Net Income Per Share

3 Months Ended

Mar. 31, 2024

2. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding. Diluted net income per share is computed by dividing net income 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 months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
(In thousands except per share data)	2024		2023
Numerator:
Net income, basic	$	36,532	$	34,865
Add: interest expense on 2023 Notes, net of tax effect		—		81
Add: interest expense on 2025 Notes, net of tax effect		1,121		1,169
Add: interest expense on 2028 Notes, net of tax effect		1,401		1,459
Net income, diluted	$	39,054	$	37,574
Denominator:
Weighted-average shares used to compute basic net income per share		63,185		67,786
Dilutive effect of 2023 Notes		—		757
Dilutive effect of 2025 Notes		11,150		11,150
Dilutive effect of 2028 Notes		9,956		9,956
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan		240		139
Weighted-average shares used to compute diluted net income per share		84,531		89,788
Net income per share
Basic	$	0.58	$	0.51
Diluted	$	0.46	$	0.42

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 March 31,
(In thousands)	2024		2023
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		1,360		1,326
Outstanding stock warrant		591		591
Total		1,951		1,917