16. Net Income per Share
The Company computed basic net income per share based on the weighted average number of shares of common stock outstanding during the period. The Company computed diluted net income per share based on the weighted average number of shares of common stock outstanding plus potentially dilutive common stock equivalents outstanding during the period. For the purposes of this calculation, stock options, restricted stock units, performance stock units and stock sold through the ESPP are considered common stock equivalents.
A reconciliation of the numerator and denominator used in the calculation of the basic and diluted net income is as follows (in thousands, except share and per share amounts):
Year Ended December 31,
202520242023
Numerator:
Net income$177,687 $14,012 $90,954 
Denominator:
Weighted average shares used to compute net income attributable to common stockholders:
Basic38,918,493 38,633,744 38,401,171 
Potential dilutive stock-based options and awards, as calculated using treasury stock method373,335 634,293 815,393 
Diluted39,291,828 39,268,037 39,216,564 
Net income per share from:
Basic$4.57 $0.36 $2.37 
Diluted$4.52 $0.36 $2.32 
For the years ended December 31, 2025, 2024, and 2023, an immaterial amount of outstanding stock-based awards were excluded from the computation of diluted net income per share because their effect was anti-dilutive.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2016Feb 28, 2017

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.