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock 340,167 
Stockholders’ equity (deficit):
Common stock10 2 
Additional paid-in-capital815,735 97,131 
Accumulated other comprehensive loss(246)(213)
Accumulated deficit(377,202)(317,494)
Total stockholders’ equity (deficit)438,297 (220,574)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)$563,572 $237,761 
See Notes to Condensed Consolidated Financial Statements
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Sumo Logic, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except for per share data)
(unaudited)
Three Months Ended October 31,Nine Months Ended October 31,
2020201920202019
Revenue$51,868 $40,513 $148,485 $110,745 
Cost of revenue13,601 11,212 42,140 29,151 
Gross profit38,267 29,301 106,345 81,594 
Operating expenses:
Research and development18,753 14,029 51,756 35,394 
Sales and marketing26,904 30,382 80,534 76,868 
General and administrative15,507 14,193 32,096 28,141 
Total operating expenses61,164 58,604 164,386 140,403 
Loss from operations(22,897)(29,303)(58,041)(58,809)
Interest and other (expense) income, net(322)726 (249)1,611 
Interest expense(290)(40)(654)(66)
Loss before provision for income taxes(23,509)(28,617)(58,944)(57,264)
Provision for income taxes417 2 764 357 
Net loss$(23,926)$(28,619)$(59,708)$(57,621)
Net loss per share, basic and diluted$(0.43)$(1.95)$(1.92)$(4.13)
Weighted-average shares used to compute net loss per share, basic and diluted55,816 14,650 31,044 13,953 
See Notes to Condensed Consolidated Financial Statements
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Sumo Logic, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)
Three Months Ended October 31,Nine Months Ended October 31,
2020201920202019
Net loss$(23,926)$(28,619)$(59,708)$(57,621)
Other comprehensive income (loss):
Foreign currency translation adjustments(51)97 (33)(45)
Total comprehensive loss$(23,977)$(28,522)$(59,741)$(57,666)
See Notes to Condensed Consolidated Financial Statements
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Sumo Logic, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit
(in thousands)
(unaudited)

Redeemable Convertible Preferred StockCommon StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ Equity (Deficit)
SharesAmountSharesAmount
Balance at July 31, 202063,762 $340,167 20,128 $2 $109,261 $(195)$(353,276)$(244,208)
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs— — 17,020 2 342,683 — — 342,685 
Conversion of convertible redeemable preferred stock to common stock upon initial public offering(63,762)(340,167)63,762 6 340,161 — — 340,167 
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering— — — — 512 — — 512 
Issuance of common stock upon exercise of stock options— — 1,301  3,992 3,992 
Vesting of early exercised stock options— — — — 49 — — 49 
Common stock issued in connection with acquisitions— — 33  — — —  
Stock-based compensation— — — — 19,077 — — 19,077 
Foreign currency translation adjustments — — — — — (51)— (51)
Net loss— — — — — — (23,926)(23,926)
Balance at October 31, 2020 $ 102,244 $10 $815,735 $(246)$(377,202)$438,297 
Balance at July 31, 201963,762 $340,167 14,290 $1 $31,397 $(239)$(254,359)$(223,200)
Issuance of common stock upon exercise of stock options— — 698  1,186 — — 1,186 
Vesting of early exercised stock options— — — — 49 — — 49 
Common stock issued and awards assumed as consideration in connection with acquisitions— — 2,922 1 43,872 — — 43,873 
Stock-based compensation — — — — 9,909 — — 9,909 
Foreign currency translation adjustments— — — — — 97 — 97 
Net loss— — — — — — (28,619)(28,619)
Balance at October 31, 201963,762 $340,167 17,910 $2 $86,413 $(142)$(282,978)$(196,705)
See Notes to Condensed Consolidated Financial Statements
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Sumo Logic, Inc.
