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Earnings Per Share
 9 Months Ended
Sep. 30, 2025
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share
(a)Basic

Basic earnings per share is calculated by dividing the net income attributable to equity holders of the Company for the period by the weighted average number of common shares outstanding during the period.
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(in thousands, except per share data)
Net income attributable to Karat Packaging Inc.$7,325 $9,094 $24,668 $24,360 
Weighted average number of common shares in issue20,091 20,018 20,062 19,994 
Basic earnings per share$0.36 $0.45 $1.23 $1.22 

(b)Diluted
Diluted earnings per share is calculated based upon the weighted average number of common shares and common equivalent shares outstanding during the period, calculated using the treasury stock method. Under the treasury stock method, exercise proceeds include the amount the employee must pay for exercising stock options and the amount of compensation cost related to stock awards for future services that the Company has not yet recognized. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect.

The following table summarizes the calculation of diluted earnings per share:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(in thousands, except per share data)
Net income attributable to Karat Packaging Inc.$7,325 $9,094 $24,668 $24,360 
Weighted average number of common shares in issue20,091 20,018 20,062 19,994 
Dilutive shares
Stock options and restricted stock units110 116 135 114 
Adjusted weighted average number of common shares20,201 20,134 20,197 20,108 
Diluted earnings per share$0.36 $0.45 $1.22 $1.21 

For the three months ended September 30, 2025 and 2024, a total of 644 and 0 shares of potentially dilutive shares, respectively, have been excluded in the diluted earnings per share calculation due to their anti-dilutive impact on earnings per share. For the nine months ended September 30, 2025 and 2024, a total of 215 and 6,403 shares of potentially dilutive shares, respectively, have been excluded in the diluted earnings per share calculation due to their anti-dilutive impact on earnings per share.