Earnings (Loss) Per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share

Basic earnings per share is calculated by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the earnings by the weighted average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported.

The following table sets forth the computation of basic and diluted net income per share:



	Three Months Ended March 31,
	2017		2016
Net income per share:	(In thousands, except per share amounts)
Numerator:
Net income	$	3,006	$	1,878
Denominator:
Weighted-average shares outstanding - basic	111,464		109,733
Effect of potential dilutive common shares	3,861		2,519
Weighted-average shares outstanding - diluted	115,325		112,252
Basic net income per share	$	0.03	$	0.02
Diluted net income per share	$	0.03	$	0.02

For the three months ended March 31, 2017 and 2016, options to purchase approximately 2.0 million and 2.6 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise and related unrecognized stock-based compensation expense.