GAAP vs non-GAAP: what 120 earnings releases reconcile, line by line

GAAP vs non-GAAP comes down to who writes the rules: GAAP figures follow the accounting standards a company's financial statements must use, while non-GAAP figures are the company's own adjusted versions, which SEC Regulation G and Item 10(e) of Regulation S-K allow only beside the GAAP figure and with a reconciliation between the two. Of the 120 Item 2.02 earnings releases behind CFO Voice's quotes, filed from June 1, 2026 to November 5, 2026, 116 used the words "non-GAAP" or "adjusted" and 111 printed a reconciliation.

That near-universal presence is the first finding. The second is that the adjustments are concentrated: a handful of line items, led by stock-based compensation, recur across most of the reconciliation tables.

Two sets of numbers and who sets each

GAAP, in Regulation G's own wording, means generally accepted accounting principles in the United States. The income statement, balance sheet and cash flow statement in a release are presented on that basis.

A non-GAAP number is defined by what it leaves out or puts in, relative to its GAAP counterpart. Regulation G, which covers any public disclosure of such a measure, opens its definitions this way:

A non-GAAP financial measure is a numerical measure¹ of a registrant's historical or future² financial performance, financial position or cash flows³ that:

1. 1Only numbers count. A ratio or a total qualifies; a narrative description does not.
2. 2Guidance in adjusted terms is a non-GAAP measure too, so the outlook table falls under the same rule.
3. 3The three statements: income, balance sheet and cash flow. Each has its adjusted cousins in the releases.

The definition goes on to the test itself. A measure is non-GAAP if it excludes amounts included in the most directly comparable GAAP measure, or includes amounts that the GAAP measure excludes.

Regulation G and Item 10(e) in two paragraphs

Regulation G applies whenever a company publicly discloses a non-GAAP measure, in a filing or anywhere else. It requires the most directly comparable GAAP measure alongside it and a reconciliation of the differences, and its Rule 100(b) forbids presenting the measure in a way that, taken with the information around it, is misleading.

Item 10(e) of Regulation S-K adds stricter terms for documents filed with the SEC, and the SEC staff's interpretations say the prominence requirement also covers releases furnished under Item 2.02 of Form 8-K. The rule text reads:

A presentation, with equal or greater prominence¹, of the most directly comparable² financial measure or measures calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP);

1. 1The GAAP figure cannot be smaller, later or less emphasized than the adjusted one.
2. 2Each adjusted measure is matched to one GAAP measure: adjusted operating income to operating income, adjusted EPS to diluted EPS.

The staff's Question 102.10 lists what it would treat as more prominent: an adjusted figure placed before the GAAP one, including in a headline; an adjusted figure in bold or larger type; or one described with words such as "record performance" without an equally prominent description of the GAAP figure. Question 100.01 adds that an adjustment can make a measure misleading even when no rule names it as prohibited, and that the answer depends on a company's own facts and circumstances.

The reconciliation table, annotated

Most reconciliations follow one pattern. They start from the GAAP figure, list each adjustment on its own line with the amount for the current and prior period, and end on the adjusted figure. Gen Digital's release for its fiscal 2027 second quarter, furnished on October 28, 2026, opens its operating income bridge like this:

Operating income (loss) $ 507 $ 438¹ Stock-based compensation 56 55² Amortization of intangible assets 118 121³

1. 1The GAAP starting point, with two periods side by side. It must be as prominent as the adjusted figure it leads to.
2. 2The most common add-back on the record: a non-cash expense under GAAP, removed from the adjusted figure.
3. 3The cost of intangibles bought in acquisitions, spread over their lives and added back.

The table continues with lines for restructuring and other costs, acquisition and integration costs and litigation costs before it reaches a line labelled "Operating income (loss) (Non-GAAP)". Each line is a choice the company makes and must explain. The GAAP line it starts from is the reported figure and does not move.