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(in thousands)
(unaudited)
Redeemable Convertible Preferred StockCommon StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ Deficit
Shares
Amount
SharesAmount
Balance at January 31, 202063,762 $340,167 18,984 $2 $97,131 $(213)$(317,494)$(220,574)
Issuance of common stock upon initial public offering, net of underwriting discounts and issuance costs— — 17,020 2 342,683 — — 342,685 
Conversion of convertible redeemable preferred stock to common stock upon initial public offering(63,762)(340,167)63,762 6 340,161 — — 340,167 
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital upon initial public offering— — — — 512 — — 512 
Issuance of common stock upon exercise of stock options — — 2,222  6,113 — — 6,113 
Vesting of early exercised stock options— — — — 148 — — 148 
Common stock issued in connection with acquisitions— — 256  — — —  
Stock-based compensation — — — — 28,987 — — 28,987 
Foreign currency translation adjustments— — — — — (33)(33)
Net loss— — — — — — (59,708)(59,708)
Balance at October 31, 2020 $ 102,244 $10 $815,735 $(246)$(377,202)$438,297 
Balance at January 31, 201953,776 $234,095 13,065 $1 $22,989 $(97)$(225,357)$(202,464)
Issuance of common stock upon exercise of stock options — — 1,574  2,455 — — 2,455 
Issuance of common stock upon early exercise of stock options — — 349  — — —  
Vesting of early exercised stock options — — — — 132 — — 132 
Common stock issued and awards assumed as consideration in connection with acquisitions— — 2,922 1 43,872 — — 43,873 
Issuance of Series G redeemable convertible preferred stock, net issuance of costs of $3,927
9,986 106,072 — — — — — — 
Stock-based compensation— — — — 16,965 — — 16,965 
Foreign currency translation adjustments — — — — — (45)— (45)
Net loss — — — — — — (57,621)(57,621)
Balance at October 31, 201963,762 $340,167 17,910 $2 $86,413 $(142)$(282,978)$(196,705)
See Notes to Condensed Consolidated Financial Statements
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Sumo Logic, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended October 31,
20202019
Cash flows from operating activities
Net loss$(59,708)$(57,621)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization6,152 1,927 
Amortization of deferred sales commissions8,148 6,419 
Stock-based compensation, net of amounts capitalized28,666 16,561 
Other186 (11)
Changes in operating assets and liabilities, net of impact of acquisitions:
Accounts receivable(14,717)(5,026)
Prepaid expenses(2,276)513 
Other assets(619)(57)
Deferred sales commissions(17,718)(10,621)
Accounts payable(149)56 
Accrued expenses and other current liabilities1,781 5,182 
Deferred revenue1,695 12,428 
Other noncurrent liabilities2,354 485 
Net cash used in operating activities(46,205)(29,765)
Cash flows from investing activities
Purchases of property and equipment(358)(1,949)
Capitalized internal-use software costs(1,205)(4,292)
Cash paid for acquisitions, net of cash and restricted cash acquired (8,260)
Net cash used in investing activities(1,563)(14,501)
Cash flows from financing activities
Proceeds from initial public offering, net of underwriting discounts349,166  
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs 106,072 
Proceeds from borrowings24,250  
Repayment of borrowings(24,250) 
Payments of deferred offering costs(1,321)(84)
Proceeds from exercise of common stock options6,113 3,614 
Cash paid for holdback consideration in connection with acquisition(100) 
Net cash provided by financing activities353,858 109,602 
Effect of exchange rate changes on cash and cash equivalents(134)(7)
Change in cash and cash equivalents and restricted cash305,956 65,329 
Cash and cash equivalents and restricted cash:
Beginning of period101,813 65,671 
End of period$407,769 $131,000 
Supplemental disclosures of cash flow information
Cash paid for income taxes846 390 
Cash paid for interest706 10 
Supplemental non-cash investing and financing information
Conversion of redeemable convertible preferred stock to common stock$340,161 $ 
Reclassification of redeemable convertible preferred stock warrant liability to additional paid-in capital$512 $ 
Vesting of early exercised options$148 $132 
Common stock and assumed awards issued as consideration for acquisitions$ $43,873 
Unpaid cash consideration for acquisitions$ $2,816 
Stock-based compensation capitalized as internal-use software costs$321 $404 
Issuance of redeemable convertible preferred stock warrants$ $71 
Deferred offering costs accrued but not yet paid$3,140 $250 
Property and equipment accrued but not yet paid$130 $5 
Reconciliation of cash, cash equivalents, and restricted cash to consolidated balance sheets
Cash and cash equivalents$407,469 $130,660 
Restricted cash included in other current assets300 340 
Total cash, cash equivalents, and restricted cash$407,769 $131,000 
See Notes to Condensed Consolidated Financial Statements
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Sumo Logic, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

1. Description of Business and Basis of Presentation
Organization and Nature of Operations
Sumo Logic, Inc. (the “Company”) was incorporated in Delaware in March 2010. The Company provides, on a cloud-native software-as-a-service (“SaaS”) delivery model, a software platform that enables organizations of all sizes to address the challenges and opportunities presented by digital transformation, modern applications, and cloud computing. The platform enables organizations to automate the collection, ingestion, and analysis of application, infrastructure, security, and IoT data to derive actionable insights.
Basis of Presentation and Principles of Consolidation
The Company’s condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission, (“SEC”), regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of January 31, 2020, and related disclosures, have been derived from the audited consolidated financial statements at that date but do not include all of the information required by GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments (consisting of only normal recurring adjustments) that are necessary for the fair statement of the Company’s condensed consolidated financial information. The results of operations for the three and nine months ended October 31, 2020 are not necessarily indicative of the results to be expected for the year ending January 31, 2021 or for any other interim period or for any other future year.
