Net Income per Share

12 Months Ended

Dec. 31, 2020

Net Income per ShareBasic 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, 2020, 2019 and 2018 (in thousands, except per share data):


	2020		2019		2018
Numerator:
Net income	$	557,054	$	478,035	$	298,373
Denominator:
Shares used for basic net income per share	162,490		162,706		167,312
Effect of dilutive securities:
Stock options	31		68		132
RSUs and DSUs	1,819		1,799		1,744
Convertible senior notes	873		—		—
Warrants related to issuance of convertible senior notes	—		—		—
Shares used for diluted net income per share	165,213		164,573		169,188
Basic net income per share	$	3.43	$	2.94	$	1.78
Diluted net income per share	$	3.37	$	2.90	$	1.76

For the years ended December 31, 2020, 2019 and 2018, 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, 2020, 2019 and 2018 (in thousands):


	2020	2019	2018

Service-based RSUs	591	763	899
Market-and performance-based RSUs	1,409	1,349	1,509
Convertible senior notes	12,922	21,991	19,797
Warrants related to issuance of convertible senior notes	21,991	21,991	19,797
Total shares excluded from computation	36,913	46,094	42,002