Net Income per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share Reconciliation [Abstract]

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. For the three months ended March 31, 2022, the dilutive effect of outstanding awards is reflected in diluted earnings per share by application of the treasury stock method and the dilutive effect of the convertible securities is reflected in diluted earnings per share by application of the if-converted method. For the three months ended March 31, 2021, 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, 2022 and 2021 (in thousands, except per share data):


	For the Three Months Ended March 31,
	2022		2021
Numerator:
Net income	$	119,163	$	155,695
Denominator:
Shares used for basic net income per share	160,494		163,061
Effect of dilutive securities:
Stock options	1		5
RSUs and DSUs	1,320		1,667
Convertible senior notes	1,822		955
Warrants related to issuance of convertible senior notes	—		—
Shares used for diluted net income per share	163,637		165,688
Basic net income per share	$	0.74	$	0.95
Diluted net income per share	$	0.73	$	0.94

For the three months ended March 31, 2022 and 2021, certain potential outstanding common shares issuable in respect of 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, 2022 and 2021 are as follows (in thousands):


	For the Three Months Ended March 31,
	2022	2021

Service-based RSUs	2,234	2,070
Market- and performance-based RSUs	1,054	1,338
Convertible senior notes	—	9,898
Warrants related to issuance of convertible senior notes	21,991	21,991
Total shares excluded from computation	25,279	35,297