Earnings Per Share

9 Months Ended

Sep. 30, 2025

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding without consideration of potential common shares. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding plus potential common shares. Stock options, performance awards, restricted stock units (“RSUs”) and shares issuable under the Company's Employee Stock Purchase Plan (“ESPP”) are considered potential common shares and are included in the calculation of diluted earnings per share using the treasury stock method when their effect is dilutive. Potential common shares are excluded from the calculation of diluted earnings per share when their effect is anti-dilutive.

For the three months ended September 30, 2025, there were 4.2 million potential dilutive common shares that were included in the calculation of diluted earnings per share, which consists of: (i) 2.6 million RSUs; (ii) 1.0 million stock options; and (iii) 0.6 million performance awards. For the nine months ended September 30, 2025, there were 3.8 million potential dilutive common shares that were included in the calculation of diluted earnings per share, which consists of: (i) 2.5 million RSUs; (ii) 0.7 million stock options; and (iii) 0.6 million performance awards. For the three and nine months ended September 30, 2025, there were 6.7 million and 7.1 million of potential common shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

For the three months ended September 30, 2024, there were 2.6 million potential dilutive common shares that were included in the calculation of diluted earnings per share, which consists of: (i) 2.1 million RSUs; (ii) 0.4 million performance awards; and (iii) 0.1 million stock options. For the nine months ended September 30, 2024, there were 1.7 million potential dilutive common shares that were included in the calculation of diluted earnings per share, which consists of: (i) 1.3 million RSUs; (ii) 0.3 million performance awards; and (iii) 0.1 million stock options. For the three and nine months ended September 30, 2024, there were 9.2 million and 11.2 million of potential common shares, respectively, that were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.