Note 9. Net Income per Share Attributable to Common Stockholders

We compute net income per share of our Class A and Class B common stock using the two-class method required for participating securities. 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):

	Three months ended July 31,									Six Months Ended July 31,
	2017				2016					2017				2016
	Class A		Class B		Class A			Class B		Class A		Class B		Class A			Class B
Basic
Numerator
Net income	$	30,215	$	7,629	$	9,381		$	3,577	$	57,887	$	15,980	$	17,787		$	7,680
Undistributed earnings allocated to participating securities		—		—		(1	)		—		—		—		(1	)		(1	)
Net income attributable to common stockholders, basic	$	30,215	$	7,629	$	9,380		$	3,577	$	57,887	$	15,980	$	17,786		$	7,679
Denominator
Weighted average shares used in computing net income per share attributable to common stockholders, basic		111,786		28,224		97,823			37,303		109,204		30,147		93,961			40,570
Net income per share attributable to common stockholders, basic	$	0.27	$	0.27	$	0.10		$	0.10	$	0.53	$	0.53	$	0.19		$	0.19

Diluted
Numerator
Net income attributable to common stockholders, basic	$	30,215	$	7,629	$	9,380		$	3,577	$	57,887	$	15,980	$	17,786		$	7,679
Reallocation as a result of conversion of Class B to Class A common stock:
Net income attributable to common stockholders, basic		7,629		—		3,577			—		15,980		—		7,679			—
Reallocation of net income to Class B common stock		—		2,705		—			767		—		5,268		—			1,474
Net income attributable to common stockholders, diluted	$	37,844	$	10,334	$	12,957		$	4,344	$	73,867	$	21,248	$	25,465		$	9,153
Denominator
Number of shares used for basic EPS computation		111,786		28,224		97,823			37,303		109,204		30,147		93,961			40,570
Conversion of Class B to Class A common stock		28,224		—		37,303			—		30,147		—		40,570			—
Effect of potentially dilutive common shares		13,768		13,768		12,029			12,029		13,950		13,950		12,159			12,159
Weighted average shares used in computing net income per share attributable to common stockholders, diluted		153,778		41,992		147,155			49,332		153,301		44,097		146,690			52,729
Net income per share attributable to common stockholders, diluted	$	0.25	$	0.25	$	0.09		$	0.09	$	0.48	$	0.48	$	0.17		$	0.17

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

	Three Months Ended July 31,				Six Months Ended July 31,
	2017		2016		2017		2016
Options and awards to purchase shares not included in the computation of diluted net income per share because their inclusion would be anti-dilutive		337,503		2,031,160		558,126		1,757,681