Exclusive: Reality Defender expands deepfake detection access to independent developers
With the API, developers can integrate commercial-grade, real-time deepfake detection into their sites or applications using just two lines of code. This functionality can support use cases such as fraud detection, identity verification, and content moderation, among others.
The Reality Defender platform features a suite of custom AI models, each designed to detect different types of deepfakes in various ways. These models are trained on extensive datasets of known deepfake images and audio made using many different types of generative tools.
'What we're doing now is saying you don't need to be a big bank, you don't need to have a bunch of developers,' Reality Defender cofounder and CEO Ben Colman tells Fast Company. 'Anyone that's building a social media platform, a video conferencing solution, a dating platform, professional networking, brand protection—all of them can now have deepfake and generative AI detection.'
The new Deepfake Detection API currently supports audio and image detection. But the company plans to expand coverage to additional modalities in the coming months. The detection system can identify visual deepfakes based not only on faces but also on other image features and the broader context in which the media appears.
Deepfakes are a form of synthetic media created using artificial intelligence to produce convincing video, image, audio, or text representations of events that never occurred. These can be used to put sham words in a public figure's mouth or to trick someone into sending money by mimicking a relative's voice.
Global losses from deepfake-enabled fraud surpassed $200 million in the first quarter of 2025, according to a report by AI voice generation company Resemble AI. The most damaging uses of deepfakes include nonconsensual explicit content (such as revenge porn), scams and fraud, political manipulation, and misinformation. As generative AI tools advance, deepfakes are becoming increasingly difficult to detect. An unidentified imposter recently used a deepfake of Secretary of State Marco Rubio's voice to place calls to at least five senior government officials.
Colman says that as generative AI tools become more widespread and deepfakes more common, both consumers and businesses will likely start viewing protection against fake content much like they do protection against computer viruses or spam.
The key difference, he adds, is that the tools required to create deepfakes are far more accessible than those needed to produce viruses or spam. 'There's thousands of tools that are free, and there's no regulation yet,' Colman says.
In other words, we're likely just seeing the beginning of the deepfake era. 'It just gets worse from there for companies, consumers, countries, elections,' Colman says. 'The risks are endless.'
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Delivers first quarter of positive GAAP EPS in Company's history since going public, announces initial results from AI Initiative SOMERSET, N.J., Aug. 05, 2025 (GLOBE NEWSWIRE) -- CareCloud, Inc. (Nasdaq: CCLD, CCLDO) ('CareCloud' or the 'Company'), a leader in healthcare technology and generative AI solutions, today announced strong financial results for the quarter ended June 30, 2025. CareCloud's strategic execution, AI-driven innovation, and disciplined financial management has positioned the Company for sustained profitability and long-term growth. Management will discuss these results and the Company's 2025 growth strategies in a live conference call today at 8:30 a.m. ET. Second Quarter 2025 Highlights ● GAAP net income of $2.9 million, compared to $1.7 million in Q2 2024, an increase of 73% ● Positive GAAP EPS of $0.04 per share, compared to negative GAAP EPS of ($0.14) per share in Q2 of 2024 ● Adjusted net income of $3.3 million, or $0.07 per share, compared to $3.0 million in Q2 2024 ● Adjusted EBITDA of $6.5 million, compared to $6.4 million in Q2 2024 ● Revenue of $27.4 million, compared to $28.1 million in Q2 2024 Year-to-date 2025 Highlights ● GAAP net income of $4.9 million, compared to $1.4 million in the same period last year, an increase of 238% ● Positive GAAP EPS of $0.02 per share, compared to a negative GAAP EPS of ($0.24) per share in the same period last year ● Adjusted net income of $5.6 million, or $0.13 per share, compared to $3.2 million in the same period last year ● Adjusted EBITDA of $12.1 million, compared to $10.1 million in the same period last year, an increase of 20% ● Free cash flow of $9.0 million, compared to $4.9 million in the same period last year, an increase of 85% ● Revenue of $55.0 million, compared to $54.1 million in the same period last year Recent Strategic Updates ● Financial Achievement: First quarter of positive GAAP EPS in CareCloud's history since going public in 2014 ● AI Center of Excellence: Now live and scaling to 500 team members by year-end, with dedicated teams driving product innovation ● Acquisition Strategy Reignited: Completed two acquisitions so far this year, with additional acquisition opportunities actively under evaluation Management Commentary: 'The launch of our AI Center of Excellence marks a pivotal moment in CareCloud's evolution,' said A. Hadi Chaudhry, Co-CEO of CareCloud. 