Note 13. Net Income (Loss) per Share

Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the periods less shares of common stock subject to repurchase and non-vested stock awards. Diluted net income (loss) per share is computed using the weighted average number of common shares outstanding and potentially dilutive common shares outstanding during the periods. The dilutive effect of outstanding stock options and restricted stock awards is reflected in diluted earnings per share by application of the treasury stock method. Potentially dilutive common shares consist of common shares issuable upon the exercise of stock options. Potentially dilutive common shares are excluded in net loss periods, as their effect would be anti-dilutive.

A reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share calculations is as follows (in thousands, except per share data):


	Year ended
	December 31,
	2018		2017		2016
Numerator:
Net income attributable to AXT, Inc.	$	9,654	$	10,148	$	5,636
Less: Preferred stock dividends		(177)		(177)		(177)
Net income available to common stockholders	$	9,477	$	9,971	$	5,459
Denominator:
Denominator for basic net income per share - weighted-average common shares		39,049		37,444		32,139
Effect of dilutive securities:
Common stock options		1,106		1,339		596
Restricted stock awards		110		183		159
Denominator for dilutive net income per common shares		40,265		38,966		32,894

Basic net income per share:
Net income attributable to AXT, Inc.	$	0.24	$	0.27	$	0.17
Net income to common stockholders	$	0.24	$	0.27	$	0.17
Diluted net income per share:
Net income attributable to AXT, Inc.	$	0.24	$	0.26	$	0.17
Net income to common stockholders	$	0.24	$	0.26	$	0.17
Options excluded from diluted net income per share as the impact is anti-dilutive		266		86		779
Restricted stock excluded from diluted net income per share as the impact is anti-dilutive		227		63		15