(18) Net Income Per Share
Basic net income per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted-average number of common shares outstanding during the period and, if dilutive, potential common shares outstanding during the period. The Company’s potential common shares consist of the incremental common shares issuable upon the exercise of stock options, the release of restricted stock units and market share units and the shares purchasable via the employee stock purchase plan as of the balance sheet date.
The following table presents the calculation of basic and diluted net income per share:
| | | | | | | | | | | | | | | | | |
| Year Ended June 30, |
| 2023 | | 2024 | | 2025 |
| Numerator: | | | | | |
| Net income | $ | 140,822 | | | $ | 206,766 | | | $ | 227,127 | |
| | | | | |
| Denominator: | | | | | |
| Weighted-average shares used in computing net income per share: | | | | | |
| Basic | 55,706 | | | 56,214 | | | 55,649 | |
| Weighted-average effect of potentially dilutive shares: | | | | | |
| Employee stock options, restricted stock units, performance stock units and market stock units | 890 | | | 762 | | | 901 | |
| Diluted | 56,596 | | | 56,976 | | | 56,550 | |
| | | | | |
| Net income per share: | | | | | |
| Basic | $ | 2.53 | | | $ | 3.68 | | | $ | 4.08 | |
| Diluted | $ | 2.49 | | | $ | 3.63 | | | $ | 4.02 | |
The following table summarizes the outstanding restricted stock units and market stock units as of the balance sheet date that were excluded from the diluted per share calculation for the periods presented because to include them would have been anti-dilutive:
| | | | | | | | | | | | | | | | | |
| Year Ended June 30, |
| 2023 | | 2024 | | 2025 |
| Restricted stock units | 39 | | | 12 | | | 8 | |
| | | | | |
| Market stock units | 48 | | | 12 | | | 68 | |
| | | | | |
| Total | 87 | | | 24 | | | 76 | |
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.