Net Income Per Share

9 Months Ended

Sep. 30, 2025

2. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding. Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock and dilutive potential common stock equivalents then outstanding. Dilutive potential common stock equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common stock issuable upon assumed conversion of our convertible senior notes due 2025 (the “2025 Notes”) and our convertible senior notes due 2028 (the “2028 Notes”) using the if-converted method. If in a net loss position, diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for dilutive potential common stock equivalents.

The following table shows the computation of basic and diluted net income per share for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except per share data)	2025		2024		2025		2024
Numerator:
Net income, basic	$	89,908	$	1,213	$	107,012	$	3,060
Add: interest expense on 2025 Notes, net of tax effect		566		—		2,820		—
Add: interest expense on 2028 Notes, net of tax effect		1,416		—		4,238		—
Net income, diluted	$	91,890	$	1,213	$	114,070	$	3,060
Denominator:
Weighted-average shares used to compute basic net income per share		69,058		62,569		64,901		62,759
Dilutive effect of 2025 Notes		5,467		—		9,235		—
Dilutive effect of 2028 Notes		9,955		—		9,955		—
Dilutive effect of options and awards granted under equity incentive plan and employee stock purchase plan		462		372		464		261
Dilutive effect of outstanding warrant		22		10		21		—
Weighted-average shares used to compute diluted net income per share		84,964		62,951		84,576		63,020
Net income per share
Basic	$	1.30	$	0.02	$	1.65	$	0.05
Diluted	$	1.08	$	0.02	$	1.35	$	0.05

Anti-Dilutive Securities

The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti-dilutive for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		1,520		1,111		1,482		1,434
Outstanding stock warrant		—		—		—		591
Outstanding 2025 Notes		—		11,150		—		11,150
Outstanding 2028 Notes		—		9,955		—		9,955
Total		1,520		22,216		1,482		23,130