Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2020

Note 7. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) 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 units and performance shares, and issuances of shares under the Employee Stock Purchase Plan (the "ESPP"), which are reflected in diluted net income (loss) per share by application of the treasury stock method. Potentially dilutive common shares are excluded from the computation of diluted net income (loss) per share when their effect is anti-dilutive.

Net income (loss) per share for the years ended December 31, 2020, 2019 and 2018 was as follows:

	Year Ended December 31,
	2020		2019		2018
	(In thousands, except per share data)
Numerator:
Net income from continuing operations	$	58,293	$	25,791	$	17,326
Net loss from discontinued operations		—		—		(35,655	)
Net income (loss)		58,293		25,791		(18,329	)
Less: Net loss attributable to non-controlling interest in discontinued operations		—		—		(9,167	)
Net income (loss) attributable to NETGEAR, Inc.	$	58,293	$	25,791	$	(9,162	)

Denominator:
Weighted average common shares - basic		29,897		30,936		31,626
Potentially dilutive common share equivalent		743		1,029		1,511
Weighted average common shares - dilutive		30,640		31,965		33,137

Basic net income (loss) per share
Net income from continuing operations	$	1.95	$	0.83	$	0.55
Net loss from discontinued operations attributable to NETGEAR, Inc.		—		—		(0.84	)
Net income (loss) attributable to NETGEAR, Inc.	$	1.95	$	0.83	$	(0.29	)

Diluted net income (loss) per share
Net income from continuing operations	$	1.90	$	0.81	$	0.52
Net loss from discontinued operations attributable to NETGEAR, Inc.		—		—		(0.80	)
Net income (loss) attributable to NETGEAR, Inc.	$	1.90	$	0.81	$	(0.28	)

Anti-dilutive employee stock-based awards, excluded		832		1,066		815