adbe-20210318

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported): March 23, 2021 (March 18, 2021)

ADOBE INC.

(Exact name of Registrant as specified in its charter)

Delaware

0-15175

77-0019522

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

345 Park Avenue

San Jose, California 95110-2704

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (408) 536-6000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.0001 par value per share	ADBE	NASDAQ Global Select Market

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On March 23, 2021, Adobe Inc. (“Adobe”) issued a press release announcing financial results for its first quarter fiscal year 2021 ended March 5, 2021. A copy of this press release is furnished and attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this report and the exhibit attached hereto are being furnished and shall not be deemed filed for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly stated by specific reference in such filing.

The attached press release includes non-GAAP operating income, non-GAAP net income, non-GAAP diluted net income per share (earnings per share) and non-GAAP tax rate.

These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. We believe that 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 and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

For our internal budgeting and resource allocation process, we use non-GAAP financial measures which exclude: (A) stock-based and deferred compensation expense; (B) amortization of intangibles; (C) investment gains and losses; (D) income tax adjustments; and (E) the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes.

We use these non-GAAP financial measures in making operating decisions because we believe the measures provide meaningful supplemental information regarding our operational performance and give us a better understanding of how we should invest in research and development and fund infrastructure and go-to-market strategies. We use these measures to help us make budgeting decisions, for example, as between product development expenses and research and development, sales and marketing and general and administrative expenses and to facilitate our internal comparisons to our historical operating results. In addition, we believe these non-GAAP financial measures are useful because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. This allows institutional investors, the analyst community and others to better understand and evaluate our operating results and future prospects in the same manner as management and to compare operating results across accounting periods and to those of our peer companies.

As described above, we exclude the following items from one or more of our non-GAAP measures:

A. Stock-based and deferred compensation expenses. Stock-based compensation expense consists of charges for employee restricted stock units, performance shares and employee stock purchases in accordance with current GAAP including stock-based compensation expense associated with any unvested options and restricted stock units assumed in connection with our acquisitions. We believe that it is useful to investors to understand the impact of the application of accounting standards pertaining to stock-based compensation to our operational performance, liquidity and our ability to invest in research and development and fund acquisitions and capital expenditures. Deferred compensation expense consists of charges associated with movements in our deferred compensation plan liability. Although stock-based compensation and deferred compensation expenses constitute ongoing and recurring expenses, such expenses are excluded from non-GAAP results because they are not expenses that typically require current cash settlement by us and because such expenses are not used by us to assess the core profitability of our business operations. We further believe these measures are useful to investors in that they allow for greater transparency to certain line items in our financial statements. In addition, excluding these items from various non-GAAP measures facilitates comparisons to our competitors’ operating results.

B. Amortization of intangibles. We recognize amortization expense of intangibles in connection with our acquisitions. Intangibles include (i) purchased technology, (ii) trademarks, (iii) customer contracts and relationships, and (iv) other intangible assets. In accordance with GAAP, we amortize the fair value of the intangibles based on the pattern in which we expect the economic benefits of the intangibles will be consumed as revenue is generated. Although the intangibles generate revenue for us, we exclude this item because the expense is non-cash in nature and because we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our operational performance, liquidity and our ability to invest in research and development, fund acquisitions and capital expenditures. In addition, excluding this item from various non-GAAP measures facilitates our internal comparisons to our historical operating results and comparisons to our competitors’ operating results.

C. Investment gains and losses. We recognize investment gains and losses principally from realized gains or losses from the sale and exchange of marketable equity investments, other-than-temporary declines in the value of marketable and non-marketable equity securities, unrealized holding gains and losses associated with our available-for-sale securities and deferred compensation plan assets (classified as trading securities), gains and losses on the sale of equity securities held indirectly through investment partnerships and gains and losses associated with the recording of equity or cost method investments to fair value upon obtaining control through a business combination, as required by GAAP. We do not actively trade publicly held securities nor do we rely on these securities positions for funding our ongoing operations. We exclude investment gains and losses on these equity securities because these items are unrelated to our ongoing business and operating results.

