Net Income (Loss) Per Share

9 Months Ended

Sep. 29, 2019

Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. The weighted average number of shares outstanding for the basic and diluted net income (loss) per share for the periods prior to the completion of the IPO is based on the number of shares of Arlo common stock outstanding on August 2, 2018, the effective date of the registration statement relating to the IPO (the “IPO Registration Statement”). On that date, the Company issued 62,499,000 shares of common stock to the Company’s sole stockholder of record, NETGEAR (after which NETGEAR held 62,500,000 shares of common stock, which represented all of the then issued and outstanding common stock). Potentially dilutive common shares, such as common shares issuable upon exercise of stock options and vesting of restricted stock awards are typically reflected in the computation of diluted net income (loss) per share by application of the treasury stock method. For certain periods presented, due to the net losses reported, these potentially dilutive securities were excluded from the computation of diluted net loss per share, since their effect would be anti-dilutive.

Net loss per share for the three and nine months ended September 29, 2019 and September 30, 2018 were as follows:



	Three Months Ended						Nine Months Ended
	September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018
	(In thousands, except per share data)
Numerator:
Net loss	$	(30,590	)	$	(13,225	)	$	(105,566	)	$	(36,410	)
Denominator:
Weighted average common shares - basic	75,337			69,600			74,831			64,867
Potentially dilutive common share equivalent	—			—			—			—
Weighted average common shares - dilutive	75,337			69,600			74,831			64,867

Basic net loss per share	$	(0.41	)	$	(0.19	)	$	(1.41	)	$	(0.56	)
Diluted net loss per share	$	(0.41	)	$	(0.19	)	$	(1.41	)	$	(0.56	)

Anti-dilutive employee stock-based awards, excluded	10,287			1,929			10,114			643