Archrock, Inc. Earnings Per Share Disclosure
24. Earnings per Common Share
Basic earnings per common share is computed using the two-class method, which is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Under the two-class method, basic earnings per common share is determined by dividing net income, after deducting amounts allocated to participating securities, by the weighted-average number of common shares outstanding for the period. Participating securities include unvested restricted stock and stock-settled restricted stock units that have nonforfeitable rights to receive dividends or dividend equivalents, whether paid or unpaid. During periods of net loss, only distributed earnings (dividends) are allocated to participating securities, as participating securities do not have a contractual obligation to participate in our undistributed losses.
Diluted earnings per common share is computed using the weighted-average number of common shares outstanding adjusted for the incremental common stock equivalents attributed to outstanding performance-based restricted stock units and stock to be issued pursuant to our ESPP unless their effect would have been anti-dilutive.
The following table shows the calculation of net income attributable to common stockholders, which is used in the calculation of basic and diluted earnings per common share, potential shares of common stock that were included in computing diluted earnings per common share and the potential shares of common stock issuable that were excluded from computing diluted earnings per common share as their inclusion would have been anti-dilutive:
Year Ended December 31, | |||||||||
(in thousands) | 2025 | | 2024 | | 2023 | ||||
Net income | $ | 322,290 | $ | 172,231 | $ | 104,998 | |||
Less: Allocation of earnings to participating securities |
| (3,334) |
| (2,279) |
| (1,878) | |||
Net income attributable to common stockholders | $ | 318,956 | $ | 169,952 | $ | 103,120 | |||
Allocation of earnings to cash or share settled restricted stock units | 877 | 1,004 | — | ||||||
Diluted net income attributable to common stockholders | $ | 319,833 | $ | 170,956 | $ | 103,120 | |||
Weighted-average common shares outstanding used in basic earnings per common share | 174,437 | 162,037 | 154,126 | ||||||
Effect of dilutive securities: | |||||||||
Performance-based restricted stock units | 296 | 328 | 207 | ||||||
Time-based restricted stock units | 13 | — | — | ||||||
ESPP shares | 7 | 10 | 11 | ||||||
Weighted-average common shares outstanding used in diluted earnings per common share | 174,753 | 162,375 | 154,344 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 20, 2019 | |
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.