EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income available to common stockholders by the weighted-average number of shares outstanding during the period. The holders of unvested RSAs do not have nonforfeitable rights to dividends or dividend equivalents and therefore, such vested awards do not qualify as participating securities and are excluded from the basic earnings per share calculation. Diluted earnings per share includes the determinants of basic net income per share and, in addition, gives effect to the potential dilution that would occur if securities or other contracts to issue common stock are exercised, vested, or converted into common stock, unless they are anti-dilutive. As the Company intends to settle the principal amount of the Notes (see Note 8, "Debt") in cash upon conversion, their dilutive effect is reflected in diluted earnings per share using the treasury stock method, which considers the number of shares that would be required to settle any premium above principal at the average stock price for the period. During the three and nine months ended September 30, 2016, the average price of the Company's stock was below the conversion price of the Notes; as a result, the Notes were not dilutive for those periods.

A reconciliation of the numerator and denominator of basic earnings per share and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 is shown in the following table (in thousands, except per share data):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Numerator
Net income	$	12,844	$	7,358	$	30,612	$	18,143
Denominator
Denominator for basic earnings per share:
Weighted average common shares outstanding	56,654		55,670		56,389		55,395
Denominator for diluted earnings per share:
Dilutive potential common shares:
Stock options	1,021		976		998		977
Restricted stock awards and units	905		681		909		570
Performance-based restricted stock units	657		386		589		330
Employee stock purchase plan	200		25		136		—
Convertible senior notes	1,177		—		643		—
Weighted average common shares outstanding with assumed conversion	60,614		57,738		59,664		57,272
Basic earnings per share	$	0.23	$	0.13	$	0.54	$	0.33
Diluted earnings per share	$	0.21	$	0.13	$	0.51	$	0.32

Anti-dilutive common stock equivalents excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 are shown in the following table (in thousands, except per share data):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016
Stock options	60	458	99	627
Restricted stock awards and units	—	20	8	30
Performance-based restricted stock units	—	—	3	—
Employee stock purchase plan	—	—	391	262
Total	60	478	501	919