Basic and Diluted Net Income Per Share

3 Months Ended

Mar. 31, 2015

Earnings Per Share, Basic and Diluted [Abstract]

Basic and Diluted Net Income Per Share

Basic and Diluted 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 shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, including performance-based stock options and restricted stock units for which performance criteria have been achieved, restricted stock units with time-based vesting and shares to be purchased under the employee stock purchase plan. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company's common stock can result in a greater dilutive effect from potentially dilutive securities.

The computations of basic and diluted net income per share are as follows (in thousands, except per share amounts): 

	Three Months Ended
	March 31,
	2015		2014
Numerator:
Net income	$	4,147	$	18,275
Denominator:
Weighted average common shares - basic	76,205		74,754
Effect of dilutive securities:
Employee stock options	2,806		3,306
Employee stock purchase plan	95		4
Restricted stock units	125		—
Weighted average common shares - diluted	79,231		78,064
Net income per share:
Basic	$	0.05	$	0.24
Diluted	$	0.05	$	0.23
Potentially dilutive securities excluded from net income per share - diluted because their effect is anti-dilutive	43		658