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No. of Recommendations: 5
First they mention transaction based cost (that’s Third party pass-through; the vast majority of the adjustment), then comes bitcoin (a tiny adjustment compared to pass-through) and then comes the sentence you highlighted, … accounting jargon for a miniscule adjustment…The point is, from an economical standpoint it makes no sense to look at total revenue, and no one following the stock seriously does so - regardless of some disclaimers the accounting or legal department might add to their statements (who cares for these things anyways? They have a totally different purpose than informing investors on what to look at).

Saul is trying to teach you a valuable lesson here which you should take to heart in my opinion: Look beyond the headline numbers and dig deeper to get a better understanding of your investments. It will improve your returns. It has improved mine.
- Niki

Thanks Niki (Diablito), for explaining it so clearly. I shouldn’t let myself get so frustrated.

Would any company adjust their revenue to make it smaller, a little less than half as big, unless it really was smaller???

Can you imagine the outcry if Square tried to pass off their total revenue as their real revenue? …The analysts would all be shouting … “That’s not your real revenue, you are counting all that pass through revenue that belongs to the credit card companies! Your real revenue is only half that!”

Even Bert, who is a real purist about adjusted figures and stock-based compensation, only talks about Square’s adjusted revenue and doesn’t even mention total revenue. For example from his September write-up:

Based on that new guidance, the current First Call consensus for revenues this year has reached $1.54 billion, representing growth of 57%.

Adjusted revenue came in at $1.59 billion for the year. So Bert, and First Call, and the analysts, whose recommendations make up the First Call consensus, don’t even mention or consider total revenue (about $3.33 billion, as I remember), because it’s an irrelevant number.

But I’m through writing about this.

Thanks again, Niki,

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