Earnings Per Share

3 Months Ended

Mar. 31, 2026

The following table sets forth the computation of basic and diluted earnings per share (EPS):


	Three Months Ended March 31,
In thousands, except per share data		2026		2025
Net income available to common shareholders		$	53,459	$	65,474

Weighted average common shares outstanding - Basic		44,734		45,338
Dilutive effect of stock-based awards		736		834
Dilutive effect of convertible notes		—		—
Weighted average common shares outstanding - Diluted		45,470		46,172
Net income per common share - Basic		$	1.20	$	1.44
Net income per common share - Diluted		$	1.18	$	1.42

Stock-based Awards

For stock-based awards, the dilutive effect is calculated using the treasury stock method. Under this method, the dilutive effect is computed as if the awards were exercised at the beginning of the period (or at time of issuance, if later) and assumes the related proceeds were used to repurchase our common stock at the average market price during the period. Related proceeds include the amount the employee must pay upon exercise and the future compensation cost associated with the stock award. Approximately 120,000 and 16,000 stock-based awards were excluded from the calculation of diluted EPS for the three months ended March 31, 2026 and 2025 because they were anti-dilutive. These stock-based awards could be dilutive in future periods.

Convertible Notes and Share Hedges

2021 Notes, Warrants and Call Option Transactions

In conjunction with the issuance of our 2021 Notes, which were fully repaid on March 16, 2026, we sold warrants to purchase 3.7 million shares of Itron common stock. The warrants have a strike price of $180.00 per share. For calculating the dilutive effect of the warrants, we use the treasury stock method. With this method, we assume exercise of the warrants at the beginning of the period, or at time of issuance if later, and the issuance of common stock upon exercise. Proceeds from the exercise of the warrants are assumed to be used to repurchase shares of our stock at the average market price during the period. The incremental shares, representing the number of shares assumed to be exercised with the warrants less the number of shares repurchased, are included in diluted weighted average common shares outstanding. For periods where the warrants strike price of $180.00 per share is greater than the average share price of Itron stock for the period, the warrants would be anti-dilutive. For the three months ended March 31, 2026, the quarterly average closing prices of our common stock did not exceed the warrant strike price, and therefore 3.7 million shares were considered anti-dilutive for GAAP. The warrants will fully expire in October 2026.

2024 Notes and Capped Call Transactions

For our convertible notes issued in June 2024 (the 2024 Notes), the dilutive effect is calculated using the if-converted method. We are required, pursuant to the indenture governing our convertible notes, to settle the principal amount of the convertible notes in cash and may elect to settle the remaining conversion obligation (stock price in excess of conversion price) in cash, shares, or a combination thereof. Under the if-converted method, we include the number of shares required to satisfy the remaining conversion obligation, assuming all the convertible notes were converted. The average closing prices of our common stock for the quarter ended March 31, 2026 were used as the basis for determining the dilutive effect on EPS. The quarterly average closing prices for our common stock did not exceed the conversion price of $131.24, and therefore all associated shares were anti-dilutive.

In connection with the issuance of the 2024 Notes, we entered into privately negotiated capped call transactions (the 2024 capped call transactions) on our common stock with certain commercial banks. The 2024 capped call transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2024 Notes, approximately 6.1 million shares of our common stock, the same number of shares initially underlying the convertible notes, at a strike price of approximately $131.2353, subject to customary adjustments. The cap price of the 2024 capped call transactions will initially be $205.86 per share, which represents a premium of 100% over the last reported stock price per share of the Company's common stock on June 17, 2024, and is subject to certain adjustments under the terms of the 2024 capped call transactions. The 2024 capped call transactions will expire upon the maturity of the 2024 Notes, subject to earlier exercise or termination. Exercise of the 2024 capped call transactions would reduce the number of shares of our common stock outstanding and therefore would be anti-dilutive.

2026 Notes and Capped Call Transactions

For our convertible notes issued in February 2026 (the 2026 Notes), the dilutive effect is calculated using the if-converted method. We are required, pursuant to the indenture governing our convertible notes, to settle the principal amount of the convertible notes in cash and may elect to settle the remaining conversion obligation (stock price in excess of conversion price) in cash, shares, or a combination thereof. Under the if-converted method, we include the number of shares required to satisfy the remaining conversion obligation, assuming all the convertible notes were converted. The average closing prices of our common stock for the quarter ended March 31, 2026 were used as the basis for determining the dilutive effect on EPS. The quarterly average closing prices for our common stock did not exceed the conversion price of $123.77, and therefore all associated shares were anti-dilutive.

In connection with the issuance of the 2026 Notes, we entered into privately negotiated capped call transactions (the 2026 capped call transactions) on our common stock with certain commercial banks. The 2026 capped call transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2026 Notes, approximately 6.5 million shares of our common stock, the same number of shares initially underlying the convertible notes, at a strike price of approximately $123.77, subject to customary adjustments. The cap price of the 2026 capped call transactions will initially be $190.42 per share, which represents a premium of 100% over the last reported stock price per share of the Company's common stock on February 23, 2026, and is subject to certain adjustments under the terms of the 2026 capped call transactions. The 2026 capped call transactions will expire upon the maturity of the 2026 Notes, subject to earlier exercise or termination. Exercise of the 2026 capped call transactions would reduce the number of shares of our common stock outstanding and therefore would be anti-dilutive.