Net Income Per Share

Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common and dilutive potential common shares outstanding during the period. Potential common shares include employee stock options, restricted stock units and performance-based stock units. For purposes of computing diluted net income per share, weighted average potential common shares do not include potential common shares that are anti-dilutive under the treasury stock method.

The following table sets forth the computation of basic and diluted net income per share:



	Three Months Ended
(in thousands, except per share amounts)	July 1, 2018		July 2, 2017
Numerator (basic and diluted):
Net income	$	30,720	$	16,714
Denominator:
Weighted average common shares outstanding, basic	129,560		133,302
Dilutive effect of employee stock options, restricted stock units and performance stock units	3,246		3,340
Weighted average common shares outstanding, diluted	132,806		136,642

Basic net income per share	$	0.24	$	0.13
Diluted net income per share	$	0.23	$	0.12

Potential dilutive common shares of 0.2 million and 24 thousand pertaining to employee stock options, restricted stock units and performance-based stock units were excluded from the calculation of diluted earnings per share for the three months ended July 1, 2018 and July 2, 2017, respectively, because the effect would have been anti-dilutive.

The denominator for diluted net income per share for each of the three months ended July 1, 2018 and July 2, 2017 does not include any effect from the 0.875% Convertible Senior Notes due 2022, or the Convertible Notes. In accordance with ASC 260, Earnings per Share, the Convertible Notes will not impact the denominator for diluted net income per share unless the average price of our common stock, as calculated under the terms of the Convertible Notes, exceeds the conversion price of $33.45 per share. Likewise, the denominator for diluted net income per share will not include any effect from the warrants unless the average price of our common stock, as calculated under the terms of the warrants, exceeds $48.66 per share.

The denominator for diluted net income per share for each of the three months ended July 1, 2018 and July 2, 2017 also does not include any effect from the convertible note hedge transaction, or the Note Hedges. In future periods, the denominator for diluted net income per share will exclude any effect of the Note Hedges, as their effect would be anti-dilutive. In the event an actual conversion of any or all of the Convertible Notes occurs, the shares that will be delivered to us under the Note Hedges are designed to neutralize the dilutive effect of the shares that the Company will issue under the Convertible Notes. Refer to Note 15 for further discussion regarding the Convertible Notes.