Morningstar, Inc. Earnings Per Share Disclosure
| (in millions, except per share amounts) | 2025 | 2024 | 2023 | |||||||||||||||||
| Basic net income per share: | ||||||||||||||||||||
| Consolidated net income | $ | 374.2 | $ | 369.9 | $ | 141.1 | ||||||||||||||
| Weighted average common shares outstanding | 41.9 | 42.8 | 42.6 | |||||||||||||||||
| Basic net income per share | $ | 8.93 | $ | 8.64 | $ | 3.31 | ||||||||||||||
| Diluted net income per share: | ||||||||||||||||||||
| Consolidated net income | $ | 374.2 | $ | 369.9 | $ | 141.1 | ||||||||||||||
| Weighted average common shares outstanding | 41.9 | 42.8 | 42.6 | |||||||||||||||||
| Net effect of dilutive stock awards | 0.3 | 0.3 | 0.3 | |||||||||||||||||
| Weighted average common shares outstanding for computing diluted income per share | 42.2 | 43.1 | 42.9 | |||||||||||||||||
| Diluted net income per share | $ | 8.87 | $ | 8.58 | $ | 3.29 | ||||||||||||||
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.