The accompanying interim unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the year ended January 31, 2020 included in the Company’s prospectus dated September 17, 2020 filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (“Prospectus”).
The Company’s condensed consolidated financial statements and accompanying notes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Fiscal Year
The Company’s fiscal year ends on January 31. Unless otherwise stated, references to year in these condensed consolidated financial statements relate to the above described fiscal year rather than calendar year.
Initial Public Offering
On September 21, 2020, the Company completed its initial public offering (“IPO”), in which it sold 14,800,000 shares of common stock at a public offering price $22.00 per share. On October 9, 2020, the Company sold an additional 2,220,000 shares of common stock at a public offering price of $22.00 per share pursuant to the exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds of $342.7 million, after deducting underwriters’ discounts and commissions and offering costs of $31.8 million. Immediately prior to the IPO, all shares of outstanding redeemable convertible preferred stock were converted into 63,761,950 shares of common stock on a one-to-one basis. Redeemable convertible preferred stock warrants also converted into 32,276 warrants to purchase common stock on a one-to-one basis.
Prior to the IPO, all deferred offering costs were capitalized in other noncurrent assets on the condensed consolidated balance sheets. Deferred offering costs of $6.5 million, primarily consisting of accounting, legal, and other fees related to the Company’s IPO, were offset against the IPO proceeds upon the closing of the Company’s IPO in September of 2020. As of January 31, 2020, deferred offering costs totaled $3.3 million.

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2. Summary of Significant Accounting Policies
Significant Accounting Policies
Other than those described below, there have been no changes to the Company’s significant accounting policies described in the Prospectus that have had a material impact on its condensed consolidated financial statements and related notes.
Use of Estimates and Judgments
The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements and may involve subjective or significant judgment by the Company; therefore, actual results could differ from the Company’s estimates. The Company’s accounting policies that involve judgment include revenue recognition, period of benefit for deferred sales commissions, assumptions used for estimating the fair value of common stock to calculate stock-based compensation (prior to the closing of the IPO), capitalization of internal-use software costs, valuation of goodwill and intangible assets, certain accrued liabilities, and valuation allowances associated with income taxes.
COVID-19
While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment actions, it has already had an adverse effect on the global economy and the lasting effects of the pandemic continue to be unknown. The Company may experience customer losses, including due to bankruptcy or customers ceasing operations, which may result in delays in collections or an inability to collect accounts receivable from these customers. The extent to which COVID-19 may continue to impact the Company’s financial condition, results of operations, or liquidity continues to remain uncertain, and as of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or an adjustment to the carrying value of the Company’s assets or liabilities. These estimates may change, as new events occur and additional information is obtained, which will be recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements.
In May 2020, as part of the Company’s efforts to respond to the COVID-19 pandemic and ensure longer-term financial stability, the Company initiated cost reduction measures, including a headcount reduction. The headcount reduction resulted in $1.2 million of severance and benefits expense and $0.1 million in stock-based compensation expense for the nine months ended October 31, 2020.
Stock-Based Compensation
The Company measures and recognizes compensation expense for all stock-based payment awards granted to employees, directors, and non-employees based on the estimated fair values on the date of the grant. The fair value of options granted is estimated on the grant date using the Black-Scholes option pricing model. The fair value of Restricted Stock Units (“RSUs”) is estimated on the date of grant based on the fair value of the Company’s underlying common stock.
The Company recognizes stock-based compensation expense for stock options on a straight-line basis. Prior to September 21, 2020, the Company recognized stock-based compensation expense for RSUs on an accelerated attribution method as the RSUs were subject to service-based and performance-based vesting conditions, which included a liquidity event condition, and in certain cases, the achievement of certain other performance metrics. None of the RSUs would vest unless the liquidity event condition was satisfied. Upon the completion of the IPO, the liquidity event condition was considered probable and the Company recognized cumulative stock-based compensation expense using the accelerated attribution method related to RSUs that had vested as of the IPO. The remaining unrecognized stock-based compensation expense related to the RSUs will be recognized over the remaining requisite service period. All RSUs granted after September 21, 2020 will not be subject to a liquidity event condition.
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Related Party Transactions
Certain members of the Company’s board of directors serve as directors of, or are executive officers of, and in some cases are investors in, companies that are customers or vendors of the Company. Related party transactions were not material as of October 31, 2020 or January 31, 2020, or for three and nine months ended October 31, 2020 or 2019.
