Net Loss per Share

12 Months Ended

Jan. 31, 2020

Net Loss Per Share

The Company calculates basic net loss per share by dividing the net loss by the weighted-average number of shares of common stock outstanding during the year, less shares subject to repurchase. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents outstanding for the period, including stock options and restricted stock units. Refer to Note 2, Summary of Significant Accounting Policies, for further details on the Company’s methodology for calculating net loss per share.

Basic and diluted net loss per share was the same for each year presented, as the inclusion of all potential common shares outstanding would have been anti-dilutive due to the net loss reported for each year presented.

The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock are identical, except with respect to voting. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to 10 votes per share. As the liquidation and dividend rights are identical for Class A and Class B common stock, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):



	Years Ended January 31,
	2020			2019			2018
Numerator:
Net loss	$	(175,522	)	$	(99,011	)	$	(83,973	)
Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	55,939,032			52,034,596			23,718,391

Net loss per share, basic and diluted	$	(3.14	)	$	(1.90	)	$	(3.54	)

The shares underlying the conversion option in the 2024 Notes and 2026 Notes were not considered in the calculation of diluted net loss per share as the effect would have been anti-dilutive. Based on the initial conversion price, the entire outstanding principal amount of the 2024 Notes and 2026 Notes as of January 31, 2020 would have been convertible into approximately 4.4 million shares and 5.4 million shares, respectively, of the Company’s Class A common stock. However, the Company currently expects to settle the principal amount of the 2024 Notes and 2026 Notes in cash. As a result, only the amount by which the conversion value exceeds the aggregate principal amount of the 2024 Notes and 2026 Notes (the “conversion spread”) is considered in the diluted earnings per share computation under the treasury stock method. The conversion spread has a dilutive impact on diluted net income per share when the average market price of the Company’s Class A common stock for a given period exceeds the initial conversion price of $68.15 per share for the 2024 Notes and $211.20 per share for the 2026 Notes. In connection with the issuance of the 2024 Notes and 2026 Notes, the Company 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. The Capped Calls are expected to partially offset the potential dilution to the Company’s Class A common stock upon any conversion of the 2024 Notes and 2026 Notes.

During the three months ended January 31, 2020, the average market price of the Company’s Class A common stock was $139.22, which exceeded the initial conversion price of the 2024 Notes. As of January 31, 2020, the Company had not received any material conversion notices for the 2024 Notes. For disclosure purposes, the Company calculated the potentially dilutive effect of the conversion spread for the 2024 Notes, which is included in the table below. The Company excluded the potentially dilutive effect of the conversion spread for the 2026 Notes as the average market price of the Company’s Class A common stock during the three months ended January 31, 2020 was less than the conversion price of the 2026 Notes.

The following weighted-average outstanding potentially dilutive shares of common stock were excluded from the computation of diluted net loss per share for the periods presented because the impact of including them would have been anti-dilutive.



	Years Ended January 31,
	2020	2019	2018
Redeemable convertible preferred stock (as converted)	—	—	19,534,014
Redeemable convertible preferred stock warrants (as converted)	—	—	22,592
Common stock warrants	—	—	90,143
Stock options to purchase Class A common stock	2,145,462	3,174,009	2,552,397
Stock options to purchase Class B common stock	5,076,831	7,691,386	9,612,572
Unvested restricted stock units	2,914,575	1,447,642	—
Early exercised stock options	29,532	126,447	236,675
Shares underlying the conversion spread in the 2024 Notes	2,112,279	227,982	—