NET INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2021

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, PSUs 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,
	2021		2020		2021		2020
Numerator:
Net income (loss)	$	3,771	$	2,855	$	11,148	$	(2,685)
Denominator:
Weighted-average common stock outstanding, basic	32,474		26,898		30,693		28,507
Dilutive effect of potential common shares:
Stock options, stock awards and ESPP	138		236		372		—
Total shares, diluted	32,612		27,134		31,065		28,507
Basic net income (loss) per share	$	0.12	$	0.11	$	0.36	$	(0.09)
Diluted net income (loss) per share	$	0.12	$	0.11	$	0.36	$	(0.09)

We include the underlying market condition stock awards in the calculation of diluted earnings per share if the performance condition has been satisfied as of the end of the reporting period and exclude stock equity awards if the performance condition has not been met.

For the three and nine months ended September 30, 2021, we had stock options, RSUs, PSUs and RSAs outstanding that could potentially dilute basic earnings per share in the future, but these were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive. These outstanding securities consisted of the following (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Stock options	342	1,368	97	1,367
RSUs and RSAs	—	181	—	1,197
	342	1,549	97	2,564