The Company applies the two-class method for computing and presenting earnings per share since the Company’s unvested restricted stock awards represent participating securities due to the right to share in dividends, if declared, equally with common stockholders. The two-class method allocates current period net income to common stock and participating securities based on (i) dividends declared and (ii) participation rights in the remaining undistributed income. For a majority-owned subsidiary, the Company’s proportionate share in that majority-owned subsidiary’s earnings per share is added to the computation of earnings per share on a consolidated basis.

Basic earnings per share is computed by dividing income attributable to common stockholders using the two-class method by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per share gives effect to all securities having a dilutive effect on income attributable to common stockholders, weighted-average shares of common stock outstanding, or both. The effect from potential dilutive securities included, but was not limited to: (i) incremental shares of common stock calculated using the if-converted method for convertible debt instruments; (ii) incremental shares of common stock calculated using the treasury stock method for warrants and share-based compensation awards; (iii) adjustments to a majority-owned subsidiary's earnings per share due to its potential dilutive securities; and (iv) the corresponding impact to income attributable to common stockholders associated with the preceding considerations. Net losses are not allocated to participating securities as the participating securities do not have a contractual obligation to share in losses.

The computations of basic and diluted earnings per share for the periods presented were as follows:


	Three Months Ended							Three Months Ended
	March 31, 2026							March 31, 2025
	Income			Shares (a)		Per Share		Income			Shares (a)		Per Share
	(Numerator)			(Denominator)		Amount		(Numerator)			(Denominator)		Amount
Net income	$	85,043						$	74,230
Less: Net income attributable to noncontrolling interests		(11,636	)						(4,546	)
Net income after noncontrolling interests		73,407							69,684
Less: Income attributable to participating securities		(3,255	)						(3,103	)
Basic Earnings Per Share:
Income attributable to common stockholders		70,152			12,490	$	5.62		66,581			10,286	$	6.47
Effect of Dilutive Securities:
Stock options		—			398				—			350
Convertible senior notes		—			—				1,873			2,142
Warrants		—			8				—			7
Net impact from reallocation of undistributed earnings to participating securities		78			—				—			—
Diluted Earnings Per Share:
Income attributable to common stockholders	$	70,230			12,896	$	5.45	$	68,454			12,785	$	5.35

(a)

Shares in thousands.

For the periods presented, all potentially dilutive securities for Exzeo were excluded from Exzeo's diluted earnings per share computation because their (i) effect would be anti-dilutive, (ii) exercise prices were out-of-the-money, or (iii) contingent exercise conditions were unsatisfied.