WATSCO INC Earnings Per Share Disclosure
4. EARNINGS PER SHARE
The following table presents the calculation of basic and diluted earnings per share for our common stock:
Years Ended December 31, |
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2025 |
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2024 |
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2023 |
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Basic Earnings per Share: |
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Net income attributable to Watsco, Inc. shareholders |
|
$ |
496,994 |
|
|
$ |
536,286 |
|
|
$ |
536,337 |
|
Less: distributed and undistributed earnings |
|
|
32,810 |
|
|
|
37,392 |
|
|
|
36,966 |
|
Earnings allocated to Watsco, Inc. shareholders |
|
$ |
464,184 |
|
|
$ |
498,894 |
|
|
$ |
499,371 |
|
Weighted-average common shares outstanding - |
|
|
37,835,054 |
|
|
|
37,391,461 |
|
|
|
36,406,148 |
|
Basic earnings per share for common stock |
|
$ |
12.27 |
|
|
$ |
13.34 |
|
|
$ |
13.72 |
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Allocation of earnings for Basic: |
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Common stock |
|
$ |
422,814 |
|
|
$ |
454,680 |
|
|
$ |
455,186 |
|
Class B common stock |
|
|
41,370 |
|
|
|
44,214 |
|
|
|
44,185 |
|
|
|
$ |
464,184 |
|
|
$ |
498,894 |
|
|
$ |
499,371 |
|
Diluted Earnings per Share: |
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|
|
|
|
|
|
|
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Net income attributable to Watsco, Inc. shareholders |
|
$ |
496,994 |
|
|
$ |
536,286 |
|
|
$ |
536,337 |
|
Less: distributed and undistributed earnings |
|
|
32,807 |
|
|
|
37,369 |
|
|
|
36,932 |
|
Earnings allocated to Watsco, Inc. shareholders |
|
$ |
464,187 |
|
|
$ |
498,917 |
|
|
$ |
499,405 |
|
Weighted-average common shares outstanding - |
|
|
37,835,054 |
|
|
|
37,391,461 |
|
|
|
36,406,148 |
|
Effect of dilutive stock options |
|
|
64,805 |
|
|
|
118,871 |
|
|
|
125,535 |
|
Weighted-average common shares outstanding - |
|
|
37,899,859 |
|
|
|
37,510,332 |
|
|
|
36,531,683 |
|
Diluted earnings per share for common stock |
|
$ |
12.25 |
|
|
$ |
13.30 |
|
|
$ |
13.67 |
|
Diluted earnings per share for our Common stock assumes the conversion of all our Class B common stock into Common stock as of the beginning of the fiscal year; therefore, no allocation of earnings to Class B common stock is required. At December 31, 2025, 2024, and 2023, our outstanding Class B common stock was convertible into 3,372,031, 3,313,787, and 3,221,259 shares of our Common stock, respectively.
Diluted earnings per share excluded 49,354, 30,154, and 18,489 shares for the years ended December 31, 2025, 2024, and 2023, respectively, related to stock options with an exercise price per share greater than the average market value, resulting in an anti-dilutive effect on diluted earnings per share.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 29, 2016 | |
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.