What Is EPS (Earnings Per Share)?
Earnings per share divides a company's net income by the number of its shares, expressing profit in per-share terms. Diluted EPS — the figure this site uses — assumes convertible instruments and options are exercised, making it the conservative version.
EPS exists because companies differ in size. A billion dollars of profit means one thing spread across a hundred million shares and quite another across ten billion. Per-share figures let owners judge what their slice of the business earned, and EPS growth over time is a fair summary of whether owning a share has become more rewarding.
Buybacks complicate the picture in a helpful-looking way. When a company repurchases its own shares, the same profit is divided among fewer shares and EPS rises even if total profit is flat. Readers should therefore check EPS growth against net income growth: if EPS grows much faster, shrinkage of the share count, not growth of the business, is doing the work.
EPS also feeds the best-known valuation ratio, the price-to-earnings multiple, which divides a share's market price by its EPS. The multiple itself needs market prices, which this site does not publish, but the EPS figures in our company tables are exactly the audited denominators that such calculations should start from.
Putting it into practice
Dilution deserves a moment of its own. Shares reserved for employee options and convertible bonds do not appear in the basic share count, but they are real claims on future profit. Diluted EPS recognises them in advance, which is why it is always equal to or lower than basic EPS and why careful publications — this one included — standardise on it. When a company's diluted share count grows year after year faster than its business, existing owners are being quietly diluted even if headline profit rises, and the share-count lines in the filing, not the EPS line alone, reveal it.
A worked example from a real filing
Abstract definitions stick better with a real number attached. Take Nvidia Corp (NVDA): in fiscal 2026 it reported revenue of $215.94 billion in its annual 10-K filing, as republished in the SEC EDGAR company facts dataset retrieved in October 2026. Open its company page and you can place that figure next to the same company's net income, operating cash flow, total assets and diluted earnings per share for the same year — the relationships between the measures, not any single one of them, are where understanding lives. Then compare it with peers in the rankings, where the same measures are lined up across the largest filers.
For the full set of plain-English explainers, return to the Learn index, and for exactly how this site selects and labels figures, read the methodology page.