Adjusted EBITDA

A non-GAAP profitability metric that starts from GAAP EBITDA and applies management-defined add-backs — typically stock-based compensation, restructuring charges, acquisition-related costs, and one-time legal or settlement items. Adjusted EBITDA is useful as a measure of underlying operating leverage when the add-backs are genuinely one-time, but it loses meaning when the same add-back categories recur every quarter. The disciplined read is to track both GAAP and adjusted figures over time and flag a widening gap (above ~30 percent of revenue persistently) as a signal the adjusted number is measuring what management wishes the business looked like rather than what it actually produces.

Lessons that use this term

• Income Statement Quality Flags
• Stock-Based Compensation: The Non-Cash Expense That Dilutes

Related terms

Accounts Payable · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay · Average Ticket

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