'By building one of the largest dedicated healthcare AI teams globally, we are creating real-world solutions to automate clinical workflows, optimize revenue cycle management, and improve patient outcomes. This initiative is intended to accelerate our operational efficiency as well as positioning CareCloud at the forefront of intelligent healthcare transformation, driving sustainable profitability and long-term growth for ourselves and the healthcare providers who use our services. We are already using AI to enhance product development, including deploying specialty-specific versions of our EHR, to allow our providers to improve their productivity with cirrusAI Notes, and to automate some follow-up tasks which would otherwise require additional members of our operations team.' 'After record profits and a successful turnaround in 2024, we are excited to announce continued momentum and financial strength as demonstrated by achieving positive GAAP EPS in this quarter, the first time in the Company's history since going public in 2014,' said Co-CEO Stephen Snyder. 'With two recent acquisitions and the launch of our AI Center of Excellence, CareCloud is not just responding to the market shift — we are leading it.' 'We are pleased to announce our fifth consecutive quarter of positive GAAP net income and an increase in year-to-date revenue, adjusted EBITDA and free cash flow year-over-year,' said Norman Roth, Interim CFO and Corporate Controller of CareCloud. 'We continue to pay our preferred stock dividends monthly out of internally generated free cash flow, while generating additional profits and cash flow which we are reinvesting for future growth. We have declared and paid preferred stock dividends every month during 2025.'On June 30, 2025, the Company had 984,530 shares of Series A Preferred Stock and 1,511,372 shares of non-convertible Series B Preferred Stock outstanding. As of June 30, 2025, the Series A and B shares both accrued dividends at the rate of 8.75% per annum, based on the $25.00 per share liquidation preference (equivalent to $2.1875 annually per share), and they are redeemable at the Company's option once the preferred stock dividends are brought current. Also as of June 30, 2025, the Company had 42,322,039 shares of common stock outstanding. 2025 Guidance: Poised for Growth CareCloud is reconfirming its earnings guidance for 2025, expecting: For the Fiscal Year Ending December 31, 2025 Forward-Looking Guidance Revenue $111 – $114 million Adjusted EBITDA $26 – $28 million GAAP Net Income Per Share (EPS) $0.10 – $0.13 The Company continues to anticipate full year 2025 revenue of approximately $111 to $114 million. Revenue guidance is based on management's expectations regarding revenue from existing clients, organic growth in new client additions and anticipated number of small tuck-in acquisitions. Adjusted EBITDA is expected to be $26 to $28 million for the full year 2025 and reflects improvements from the Company's cost reduction efforts. GAAP EPS is expected to be $0.10 to $0.13 for the full year 2025. Conference Call Information CareCloud management will host a conference call today at 8:30 a.m. Eastern Time to discuss the first half of 2025 results. The live webcast of the conference call and related presentation slides can be accessed at An audio-only option is available by dialing 201-389-0920 and referencing 'CareCloud Second Quarter 2025 Results Conference Call.' Investors who opt for audio-only will need to download the related slides at A replay of the conference call and related presentation slides will be available approximately three hours after conclusion of the call at the same link. An audio-only option can also be accessed by dialing 412-317-6671 and providing the access code 13754330. Use of Non-GAAP Financial Measures In our earnings releases, prepared remarks, conference calls, slide presentations, and webcasts, we use and discuss non-GAAP financial measures, as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investor Relations section of our web site at Forward-Looking Statements This press release contains various forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements relate to anticipated future events, future results of operations or future financial performance. In some cases, you can identify forward-looking statements by terminology such as 'may,' 'might,' 'will,' 'shall,' 'should,' 'could,' 'intends,' 'expects,' 'plans,' 'goals,' 'projects,' 'anticipates,' 'believes,' 'seeks,' 'estimates,' 'forecasts,' 'predicts,' 'possible,' 'potential,' 'target,' or 'continue' or the negative of these terms or other comparable terminology. