NOTE 3. NET (LOSS) INCOME PER SHARE

Basic net (loss) income per share is calculated by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share is calculated by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding during the period, plus potentially dilutive common shares, consisting of stock options, RSUs, PSUs, 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 ESPP, are considered to be potential common shares and are only included in the calculation of diluted net (loss) income per share when their effect is dilutive. Basic and diluted earnings per common share are calculated as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except for per share amounts)	2018		2017		2018		2017
Basic and diluted net (loss) income per share
Net (loss) income	$	(21,048)	$	(26,659)	$	12,776	$	(53,400)
Denominator		63,719		62,532		63,611		62,331
Basic net (loss) income per share	$	(0.33)	$	(0.43)	$	0.20	$	(0.86)

Diluted net (loss) income per share
Numerator:
Net (loss) income	$	(21,048)	$	(26,659)	$	12,776	$	(53,400)
Denominator:
Denominator for basic (loss) income per share		63,719		62,532		63,611		62,331
Add effect of diluted securities:
Stock options and equivalents		—		—		496		—
Denominator for diluted (loss) income per share		63,719		62,532		64,107		62,331
Diluted net (loss) income per share	$	(0.33)	$	(0.43)	$	0.20	$	(0.86)

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


	June 30,	June 30,
(in thousands)	2018	2017
Convertible debt	17,931	17,931
Stock options and equivalents	3,902	8,215
Total potentially dilutive common shares	21,833	26,146