Earnings Per Share

9 Months Ended

Apr. 30, 2024

Our basic earnings per share ("EPS") is computed based on the weighted average number of common shares (including vested but unissued share units, performance shares and restricted stock units ("RSUs")) outstanding during each respective period. Our diluted EPS reflects the dilution from potential common stock issuable pursuant to the exercise of equity-classified stock-based awards, settlement of escrow arrangements related to our acquisition of UHP Networks Inc. ("UHP") and the assumed conversion of Convertible Preferred Stock, if dilutive, outstanding during each respective period. Pursuant to FASB ASC 260 "Earnings Per Share" ("ASC 260"), shares whose issuance is contingent upon the satisfaction of certain conditions are included in diluted EPS based on the number of shares, if any, that would be issuable if the end of the reporting period were the end of the contingency period. When calculating our diluted earnings per share, we consider the amount an employee must pay upon assumed exercise of stock-based awards and the amount of stock-based compensation cost attributed to future services and not yet recognized.

There were no repurchases of our common stock during the three and nine months ended April 30, 2024 and 2023. See Note (18) - "Stockholders’ Equity" for more information.

Weighted average stock options, RSUs and restricted stock outstanding of 930,000 and 956,000 shares for the three months ended April 30, 2024 and 2023, respectively, and 1,067,000 and 1,001,000 shares for the nine months ended April 30, 2024 and 2023, respectively, were not included in our diluted EPS calculation because their effect would have been anti-dilutive. Our EPS calculations exclude 469,000 and 429,000 weighted average performance shares outstanding for the three months ended April 30, 2024 and 2023, respectively, and 624,000 and 384,000 for the nine months ended April 30, 2024 and 2023, respectively, as the performance conditions have not yet been satisfied. However, the numerator for EPS calculations for each respective period is reduced by the compensation expense related to these awards.

Weighted average common shares of 67,000 and 228,000 for the three months ended April 30, 2024 and 2023, respectively, and 131,000 and 293,000 for the nine months ended April 30, 2024 and 2023, respectively, related to our acquisition of UHP in March 2021 were not included in our diluted EPS calculation because their effect would have been anti-dilutive. As of April 30, 2024, all of the shares held in escrow related to the UHP acquisition were settled.

Weighted average common shares underlying the assumed conversion of convertible preferred stock, on an if-converted basis, of 21,308,000 and 4,606,000 for the three months ended April 30, 2024 and 2023, respectively, and 10,902,000 and 4,533,000 for the nine months ended April 30, 2024 and 2023, respectively, were not included in our diluted EPS calculation for the respective periods because their effect would have been anti-dilutive. As a result, the numerator for our basic and diluted EPS calculation for the three and nine months ended April 30, 2024 and 2023 is the respective net loss attributable to common stockholders.

The following table reconciles the numerators and denominators used in the basic and diluted EPS calculations:


	Three months ended April 30,			Nine months ended April 30,
	2024		2023	2024		2023
Numerator:
Net income (loss)	$	2,795,000	(7,458,000)	$	(9,200,000)	(23,359,000)
Loss on extinguishment of convertible preferred stock	—		—	(13,640,000)		—
Convertible preferred stock issuance costs	(76,000)		—	(4,349,000)		—
Dividend on convertible preferred stock	(3,759,000)		(1,766,000)	(7,643,000)		(5,213,000)
Net loss attributable to common stockholders	$	(1,040,000)	(9,224,000)	$	(34,832,000)	(28,572,000)

Denominator:



Denominator for basic and diluted calculation	28,854,000		28,071,000	28,753,000		27,950,000

As discussed further in Note (17) - "Convertible Preferred Stock," such shares of preferred stock represent a "participating security" as defined in ASC 260. As a result, our EPS calculations for the three and nine months ended April 30, 2024 and 2023 were based on the two-class method. Given the net loss attributable to common stockholders for the three and nine months ended April 30, 2024 and 2023, there was no impact of applying the two-class method to our reported basic or diluted earnings per common share.