Net Loss Per Share

9 Months Ended

Oct. 31, 2020

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including convertible senior notes, stock options, RSUs, PSUs and RSAs to the extent dilutive.

The following table sets forth the computation of historical basic and diluted net loss per share:


	Three Months Ended October 31,				Nine Months Ended October 31,
(In thousands, except per share amounts)	2020		2019		2020		2019
Numerator:
Net loss	$	(201,531)	$	(57,639)	$	(768,432)	$	(313,940)
Denominator:
Weighted-average common shares outstanding	161,114		153,086		159,717		151,226
Less: Weighted-average unvested common shares subject to repurchase or forfeiture	(599)		(682)		(719)		(567)
Weighted-average shares used to compute net loss per share, basic and diluted	160,515		152,404		158,998		150,659

Net loss per share, basic and diluted	$	(1.26)	$	(0.38)	$	(4.83)	$	(2.08)

Since we were in a net loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potentially dilutive securities outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:


	As of October 31,
(In thousands)	2020	2019
Shares subject to outstanding common stock options	460	1,114
Shares subject to outstanding RSUs, PSUs and RSAs	11,124	12,413
Employee stock purchase plan	356	360
Shares underlying the conversion spread in the convertible senior notes	2,882	—
Total	14,822	13,887

As of October 31, 2020, the aggregate outstanding principal amount under the Notes is potentially convertible into approximately 16.0 million shares of our common stock. Since we expect to settle the principal amount of our convertible senior notes in cash, we use the treasury stock method for calculating any potential dilutive effect on diluted net income per share, if applicable. As a result, only the amount by which the conversion value exceeds the aggregate principal amount of the Notes (the “conversion spread”) is considered in the diluted earnings per share calculation. The conversion spread has a potentially dilutive effect on diluted net income per share when the average market price of our common stock for a given period exceeds the initial conversion price of $148.30 per share for the 2023 Notes and the 2025 Notes, and $255.34 per share for the 2027 Notes.

During the three months ended October 31, 2020, the average market price of our common stock was $200.59, which exceeded the initial conversion price of the 2023 Notes and the 2025 Notes. Accordingly, we calculated the potentially dilutive effect of the conversion spread for the 2023 Notes and 2025 Notes, which is included in the table above. We excluded the potentially dilutive effect of the conversion spread for the 2027 Notes as the average market price of our common stock during the three months ended October 31, 2020 was less than the conversion price of the 2027 Notes.

In connection with the issuance of the Notes, we entered into Capped Calls, which were not included for purposes of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.