Net Income Per Share

12 Months Ended

Dec. 31, 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 subordinated notes due 2023 (the “2023 Notes”) up until its maturity date on January 15, 2023, our convertible senior notes due 2025 (the “2025 Notes”) up until its maturity date on August 15, 2025, and our convertible senior notes due 2028 (the “2028 Notes”) using the if-converted method. If the results are 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 potential dilutive common stock equivalents.

The following table shows the computation of basic and diluted net income per share for the years ended December 31, 2025, 2024 and 2023:


	Year Ended December 31,
(In thousands except per share data)	2025		2024		2023
Numerator:
Net income, basic	$	271,165	$	23,392	$	179,722
Add: interest expense on 2023 Notes, net of tax effect		—		—		89
Add: interest expense on 2025 Notes, net of tax effect		2,882		3,468		5,116
Add: interest expense on 2028 Notes, net of tax effect		5,776		—		6,377
Net income, diluted	$	279,823	$	26,860	$	191,304
Denominator:
Weighted-average shares used to compute basic net income per share		67,395		62,726		65,435
Dilutive effect of 2023 Notes		—		—		187
Dilutive effect of 2025 Notes		6,900		11,150		11,150
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		491		311		149
Dilutive effect of outstanding warrant		19		—		—
Weighted-average shares used to compute diluted net income per share		84,760		74,187		86,876
Net income per share
Basic	$	4.02	$	0.37	$	2.75
Diluted	$	3.30	$	0.36	$	2.20

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:


	Year Ended December 31,
(In thousands)	2025		2024		2023
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		1,535		1,196		1,333
Outstanding stock warrant		—		591		591
Outstanding 2028 Notes		—		9,955		—
Total		1,535		11,742		1,924