D. Income tax adjustments. Our income tax expense is based on our GAAP taxable income and actual tax rates in effect, which can differ significantly from the non-GAAP tax rate applied to our non-GAAP financial results. In arriving at our non-GAAP tax rate, certain non-recurring and period-specific income tax adjustments, such as a one-time tax charge in connection with an acquisition, resolution of certain income tax audits and any significant financial impacts and certain indirect effects resulting from tax legislation or changes to our trading structure are made to help us assess the core profitability of our business operations. This non-GAAP tax rate could be subject to change for several reasons, including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate. In addition, excluding this item from various non-GAAP measures facilitates our internal comparisons to our historical operating results.

E. Income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes. Excluding the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes assists investors in understanding the tax provision associated with those adjustments and the effective tax rate related to our ongoing operations.

We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our financial results as determined in accordance with GAAP and that these measures should only be used to evaluate our financial results in conjunction with the corresponding GAAP measures and that is why we qualify the use of non-GAAP financial information in a statement when non-GAAP information is presented.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)

On March 18, 2021, John Murphy notified Adobe of his intent to retire as Executive Vice President and Chief Financial Officer during 2021. Mr. Murphy will stay on as needed to ensure an orderly transition and continuity of operations as the company looks to identify a successor. Adobe will be conducting an internal and external search to fill the role.

A copy of our press release announcing Mr. Murphy's retirement is attached hereto as Exhibit 99.2 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


Exhibit Number						Exhibit Description

99.1						Press release issued on March 23, 2021 entitled “Adobe Raises Annual Targets on Strong Q1 Results”

99.2						Press release issued on March 23, 2021 entitled “Adobe Announces Executive Retirement”

104						Cover Page Interactive Data File (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			ADOBE INC.

			By:			/s/ JOHN MURPHY
						John Murphy
						Executive Vice President and Chief Financial Officer

Date: March 23, 2021

Exhibit 99.1

Investor Relations Contact

Jonathan Vaas

Adobe

[email protected]

Public Relations Contact

Ashley Levine

Adobe

[email protected]

FOR IMMEDIATE RELEASE

Adobe Raises Annual Targets on Strong Q1 Results

Company Achieves Record Quarterly Revenue Across Creative Cloud, Document Cloud and Experience Cloud

SAN JOSE, Calif. - March 23, 2021 - Adobe (Nasdaq:ADBE) today reported financial results for its first quarter fiscal year 2021 ended March 5, 2021.

First Quarter Fiscal Year 2021 Financial Highlights

•Adobe achieved record quarterly revenue of $3.91 billion in its first quarter of fiscal year 2021, which represents 26 percent year-over-year growth. Diluted earnings per share was $2.61 on a GAAP basis, representing 33 percent year-over-year growth, and $3.14 on a non-GAAP basis, representing 38 percent year-over-year growth.

•Digital Media segment revenue was $2.86 billion, which represents 32 percent year-over-year growth. Creative revenue grew to $2.38 billion, representing 31 percent year-over-year growth. Document Cloud revenue was $480 million, representing 37 percent year-over-year growth.

•Digital Media Annualized Recurring Revenue (“ARR”) increased $435 million quarter-over-quarter to $10.69 billion exiting the quarter. Creative ARR grew to $9.12 billion and Document Cloud ARR grew to $1.57 billion.

•Digital Experience segment revenue was $934 million, representing 24 percent year-over-year growth. Digital Experience subscription revenue was $812 million, representing 27 percent year-over-year growth.

•GAAP operating income in the first quarter was $1.45 billion, and non-GAAP operating income was $1.83 billion. GAAP net income was $1.26 billion, and non-GAAP net income was $1.52 billion.

•Cash flows from operations were $1.77 billion.

•Remaining Performance Obligation (“RPO”) exiting the quarter was $11.61 billion, representing 17 percent year-over-year growth.

•Adobe repurchased approximately 1.9 million shares during the quarter.

Adobe’s first quarter fiscal 2021 results benefited from an extra week in the quarter due to the company’s 52/53 week financial calendar whereby fiscal 2021 is a 53-week year compared with fiscal 2020, which was a 52-week year.

A reconciliation between GAAP and non-GAAP results is provided at the end of this press release and on Adobe’s website.

