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. Prior to the date of our IPO in October 2013, we considered 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 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 loss 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. The unvested shares of common stock resulting from early exercises of stock options accounted for all of our participating securities.

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 equivalents outstanding during the period. The dilutive effect of potential shares of common stock are 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):

	For the fiscal year ended January 31,
	2017						2016						2015
	Class A			Class B			Class A			Class B			Class A			Class B
Basic
Numerator
Net income	$	49,799		$	19,005		$	31,453		$	23,007		$	14,540		$	25,843
Undistributed earnings allocated to participating securities		(2	)		(1	)		(27	)		(20	)		(88	)		(157	)
Net income attributable to common stockholders, basic	$	49,797		$	19,004		$	31,426		$	22,987		$	14,452		$	25,686
Denominator
Weighted average shares used in computing net income per share attributable to common stockholders, basic		98,216			37,482			76,246			55,774			45,983			81,730
Net income per share attributable to common stockholders, basic	$	0.51		$	0.51		$	0.41		$	0.41		$	0.31		$	0.31

Diluted
Numerator
Net income attributable to common stockholders, basic	$	49,797		$	19,004		$	31,426		$	22,987		$	14,452		$	25,686
Reallocation as a result of conversion of Class B to Class A common stock:
Net income attributable to common stockholders, basic		19,004			—			22,987			—			25,686			—
Reallocation of net income to Class B common stock		—			4,009			—			2,808			—			1,653
Net income attributable to common stockholders, diluted	$	68,801		$	23,013		$	54,413		$	25,795		$	40,138		$	27,339
Denominator
Number of shares used for basic EPS computation		98,216			37,482			76,246			55,774			45,983			81,730
Conversion of Class B to Class A common stock		37,482			—			55,774			—			81,730			—
Effect of potentially dilutive common shares		11,880			11,880			12,957			12,957			16,491			16,491
Weighted average shares used in computing net income per share attributable to common stockholders, diluted		147,578			49,362			144,977			68,731			144,204			98,221
Net income per share attributable to common stockholders, diluted	$	0.47		$	0.47		$	0.38		$	0.38		$	0.28		$	0.28

Potential common share equivalents excluded where the inclusion would be anti-dilutive are as follows:

Fiscal Year Ended

January 31,

2017

2016

2015

Options and awards to purchase shares not included in the

computation of diluted net income per share because their

inclusion would be anti-dilutive

2,040,238

886,472

355,263