Net Loss Per Share

9 Months Ended

Oct. 31, 2021

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 period, less shares subject to repurchase. Diluted net loss per share is computed by giving effect to all potentially dilutive shares of Class A common stock outstanding for the period, including stock options, restricted stock units and shares underlying the conversion option of the 2024 Notes and the 2026 Notes. Basic and diluted net loss per share was the same for each period presented, as the inclusion of all potential shares of Class A common stock outstanding would have been anti-dilutive due to the net loss reported for each period presented.

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


	Three Months Ended October 31,				Nine Months Ended October 31,
	2021		2020		2021		2020
Numerator:
Net loss	$	(81,293)	$	(72,651)	$	(222,418)	$	(191,143)

Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	66,386,379		59,368,167		63,750,884		58,476,521

Net loss per share, basic and diluted	$	(1.22)	$	(1.22)	$	(3.49)	$	(3.27)

Prior to the adoption of ASU 2020-06, the Company calculated the potential dilutive effect of its 2024 Notes and 2026 Notes under the treasury stock method. As a result, only the amount by which the conversion value exceeded the aggregate principal amount of the 2024 Notes and 2026 Notes (the “conversion spread”) was considered in the diluted earnings per share computation. The conversion spread only had 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 exceeded the initial conversion price of $68.15 per share for the 2024 Notes and $211.20 per share for the 2026 Notes.

Upon the adoption of ASU 2020-06 on February 1, 2021, the Company calculates the potential dilutive effect of its 2024 Notes and 2026 under the if-converted method. Under this method, diluted earnings per share is determined by assuming that all of the 2024 Notes and the 2026 Notes were converted into shares of the Company’s Class A common stock at the beginning of the reporting period.

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. The Company has not exercised any of its Capped Calls as of October 31, 2021.

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:


	Three Months Ended October 31,		Nine Months Ended October 31,
	2021	2020	2021	2020
Stock options pursuant to the 2016 Equity Incentive Plan	722,070	1,234,642	818,589	1,434,388
Stock options pursuant to the 2008 Stock Incentive Plan (previously options to purchase Class B common stock)	2,250,736	3,614,730	2,476,270	4,013,050
Unvested restricted stock units	3,679,734	3,938,037	3,745,955	4,004,267
Early exercised stock options	—	2,831	136	6,418
Shares underlying the conversion option of the 2024 Notes (conversion spread only prior to the adoption of ASU 2020-06)	27,337	925,870	308,849	841,126
Shares underlying the conversion option of the 2026 Notes	5,445,092	—	5,445,116	—
Total	12,124,969	9,716,110	12,794,915	10,299,249