15. Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing the net income (loss) by the number of weighted-average outstanding shares of common stock. Diluted net income (loss) per share is determined by giving effect to all potential common equivalents during the reporting period, unless including them yields an antidilutive result. We consider our stock options and RSUs as potential common stock equivalents. In periods when we report net losses, we exclude potential common stock equivalents from the computation of diluted net loss per share, as their effects are antidilutive.

The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock are identical, except with respect to voting, conversion, and transfer rights. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net income (loss) per share are the same for both Class A and Class B common stock on both an individual and combined basis.

The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share data):


	Year Ended December 31,
	2025		2024		2023
Numerator:
Net income (loss)	$	183,723	$	(95,368)	$	(137,436)



Denominator:
Weighted-average shares used in computing net income (loss) per share - basic	291,079		300,843		293,087
Weighted-average effect of potentially dilutive equity awards	2,690		—		—
Weighted-average shares used in computing net income (loss) per share - diluted	293,769		300,843		293,087
Net income (loss) per share - basic	$	0.63	$	(0.32)	$	(0.47)
Net income (loss) per share - diluted	$	0.63	$	(0.32)	$	(0.47)

Equity awards excluded from diluted net income (loss) per share because their effect would have been anti-dilutive	10,679		24,462		29,259

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.

Freshworks Inc. Earnings Per Share Disclosure

About Earnings Per Share Disclosures

Other Available Disclosures