Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2024

Note 17. Net Income (Loss) Per Share

Earnings per share (“EPS”) is calculated using the two-class method unless the treasury stock method results in lower EPS. Basic EPS is calculated by dividing net income or loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. To calculate diluted EPS, basic EPS is further adjusted to include the effect of potentially dilutive stock options, RSUs, PRSUs, RSAs, convertible notes, earnout shares, and warrants using the more dilutive result of the treasury stock method or the if-converted method. All potentially dilutive securities are antidilutive to periods with net losses, and basic EPS equals diluted EPS in those periods.

The following table summarizes the computation of basic and diluted net income (loss) attributable per share to common stockholders for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Numerator:
Net income (loss) used to compute net income (loss) per share - basic	$	14,382	$	(5,744)	$	(63,303)	$	(131,447)
Effect of dilutive securities: 2026 Notes	694		—		—		—
Net income (loss) used to compute net income (loss) per share - diluted	$	15,076	$	(5,744)	$	(63,303)	$	(131,447)
Denominator:
Weighted average shares outstanding used to compute net income (loss) per share - basic	100,430		96,367		99,050		95,771
Effect of dilutive securities:
RSUs	8,779		—		—		—
PRSUs	6,301		—		—		—
2026 Notes	8,523		—		—		—
Weighted average shares outstanding used to compute net income (loss) per share - diluted	124,033		96,367		99,050		95,771

Net income (loss) per share - basic	$	0.14	$	(0.06)	$	(0.64)	$	(1.37)
Net income (loss) per share - diluted	$	0.12	$	(0.06)	$	(0.64)	$	(1.37)

The following table discloses securities that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for the periods presented:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Stock options	3,231	3,686	3,231	3,686
Restricted stock units and awards	—	8,655	8,565	8,655
Performance restricted stock units	—	4,056	6,300	4,056
Public and private warrants	1,796	1,796	1,796	1,796
Earnout shares (1)	—	2,050	—	2,050
Convertible debt (2)	13,332	22,331	20,282	22,331
Contingently issuable shares in connection with acquisitions (3)	—	24,363	—	24,363

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(1)Earnout shares expired December 23, 2023, without vesting and were subsequently cancelled.

(2)In connection with the September 16, 2021, issuance of the 2026 Notes, we used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to our common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing our conversion price from $25 per share to approximately $37.74, which would result in approximately 5 million potentially dilutive shares instead of the shares reported in this table as of September 30, 2024.

(3)In connection with the acquisition of Floify, we issued shares as partial closing consideration and guaranteed that the value of those shares would equal or exceed 200% of such price on or prior to December 31, 2024. If the value of those shares did not equal or exceed 200% of their value, we would have been obligated to settle any differences in cash, Porch common stock, or combination thereof. On March 27, 2024, we entered into a settlement agreement to settle a post-closing dispute. As part of this agreement, the sellers of Floify agreed to terminate this obligation in full.