Recently Adopted Accounting Pronouncements
The Company assesses the adoption impacts of recently issued accounting pronouncements by the Financial Accounting Standards Board (“FASB”) on its condensed consolidated financial statements. The sections below describe impacts from newly adopted pronouncements.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350)—Simplifying the Test for Goodwill Impairment, which simplifies the required methodology to calculate an impairment charge for goodwill. The Company adopted this guidance as of February 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. The amendments in the updated guidance expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The Company adopted this guidance as of February 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures for certain investments. The Company adopted this guidance as of February 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The Company adopted this guidance, on a prospective basis, as of February 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). The amendments in the updated guidance simplify the accounting for income taxes by removing certain exceptions and improving consistent application of other areas of the topic by clarifying the guidance. The Company adopted this guidance, on a prospective basis, as of February 1, 2020, and the adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
Under the JOBS Act, the Company meets the definition of an emerging growth company and can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the Company is no longer an emerging growth company or until the Company affirmatively and irrevocably opts out of the extended transition period.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about lease arrangements. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The ASU seeks to clarify how to apply certain aspects of the new leasing standard. In October 2018, the FASB also issued ASU No. 2018-11, Leases (Topic 842). The ASU provides (1) an optional transition method that entities can use when adopting the standard and (2) a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met. In March 2019, the FASB also issued ASU No. 2019-01, which impacts transition disclosures related to the new guidance. In June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic
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842): Effective Dates for Certain Entities, which amended the effective date of the new guidance. The deferral applies only if those entities have not yet issued their financial statements as of June 3, 2020. The new guidance will be effective for the Company for the fiscal year ending January 31, 2023 and interim periods within the fiscal year ending January 31, 2024. The Company is currently reviewing this guidance to assess the potential impact on its condensed consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has since issued various amendments including ASU No. 2018-19, ASU No. 2019-04, and ASU No. 2019-05. The guidance establishes a new "expected loss model”, that requires entities to estimate current expected losses on financial instruments by using all practical and relevant information. Additionally, any expected credit losses are to be reflected as allowances rather than reductions in the amortized cost of available-for-sale debt securities. The new guidance will be effective for the Company for the fiscal year, and interim periods within the fiscal year, ending January 31, 2024, though early adoption is permitted. The Company is currently reviewing this guidance to assess the potential impact on its condensed consolidated financial statements.
3. Fair Value Measurements
The Company measures its financial assets and liabilities 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 fair value, as follows:
Level 1    Observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level 2    Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3    Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of the short maturity of those instruments.
The following tables present the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis, based on the three-tier fair value hierarchy (in thousands):
As of October 31, 2020
Level 1Level 2Level 3Total
Assets:
Money market funds$400,212 $ $ $400,212 
As of January 31, 2020
Level 1Level 2Level 3Total
Assets:
Money market funds$98,469 $ $ $98,469 
Liabilities:
Redeemable convertible preferred stock warrant liability$ $ $270 $270 
Level 3 financial liabilities consisted of the redeemable convertible preferred stock warrant liability. In connection with an agreement with Silicon Valley Bank, discussed in Note 6, the Company issued 32,276 warrants to purchase shares of the Company’s redeemable convertible preferred stock. The Company used a Black-Scholes option valuation model to value its redeemable convertible preferred stock warrant liability at inception and on subsequent valuation dates. Changes in the fair values of the redeemable convertible preferred stock warrant liability were recorded as interest and other (expense) income, net in the Company’s condensed consolidated statements of operations. All 32,276 warrants to purchase shares of redeemable convertible preferred stock
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converted into warrants to purchase common stock upon the closing of the Company’s IPO and the related liability was reclassified to additional-paid in capital in the Company’s condensed consolidated balance sheet.
4. Property and Equipment, Net
Property and equipment, net, consisted of the following (in thousands):
October 31,
2020
January 31,
2020
Computer and hardware equipment$2,147 $1,954 
Furniture and fixtures1,213 1,129 
Leasehold improvements2,292 2,120 
Capitalized internal-use software3,386 9,823 
Gross property and equipment9,038 15,026 
Accumulated depreciation and amortization(5,086)(12,033)
Property and equipment, net$3,952 $2,993 
Depreciation and amortization expense of property and equipment was $0.4 million and $0.3 million for the three months ended October 31, 2020 and 2019, respectively, and $1.0 million and $1.3 million for the nine months ended October 31, 2020 and 2019, respectively.
The following table presents the Company’s long-lived assets by geographic region for the periods indicated (in thousands):
October 31,
2020
January 31,
2020
United States$3,138 $1,970 
International814 1,023 
Total long-lived assets$3,952 $2,993 
The Company capitalized $0.4 million and $1.8 million of internal-use software costs for the three months ended October 31, 2020 and 2019, respectively, and $1.5 million and $4.7 million of internal-use software costs during the nine months ended October 31, 2020 and 2019, respectively. Amortization of internal-use software costs was $0.2 million and $0.2 million during the three months ended October 31, 2020 and 2019, respectively, and $0.5 million and $0.8 million during the nine months ended October 31, 2020 and 2019, respectively. There were no impairments of capitalized internal-use software costs during the nine months ended October 31, 2020 or 2019.
