<PAGE>
 
                                                                    EXHIBIT 11.1

                               HEARTSTREAM, INC.
                       COMPUTATION OF NET LOSS PER SHARE
<TABLE>
<CAPTION>
                                                      Three Months Ended June 30,      Six Months Ended June 30,
                                                      ---------------------------     --------------------------
                                                         1997            1996            1997           1996
                                                      -----------     -----------     -----------    -----------
<S>                                                   <C>             <C>             <C>            <C>
Net loss...........................................   $(4,142,778)    $(2,779,629)    $(8,268,147)   $(4,870,521)
                                                      -----------     -----------     -----------    -----------
Shares used in calculating historical net loss per                                
 share:                                                                           
 Weighted average shares outstanding...............    11,743,757      11,427,645      11,709,184      9,697,880
 Net effect of preferred stock issued, after giving                               
  effect to the conversion into common stock, at                                  
  less than the offering price during the 12 months                               
  prior to the Company's filing of its initial                                    
  public offering, calculated using the treasury                                  
  stock method at an offering price of $13 per                                    
  share, and treated as outstanding for all periods                               
  prior to the closing date of the Company's                                      
  initial public offering..........................            --              --              --        203,610
 Net effect of stock options granted or exercised
  at less than the offering price during the 12 
  months prior to the Company's filing of its 
  initial public offering, calculated using the 
  treasury stock method at an offering price of 
  $13 per share, and treated as outstanding for 
  all periods prior to the closing date of the 
  Company's initial public offering................            --              --              --         75,094
                                                       ----------     -----------     -----------    -----------
Shares used in computation of historical net loss
 per share.........................................    11,743,757      11,427,645      11,709,184      9,976,584
                                                       ----------     -----------     -----------    -----------
Historical net loss per share......................    $    (0.35)    $     (0.24)    $     (0.71)   $     (0.49)
                                                       ==========     ===========     ===========    =========== 
Net loss...........................................                                                  $(4,870,521)
                                                                                                     -----------
Shares used in calculating pro forma net loss per
 share:
 Weighted average shares outstanding...............                                                    9,697,880
 Weighted average common shares giving effect to
  the conversion of preferred stock into common
  for all periods subsequent to issuance...........                                                    1,020,386
Net effect of stock options granted or exercised at
 less than the offering price during the 12 months
 prior to the Company's filing of its initial
 public offering, calculated using the treasury 
 stock method at an offering price of $13 per 
 share, and treated as outstanding for all periods 
 prior to the closing date of the Company's initial
 public offering...................................                                                       75,094
                                                                                                     -----------
Shares used in computation of pro forma net loss
 per share.........................................                                                   10,793,360
                                                                                                     -----------
Pro forma net loss per share.......................                                                  $     (0.45)
                                                                                                     ===========
 
</TABLE>