Computation of Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of shares of Common Stock outstanding during the period. Diluted EPS reflects the potential dilution of securities that could share in earnings. Potential shares of common stock are excluded from the computation of diluted earnings per share when their effect would be anti-dilutive.
The table below sets forth the calculation of basic and diluted income per share for the years ended December 31 (in thousands, except per share data).
 202520242023
Numerator:   
Net income used for calculating basic and diluted income per share$729,231 $1,253,715 $882,466 
Denominator:   
Weighted average common shares used in the calculation of basic income per share75,355 77,785 79,004 
Dilutive effect of outstanding awards associated with stock-based compensation plans250 553 676 
Shares used in the calculation of diluted income per share75,605 78,338 79,680 
Income per share (1):
   
Basic$9.68 $16.12 $11.17 
Diluted$9.65 $16.00 $11.08 
(1)Both basic and diluted income per share for 2024 included a tax benefit of approximately $2.08 per share related to intercompany sales of certain intellectual property (see Note 12 — Income Taxes).
The table below presents the number of outstanding awards associated with stock-based compensation plans that were not included in the computations of diluted income per share in the above table because the effect would have been anti-dilutive. During years with net income, the outstanding awards were anti-dilutive because their exercise prices were greater than the average market price per share of Common Stock during such year.
Year Ended December 31,
 202520242023
Anti-dilutive outstanding awards associated with stock-based compensation plans (in millions)
0.3 0.1 0.1 
Average market price per share of Common Stock during the year$358.33 $475.66 $351.31 

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 13, 2025
2023Feb 15, 2024
2022Feb 16, 2023
2021Feb 23, 2022
2020Feb 24, 2021
2019Feb 19, 2020
2018Feb 22, 2019
2017Feb 22, 2018
2016Feb 22, 2017
2015Feb 24, 2016

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.