Apollo Commercial Real Estate Finance, Inc. Earnings Per Share Disclosure
ASC Topic 260, "Earnings Per Share" requires the use of the two-class method of computing both basic and diluted earnings (loss) per share for all periods presented for each class of common stock and participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to common shares and participating securities according to their respective rights to receive dividends. The unvested RSUs granted under our Equity Incentive Plans to certain employees of the Manager qualify as participating securities as RSUs have non-forfeitable rights to participate in dividends. Therefore, unvested RSUs are included in the calculation of basic earnings per share.
For the years ended December 31, 2025, 2024 and 2023, dilutive earnings per share was calculated under the more dilutive computation of the treasury stock method and the if-converted method. Under the treasury stock method, the denominator includes the weighted-average outstanding common shares plus the incremental shares related to participating securities. The incremental shares are determined by subtracting the average unrecognized compensation cost for the period divided by the average stock price from the unvested RSUs.
The table below presents the computation of basic and diluted net income (loss) per share of common stock for the years ended December 31, 2025 and 2024 ($ in thousands except per share data):
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|
Year Ended December 31, |
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|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Net income (loss) |
|
$ |
126,720 |
|
|
$ |
(119,636 |
) |
|
$ |
58,127 |
|
Less: Preferred dividends |
|
|
(12,272 |
) |
|
|
(12,272 |
) |
|
|
(12,272 |
) |
Less: Earnings attributable to participating securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Less: Dividends on participating securities |
|
|
(2,535 |
) |
|
|
(3,252 |
) |
|
|
(4,353 |
) |
Net income (loss) attributable to common stockholders, basic and diluted |
|
$ |
111,913 |
|
|
$ |
(135,160 |
) |
|
$ |
41,502 |
|
|
|
|
|
|
|
|
|
|
|
|||
Number of Shares: |
|
|
|
|
|
|
|
|
|
|||
Basic weighted-average shares of common stock outstanding |
|
|
138,868,602 |
|
|
|
139,674,140 |
|
|
|
141,281,286 |
|
Diluted weighted-average shares of common stock outstanding |
|
|
138,868,602 |
|
|
|
139,674,140 |
|
|
|
141,281,286 |
|
|
|
|
|
|
|
|
|
|
|
|||
Earnings (Loss) Per Share Attributable to Common Stockholders |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
0.81 |
|
|
$ |
(0.97 |
) |
|
$ |
0.29 |
|
Diluted |
|
$ |
0.81 |
|
|
$ |
(0.97 |
) |
|
$ |
0.29 |
|
For the years ended December 31, 2025 and 2024 there were no incremental shares included in the calculation of diluted net income per share. For year ended December 31, 2023, 2,932,284 weighted-average unvested RSUs were excluded in the calculation of diluted net income per share because the effect was anti-dilutive.
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.