Net income per share attributable to common stockholders

12 Months Ended

Dec. 31, 2015

Net income per share attributable to common stockholders

Basic and diluted net income per common share is presented in conformity with the two-class method required for participating securities. The Company considers shares issued upon the early exercise of options subject to repurchase and non-vested restricted shares to be participating securities, because holders of such shares have a non-forfeitable right to dividends. Additionally, prior to the Company's IPO and their conversion, the Company considered its redeemable convertible preferred stock to be participating securities due to their non-cumulative dividend rights.

Basic net income per share attributable to common stockholders is computed by dividing the net income 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. Diluted net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares.

Undistributed earnings are allocated based on the contractual participation rights of Class A and Class B 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 per share of Class A common stock assumes the conversion of Class B common stock.

The following table presents the calculations of basic and diluted net income per share attributable to common stockholders:



	Year ended December 31,
(in thousands, except per share data)	2015				2014						2013
	Class A		Class B		Class A			Class B
Numerator:
Allocation of net income	$	24,559	$	11,572	$	16,647		$	111,441		$	60,578
Less: net income allocable to participating securities	—		—		(2,147		)	(14,365		)	(16,727		)
Net income attributable to common stockholders—basic	24,559		11,572		14,500			97,076			43,851
Add: net income allocable to dilutive participating securities	—		—		2,277			1,981			2,309
Reallocation of net income as a result of conversion of Class B to Class A shares	11,572				97,076			—			—
Reallocation of net income to Class B shares	—		1,974		—			2,237			—
Net income attributable to common stockholders—diluted	$	36,131	$	13,546	$	113,853		$	101,294		$	46,160

Denominator:
Weighted-average common shares—basic	91,486		43,109		13,575			90,878			81,018
Conversion of Class B to Class A common stock outstanding	43,109		—		90,878			—			—
Effect of potentially dilutive shares	11,891		11,810		19,177			19,115			17,923
Weighted-average common shares—diluted	146,486		54,919		123,630			109,993			98,941

Net income per share attributable to common stockholders:
Basic	$	0.27	$	0.27	$	1.07		$	1.07		$	0.54
Diluted	$	0.25	$	0.25	$	0.92		$	0.92		0.47

The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:



	Year ended December 31,
(in thousands)	2015	2014	2013
Redeemable convertible preferred stock	—	15,136	30,523
Stock options, ESPP shares, and RSUs	2,680	360	1,409
Unvested restricted stock awards	1	425	380
	2,681	15,921	32,312