Net Income Per Common Share

12 Months Ended

Dec. 31, 2023

NET INCOME PER COMMON SHARE

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


	2023		2022		2021
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	448,752	$	715,501	$	1,014,589
Weighted average common shares-basic		154,310		158,434		164,960
Effect of dilutive potential common shares:
Convertible note hedge warrant shares (1)		8,897		8,806		9,956
Incremental shares from assumed conversion of convertible notes (2)		633		1,763		7,435
Restricted stock units		423		657		1,180
Stock options		34		52		86
Employee stock purchase rights		7		22		8
Dilutive potential common shares		9,994		11,300		18,665
Weighted average common shares-diluted		164,304		169,734		183,625
Net income per common share-basic	$	2.91	$	4.52	$	6.15
Net income per common share-diluted	$	2.73	$	4.22	$	5.53

(1)

Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price, multiplied by the number of warrant shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period.

(2)

Incremental shares from the assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price, multiplied by the number of convertible notes shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

The computation of diluted net income per common share for 2023 excludes the effect of the potential exercise of stock options to purchase approximately 0.1 million shares and restricted stock units to purchase approximately 0.1 million shares because the effect would have been anti-dilutive. The computation of diluted net income per common share for 2022 excludes the effect of the potential exercise of stock options to purchase approximately 0.1 million shares and restricted stock units to purchase approximately 0.4 million shares because the effect would have been anti-dilutive.