Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic and diluted net income (loss) per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities. The Company considers its convertible preferred stock, options exercised in exchange for nonrecourse promissory notes, early exercised unvested stock options and unvested restricted stock awards to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to convertible preferred stock, options exercised in exchange for nonrecourse promissory notes, early exercised unvested common stock options and unvested restricted stock awards as the holders of these instruments do not have a contractual obligation to share in the Company’s losses. Net income is attributed to common stockholders and participating securities based on their participation rights. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options.

The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands, except share and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Basic EPS
Numerator:
Net income (loss) attributable to AppLovin	$	14,423	$	(21,391)	$	3,902	$	(16,727)
Less:
Income attributable to convertible preferred stock	(902)		—		(731)		—
Income attributable to options exercised via promissory notes	(140)		—		(55)		—
Income attributable to unvested early exercised options	(61)		—		(12)		—
Income attributable to unvested RSA’s	(25)		—		(9)		—
Net income (loss) attributable to common stock—Basic	$	13,295	$	(21,391)	$	3,095	$	(16,727)
Denominator:
Weighted-average shares used in computing net income (loss) per share—Basic	335,619,207		213,440,147		279,326,624		212,169,247
Net income (loss) per share attributable to common stock—Basic	$	0.04	$	(0.10)	$	0.01	$	(0.08)
Diluted EPS
Numerator:
Net income (loss) attributable to AppLovin	$	14,423	$	(21,391)	$	3,902	$	(16,727)
Less:
Income attributable to convertible preferred stock	(859)		—		(693)		—
Income attributable to options exercised via promissory notes	(132)		—		(53)		—
Income attributable to unvested early exercised options	(59)		—		(11)		—
Income attributable to unvested RSA’s	(24)		—		(8)		—
Net income (loss) attributable to common stock—Diluted	$	13,349	$	(21,391)	$	3,137	$	(16,727)
Denominator:
Weighted-average shares used in computing net income (loss) per share—Basic	335,619,207		213,440,147		279,326,624		212,169,247
Weighted-average dilutive stock options, RSUs, warrants and other convertible securities	18,238,607		—		19,179,641		—
Weighted-average shares used in computing net income (loss) per share—Diluted	353,857,814		213,440,147		298,506,265		212,169,247
Net income (loss) per share attributable to common stock—Diluted	$	0.04	$	(0.10)	$	0.01	$	(0.08)

The following table presents the forms of antidilutive potential common shares:

	As of June 30,
	2021	2020
Convertible preferred stock	—	109,090,908
Stock options exercised for promissory notes	3,484,999	5,709,999
Shares issuable upon conversion of Athena convertible security	616,003	—
Early exercised stock options	1,291,975	6,789
Unvested RSAs	512,613	2,580,582
Stock options	35,250	23,154,934
ESPP	226,156	—
Total antidilutive potential common shares	6,166,996	140,543,212