INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2024

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, RSUs, PSUs, ESPP shares, convertible senior notes and capped call transactions. If dilutive, those potentially dilutive securities are reflected in diluted net income (loss) per share using the treasury stock method, except for the convertible senior notes, which are subject to the if-converted method.

The following table sets forth the computation of basic and diluted net income (loss) per share of Common Stock for the three and nine months ended September 30, 2024 and 2023 (in thousands, except share amounts and per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Basic and diluted net income (loss) per share:

Numerator
Net income (loss)	$	14,522	$	(40,806)	$	(6,396)	$	(81,423)
Less: Net income (loss) attributable to noncontrolling interests	594		552		1,982		1,689
Basic net income (loss) attributable to common stockholders	$	13,928	$	(41,358)	$	(8,378)	$	(83,112)

Diluted net income (loss) attributable to common stockholders	13,928		(41,358)		(8,378)		(83,112)
Plus: Interest expense from assumed conversion of convertible senior notes	710		—		—		—
Net income (loss) attributable to common stockholders plus assumed conversions	$	14,638	$	(41,358)	$	(8,378)	$	(83,112)

Denominator
Shares used in computation of basic net income (loss) per share	39,748,268		31,500,489		38,966,238		31,039,668
Weighted-average effect of diluted securities:
Stock options	1,613,858		—		—		—
RSUs	272,224		—		—		—
ESPP shares	3,696		—		—		—
Convertible senior notes due 2026	3,376,400		—		—		—
Shares used in computation of diluted net income (loss) per share	45,014,446		31,500,489		38,966,238		31,039,668

Net income (loss) per share:
Basic	$	0.35	$	(1.31)	$	(0.22)	$	(2.68)
Diluted	$	0.33	$	(1.31)	$	(0.22)	$	(2.68)

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
RSUs	85,171	1,108,379	806,857	1,695,383
Stock options	—	3,309,783	3,062,500	2,282,890
PSUs	—	—	280,807	959
ESPP shares	—	7,923	12,001	34,119
Convertible Senior notes due 2026 (1)	—	3,376,400	3,376,400	3,376,400
Capped call transactions	3,376,400	3,376,400	3,376,400	3,376,400
Total	3,461,571	11,178,885	10,914,965	10,766,151

(1)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations is adjusted for interest expense, net of tax, and the denominator is adjusted for the number of shares into which the convertible senior notes could be converted. The effect is only included in the calculation of income (loss) per share for those instruments for which it would reduce income (loss) per share. See Note 5, Financing Arrangements, for additional information.

As of September 30, 2024, there were up to 3,553,562 shares of Common Stock issuable upon vesting of outstanding 2024 Executive PSUs and PSUs that were excluded from the table above as the applicable market and performance conditions were not satisfied as of the end of the period. As of September 30, 2023, there were up to 724,487 shares of Common Stock issuable upon vesting of outstanding PSUs that were excluded from the table above as the performance conditions were not satisfied as of the end of the period.