Earnings per share formula: from net income to the per-share figure, with filed numbers

The earnings per share formula is net income available to common shareholders divided by the weighted average number of common shares outstanding in the period; diluted earnings per share adds to the denominator the shares that options, restricted stock units and convertible securities would create. Worked from the XBRL that 49 companies behind CFO Voice's quotes filed for their 2025 fiscal year, the formula lands within one cent of the basic EPS each of them printed.

The differences are rounding. A company computes the figure from unrounded net income and share counts and prints it to the cent, so a recomputation from the filed totals can be off by a fraction of a cent and never more than that unless an input is different.

The formula in one line

Basic EPS = (net income − preferred dividends) ÷ weighted average common shares outstanding.

Diluted EPS = (net income − preferred dividends, adjusted for convertible securities) ÷ (weighted average common shares + dilutive potential common shares).

The 10-Q note that carries the calculation usually says it in words. Expeditors International of Washington's Note 4 reads: "Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding." The next sentence adds the dilutive shares for the diluted figure, and the one after names them: stock options, purchase options under the employee stock purchase plan, and unvested RSUs.

The two lines answer different questions. Basic EPS divides the period's earnings among the shares that were actually outstanding. Diluted EPS asks what each share would have earned if every option, unvested award and convertible security that would lower the figure had become a share during the period. A company prints both on the face of its income statement, and in the notes it shows the pieces, so either figure can be rebuilt from the filing without any outside data.

The numerator: net income and preferred dividends

The numerator is not total net income. It is the income that belongs to common shareholders: net income attributable to the company, after the share that belongs to noncontrolling interests in subsidiaries, less dividends on preferred stock and, where a company uses the two-class method, the earnings allocated to participating securities.

XBRL has a tag for each step. NetIncomeLoss is net income attributable to the parent. NetIncomeLossAvailableToCommonStockholdersBasic is the numerator itself, after preferred dividends and participating securities. Of the 49 companies worked here, 21 tag the second; for the other 28 the script used the first, which for a company with no preferred stock is the same number.

The denominator: weighted average shares

The share count is an average over the period, weighted by the days each share was outstanding. A company that repurchases shares through a quarter has fewer shares at the end than at the start, and the average falls between them. That is how the buybacks counted in the share repurchase piece reach EPS: they shrink the denominator over time, not on the day of purchase.

Expeditors prints the full reconciliation, numerator and denominator, in its 10-Q for the quarter ended September 30, 2026:

Numerator: Net earnings attributable to shareholders¹ $ 344,512 $ 222,256 $ 840,348 $ 609,625 Denominator: Weighted-average basic shares outstanding² 129,918 134,956 131,458 136,346 Effect of dilutive share-based awards³ 199 329 269 444 Weighted-average diluted shares⁴ 130,117

1. 1The numerator, in thousands of dollars: the quarter, the same quarter a year earlier, then nine months for each year.
2. 2The basic denominator, in thousands of shares, averaged over each period.
3. 3The shares options and unvested RSUs would add, under the treasury stock method.
4. 4Basic shares plus the dilutive effect: the diluted denominator.

Divide it out. For the quarter, $344,512 thousand over 129,918 thousand shares is $2.6518, printed as $2.65. Adding 199 thousand dilutive shares gives 130,117 thousand, and $344,512 thousand over that is $2.6477, which also rounds to $2.65. Basic and diluted EPS are the same to the cent because the dilutive shares are less than 0.2% of the count.

Basic and diluted, side by side

Two more 10-Qs for the same quarter show the formula from the income statement alone. Cadence Design Systems prints net income of $289,747 thousand, weighted basic shares of 273,748 thousand and diluted shares of 275,278 thousand. Basic EPS works out to $1.0584 and diluted to $1.0526; the 10-Q prints $1.06 and $1.05. The 1,530 thousand dilutive shares are enough to move the second figure across a rounding line.

Paccar prints net income of $847.5 million, basic shares of 527.1 million and diluted shares of 527.7 million. The formula gives $1.6079 basic and $1.606 diluted, and the 10-Q prints $1.61 for both. Its dilutive shares, 0.6 million, are too few to change the cent.

