PRSS 2017 Annual Report

39 Adjusted EBITDA We closelymonitorAdjusted EBITDAwhichmeets the definition of a Non-GAAP financial measure. We defineAdjusted EBITDA as net income (loss) less interest and other (income) expense, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, acquisition-related costs, restructuring costs and impairment charges. We use Adjusted EBITDA as a key performance measure because we believe it facilitates operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures (affecting net interest expense), tax positions (such as the impact on periods of changes in effective tax rates or fluctuations in permanent differences or discrete quarterly items), the impact of depreciation and amortization, stock-based compensation, acquisition-related costs, restructuring costs and impairment charges. BecauseAdjusted EBITDAfacilitates internal comparisons of our historical operating performance on a more consistent basis, we also use Adjusted EBITDA for business planning purposes and to incentivize and compensate our management personnel. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our results as reported under GAAP as the excluded items may have significant effects on our operating results and financial condition. When evaluating our performance, you should considerAdjusted EBITDAalongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results. The following table presents a reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP measure, for each of the periods indicated: Year Ended December 31, 2017 2016 (in thousands) Net loss $ (10,257) $ (26,470) Non-GAAP adjustments: Interest and other income (251) (524) Provision (benefit) for income taxes 4 (390) Depreciation and amortization 4,709 4,256 Stock-based compensation 1,769 1,607 Impairment charges — 20,899 Restructuring costs — 2,103 Adjusted EBITDA $ (4,026) $ 1,481 The following shows the Adjusted EBITDA as a percentage of net revenue, for each of the periods indicated: Year Ended December 31, 2017 2016 (in thousands, except for percentages) Net revenue $85,685 $102,208 Non-GAAP Adjusted EBITDA (4,026) 1,481 % of net revenue (4.7)% 1.4% Cash Contribution Margin Cash contribution margin (a non-GAAP financial measure that we reconcile to “Gross profit” in our consolidated statements of comprehensive loss) consists of gross profit plus stock-based compensation and depreciation and amortization included in cost of net revenue less variable sales and marketing expense. When viewed together with our GAAP results, we believe cash contribution margin provides management and users of the financial statements information about our ability to cover our operating costs, such as Technology and Development and General and Administrative expense. Cash contribution margin is used in addition to and in conjunction with results presented in accordance