Note 3—Earnings Per Share

In September 2016, and in preparation of the Company’s IPO and the establishment of two classes of common stock, each share of the then outstanding common stock was reclassified to Class B common stock. The Company sold Class A common stock in its IPO. As of September 30, 2016, the Company has two classes of common stock, Class A and Class B. Basic and diluted earnings (loss) per share attributable to common stockholders for Class A and Class B common stock were the same because they were entitled to the same liquidation and dividend rights.

The reconciliations of the numerators and denominators of the basic and diluted earnings (loss) per share computations are as follows (in thousands, except per share amounts):

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2016			2015			2016			2015
Earnings (loss) per share—basic:
Numerator:
Net income	$	3,644		$	4,605		$	10,202		$	10,279
Less: Income attributable to convertible preferred stock	(2,672		)	(3,152		)	—			(7,150		)
Add: Preferred stock modification	—			—			—			3,793
Less: Premium on repurchase of convertible preferred stock	—			—			(47,209		)	—

Net income (loss) attributable to common stockholders	$	972		$	1,453		$	(37,007	)	$	6,922

Denominator:
Weighted-average common shares outstanding	12,629			10,228			11,461			10,193

Earnings (loss) per share—basic	$	0.08		$	0.14		$	(3.23	)	$	0.68


Earnings (loss) per share—diluted:
Numerator:
Net income (loss) attributable to common stockholders—basic	$	972		$	1,453		$	(37,007	)	$	6,922
Add: Income attributable to dilutive convertible preferred stock	—			—			—			1,218
Less: Preferred stock modification	—			—			—			(3,793		)

Net income (loss) attributable to common stockholders—diluted	$	972		$	1,453		$	(37,007	)	$	4,347

Denominator:
Weighted-average shares outstanding	12,629			10,228			11,461			10,193
Dilutive convertible preferred stock	—			—			—			2,790
ESPP shares	5			—			—			—
Options to purchase common stock	4,430			4,003			—			3,603

Weighted-average shares outstanding—diluted	17,064			14,231			11,461			16,586

Earnings (loss) per share—diluted	$	0.06		$	0.10		$	(3.23	)	$	0.26

The following table presents the anti-dilutive shares excluded from the calculation of diluted earnings (loss) per share (in thousands):

	Three Months		Nine Months
	Ended September 30,		Ended September 30,
	2016	2015	2016	2015
Anti-dilutive options to purchase common stock	432	576	5,207	576
Common shares issuable upon conversion of convertible preferred stock	—	22,110	—	19,320
Anti-dilutive ESPP shares	—	—	2	—
Common shares issuable upon conversion of preferred stock warrants	—	730	—	730

Total shares excluded from earnings (loss) per share—diluted	432	23,416	5,209	20,626