Net Income Per Share

9 Months Ended

Sep. 30, 2022

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of shares outstanding during the period. In periods of net loss, all potential common shares are anti-dilutive, so diluted net loss per share equals the basic net loss per share. In periods of net income, diluted net income per share is computed by dividing net income for the period by the basic weighted-average number of shares plus any dilutive potential common stock outstanding during the period, using the treasury stock method. Potential common stock includes the effect of outstanding dilutive stock options, restricted stock awards, and restricted stock units, as well as shares the Company could be obligated to issue from its convertible senior notes and warrants, as described in Note 10, Convertible Senior Notes (pre-ASU 2020-06 adoption). For periods prior to the adoption of ASU 2020-06 on January 1, 2022, the Company applied the treasury stock method to calculate the dilutive impact of the convertible senior notes. Upon adoption of ASU 2020-06, effective January 1, 2022, the Company is required to apply the if-converted method for calculating the dilutive impact of the convertible senior notes. Refer to Note 1, Organization and Summary of Significant Accounting Policies, for further information. Any anti-dilutive weighted-average dilutive shares related to stock award plans, convertible senior notes, and warrants are excluded from the computation of the diluted net income per share.

The basic and diluted net income per share calculations for the three and nine months ended September 30, 2022 and 2021 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(In thousands, except per share data)
Net income	$	16,774	$	29,317	$	34,056	$	63,868
Weighted-average shares outstanding – basic	44,441		43,648		44,304		43,293
Effect of dilutive securities from stock award plans	943		2,087		1,293		2,086
Effect of convertible senior notes	435		2,156		1,162		1,816
Effect of warrants	—		450		—		—
Weighted-average shares outstanding – diluted	45,819		48,341		46,759		47,195


Net income per share – basic	$	0.38	$	0.67	$	0.77	$	1.48
Net income per share – diluted	$	0.37	$	0.61	$	0.73	$	1.35

Anti-dilutive weighted-average shares related to stock award plans	810		64		689		199
Anti-dilutive weighted-average shares related to convertible senior notes and warrants	5,908		—		5,908		5,908