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 months ended March 31, 2019 and 2018 (in thousands, except per share data):



	For the Three Months Ended March 31,
	2019		2018
Numerator:
Net income	$	107,130	$	53,714
Denominator:
Shares used for basic net income per share	163,236		170,116
Effect of dilutive securities:
Stock options	49		142
RSUs and DSUs	1,502		1,746
Convertible senior notes	—		—
Warrants related to issuance of convertible senior notes	—		—
Shares used for diluted net income per share	164,787		172,004
Basic net income per share	$	0.66	$	0.32
Diluted net income per share	$	0.65	$	0.31

For the three months ended March 31, 2019 and 2018, certain potential outstanding common 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 common shares excluded from the computation of diluted net income per share for the three months ended March 31, 2019 and 2018 are as follows (in thousands):



	For the Three Months Ended March 31,
	2019	2018
Service-based RSUs	2,565	2,815
Performance-based RSUs	1,484	1,529
Convertible senior notes	12,093	7,704
Warrants related to issuance of convertible senior notes	12,093	7,704
Total shares excluded from computation	28,235	19,752