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, performance-based stock units and convertible notes. 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				Six Months Ended
(in thousands, except per share amounts)	September 30, 2018		October 1, 2017		September 30, 2018		October 1, 2017
Numerator (basic and diluted):
Net income	$	35,500	$	18,680	$	66,220	$	35,394
Denominator:
Weighted average common shares outstanding, basic	129,155		133,269		129,357		133,286
Dilutive effect of employee stock options, restricted stock units and performance stock units	4,100		2,790		4,052		3,148
Dilutive effect of convertible notes	1,500		—		548		—
Weighted average common shares outstanding, diluted	134,755		136,059		133,957		136,434
Basic net income per share	$	0.27	$	0.14	$	0.51	$	0.27
Diluted net income per share	$	0.26	$	0.14	$	0.49	$	0.26

Potential dilutive common shares of seven thousand and 18 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 September 30, 2018 and October 1, 2017, respectively, because the effect would have been anti-dilutive. Potential dilutive common shares of 11 thousand and 55 thousand pertaining to employee stock options, restricted stock units and performance stock units were excluded from the calculation of diluted earnings per share for the six months ended September 30, 2018 and October 1, 2017, respectively, because the effect would have been anti-dilutive.

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 the Company's 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 the Company's common stock, as calculated under the terms of the warrants, exceeds $48.66 per share. For the three and six months ended September 30, 2018, the Company included the Convertible Notes in the calculation of diluted earnings per share of common stock because the average market price of the Company's stock was above the conversion price. The Company could potentially exclude the Convertible Notes in the future if the average market price is below the conversion price. The denominator for diluted net income per share for the three and six months ended October 1, 2017 does not include any effect from the Convertible Notes.

The denominator for diluted net income per share for each of the three and six months ended September 30, 2018 and October 1, 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.