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements in this press release include, without limitation, statements reflecting management's expectations for future financial performance and operating expenditures, expected growth, profitability and business outlook, the impact of pandemics on our financial performance and business activities, and the expected results from the integration of our acquisitions. These forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which may cause our (or our industry's) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to the Company's ability to manage growth, migrate newly acquired customers and retain new and existing customers, maintain cost-effective global operations, increase operational efficiency and reduce operating costs, predict and properly adjust to changes in reimbursement and other industry regulations and trends, retain the services of key personnel, develop new technologies, upgrade and adapt legacy and acquired technologies to work with evolving industry standards, compete with other companies' products and services competitive with ours, manage and keep our information systems secure and other important risks and uncertainties referenced and discussed under the heading titled 'Risk Factors' in the Company's filings with the Securities and Exchange Commission. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made. About CareCloud CareCloud (Nasdaq: CCLD, CCLDO) brings disciplined innovation and generative AI solutions to the business of healthcare. Our suite of technology-enabled solutions helps clients increase financial and operational performance, streamline clinical workflows and improve the patient experience. More than 40,000 providers count on CareCloud to help them improve patient care while reducing administrative burdens and operating costs. Learn more about our products and services, including revenue cycle management (RCM), practice management (PM), electronic health records (EHR), artificial intelligence (AI), business intelligence (BI), patient experience management (PXM) and digital health, at Follow CareCloud on LinkedIn, X and Facebook. For additional information, please visit our website at To listen to video presentations by CareCloud's management team, read recent press releases and view the latest investor presentation, please visit SOURCE CareCloud Company Contact: Norman RothInterim Chief Financial Officer and Corporate ControllerCareCloud, Investor Contact: Stephen SnyderCo-Chief Executive OfficerCareCloud, CARECLOUD, CONSOLIDATED BALANCE SHEETS($ in thousands, except share and per share amounts) June 30, December 31, 2025 2024 (Unaudited) ASSETS Current assets: Cash $ 10,440 $ 5,145 Accounts receivable - net 13,563 12,774 Contract asset 3,955 4,334 Inventory 523 574 Current assets - related party 16 16 Prepaid expenses and other current assets 2,593 1,957 Total current assets 31,090 24,800 Property and equipment - net 5,828 5,290 Operating lease right-of-use assets 3,058 3,133 Intangible assets - net 15,512 18,698 Goodwill 19,192 19,186 Other assets 564 507 TOTAL ASSETS $ 75,244 $ 71,614 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,215 $ 4,565 Accrued compensation 3,324 1,817 Accrued expenses 4,909 4,951 Operating lease liability (current portion) 1,294 1,287 Deferred revenue (current portion) 1,232 1,212 Notes payable (current portion) 222 310 Contingent consideration (current portion) 330 - Dividend payable 714 5,438 Total current liabilities 16,240 19,580 Notes payable 86 26 Contingent consideration 426 - Operating lease liability 1,785 1,847 Deferred revenue 631 387 Total liabilities 19,168 21,840 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred stock, $0.001 par value - authorized 7,000,000 shares. Series A, issued and outstanding 984,530 and 4,526,231 shares at June 30, 2025 and December 31, 2024, respectively. Series B, issued and outstanding 1,511,372 shares at June 30, 2025 and December 31, 2024. 