| NET INCOME PER COMMON SHARE Basic net income per share is computed by dividing net income attributable to stockholders of the Company by the weighted average number of outstanding common shares for the period. The computation of diluted net income per share is similar to the computation of basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. The following table sets forth the computation of basic and diluted net income per share for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2026 | | 2025 | | 2026 | | 2025 | | Numerator: | | | | | | | | | | | | | | | | | | | | | | | | | Net income attributable to The Pennant Group, Inc. | $ | 9,082 | | | $ | 7,085 | | | $ | 17,601 | | | $ | 14,860 | | | | | | | | | | | Denominator: | | | | | | | | | Weighted average shares outstanding for basic net income per share | 34,835 | | | 34,529 | | | 34,781 | | | 34,500 | | Plus: assumed incremental shares from exercise of options and assumed conversion or vesting of restricted stock(a) | 1,122 | | | 843 | | | 1,076 | | | 784 | | | Adjusted weighted average common shares outstanding for diluted income per share | 35,957 | | | 35,372 | | | 35,857 | | | 35,284 | | | | | | | | | | | Earnings Per Share: | | | | | | | | | Basic net income per common share | $ | 0.26 | | | $ | 0.21 | | | $ | 0.51 | | | $ | 0.43 | | | Diluted net income per common share | $ | 0.25 | | | $ | 0.20 | | | $ | 0.49 | | | $ | 0.42 | |
| | | | | | | | | | (a) | | The diluted per share amounts do not reflect common share equivalents outstanding of 2,207 and 2,039 for the three and six months ended June 30, 2026, and 1,557 and 1,368 for the three and six months ended June 30, 2025, because of their anti-dilutive effect. |
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