Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share

Earnings Per Share

(4) Earnings Per Share

Basic earnings per share of Class A common stock is calculated pursuant to the two-class method as a result of the issuance of the Series A Convertible Preferred Stock (the “Preferred Stock”) on April 21, 2020. The Preferred Stock is considered a participating security because the holders of Preferred Stock are entitled, on an as-converted basis, to participate in and receive any dividends declared or paid on the Class A common stock, and no dividends may be paid to holders of Class A common stock unless full participating dividends are concurrently paid to holders of Preferred Stock. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all earnings, distributed and undistributed, are allocated to common stock and participating securities based on their respective rights to receive dividends. The Preferred Stock is not included in the computation of basic earnings per share in periods in which the Company reports a net loss, as the Preferred Stock holders are not contractually obligated to share in the net losses. However, the cumulative dividends that accrete on the Preferred Stock for the period increase the net loss allocated to common stockholders. Earnings per share is not separately presented for Class B common stock, Class C common stock, and Class D common stock since they have no economic rights to the earnings of the Company.

Diluted earnings per share of Class A common stock is calculated using the more dilutive of the (a) treasury stock method and as-converted method or (b) the two-class method. Class B common stock is not considered when calculating diluted earnings per share as this class of common stock may not convert to Class A common stock. Class C common stock and Class D common stock are considered in the calculation of diluted earnings per share on an if-converted basis as these classes, together with the related LLC Interests, have exchange rights that could result in additional shares of Class A common stock being issued. Potentially dilutive shares issuable upon conversion of the Preferred Stock are considered in the calculation of diluted earnings per share on an if-converted basis. All other potentially dilutive securities are determined based on the treasury stock method.

Refer to Note 16, “Redeemable Preferred Stock,” and Note 21, “Shareholders’ Equity,” for further information on rights to each class of common stock and preferred stock.  

The following table sets forth the computation of the Company's basic and diluted net loss per share of Class A common stock, as well as the anti-dilutive shares excluded (in thousands, except share and per share data):

	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,
	2020				2019
Numerator:
Net loss attributable to EVO Payments, Inc.	$	(3,771)	$	(8,579)	$	463	$	(4,827)
Accrual of redeemable preferred stock paid-in-kind dividends		1,771		1,771		—		—
Allocation of undistributed earnings to preferred shares		—		—		—		—
Undistributed earnings (loss) attributable to shares of Class A common stock	$	(5,542)	$	(10,350)	$	463	$	(4,827)
Denominator:
Weighted-average Class A common stock outstanding		41,398,838		41,329,118		31,898,531		29,147,326
Effect of dilutive securities		—		—		—		—
Total dilutive securities		41,398,838		41,329,118		31,898,531		29,147,326
Earnings per share:
Basic	$	(0.13)	$	(0.25)	$	0.01	$	(0.17)
Diluted	$	(0.13)	$	(0.25)	$	0.01	$	(0.17)
Weighted-average anti-dilutive securities:
Redeemable preferred stock		118,788		59,394		—		—
Stock options		5,714,359		4,813,692		3,346,839		2,847,279
RSUs		1,289,893		1,158,882		923,813		763,323
RSAs		4,127		4,459		17,748		26,267
Class C common stock		2,317,955		2,318,450		2,414,771		2,435,830
Class D common stock		4,339,978		4,342,368		12,127,451		14,258,286