Fully amortized capitalized internal-use software was written off in the amount of $8.0 million during the nine months ended October 31, 2020.
5. Acquisitions, Intangible Assets, and Goodwill
Jask Labs Inc.
On October 20, 2019, the Company executed a merger agreement to acquire the assets and liabilities of Jask Labs. The acquisition closed on October 25, 2019. Jask Labs is a software company with a platform that offers a cloud-native autonomous security operations center solution. The Company acquired Jask Labs primarily for its team and their platform, which includes their security analytics solution to deliver an integrated, cloud-native intelligence solution. The aggregate purchase consideration was $55.1 million, of which $11.2 million was paid in cash, $43.3 million was comprised of 3,573,659 shares of common stock, and $0.6 million was comprised of assumed options to purchase 265,075 shares of common stock. The value of consideration assigned to the common stock paid was based on the fair value of the Company’s common stock on the date of acquisition. Of the consideration transferred, $0.9 million in cash and 543,095 shares of common stock for $6.6 million was placed in an indemnity escrow fund to be held for 15 months after the acquisition date for general representations and warranties.
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At closing, certain Jask Labs stockholders had not completed administrative forms that were required for the Company’s common stock to be legally issued. Thus, the shares were to be issued once the administrative forms were completed. The Company has included the total fair value of the consideration for shares legally issued and legally issuable within additional-paid-in capital and common stock. As of October 31, 2020, all administrative forms were completed and all shares were legally issued and outstanding.
The acquisition was accounted for as a business combination, and the total purchase price was allocated to the net tangible and intangible assets and liabilities acquired based on their respective fair values on the acquisition date and the excess was recorded as goodwill.
Certain stock options held by Jask Labs employees were assumed by the Company with a total fair value of $1.7 million, of which $0.6 million was attributed to pre-combination services and was included in consideration transferred and $1.1 million was allocated to post-combination services and will be recognized as stock-based compensation over the remaining service period. See Note 9 for more details on the Jask Labs options assumed.
The assets acquired and liabilities assumed in connection with the acquisition were recorded at their fair value on the date of acquisition as follows (in thousands):
Amount
Cash
$782 
Restricted cash
300 
Accounts receivable
503 
Prepaid expenses and other assets
659 
Fixed assets
367 
Intangible assets
17,500 
Goodwill
41,368 
Accounts payable
(1,760)
Deferred revenue, current
(2,358)
Accrued and other current liabilities
(1,609)
Deferred revenue, noncurrent
(354)
Other noncurrent liabilities
(291)
Total acquisition consideration
$55,107 
Subsequent to the acquisition, the Company recorded a $0.3 million tax benefit related to on the release of the valuation allowance on its net deferred tax assets.
Intangible assets acquired are comprised of developed technology with an estimated useful life of 3 years. The fair value assigned to the developed technology was determined using the reproduction cost approach, which estimates the cost to reproduce the asset. Goodwill represents the future economic benefits arising from other assets that could not be individually identified and separately recognized, such as the acquired assembled workforce of Jask Labs. In addition, goodwill represents the future benefits as a result of the acquisition that will enhance the Company’s product available to both new and existing customers and increase the Company’s competitive position. The goodwill is not deductible for tax purposes.
In connection with the acquisition, the Company granted 130,180 shares of restricted common stock, with a fair value of $12.11683 per share at the time of grant, that vest over a period of two years. The Company recorded stock-based compensation expense related to the vesting of the restricted common stock of $0.2 million during the three months ended October 31, 2020 and $0.6 million during the nine months ended October 31, 2020. Stock-based compensation expense related to the vesting of the restricted common stock was immaterial for the nine months ended October 31, 2019. As of October 31, 2020 and January 31, 2020, the remaining unrecognized stock-based compensation expense of $0.8 million and $1.4 million, respectively, will be recognized over the remaining vesting period.
The Company incurred acquisition-related expenses of $2.6 million, which were recorded as general and administrative expenses in the condensed consolidated statement of operations during the three and nine months ended October 31, 2019. The Company paid $0.8 million in acquisition-related expenses incurred by Jask Labs related to Jask Labs’ advisors which was included as part of the purchase consideration.
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The results of operations of Jask Labs are included in the accompanying condensed consolidated statements of operations from the date of acquisition. Jask Labs’ results of operations since the date of acquisition were not material to the Company’s condensed consolidated results for the year ended January 31, 2020.
