Net Income Per Share

12 Months Ended

Dec. 31, 2023

Net income per share of Class A and Class B common stock amounts are computed using the two‑class method required for participating securities, using the treasury stock method for awards under the Company’s equity compensation plans and ESPP, and using the if‑converted method for the convertible senior notes. In addition, the weighted average number of shares of the Company’s Class A and Class B common stock is inclusive of undistributed shares held in the DCP as phantom shares of the Company’s Class B common stock.

The 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 December 31, 2023, 2022, and 2021, there were 365,641, 362,773, and 96,683 participating securities outstanding, respectively.

Undistributed net income allocated to participating securities are subtracted from net income in determining basic net income attributable to common stockholders. Basic net income per share is computed by dividing basic net income 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 per share numerator, interest expense, net of tax, attributable to the assumed conversion of the convertible senior notes is added back to basic net income attributable to common stockholders. For the Company’s diluted net income per share denominator, the basic weighted average number of shares is adjusted for the effect of dilutive securities, including awards under the Company’s equity compensation plans and ESPP, and for the dilutive effect of the assumed conversion of the convertible senior notes. Diluted net income per share attributable to common stockholders is computed by dividing diluted net income 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 per share would not differ under the two‑class method.

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


	Year Ended December 31,
	2023		2022		2021
Numerator:
Net income	$	326,787	$	174,780	$	93,192
Less: Net income attributable to participating securities	(74)		(42)		(9)
Net income attributable to Class A and Class B common stockholders, basic	326,713		174,738		93,183
Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes	6,874		6,810		—
Net income attributable to Class A and Class B common stockholders, diluted	$	333,587	$	181,548	$	93,183

Denominator:
Weighted average shares, basic	312,358,823		309,226,677		305,711,345
Dilutive effect of stock options, restricted stock, and RSUs	2,435,456		4,705,172		8,791,084
Dilutive effect of ESPP	75,568		166,606		108,385
Dilutive effect of assumed conversion of convertible senior notes	17,633,786		17,666,703		—
Weighted average shares, diluted	332,503,633		331,765,158		314,610,814

Net income per share, basic	$	1.05	$	0.57	$	0.30
Net income per share, diluted	$	1.00	$	0.55	$	0.30

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


	Year Ended December 31,
	2023	2022	2021
RSUs	—	718,105	150,017

Convertible senior notes	—	—	13,474,580
Total anti-dilutive securities	—	718,105	13,624,597