Basic net income per share is computed by dividing net income during the period by the weighted average number of shares of common stock outstanding during that period, less unvested restricted stock awards. Diluted net income per share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock method of accounting.

The calculations for basic and diluted net income per share for the three and six months ended June 30, 2026 and June 30, 2025 are as follows:


	Three Months Ended				Six Months Ended
	June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
	(In thousands, except per share amounts)
Net income	$	367,076	$	160,051	$	702,736	$	433,630
Weighted average common shares used to calculate basic net income per share	273,955		271,294		273,012		271,633
Stock-based awards	2,208		1,605		1,936		1,631
Weighted average common shares used to calculate diluted net income per share	276,163		272,899		274,948		273,264
Net income per share - basic	$	1.34	$	0.59	$	2.57	$	1.60
Net income per share - diluted	$	1.33	$	0.59	$	2.56	$	1.59

The following table presents shares of Cadence’s common stock outstanding for the three and six months ended June 30, 2026 and June 30, 2025 that were excluded from the computation of diluted net income per share because the effect of including these shares in the computation of diluted net income per share would have been anti-dilutive:


	Three Months Ended		Six Months Ended
	June 30, 2026	June 30, 2025	June 30, 2026	June 30, 2025
	(In thousands)
Market-based awards	1,536	1,472	1,532	830
Options to purchase shares of common stock	9	206	101	220
Non-vested shares of restricted stock	3	22	595	106
Total potential common shares excluded	1,548	1,700	2,228	1,156