EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is calculated by dividing the applicable income (loss) by the weighted average number of shares of common stock outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential shares outstanding during the period using the treasury stock method, except for the 2028 Convertible Notes and 2025 Convertible Notes, which are calculated using the if-converted method. Dilutive potential common shares include employee equity options, non-vested shares and similar instruments granted by the Company and the assumed conversion impact of convertible notes. The Company will settle any convertible note conversions through a combination settlement by satisfying the principal amount outstanding with cash and any convertible note conversion value in excess of the principal amount in cash or shares of the Company’s common stock or any combination thereof. As the Company will settle the principal amount of convertible notes in cash upon conversion, the convertible notes only have an impact on the Company's diluted earnings per share when the average share price of the Company’s common stock exceeds the conversion price, in any applicable period. See the computation of earnings per share below for the dilutive impact of the convertible notes for the years ended December 31, 2025, 2024 and 2023.
In connection with the offering of the 2025 Convertible Notes, the Company entered into Capped Calls, which are intended to reduce or offset the potential dilution from shares of common stock issued upon conversion. The Company completed a partial unwind of the Capped Calls in connection with the Notes Exchanges and the impact of the remaining Capped Calls is
not included when calculating potentially dilutive shares since their effect is anti-dilutive. On June 1, 2025 the remaining Capped Calls expired in conjunction with the maturity and payoff of the 2025 Convertible Notes.
The table below presents the computation of basic and diluted earnings per share ($ and shares in millions, except per share amounts):
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| | | | | Year Ended December 31, | |
| | | | | | | | | 2025 | | 2024 | | 2023 | |
| Numerator: | | | | | | | | | | | | | | |
| Net income (loss) | | | | | | | | | $ | 47.0 | | | $ | (1,118.6) | | | $ | (100.2) | | |
| | | | | | | | | | | | | | |
| Denominator: | | | | | | | | | | | | | | |
| Weighted-average common shares outstanding used in basic earnings per share | | | | | | | | | 168.0 | | | 172.2 | | | 166.9 | | |
| Incremental common shares from: | | | | | | | | | | | | | | |
| Assumed exercise of dilutive options, vesting of dilutive restricted stock units and performance stock units | | | | | | | | | 1.2 | | | — | | | — | | |
| | | | | | | | | | | | | | |
Weighted-average common shares outstanding used in diluted earnings per share | | | | | | | | | 169.2 | | | 172.2 | | | 166.9 | | |
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| Earnings (loss) per share: | | | | | | | | | | | | | | |
| Earnings (loss) - basic | | | | | | | | | $ | 0.28 | | | $ | (6.50) | | | $ | (0.60) | | |
| Earnings (loss) - diluted | | | | | | | | | $ | 0.28 | | | $ | (6.50) | | | $ | (0.60) | | |
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The following table presents the number of outstanding securities not included in the computation of diluted income per share, because their effect was anti-dilutive (in millions):
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| | | | Year Ended December 31, |
| | | | | | | | 2025 | | 2024 | | 2023 |
| Stock-based awards | | | | | | | | 7.2 | | | 6.8 | | | 4.4 | |
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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.