Net Income per Share

12 Months Ended

Dec. 31, 2022

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. For the year ended December 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 years ended December 31, 2021 and 2020, the dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method.

The components used in the computation of basic and diluted net income per share for the years ended December 31, 2022, 2021 and 2020 were as follows (in thousands, except per share data):


	2022		2021		2020
Numerator:
Net income	$	523,672	$	651,642	$	557,054
Denominator:
Shares used for basic net income per share	159,089		162,665		162,490
Effect of dilutive securities:
Stock options	21		21		31
RSUs and DSUs	637		1,518		1,819
Convertible senior notes	720		1,600		873
Warrants related to issuance of convertible senior notes	—		—		—
Shares used for diluted net income per share	160,467		165,804		165,213
Basic net income per share	$	3.29	$	4.01	$	3.43
Diluted net income per share	$	3.26	$	3.93	$	3.37

For the years ended December 31, 2022, 2021 and 2020, certain potential outstanding shares from 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, 2022, 2021 and 2020 were as follows (in thousands):


	2022	2021	2020

Service-based RSUs	2,211	776	591
Market- and performance-based RSUs	1,030	1,199	1,409
Convertible senior notes	—	9,898	12,922
Warrants related to issuance of convertible senior notes	21,991	21,991	21,991
Total shares excluded from computation	25,232	33,864	36,913