5 ms·

Actually most companies and ALL analysts use non-GAAP numbers (search for your favorite company + non-gaap https://www.google.com/search?sourceid=chrome&ie=UTF-

by pitdesi 14y ago

Actually most companies and ALL analysts use non-GAAP numbers (search for your favorite company + non-gaap https://www.google.com/search?sourceid=chrome&ie=UTF-8&q=google+non-gaap https://www.google.com/search?sourceid=chrome&ie=UTF-8&#...)... it reflects the true nature of the business. They are also referred to as pro-forma numbers. There isn't any funny business going on here. It is good that we have GAAP so you can compare apples to apples in different industries but for a further breakdown non-GAAP numbers are very useful to an analyst.

marcusf 14y ago
Yeah but the non-GAAP numbers exclude customer acquisition costs (e.g. marketing). Not sure why that's excluded as marketing is a continuous and fundamental cost of doing business.
- pitdesi 14y ago
  No they don't. You misunderstood what acquisition-related costs means. Acquisition related costs are costs related to acquiring another company, not acquiring a customer. It is completely standard practice to treat one-time costs like that differently.
  - marcusf 14y ago
    Ok, sorry, I misunderstood. I had lingering memories of the critiques against groupons earlier non-GAAP measures [1][2][3][4][5][6] but the non-GAAP net income mostly seems to exclude stock, acquistion costs are pretty low and very clearly separated from marketing and customer acquisitions. Again, my bad. [1] http://online.wsj.com/article/SB10001424053111903635604576472531846174782.html http://online.wsj.com/article/SB1000142405311190363560457647... [2] http://www3.cfo.com/article/2012/2/banking-capital-markets_groupon-earnings-net-loss-accounting http://www3.cfo.com/article/2012/2/banking-capital-markets_g... [3] http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/530 http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/530 [4] http://www.scalefinance.com/accounting-finance-and-groupons-ipo-mess/ http://www.scalefinance.com/accounting-finance-and-groupons-... [5] http://blog.agrawals.org/2011/09/24/groupons-cost-of-revenue-is-soaring/ http://blog.agrawals.org/2011/09/24/groupons-cost-of-revenue... [6] http://takingpitches.com/2011/06/04/groupon-s1-ipo-marketing-spend-subscriber-acquisition-cost-or-priming-the-pump/ http://takingpitches.com/2011/06/04/groupon-s1-ipo-marketing...

by pitdesi 14y ago

marcusf 14y ago

Yeah but the non-GAAP numbers exclude customer acquisition costs (e.g. marketing). Not sure why that's excluded as marketing is a continuous and fundamental cost of doing business.

pitdesi 14y ago
No they don't. You misunderstood what acquisition-related costs means. Acquisition related costs are costs related to acquiring another company, not acquiring a customer. It is completely standard practice to treat one-time costs like that differently.
- marcusf 14y ago
  Ok, sorry, I misunderstood. I had lingering memories of the critiques against groupons earlier non-GAAP measures [1][2][3][4][5][6] but the non-GAAP net income mostly seems to exclude stock, acquistion costs are pretty low and very clearly separated from marketing and customer acquisitions. Again, my bad. [1] http://online.wsj.com/article/SB10001424053111903635604576472531846174782.html http://online.wsj.com/article/SB1000142405311190363560457647... [2] http://www3.cfo.com/article/2012/2/banking-capital-markets_groupon-earnings-net-loss-accounting http://www3.cfo.com/article/2012/2/banking-capital-markets_g... [3] http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/530 http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/530 [4] http://www.scalefinance.com/accounting-finance-and-groupons-ipo-mess/ http://www.scalefinance.com/accounting-finance-and-groupons-... [5] http://blog.agrawals.org/2011/09/24/groupons-cost-of-revenue-is-soaring/ http://blog.agrawals.org/2011/09/24/groupons-cost-of-revenue... [6] http://takingpitches.com/2011/06/04/groupon-s1-ipo-marketing-spend-subscriber-acquisition-cost-or-priming-the-pump/ http://takingpitches.com/2011/06/04/groupon-s1-ipo-marketing...