if ebitda is a non-gaap metric, why do i sometimes see "gaap vs. cash ebitda"? very confused here. how can there be a "gaap" ebitda? and then what's cash ebitda?
thanks team! appreciate all the help
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From what I have seen, GAAP EBITDA is calculated NI + Tax + Interest + D&A and cash EBITDA includes changes in Deferred Revenue
It’s more like the opposite. Cash ebitda includes change in deferred revenue. So if dr goes up by 100 you’d add 100 to your non-cash ebitda figure
Agree.. corrected
I have seen Cash EBITDA also include (deduct) capitalized R&D as well as change in deferred revenue.
Shouldn't you add tax to GAAP EBITDA?
Simple answer. EBITDA is under GAAP principles/ what you are used to.
Cash EBITDA includes the change in deferred revenue. So GAAP EBITDA is what you are used to but doesn’t account for bookings made that you have received cash for that aren't yet able to be recognized as revenue. People often like to use cash ebitda for businesses that are growing with lots of paying upfront/ deferred revenue because they might be more cash efficient than fully realized just looking at ebitda.
Helpful! But still confused why folks call it "gaap ebitda"? Isn't ebitda non gaap?
Thanks all!
EBITDA is inherently non-GAAP, and if you get off on semantics there's no such thing as "GAAP EBITDA"
That said, most people don't care about the specific jargon - they're using "GAAP" as shorthand for "Reported" or "Definitional" EBITDA, i.e. by-the-book and not adjusted for things like non-cash earnings (or cash non-earnings)
Why don’t you gross margin affect the change in deferred you’re adding to EBITDA? Seems like just taking change in short term deferred is overstating because of GM% affect you need to incorporate.
Great question btw. Will throw this in my technical questions set.
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