Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2022

Loss) Per Share

Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the earnings by the weighted-average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported.

The following table sets forth the computation of basic and diluted net income (loss) per share:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands, except per share amounts)	2022		2021		2022		2021
Net income (loss) per share:
Numerator:
Net income (loss)	$	35,020	$	11,166	$	(31,198)	$	8,553
Denominator:
Weighted-average shares outstanding - basic	110,447		112,144		110,170		112,177
Effect of potential dilutive common shares	2,268		2,787		—		3,181
Weighted-average shares outstanding - diluted	112,715		114,931		110,170		115,358
Basic net income (loss) per share	$	0.32	$	0.10	$	(0.28)	$	0.08
Diluted net income (loss) per share	$	0.31	$	0.10	$	(0.28)	$	0.07

For the six months ended June 30, 2022, an additional 3.0 million shares were excluded from the weighted-average dilutive shares because there was a net loss position for the period. During the three months ended June 30, 2022, the Company’s stock price exceeded the 2023 Notes’ conversion price of $18.93 per share, therefore approximately 0.6 million shares for the three months ended June 30, 2022 were included in the weighted-average dilutive shares. During the three and six months ended June 30, 2021, the Company’s stock price exceeded the 2023 Notes’ conversion price of $18.93 per share, therefore approximately 0.5 million shares for each of the three and six months ended June 30, 2021, were included in the weighted-average dilutive shares.

As a result of the Company’s adoption of ASU No. 2020-06 on January 1, 2022, the dilutive impact of the 2023 Notes on the calculation of diluted net income (loss) per share is considered using the if-converted method. Furthermore, because the principal amount of the 2023 Notes must be settled in cash, the dilutive impact of applying the if-converted method is limited to the in-the-money portion, if any, of the 2023 Notes. For periods prior to the Company’s January 1, 2022 adoption of ASU No. 2020-06, the Company applied the treasury stock method to account for the dilutive impact of the 2023 Notes for diluted net income (loss) per share purposes. As noted in ASU No. 2020-06, for convertible instruments where the principal is required to be paid in cash, the results of applying the if-converted method are consistent with the results of applying the historical treasury stock method. Therefore, even though the Company is required to apply the if-converted method upon adoption of ASU No. 2020-06, there is no impact to its earnings per share calculation. Under the if-converted method, the cumulative dilutive effect of the 2023 Notes would be approximately 2.6 million shares. Refer to Note 10, “Convertible Notes,” for additional information.