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On the Radar

Non-GAAP Financial Measures and Metrics

October 2021
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On the Radar
Non-GAAP Financial Measures and Metrics

Non-GAAP financial measures and metrics are used commonly by both existing registrants and companies seeking to gain access to the U.S. capital markets through an initial public offering. Many registrants assert that non-GAAP measures are meaningful and provide valuable insight into the information that management considers important in running the business.
The SEC monitors non-GAAP measures and metrics vigilantly. Non-GAAP reporting, particularly related to misleading measures and prominence, is consistently among the top areas of SEC comment, and this trend is expected to continue. Registrants should therefore remain mindful of key topics of focus, including whether: