NET INCOME (LOSS) PER SHARE

Basic and diluted net loss per share attributable to common stockholders for periods prior to the Conversion are presented in conformity with the “two-class method” required for participating securities. Prior to the Conversion, shares of Class A and Class B common stock were the only outstanding equity in the Company. The rights of the holders of Class A and Class B common stock were identical, except with respect to voting and conversion. Each share of Class A common stock was entitled to one vote per share and each share of Class B common stock was entitled to ten votes per share. Shares of Class B common stock were convertible into Class A common stock at any time at the option of the stockholder, and were automatically converted upon sale or transfer to Class A common stock, subject to certain limited exceptions, and in connection with certain other conversion events. Under the two-class method, basic net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares of common stock and, if dilutive, potential shares of common stock outstanding during the period. The Company’s potential shares of common stock consist of the incremental shares of common stock issuable upon the exercise of stock options, shares issuable upon the vesting of RSUs and unvested shares subject to RSAs (if any), and purchases related to the ESPP. The dilutive effect of these potential shares of common stock is reflected in diluted earnings per share by application of the treasury stock method. The computation of the diluted net loss per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net loss per share of Class B common stock does not assume the conversion of Class B common stock.

The undistributed earnings are allocated based on the contractual participation rights of the Class A and Class B common stock as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, as the conversion of Class B common stock is assumed in the computation of the diluted net loss per share of Class A common stock, the undistributed earnings are equal to net loss for that computation.

On September 22, 2016, the Company’s Class A and Class B common stock converted into a single class of common stock. Because shares of Class A and Class B common stock were outstanding during the three and nine months ended September 30, 2016, the Company has disclosed earnings per common share for both classes of common stock for those reporting periods. Basic and diluted net loss per share attributable to common stockholders for periods after the Conversion, including the current reporting period, are presented based on the number of shares of common stock then outstanding.

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



	Three Months Ended September 30,
	2017		2016
	Common stock		Class A		Class B
Net income attributable to common stockholders	$	7,947	$	1,869	$	201
Basic Shares:
Weighted-average shares outstanding	82,259		69,978		7,543
Basic net income per share attributable to common stockholders:	$	0.10	$	0.03	$	0.03

	Three Months Ended September 30,
	2017		2016
	Common stock		Class A		Class B
Diluted net income per share attributable to common stockholders:
Numerator:
Allocation of undistributed earnings for basic computation	$	7,947	$	1,869	$	201
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	—		201		—
Reallocation of undistributed earnings to Class B shares	—		—		39
Allocation of undistributed earnings	$	7,947	$	2,070	$	240
Denominator:
Number of shares used in basic calculation	82,259		69,978		7,543
Weighted-average effect of dilutive securities Conversion of Class B to Class A shares	—		7,543		—
Stock options	3,253		3,526		2,246
Restricted stock units	1,921		1,870		—
Number of shares used in diluted calculation	87,433		82,917		9,789
Diluted net income per share attributable to common stockholders	$	0.09	$	0.02	$	0.02



	Nine Months Ended September 30,
	2017		2016
	Common stock		Class A			Class B
Net income (loss) attributable to common stockholders	$	10,724	$	(11,639	)	$	(1,294	)
Basic Shares:
Weighted-average shares outstanding	81,041		68,961			7,666
Basic net income (loss) per share attributable to common stockholders:	$	0.13	$	(0.17	)	$	(0.17	)

	Nine Months Ended September 30,
	2017		2016
	Common stock		Class A			Class B
Diluted net income (loss) per share attributable to common stockholders:
Numerator:
Allocation of undistributed earnings (losses)	$	10,724	$	(11,639	)	$	(1,294	)
Denominator:
Number of shares used in basic calculation	81,041		68,961			7,666
Weighted-average effect of dilutive securities
Stock options	3,179		—			—
Restricted stock units	1,877		—			—
Number of shares used in diluted calculation	86,097		68,961			7,666
Diluted net income (loss) per share attributable to common stockholders	$	0.12	$	(0.17	)	$	(0.17	)

The following weighted-average stock-based instruments were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016
Stock options	1,793	1,406	1,911	3,139
Restricted stock units and awards	871	1,240	978	2,414