3. Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock of the Company outstanding during the period. The Company computed net income (loss) per share of common stock using the treasury stock method for the three and nine months ended September 30, 2017, and using the two-class method required for participating securities for the three and nine months ended September 30, 2016. The Company considered its redeemable convertible preferred stock to be participating securities as the holders of the preferred stock were entitled to receive a dividend in the event that a dividend was paid on common stock. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock during the period plus the impact of dilutive securities, to the extent that they are not anti-dilutive. The following table presents the calculation of basic and diluted net income (loss) per share for the Company’s common stock:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Numerator:
Net income (loss)	$	7,695	$	(142)	$	3,350	$	(219)
Decretion of redeemable convertible preferred stock		—		2,641		—		2,439
Undistributed income attributable to redeemable convertible preferred stockholders		—		(1,271)		—		(1,140)
Net income (loss) attributable to common stockholders, basic	$	7,695	$	1,228	$	3,350	$	1,080
Decretion of redeemable convertible preferred stock		—		(2,641)		—		(2,439)
Revaluation of warrant liability, net of tax		—		(661)		—		(675)
Adjustment to undistributed income attributable to redeemable convertible preferred stockholders		—		1,271		—		1,140
Net income (loss) attributable to common stockholders, diluted	$	7,695	$	(803)	$	3,350	$	(894)
Denominator (basic):
Weighted average shares of common stock outstanding, basic		16,699,102		4,918,885		16,483,169		4,817,285
Denominator (diluted):
Weighted average shares of common stock outstanding		16,699,102		4,918,885		16,483,169		4,817,285
Effect of potential dilutive securities:
Weighted average dilutive effect of stock options		1,235,883		—		1,308,202		—
Weighted average dilutive effect of restricted shares		711,046				607,988		—
Weighted average dilutive effect of common shares from warrants		—		—		12,441		—
Dilutive effect from preferred stock and preferred stock warrants assuming conversion		—		5,414,838		—		5,414,765
Weighted average shares of common stock outstanding, diluted		18,646,031		10,333,723		18,411,800		10,232,050
Net income per share attributable to common stockholders, basic	$	0.46	$	0.25	$	0.20	$	0.22
Net income (loss) per share attributable to common stockholders, diluted	$	0.41	$	(0.08)	$	0.18	$	(0.09)

The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016
Stock options to purchase common stock	—	2,723,193	—	2,723,193
Restricted stock	—	722,646	—	722,646
Common stock warrants	—	213,806	—	213,806
	—	3,659,645	—	3,659,645

On October 4, 2016, the Company closed its IPO in which the Company issued and sold 4,300,000 shares of common stock, plus the exercise of the underwriters’ option to purchase an additional 645,000 shares, at an issuance price of $12.00 per share. See Notes 1 and 13 for additional information.