Net Income Per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per ShareThe Company issues certain performance-based RSUs 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 March 31, 2022, there were 305,785 participating securities outstanding. As of March 31, 2021, there were no participating securities outstanding.

Undistributed net income allocated to participating securities are subtracted from net income in determining basic net income attributable to common stockholders. Basic net income per share is computed by dividing basic net 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 income per share numerator, interest expense, net of tax, attributable to the conversion of the convertible senior notes is added back to basic net income attributable to common stockholders. For the Company’s diluted net 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 income per share attributable to common stockholders is computed by dividing diluted net 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 income per share would not differ under the two‑class method.

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

	Three Months Ended
	March 31,
	2022		2021
Numerator:
Net income	$	56,388	$	57,006
Less: Net income attributable to participating securities	(9)		—
Net income attributable to Class A and Class B common stockholders, basic	56,379		57,006
Add: Interest expense, net of tax, attributable to assumed conversion of convertible senior notes	1,695		130
Net income attributable to Class A and Class B common stockholders, diluted	$	58,074	$	57,136
Denominator:
Weighted average shares, basic	307,969,672		302,583,452
Dilutive effect of stock options, restricted stock, and RSUs	5,542,252		11,388,113
Dilutive effect of ESPP	150,709		114,364
Dilutive effect of assumed conversion of convertible senior notes	17,667,623		7,650,720
Weighted average shares, diluted	331,330,256		321,736,649
Net income per share, basic	$	0.18	$	0.19
Net income per share, diluted	$	0.18	$	0.18

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

	Three Months Ended
	March 31,
	2022	2021
Stock options, restricted stock, and RSUs	1,282,161	6,714
Total anti-dilutive securities	1,282,161	6,714