What is a non-GAAP measure?
GAAP stands for generally accepted accounting principles: the US accounting rules behind the audited statements. A non-GAAP measure is a number the company builds itself. It leaves out amounts that the closest GAAP number includes, or includes amounts that it leaves out.[S1]
Common examples are "adjusted EPS", "adjusted EBITDA" and "free cash flow". EBITDA is profit before interest, tax, depreciation and amortization.
Operating counts such as users or cars delivered are not non-GAAP measures. Neither are ratios built only from GAAP figures and such counts.[S2]
Why do first-time readers get caught by them?
Earnings releases often show adjusted figures next to, or near, the official ones. Each company chooses its own adjustments, so two numbers with the same name can be built differently.
The adjusted number is the company's own measure. The reconciliation shows exactly what was left out.
What does Regulation G require?
Regulation G applies whenever a company makes a non-GAAP measure public. It must show the most directly comparable GAAP measure alongside.[S1]
It must also give a reconciliation: a table or other clear method showing the differences between the two. For past periods the reconciliation has to be in numbers.[S1]
The measure, read with everything around it, must not be misleading.[S1]
The rule also covers figures given on a call or webcast. In that case the GAAP figure and reconciliation go on the company's website, and the call says where.[S1]
What does Item 10(e) add for SEC filings and earnings releases?
Item 10(e) of Regulation S-K covers non-GAAP measures in SEC filings. The GAAP measure must appear with "equal or greater prominence".[S2]
The filing must also explain why management thinks the measure is useful to investors.[S2]
The same prominence and reconciliation rules apply to earnings releases furnished on Form 8-K under Item 2.02.[S4]
Item 10(e) also lists things a company must not do:[S2]
- Put non-GAAP measures on the face of the GAAP financial statements or in their notes.
- Give a non-GAAP measure a title the same as, or confusingly similar to, a GAAP title.
- Remove a charge or gain as "non-recurring" if a similar one is reasonably likely within two years. The same applies if one happened in the prior two years.
- Leave cash-settled charges out of a liquidity measure, except for EBIT and EBITDA.
What do the SEC staff's interpretations say?
The SEC's Division of Corporation Finance publishes its interpretations of these rules as questions and answers. The set on non-GAAP measures was last updated on Dec 13, 2022.[S3]
- A measure that leaves out normal, recurring cash costs of running the business could mislead (Question 100.01).[S3]
- A measure presented inconsistently between periods could mislead, unless the change is disclosed and explained. Earlier periods may need to be recast (Question 100.02).[S3]
- Putting the non-GAAP measure first, including in a headline, gives it more prominence than the GAAP one (Question 102.10).[S3]
- Free cash flow has no uniform definition, so the calculation should be described and reconciled. It must not be shown per share (Questions 102.07 and 102.05).[S3]
What does a real reconciliation look like?
Nvidia, quarter ended Jul 26, 2026. The release's summary shows the GAAP table first and the non-GAAP table below it.[S5] The reconciliation starts from GAAP net income:
In the filing · Reconciliation of GAAP to non-GAAP measures, three months ended Jul 26, 2026
GAAP net income $59,688 million[S5]
In the filing · Same table
Total pre-tax impact of non-GAAP adjustments ($7,251 million)[S5]
In the filing · Same table
Income tax impact of non-GAAP adjustments $1,517 million[S5]
In the filing · Same table
Non-GAAP net income $53,954 million[S5]
Diluted EPS was $2.46 under GAAP and $2.22 on Nvidia's non-GAAP basis.[S5]
Nvidia also changed its definition. From the first quarter of fiscal 2027, its non-GAAP measures no longer leave out stock-based compensation. It updated the earlier periods shown to match.[S5]
Tesla, fiscal 2025. GAAP net income attributable to common stockholders was $3,794 million. Tesla's non-GAAP version was $5,858 million.[S6]
The gap is stock-based compensation of $2,012 million after tax, plus $52 million of net digital-asset losses after tax. Diluted EPS was $1.08 under GAAP and $1.66 non-GAAP.[S6]
Tesla notes that from Q1 2025 its adjusted figures leave out digital-asset gains and losses, with prior periods adjusted.[S6]
Meta, quarter ended Sep 30, 2026. Meta's non-GAAP measures are revenue and advertising revenue excluding currency effects, and free cash flow.[S7]
Its free cash flow takes cash from operations of $32,786 million and subtracts property and equipment purchases of $33,942 million. It also subtracts finance-lease principal payments of $964 million, giving negative $2,120 million.[S7]
Meta says this free cash flow is not intended to represent residual cash available for discretionary spending.[S7]
How does Cityfort show these numbers?
Cityfort stock pages use the GAAP figures from the 10-K and 10-Q. A company's adjusted figures appear only in their own block, labelled as the company's measure.
Each sits next to the nearest GAAP number, with one plain line on what the company leaves out. See the Nvidia, Tesla and Meta pages for examples.
To see where these tables sit in a results filing, read how to read a US earnings release.