Note 11. Net Income per Share Attributable to Common Stockholders

We compute net income per share of Class A and Class B common stock using the two-class method required for participating securities. We consider all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. Immediately prior to the completion of our IPO, all outstanding shares of convertible preferred stock converted to Class B common stock. Additionally, we consider unvested shares issued upon the early exercise of options to be participating securities as the holders of these shares have a non-forfeitable right to dividends in the event of our declaration of a dividend for common shares.

Under the two-class method, net income attributable to common stockholders is determined by allocating undistributed earnings, calculated as net income, less (i) current period convertible preferred stock non-cumulative dividends and (ii) earnings attributable to participating securities.

The net income per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the income for the year has been distributed. As the liquidation and dividend rights are identical, the net income attributable to common stockholders is allocated on a proportionate basis.

Basic net income per share of common stock is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. All participating securities are excluded from the basic weighted-average shares of common stock outstanding. Unvested shares of common stock resulting from the early exercises of stock options are excluded from the calculation of the weighted-average shares of common stock until they vest as they are subject to repurchase until they are vested.

Diluted net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted-average shares outstanding, including potentially dilutive shares of common stock assuming the dilutive effect of potential shares of common stock for the period determined using the treasury stock method.

Undistributed net income for a given period is apportioned to participating securities based on the weighted-average shares of each class of common stock outstanding during the applicable period as a percentage of the total weighted-average shares outstanding during the same period.

For purposes of the diluted net income per share attributable to common stockholders calculation, unvested shares of common stock resulting from the early exercises of stock options and unvested options to purchase common stock are considered to be potentially dilutive shares of common stock. In addition, the computation of the fully diluted net income per share of Class A common stock assumes the conversion from Class B common stock, while the fully diluted net income per share of Class B common stock does not assume the conversion of those shares.

The numerators and denominators of the basic and diluted EPS computations for our common stock are calculated as follows (in thousands, except per share data):


	Fiscal Year Ended January 31,
	2014						2013					2012
	Class A			Class B			Class A		Class B			Class A		Class B
Basic
Numerator
Net income	$	1,934		$	21,681		$	—	$	18,783		$	—	$	4,230
Noncumulative dividends on convertible preferred stock		(33	)		(371	)		—		(560	)		—		(560	)
Undistributed earnings allocated to participating securities		(1,049	)		(11,757	)		—		(14,743	)		—		(3,071	)

Net income attributable to common stockholders, basic	$	852		$	9,553		$	—	$	3,480		$	—	$	599

Denominator
Weighted average shares used in computing net income per share attributable to common stockholders, basic		4,237			47,488			—		20,887			—		17,655

Net income per share attributable to common stockholders, basic	$	0.20		$	0.20		$	—	$	0.17		$	—	$	0.03

Diluted
Numerator
Net income attributable to common stockholders, basic	$	852		$	9,553		$	—	$	3,480		$	—	$	599
Reallocation as a result of conversion of Class B to Class A common stock:
Net income attributable to common stockholders, basic		9,553			—			—		—			—		—
Reallocation of net income to Class B common stock		—			204			—		—			—		—

Net income attributable to common stockholders, diluted	$	10,405		$	9,757		$	—	$	3,480		$	—	$	599

Denominator
Number of shares used for basic EPS computation		4,237			47,488			—		20,887			—		17,655
Conversion of Class B to Class A common stock		47,488			—			—		—			—		—
Effect of potentially dilutive securities		16,299			16,299			—		9,712			—		7,121

Weighted average shares used in computing net income per share attributable to common stockholders, diluted		68,024			63,787			—		30,599			—		24,776

Net income per share attributable to common stockholders, diluted	$	0.15		$	0.15		$	—	$	0.11		$	—	$	0.02