Reading the pair side by side

The prominence rule shapes how a release prints its highlights: the GAAP figure and its adjusted twin in one sentence, the GAAP one first. Intuit's release for its fiscal year ended July 31, 2026 does it this way in its full-year bullets:

GAAP operating income increased 20 percent¹ to $5.9 billion, and non-GAAP operating income increased 18 percent² to $8.9 billion.

1. 1The GAAP measure leads the sentence, as Item 10(e) and the staff's Question 102.10 expect.
2. 2The adjusted twin follows. The gap between the two amounts is what the reconciliation table at the back of the release has to explain, line by line.

The pair shows why both numbers matter to a reader. In Intuit's case the growth rates are close while the two amounts are billions of dollars apart. A reader who sees only the adjusted figure sees a company without its stock-based compensation or the amortization of what it has bought. A reader who sees only the GAAP figure cannot tell a one-time charge from the run rate. The release is required to give both, and the reconciliation is where the two meet.

Which GAAP measures get an adjusted twin

The count below matches each release's exhibit text against a rule per measure: the word "non-GAAP" or "adjusted" directly before the measure's name. "Adjusted diluted earnings per share", "non-GAAP EPS" and "adjusted EPS" all count for earnings per share. EBITDA and free cash flow have no GAAP line to adjust, so a release counts for them wherever the term appears.

Earnings per share is the GAAP figure most often given an adjusted twin: 84 of 120 releases

Releases naming the adjusted measure, of 120; n = 120

The numbers

Measure	Releases naming the adjusted measure, of 120
Earnings per share	84
Operating income	60
Net income	71
Gross margin or gross profit	38
Operating margin	44
EBITDA	49
Free cash flow	66

Earnings per share leads at 84 releases, or 70 percent. Adjusted net income follows at 71, then free cash flow at 66 and adjusted operating income at 60. EBITDA, in any form, appears in 49. Adjusted gross margin and adjusted operating margin are less common, at 38 and 44.

The adjustments named most often

For the adjustments, only the text from the first use of the word "reconciliation" onward was read, and an adjustment counts only when it appears as a table line: its name followed within 40 characters by a figure, a dollar sign or a dash. That keeps the count to reconciling items and leaves out the same words in risk language or footnotes. Counts are of releases, and no company is compared with another.

Stock-based compensation is a reconciling line in 85 of the 111 releases with a reconciliation

Releases, of 111 with a reconciliation; n = 111

The numbers

Adjustment	Releases, of 111 with a reconciliation
Stock-based compensation	85
Amortization of acquired intangibles	53
Restructuring	55
Acquisition, merger or transaction costs	47
Tax effect of the adjustments	42
Impairment	45
Gains or losses on investments	28
Litigation or legal settlements	59

Stock-based compensation is a reconciling line in 85 of the 111 releases with a reconciliation, or 76.6 percent. Litigation or legal settlements appear in 59, restructuring in 55, amortization of acquired intangibles in 53, and acquisition, merger, transaction or integration costs in 47. An impairment line appears in 45. The tax effect of the adjustments has its own line in 42; Question 102.11 of the staff's guidance says tax should be shown as a separate adjustment, not netted into each line. Gains or losses on investments appear in 28.

The median release with a reconciliation lists four of these eight types. A release can also adjust items outside these eight types, which this count does not track.

What the common lines are, in plain terms. Stock-based compensation is the expense of paying employees in shares and options; it is a cost under GAAP that uses no cash in the period. Amortization of acquired intangibles spreads the price paid for customer lists, technology and brands of acquired companies over their useful lives. Restructuring covers severance, site closures and similar programs the company has announced. Acquisition and integration costs are the advisers' fees and the costs of combining a business once bought. Impairment writes an asset down when its value on the books exceeds what it will recover. Litigation lines carry settlements and legal charges the company treats as outside its normal operations. The tax line restates income tax on the adjusted profit.

