Earnings (Loss) per Share

6 Months Ended

Sep. 30, 2019

Earnings (Loss) per Share

Earnings (Loss) per Share

(3) Earnings (Loss) per Share

Basic earnings (loss) per share available to Virtusa common stockholders (“EPS”) is computed by dividing net income (loss), less any dividends and accretion of issuance cost on the Series A Convertible Preferred Stock by the weighted average number of shares of common stock outstanding for the period. In computing diluted EPS, the Company adjusts the numerator used in the basic EPS computation, subject to anti-dilution requirements, to add back the dividends (declared or cumulative undeclared) applicable to the Series A Convertible Preferred Stock. Such add-back would also include any adjustments to equity in the period to accrete the Series A Convertible Preferred Stock to its redemption price. The Company adjusts the denominator used in the basic EPS computation, subject to anti-dilution requirements, to include the dilution from potential shares resulting from the issuance of restricted stock units, unvested restricted stock and stock options along with the conversion of the Series A Convertible Preferred Stock to common stock. The following table sets forth the computation of basic and diluted EPS for the periods set forth below:

The components of basic earnings (loss) per share are as follows:

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Numerators:
Net income (loss) available to Virtusa stockholders	$	7,102	$	1,505	$	12,936	$	(4,791)
Less: Series A Convertible Preferred Stock dividends and accretion		1,088		1,088		2,175		2,175
Net income (loss) available to Virtusa common stockholders	$	6,014	$	417	$	10,761	$	(6,966)
Denominators:
Basic weighted average common shares outstanding		30,107,942		29,767,276		30,137,926		29,700,151
Basic earnings (loss) per share available to Virtusa common stockholders	$	0.20	$	0.01	$	0.36	$	(0.23)

The components of diluted earnings (loss) per share are as follows:

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Numerators:
Net income (loss) available to Virtusa common stockholders	$	6,014	$	417	$	10,761	$	(6,966)
Add : Series A Convertible Preferred Stock dividends and accretion		—		—		—		—
Net income (loss) available to Virtusa common stockholders and assumed conversion	$	6,014	$	417	$	10,761	$	(6,966)
Denominators:
Basic weighted average common shares outstanding		30,107,942		29,767,276		30,137,926		29,700,151
Dilutive effect of Series A Convertible Preferred Stock if converted		—		—		—		—
Dilutive effect of employee stock options and unvested restricted stock awards and restricted stock units		600,220		859,768		683,361		—
Weighted average shares—diluted		30,708,162		30,627,044		30,821,287		29,700,151
Diluted earnings (loss) per share available to Virtusa common stockholders	$	0.20	$	0.01	$	0.35	$	(0.23)

During the three months ended September 30, 2019 and 2018, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase 277,265 and 20,617 shares of common stock, respectively, were excluded from the calculations of diluted earnings (loss) per share as their effect would have been anti-dilutive.  For the three months ended September 30, 2019 and 2018, all of the 3,000,000 shares of Series A Convertible Preferred Stock were excluded from the diluted earnings (loss) per share as their effect would have been anti-dilutive using the if-converted method.

During the six months ended September 30, 2019 and 2018, unvested restricted stock awards and unvested restricted stock units issuable for, and options to purchase 138,633 and 1,710,551 shares of common stock, respectively, were excluded from the calculations of diluted earnings (loss) per share as their effect would have been anti-dilutive. For the six months ended September 30, 2019 and 2018, all of the 3,000,000 shares of Series A Convertible Preferred Stock were excluded from the diluted earnings (loss) per share as their effect would have been anti-dilutive using the if-converted method.