19. Net Income per Share
The calculation of basic and diluted net income per share for the years ended December 31, 2025, 2024, and 2023 was as follows (in thousands, except per share amounts):
| | | | | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| Basic net income per share | | | | | | |
| Numerator: | | | | | | |
| Net income | | $ | 1,528,229 | | | $ | 1,292,044 | | | $ | 830,777 | |
| Denominator: | | | | | | |
| Weighted-average common shares outstanding | | 107,235 | | 107,015 | | 106,795 |
| | | | | | |
| Diluted net income per share | | | | | | |
| Denominator: | | | | | | |
| Weighted-average common shares outstanding | | 107,235 | | 107,015 | | 106,795 |
| Effect of restricted stock and performance units | | 302 | | | 510 | | | 577 | |
| Weighted-average shares used in computing diluted net income per share | | 107,537 | | 107,525 | | 107,372 |
| | | | | | |
| Net income per share: | | | | | | |
| Basic | | $ | 14.25 | | | $ | 12.07 | | | $ | 7.78 | |
| Diluted | | $ | 14.21 | | | $ | 12.02 | | | $ | 7.74 | |
The following table summarizes the potential shares of common stock that were excluded from the computation of diluted net income per share for the years ended December 31, 2025, 2024, and 2023 as such shares would have had an anti-dilutive effect (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| Anti-dilutive shares | | 2 | | — | | — |
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.