PACS Group, Inc.PACS

PACS Group, Inc. Earnings Per Share Disclosure

10-KFiled Feb 27, 20262 min read
COMPUTATION OF NET INCOME PER COMMON SHARE
Basic net income per share is calculated by dividing net income attributable to the common stockholders by the weighted-average shares of common stock outstanding for the period. The computation of diluted net income per share is similar to the computation of basic net income per share, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the dilutive potential shares of common stock had been issued, which are comprised of restricted stock units using the treasury stock method.
A reconciliation of the numerator and denominator used in the calculation of basic net income per common share follows:
Year Ended December 31,
202520242023
Numerator:
Net income$191,461 $55,344 $112,882 
Less: net (loss) income attributable to noncontrolling interest(82)(416)8 
Net income attributable to PACS Group, Inc.$191,543 $55,760 $112,874 
Denominator:
Weighted average common shares outstanding156,180,786 146,663,371 128,723,386 
Basic net income per common share$1.23 $0.38 $0.88 
A reconciliation of the numerator and denominator used in the calculation of diluted net income per common share follows:
Year Ended December 31,
202520242023
Numerator:
Net income$191,461 $55,344 $112,882 
Less: net (loss) income attributable to noncontrolling interest(82)(416)8 
Net income attributable to PACS Group, Inc.$191,543 $55,760 $112,874 
Denominator:
Weighted average common shares outstanding156,180,786 146,663,371 128,723,386 
Plus: effect of diluted shares(1)
519,553 1,911,235 — 
Adjusted weighted average common shares outstanding156,700,339 148,574,606 128,723,386 
Diluted net income per common share$1.22 $0.38 $0.88 
__________________
(1) The diluted per share amounts do not reflect 2,289,103 common share equivalents from restricted stock units for the year ended December 31, 2025 because of their anti-dilutive effect.

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.

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