Revolve Group, Inc. Earnings Per Share Disclosure
Note 10. Earnings per Share
Basic and diluted earnings per share is presented in conformity with the two-class method required for multiple classes of common stock. The rights of the holders of Class A and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible at any time into one share of Class A common stock.
Basic earnings per share is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.
Diluted earnings per share represents net income attributable to common stockholders divided by the weighted-average number of shares of common stock outstanding, inclusive of the effect of dilutive stock options and RSUs. The undistributed earnings are allocated based on the participation rights of shares of Class A and Class B common stock as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical for both classes, the undistributed earnings are allocated on a proportionate basis.
The calculation of diluted earnings per share for Class A common stock assumes the conversion of Class B common stock, while diluted earnings per share of Class B common stock does not assume the conversion of Class A common stock as Class A common stock is not convertible into Class B common stock. Similarly, outstanding options to purchase Class B common stock and RSUs that are dilutive are included in the calculation of diluted earnings for both Class A and Class B common stock.
In August 2023, our board of directors authorized a stock repurchase program of up to $100 million of our outstanding Class A common stock. Repurchases during any given fiscal period under the repurchase program reduce the weighted-average number of shares of common stock outstanding for the period.
The following table presents the calculation of basic and diluted earnings per share:
|
|
Year Ended December 31, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||||||||||||||
|
|
Class A |
|
|
Class B |
|
|
Class A |
|
|
Class B |
|
|
Class A |
|
|
Class B |
|
||||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income |
|
$ |
34,612 |
|
|
$ |
26,534 |
|
|
$ |
26,414 |
|
|
$ |
22,357 |
|
|
$ |
15,572 |
|
|
$ |
12,575 |
|
Net loss attributable to |
|
|
319 |
|
|
|
244 |
|
|
|
426 |
|
|
|
360 |
|
|
|
— |
|
|
|
— |
|
Net income attributable to common stockholders - basic |
|
|
34,931 |
|
|
|
26,778 |
|
|
|
26,840 |
|
|
|
22,717 |
|
|
|
15,572 |
|
|
|
12,575 |
|
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares |
|
|
26,778 |
|
|
|
— |
|
|
|
22,717 |
|
|
|
— |
|
|
|
12,575 |
|
|
|
— |
|
Reallocation of undistributed earnings to Class B shares |
|
|
— |
|
|
|
384 |
|
|
|
— |
|
|
|
311 |
|
|
|
— |
|
|
|
132 |
|
Net income attributable to common stockholders - diluted |
|
$ |
61,709 |
|
|
$ |
27,162 |
|
|
$ |
49,557 |
|
|
$ |
23,028 |
|
|
$ |
28,147 |
|
|
$ |
12,707 |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares used to compute earnings per share — basic |
|
|
40,358 |
|
|
|
30,939 |
|
|
|
38,370 |
|
|
|
32,476 |
|
|
|
40,364 |
|
|
|
32,597 |
|
Conversion of Class B to Class A common shares outstanding |
|
|
30,939 |
|
|
|
— |
|
|
|
32,476 |
|
|
|
— |
|
|
|
32,597 |
|
|
|
— |
|
Effect of dilutive stock options and RSUs |
|
|
790 |
|
|
|
790 |
|
|
|
831 |
|
|
|
831 |
|
|
|
622 |
|
|
|
622 |
|
Weighted average number of shares used to compute earnings per share — diluted |
|
|
72,087 |
|
|
|
31,729 |
|
|
|
71,677 |
|
|
|
33,307 |
|
|
|
73,583 |
|
|
|
33,219 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
|
$ |
0.87 |
|
|
$ |
0.87 |
|
|
$ |
0.70 |
|
|
$ |
0.70 |
|
|
$ |
0.39 |
|
|
$ |
0.39 |
|
Diluted |
|
$ |
0.86 |
|
|
$ |
0.86 |
|
|
$ |
0.69 |
|
|
$ |
0.69 |
|
|
$ |
0.38 |
|
|
$ |
0.38 |
|
The following have been excluded from the computation of basic and diluted earnings per share as their effect would have been anti-dilutive (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Stock options to purchase Class A |
|
|
1,197 |
|
|
|
1,265 |
|
|
|
1,365 |
|
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.