14. Net (Loss) Earnings per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Prior to the Company’s IPO of its common stock, the Company’s convertible preferred stock was entitled to receive dividends, prior and in preference to any declaration or payment of any dividend on common stock and thereafter participate pro rata on an as converted basis with the common stock holders on any distributions to common stockholders. The convertible preferred shares were therefore considered to be participating securities. As a result, the Company calculated the net income (loss) per share using the two-class method. Accordingly, the net income (loss) attributable to common stockholders is derived from the net income (loss) for the period and, in periods in which the Company has net income attributable to common stockholders, an adjustment is made for the noncumulative dividends and allocations of earnings to participating securities based on their outstanding shareholder rights. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the convertible preferred stock did not have a contractual obligation to share in the Company’s losses. The diluted net income per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. In periods when the Company has incurred a net loss, convertible preferred stock, options to purchase common stock, common stock warrants and common stock subject to repurchase are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive.

The following table provides the basic and diluted net (loss) earnings per common share computations for the three and nine months ended September 30, 2015 and 2014.


	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015		2014
Basic earnings per common share:
Net (loss) income	$	(17,630)	$	3,724	$	(47,315)	$	(6,406)
Less: Noncumulative dividends on convertible preferred stock		—		(2,552)		—		—
Undistributed earnings to participating securities		—		(1,000)		—		—
Net (loss) income attributable to common shares, basic		(17,630)		172		(47,315)		(6,406)

Weighted-average common shares outstanding		46,380		6,689		20,252		6,646
Less: weighted-average unvested common shares subject to repurchase		(1,436)		(1,823)		(1,531)		(1,918)
Weighted-average number of shares used in computing net loss per share, basic		44,944		4,866		18,721		4,728

Basic net (loss) income per share	$	(0.39)	$	0.04	$	(2.53)	$	(1.35)

Diluted earnings per common share:
Net (loss) income attributable to common shares, basic	$	(17,630)	$	172	$	(47,315)	$	(6,406)
Adjustment to undistributed earnings to participating securities		—		1,000		—		—
Net (loss) income attributable to common shares, diluted		(17,630)		1,172		(47,315)		(6,406)

Weighted-average number of shares used in computing net loss per share, basic		44,944		4,866		18,721		4,728
Add: Weighted average number of potential dilutive common shares		—		32,065		—		—
Weighted-average number of shares unused in computing net loss per share, diluted		44,944		36,931		18,721		4,728

Diluted net (loss) income per share	$	(0.39)	$	0.03	$	(2.53)	$	(1.35)

Potentially dilutive shares that were not included in the diluted per share calculations because they would be anti‑dilutive as of the three and nine months ended September 30, 2015 and 2014 were as follows:


	Three months ended		Nine months ended
	September 30,		September 30,
	2015	2014	2015	2014
	(in thousands)
Options to purchase common stock	9,399	4,270	9,399	7,968
Warrants	410	401	410	401
Common stock subject to repurchase	1,403	440	1,403	1,758
Convertible preferred stock	—	—	—	27,048
	11,212	5,111	11,212	37,175