Honest Company, Inc.HNST

Honest Company, Inc. Earnings Per Share Disclosure

10-KFiled Feb 25, 20262 min read
Net Income (Loss) per Share Attributable to Common Stockholders
Basic net income (loss) attributable to common stockholders per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding. The Company computes diluted net income per share under a two-class method where income is reallocated between common stock, potential common stock and participating securities, if any. Diluted net income (loss) per share attributable to common stockholders adjusts the basic net income (loss) per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock options using the treasury stock method.
The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders:
For the year ended December 31,
(In thousands, except for share and per share values)202520242023
Numerator:
Net loss$(15,686)$(6,124)$(39,238)
Net loss attributable to common stockholders - basic and diluted$(15,686)$(6,124)$(39,238)
Denominator:
Weighted average shares of common stock outstanding - basic and diluted111,209,322 100,245,394 94,516,690 
Net loss per share, attributable to common shareholders:
Basic and diluted$(0.14)$(0.06)$(0.42)

The following potentially dilutive shares were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive:
For the year ended December 31,
202520242023
Stock options to purchase common stock4,413,917 4,985,886 13,315,796 
Unvested restricted stock units7,394,489 7,683,177 8,256,453 
Employee stock purchase plan27,006 20,753 71,142 
Total11,835,412 12,689,816 21,643,391 

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Mar 8, 2024
2022Mar 16, 2023

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.

Other Available Disclosures

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