Pro Forma Financial Information
The following pro forma information gives effect to the acquisition of Jask Labs as if it had been completed on February 1, 2017 (the beginning of the comparable prior annual reporting period presented in the Prospectus), including pro forma adjustments primarily related to amortization of acquired intangible assets, reduction in revenue related to the fair value of deferred revenue, stock-based compensation, tax benefit from release of the valuation allowance, and the inclusion of acquisition-related expenses reflected in the revenue and net loss figures below at the earliest period presented. The pro forma results have been prepared based on estimates and assumptions, which the Company believes are reasonable; however, they are not necessarily indicative of the consolidated results of operations had the acquisition occurred on February 1, 2017, or of future results of operations (in thousands):
Three Months Ended
October 31, 2019
Nine Months Ended
October 31, 2019
Revenue
$41,503 $113,124 
Net loss
$(34,258)$(81,025)
Pro forma revenue and net loss reflect nonrecurring adjustments for acquisition-related expenses of $3.4 million, a tax benefit of $0.3 million for the release of the valuation allowance, and accelerated stock-based compensation of $0.1 million that resulted from the acquisition.
Other Acquisitions
During the nine months ended October 31, 2019, the Company completed an asset acquisition for total consideration of $1.0 million which was attributed to intangible assets. The intangible assets acquired in the asset acquisition were comprised of developed technology with an estimated weighted average useful life of 1.5 years. This acquisition generally enhances the breadth and depth of certain of the Company’s product offerings.
Acquired Intangible Assets
Intangible assets as of October 31, 2020 and January 31, 2020 consisted of developed technology with acquisition-date fair values of $20.1 million and $20.1 million, respectively.
As of October 31, 2020 and January 31, 2020, the accumulated amortization of the developed technology was $7.8 million and $2.7 million, respectively. As of October 31, 2020 and January 31, 2020, the weighted-average remaining useful life of the developed technology was 2.0 years and 2.7 years, respectively. The Company recorded amortization expense of $1.7 million and $0.3 million during the three months ended October 31, 2020 and 2019, respectively, and $5.1 million and $0.6 million during the nine months ended October 31, 2020 and 2019, respectively. There was no impairment of intangible assets recorded for the nine months ended October 31, 2020 or 2019.
As of October 31, 2020, future amortization expense related to acquired developed technology was as follows (in thousands):
Amortization Expense
Remainder of fiscal 2021$1,648 
20226,148 
20234,502 
Total.$12,298 
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As of January 31, 2020, future amortization expense related to acquired developed technology was as follows (in thousands):
Amortization Expense
2021$6,765 
20226,148 
20234,502 
Total$17,415 
Goodwill
There was no impairment of goodwill recorded for the nine months ended October 31, 2020 or 2019.
6. Debt
On January 31, 2016, the Company entered into a Loan and Security Agreement (the “Agreement”) with Silicon Valley Bank. The Agreement provides for a revolving line of credit facility, which was amended in July 2019 to extend it to July 31, 2021. Under the Agreement, the Company can borrow up to $25 million. Interest on any drawdown under the revolving line of credit accrues either at the prime rate plus a spread rate of ranging from 0.25% to 0.75% as determined by the Company’s adjusted quick ratio. The Agreement is secured by substantially all of the Company’s assets. The Agreement includes restrictive covenants, in each case subject to certain exceptions, that limit the Company’s ability to: sell or otherwise dispose of the Company’s business or property; change its business, liquidate or dissolve or undergo a change in control; enter into mergers, consolidations, and acquisitions; incur indebtedness; create liens; pay dividends or make distributions; make investments; enter into material transactions with affiliates; pay any subordinated debt or amend certain terms thereof; or become an investment company. The Agreement also contains customary events of default, upon which Silicon Valley Bank may declare all or a portion of the Company’s outstanding obligations payable to be immediately due and payable.
In June 2020, the Company amended the Agreement with Silicon Valley Bank to extend its maturity to June 2022. Under the amended Agreement, the Company can borrow up to $50 million. Interest on any drawdown accrues at the greater of the prime rate plus a spread of 0.75% or 5.25%. Pursuant to the amended Agreement, the Company is required to maintain a minimum adjusted quick ratio of 1.25 to 1.00. If the Company’s adjusted quick ratio is greater than or equal to 1.75 to 1.00, interest on any drawdown will accrue at the greater of the prime rate plus a spread of 0.25% or 4.75%. The revolving line of credit must be repaid by June 26, 2022.
During the three months ended October 31, 2020, the Company repaid the outstanding balance under this facility. The Company did not have any balance outstanding under this facility as of January 31, 2020. The Company was in compliance with the financial covenants associated with the amended Agreement as of October 31, 2020.
