What it measures
Adjusted EBITDA is a profit figure that a company defines for itself. It starts from net income or loss and adds back interest, taxes, depreciation and amortization, as plain EBITDA does. It then adds back a company-chosen list of other costs, such as stock-based compensation, one-time listing costs and impairments.
In one line: Adjusted EBITDA = net income + interest + tax + depreciation + amortization + company-chosen add-backs. It is in currency, usually the reporting currency of the filing.
How to read it
Loss-making tech companies use it to show a cleaner profit trend. A rising Adjusted EBITDA with a flat or shrinking gap to operating profit means the business is improving. If Adjusted EBITDA rises while operating profit does not, the add-backs are growing faster than the profit.
There is no normal range. The figure is only comparable with the same company's earlier quarters, and only if its add-back list has not changed.
Where it misleads
The add-back list differs from company to company and can flatter results if taken at face value. Stock-based compensation is the clearest case: it is a real cost to existing shareholders through dilution, yet it is added back. Always check the reconciliation to operating profit and read what sits between the two.
Worked example
In Grab's Q2 2026 post, Adjusted EBITDA was $168M. Grab's own reconciliation then takes off these items to reach operating profit of $19M:
| Step | US$ million |
|---|---|
| Adjusted EBITDA | 168 |
| Depreciation and amortization | (56) |
| Share-based compensation expenses | (62) |
| Costs related to mergers and acquisitions | (5) |
| Day-1 expected credit loss on an acquired loan portfolio | (15) |
| Restructuring costs | (2) |
| Legal, tax and regulatory settlement provisions | (11) |
| Net other income | 2 |
| Operating profit | 19 |
The arithmetic: 168 - 56 - 62 - 5 - 15 - 2 - 11 + 2 = 19. Depreciation and share-based compensation together are $118M of the $149M gap (56 + 62 = 118; 168 - 19 = 149).
Where to find it
Income statement, in the non-IFRS/non-GAAP reconciliation.
See also: EBITDA, Adjusted Net Income, Free Cash Flow (FCF).