This article sparked my post on Adjusted EBITDA.

Uber “reported its first adjusted EBITDA profit of $8 million for the quarter.” Its actual loss? $2.4 billion – 300x bigger, and in the wrong direction. And they’re also giving adjusted EBITDA guidance….

In Q2 of 2021 their net income number was much better, $1.1B, but that was in part because of a big bump from the same Didi investment that hammered them in Q3 2021. (Another reminder to have a longer-term perspective unless you’re an HFT hedge fund.)

The real takeaway for investors, boards, and CEOs? Look at the cash flow statement to understand what’s really going on. Cash never lies unless someone’s actually lying. You can’t “adjust” cash or choose different accounting treatments to make more or less cash show up. And, as a reminder, the value of any business is the discounted sum of all its future cash flows. That’s why the board has to keep FCF in mind at all times: whether it’s cash today or cash tomorrow, you still need to bring it in the door.