Ethos Technologies Inc. Earnings Per Share Disclosure
12. Net Income Per Share Attributable to Common Stockholders
Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration for common stock equivalents. Diluted net income per share attributable to common stockholders is computed by dividing net income by the weighted-average number of common shares outstanding during the period and potentially dilutive common stock equivalents. For periods of net loss, basic and diluted earnings per share are the same as the effect of potential common stock is anti-dilutive.
A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is as follows (in thousands):
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Year Ended December 31, |
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2025 |
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2024 |
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Basic net income per share: |
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Net income attributable to common stockholders |
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$ |
71,151 |
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$ |
48,832 |
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Shares used in computation (denominator): |
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Weighted-average common shares outstanding |
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16,490 |
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16,007 |
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Basic net income per share |
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$ |
4.31 |
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$ |
3.05 |
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Diluted net income per share: |
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Net income attributable to common stockholders |
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$ |
71,151 |
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$ |
48,832 |
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Shares used in computation (denominator): |
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Weighted-average common shares outstanding |
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16,490 |
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16,007 |
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Effect of dilutive securities: |
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Stock options |
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1,112 |
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1,274 |
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Redeemable convertible preferred Stock |
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37,296 |
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37,296 |
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Warrants |
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130 |
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110 |
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Restricted stock units |
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3,388 |
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2,913 |
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Weighted-average diluted shares |
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58,416 |
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57,600 |
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Diluted net income per share |
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$ |
1.22 |
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$ |
0.85 |
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The weighted-average impact of potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive was as follows:
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Year Ended December 31, |
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2025 |
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2024 |
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Restricted stock units |
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4,216 |
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122 |
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.