RingCentral, Inc.RNG

RingCentral, Inc. Earnings Per Share Disclosure

10-KFiled Feb 27, 20262 min read
Note 14. Basic and Diluted Net Loss Per Share
Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potential shares of common stock, stock options, restricted stock units, performance stock units, ESPP, convertible notes, and convertible preferred stock, to the extent dilutive. For the years ended December 31, 2024 and 2023, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive.
The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share of common stock (in thousands, except per share data):
Year Ended December 31,
202520242023
Numerator
Net income (loss)$43,391 $(58,288)$(165,240)
Denominator
Weighted-average common shares outstanding for basic net income (loss) per share89,481 92,110 94,912 
Effect of dilutive securities:
Shares of common stock issuable under equity incentive awards outstanding990 — — 
Shares of common stock related to convertible preferred stock743 — — 
Weighted-average common shares outstanding for diluted net income (loss) per share91,214 92,110 94,912 
Basic net income (loss) per share$0.48 $(0.63)$(1.74)
Diluted net income (loss) per share$0.48 $(0.63)$(1.74)
The following table summarizes the potentially dilutive common shares that were excluded from diluted weighted-average common shares outstanding because including them would have had an anti-dilutive effect (in thousands):
Year Ended December 31,
202520242023
Shares of common stock issuable under equity incentive plans outstanding6,910 9,860 9,999 
Shares of common stock related to convertible preferred stock— 743 743 
Potential common shares excluded from diluted net loss per share6,910 10,603 10,742 
Pursuant to the terms of the 2026 Convertible Notes Indenture, effective January 1, 2022, the Company made an irrevocable election to, upon conversions of the 2026 Convertible Notes, settle the principal portion of such converted 2026 Convertible Notes only in cash, with the conversion premium to be settled in cash or shares at the Company’s election.
The Company calculates the potential dilutive effect of the 2026 Convertible Notes under the if-converted method. Under this method, only the amounts settled in excess of the principal will be considered in diluted earnings per share, in line with the terms of the 2026 Convertible Notes Indenture.

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.

Other Available Disclosures

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