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7. Commitments and Contingencies
Operating Leases
The Company leases office space globally under non-cancelable operating lease agreements that expire at various dates through fiscal 2025. As of October 31, 2020, future annual minimum lease payments under non-cancelable operating leases were as follows (in thousands):
Minimum
Lease
Payments
Remainder of 2021$1,199 
20224,787 
20234,649 
20241,887 
2025404 
Total $12,926 
Rent expense was $1.0 million and $0.9 million for the three months ended October 31, 2020 and 2019, respectively, and $3.0 million and $2.3 million for the nine months ended October 31, 2020 and 2019, respectively.
Non-Cancellable Purchase Commitments
During the nine months ended October 31, 2020, there were no material changes, outside the ordinary course of business, to the Company’s contractual obligations and commitments, except as follows.
In July 2020, the Company entered into an amended hosting agreement effective August 2020. Under the amended agreement, the Company has committed to spend $220.0 million between August 2020 and January 2024 for its hosting agreement ($90.0 million between August 2020 and January 2022, $60 million between February 2022 and January 2023, and $70.0 million between February 2023 and January 2024).
Litigation and Other Matters
From time to time, the Company may be a party to various legal matters, threatened claims, or proceedings in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Legal accruals are recorded when and if it is determined that a loss related to a certain matter is both probable and reasonably estimable.
Attorneys representing a purported class of current and former employees in various sales roles alleged potential claims of employee misclassification and related federal and state law claims, which the Company disputed. In response, the Company mediated the dispute, and in August 2020, the Company entered into a settlement agreement with the purported class counsel to resolve the dispute, which is being handled in arbitration and will result in the Company paying $4.5 million to resolve the class-wide claims, subject to final approval by the arbitrator. As of October 31, 2020, the Company had recorded $4.5 million related to these claims within accrued expenses and other current liabilities on the condensed consolidated balance sheet.
The Company is not always able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued. In management’s opinion, resolution of all current matters, including employment matters, is not expected to have a material adverse impact on the Company’s business, financial position, results of operations, or cash flows as of October 31, 2020 or January 31, 2020.
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8. Revenue
Disaggregation of Revenue
The following table presents the Company’s revenue by geographic region, based on the billing address of the customer, for the periods indicated (in thousands):
Three Months Ended October 31,Nine Months Ended October 31,
2020201920202019
United States$44,636 $34,355 $125,648 $93,269 
International7,232 6,158 22,837 17,476 
Total revenue$51,868 $40,513 $148,485 $110,745 
No individual foreign country contributed 10% or more of revenue for the three and nine months ended October 31, 2020 and 2019.
No customer individually accounted for 10% or more of the Company’s revenue for the three and nine months ended October 31, 2020 or 2019.
Deferred Revenue, and Remaining Performance Obligations
The Company recognized revenue of $38.1 million and $29.7 million during the three months ended October 31, 2020 and 2019, respectively, and $77.6 million and $55.9 million during the nine months ended October 31, 2020 and 2019, respectively, that was included in the deferred revenue balance at the beginning of the respective periods.
As of October 31, 2020, future estimated revenue related to performance obligations from non-cancelable contracts that were unsatisfied or partially unsatisfied were $234.4 million. Of this amount, the Company expects to recognize revenue of approximately $139.9 million over the next twelve months, with the remaining balance recognized thereafter.
Accounts Receivable and Related Allowance
Accounts receivable consist of amounts billed and currently due from customers. The Company’s accounts receivable are subject to collection risk. Gross accounts receivable is adjusted for estimated losses resulting from the inability of the Company’s customers to fulfill their payment obligations. The Company periodically reviews factors such as past collection experience, specific allowances for known troubled accounts, and other currently available evidence to determine the best estimate of probable losses inherent in the receivables. As of October 31, 2020, there was less than $0.1 million recorded as an allowance for doubtful accounts for the Company’s accounts receivables, and there was no allowance for doubtful accounts as of January 31, 2020.
As of October 31, 2020, two customers accounted for 19% and 11% of total accounts receivable, respectively. As of January 31, 2020, no individual customer accounted for 10% or more of total accounts receivable.
Deferred Sales Commissions
The Company capitalized sales commission of $10.8 million and $4.0 million during the three months ended October 31, 2020 and 2019, respectively, and $17.7 million and $10.6 million during the nine months ended October 31, 2020 and 2019, respectively. Amortized costs were $2.9 million and $2.2 million for the three months ended October 31, 2020 and 2019, respectively, and $8.1 million and $6.4 million for the nine months ended October 31, 2020 and 2019, respectively. There was no impairment loss in relation to deferred sales commissions for the nine months ended October 31, 2020 or 2019.
