EARNINGS (LOSS) PER SHARE

The following table displays the computation of basic and diluted EPS for both Class A and Class B common stock for the years ended December 31, 2025, 2024 and 2023:


	For the Years Ended December 31,
	2025		2024		2023
	(in millions, except per share amounts)
Numerator:
Net income (loss)	$	40.3	$	30.9	$	(147.4)
Less: Undistributed income allocated to participating securities	2.0		1.7		—
Net income (loss) attributable to common shareholders	38.3		29.2		(147.4)
Denominator:
Weighted-average common shares outstanding: basic (both Class A and B)	15.4		14.9		14.4
Effect of dilutive securities:
Redeemable convertible preferred stock	0.8		0.8		—
Service-based restricted stock units	0.5		0.8		—
Market-based restricted stock units	0.3		0.3		—
Stock options	0.1		0.1		—

Weighted-average common shares outstanding: diluted (both Class A and B)	17.1		16.9		14.4
Earnings (loss) per common share (both Class A and B):
Basic	$	2.49	$	1.96	$	(10.24)
Diluted	$	2.36	$	1.83	$	(10.24)

For the year ended December 31, 2023, we operated at a loss and therefore, the conversion of common stock equivalents would increase the denominator of the diluted EPS calculation and create a lower loss per share. Therefore, these common stock equivalents are considered anti-dilutive and diluted EPS is equal to basic EPS.

We excluded the following potentially dilutive common stock equivalents, presented based on amounts outstanding at each year end, from the computation of diluted EPS attributable to common stockholders for the years indicated because including them would have had an anti-dilutive effect:


	For the Years Ended December 31,
	2025	2024	2023
	(in millions)
Options to purchase common stock	—	—	0.1
Nonvested shares subject to repurchase	—	—	0.1
Service-based restricted stock units	0.1	—	1.5
Market-based restricted stock units	—	—	0.4
Redeemable convertible preferred stock (as converted to common stock)	—	—	0.8
Warrants to purchase common stock	7.5	7.5	7.7
Total	7.6	7.5	10.6

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.

Root, Inc. Earnings Per Share Disclosure

About Earnings Per Share Disclosures

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