Earnings Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share

Earnings Per Share

14. Earnings per Share

Basic net income (loss) per common share is computed using the two-class method, which is an earnings allocation formula that determines net income (loss) per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic net income (loss) per common share is determined by dividing net income (loss), after deducting amounts allocated to participating securities, by the weighted average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock-settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, only distributed earnings (dividends) are allocated to participating securities, as participating securities do not have a contractual obligation to participate in our undistributed losses.

Diluted net income (loss) per common share is computed using the weighted average number of shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding options, performance-based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would be anti-dilutive.

The following table shows the calculation for net income attributable to common stockholders, which is used in the calculation of basic and diluted net income per common share:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Net income	$	16,746	$	8,752	$	18,467	$	12,921
Less: Earnings attributable to participating securities		(305)		(285)		(819)		(454)
Net income attributable to common stockholders	$	16,441	$	8,467	$	17,648	$	12,467

The following table shows the potential shares of common stock that were included in computing diluted net income per common share:

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(in thousands)	2022	2021	2022	2021
Weighted average common shares outstanding including participating securities	155,188	154,047	155,005	153,334
Less: Weighted average participating securities outstanding	(2,155)	(2,014)	(2,148)	(1,797)
Weighted average common shares outstanding used in basic net income per common share	153,033	152,033	152,857	151,537
Net dilutive potential common shares issuable:
On vesting of restricted stock units	128	169	123	159
On settlement of ESPP shares	3	1	2	3
Weighted average common shares outstanding used in diluted net income per common share	153,164	152,203	152,982	151,699

The following table shows the potential shares of common stock issuable that were excluded from computing diluted net income per common share as their inclusion would have been anti-dilutive:

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(in thousands)	2022	2021	2022	2021
On exercise of options where exercise price is greater than average market value for the period	—	22	—	33