Claros Mortgage Trust, Inc. Earnings Per Share Disclosure
Note 10. Earnings Per Share
We calculate basic earnings per share (“EPS”) using the two-class method, which defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities. Under the two-class method, both distributed and undistributed earnings are allocated to common stock and participating securities based on their respective rights. Basic EPS is calculated by dividing our net income (loss) less participating securities’ share in earnings by the weighted average number of shares of common stock outstanding during each period.
Diluted EPS is calculated under the more dilutive of the treasury stock or the two-class method. Under the treasury stock method, diluted EPS is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding plus the incremental potential shares of common stock assumed issued during the period if they are dilutive.
As of December 31, 2025, 2024 and 2023 we had no dilutive securities. As a result, basic and diluted EPS are the same. The calculation of basic and diluted EPS is as follows ($ in thousands, except for share and per share data):
|
|
Year Ended |
|
|||||||||
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|||
Net (loss) income |
|
$ |
(489,069 |
) |
|
$ |
(221,265 |
) |
|
$ |
6,027 |
|
Dividends on participating securities(1) |
|
|
- |
|
|
|
(1,949 |
) |
|
|
(3,681 |
) |
Participating securitiesʾ share in earnings |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Basic (loss) earnings |
|
$ |
(489,069 |
) |
|
$ |
(223,214 |
) |
|
$ |
2,346 |
|
Weighted average shares of common stock outstanding, |
|
|
140,149,720 |
|
|
|
139,225,441 |
|
|
|
138,617,043 |
|
Net (loss) income per share of common stock, |
|
$ |
(3.49 |
) |
|
$ |
(1.60 |
) |
|
$ |
0.02 |
|
For the years ended December 31, 2025, 2024, and 2023, 2,641,770, 2,689,202, and 2,637,717 of weighted average unvested RSUs, respectively, were excluded from the calculation of diluted EPS 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.