INNODATA INC Earnings Per Share Disclosure
14. Income per Share
Year Ended December 31, | ||||||
| 2025 | | 2024 | |||
Net income attributable to Innodata Inc. and Subsidiaries | $ | 32,181 | | $ | 28,660 | |
Weighted average common shares outstanding |
| 31,807 |
| 29,163 | ||
Dilutive effect of outstanding options and restricted stock units |
| 3,218 | 3,014 | |||
Adjusted for dilutive computation |
| 35,025 |
| 32,177 | ||
Basic income per share is computed using the weighted-average number of common shares outstanding during the year. Diluted income per share is computed by considering the impact of the potential issuance of common shares, using the treasury stock method, on the weighted average number of shares outstanding. For those securities that are not convertible into a class of common stock, the two-class method of computing income per share is used.
Options to purchase 3.2 million shares of common stock for the year ended December 31, 2025 were outstanding and included in the computation of diluted income per share. Also included in the computation of dilutive income per share are 623,910 restricted stock units using the treasury stock method to determine the dilutive effect of restricted stock units outstanding as of December 31, 2025.
Options to purchase 4.0 million shares of common stock for the year ended December 31, 2024 were outstanding. Of these options, 3.7 million were included in the computation of diluted income per share while the remaining 0.3 million were not included in the computation of diluted income per share because the exercise price of the options were greater than the average market price of the common shares and therefore have not been considered as potential equity shares. Also included in the computation of dilutive income per share are 513,455 restricted stock units using the treasury stock method to determine the dilutive effect of restricted stock units outstanding as of December 31, 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.