Inovalon Investor Conference Presentation Deck
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, 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 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 (1)
EBITDA
Stock-based compensation
Acquisition costs:
Transaction costs
Integration costs
Contingent consideration
Other non-comparable items (2)
Adjusted EBITDA
Adjusted EBITDA margin
69
INOV Investor Presentation (1.14.20) v1.0.0
Three Months Ending
December 31, 2019
Low
High
6
27
16
(1)
2
50
6
56
33,1%
69
$
10
27
16
(1)
3
6
35,6%
69
Guidance Range
Year Ending
December 31, 2019
Low
High
9
108
66
(3)
179
20
5
4
209
32.8%
69
13
108
66
184
20
1
5
5
215
33.4%
+A
Year Ending
December 31, 2020
Low
High
22
109
63
(3)
200
27
231
33.1%
$
109
64
(3)
11
209
241
33.6%
A 28% statutory 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, 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.
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