Net Income Per Share

6 Months Ended

Jun. 30, 2022

9. Net Income Per Share

We compute net income per share of common stock using the two-class method required for participating securities. We consider warrants to be participating securities because holders of such shares have dividend rights in the event of our declaration of a dividend for common shares. Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders.

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

For the calculation of diluted net income per share, net income attributable to common stockholders for basic net income per share is adjusted by the effect of dilutive securities, including awards under our equity compensation plans and change in fair value of warrant liability. Diluted net income per share attributable to common stockholders is computed by dividing the resulting net income attributable to common stockholders by the weighted-average number of fully diluted common shares outstanding.

The numerators and denominators of the basic and diluted net income per share computations for our common stock are calculated as follows (in thousands):


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2022		2021			2022			2021
Numerator
Net income	$	128,755	$	4,473		$	161,614		$	5,364
Less: undistributed earnings allocated to participating securities		-		(333	)		(316	)		(410	)
Net income attributable to common stockholders, basic		128,755		4,140			161,298			4,954
Add: undistributed earnings allocated to participating securities		-		-			316			-
Less: removal of change in fair value of warrant liability		-		(2,097	)		(1,801	)		-
Add: interest expense on convertible notes		1,260		-			2,519			-
Net income attributable to common stockholders, diluted	$	130,015	$	2,043		$	162,332		$	4,954
Denominator
Weighted average common stock outstanding, basic		126,347		114,629			125,456			113,339
Effect of dilutive shares:
Stock-based compensation plans		2,015		1,630			2,659			1,639
Dilutive warrants		-		2,571			163			-
Convertible Notes (as converted to common stock)		21,543		-			21,543			-
Weighted average common stock outstanding, diluted		149,905		118,830			149,821			114,978

The following were excluded from the calculation of diluted net income per share as the effect of their inclusion would have been anti-dilutive (in thousands).


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Outstanding securities not included in diluted net income (loss) per share calculation:
Stock options and stock awards		9,647		6,991		9,067		8,476
Series B Convertible Preferred Stock (as converted to common stock)		-		4,140		-		4,140
Warrants (as exercisable into common stock)		-		-		-		2,474
Convertible Notes (as converted to common stock)		-		11,363		-		5,713
Total		9,647		22,494		9,067		20,803