Net Income per Share

12 Months Ended

Dec. 31, 2019

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, RSUs, 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 years ended December 31, 2019, 2018 and 2017 (in thousands, except per share data):



	2019		2018		2017
Numerator:
Net income	$	478,035	$	298,373	$	222,766
Denominator:
Shares used for basic net income per share	162,706		167,312		171,559
Effect of dilutive securities:
Stock options	68		132		260
RSUs and DSUs	1,799		1,744		892
Convertible senior notes	—		—		—
Warrants related to issuance of convertible senior notes	—		—		—
Shares used for diluted net income per share	164,573		169,188		172,711
Basic net income per share	$	2.94	$	1.78	$	1.30
Diluted net income per share	$	2.90	$	1.76	$	1.29

For the years ended December 31, 2019, 2018 and 2017, 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 years ended December 31, 2019, 2018 and 2017 (in thousands):



	2019	2018	2017
Stock options	—	—	9
Service-based RSUs	763	899	3,258
Market-and performance-based RSUs	1,349	1,509	1,054
Convertible senior notes	21,991	19,797	7,704
Warrants related to issuance of convertible senior notes	21,991	19,797	7,704
Total shares excluded from computation	46,094	42,002	19,729