2 6 Common stock, $0.001 par value - authorized 85,000,000 shares. Issued 43,062,838 and 16,997,035 shares at June 30, 2025 and December 31, 2024, respectively. Outstanding 42,322,039 and 16,256,236 shares at June 30, 2025 and December 31, 2024, respectively 43 17 Additional paid-in capital 122,635 121,046 Accumulated deficit (61,780 ) (66,630 ) Accumulated other comprehensive loss (4,162 ) (4,003 ) Less: 740,799 common shares held in treasury, at cost at June 30, 2025 and December 31, 2024 (662 ) (662 ) Total shareholders' equity 56,076 49,774 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 75,244 $ 71,614 CARECLOUD, CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)($ in thousands, except share and per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 NET REVENUE $ 27,377 $ 28,090 $ 55,009 $ 54,052 OPERATING EXPENSES: Direct operating costs 14,480 15,242 29,944 30,419 Selling and marketing 1,118 1,664 2,249 3,434 General and administrative 4,358 4,028 8,690 7,749 Research and development 1,020 1,055 2,255 1,968 Depreciation and amortization 3,382 3,714 6,719 7,644 Restructuring costs 23 116 137 438 Total operating expenses 24,381 25,819 49,994 51,652 OPERATING INCOME 2,996 2,271 5,015 2,400 OTHER: Interest income 51 24 93 51 Interest expense (68 ) (288 ) (126 ) (653 ) Other expense - net (35 ) (294 ) (49 ) (287 ) INCOME BEFORE PROVISION FOR INCOME TAXES 2,944 1,713 4,933 1,511 Income tax provision 42 39 83 78 NET INCOME $ 2,902 $ 1,674 $ 4,850 $ 1,433 Preferred stock dividend 1,365 3,923 4,176 5,235 NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 1,537 $ (2,249 ) $ 674 $ (3,802 ) Net income (loss) per common share: basic and diluted $ 0.04 $ (0.14 ) $ 0.02 $ (0.24 ) Weighted-average common shares used to compute basic and diluted loss per share 42,321,629 16,132,420 33,118,912 16,073,364 CARECLOUD, CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024($ in thousands) 2025 2024 OPERATING ACTIVITIES: Net income $ 4,850 $ 1,433 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,855 7,818 Lease amortization 901 1,008 Deferred revenue 264 (22 ) Provision for expected credit losses 169 123 Foreign exchange loss (gain) 1 (57 ) Interest accretion 219 321 Stock-based compensation expense (benefit) 219 (443 ) Changes in operating assets and liabilities: Accounts receivable (958 ) (1,314 ) Contract asset 411 294 Inventory 51 (32 ) Other assets (838 ) (825 ) Accounts payable and other liabilities 377 41 Net cash provided by operating activities 12,521 8,345 INVESTING ACTIVITIES: Purchases of property and equipment (1,786 ) (425 ) Capitalized software and other intangible assets (1,677 ) (3,046 ) Initial payment for acquisition (40 ) - Net cash used in investing activities (3,503 ) (3,471 ) FINANCING ACTIVITIES: Preferred stock dividends paid (3,317 ) - Settlement of tax withholding obligations on stock issued to employees (22 ) (184 ) Repayments of notes payable (355 ) (328 ) Repayment of line of credit - (5,000 ) Net cash used in financing activities (3,694 ) (5,512 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH (29 ) (76 ) NET INCREASE (DECREASE) IN CASH 5,295 (714 ) CASH - Beginning of the period 5,145 3,331 CASH - End of the period $ 10,440 $ 2,617 SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES: Conversion of preferred stock and accrued dividends to common stock $ 2,435 $ - Dividends declared, not paid $ 714 $ 5 Purchase of prepaid insurance with assumption of note $ - $ 96 Reclass of deposits for property and equipment placed in service $ - $ 296 SUPPLEMENTAL INFORMATION - Cash paid during the period for: Income taxes $ 144 $ 122 Interest $ 44 $ 527 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP MEASURES (UNAUDITED) The following is a reconciliation of the non-GAAP financial measures used by us to describe our financial results determined in accordance with accounting principles generally accepted in the United States of America ('GAAP'). An explanation of these measures is also included below under the heading 'Explanation of Non-GAAP Financial Measures.' While management believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and management may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Adjusted EBITDA to GAAP Net Income Set forth below is a reconciliation of our 'adjusted EBITDA' to our GAAP net income. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) Net revenue $ 27,377 $ 28,090 $ 55,009 $ 54,052 GAAP net income 2,902 1,674 4,850 1,433 Provision for income taxes 42 39 83 78 Net interest expense 17 264 33 602 Foreign exchange loss / other expense 41 306 60 301 Stock-based compensation expense (benefit) 111 265 219 (443 ) Depreciation and amortization 3,382 3,714 6,719 7,644 Transaction and integration costs 11 11 23 23 Restructuring costs 23 116 137 438 Adjusted EBITDA $ 6,529 $ 6,389 $ 12,124 $ 10,076 Non-GAAP Adjusted Operating Income to GAAP Operating Income Set forth below is a reconciliation of our non-GAAP 'adjusted operating income' and non-GAAP 'adjusted operating margin' to our GAAP operating income and GAAP operating margin. