INOV Investor Presentation
Reconciliation of Forward-Looking Guidance Adjusted
EBITDA
Inovalon defines Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) as net income or loss calculated in
accordance with GAAP, adjusted for the impact of depreciation and amortization, other expense, net, interest income, interest expense, provision for
income taxes, stock-based compensation, acquisition costs, restructuring expense, and other non-comparable items. Adjusted EBITDA margin is defined
as Adjusted EBITDA as a percentage of revenue. A reconciliation of net income to Adjusted EBITDA follows:
(In millions)
Reconciliation of Forward-Looking Guidance Net (loss) income to Adjusted EBITDA:
Net (loss) income
Depreciation and amortization
Interest expense
Interest income
Provision for income taxes
EBITDA
Stock-based compensation
Acquisition costs:
Integration costs
(1)
Other non-comparable items
Adjusted EBITDA
Adjusted EBITDA margin
EA
Guidance Range
Three Months Ending
Year Ending
September 30, 2020
Low
High
December 31, 2020
Low
High
7 $
8
$
15 $
21
29
30
116
116
14
14
57
58
(1)
(1)
3
4
4
53
56
189
198
8
8
31
31
1
1
1
5
6
$
61
$
65
$
226
$
236
34.9%
35.2%
33.5%
33.8%
51
(2) 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, and legal expenses beyond those in the normal course of business. Non-comparable items are excluded from Adjusted EBITDA in order to more effectively assess the Company's period over period and ongoing operating performance.
(1) A 28% statutory tax rate is assumed in order to approximate the Company's effective corporate tax rate for future periods.
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