PAPA JOHNS INTERNATIONAL INCPZZA

PAPA JOHNS INTERNATIONAL INC Earnings Per Share Disclosure

10-KFiled Feb 26, 20262 min read
7. Earnings per Share
We compute earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. Time-based restricted stock awards are participating securities because holders of such unvested shares have rights to receive non-forfeitable dividends. Under the two-class method, total dividends provided to the holders of participating securities are subtracted from net income attributable to the Company to determine net income attributable to common shareholders. The Company may, at its sole discretion, require any dividends paid on the unvested restricted stock awards to be paid in shares rather than in cash, which could then be forfeited if the employee forfeits the underlying awards.
Basic earnings per common share are computed by dividing net income attributable to common shareholders by the weighted-average common shares outstanding. Diluted earnings per common share are computed by dividing the net income attributable to common shareholders by the diluted weighted average common shares outstanding. Diluted weighted average common shares outstanding consist of basic weighted average common shares outstanding plus weighted average awards outstanding under our equity compensation plans, which are dilutive securities.
The calculations of basic earnings per common share and diluted earnings per common share for the years ended December 28, 2025, December 29, 2024 and December 31, 2023 are as follows (in thousands, except per share data):
202520242023
Calculation of net income attributable to common shareholders
Net income attributable to the Company$30,531 $83,486 $82,098 
Dividends paid to participating securities(962)(166)— 
Net income attributable to common shareholders$29,569 $83,320 $82,098 
Basic earnings per common share
Basic weighted average common shares outstanding32,851 32,717 32,931 
Basic earnings per common share$0.90 $2.55 $2.49 
Diluted earnings per common share
Weighted average common shares outstanding32,851 32,717 32,931 
Dilutive effect of outstanding equity awards (a)
94 102 228 
Diluted weighted average common shares outstanding32,945 32,819 33,159 
Diluted earnings per common share$0.90 $2.54 $2.48 
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(a)Excludes 268,712, 342,440, and 194,846 shares underlying equity awards for the year ended December 28, 2025, December 29, 2024, and December 31, 2023, respectively, as the effect of including such awards would have been anti-dilutive.
See “Note 19. Equity Compensation” for additional information regarding our equity awards, including restricted stock.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 29, 2024
2022Feb 23, 2023
2019Feb 26, 2020
2018Mar 8, 2019
2017Feb 27, 2018
2016Feb 21, 2017
2015Feb 23, 2016

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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