Non-GAAP Financial Measures
Adjusted Revenue and metrics presented as a percentage of Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Net Income, Adjusted Net Income Margin and Adjusted Earnings Per Share are supplemental measures of
our performance that are not required by, or presented in accordance with, U.S. GAAP. We also present each cost and
operating expense on our condensed consolidated statements of operations on an adjusted basis to arrive at adjusted
operating income. Collectively, we refer to these non-GAAP financial measures as our “Non-GAAP Measures."
We define Adjusted Revenue for a particular period as revenue excluding client contract termination costs associated with
restructuring related activities. We exclude these costs from revenue because we believe they are not indicative of past or
future underlying performance of the business.
We define Adjusted EBITDA for a particular period as net income or loss before interest, taxes, depreciation and
amortization, and as further adjusted for, as applicable for the periods presented, acquisition related expenses, stock-based
compensation expense, payroll tax expense related to stock-based compensation, loss on extinguishment of debt, financing
related expenses, loss on operating lease assets, restructuring related expenses, legal settlement expenses, charitable
stock donation, gain on sale of business, and other income or expense, net. Adjusted EBITDA Margin represents Adjusted
EBITDA as a percentage of Adjusted Revenue.
We define Adjusted Net Income for a particular period as net income or loss adjusted for, as applicable for the periods
presented, amortization of intangibles related to acquisitions and restructuring activities, acquisition related expenses, stock-
based compensation expense, payroll tax expense related to stock-based compensation, loss on extinguishment of debt,
financing related expenses, loss on operating lease assets, restructuring related expenses, legal settlement expenses,
charitable stock donation, gain on sale of business, other expense, and as further adjusted for estimated income tax on such
adjusted items. Our adjusted taxes also excludes (i) the valuation allowance recorded against certain of our net deferred tax
assets that was recognized in accordance with GAAP and any subsequent releases of the valuation allowance, and (ii) all
tax benefits/expenses resulting from excess tax benefits/deficiencies in connection with stock-based compensation.
Adjusted Net Income Margin represents Adjusted Net Income as a percentage of Adjusted Revenue.
Adjusted Earnings Per Share is Adjusted Net Income attributable to common stockholders divided by weighted average
number of shares. The weighted average shares we use in computing Adjusted Earnings Per Share – basic is equal to our
GAAP weighted average shares – basic and the weighted average shares we use in computing Adjusted Earnings Per
Share – diluted is equal to either GAAP weighted average shares – basic or GAAP weighted average shares – diluted,
depending on whether we have adjusted net loss or adjusted net income, respectively.
We also assess our performance by evaluating each cost and operating expense on our condensed consolidated
statements of operations on a non-GAAP, or adjusted, basis to arrive at adjusted operating income. The adjustments to
these cost and operating expense items include, as applicable for the periods presented, acquisition related expenses,
amortization of intangibles related to acquisitions and restructuring activities, stock-based compensation expense, payroll
tax expense related to stock-based compensation, financing related expenses, restructuring related expenses, legal
settlement expenses, loss on operating lease assets, charitable stock donation, and gain on sale of business. Adjusted
operating income is Adjusted Revenue less non-GAAP costs and operating expenses.
We believe our Non-GAAP Measures are helpful to investors, analysts and other interested parties because they assist in
providing a more consistent and comparable overview of our operations across our historical financial periods. Adjusted
Revenue, Adjusted EBITDA and Adjusted EBITDA Margin are also key measures we use to assess our financial
performance and are also used for internal planning and forecasting purposes. In addition, Adjusted Revenue, Adjusted
EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Earnings Per Share are frequently used by analysts,
investors and other interested parties to evaluate and assess performance.
The Non-GAAP Measures are presented for supplemental informational purposes only and should not be considered as
alternatives or substitutes to financial information presented in accordance with GAAP. These measures have certain
limitations in that they do not include the impact of certain costs that are reflected in our condensed consolidated statements
of operations that are necessary to run our business. Other companies, including other companies in our industry, may not
use these measures or may calculate these measures differently than as presented herein, limiting their usefulness as
comparative measures.