Net Loss per Share

12 Months Ended

Dec. 31, 2015

10. Net Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture as they are not deemed to be issued for accounting purposes. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including preferred stock, stock options, RSUs and employee stock purchase plan, to the extent they are dilutive.

The following table sets forth the computation of the Company's basic and diluted net loss per share of common stock under the two-class method attributable to common stockholders for the periods presented:

	Year Ended December 31,
	2015			2014			2013
	(in thousands, except per share data)
Numerator:
Net loss attributable to Marketo	$	(71,497	)	$	(54,337	)	$	(47,360	)
Denominator:
Weighted-average common shares outstanding		42,616			40,602			24,881
Less: Weighted-average unvested common shares subject to repurchase or forfeiture and shares held in escrow		(112	)		(217	)		(172	)

Weighted-average shares used in computing net loss per share of common stock, basic and diluted		42,504			40,385			24,709


Net loss per share of common stock, basic and diluted	$	(1.68	)	$	(1.35	)	$	(1.92	)

The Company applied the two-class method to calculate its basic and diluted net loss per share of common stock, as its convertible preferred stock and common stock subject to repurchase are participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common shareholders. However, the two-class method does not impact the net loss per share of common stock as the Company was in a loss position for each of the periods presented and preferred shareholders and holders of common stock subject to repurchase do not have to participate in losses.

Additionally, since the Company was in a loss position for each of the periods presented, diluted net loss per share is the same as basic net loss per share for each periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. Potentially dilutive securities that were excluded from the diluted per share calculation because they would have been antidilutive were as follows:

	Year Ended December 31,
	2015		2014		2013
	(in thousands)
Stock options to purchase common stock		3,777		5,404		6,343
Common stock held in escrow		22		159		137
Common stock subject to repurchase		12		50		127
Employee stock purchase plan		127		125		304
Restricted stock units and market stock units		3,230		2,360		582

		7,168		8,098		7,493