The size of the gap between basic and diluted shares depends on how much a company pays in stock and whether it has convertible debt. Across the 49 companies with both share counts in the same 2025 annual filing, the median company's diluted count was 0.52% above its basic count.

For most companies, dilution adds under 1% to the share count

Companies, of 49; n = 49

The numbers

Diluted shares above basic shares	Companies, of 49
Zero or below (diluted at or under basic)	9
Under 0.5%	14
0.5% to under 1%	10
1% to under 2%	10
2% or more	6

Nine companies show no difference or a lower diluted count. Of the 8 companies with a net loss in the year, 7 report the same basic and diluted EPS. That follows from the rule on antidilution: a share that would make a loss per share smaller is left out of the diluted count, so in a loss year the two figures are usually equal. Expeditors' note states the same rule from the other side, saying potential shares excluded because their effect would have been antidilutive were not material.

Forty-nine filers computed from XBRL

The check uses the SEC's frames API, which returns one tag's value for every filer for a calendar period. For each of the 76 companies on the record, the script took the 2025 annual numerator, basic share count and basic EPS, and kept the company only if all three came from the same filing, so the period is the same. That left 49 companies, with fiscal years ending from June 30, 2025 to March 31, 2026. The other 27 either lack one of the three tags in the dollar frame or have inputs that come from different filings.

For all 49 companies, the formula lands within a cent of the tagged basic EPS

Companies, of 49; n = 49

The numbers

Gap between recomputed and tagged basic EPS	Companies, of 49
Within half a cent	43
Within one cent	6
Two to five cents	0
More than five cents	0

The result is uniform. For 43 companies the recomputed figure is within half a cent of the tagged basic EPS, and for the other 6 within one cent. The largest gap is 0.89 cents. None is more than a cent off, which is what rounding to the cent allows when the inputs are themselves rounded to thousands or millions.

That does not test whether a company's EPS is right; it tests whether the filed pieces fit together. Where they would not, the likely reasons are a numerator tag that includes noncontrolling interests, a two-class allocation the plain formula ignores, or share counts restated for a split. None of the 49 needed any of those explanations. Every company's pair of figures is in the table, in cents, so a loss shows as a negative number.

All 49 companies, alphabetical: tagged and recomputed basic EPS

Cents per share; n = 49

The numbers

Company	Basic EPS as tagged, cents	Net income over weighted basic shares, cents
Allstate	3,856	3856.2
Apple Inc.	749	749.3
Applied Materials	871	870.4
Ball Corporation	333	332.5
Cadence Design Systems	409	408.7
Carnival Corp Ltd.	210	210.4
Certara, Inc.	-1	-1.0
Ciena	87	86.7
Coherent Corp.	-52	-52.1
Columbus McKinnon Corporation	-740	-740
Constellation Energy Corp	740	740.9
Corning Inc.	187	186.7
DTE Energy	704	704.8
Everpure, Inc.	57	57.3
Expeditors International	597	596.7
Fiserv	636	636.1
Ford Motor Company	-206	-205.6
Global Payments	579	579.4
GoDaddy Inc.	634	633.6
Herbalife Ltd.	222	222.1
Hewlett Packard Enterprise Co	-4	-4.5
Hilton Worldwide Holdings Inc.	618	617.4
Host Hotels & Resorts	111	110.7
IBM	1,136	1136.2
Intel	-6	-5.9
Intercontinental Exchange, Inc.	579	579.5
Intuit	1,382	1381.8
MGM Resorts International	77	76.8
Microchip Technology	22	22.0
MSC Industrial Direct Co., Inc.	357	357.3
Owens Corning	-622	-621.4
Paccar	452	451.8
PTC Inc.	612	611.6
Public Storage	904	903.7
Robinhood Markets, Inc.	212	211.9
Rollins, Inc.	109	108.8
Skyworks Solutions	309	309
SoundHound AI, Inc.	-3	-3.5
Stanley Black & Decker	266	265.7
Starbucks	163	163.4
Synchrony Financial	938	937.8
Synopsys	813	812.6
TaskUs, Inc.	114	113.6
The Boston Beer Company, Inc.	990	989.7
Tyler Technologies	732	732.3
Uber Technologies, Inc	482	482.1
Veeva Systems	555	555.3
Wendy's Co	85	85.3
Zebra Technologies	824	824.5

