Investor Presentaiton
Non-GAAP Measures
Adjusted EBITDA
The term "EBITDA" refers to earnings before deducting interest, taxes, depreciation and
amortization. The Company believes that Adjusted EBITDA is useful additional information
to management, the Board and investors as it provides an indication of the operational
results generated by its business activities prior to taking into consideration how those
activities are financed and taxed and also prior to taking into consideration asset
depreciation and amortization and it excludes items that could affect the comparability of
our operational results and could potentially alter the trends analysis in business
performance. Excluding these items does not necessarily imply they are non-recurring,
infrequent or unusual. Adjusted EBITDA is also used by some investors and analysts for the
purpose of valuing a company. The Company calculates Adjusted EBITDA as earnings
before deducting interest, taxes, depreciation and amortization, foreign exchange gain or
loss, finance costs, finance income, gain or loss on disposal of network assets, property and
equipment, impairment of property, plant, & equipment and intangible assets, stock-based
compensation and restructuring, acquisition-related and integration costs. Investors are
cautioned that Adjusted EBITDA should not be construed as an alternative to operating
earnings or net earnings determined in accordance with IFRS as an indicator of our
financial performance or as a measure of our liquidity and cash flows. Adjusted EBITDA
does not take into account the impact of working capital changes, capital expenditures,
debt principal reductions and other sources and uses of cash, which are disclosed in the
consolidated statements of cash flows.
Adjusted EBITDA does not have any standardized meaning under GAAP. TeraGo's method
of calculating Adjusted EBITDA may differ from other issuers and, accordingly, Adjusted
EBITDA may not be comparable to similar measures presented by other issuers. Please
refer to the Company's MD&A for the three and nine months ended September 30, 2019
for a reconciliation of net loss to Adjusted EBITDA. Adjusted EBITDA Margin is calculated by
dividing Adjusted EBITDA by Revenue in the applicable period.
Backlog MRR
The term "Backlog MRR" is a measure of contracted monthly recurring revenue (MRR)
from customers that have not yet been provisioned. The Company believes backlog MRR is
useful additional information as it provides an indication of future revenue. Backlog MRR is
not a recognized measure under IFRS and may not translate into future revenue, and
accordingly, investors are cautioned in using it. The Company calculates backlog MRR by
summing the MRR of new customer contracts and upgrades that are signed but not yet
provisioned, as at the end of the period. TeraGo's method of calculating backlog MRR may
differ from other issuers and, accordingly, backlog MRR may not be comparable to similar
measures presented by other issuers.
ARPU
The term "ARPU" refers to the Company's average revenue per customer per month in the
period. The Company believes that ARPU is useful supplemental information as it provides
an indication of our revenue from an individual customer on a per month basis. ARPU is
not a recognized measure under IFRS and, accordingly, investors are cautioned that ARPU
should not be construed as an alternative to revenue determined in accordance with IFRS
as an indicator of our financial performance. The Company calculates ARPU by dividing our
total revenue before revenue from early terminations by the number of customers in
service during the period and we express ARPU as a rate per month. TeraGo's method of
calculating ARPU has changed from the Company's past disclosures to exclude revenue
from early termination fees, where ARPU was previously calculated as revenue divided by
the number of customers in service during the period. TeraGo's method may differ from
other issuers, and accordingly, ARPU may not be comparable to similar measures
presented by other issuers.
Churn
The term "churn" or "churn rate" is a measure, expressed as a percentage, of customer
cancellations in a particular month. The Company calculates churn by dividing the number
of customer cancellations during a month by the total number of customers at the end of
the month before cancellations. The information is presented as the average monthly
churn rate during the period. The Company believes that the churn rate is useful
supplemental information as it provides an indication of future revenue decline and is a
measure of how well the business is able to renew and keep existing customers on their
existing service offerings. Churn and churn rate are not recognized measures under IFRS
and, accordingly, investors are cautioned in using it. TeraGo's method of calculating churn
and churn rate may differ from other issuers and, accordingly, churn may not be
comparable to similar measures presented by other issuers.
TeraGo
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