Executive Quotes

“Adobe drove record Q1 revenue and we are raising our annual targets based on the tremendous opportunity across our business and our continued confidence in our global execution,” said Shantanu Narayen, president and CEO, Adobe. “Adobe’s Creative Cloud, Document Cloud

and Experience Cloud have become mission critical to all customer segments—from students to individuals to large enterprises—across the world.”

“Our execution in the first quarter was strong, driving accelerated revenue growth and earnings,” said John Murphy, executive vice president and CFO, Adobe. “Adobe is unique in its ability to drive both top-line and bottom-line growth with strong cash flows and margins.”

Adobe Provides Second Quarter Financial Targets

The following table summarizes Adobe’s second quarter fiscal year 2021 targets:


Total revenue	~$3.72 billion
Digital Media segment revenue	~21 percent year-over-year growth
Digital Media annualized recurring revenue (ARR)	~$450 million of net new ARR
Digital Experience segment revenue	~18 percent year-over-year growth
Digital Experience subscription revenue	~20 percent year-over-year growth
Tax rate	GAAP: ~19.5 percent	Non-GAAP: ~16 percent
Share count	~482 million shares
Earnings per share	GAAP: ~$2.09	Non-GAAP: ~$2.81

Adobe Provides Updated Fiscal 2021 Annual Targets

Adobe today is providing updated fiscal 2021 annual targets, factoring in the company’s strong first quarter business performance and the momentum reflected in the company’s second quarter targets.

The following table summarizes Adobe’s updated fiscal year 2021 targets:


Total revenue	~$15.45 billion
Digital Media segment revenue	~22 percent year-over-year growth
Digital Media annualized recurring revenue (ARR)	~$1.8 billion of net new ARR
Digital Experience segment revenue	~20 percent year-over-year growth
Digital Experience subscription revenue	~23 percent year-over-year growth
Tax rate	GAAP: ~17.5 percent	Non-GAAP: ~16 percent
Share count	~481 million shares
Earnings per share	GAAP: ~$9.13	Non-GAAP: ~$11.85

A reconciliation between GAAP and non-GAAP targets is provided at the end of this press release.

Adobe to Webcast First Quarter Earnings Conference Call

Adobe will webcast its first quarter fiscal year 2021 earnings conference call today at 2:00 p.m. Pacific Time from its investor relations website: www.adobe.com/ADBE. Earnings documents, including Adobe management’s prepared conference call remarks with slides and an investor datasheet are posted to Adobe’s investor relations website in advance of the conference call for reference. A reconciliation between GAAP and non-GAAP earnings results and financial targets is also provided on the website.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including those related to business momentum, the financial impacts of the Workfront acquisition, the effects of the COVID-19 pandemic on our business and results of operations, our market opportunity, market trends, current macroeconomic conditions, customer success, revenue, operating margin, seasonality, annualized recurring revenue, tax rate on a GAAP and non-GAAP basis, earnings per share on a GAAP and non-GAAP basis, and share count, all of which involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure to compete effectively, failure to develop, acquire, market and offer products and services that meet customer requirements, introduction of new technology, information security and privacy, potential interruptions or delays in hosted services provided by us or third parties, macroeconomic conditions and economic impact of the COVID-19 pandemic, risks associated with cyber-attacks, complex sales cycles, risks related to the timing of revenue recognition from our subscription offerings, fluctuations in subscription renewal rates, failure to realize the anticipated benefits of past or future acquisitions, failure to effectively manage critical strategic third-party business relationships, changes in accounting principles and tax regulations, uncertainty in the financial markets and economic conditions in the countries where we operate, and other various risks associated with being a multinational corporation. For a discussion of these and other risks and uncertainties, please refer to Adobe’s Annual Report on Form 10-K for our fiscal year 2020 ended Nov. 27, 2020, and Adobe's Quarterly Reports on Form 10-Q issued in fiscal year 2021.

The financial information set forth in this press release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in Adobe’s Quarterly Report on Form 10-Q for our quarter ended March 5, 2021, which Adobe expects to file in late March or early April 2021. Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements.

About Adobe

Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.

