Crexendo, Inc. Earnings Per Share Disclosure
3. Earnings Per Common Share
Basic net income/(loss) per common share is computed by dividing the net income/(loss) for the period by the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed giving effect to all dilutive common stock equivalents, consisting of common stock options. Diluted net loss per common share for the year ended December 31, 2023 is the same as basic net loss per common share because the common share equivalents were anti-dilutive due to the net loss. The following table sets forth the computation of basic and diluted net income/(loss) per common share
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| Year Ended December 31, |
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| 2024 |
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| 2023 |
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Net income/(loss) (in thousands) (A) |
| $ | 1,677 |
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| $ | (362 | ) |
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Weighted-average share reconciliation: |
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Weighted-average basic shares outstanding (B) |
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| 26,757,242 |
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| 25,944,748 |
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Dilutive effect of stock-based awards |
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| 3,262,117 |
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| - |
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Diluted weighted-average outstanding shares of common stock (C) |
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| 30,019,359 |
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| 25,944,748 |
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Earnings per common share: |
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Basic (A/B) |
| $ | 0.06 |
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| $ | (0.01 | ) |
Diluted (A/C) |
| $ | 0.06 |
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| $ | (0.01 | ) |
For the years ended December 31, 2024 and 2023, respectively, the following potentially dilutive common stock, including awards granted under our equity incentive compensation plans, were excluded from the computation of diluted earnings per share because including them would be anti-dilutive.
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| Year Ended December 31, |
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| 2024 |
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| 2023 |
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Stock options |
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| 1,650,687 |
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| 4,580,824 |
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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.