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9. Stockholders’ Equity (Deficit) and Equity Incentive Plans
Redeemable Convertible Preferred Stock
Upon the closing of the Company’s IPO, all 63,761,950 shares of redeemable convertible preferred stock were automatically converted into shares of common stock on a one-to-one basis, and the carrying value of $340.2 million was reclassified into common stock and additional paid-in-capital. As of October 31, 2020, there were no shares of redeemable convertible preferred stock issued and outstanding.
Common Stock
The Company’s Amended and Restated Certificate of Incorporation authorized the Company to issue 1,000.0 million and 122.0 million shares of common stock at a par value of $0.0001 as of October 31, 2020 and January 31, 2020, respectively. As of October 31, 2020 and January 31, 2020, approximately 102.0 million and 19.0 million shares of common stock were issued and outstanding, respectively.
Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. As of October 31, 2020 and January 31, 2020, no dividends had been declared.
Stock Plans
The Company has two equity incentive plans: the 2010 Stock Plan (the “2010 Plan”) and the 2020 Equity Incentive Plan (the “2020 Plan”). In connection with the Company’s IPO in September 2020, the 2010 Plan was terminated and replaced by the 2020 Plan and all shares that remained available for issuance under the 2010 Plan at that time were reserved for issuance under the 2020 Plan. The number of shares of common stock available for issuance under the 2020 Plan will be increased by any shares of common stock subject to awards outstanding under the 2010 Plan that expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by the Company for payment of an exercise price or for satisfying tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest.
The Company has issued stock options and restricted stock units (“RSUs”) to employees, directors, consultants, and advisors pursuant to the 2010 Plan. Through October 31, 2020, the Company has granted no equity awards pursuant to the 2020 Plan.
Employee stock options are granted with an exercise price no less than the fair value of the underlying common stock on the grant date, in general vest based on continuous service over four years, and expire 10 years from the date of grant. The value of RSUs is measured based on the grant date fair value of the awards and in general vest based on satisfying both a service-based condition based on continuous service over four years and a liquidity event condition.
As of October 31, 2020, there were 13.3 million shares available for grant under the 2020 Plan. The 2020 Plan provides that the number of shares reserved will automatically increase on the first day of each fiscal year, beginning on February 1, 2021, by an amount equal to the least of (i) 12,500,000 shares, (ii) 5% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year, or (iii) such other amount as the administrator of the 2020 Plan may determine.
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Stock Options
The following table is a summary of option activity during the nine months ended October 31, 2020:
Number of
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic Value
(in thousands)(years)(in thousands)
Balance at January 31, 2020
27,841 $3.72 7.7$233,918 
Options granted1,635 $12.12 
Options exercised(2,170)$2.61 
Options cancelled(2,072)$6.08 
Balance at October 31, 2020
25,234 $4.16 7.0$331,066 
Options exercisable at January 31, 2020
14,141 $2.01 6.5$142,932 
Options exercisable at October 31, 2020
15,710 $2.61 6.1$230,411 
Stock options granted during the three months ended October 31, 2020 and 2019 had a weighted-average grant-date fair value $11.13 and $6.68 per share, respectively. The aggregate intrinsic value of options exercised during the three months ended October 31, 2020 and 2019 was $17.0 million and $6.7 million, respectively.
Stock options granted during the nine months ended October 31, 2020 and 2019 had a weighted-average grant date fair value of $6.21 and $5.46 per share, respectively. The aggregate intrinsic value of options exercised during the nine months ended October 31, 2020 and 2019 was $25.9 million and $9.9 million, respectively.
No income tax benefits have been recognized for stock-based compensation arrangements. As of October 31, 2020 and January 31, 2020, there was $40.4 million and $52.0 million, respectively, of total unrecognized compensation expense related to unvested employee and non-employee stock options that is expected to be recognized over a weighted-average period of 2.6 and 3.1 years, respectively.
Early Exercise of Employee Options
As of October 31, 2020 and January 31, 2020, the Company had a liability $0.3 million and $0.4 million, respectively, for 91,375 and 139,750 shares of common stock that were unvested and early exercised by employees as of October 31, 2020 and January 31, 2020, respectively.
Restricted Stock Units
The following table is a summary of RSU activity for the nine months ended October 31, 2020:
Number of
Shares
Weighted
Average Grant
Date Fair
Value per
Share
(in thousands)
RSUs outstanding at February 1, 2020 
Granted 3,274 $13.03 
Forfeited (83)$12.12 
RSUs outstanding at October 31, 2020
3,191 $13.06 
RSUs expected to vest at October 31, 2020
3,191 $13.06 
As of October 31, 2020, there was $27.7 million of total unrecognized compensation expense related to unvested employee and director RSUs, of which $1.0 million is for the RSUs subject to certain other performance metrics. Total unrecognized compensation expense related to unvested RSUs is expected to be recognized over a weighted-average period of 1.8 years.
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Jask Labs Plans