Earnings Per Share

12 Months Ended

Dec. 31, 2025

(a)Basic

Basic earnings per share is calculated by dividing the net income attributable to equity holders of the Company for the year by the weighted average number of common shares outstanding during the period.


	Year Ended December 31,
	2025		2024
	(in thousands, except per share data)
Net income attributable to Karat Packaging Inc.	$	31,478	$	29,975
Weighted average shares	20,058		20,002
Basic earnings per share	$	1.57	$	1.50

(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:


	Year Ended December 31,
	2025		2024
	(in thousands, except per share data)
Net income attributable to Karat Packaging Inc.	$	31,478	$	29,975
Weighted average shares	20,058		20,002
Dilutive shares
Stock options and restricted stock units	122		122
Total dilutive shares	20,180		20,124
Diluted earnings per share	$	1.56	$	1.49

For the years ended December 31, 2025 and 2024 a total of 161 and 4,803 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.