Net Income Per Share

Basic net income per share is computed by dividing the net income attributable to NETGEAR, Inc. for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing the net income attributable to NETGEAR, Inc. for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. Potentially dilutive common shares include common shares issuable upon exercise of stock options, vesting of restricted stock awards, and issuances of shares under the Employee Stock Purchase Plan (the “ESPP”), which are reflected in diluted net income per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income per share when their effect is anti-dilutive.

Net income per share attributable to NETGEAR, Inc. for the three and nine months ended September 30, 2018 and October 1, 2017 were as follows:



	Three Months Ended					Nine Months Ended
	September 30, 2018			October 1, 2017		September 30, 2018			October 1, 2017
	(In thousands, except per share data)
Numerator:
Net income	$	9,150		$	20,794	$	9,510		$	51,370
Less: Net loss attributable to non-controlling interest	(799		)	—		(799		)	—
Net income attributable to NETGEAR, Inc.	$	9,949		$	20,794	$	10,309		$	51,370

Denominator:
Weighted average common shares - basic	31,802			31,704		31,634			32,335
Potentially dilutive common share equivalent	1,172			689		1,192			934
Weighted average common shares - dilutive	32,974			32,393		32,826			33,269

Basic net income per share attributable to NETGEAR, Inc.	$	0.31		$	0.66	$	0.33		$	1.59
Diluted net income per share attributable to NETGEAR, Inc.	$	0.30		$	0.64	$	0.31		$	1.54

Anti-dilutive employee stock-based awards, excluded	450			975		874			431