A quarter is not a year

EPS is computed for each period with that period's own average share count, so quarterly figures do not have to add up to the year-to-date figure. Expeditors' note shows why. Its basic share count averaged 129,918 thousand in the third quarter of 2026 but 131,458 thousand over the nine months, because the company was repurchasing shares and the count was falling. Nine-month net earnings of $840,348 thousand over 131,458 thousand shares is $6.3925, printed as $6.39.

The same company's third quarter of 2025 shows the effect of a year of repurchases on the denominator. Net earnings were $222,256 thousand over 134,956 thousand shares, $1.6469, printed as $1.65. A year later the share count was 5,038 thousand lower, so part of the growth in EPS came from the smaller denominator rather than from higher earnings. Reading growth in EPS against growth in net income separates the two. The arithmetic is the same for any company: divide each period's numerator by its own denominator, and compare those two growth rates.

The weighted average also explains a common surprise in the first quarter after a large share issue or an acquisition paid in stock. The new shares count only from the day they were issued, so the average share count rises over two or more quarters, not in one step.

How the release states EPS, and the CFO sentence

The earnings release states EPS on its first page, usually as "per diluted share". The phrase matters: a release that says "net income of $X, or $Y per diluted share" is giving the diluted figure, and the basic figure appears only in the income statement at the back. Where the release and the 10-Q both print EPS for the same quarter, they should agree to the cent, because the 10-Q statements are the ones the release reproduces. A difference between the two documents is a reason to read the 10-Q's EPS note before using either figure. In the latest release of each of the 76 companies, 66 use diluted EPS wording, 86.8%, and 53, 69.7%, also state an adjusted, non-GAAP or core EPS. Thirty of the 199 verified CFO quotes name EPS, earnings per share or a per-share figure. Most mention it in passing, as a measure among others:

Results exceeded expectations across revenue, operating income, and earnings per share.

Amy Hood, executive vice president and chief financial officer of Microsoft, Microsoft, in the release furnished on October 28, 2026 (Exhibit 99.1; quote record).

Exelon delivered $0.87 adjusted operating earnings per share in the third quarter

Rob Kleczynski, Exelon Chief Financial Officer, Exelon, in the release furnished on October 30, 2026 (Exhibit 99.1; quote record).

The second sentence names an adjusted measure. The formula for it is the same fraction with a different numerator: net income with the company's adjustments added back or taken out, divided by the same diluted share count in most cases.

Where EPS can differ between GAAP and non-GAAP

GAAP EPS follows the formula above with GAAP net income. Adjusted EPS replaces the numerator with the company's adjusted net income, and the release must reconcile it to the GAAP figure under Regulation G. The denominator usually stays the same, but not always: a company with a GAAP loss uses basic shares for GAAP EPS, because of the antidilution rule, and may use diluted shares for a positive adjusted figure in the same quarter.

Adjusted EPS grew 7%, exceeding revenue growth both in the quarter and year-to-date.

Jatin Dalal, Chief Financial Officer, Cognizant, in the release furnished on October 29, 2026 (Exhibit 99.1; quote record).

A growth rate for adjusted EPS is a growth rate for that numerator over that denominator. To check one, find the adjusted net income and the share count in the reconciliation table of both releases and divide, the same way as above. The adjustments themselves are counted in GAAP vs non-GAAP, and forecasts of EPS are covered in the earnings guidance piece.

A short way to check any EPS figure:

1. Find net income attributable to the company on the income statement, and subtract preferred dividends if there are any.
2. Find the weighted average basic and diluted shares, usually printed under the EPS lines or in the EPS note.
3. Divide, and compare to the cent. A gap under one cent is rounding.
4. If the gap is larger, read the EPS note for the two-class method, preferred stock or a share split.
5. For adjusted EPS, use the adjusted net income from the reconciliation and the share count the release says it used.

How the release around these figures is built is set out in what an earnings report contains. The methodology explains how each quote reaches the site.