NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of shares of common stock, adjusted for any dilutive effect of potential common stock. Potential common stock, computed using the treasury stock method, includes stock options, RSUs, RSAs and ESPP.

The following is a reconciliation of the numerators and denominators used in computing basic and diluted net income (loss) per share (in thousands, except per share amounts):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Numerator:
Net income (loss)	$	(1,387	)	$	(4,640	)	$	(21,023	)	$	57,485
Denominator:
Weighted-average common stock outstanding, basic	31,711			30,780			31,461			30,340
Dilutive effect of potential common shares:
Stock options, RSUs, RSA and ESPP	—			—			—			994
Total shares, diluted	31,711			30,780			31,461			31,334
Basic net income (loss) per share	$	(0.04	)	$	(0.15	)	$	(0.67	)	$	1.89
Diluted net income (loss) per share	$	(0.04	)	$	(0.15	)	$	(0.67	)	$	1.83

The Company includes the underlying market condition-based stock options in the calculation of diluted earnings per share if the performance condition has been satisfied as of the end of the reporting period and excludes such options if the performance condition has not been met.

For the nine months ended September 30, 2018, standard stock options to purchase approximately 262,000 shares of common stock, with exercise prices greater than the average fair market value of the Company’s stock of $12.04 per share, were not included in the calculation because the effect would have been anti-dilutive.

As of September 30, 2019 and 2018, the Company had stock options, RSUs and RSAs outstanding that could potentially dilute basic earnings per share in the future, but these were excluded from the computation of diluted net loss per share for the three and nine months ended September 30, 2019 and the three months ended September 30, 2018, since their effect would have been anti-dilutive. These outstanding securities consisted of the following (in thousands):



	September 30
	2019	2018
Standard and market condition-based stock options outstanding	2,011	2,323
RSUs outstanding	949	1,091
RSAs outstanding	91	63