
	Net Income Per Share

Basic net income per share is computed by dividing net income for the period by the weighted average number of shares outstanding during the period, less shares subject to repurchase. Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares, less shares subject to repurchase, plus, if dilutive, potential common stock outstanding during the period. Potential common stock includes the effect of outstanding dilutive stock options, restricted stock awards and restricted stock units computed using the treasury stock method. Since their impact is anti-dilutive, we excluded 1,178,755 and 2,067,273 shares from the calculations of diluted net income per share for the nine months ended September 30, 2013 and 2012, respectively.

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Basic:
Net income	$	7,755	$	6,920	$	17,156	$	10,646
Weighted average shares outstanding — basic	35,133		33,193		34,499		33,316
Net income per share — basic	$	0.22	$	0.21	$	0.50	$	0.32
Diluted:
Net income	$	7,755	$	6,920	$	17,156	$	10,646
Weighted average shares outstanding — basic	35,133		33,193		34,499		33,316
Add: Dilutive effect of employee stock plans	1,057		875		967		925
Weighted average shares outstanding — diluted	36,190		34,068		35,466		34,241
Net income per share — diluted	$	0.21	$	0.20	$	0.48	$	0.31