Two cautions apply. The count measures whether a line exists, not its size: a stock-based compensation add-back worth a small share of operating income counts the same as one worth half of it. And the rules depend on wording. A company that labels the line "equity compensation expense" without the word "based" would be missed, so the counts are a floor.

How CFOs introduce the adjusted figure

The quote records show where adjusted figures sit in the CFO's own paragraph. Of the 199 verified quotes, 37 contain the word "adjusted" or "non-GAAP", or 18.6 percent.

37 CFO quotes on the record use an adjusted or non-GAAP figure

Quotes; n = 37

The numbers

Calendar quarter of the release	Quotes
Q2 2026	5
Q3 2026	18
Q4 2026	14

Most use the adjusted figure as the headline result. Uber's finance chief put two adjusted measures in one sentence:

Uber continues to translate strong growth into expanding profitability, with Non-GAAP Operating Income margins reaching a record 3.9% of Gross Bookings and Non-GAAP EPS growing 35%

Balaji Krishnamurthy, CFO, Uber Technologies, in the release furnished on November 4, 2026 (Exhibit 99.1; quote record).

Others set the adjusted figure against revenue growth:

Adjusted EPS grew 7%, exceeding revenue growth both in the quarter and year-to-date.

Jatin Dalal, Chief Financial Officer, Cognizant, in the release furnished on October 29, 2026 (Exhibit 99.1; quote record).

A third group uses adjusted terms for the outlook. Guidance given in non-GAAP terms is a forward-looking non-GAAP measure under Regulation G's definition, and Item 10(e) asks for a quantitative reconciliation of it to the extent available without unreasonable efforts.

Looking ahead, for our fiscal second quarter of 2027, at the midpoint of the ranges, we expect revenue of $5.1 billion, non-GAAP gross margin of 60.5%, and non-GAAP EPS of $5.80.

Kris Sennesael, CFO of WD, Western Digital, in the release furnished on October 22, 2026 (Exhibit 99.1; quote record).

Every quote counted here, with the full list of those that touch margins, is on the margins topic page. The CFO's paragraph usually begins in the first fifth of the release, ahead of the tables, as the anatomy of an earnings report shows.

What the sample is, and is not

The 120 releases are those behind the quotes CFO Voice has verified, not a random draw from every filer. A release enters the sample only when it quotes a chief financial officer by name and title, which leaves out companies whose releases quote no one or only the chief executive. The sample spans 76 companies and several months of filings, so some companies appear twice, once per quarter. The counts describe this set of releases, and they would shift with a different one.

Within that set the method is the same for every release: one exhibit, one pass of the rules, no reading by eye. Each rule is printed above, and the script that applies them is published with the data, so anyone with the exhibits can rerun the count and check a single release against its line in the data file. When a release is corrected or a new quote is verified, the counts are recomputed from the record rather than edited by hand.

What to check in any reconciliation

These checks follow the rule text and the staff's interpretations quoted above. None of them is a view on whether a company's adjustments are right.

1. Find the GAAP figure first. It should come before the adjusted one, in type at least as large, including in the headline.
2. Match each adjusted measure to its GAAP twin. Adjusted EPS starts from diluted EPS, adjusted operating income from operating income.
3. Read each reconciling line. Note which items recur every quarter and which are new this quarter.
4. Look for the tax line. Under the staff's guidance it is a separate adjustment, not netted into each item.
5. Compare the adjustments with the prior period's table. Question 100.02 says a charge adjusted now but not in earlier periods can make the measure misleading unless the change is disclosed and explained.
6. For free cash flow, read the definition the company prints. It is not a single formula, as the count of company definitions shows, and the capital spending it subtracts goes by many labels, traced in the capex piece.
7. Read the outlook in the same way. Adjusted guidance carries a reconciliation where one is available without unreasonable effort, or a statement that it is not.

The data behind each chart and the script that computes it are published with this article, and the rules for how a quote reaches this site are in the methodology.