HALOZYME THERAPEUTICS, INC.HALO

HALOZYME THERAPEUTICS, INC. Earnings Per Share Disclosure

10-KFiled Feb 17, 20262 min read
Earnings per share
Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. Outstanding stock options, unvested RSUs, unvested PSUs, common shares expected to be issued under our ESPP and the Convertible Notes are considered common stock equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive.
Potentially dilutive common shares issuable upon vesting of stock options, RSUs and PSUs are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of the Convertible Notes are determined using the if-converted method. Since we have committed to settle the principal amount of the Convertible Notes in cash upon conversion only, the number of shares for the conversion spread will be included as a dilutive common stock equivalent.
A reconciliation of the numerators and the denominators of the basic and diluted earnings per share computations is as follows (in thousands, except per share amounts):
Year Ended December 31,
 202520242023
Numerator
Net income$316,889 $444,091 $281,594 
Denominator
Weighted average common shares outstanding for basic earnings per share
119,840 126,827 131,927 
Dilutive potential common stock outstanding
Stock options
2,077 1,827 1,824 
RSUs, PSUs and ESPP
969 696 388 
Convertible Notes1,018 74 58 
Weighted average common shares outstanding for diluted earnings per share
123,904 129,424 134,197 
Earnings per share
Basic$2.64 $3.50 $2.13 
Diluted$2.56 $3.43 $2.10 
Shares which have been excluded from the calculation of diluted earnings per common share because their effect was anti-dilutive include the following (shares in millions):
Year Ended December 31,
 202520242023
Anti-dilutive securities(1)
24.6 26.1 27.8 
(1)    The anti-dilutive securities include outstanding stock options, unvested RSUs, unvested PSUs, common shares expected to be issued under our ESPP and Convertible Notes.

Historical Timeline

Fiscal YearFiled
2025Feb 17, 2026Showing above
2024Feb 18, 2025
2023Feb 20, 2024

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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