Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2022

Net Income (Loss) Per ShareThe Company issues certain performance-based RSUs determined to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of the Company’s declaration of a dividend for common shares. As of September 30, 2022 and 2021, there were 362,773 and 99,683 participating securities outstanding, respectively.

Undistributed net income (loss) allocated to participating securities are subtracted from net income (loss) in determining basic net income (loss) attributable to common stockholders. Basic net income (loss) per share is computed by dividing basic net income (loss) attributable to common stockholders by the weighted average number of shares, inclusive of undistributed shares held in the DCP as phantom shares of the Company’s Class B Common Stock.

For the Company’s diluted net income (loss) per share numerator, interest expense, net of tax, attributable to the conversion of the convertible senior notes is added back to basic net income (loss) attributable to common stockholders. For the Company’s diluted net income (loss) per share denominator, the basic weighted average number of shares is adjusted by the effect of dilutive securities, including awards under the Company’s equity compensation plans and ESPP, and by the dilutive effect of the assumed conversion of the convertible senior notes. Diluted net income (loss) per share attributable to common stockholders is computed by dividing diluted net income (loss) attributable to common stockholders by the weighted average number of fully diluted common shares.

Except with respect to voting and conversion, the rights of the holders of the Company’s Class A Common Stock and the Company’s Class B Common Stock are identical. Each class of shares has the same rights to dividends and allocation of income (loss) and, therefore, net income (loss) per share would not differ under the two‑class method.

The details of basic and diluted net income (loss) per share are as follows:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2022		2021			2022		2021
Numerator:
Net income (loss)	$	36,997	$	(48,022)		$	149,058	$	54,611
Less: Net income (loss) attributable to participating securities	(11)		(3)			(31)		(6)
Net income (loss) attributable to Class A and Class B common stockholders, basic	36,986		(48,025)			149,027		54,605
Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes	832		—		(1)	5,116		—
Net income (loss) attributable to Class A and Class B common stockholders, diluted	$	37,818	$	(48,025)		$	154,143	$	54,605

Denominator:
Weighted average shares, basic	310,116,104		308,195,379			308,959,801		305,119,985
Dilutive effect of stock options, restricted stock, and RSUs	4,126,936		—			5,278,839		9,430,643
Dilutive effect of ESPP	168,518		—			171,571		107,508
Dilutive effect of assumed conversion of convertible senior notes	10,758,825		—			17,667,623		—
Weighted average shares, diluted	325,170,383		308,195,379			332,077,834		314,658,136

Net income (loss) per share, basic	$	0.12	$	(0.16)		$	0.48	$	0.18
Net income (loss) per share, diluted	$	0.12	$	(0.16)		$	0.46	$	0.17

(1)The effect of interest expense, net of tax, attributable to assumed conversion of convertible senior notes for the three months ended September 30, 2021 has been excluded from the calculation of diluted net loss per share due to the net loss for the period.

The following potential common shares were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their effect would have been anti‑dilutive for the periods presented:


	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2022	2021		2022	2021
RSUs	297,789	8,174,124		279,789	90,400
ESPP	—	97,804		—	—
Convertible senior notes	6,908,798	17,667,623		—	12,076,899
Total anti-dilutive securities	7,206,587	25,939,551	(1)	279,789	12,167,299

(1)The effect of dilutive securities for the three months ended September 30, 2021 have been excluded from the calculation of diluted net loss per share as those potential common shares would have been anti‑dilutive due to the net loss for the period, except for 90,400 RSUs that were anti‑dilutive under the two‑class method calculation of diluted net income (loss) per share.