Non-GAAP Metrics
Financial performance measures that exclude certain items required under GAAP to provide what management considers a more useful view of operating performance.
Non-GAAP metrics — including adjusted EBITDA, adjusted net income, adjusted EPS, and various SaaS metrics — are not governed by accounting standards and can be defined differently by each company. Common adjustments include stock-based compensation, restructuring charges, amortization of acquired intangibles, and litigation settlements. Management presents these metrics alongside GAAP results under the SEC's Regulation G, which requires a reconciliation to the nearest GAAP equivalent.
The proliferation of non-GAAP reporting has made financial comparison across companies increasingly complex. Document intelligence can extract non-GAAP adjustments from earnings releases and 10-K filings, compare the specific items excluded by different companies, and highlight when a company changes its non-GAAP definition year-over-year — a practice that should prompt analyst scrutiny.
Related Terms
More financial Terms
10-K Filing
An annual report filed with the SEC that provides a comprehensive overview of a public company's financial performance.
Balance Sheet
A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.
EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortization — a measure of a company's operating profitability.
Amortization
The gradual reduction of an intangible asset's value or a loan balance through scheduled periodic payments.
Revenue Recognition
The accounting principle that determines when and how revenue is recorded in financial statements.
Cash Flow Statement
A financial statement that tracks the movement of cash in and out of a business across operating, investing, and financing activities.
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