Innoviva, Inc. Earnings Per Share Disclosure
2. NET INCOME PER SHARE
Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding. Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock and dilutive potential common stock equivalents then outstanding. Dilutive potential common stock equivalents include the assumed exercise, vesting and issuance of employee stock awards using the treasury stock method, as well as common stock issuable upon assumed conversion of our convertible subordinated notes due 2023 (the “2023 Notes”) up until its maturity date on January 15, 2023, our convertible senior notes due 2025 (the “2025 Notes”) up until its maturity date on August 15, 2025, and our convertible senior notes due 2028 (the “2028 Notes”) using the if-converted method. If the results are in a net loss position, diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive common stock equivalents.
The following table shows the computation of basic and diluted net income per share for the years ended December 31, 2025, 2024 and 2023:
|
|
Year Ended December 31, |
|
|||||||||
(In thousands except per share data) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Numerator: |
|
|
|
|
|
|
|
|
|
|||
Net income, basic |
|
$ |
271,165 |
|
|
$ |
23,392 |
|
|
$ |
179,722 |
|
Add: interest expense on 2023 Notes, net of tax effect |
|
|
— |
|
|
|
— |
|
|
|
89 |
|
Add: interest expense on 2025 Notes, net of tax effect |
|
|
2,882 |
|
|
|
3,468 |
|
|
|
5,116 |
|
Add: interest expense on 2028 Notes, net of tax effect |
|
|
5,776 |
|
|
|
— |
|
|
|
6,377 |
|
Net income, diluted |
|
$ |
279,823 |
|
|
$ |
26,860 |
|
|
$ |
191,304 |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|||
Weighted-average shares used to compute basic net income |
|
|
67,395 |
|
|
|
62,726 |
|
|
|
65,435 |
|
Dilutive effect of 2023 Notes |
|
|
— |
|
|
|
— |
|
|
|
187 |
|
Dilutive effect of 2025 Notes |
|
|
6,900 |
|
|
|
11,150 |
|
|
|
11,150 |
|
Dilutive effect of 2028 Notes |
|
|
9,955 |
|
|
|
— |
|
|
|
9,955 |
|
Dilutive effect of options and awards granted under equity |
|
|
491 |
|
|
|
311 |
|
|
|
149 |
|
Dilutive effect of outstanding warrant |
|
|
19 |
|
|
|
— |
|
|
|
— |
|
Weighted-average shares used to compute diluted net income |
|
|
84,760 |
|
|
|
74,187 |
|
|
|
86,876 |
|
Net income per share |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
4.02 |
|
|
$ |
0.37 |
|
|
$ |
2.75 |
|
Diluted |
|
$ |
3.30 |
|
|
$ |
0.36 |
|
|
$ |
2.20 |
|
Anti‑dilutive Securities
The following common stock equivalents were not included in the computation of diluted net income per share because their effect was anti‑dilutive for the periods presented:
|
|
Year Ended December 31, |
|
|||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Outstanding options and awards granted under equity incentive |
|
|
1,535 |
|
|
|
1,196 |
|
|
|
1,333 |
|
Outstanding stock warrant |
|
|
— |
|
|
|
591 |
|
|
|
591 |
|
Outstanding 2028 Notes |
|
|
— |
|
|
|
9,955 |
|
|
|
— |
|
Total |
|
|
1,535 |
|
|
|
11,742 |
|
|
|
1,924 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Feb 28, 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.