Net Loss Per Share

12 Months Ended

Jan. 31, 2022

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 shares 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.

For periods in which there were Class B shares outstanding, the rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock were identical, except with respect to voting. Each share of Class A common stock was and is entitled to one vote per share and each share of Class B common stock was entitled to ten votes per share. As the liquidation and dividend rights were identical for Class A and Class B common stock, the undistributed earnings were allocated on a proportionate basis and the resulting net loss per share would, 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,
	2022		2021		2020
Numerator:
Net loss	$	(306,866)	$	(266,944)	$	(175,522)
Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	64,563,032		58,984,604		55,939,032

Net loss per share, basic and diluted	$	(4.75)	$	(4.53)	$	(3.14)

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 Notes under the if-converted method. Under this method, diluted earnings per share is determined by assuming that all of the 2024 Notes and 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 antidilutive. 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 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,
	2022	2021	2020
Stock options pursuant to the 2016 Equity Incentive Plan	778,172	1,340,476	2,145,462
Stock options pursuant to the 2008 Stock Incentive Plan (previously options to purchase Class B common stock)	2,391,439	3,759,063	5,076,831
Unvested restricted stock units	3,680,895	3,864,504	2,914,575
Early exercised stock options	102	5,032	29,532
Shares underlying the conversion option of the 2024 Notes (conversion spread only prior to the adoption of ASU 2020-06)	231,637	889,755	2,112,279
Shares underlying the conversion option of the 2026 Notes (conversion spread only prior to the adoption of ASU 2020-06)	5,445,107	450,869	—
Total	12,527,352	10,309,699	12,278,679