Adjusted net income adds stock-based compensation expense back to GAAP net income. It represents what the company would have earned if all employee compensation were paid in cash rather than equity. This metric is useful for understanding the underlying cash-generation capacity of the business, though it should not be treated as a replacement for GAAP net income because SBC dilution is a real economic cost.
Adjusted Net Income = Net Income (TTM) + Stock-Based Compensation (TTM)
GeminIQ adds TTM SBC to TTM net income, both from SEC filings.
A: SBC is a non-cash charge that reduces GAAP earnings but does not reduce cash. Adding it back shows the cash-equivalent earnings of the business. This is especially useful when comparing companies with very different compensation structures — a company that pays employees mostly in cash will have similar GAAP and adjusted earnings, while one that relies heavily on equity compensation will show a large gap.
A: Not necessarily. Companies report their own non-GAAP figures with various adjustments (restructuring charges, acquisition costs, etc.). GeminIQ's adjusted net income makes only one adjustment — adding back SBC — which is clearly defined and consistent across all companies.
A: Different platforms make different adjustments. GeminIQ adds back only SBC. Other platforms may also add back amortization of intangibles, one-time charges, or other items. Always check which adjustments are included.