NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period, plus potentially dilutive common shares, consisting of shares issuable in connection with stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs), the ESPP and convertible debt. The Company uses the treasury-stock method to compute diluted earnings per share with respect to its stock options and equivalents. The Company uses the if-converted method to compute diluted earnings per share with respect to its convertible debt. For purposes of this calculation, options to purchase stock, including stock options, RSUs, PSUs and the ESPP, are considered to be potential common shares and are only included in the calculation of diluted net income (loss) per share when their effect is dilutive. Basic and diluted earnings per common share are calculated as follows (in thousands, except for per share amounts):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019			2018
Basic net income (loss) per share
Net income (loss)	$	3,331	$	48,270	$	(24,575	)	$	61,046
Denominator	72,747		63,917		67,332			63,714
Basic net income (loss) per share	$	0.05	$	0.76	$	(0.36	)	$	0.96

Diluted net income (loss) per share
Numerator:
Net income (loss)	$	3,331	$	48,270	$	(24,575	)	$	61,046
Add: Interest expense on convertible debt, net of tax	—		5,340		—			15,815
Denominator:
Denominator for basic net income (loss) per share	72,747		63,917		67,332			63,714
Add effect of diluted securities:
Stock options and equivalents and convertible debt	—		18,773		—			18,568
Denominator for diluted net income (loss) per share	72,747		82,690		67,332			82,282
Diluted net income (loss) per share	$	0.05	$	0.65	$	(0.36	)	$	0.93

The following table sets forth outstanding potentially dilutive common shares that are not included in the computation of diluted net income (loss) per share because to do so would be anti-dilutive (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
2.50% Convertible Notes due 2021	12,313	—	16,038	—
5.00% Convertible Notes due 2024	20,262	—	6,828	—
Stock options and equivalents	6,718	2,741	6,618	3,359
Total potentially dilutive common shares	39,293	2,741	29,484	3,359