Earnings Per Share

3 Months Ended

Mar. 31, 2022

11. EARNINGS PER SHARE

Basic earnings per share (“basic EPS”) and diluted earnings per share (“diluted EPS”) attributable to common stockholders is calculated in conformity with the two-class method required for participating securities: Class A and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to twenty votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock.

Basic EPS attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. For the calculation of diluted EPS, net income attributable to common stockholders for basic EPS is adjusted by the effect of dilutive securities. Diluted EPS attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares.

As the economic rights of Class A and Class B common stock are identical, undistributed earnings are allocated on a proportionate basis and presented on a combined basis. The following table sets forth the computation of basic and diluted EPS and a reconciliation of the weighted average number of common and common equivalent shares outstanding for the three months ended March 31, 2022 and 2021 (in thousands, except share and per share amounts):


	Three months ended March 31,
	2022		2021
Numerator:
Net income	$	8,899	$	11,440
Denominator:
Weighted-average shares—basic		164,406,142		154,501,660
Effect of dilutive stock options		26,559,931		13,510,704
Effect of dilutive restricted stock		2,413,202		—
Weighted-average shares—diluted		193,379,275		168,012,364

Earnings per share:
Basic earnings per share	$	0.05	$	0.07
Effect of dilutive stock options and restricted stock		—		—
Diluted earnings per share	$	0.05	$	0.07

The Company excluded the following weighted average common equivalent shares from the computation of diluted earnings per share for the three months ended March 31, 2022 and the three months ended March 31, 2021 because including them would have had an anti-dilutive effect:


	Three months ended March 31,
	2022		2021
Stock options to purchase common stock		3,161,837		27,208,611
Restricted stock units		1,021,834		5,410,440