Note 15. Net Income Per Share
Our basic net income per share is computed by dividing the net income by the number of weighted average common shares outstanding during the period. Our diluted net income per share is computed by dividing net income by the weighted average common shares outstanding during the period assuming potentially dilutive common shares of stock options, RSUs and PSUs.
Net income per share was calculated as follows for the periods indicated below:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in thousands, except per share data) | | 2025 | | 2024 | | 2023 |
| Basic net income | | $ | 1,286,650 | | | $ | 32,615 | | | $ | 597,599 | |
| | | | | | |
| Weighted average common shares outstanding | | 195,204 | | 207,110 | | 223,628 |
| | | | | | |
| Basic net income per share | | $ | 6.59 | | | $ | 0.16 | | | $ | 2.67 | |
| | | | | | |
| Diluted net income | | $ | 1,286,650 | | | $ | 32,615 | | | $ | 597,599 | |
| | | | | | |
| Weighted average common shares outstanding | | 195,204 | | 207,110 | | 223,628 |
| Dilutive stock options and awards | | 5,496 | | | 3,420 | | | 2,300 | |
| Weighted average shares used to compute diluted net income per share | | 200,700 | | 210,530 | | 225,928 |
| | | | | | |
| Diluted net income per share | | $ | 6.41 | | | $ | 0.15 | | | $ | 2.65 | |
The potential common shares that were excluded from the diluted net income per share computation are as follows:
| | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | 2023 |
| Outstanding stock options and awards | 8,300,526 | | 12,905,281 | | 12,710,250 |
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.