Net Income (Loss) per Share
Basic net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is calculated using the weighted average number of shares of common stock plus, when dilutive, potential shares of common stock outstanding using the treasury-stock method. Potential shares of common stock outstanding include stock options, and unvested restricted stock units.
The components of basic and diluted earnings per share were as follows (in thousands, except share and per share information):
| | | | | | | | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 | | 2023 |
| Basic earnings per share: | | | | | |
| Net income (loss) | $ | 19,433 | | | $ | (9,633) | | | $ | (44,693) | |
| Shares used in computation: | | | | | |
| Weighted average shares of common stock outstanding | 42,958,654 | | | 42,158,773 | | | 41,436,882 | |
| Basic earnings per share | $ | 0.45 | | | $ | (0.23) | | | $ | (1.08) | |
| | | | | |
| Diluted earnings per share: | | | | | |
| Net income (loss) | $ | 19,433 | | | $ | (9,633) | | | $ | (44,693) | |
| Shares used in computation: | | | | | |
| Weighted average shares of common stock outstanding | 42,958,654 | | | 42,158,773 | | | 41,436,882 | |
| Stock options | 233,377 | | | — | | | — | |
| Restricted stock units | 363,853 | | | — | | | — | |
| Weighted average number of shares | 43,555,884 | | | 42,158,773 | | | 41,436,882 | |
| Diluted earnings per share | $ | 0.45 | | | $ | (0.23) | | | $ | (1.08) | |
The following potentially dilutive equity securities were not included in the diluted earnings per share of common stock calculation because they would have had an antidilutive effect:
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Stock options | — | | | 347,334 | | | 408,970 | |
| Restricted stock units | 1,129,314 | | | 970,739 | | | 714,382 | |
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.