NET INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2016

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is computed in a similar manner, but it also includes the effect of potential common shares outstanding during the period, when dilutive. Potential common shares include outstanding in-the-money stock options, restricted stock units, shares to be purchased under the Company’s employee stock purchase plan and warrants to purchase common stock. The dilutive effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the treasury stock method. To the extent these potential common shares are antidilutive, they are excluded from the calculation of diluted net income (loss) per share.

The following table presents the computation of basic and diluted net income (loss) per share for the periods presented (in thousands, except per share data):



	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016			2015
Numerator:
Net income (loss)	$	(18,756	)	$	624	$	(54,274	)	$	(6,299	)

Denominator:
Weighted average common shares outstanding	47,278			44,734		46,704			44,339
Effect of dilutive securities
Employee stock-based awards	—			3,261		—			—
Warrants	—			1		—			—
Weighted average common shares outstanding for diluted calculation	47,278			47,996		46,704			44,339

Net income (loss) per share, basic	$	(0.40	)	$	0.01	$	(1.16	)	$	(0.14	)
Net income (loss) per share, diluted	$	(0.40	)	$	0.01	$	(1.16	)	$	(0.14	)

For the three months ended September 30, 2015, the Company excluded 6.3 million of potential common shares outstanding from the calculation of diluted net income per share because their effect would have been antidilutive. In periods of net loss, all potential common shares were excluded from the diluted calculation because their effect would have been antidilutive. The following table summarizes the potential common shares excluded from the diluted calculation for the periods indicated (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
Employee stock options	9,383	4,817	8,944	8,718
Restricted stock units	840	1,523	994	1,551
Warrants to purchase common stock	45	—	85	111
Total	10,268	6,340	10,023	10,380