###

©2021 Adobe. All rights reserved. Adobe, Creative Cloud, Document Cloud and the Adobe logo are either registered trademarks or trademarks of Adobe (or one of its subsidiaries) in the United States and/or other countries. All other trademarks are the property of their respective owners.

Condensed Consolidated Statements of Income

(In millions, except per share data; unaudited)


	Three Months Ended
	March 5, 2021		February 28, 2020
Revenue:
Subscription	$	3,584	$	2,732
Product	155		143
Services and other	166		216
Total revenue	3,905		3,091

Cost of revenue:
Subscription	324		274
Product	10		7
Services and other	113		171
Total cost of revenue	447		452

Gross profit	3,458		2,639

Operating expenses:
Research and development	620		532
Sales and marketing	1,049		857
General and administrative	290		271

Amortization of intangibles	45		42
Total operating expenses	2,004		1,702

Operating income	1,454		937

Non-operating income (expense):
Interest expense	(30)		(33)
Investment gains (losses), net	5		(3)
Other income (expense), net	4		18
Total non-operating income (expense), net	(21)		(18)
Income before income taxes	1,433		919
Provision for (benefit from) income taxes	172		(36)
Net income	$	1,261	$	955
Basic net income per share	$	2.63	$	1.98
Shares used to compute basic net income per share	479		482
Diluted net income per share	$	2.61	$	1.96
Shares used to compute diluted net income per share	483		488

Condensed Consolidated Balance Sheets

(In millions; unaudited)


	March 5, 2021		November 27, 2020
ASSETS

Current assets:
Cash and cash equivalents	$	3,452	$	4,478
Short-term investments	1,511		1,514
Trade receivables, net of allowances for doubtful accounts of $21 for both periods	1,520		1,398
Prepaid expenses and other current assets	901		756
Total current assets	7,384		8,146

Property and equipment, net	1,530		1,517
Operating lease right-of-use assets, net	477		487
Goodwill	11,845		10,742
Other intangibles, net	1,729		1,359

Deferred income taxes	1,262		1,370
Other assets	758		663
Total assets	$	24,985	$	24,284

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Trade payables	$	254	$	306
Accrued expenses	1,243		1,422

Deferred revenue	4,134		3,629
Income taxes payable	81		63
Operating lease liabilities	94		92
Total current liabilities	5,806		5,512

Long-term liabilities:
Debt	4,119		4,117
Deferred revenue	151		130
Income taxes payable	540		529
Deferred income taxes	81		10
Operating lease liabilities	494		499
Other liabilities	248		223
Total liabilities	11,439		11,020

Stockholders’ equity:
Preferred stock	—		—
Common stock	—		—
Additional paid-in-capital	7,617		7,357
Retained earnings	20,521		19,611
Accumulated other comprehensive income (loss)	(141)		(158)
Treasury stock, at cost	(14,451)		(13,546)
Total stockholders’ equity	13,546		13,264
Total liabilities and stockholders’ equity	$	24,985	$	24,284

Condensed Consolidated Statements of Cash Flows

(In millions; unaudited)


	Three Months Ended
	March 5, 2021		February 28, 2020
Cash flows from operating activities:
Net income	$	1,261	$	955
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	196		188
Stock-based compensation	260		217

Unrealized investment (gains) losses, net	—		6
Other non-cash adjustments	138		(70)
Changes in deferred revenue	471		114
Changes in other operating assets and liabilities	(554)		(85)
Net cash provided by operating activities	1,772		1,325

Cash flows from investing activities:
Purchases, sales and maturities of short-term investments, net	(4)		48
Purchases of property and equipment	(59)		(94)

Purchases and sales of long-term investments, intangibles and other assets, net	(25)		(2)
Acquisitions, net of cash acquired	(1,470)		—
Net cash used for investing activities	(1,558)		(48)

Cash flows from financing activities:
Repurchases of common stock	(950)		(850)
Taxes paid related to net share settlement of equity awards, net of proceeds from treasury stock re-issuances	(304)		(379)
Proceeds from issuance of debt	—		3,144
Repayment of debt	—		(3,150)
Other financing activities, net	10		2


Net cash used for financing activities	(1,244)		(1,233)
Effect of exchange rate changes on cash and cash equivalents	4		(6)
Net increase (decrease) in cash and cash equivalents	(1,026)		38
Cash and cash equivalents at beginning of period	4,478		2,650
Cash and cash equivalents at end of period	$	3,452	$	2,688

Non-GAAP Results

(In millions, except per share data)

The following table shows Adobe’s GAAP results reconciled to non-GAAP results included in this release.


