Net Income per Share

Basic net income per share is computed using the weighted average number of common shares outstanding during the applicable period. Diluted net income per share is computed using the weighted average number of common shares outstanding during the period, plus the dilutive effect of potential common stock. Potential common stock consists of shares issuable pursuant to stock options, restricted stock units ("RSUs"), deferred stock units ("DSUs"), convertible senior notes and warrants issued by the Company. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method.

The following table sets forth the components used in the computation of basic and diluted net income per share for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share data):



	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Numerator:
Net income	$	60,512	$	76,000	$	199,214	$	224,493
Denominator:
Shares used for basic net income per share	170,976		174,429		172,269		175,444
Effect of dilutive securities:
Stock options	150		341		279		380
RSUs and DSUs	379		847		823		701
Convertible senior notes	—		—		—		—
Warrants related to issuance of convertible senior notes	—		—		—		—
Shares used for diluted net income per share	171,505		175,617		173,371		176,525
Basic net income per share	$	0.35	$	0.44	$	1.16	$	1.28
Diluted net income per share	$	0.35	$	0.43	$	1.15	$	1.27

For the three and nine months ended September 30, 2017 and 2016, certain potential outstanding shares from stock options, service-based RSUs, convertible notes and warrants were excluded from the computation of diluted net income per share because the effect of including these items was anti-dilutive. Additionally, certain performance-based RSUs were excluded from the computation of diluted net income per share because the underlying performance conditions for such RSUs had not been met as of these dates. The number of potentially outstanding shares excluded from the computation of diluted net income per share for the three and nine months ended September 30, 2017 and 2016 are as follows (in thousands):



	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2017	2016	2017	2016
Stock options	25	36	13	74
Service-based RSUs	5,407	1,450	4,074	2,672
Performance-based RSUs	1,116	1,245	1,165	884
Convertible senior notes	7,704	7,704	7,704	7,704
Warrants related to issuance of convertible senior notes	7,704	7,704	7,704	7,704
Total shares excluded from computation	21,956	18,139	20,660	19,038