Inovalon Results Presentation Deck
Reconciliation of Forward-Looking Guidance
Adjusted EBITDA
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Inovalon defines Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) as
net income calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization,
realized losses on short-term investments, gain on disposal of equipment, interest expense, interest income,
provision for income taxes, stock-based compensation, acquisition costs, tax on equity exercises, and other non-
comparable items. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue. A
reconciliation of forward-looking net income to Adjusted EBITDA guidance follows:
(In millions)
Reconciliation of Forward-Looking Guidance Net Income to Adjusted EBITDA:
Net income
Depreciation and amortization
Loss (gain) on disposal of equipment
Interest expense
Interest income
Provision for income taxes (1)
EBITDA
Stock-based compensation
Acquisition costs:
Transaction costs
Contingent consideration
Other non-comparable items (2)
Adjusted EBITDA
Adjusted EBITDA margin
$
Guidance Range
Twelve Months Ending
December 31, 2017
High
Low
18
51
5
(6)
12
80
15
25
3
105
23.5%
$
23
52
5
(6)
14
88
15
25
3
113
24.5%
A 40% tax rate is assumed in order to approximate the Company's effective corporate tax rate.
Other "non-comparable items include items that are not comparable across reporting periods or items that do not otherwise relate to the Company's ongoing financial results,
such as certain employee related expenses attributable to advancements in automation and operational efficiencies. Non-comparable items are excluded from Adjusted EBITDA
in order to more effectively assess the Company's period over period and on going operating performance.
INOV 02 2017 Earnings Presentation Supplement (8.2.17) v1.0.0
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