Earnings per Share

6 Months Ended

Jun. 30, 2023

Note 8. Earnings per Share

Basic and diluted earnings per share is presented in conformity with the two-class method required for multiple classes of common stock. The rights of the holders of Class A and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible at any time into one share of Class A common stock.

Basic earnings per share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per share represents net income divided by the weighted-average number of shares of common stock outstanding, inclusive of the effect of dilutive stock options and RSUs. The undistributed earnings are allocated based on the participation rights of shares of Class A and Class B common stock as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical for both classes, the undistributed earnings are allocated on a proportionate basis.

The calculation of diluted earnings per share for Class A common stock assumes the conversion of Class B common stock, while diluted earnings per share of Class B common stock does not assume the conversion of Class A common stock as Class A common stock is not convertible into Class B common stock. Similarly, outstanding options to purchase Class B common stock and RSUs that are dilutive are included in the calculation of diluted earnings for both Class A and Class B common stock.

In August 2023, our board of directors authorized a stock repurchase program of up to $100 million of our outstanding Class A common stock. The timing and amount of any stock repurchases will be determined based on market conditions, stock price and other factors. Repurchases during any given fiscal period under the repurchase program will reduce the weighted-average number of shares of common stock outstanding for the period.

The following table presents the calculation of basic and diluted earnings per share:


	Three Months Ended June 30,								Six Months Ended June 30,
	2023				2022				2023				2022
	Class A		Class B		Class A		Class B		Class A		Class B		Class A		Class B
	(in thousands, except per share data)
Numerator
Net income	$	4,062	$	3,241	$	9,035	$	7,238	$	11,939	$	9,536	$	21,475	$	17,366
Reallocation of undistributed earnings as a result of conversion of Class B to Class A common stock		3,241		—		7,238		—		9,536		—		17,366		—
Reallocation of undistributed earnings to Class B common stock		—		35		—		160		—		132		—		411
Net income attributable to common stockholders — diluted	$	7,303	$	3,276	$	16,273	$	7,398	$	21,475	$	9,668	$	38,841	$	17,777
Denominator
Weighted average shares used to compute earnings per share — basic		40,845		32,597		40,706		32,606		40,809		32,597		40,521		32,768
Conversion of Class B to Class A common stock outstanding		32,597		—		32,606		—		32,597		—		32,768		—
Effect of dilutive stock options and RSUs		639		639		1,323		1,323		823		823		1,431		1,431
Weighted average number of shares used to compute earnings per share — diluted		74,081		33,236		74,635		33,929		74,229		33,420		74,720		34,199
Earnings per share:
Basic	$	0.10	$	0.10	$	0.22	$	0.22	$	0.29	$	0.29	$	0.53	$	0.53
Diluted	$	0.10	$	0.10	$	0.22	$	0.22	$	0.29	$	0.29	$	0.52	$	0.52

The following have been excluded from the computation of basic and diluted earnings per share as their effect would have been anti-dilutive (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Stock options to purchase Class A and Class B common stock, and RSUs		1,214		504		936		986