Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, unvested equity-settled RSUs and the stock to be issued under the Company’s ESPP. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method.


	Three Months Ended March 31,
	2026		2025
Numerator for basic and diluted earnings per share:
Net income	$	82,521	$	73,482
Numerator for basic and diluted earnings per share	$	82,521	$	73,482

Denominator:
Weighted average common shares for basic earnings per share	53,793		56,780
Net effect of dilutive equity awards and stock issuable under the ESPP	390		482
Weighted average common shares for diluted earnings per share	54,183		57,262

Net income per share:
Basic	$	1.53	$	1.29
Diluted	$	1.52	$	1.28

The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 846 thousand and 989 thousand during the three months ended March 31, 2026 and 2025, respectively. The calculation of diluted earnings per share was not affected by the 492 thousand shares that would have been received if the ASR discussed in Note 10 “Stockholders’ Equity” was settled as of March 31, 2026 as their effect would have been anti-dilutive.