Earnings Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share

Earnings Per Share

6. Earnings Per Share

Basic earnings per share is calculated by dividing the net income or loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted earnings per share is computed by dividing the net income or loss by the weighted-average number of shares of common stock, plus potentially dilutive securities outstanding for the period, as determined in accordance with the treasury stock, if-converted, or contingently issuable accounting methods, depending on the nature of the security. For purposes of the diluted earnings per share calculation, stock options, restricted stock units (“RSUs”), performance share units (“PSUs”),

and shares potentially issuable in connection with our employee stock purchase plan and convertible senior notes are considered potentially dilutive securities and included to the extent that their addition is not anti-dilutive.

The following table presents the computations of basic and dilutive earnings per common share:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator:
Net income (loss)	$	457	$	8,046	$	(17,803)	$	96,551
Adjustment for interest expense recognized on convertible senior notes:		—		—		—		3,504
Net income (loss) - diluted	$	457	$	8,046	$	(17,803)	$	100,055
Denominator:
Weighted-average shares outstanding — basic		34,058,802		35,373,909		33,912,832		35,210,966
Effect of dilutive securities:
Stock options		191,454		435,099		—		564,171
Restricted stock units		320,063		333,572		—		405,632
Employee stock purchase plan		—		1,829		—		3,403
Warrants		—		116,765		—		164,884
Convertible senior notes		—		—		—		4,925,134
Weighted average shares outstanding — diluted		34,570,319		36,261,174		33,912,832		41,274,190
Earnings (loss) per share — basic	$	0.01	$	0.23	$	(0.52)	$	2.74
Earnings (loss) per share — diluted	$	0.01	$	0.22	$	(0.52)	$	2.42

The Company has the option to settle the conversion obligation for its convertible senior notes due in 2026 in cash, shares or a combination of the two. The Company uses the if-converted method for the convertible senior notes.

The following table presents dilutive securities excluded from the calculation of diluted earnings per share:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Stock options	1,061,235	1,433,791	2,156,501	1,360,024
Restricted stock units	523,991	694,694	1,960,160	50,450
Performance share units	447,770	353,100	447,770	353,100
Employee stock purchase plan	11,553	—	—	—
Warrants	1,041,667	—	1,041,667	—
Convertible senior notes	4,925,134	4,925,134	4,925,134	—

For PSUs, these securities were excluded from the calculation of diluted earnings per share as the performance-based or market-based vesting conditions were not met as of the end of the reporting period. All other securities presented in the table above were excluded from the calculation of diluted earnings per share as their inclusion would have had an antidilutive effect.