SM Energy CoSM

SM Energy Co Earnings Per Share Disclosure

10-KFiled Feb 26, 20262 min read
Note 9 – Earnings Per Share
Basic net income or loss per common share is calculated by dividing net income or loss available to common stockholders by the basic weighted-average number of common shares outstanding for the respective period. Diluted net income or loss per common share is calculated by dividing net income or loss available to common stockholders by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities.
For the years ended December 31, 2025, 2024, and 2023, potentially dilutive securities for this calculation consisted primarily of non-vested RSUs and contingent PSUs, which were measured using the treasury stock method.
PSUs represent the right to receive, upon settlement of the PSUs after the completion of the three-year performance period, a number of shares of the Company’s common stock that may range from zero to two times the number of PSUs granted on the award date. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective reporting period, assuming that date was the end of the contingency period applicable to such PSUs.
Refer to Note 10 – Stock-Based Compensation for additional detail on RSUs and PSUs.
The following table sets forth the calculations of basic and diluted net income per common share:
For the Years Ended December 31,
202520242023
(in millions, except per share data)
Net income$648 $770 $818 
Basic weighted-average common shares outstanding115 115 119 
Dilutive effect of non-vested RSUs, contingent PSUs, and other— 1 1 
Diluted weighted-average common shares outstanding115 116 119 
Basic net income per common share$5.65 $6.71 $6.89 
Diluted net income per common share$5.64 $6.67 $6.86 
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Note: Amounts may not calculate due to rounding.
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Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 20, 2025

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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