NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common shares outstanding during the period. Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and the purchase of shares from the ESPP (using the treasury stock method) as well as the conversion of the excess conversion value on the 2022 Notes. As discussed in Note 7, Debt, the Company has the option to pay cash for the aggregate principal amount due upon the conversion of its 2022 Notes. Since it is the Company’s intent to settle the principal amount of its 2022 Notes in cash, the potentially dilutive effect of such notes on net income (loss) per share is computed under the treasury stock method. The Company must settle the principal of its 2019 Notes in cash and also intends to settle any conversion premium in cash.

Potential common shares are excluded from the diluted net income (loss) per share computation to the extent they would be antidilutive. Because the Company reported a net loss for the three months ended June 30, 2017 and the six months ended June 30, 2018 and 2017, no potentially dilutive securities have been included in the computation of diluted net loss per share for those periods.

The following table sets forth the computation of basic and diluted net income (loss) per share for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share amounts):



	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018			2017
Numerator:
Net income (loss)	$	2,564	$	(19,743	)	$	(8,116	)	$	(39,609	)
Denominator:
Weighted average common shares outstanding	40,796		40,160			40,751			39,079
Computation of diluted securities:
Dilutive effect of stock options	807		—			—			—
Dilutive effect of RSUs	87		—			—			—
Dilutive effect of ESPP purchase options	4		—			—			—
Weighted average common shares outstanding—diluted	41,694		40,160			40,751			39,079
Net loss per share:
Basic and diluted net income (loss) per common share	$	0.06	$	(0.49	)	$	(0.20	)	$	(1.01	)

The following outstanding stock options, RSUs, conversion premiums on the Company’s convertible senior notes and ESPP purchase options are antidilutive in the periods presented (in thousands):



	Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017
Weighted average number of stock options	3,918	5,092	5,094	5,102
Weighted average number of RSUs	367	375	483	364
Conversion premium on the 2019 Notes	—	9	—	817
Weighted average ESPP purchase options	5	36	33	37
Total	4,290	5,512	5,610	6,320