Income (loss) per share

3 Months Ended

Mar. 31, 2012

Earnings Per Share [Abstract]

Income (loss) per share

Income (loss) per share

Basic and diluted net income (loss) per common share is presented in conformity with the two-class method required for participating securities. Holders of Series A through Series F preferred stock were each entitled to receive non-cumulative dividends at the annual rate of 8% per share per annum, respectively, payable prior and in preference to any dividends on any

shares of the Company’s common stock. In the event a dividend is paid on common stock, the holders of preferred stock were entitled to a proportionate share of any such dividend as if they were holders of common stock (on an as-if converted basis). The holders of the preferred stock do not have a contractual obligation to share in the losses of the Company. The Company

considered its preferred stock to be participating securities. Additionally, the Company considers shares issued upon the early exercise of options subject to repurchase and unvested restricted shares to be participating securities as the holders of these shares have a nonforfeitable right to dividends. In accordance with the two-class method, earnings allocated to these participating securities and the related number of outstanding shares of the participating securities, which include contractual participation rights in undistributed earnings, have been excluded from the computation of basic and diluted net income (loss) per common share.

Under the two-class method, net income (loss) attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less income attributable to participating securities between common stock and participating securities. In computing diluted net income (loss) attributable to common stockholders, undistributed earnings are re-allocated to reflect the potential impact of dilutive securities. Basic net income (loss) per common share 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. 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 potential dilutive common shares assuming the dilutive effect of outstanding stock options using the treasury stock method.

The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts):

	Three months ended March 31,
(in thousands, except per share amounts)	2012			2011
Numerator:
Net income (loss)	$	(836	)	$	155
Less: undistributed earnings allocated to preferred stockholders	—			(155		)
Net income (loss) attributable to common stockholders	(836		)	—
Denominator:
Weighted-average shares used to compute basic net income (loss) per common share	3,661			2,943
Effect of potentially dilutive securities:
Employee stock options	—			1,975
Weighted average shares used to compute diluted income (loss) per common share	3,661			4,918
Net income (loss) per share
Basic and diluted net income (loss) per common share	$	(0.23	)	$	0.00

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

	Three months ended March 31,
(in thousands)	2012	2011
Convertible preferred stock (on an if converted basis)	12,938	12,899
Options to purchase common stock	3,682	2,181
Common stock subject to repurchase	195	851
Warrants to purchase convertible preferred stock	187	238