Key Performance Metrics and Non-GAAP Financial Measures
This earnings release includes non-GAAP financial measures for non-GAAP sales and
marketing expenses, non-GAAP general and administrative expenses, non-GAAP adjusted net earnings (loss) and non-GAAP adjusted
EBITDA (loss).
Non-GAAP sales and marketing expenses exclude non-cash stock
compensation expenses.
Non-GAAP general and administrative expenses exclude non-cash
stock compensation expenses.
Non-GAAP adjusted net earnings (loss) is defined as net income or net loss, as applicable,
excluding non-cash stock-based compensation expenses and unrealized (loss) gain on mark-to-market derivative financial
instruments.
Non-GAAP adjusted EBITDA (loss) is defined as net income or net loss, as applicable, before net interest income
(expense), taxes, depreciation and amortization expense, non-cash stock-based compensation expenses, and unrealized (loss) gain on
mark-to-market derivative financial instruments.
Sales and marketing expenses
consist of salaries and benefits for our employees engaged in our consultative sales process. General and administrative expenses are recorded in the period in which they are incurred and include salaries, benefits, and non-cash stock-based compensation expense for certain employees as well as support services, product development, finance, legal, human resources, other administrative employees, information technology expenses,
outside services, legal and accounting services, depreciation expense, and other costs required to support our operations.
Net loss per share is computed by
dividing net loss by the weighted average number of shares outstanding during the period as calculated using the treasury stock method.
Non-GAAP measures are in addition, and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to sales, net income,
operating income, cash flows from operations, or any other performance measures derived in accordance with GAAP. Other companies may calculate these non-GAAP financial measures differently, and therefore such
financial measures may not be directly comparable to similarly titled measures of other companies. The Company believes that these non-GAAP measures of financial results provide useful supplemental
information. The Company’s management uses these non-GAAP measures to evaluate the Company’s operating performance, trends, and to compare it against the performance of other companies. There are,
however, a number of limitations related to the use of these non-GAAP measures and their nearest GAAP equivalents. See the tables above regarding reconciliation of
non-GAAP measures to the most directly comparable GAAP measures.
Active Members is defined as the number of Learners with an
active paid Learning Membership as of the date presented. Variations in the number of Active Members are due to changes in demand for our solutions, seasonality, testing schedules, the extension of Learning Memberships to additional Consumer
audiences, and the launch of new Learning Membership options. As a result, Active Members is a key indicator of our ability to attract, engage and retain Learners. Active Members exclude EduNation Limited, a company incorporated in England and Wales
(“First Tutors UK”) and our Institutional offerings. Active Experts include our Institutional offerings, but exclude First Tutors UK.
Annualized run-rate is defined as the number of Active Members at the end of the period multiplied by average revenue per Learning Membership per month multiplied by twelve months. This recurring revenue customer base provides
us with increased forecasting visibility into future periods.
Active Experts is defined as the number of Experts who have instructed one or more sessions in a given
period.
Bookings represent contracted amounts during the period for Varsity Tutors for Schools.
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Q1 Earnings Release 2024 |
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