Arlo Technologies, Inc. Earnings Per Share Disclosure
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands, except for per share data) | |||||||||||||||||
| Numerator: | |||||||||||||||||
| Net income (loss) | $ | 14,926 | $ | (30,504) | $ | (22,036) | |||||||||||
| Denominator: | |||||||||||||||||
| Weighted-average common shares outstanding - basic | 104,203 | 98,630 | 92,754 | ||||||||||||||
| Effect of dilutive stock-based awards | 5,953 | — | — | ||||||||||||||
| Weighted-average common shares outstanding - diluted | 110,156 | 98,630 | 92,754 | ||||||||||||||
| Earnings (loss) per share - basic | $ | 0.14 | $ | (0.31) | $ | (0.24) | |||||||||||
| Earnings (loss) per share - diluted | $ | 0.14 | $ | (0.31) | $ | (0.24) | |||||||||||
| Anti-dilutive employee stock-based awards, excluded | 378 | 814 | 1,776 | ||||||||||||||
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.