Another example of GAAP nonsense.

I couldn’t help commenting on this example of the nonsense in GAAP. It’s from the Datadog conference call referring to next quarter’s operating income.

we expect an approximately $5.5 million non-cash tax adjustment related to the expiration of a payroll tax liability. …this will be a benefit to GAAP operating income, but we intend to normalize for it [not count it as extra income] in our non-GAAP results. And, therefore, it is neutral to non-GAAP operating income.

In other words, GAAP will count this as $5.5 million added to GAAP operating income, even though it’s just a paper adjustment. The company will be honest though, and WON’T add it to adjusted operating income, which by definition is supposed to refer to actual income from operations, not a non-cash tax adjustment. As I said above, another example of GAAP silliness.