Inovalon Results 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
Other expense, net
Benefit from income taxes (1)
EBITDA
Stock-based compensation
Acquisition costs:
Transaction costs
Integration costs
Contingent consideration accretion
Compensatory contingent consideration
Restructuring expense
Other non-comparable items (2)
Adjusted EBITDA
Adjusted EBITDA margin
S
INOV Q3 2018 Earnings Supplement (11.7.18) v1.0.0
$
Guidance Range
Year Ending
December 31, 2018
Low
High
(38)
50
(2)
2
(18)
90
16
7
7
10
4
9
7
150
28.6%
$
(28)
50
(2)
2
(13)
105
16
7
8
10
4
9
7
166
30.5%
in A 30% 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 boms 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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