Net Income Per Share

3 Months Ended

Mar. 31, 2022

10.	Net income per share

The Company adopted ASU 2020-06 on January 1, 2022, using the modified retrospective method, applicable to its convertible senior notes outstanding as of adoption. The Company has not changed any previously disclosed amounts or provided additional disclosures for comparative periods. ASU 2020-06 requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. Under the if-converted method, shares related to convertible senior notes, to the extent dilutive, are assumed to be converted into common stock at the beginning of the period.

Basic net income per share attributable to common stockholders is computed using the weighted average number of shares of common stock outstanding for the period, excluding dilutive securities, stock options, RSUs, and ESPP shares. Diluted net income per share attributable to common stockholders is based upon the weighted average number of shares of common stock outstanding for the period and potentially dilutive common shares, including the effect of dilutive securities, stock options, RSUs and ESPP shares under the treasury stock method. The following table sets forth the computation of the numerators and denominators used in the basic and diluted net income per share amounts (in thousands, except per share data):

	Three Months Ended March 31,
	2022		2021
Numerator:
Net income	$	11,528	$	14,360
Interest expense related to Convertible Notes, net of tax		144		—
Numerator for diluted income per share	$	11,672	$	14,360
Denominator:
Denominator for basic income per share— weighted average shares		79,462		74,651
Effect of dilutive securities, stock options, RSUs and ESPP shares		7,799		4,644
Denominator for dilutive income per share		87,261		79,295
Net income per share attributable to common stockholders, basic	$	0.15	$	0.19
Net income per share attributable to common stockholders, diluted	$	0.13	$	0.18

There were no anti-dilutive shares excluded from the computation of diluted net income per share for the three months ended March 31, 2022 or 2021.