Net Income Per Share

9 Months Ended

Sep. 30, 2023

2. Net Income Per Share

Basic net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock outstanding. Diluted net income per share attributable to Innoviva stockholders is computed by dividing net income attributable to Innoviva stockholders by the weighted-average number of shares of common stock and dilutive potential common stock equivalents then outstanding. Dilutive potential common stock equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common stock issuable upon assumed conversion of our convertible subordinated notes due 2023 (the “2023 Notes”) up until its maturity date on January 15, 2023, our convertible senior notes due 2025 (the “2025 Notes”) and our convertible senior notes due 2028 (the “2028 Notes”) using the if-converted method.

The following table shows the computation of basic and diluted net income per share for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except per share data)	2023		2022		2023		2022
Numerator:
Net income attributable to Innoviva stockholders, basic	$	82,046	$	265,523	$	118,191	$	282,235
Add: interest expense on 2023 Notes, net of tax effect		—		412		86		2,003
Add: interest expense on 2025 Notes, net of tax effect		1,236		994		3,703		3,533
Add: interest expense on 2028 Notes, net of tax effect		1,543		1,769		4,618		3,862
Net income attributable to Innoviva stockholders, diluted	$	84,825	$	268,698	$	126,598	$	291,633
Denominator:
Weighted-average shares used to compute basic net income per share attributable to Innoviva stockholders		64,953		69,731		66,016		69,640
Dilutive effect of 2023 Notes		—		4,866		250		6,629
Dilutive effect of 2025 Notes		11,150		11,150		11,150		11,150
Dilutive effect of 2028 Notes		9,955		9,955		9,955		7,559
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan		106		128		133		94
Weighted-average shares used to compute diluted net income per share attributable to Innoviva stockholders		86,164		95,830		87,504		95,072
Net income per share attributable to Innoviva stockholders
Basic	$	1.26	$	3.81	$	1.79	$	4.05
Diluted	$	0.98	$	2.80	$	1.45	$	3.07

Anti-Dilutive Securities

The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti-dilutive for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		1,389		705		1,284		577
Outstanding stock warrant		591		526		591		177
Total		1,980		1,231		1,875		754