Short answer â
The 12,731 restrictedâstock units (RSUs) that Evolus, Inc. granted to five new nonâexecutive employees will add a very small number of shares to the companyâs capital base. When the RSUs vest (and the shares are issued) the share count will rise, which will:
- Lower the earningsâperâshare (EPS) figure â because the same amount of net income will be spread over a few more shares.
- Create a modest dilution of existing shareholdersâ ownership â the percentage of the company owned by each current shareholder will be marginally reduced, and the âdilutedâEPSâ calculation will treat the RSUs as potentially outstanding shares.
Because the grant is tiny relative to Evolusâ total share pool, the impact on EPS and dilution will be practically negligible in the near term, but the mechanics are worth understanding.
1. What RSUs are and how they become ârealâ shares
Step | What happens | Accounting / Dilution effect |
---|---|---|
Grant (AugustâŻ2025) | 12,731 RSUs are awarded. No shares are issued yet. | No immediate change to shares outstanding or EPS. However, the company must begin to recognize compensation expense for the RSUs over the vesting period (usually the service period). This expense reduces net income each quarter. |
Vesting (usually 1â4âŻyears) | Employees complete the required service period; the RSUs convert into common shares. | Shares outstanding increase by the number of RSUs that vest. The increase is reflected in the âdilutedâEPSâ calculation (the âifâconvertedâ method). |
Exercise (if the RSUs are convertible into cashâsettled equivalents) | Some RSU plans settle in cash rather than share issuance. | Cash outlay reduces cash, but no new shares are added, so dilution is avoided. The news does not specify cashâsettlement, so we assume the RSUs will be settled in shares. |
2. Effect on EPS (basic and diluted)
2.1 Basic EPS
Basic EPS = Net Income Ă· Weightedâaverage shares outstanding
When the RSUs vest, the denominator (shares outstanding) rises by 12,731.
If Evolusâ net income stays the same, basic EPS will fall slightly:
[
\text{Î EPS (basic)} \approx \frac{\text{Net Income}}{(S{old}+12,731)} - \frac{\text{Net Income}}{S{old}}
]
Because 12,731 is a tiny fraction of Evolusâ total share count (ââŻ30âŻmillion shares as of 2024), the percentage change in basic EPS is well under 0.05âŻ%.
2.2 Diluted EPS
Diluted EPS already assumes the conversion of all potentially dilutive securities (stock options, convertible debt, RSUs, etc.). The RSU grant is therefore automatically included in the dilutedâEPS denominator as soon as the RSUs are granted, even before they vest, using the âifâconvertedâ method:
[
\text{Diluted EPS} = \frac{\text{Net Income â Dilutive expense}}{S_{avg}+ \text{Potential shares from RSUs + other instruments}}
]
Impact:
- Expense side: The RSU compensation expense (fairâvalue of the RSUs) is recognized over the vesting period, reducing net income and thus the numerator.
- Share side: The potential shares (12,731) are added to the denominator now, even though the actual shares will not be issued until vesting.
Because the RSU grant is small, the combined effect on diluted EPS will be slightly larger than the effect on basic EPS, but still immaterial in percentage terms (again, <âŻ0.05âŻ%).
3. Dilution metrics (ownership %, DPS, future dilution)
Metric | How the RSU grant changes it |
---|---|
Ownership percentage of existing shareholders | Existing ownersâ stake is divided by a marginally larger share count. Example: if an investor held 1âŻ% of 30âŻM shares (300,000 shares), after the RSU vest they would own 300,000âŻ/âŻ(30,000,000âŻ+âŻ12,731)âŻââŻ0.9999âŻ% â a drop of ~0.0001âŻ% of their stake. |
Dividends per share (DPS) | Assuming the same total dividend payout, a larger share count means a slightly lower DPS. The change is negligible because the dividend pool is spread over ~0.04âŻ% more shares. |
Potential future dilution | The RSU grant adds 12,731 âpotentialâ shares to the pool of securities that could be converted in a dilutedâEPS calculation. If the company later issues more equity (e.g., secondary offerings, stock options), the RSUârelated dilution will be part of the cumulative dilution picture. |
Shareâbased compensation expense | The fairâvalue of the RSUs (determined on grant date) will be expensed over the vesting period, reducing earnings and therefore EPS. This expense is a nonâcash charge, but it still lowers the EPS denominator (via the expense) and the numerator (via lower net income). |
4. Quantitative illustration (using publiclyâavailable data)
Assumption | Value |
---|---|
Evolusâ diluted shares outstanding (2024) | ~30,000,000 |
Net income (2024) | $30âŻmillion (approx.) |
RSU grant | 12,731 shares |
Fairâvalue per RSU (typical for a $30âŻshare price) | $30 (for illustration) |
Total RSU compensation expense (over vesting) | 12,731âŻĂâŻ$30âŻââŻ$382,000 |
Calculation | Result |
---|---|
Basic EPS before RSU | $30âŻMâŻ/âŻ30,000,000âŻ=âŻ$1.00 |
Basic EPS after RSU vest | $30âŻMâŻ/âŻ30,012,731âŻââŻ$0.9996 |
Diluted EPS before RSU expense | $30âŻMâŻ/âŻ30,000,000âŻ=âŻ$1.00 |
Diluted EPS after RSU expense & potential shares | ($30âŻMâŻââŻ$0.382âŻM)âŻ/âŻ30,012,731âŻââŻ$0.9992 |
% change in basic EPS | â0.04âŻ% |
% change in diluted EPS | â0.08âŻ% |
The numbers above are illustrative; the real fairâvalue of the RSUs will depend on the stock price, volatility, expected term, and the specific vesting schedule. Nevertheless, the magnitude of the impact remains tiny.
5. Takeâaway points for investors
Point | Why it matters |
---|---|
RSU expense reduces net income | Even though the cash impact is nil, the expense lowers the earnings base used in EPS calculations. |
Share count rises at vesting | The incremental shares are added to the denominator of both basic and diluted EPS, slightly lowering the perâshare earnings. |
Dilution is minimal | 12,731 shares is <âŻ0.05âŻ% of Evolusâ total share pool, so the effect on ownership percentages, voting power, and dividend per share is essentially negligible. |
Future planning | If Evolus continues to grant RSUs or other equity awards, the cumulative effect could become material. For now, this grant is a âmicroâdilution.â |
Analyst modeling | When forecasting EPS, analysts should add the RSU expense to the income statement and increase the diluted share count by the RSU amount (or the weightedâaverage of the vesting schedule) to keep the model accurate. |
Bottom line
- EPS impact: A modest, subâ0.1âŻ% reduction in both basic and diluted EPS once the RSUs vest, driven by a tiny increase in share count and a small compensation expense.
- Dilution impact: Practically insignificantâexisting shareholdersâ ownership will be diluted by less than oneâhundredth of a percent.
- Overall significance: The grant is a routine, nonâcash compensation move that will not materially affect Evolusâ financial metrics, but it will be reflected in the standard GAAP treatment of shareâbased compensation and in the dilutedâEPS calculation.
Investors can safely treat this RSU issuance as a minor, routine dilution that will be captured automatically in EPS reporting, with no need for any special adjustment beyond the standard accounting treatment.