Net Income Per Share

3 Months Ended

Mar. 31, 2017

Net Income Per Share

Net Income Per Share

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 shares outstanding. Diluted net income per share is computed by dividing net income adjusted with the interest expense on our unsecured convertible subordinated notes due 2023 (the “2023 Notes”) by the weighted-average number of shares of common shares and dilutive potential common share equivalents then outstanding. Dilutive potential common share equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common shares issuable upon assumed conversion of our 2023 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, 2017 and 2016:

	Three Months Ended March 31,
(In thousands except per share data)	2017		2016
Numerator:
Net income, basic	$	16,845	$	4,435
Add: Interest expense on 2023 Notes	1,407		—
Net income, diluted	$	18,252	$	4,435
Denominator:
Weighted-average shares used to compute basic net income per share	107,487		112,482
Dilutive effect of 2023 Notes	12,189		—
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan	660		696
Weighted-average shares used to compute diluted net income per share	120,336		113,178
Net income per share
Basic	$	0.16	$	0.04
Diluted	$	0.15	$	0.04

Anti-Dilutive Securities

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

	Three months ended March 31,
(In thousands)	2017	2016
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan	3,062	4,427
Shares issuable upon conversion of 2023 Notes	—	12,904
	3,062	17,331