	Three Months Ended
	March 5, 2021		February 28, 2020		November 27, 2020
Operating income:

GAAP operating income	$	1,454	$	937	$	1,215
Stock-based and deferred compensation expense	286		214		239

Amortization of intangibles	89		94		84

Non-GAAP operating income	$	1,829	$	1,245	$	1,538

Net income:

GAAP net income	$	1,261	$	955	$	2,250
Stock-based and deferred compensation expense	286		214		239

Amortization of intangibles	89		94		84
Investment (gains) losses, net	(5)		3		(6)

Income tax adjustments	(116)		(159)		(1,204)
Non-GAAP net income	$	1,515	$	1,107	$	1,363

Diluted net income per share:

GAAP diluted net income per share	$	2.61	$	1.96	$	4.64
Stock-based and deferred compensation expense	0.59		0.44		0.49

Amortization of intangibles	0.19		0.19		0.17
Investment (gains) losses, net	(0.01)		0.01		(0.01)

Income tax adjustments	(0.24)		(0.33)		(2.48)
Non-GAAP diluted net income per share	$	3.14	$	2.27	$	2.81

Shares used in computing diluted net income per share	483		488		484

The following table shows Adobe’s GAAP first quarter fiscal year 2021 tax rate reconciled to the non-GAAP tax rate included in this release.


	First Quarter Fiscal 2021
Effective income tax rate:

GAAP effective income tax rate		12.0	%
Income tax adjustments		5.5
Stock-based and deferred compensation expense		(1.1)
Amortization of intangibles		(0.4)
Non-GAAP effective income tax rate		16.0	%

Reconciliation of GAAP to Non-GAAP Financial Targets

(Shares in millions)

The following tables show Adobe's second quarter fiscal year 2021 financial targets reconciled to the non-GAAP financial targets included in this release.


	Second Quarter Fiscal 2021
Diluted net income per share:

GAAP diluted net income per share	$	2.09
Stock-based and deferred compensation expense		0.57
Amortization of intangibles		0.18
Income tax adjustments		(0.03)
Non-GAAP diluted net income per share	$	2.81

Shares used to compute diluted net income per share	482


	Second Quarter Fiscal 2021
Effective income tax rate:

GAAP effective income tax rate		19.5	%
Stock-based and deferred compensation expense		(1.4)
Amortization of intangibles		(0.1)
Income tax adjustments		(2.0)
Non-GAAP effective income tax rate		16.0	%

The following tables show Adobe's updated fiscal year 2021 financial targets reconciled to the non-GAAP financial targets included in this release.


	Fiscal Year 2021
Diluted net income per share:

GAAP diluted net income per share	$	9.13
Stock-based and deferred compensation expense		2.33
Amortization of intangibles		0.71
Income tax adjustments		(0.32)
Non-GAAP diluted net income per share	$	11.85

Shares used to compute diluted net income per share	481


	Fiscal Year 2021
Effective income tax rate:

GAAP effective income tax rate		17.5	%
Stock-based and deferred compensation expense		(1.4)
Amortization of intangibles		(0.1)

Non-GAAP effective income tax rate		16.0	%

Use of Non-GAAP Financial Information

Adobe continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Adobe uses non-GAAP financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. Adobe's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adobe presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Adobe's operating results. Adobe believes these non-GAAP financial measures are useful because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. This allows institutional investors, the

analyst community and others to better understand and evaluate our operating results and future prospects in the same manner as management.

Adobe's management believes it is useful for itself and investors to review, as applicable, both GAAP information as well as non-GAAP measures, which may exclude items such as stock-based and deferred compensation expenses, amortization of intangibles, investment gains and losses, the related tax impact of all of these items, income tax adjustments, and the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes. Adobe uses these non-GAAP measures in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Whenever such a non-GAAP measure is used, Adobe provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above.