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Earnings Per Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share

Earnings Per Share

4. Earnings Per Share

Basic earnings per share is calculated by dividing the net income or loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted earnings per share is computed by dividing the net income or loss by the weighted-average number of shares of common stock, plus potentially dilutive securities outstanding for the period, as determined in accordance with the treasury stock, if-converted, or contingently issuable accounting methods, depending on the nature of the security. For purposes of the diluted earnings per share calculation, stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), and shares potentially issuable in connection with the Company’s employee stock purchase plan and convertible senior notes are considered potentially dilutive securities and included to the extent that their addition is not antidilutive.

The following table presents the computations of basic and dilutive earnings per common share:


	Three Months Ended March 31,
	2024			2023
Numerator:
Net income (loss)	$	27,713		$	(17,426)
Adjustment for interest expense recognized on convertible senior notes		1,622			—
Net income (loss) - diluted	$	29,335		$	(17,426)
Denominator:
Weighted-average shares outstanding — basic		32,326,589			34,319,291
Effect of dilutive securities:
Stock options		468,057			—
Restricted stock units		1,134,716			—
Performance share units		—			—
Convertible senior notes		7,509,104			—
Weighted average shares outstanding — diluted		41,438,466			34,319,291

Earnings (loss) per share — basic	$	0.86		$	(0.51)
Earnings (loss) per share — diluted	$	0.71		$	(0.51)

The Company has the option to settle the conversion obligation for its convertible senior notes due in 2026 and 2029 in cash, shares or a combination of the two. On April 11, 2024, the Company announced that it called all $26,350 aggregate principal amount of its 2026 Convertible Notes for redemption on the Redemption Date (refer to Note 2, Summary of Significant Accounting Policies – Subsequent Events), which represented 902,799 shares included in the diluted earnings per share for the three months ended March 31, 2024. The Company uses the if-converted method for the convertible senior notes.

The following table presents dilutive securities excluded from the calculation of diluted earnings per share:


	Three Months Ended March 31,
	2024		2023
Stock options	—		1,443,996
Restricted stock units	1,050		2,455,919
Performance share units	511,680		503,880
Employee stock purchase plan	17,320		—
Convertible senior notes	—		7,509,104

For PSUs, these securities were excluded from the calculation of diluted earnings per share as the market-based vesting conditions were not met as of the end of the reporting period. All other securities presented in the table above were excluded from the calculation of diluted earnings per share as their inclusion would have had an antidilutive effect.