Was wondering why their FY21 costs where much higher than first half of this year, this probably explains it:
> Stock-based compensation expense for fiscal 2020 and 2021, and six months ended July 31, 2021 includes $32.7 million, $103.8 million, and $0.3 million, respectively, of compensation expense related to secondary stock sales described in Note 16 to our consolidated financial statements included elsewhere in this prospectus.
Which makes the numbers not as bad as they seem on first glance.
True, but sometimes you have a big lump of early employees become liquid at the same time. That’s a not a recurring event, which is important when deciding how viable the business is.
Absolutely agreed, but events like one-off secondaries can somewhat distort the numbers in that they put costs that should be amortized over many in years into a single quarter. You see similar at big cos 6mos after IPO when everything vests.
It does not affect free cash flow or strain the resources of already available to the company.
Stock holders existing and new participate in the success of failure of the company, different from say vendor who needs to be paid no matter what.
it is far worse to be spending 100m in cash to get say 50m in new revenue (if the customers don't stay long enough) as this requires new cash to be infused to keep growing.
> Stock-based compensation expense for fiscal 2020 and 2021, and six months ended July 31, 2021 includes $32.7 million, $103.8 million, and $0.3 million, respectively, of compensation expense related to secondary stock sales described in Note 16 to our consolidated financial statements included elsewhere in this prospectus.
Which makes the numbers not as bad as they seem on first glance.