IRONWOOD PHARMACEUTICALS INC Earnings Per Share Disclosure
3. Net Income Per Share
The following table sets forth the computation of basic and diluted net income per common share (in thousands, except per share amounts):
Year Ended December 31, | ||||||
2025 | 2024 | |||||
Numerator: | ||||||
Net income | $ | 24,017 | $ | 880 | ||
Numerator used in computing net income per share — basic & diluted | $ | 24,017 | $ | 880 | ||
Denominator: | ||||||
Weighted average number of common shares outstanding used in computing net income per share — basic | 161,842 |
| 159,083 | |||
Effect of dilutive securities: |
| |||||
Time-based RSUs | 598 | 425 | ||||
Performance-based RSUs | 396 | 480 | ||||
Restricted stock | 147 | 96 | ||||
Dilutive potential common shares | ||||||
Weighted average number of common shares outstanding used in computing net income per share — diluted | 162,983 |
| 160,084 | |||
Net income per share — basic & diluted | $ | 0.15 | $ | 0.01 | ||
The dilutive impact of the convertible senior notes is determined using the if-converted method. Under the if-converted method, the convertible senior notes are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Interest charges are deducted from the numerator, unless the principal amount of the convertible instruments is required to be paid in cash. The dilutive impact of all other types of dilutive securities is determined using the treasury stock method.
On December 15, 2025, the Company elected to settle conversions of the 2026 Convertible Notes through cash payment equal to the principal value and shares of Class A Common Stock for the conversion premium, if any (Note 9). Accordingly, interest expense is added to the numerator and the calculated spread is added to the denominator only for the period the 2026 Convertible Notes were outstanding prior to the settlement method election, to the extent an assumed conversion is dilutive. Interest expense was excluded from the numerator and there was no calculated spread added to the denominator because an assumed conversion would be anti-dilutive.
The outstanding securities set forth in the following table have been excluded from the computation of diluted weighted average shares outstanding, as applicable, as their effect would be anti-dilutive (in thousands):
Year Ended December 31, | ||||
| 2025 | | 2024 | |
Stock options | 3,709 |
| 4,821 | |
Time-based RSUs | 3,403 | 3,596 | ||
Performance-based RSUs | — | 34 | ||
2026 Convertible Notes | 14,277 | 14,934 | ||
Total |
| 21,389 |
| 23,385 |
There was no dilutive impact of the 2024 Convertible Notes for the year ended December 31, 2024 because the Company had elected prior to the beginning of the period to settle the conversion of 2024 Convertible Notes, if any, with a combination settlement of a cash payment equal to the principal value of converted notes and shares of Class A Common Stock equal to the conversion value in excess of the principal value, if any (Note 9). Accordingly, interest expense was removed from the numerator and there was no calculated spread added to the denominator because the average market price of the Company’s Class A Common Stock during the period was not in excess of the conversion price.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2017 | Feb 22, 2018 | |
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.