The 'Exclude IP number' box allows you to exclude from the stats all visits coming from a given IP address.
Once you specify an IP number (i.e. 18.104.22.168), anyone arriving to your site from a server which IP address contains the IP address you entered will be excluded from the stats. You can exclude up to 20 IP numbers at once if you wish, simply place one IP number per line in the IP exclusion box.
General example: Imagine that your company has a server through which all employees gain Internet access ; if you want to exclude from the stats all visits by your co-workers simply get the server's IP number and enter it in the IP exclusion box. From then on, only 'outside' traffic will get recorded.
Note that another way of accomplishing the same thing would be to use the 'Exclude my own visits' setting on everyone's browser, but if your company has hundreds of computers this process might take a long time. In such a case it is easier to exclude the server's IP number.
IP rangesIf you need to exclude more than 20 IPs, try using IP ranges instead of excluding the IPs one by one. Simply enter the low-end IP, followed by a dash and by the high-end IP. Example : to exclude IP's between 22.214.171.124 and 126.96.36.199 you would enter the following IP exclusion : 188.8.131.52-184.108.40.206