Net (Loss) Income Per Share

9 Months Ended

Sep. 30, 2021

Net (loss) income per share of Class A and Class B Common Stock amounts are computed using the two‑class method required for participating securities and using the if‑converted method for the convertible senior notes in accordance with ASU 2020‑06.

The Company issues certain restricted stock awards determined to be participating securities because holders of such shares have non-forfeitable dividend rights in the event of the Company’s declaration of a dividend for common shares. As of September 30, 2021 and 2020, there were 99,683 and 148,087 participating securities outstanding, respectively.

Undistributed net (loss) income allocated to participating securities are subtracted from net (loss) income in determining basic net (loss) income attributable to common stockholders. Basic net (loss) income per share is computed by dividing basic net (loss) income attributable to common stockholders by the weighted average number of shares, inclusive of undistributed shares held in the DCP as phantom shares of the Company’s Class B Common Stock.

For the Company’s diluted net (loss) income per share numerator, interest expense, net of tax, attributable to the conversion of the convertible senior notes is added back to basic net (loss) income attributable to common stockholders. For the Company’s diluted net (loss) income per share denominator, the basic weighted average number of shares is adjusted by the effect of dilutive securities, including awards under the Company’s equity compensation plans and ESPP, and by the dilutive effect of the assumed conversion of the convertible senior notes. Diluted net (loss) income per share attributable to common stockholders is computed by dividing diluted net (loss) income attributable to common stockholders by the weighted average number of fully diluted common shares.

Except with respect to voting and conversion, the rights of the holders of the Company’s Class A Common Stock and the Company’s Class B Common Stock are identical. Each class of shares has the same rights to dividends and allocation of income (loss) and, therefore, net (loss) income per share would not differ under the two‑class method.

The details of basic and diluted net (loss) income per share are as follows:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2021			2020		2021		2020
Numerator:
Net (loss) income	$	(50,128)		$	5,844	$	51,788	$	74,589
Less: Net (loss) income attributable to participating securities	(3)			(4)		(6)		(4)
Net (loss) income attributable to Class A and Class B common stockholders, basic	(50,131)			5,840		51,782		74,585
Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes	—		(1)	—		—		—
Net (loss) income attributable to Class A and Class B common stockholders, diluted	$	(50,131)		$	5,840	$	51,782	$	74,585

Denominator:
Weighted average shares, basic	308,195,379			289,318,391		305,119,985		287,063,892
Dilutive effect of stock options, restricted stock, and RSUs	—			10,316,570		9,430,643		10,187,457
Dilutive effect of ESPP	—			—		107,508		—
Dilutive effect of assumed conversion of convertible senior notes	—			—		—		—
Weighted average shares, diluted	308,195,379			299,634,961		314,658,136		297,251,349

Net (loss) income per share, basic	$	(0.16)		$	0.02	$	0.17	$	0.26
Net (loss) income per share, diluted	$	(0.16)		$	0.02	$	0.16	$	0.25

(1)The effect of interest expense, net of tax, attributable to assumed conversion of convertible senior notes for the three months ended September 30, 2021 has been excluded from the calculation of diluted net loss per share due to the net loss for the period.

The following potential common shares were excluded from the calculation of diluted net (loss) income per share attributable to common stockholders because their effect would have been anti‑dilutive for the periods presented:


	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2021		2020	2021	2020
Stock options, restricted stock, and RSUs	8,174,124		—	90,400	1,150,860
ESPP	97,804		—	—	—
Convertible senior notes	17,667,623		—	12,076,899	—
Total anti-dilutive securities	25,939,551	(1)	—	12,167,299	1,150,860

(1)The effect of dilutive securities for the three months ended September 30, 2021 have been excluded from the calculation of diluted net loss per share as those potential common shares would have been anti‑dilutive due to the net loss for the period, except for 90,400 RSUs that were anti‑dilutive under the two‑class method calculation of diluted net (loss) income per share.