PennyMac Financial Services, Inc. Earnings Per Share Disclosure
Note 25—Earnings Per Share of Common Stock
Basic earnings per share of common stock is determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share of common stock is determined by dividing net income by the weighted average number of shares of common stock and dilutive securities outstanding during the year.
The Company’s potentially dilutive securities are stock-based compensation awards. The Company applies the treasury stock method to determine the diluted weighted average number of shares of common stock outstanding based on the outstanding stock-based compensation awards.
The following table summarizes the basic and diluted earnings per share calculations:
Year ended December 31, | |||||||||
2025 | | 2024 | | 2023 | |||||
(in thousands, except per share amounts) | |||||||||
Net income | $ | 501,077 | | $ | 311,423 | | $ | 144,656 | |
Weighted average shares of common stock outstanding | 51,728 | 50,990 | 49,978 | ||||||
Effect of dilutive securities - shares issuable under | 2,154 | 2,366 | 2,755 | ||||||
Weighted average diluted shares of common stock outstanding | 53,882 | 53,356 | 52,733 | ||||||
Basic earnings per share | $ | 9.69 | $ | 6.11 | $ | 2.89 | |||
Diluted earnings per share | $ | 9.30 | $ | 5.84 | $ | 2.74 | |||
Calculations of diluted earnings per share require certain potentially dilutive shares to be excluded when their inclusion in the diluted earnings per share calculation would be anti-dilutive. The following table summarizes the weighted-average number of anti-dilutive outstanding performance-based RSUs, time-based RSUs and stock options excluded from the calculation of diluted earnings per share:
Year ended December 31, | |||||||||
| 2025 | | 2024 | | 2023 | ||||
(in thousands except for weighted average exercise price) | |||||||||
Time-based RSUs | 3 | 3 | 2 | ||||||
Performance-based RSUs (1) | 192 | 775 | 561 | ||||||
Stock options (2) | 163 | 153 | 289 | ||||||
Total anti-dilutive units and options | 358 | 931 | 852 | ||||||
Weighted average exercise price of anti-dilutive stock options (2) | $ | 102.19 | $ | 84.93 | $ | 59.42 | |||
| (1) | Certain performance-based RSUs were outstanding but not included in the computation of earnings per share because the performance thresholds included in such RSUs have not been achieved. |
| (2) | Certain stock options were outstanding but not included in the computation of diluted earnings per share because the combination of the weighted-average exercise prices and average unamortized stock compensation cost exceeded the average market price of the outstanding stock options for the period. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Mar 5, 2019 | |
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.