Earnings per share

12 Months Ended

Dec. 31, 2023

Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. Outstanding stock options, unvested RSUs, unvested PSUs, common shares expected to be issued under our ESPP and the Convertible Notes are considered common stock equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive.

Potentially dilutive common shares issuable upon vesting of stock options, RSUs and PSUs are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of the Convertible Notes are determined using the if-converted method. Since we have committed to settle the principal amount of the Convertible Notes in cash upon conversion only, the number of shares for the conversion spread will be included as a dilutive common stock equivalent.

A reconciliation of the numerators and the denominators of the basic and diluted earnings per share computations is as follows (in thousands, except per share amounts):


	Twelve Months Ended December 31,
	2023		2022		2021
Numerator
Net income	$	281,594	$	202,129	$	402,710
Denominator
Weighted average common shares outstanding for basic earnings per share	131,927		136,844		140,646
Dilutive potential common stock outstanding
Stock options	1,824		2,265		2,737
RSUs, PSUs and ESPP	388		422		555
Convertible Notes	58		1,077		2,858
Weighted average common shares outstanding for diluted earnings per share	134,197		140,608		146,796
Earnings per share
Basic	$	2.13	$	1.48	$	2.86
Diluted	$	2.10	$	1.44	$	2.74

Shares which have been excluded from the calculation of diluted earnings per common share because their effect was anti-dilutive, include the following (shares in millions):


	Twelve Months Ended December 31,
	2023	2022	2021
Anti-dilutive securities (1)	27.8	20.7	13.8

(1) The anti-dilutive securities include outstanding stock options, unvested RSUs, unvested PSUs, common shares expected to be issued under our ESPP and Convertible Notes.