Earnings (Loss) Per Share Attributable to Common Stockholders

12 Months Ended

Aug. 03, 2019

Earnings (Loss) Per Share Attributable to Common Stockholders

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. We consider convertible preferred stock and early exercised share options to be participating securities. In connection with our IPO, we established two classes of authorized common stock: Class A common stock and Class B common stock. As a result, all then-outstanding shares of common stock were converted into shares of Class B common stock upon effectiveness of our IPO. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock.

Undistributed earnings allocated to participating securities are subtracted from net income (loss) in determining net income (loss) attributable to common stockholders. Basic earnings per share (“EPS”) attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. All participating securities are excluded from basic weighted-average common shares outstanding.

For the calculation of diluted earnings per share, net income (loss) attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares. The undistributed earnings are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. The computation of the diluted net income (loss) per share of Class A common stock assumes the conversion of Class B common stock, while diluted net income (loss) 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.

A reconciliation of the numerator and denominator used in the calculation of the basic and diluted EPS attributable to common stockholders is as follows (in thousands except share and per share amounts):



	August 3, 2019						July 28, 2018						July 29, 2017
(in thousands except share and per share amounts)	Class A			Class B			Class A			Class B			Class B
Numerator:
Net income (loss)	$	16,604		$	20,277		$	7,650		$	37,250		$	(594	)
Less: noncumulative dividends to preferred stockholders	—			—			(131		)	(637		)	—
Less: undistributed earnings to participating securities	(8		)	(10		)	(1,464		)	(7,127		)	—
Net income (loss) attributable to common stockholders – basic	16,596			20,267			6,055			29,486			(594		)
Less: change in fair value of preferred stock warrant liability (net of tax)	—			—			(10,685		)	(10,685		)	—
Add: adjustments to undistributed earnings to participating securities	1			—			2,429			2,015			—
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	20,267			—			29,486			—			—
Reallocation of undistributed earnings to Class B shares	—			302			—			2,122			—
Net income (loss) attributable to common stockholders – diluted	$	36,864		$	20,569		$	27,285		$	22,938		$	(594	)
Denominator:
Weighted-average shares of common stock – basic	45,027,352			54,986,110			12,940,593			63,007,166			24,973,931
Conversion of Class B to Class A common shares outstanding	54,986,110			—			63,007,166			—			—
Effect of dilutive stock options and restricted stock units	3,640,164			2,849,737			5,021,692			5,011,712			—
Effect of potentially dilutive preferred stock warrants	—			—			318,967			318,967			—
Weighted-average shares of common stock – diluted	103,653,626			57,835,847			81,288,418			68,337,845			24,973,931
Earnings (loss) per share attributable to common stockholders:
Basic	$	0.37		$	0.37		$	0.47		$	0.47		$	(0.02	)
Diluted	$	0.36		$	0.36		$	0.34		$	0.34		$	(0.02	)

The following common stock equivalents were excluded from the computation of diluted earnings (loss) per share for the periods presented because including them would have been antidilutive:



	August 3, 2019	July 28, 2018	July 29, 2017
Convertible preferred stock	—	—	59,511,055
Preferred stock warrants	—	—	1,066,225
Restricted stock units	2,914,630	2,276,994	—
Stock options to purchase Class A common stock	1,547,495	1,271,152	—
Stock options to purchase Class B common stock	969,179	3,689,369	5,675,447
Total	5,431,304	7,237,515	66,252,727