§ 05The SBC debate, settled in three numbers

The single most contested adjustment in the bridge is the $1.93B of stock-based compensation. Add it back, or don't?

Sell-side: add back

Most analysts treat SBC as non-cash and add it back. Adj. EBITDA $72.9B at 89.4% margin. This is the headline number most decks use.

Credit: keep it in

Moody's, S&P, and Fitch treat SBC as compensation paid in equity-dilution form. EBITDA $70.1B at 85.9% margin. Buffett and Munger agree.

Practical answer

At this scale the choice moves the multiple by ~3%. Disclose both, and check that the dilution showing up below the line (shares outstanding) is consistent with the SBC running above it.