Elanco Animal Health IncELAN

Elanco Animal Health Inc Earnings Per Share Disclosure

10-KFiled Feb 24, 20261 min read
Note 18. Earnings Per Share
We compute basic earnings (loss) per share by dividing net income (loss) by the weighted-average number of common shares outstanding for the reporting period. Elanco has variable common stock equivalents relating to certain equity awards in stock-based compensation arrangements. Diluted earnings per share reflects the potential dilution that could have occurred if holders of the unvested equity awards converted their holdings into common stock. The weighted-average number of potentially dilutive shares outstanding was calculated using the treasury stock method. Potential common shares that would have had the effect of increasing diluted earnings per share (or reducing loss per share) were considered to be anti-dilutive and as such, these shares were not included in the calculation of diluted earnings (loss) per share.
Basic and diluted weighted-average shares outstanding for the years ended December 31, were as follows:
202520242023
Basic weighted-average common shares outstanding496.4 494.0492.3 
Assumed conversion of dilutive common stock equivalents (1)
— 3.3 — 
Diluted weighted-average shares outstanding496.4 497.3492.3 
(1)For the years ended December 31, 2025, 2024 and 2023, approximately 7.5 million, 1.4 million, and 2.9 million, respectively, of potential common shares were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 25, 2025
2023Feb 26, 2024
2019Feb 28, 2020
2018Feb 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.

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