EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. 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 awards using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock awards, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recorded in additional paid-in capital when the award becomes deductible, are collectively assumed to repurchase shares.

For the year ended December 31, 2012, basic and diluted net income per common share was computed using the two-class method required for participating securities. Prior to the IPO, holders of convertible preferred stock were each entitled to receive non-cumulative dividends. Under the two-class method, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income less current period preferred stock non-cumulative dividends, between common stock and preferred stock. Concurrent with the closing of the IPO in November 2012, all shares of outstanding preferred stock automatically converted into shares of the Company’s common stock and the two-class method was no longer required, as the Company had one class of securities.

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):

	Years Ended December 31,
	2014		2013		2012
Numerator:
Net income	$	8,190	$	1,789	$	31,704
Less: Undistributed earnings allocated to participating securities	—		—		(22,668		)
Net income attributable to common stockholders, basic and diluted	$	8,190	$	1,789	$	9,036
Denominator:
Weighted-average shares used in computing basic net income per share attributable to common stockholders	82,908		76,744		24,847
Weighted-average effect of potentially dilutive shares:
Employee stock options	10,538		16,442		12,788
RSUs and ESPP	222		175		140
Diluted	93,668		93,361		37,775
Net income per share attributable to common stockholders:
Basic	$	0.10	$	0.02	$	0.36
Diluted	$	0.09	$	0.02	$	0.24

The following table summarizes the weighted average outstanding stock awards that were excluded from the diluted per share calculation because to include them would have been anti-dilutive for the period (in thousands):

	Years Ended December 31,
	2014	2013	2012
Stock options	2,649	1,134	3,348
RSUs and ESPP	977	233	—
Total	3,626	1,367	3,348