Avalara Analyst Day Virtual

Reconciliation to Non-GAAP financial measures ($000) Reconciliation of non-GAAP gross profit Gross profit Stock-based compensation expense Amortization of acquired intangibles ASC 605 2018 ASC 605 2019 ASC 606 2019 ASC 606 2020 ASC 606 2021 ASC 606 Q1 21 ASC 606 Q1 22 $193,449 $1,665 $4,020 $267,478 $3,352 $4,854 $266,892 $3,352 $4,854 $356,780 $6,603 $5,166 $492,633 $11,715 $9,319 $109,105 $144,404 $2,032 $2,020 $3,759 $2,645 $199,134 $275,684 $275,098 $368,549 $513,667 $113,157 $150,808 Non-GAAP gross profit Reconciliation of non-GAAP gross margin Gross margin 71% 70% 70% 71% 70% 71% 71% Stock-based compensation expense as a percentage of revenue Amortization of acquired intangibles as a percentage of revenue 1% 1% 1% 1% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% Non-GAAP gross margin 73% 72% 72% 74% 73% 74% 74% Reconciliation of non-GAAP research and development expense Research and development Stock-based compensation expense Amortization of acquired intangibles $51,909 $(3,179) $ - $82,989 $(7,213) $- $82,989 $(7,213) $ - $121,578 $(15,094) $ - $171,016 $(27,968) $ - $39,274 $(5,404) $ - $50,852 $(9,463) $ - Non-GAAP research and development expense $48,730 $75,776 $75,776 $106,484 $143,048 $33,870 $41,389 Non-GAAP research and development expense (% of revenue) 18% 20% 20% 21% 20% 22% 20% AVALARA ANALYST DAY VIRTUAL | 49

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