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) Net revenue $ 27,377 $ 28,090 $ 55,009 $ 54,052 GAAP net income 2,902 1,674 4,850 1,433 Provision for income taxes 42 39 83 78 Net interest expense 17 264 33 602 Other expense - net 35 294 49 287 GAAP operating income 2,996 2,271 5,015 2,400 GAAP operating margin 10.9 % 8.1 % 9.1 % 4.4 % Stock-based compensation expense (benefit) 111 265 219 (443 ) Amortization of purchased intangible assets 193 586 282 1,426 Transaction and integration costs 11 11 23 23 Restructuring costs 23 116 137 438 Non-GAAP adjusted operating income $ 3,334 $ 3,249 $ 5,676 $ 3,844 Non-GAAP adjusted operating margin 12.2 % 11.6 % 10.3 % 7.1 % Non-GAAP Adjusted Net Income to GAAP Net Income Set forth below is a reconciliation of our non-GAAP 'adjusted net income' and non-GAAP 'adjusted net income per share' to our GAAP net income and GAAP net income per share. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) GAAP net income $ 2,902 $ 1,674 $ 4,850 $ 1,433 Foreign exchange loss / other expense 41 306 60 301 Stock-based compensation expense (benefit) 111 265 219 (443 ) Amortization of purchased intangible assets 193 586 282 1,426 Transaction and integration costs 11 11 23 23 Restructuring costs 23 116 137 438 Non-GAAP adjusted net income $ 3,281 $ 2,958 $ 5,571 $ 3,178 For purposes of determining non-GAAP adjusted net income per share, we used the number of common shares outstanding as of June 30, 2025 and 2024. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 GAAP net income (loss) attributable to common shareholders, per share $ 0.04 $ (0.14 ) $ 0.02 $ (0.24 ) Impact of preferred stock dividend 0.03 0.24 0.09 0.33 Net income per end-of-period share 0.07 0.10 0.11 0.09 Foreign exchange loss / other expense 0.00 0.02 0.00 0.02 Stock-based compensation expense (benefit) 0.00 0.01 0.01 (0.03 ) Amortization of purchased intangible assets 0.00 0.04 0.01 0.09 Transaction and integration costs 0.00 0.00 0.00 0.00 Restructuring costs 0.00 0.01 0.00 0.03 Non-GAAP adjusted earnings per share $ 0.07 $ 0.18 $ 0.13 $ 0.20 Net cash provided by operating activities to free cash flow Set forth below is a reconciliation of our non-GAAP 'free cash flow' to our GAAP net cash provided by operating activities. Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 ($ in thousands) Net cash provided by operating activities $ 7,408 $ 4,279 $ 12,521 $ 8,345 Purchases of property and equipment (1,162 ) (127 ) (1,786 ) (425 ) Capitalized software and other intangible assets (831 ) (1,476 ) (1,677 ) (3,046 ) Initial payment for acquisition - - (40 ) - Free cash flow $ 5,415 $ 2,676 $ 9,018 $ 4,874 Net cash used in investing activities 1 $ (1,993 ) $ (1,603 ) $ (3,503 ) $ (3,471 ) Net cash used in financing activities $ (1,762 ) $ (4,138 ) $ (3,694 ) $ (5,512 ) 1 Net cash used in investing activities includes purchases of property and equipment and capitalized software and other intangible assets, which are also included in our computation of free cash flow. Explanation of Non-GAAP Financial Measures We report our financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, management believes that, in order to properly understand our short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and impact on continuing operations. Management also uses results of operations before such items to evaluate the operating performance of CareCloud and compare it against past periods, make operating decisions, and serve as a basis for strategic planning. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in our ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods more difficult, obscure trends in ongoing operations, or reduce management's ability to make useful forecasts. Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. Management uses adjusted EBITDA, adjusted operating income, adjusted operating margin, and non-GAAP adjusted net income to provide an understanding of aspects of operating results before the impact of investing and financing charges and income taxes. Adjusted EBITDA may be useful to an investor in evaluating our operating performance and liquidity because this measure excludes non-cash expenses as well as expenses pertaining to investing or financing transactions. Management defines 'adjusted EBITDA' as the sum of GAAP net income (loss) before provision for (benefit from) income taxes, net interest expense, other (income) expense, stock-based compensation expense, depreciation and amortization, integration costs, transaction costs, impairment charges and changes in contingent consideration. Management defines 'non-GAAP adjusted operating income' as the sum of GAAP operating income (loss) before stock-based compensation expense, amortization of purchased intangible assets, integration costs, transaction costs, impairment charges and changes in contingent consideration, and 'non-GAAP adjusted operating margin' as non-GAAP adjusted operating income divided by net revenue. Management defines 'non-GAAP adjusted net income' as the sum of GAAP net income (loss) before stock-based compensation expense, amortization of purchased intangible assets, other (income) expense, integration costs, transaction costs, impairment charges, changes in contingent consideration, any tax impact related to these preceding items and income tax expense related to goodwill, and 'non-GAAP adjusted net income per share' as non-GAAP adjusted net income divided by common shares outstanding at the end of the period, including the shares which were issued but are subject to forfeiture and considered contingent consideration. Management considers all of these non-GAAP financial measures to be important indicators of our operational strength and performance of our business and a good measure of our historical operating trends, in particular the extent to which ongoing operations impact our overall financial performance. In addition to items routinely excluded from non-GAAP EBITDA, management excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to that excluded item: Foreign exchange loss/other expense. Other expense is excluded because foreign currency gains and losses and other non-operating expenses are expenditures that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expense is partially outside of our control. Foreign currency gains and losses are based on global market factors which are unrelated to our performance during the period in which the gains and losses are recorded. Stock-based compensation expense (benefit). Stock-based compensation expense (benefit) is excluded because this is primarily a non-cash expenditure that management does not consider part of ongoing operating results when assessing the performance of our business, and also because the total amount of the expenditure is partially outside of our control because it is based on factors such as stock price, volatility, and interest rates, which may be unrelated to our performance during the period in which the expenses are incurred. Stock-based compensation expense includes cash-settled awards based on changes in the stock price. Amortization of purchased intangible assets. Purchased intangible assets are amortized over their estimated useful lives and generally cannot be changed or influenced by management after the acquisition. Accordingly, this item is not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are recorded. Transaction costs. Transaction costs are upfront costs related to acquisitions and related transactions, such as brokerage fees, pre-acquisition accounting costs and legal fees, and other upfront costs related to specific transactions. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred. Integration costs. Integration costs are severance payments for certain employees relating to our acquisitions and exit costs related to terminating leases and other contractual agreements. Accordingly, management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred. Restructuring costs. Restructuring costs primarily consist of severance and separation costs associated with the optimization of the Company's operations and profitability improvements. Management believes that such expenses do not have a direct correlation to future business operations, and therefore, these costs are not considered by management in making operating decisions. Management does not believe such charges accurately reflect the performance of our ongoing operations for the period in which such charges are incurred. Free cash flow. Management believes that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use in evaluating the Company's financial performance. Free cash flow should be considered in addition to, rather than as a substitute for, consolidated net operating results as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, the Company's definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our condensed consolidated statements of cash in to access your portfolio
