Adjusted EBITDA Ex-SBC
A non-GAAP profitability metric that strips stock-based compensation expense out of Adjusted EBITDA on top of the other adjustments. Common at late-stage growth software and consumer-internet companies where SBC runs 15 to 25 percent of revenue. The metric is useful as a measure of cash operating leverage, but it ignores the dilution cost that SBC imposes on existing shareholders. Presented as a headline profitability figure without naming the implied dilution, it gives a fundamentally incomplete picture of return to existing shareholders. The disciplined practice computes net annual dilution (gross SBC dilution minus buyback offset, both expressed as a percentage of market cap) alongside the Ex-SBC figure rather than accepting the adjusted metric in isolation.
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Related terms
Accounts Payable · Adjusted EBITDA · ADR · ARPU · Average Length Of Stay · Average Ticket
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