Earnings Per Share

Basic earnings per share is calculated by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the earnings by the weighted average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported.

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net income per share:	(In thousands, except per share amounts)
Numerator:
Net income	$	7,695	$	4,511	$	13,306	$	10,265
Denominator:
Weighted-average shares outstanding - basic	109,555		110,214		110,353		109,951
Effect of potential dilutive common shares	3,564		3,509		3,508		2,854
Weighted-average shares outstanding - diluted	113,119		113,723		113,861		112,805
Basic net income per share	$	0.07	$	0.04	$	0.12	$	0.09
Diluted net income per share	$	0.07	$	0.04	$	0.12	$	0.09

For the three months ended September 30, 2017 and 2016, options to purchase approximately 1.8 million and 1.8 million shares, respectively, and for the nine months ended September 30, 2017 and 2016, options to purchase approximately 1.9 million and 2.2 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise and related unrecognized stock-based compensation expense.