Basic and Diluted (Loss) Earnings per Share

9 Months Ended

Sep. 30, 2024

Basic and Diluted (Loss) Earnings per Share

(9) Basic and Diluted (Loss) Earnings per Share

The Company has two classes of common stock: class A common stock and class B common stock. Holders of class A common stock generally have the same rights, including rights to dividends, as holders of class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. Each share of class B common stock is convertible at any time, at the option of the holder, into one share of class A common stock. As such, basic and fully diluted earnings per share for class A common stock and for class B common stock are the same. The Company has never declared or paid any cash dividends on either class A or class B common stock. As of September 30, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

The impact from potential shares of common stock on the diluted earnings per share calculation are included when dilutive. Potential shares of class A common stock issuable upon the exercise of outstanding stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Convertible Notes are computed using the if-converted method. In computing diluted earnings per share, the Company first calculates the earnings per incremental share (“EPIS”) for each class of potential shares of common stock and ranks the classes from the most dilutive (i.e., lowest EPIS) to the least dilutive (i.e., highest EPIS). Basic earnings per share is then adjusted for the effect of each class of shares, in sequence and cumulatively, until a particular class no longer produces further dilution.

The following table sets forth the computation of basic and diluted (loss) earnings per share (in thousands, except per share data) for the periods indicated.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Numerator:
Net (loss) income - Basic	$	(340,174	)	$	(143,441	)	$	(495,851	)	$	339,995
Effect of dilutive shares on net (loss) income:
Interest expense on 2025 Convertible Notes, net of tax		0			0			0			4,255
Interest expense on 2027 Convertible Notes, net of tax		0			0			0			2,165
Net (loss) income - Diluted	$	(340,174	)	$	(143,441	)	$	(495,851	)	$	346,415

Denominator:
Weighted average common shares of class A common stock		177,633			122,574			163,055			97,008
Weighted average common shares of class B common stock		19,640			19,640			19,640			19,640
Total weighted average shares of common stock outstanding - Basic		197,273			142,214			182,695			116,648

Effect of dilutive shares on weighted average common shares outstanding:
Stock options		0			0			0			4,307
Restricted stock units		0			0			0			428
Performance stock units		0			0			0			78
Employee stock purchase plan		0			0			0			2
2025 Convertible Notes		0			0			0			16,332
2027 Convertible Notes		0			0			0			7,330
Total weighted average shares of common stock outstanding - Diluted		197,273			142,214			182,695			145,125

(Loss) earnings per share:
Basic (loss) earnings per share (1)	$	(1.72	)	$	(1.01	)	$	(2.71	)	$	2.91
Diluted (loss) earnings per share (1)	$	(1.72	)	$	(1.01	)	$	(2.71	)	$	2.39

(1) Basic and fully diluted (loss) earnings per share for class A and class B common stock are the same.

For the three and nine months ended September 30, 2024 and 2023, the following weighted average shares of potential class A common stock were excluded from the diluted (loss) earnings per share calculation because their impact would have been anti-dilutive (in thousands).


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Stock options		5,823		14,056		7,481		6,333
Restricted stock units		1,587		2,042		1,756		339
Performance stock units		606		516		576		0
Employee stock purchase plan		8		27		13		18
2025 Convertible Notes		0		16,332		6,664		0
2027 Convertible Notes		7,330		7,330		7,330		0
2028 Convertible Notes		719		0		240		0
2030 Convertible Notes		5,342		0		4,031		0
2031 Convertible Notes		2,594		0		1,863		0
2032 Convertible Notes		3,915		0		1,506		0
Total		27,924		40,303		31,460		6,690