Note 3. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of dilutive common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted average shares outstanding any potential dilutive securities outstanding for the period. Potential dilutive securities include stock options, restricted stock units, performance-based stock awards and shares to be purchased under the Company’s employee stock purchase plan. The Company’s basic and diluted net income per share for the three and six months ended September 30, 2017 and 2016 were as follows (in thousands, except per share data):

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2017		2016		2017		2016
Basic Net Income Per Share
Net income	$	24,503	$	8,875	$	61,877	$	21,785

Weighted average shares used in computing basic net income per share		44,141		43,129		44,018		42,971

Net income per share - basic	$	0.56	$	0.21	$	1.41	$	0.51

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2017		2016		2017		2016
Diluted Net Income Per Share
Net income	$	24,503	$	8,875	$	61,877	$	21,785

Weighted average shares used in computing basic net income per share		44,141		43,129		44,018		42,971
Effect of dilutive securities		1,557		1,451		1,637		1,522
Weighted average shares used in computing diluted net income per share		45,698		44,580		45,655		44,493

Net income per share - diluted	$	0.54	$	0.20	$	1.36	$	0.49

For the three and six months ended September 30, 2017, approximately 200 and 5,700 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 77,000 restricted shares in each of the three and six months ended September 30, 2017, respectively, related to performance-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

For the three and six months ended September 30, 2016, approximately 1,500 and 8,800 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 186,000 restricted shares in each of the three and six months ended September 30, 2016, related to performance-based awards for which milestones had not been met at that date were not included in the computation of diluted earnings per share.