NET INCOME (LOSS) PER SHARE

Basic and diluted net income (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 income (loss) per share is computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (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, to a lesser extent,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 income (loss) per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income (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 income (loss) per share of Class A common stock, the undistributed earnings are equal to net income (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 for a portion of the year ended December 31, 2016, the Company has disclosed earnings per common share for both classes of common stock for such reporting period. Basic and diluted net income (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):



	Year Ended December 31,
	2017		2016						2015
	Common Stock		Class A			Class B			Class A			Class B
Basic net income (loss) per share attributable to common stockholders:
Numerator:
Net income (loss)	$	152,858	$	(4,296	)	$	(374	)	$	(28,694	)	$	(4,206	)
Allocation of undistributed earnings	$	152,858	$	(4,296	)	$	(374	)	$	(28,694	)	$	(4,206	)
Denominator:
Weighted-average shares outstanding	81,602		70,997			6,189			65,135			9,548
Basic net income (loss) per share attributable to common stockholders:	$	1.87	$	(0.06	)	$	(0.06	)	$	(0.44	)	$	(0.44	)



	Year Ended December 31,
	2017		2016						2015
	Common Stock		Class A			Class B			Class A			Class B
Diluted net income (loss) per share attributable to common stockholders:
Numerator:
Allocation of undistributed earnings for basic calculations	$	152,858	$	(4,296	)	$	(374	)	$	(28,694	)	$	(4,206	)
Reallocation of undistributed earnings as a result of conversion from Class B to Class A shares	—		(374		)	—			(4,206		)	—
Allocation of undistributed earnings	$	152,858	$	(4,670	)	$	(374	)	$	(32,900	)	$	(4,206	)
Denominator:
Number of shares used in basic calculation	81,602		70,997			6,189			65,135			9,548
Weighted-average effect of dilutive securities
Conversion of Class B to Class A common shares outstanding	—		6,189			—			9,548			—
Stock options	3,279		—			—			—			—
Restricted stock units	2,289		—			—			—			—
Number of shares used in diluted calculation	87,170		77,186			6,189			74,683			9,548
Diluted net income (loss) per share attributable to common stockholders	$	1.75	$	(0.06	)	$	(0.06	)	$	(0.44	)	$	(0.44	)

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



	Year Ended December 31,
	2017	2016	2015
Stock options	1,659	2,082	8,206
Restricted stock units and awards	593	2,090	4,095
Contingently issuable shares	—	—	309