Per Common Share Amounts
We calculate basic earnings per share using the two-class method. Unvested Class A Common Shares awarded to our employees are deemed participating securities for purposes of calculating basic earnings per common share because they have dividend rights. Under the two-class method, we allocate earnings proportionately to vested Class A Common Shares and Class B-1 Common Shares outstanding and unvested Class A Common Shares outstanding for the period. Accordingly, earnings attributable to unvested Class A Common Shares are excluded from basic earnings per share under the two-class method. Our Class B-2 Common Shares, which are paired with ABP Trust’s Class A Units, have no independent economic interest in RMR Inc. and thus are not included as common shares outstanding for purposes of calculating basic earnings per common share.
Diluted earnings per share is calculated using the treasury stock method for unvested Class A Common Shares and the if-converted method for Class B-2 Common Shares. The 15,000,000 Class A Units that we do not own may be redeemed for our Class A Common Shares on a one-for-one basis or, upon such redemption, we may elect to pay cash instead of issuing Class A Common Shares. Upon redemption of a Class A Unit, the Class B-2 Common Share “paired” with such unit is canceled for no additional consideration. In computing the dilutive effect, if any, the assumed redemption would have on earnings per share, we considered net income available to holders of our Class A Common Shares would increase due to elimination of the noncontrolling interest offset by any tax effect, which may be dilutive. For the fiscal years ended September 30, 2025, 2024 and 2023, such redemption is not reflected in diluted earnings per share as the assumed redemption would be anti-dilutive.
The calculation of basic and diluted earnings per share for the fiscal years ended September 30, 2025, 2024 and 2023, is as follows (amounts in thousands, except per share amounts):
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| | Fiscal Year Ended September 30, |
| | 2025 | | 2024 | | 2023 |
| Numerators: | | | | | | |
| Net income attributable to The RMR Group Inc. | | $ | 17,596 | | | $ | 23,130 | | | $ | 57,147 | |
| Less: income attributable to unvested participating securities | | (400) | | | (323) | | | (651) | |
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| Net income used in calculating diluted EPS | | $ | 17,196 | | | $ | 22,807 | | | $ | 56,496 | |
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| Denominators: | | | | | | |
| Common shares outstanding | | 17,063 | | | 16,846 | | | 16,712 | |
| Less: unvested participating securities and incremental impact of weighted average | | (419) | | | (314) | | | (286) | |
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| Weighted average common shares outstanding - diluted | | 16,644 | | | 16,532 | | | 16,426 | |
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| Net income attributable to The RMR Group Inc. per common share - basic and diluted | | $ | 1.03 | | | $ | 1.38 | | | $ | 3.44 | |
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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.