Growth and Profitability Strategy
Adjusted EBITDA reconciliation
($ in millions)
20131
2014¹
2015¹
2016
2017
2018
2019
Net Income/ (Loss)
($10.1)
$36.5
($32.9)
($1.7)
$153.0
$55.4
$40.9
+ Tax & Other Income
1.2
(25.4)
11.6
(0.3)
26.6
(29.5)
(5.4)
+ Depreciation & Amortization
11.5
17.6
29.6
35.3
41.2
42.8
49.4
+ Stock Based Compensation
26.1
42.3
60.8
86.3
100.4
114.4
121.5
- Gain on Disposal of a Business Unit
0.0
+ Restructuring & Integration
0.7
88
0.0
0.0
0.0
(163.7)
0.0
0.0
0.0
0.0
3.5
0.3
0.0
0.0
+ Fees Related to Shareholder
Activism
Adjusted EBITDA
/ Net Revenue
Adjusted
EBITDA Margin
0.0
0.0
0.0
0.0
0.0
0.0
7.1
$29.4
$70.9
$69.1
$123.0
$157.8
$183.1
$213.5
$233.0
$377.5
$549.7
$716.1
$850.8
$942.8
$1,014.2
12.6%
18.8%
12.6%
17.2%
18.5%
19.4%
21.1%
We define Adjusted EBITDA as Net income, adjusted to exclude: provision for (benefit from) income taxes; other income, net; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items.
This presentation includes Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP financial measures that Yelp uses to evaluate its business. Yelp includes Adjusted EBITDA because it is a key measure used by Yelp's management and board of directors to understand and evaluate core operating
performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of Yelp's core business. Accordingly, Yelp
believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating Yelp's operating results in the same manner as its management and board of directors. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a
substitute for analysis of Yelp's results as reported under GAAP. You can read more about the limitations of Adjusted EBITDA, as well as the basis of presentation of the numbers in the table above, in Yelp's most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q at www.yelp-ir.com or the
SEC's website at www.sec.gov. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, Net income (loss) and Yelp's other GAAP results,
1 Amounts have not been recast in accordance with Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (ASC 606)."
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