The Company has issued incentive and non-qualifying stock options to employees and non-employee directors under the 2005 Stock Option/Restricted Stock Plan, the 2015 Equity Incentive Plan (the “2015 Plan”), and the 2018 Equity Incentive Plan (the “2018 Plan”). Employee stock options are granted with exercise prices at the fair value of the underlying common stock on the grant date, generally vest, based on continuous employment, over three or four years, and expire 10 years from the date of grant.

The Company has also issued RSUs to employees and non-employee directors pursuant to the 2015 Plan and the 2018 Plan. Employee RSUs are measured based on the grant-date fair value of the awards and generally vest, based on continuous employment, over three or four years.

The Company has also issued market-based PSUs to certain executives pursuant to the 2018 Plan. The number of shares that can be earned range from 0% to 200% of the target number of shares, based on the relative growth of the Company’s total shareholder return as compared to the total shareholder return of the Standard & Poor’s (“S&P”) Software and Services Select Index. PSUs vest over a three-year period, subject to continuous service with the Company. Share-based compensation expense for PSUs with market conditions is measured using a Monte Carlo simulation approach and recorded over the vesting period under the graded-vesting attribution method.

The target number of PSUs granted was 195,948 shares during the year ended January 31, 2024 and 194,624 shares during the nine months ended October 31, 2024. No shares were granted during the three months ended October 31, 2024. These PSUs are measured over a two-year performance period ending in the fourth quarter of fiscal year 2026. PSU’s granted during the year ended January 31, 2023 have two separate performance periods. The first tranche of awards, which had a one-year performance period, vested during the year ended January 31, 2024. The second tranche of awards is measured over a two-year performance period starting on the date of grant and ending in the fourth quarter of fiscal year ending January 31, 2025.

The following table includes a summary of the option activity during the nine months ended October 31, 2024:


	Number of Options	Weighted-Average Exercise Price
Outstanding at January 31, 2024	3,517,075	$	24.77
Granted	—	—
Exercised	(712,219)	15.38
Forfeited or canceled	(163,276)	61.25
Outstanding at October 31, 2024	2,641,580	25.04
Exercisable at October 31, 2024	2,466,276	22.86

The following table includes a summary of the RSU activity during the nine months ended October 31, 2024:


	Number of Shares	Weighted-Average Grant-Date Fair Value
Outstanding at January 31, 2024	8,798,624	$	45.41
Granted	1,085,216	42.69
Vested	(2,874,718)	46.43
Forfeited or canceled	(1,184,921)	44.72
Outstanding at October 31, 2024	5,824,201	44.53

The following table includes a summary of the PSU activity during the nine months ended October 31, 2024:


	Number of Shares	Weighted-Average Grant-Date Fair Value
Outstanding at January 31, 2024	321,463	$	50.54
Granted	194,624	34.27
Vested	—	—
Forfeited or canceled	(63,206)	50.61
Outstanding at October 31, 2024	452,881	43.53

The Company adopted the ESPP on April 26, 2018, with the effective date of our Initial Public Offering. Under the ESPP, eligible employees are able to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 15% of their compensation, subject to plan limitations. Purchases are accomplished through participation in discrete offering periods. Each offering period is six months (commencing each January 1 and July 1), with a purchase date following the end of the period, unless otherwise determined by our board of directors or our compensation committee. Employees may purchase shares at 85% of the lesser of the fair market value of the Company’s Class A common stock on (i) the first trading day of the applicable offering period or (ii) the last trading day of the purchase period in the applicable offering period.

The following table includes a summary of the activity of shares available for issuance under the 2018 Plan and the ESPP during the nine months ended October 31, 2024:


	2018 Plan	ESPP
Balance at January 31, 2024	18,985,254	5,572,546
Authorized	6,844,200	1,368,840
Granted	(1,279,840)	(298,236)
Forfeited or canceled	1,411,403	—
Balance at October 31, 2024	25,961,017	6,643,150

The aggregate number of shares reserved for issuance under the ESPP will increase automatically on February 1 of each of the first 10 calendar years after the first offering date. The increase of shares is equal to 1% of the total outstanding shares of the Company’s Class A and Class B common stock as of the immediately preceding January 31 (rounded to the nearest whole share), or such lesser number of shares as may be determined by our board of directors. The aggregate number of shares issued under the ESPP, subject to stock-splits, recapitalizations or similar events, may not exceed 20,400,000 shares of the Company’s common stock.

As of October 31, 2024, $6.2 million has been withheld on behalf of our employees for a future purchase under the ESPP and is recorded in accrued compensation and related benefits in the condensed consolidated balance sheets.

Share-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2024		2023		2024		2023
Cost of subscription revenue	$	2,983	$	3,164	$	9,055	$	9,980
Cost of professional services revenue	1,485		1,777		4,734		5,602
Research and development	17,763		17,220		54,036		52,263
Sales and marketing	14,453		17,462		45,472		55,505
General and administrative	9,151		10,024		29,827		30,099
Total share-based compensation expense	$	45,835	$	49,647	$	143,124	$	153,449

The Company has excluded $0.4 million and $1.3 million of capitalized software development costs from share-based compensation expense for the three months ended October 31, 2024 and 2023, respectively, and $2.3 million and $3.6 million of capitalized software development costs from share-based compensation expense for the nine months ended October 31, 2024 and 2023, respectively.

As of October 31, 2024, there was a total of $234.2 million of unrecognized share-based compensation expense, which is expected to be recognized over a weighted-average period of 1.6 years.

In April 2024, the Company’s Board of Directors authorized the repurchase of up to $150.0 million of the Company’s outstanding Class A common stock. During the three months ended October 31, 2024, we repurchased 0.2 million shares of our Class A common stock at an average price of $46.05 per share, for aggregate repurchases of $9.7 million. During the nine months ended October 31, 2024, we repurchased 1.1 million shares of our Class A common stock at an average price of $44.34 per share, for aggregate repurchases of $50.0 million.