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GAAP vs. non-GAAP earnings

Why adjusted EPS and reported EPS differ, what companies leave out, and the SEC rules every non-GAAP figure has to follow.

The short answer

GAAP figures follow US generally accepted accounting principles, the rules every company's financial statements must use. Non-GAAP figures are a company's own versions, such as adjusted EPS, that leave out items it considers unusual or outside the running of the business. In its Q3 2026 release, Thermo Fisher reported diluted EPS of $4.64 and adjusted diluted EPS of $6.68.

What GAAP is

GAAP is the body of accounting standards US companies use for their financial statements, written by the Financial Accounting Standards Board (FASB) and required by the SEC. Every figure in a 10-K or 10-Q statement, and every figure on a Ticker Sage company page, is a GAAP figure. GAAP leaves room for judgment, but the same rules apply to everyone, and the annual statements are audited against them.

What gets adjusted

Amortization of acquired intangibles: the yearly write-down of customer lists, patents and brands bought in acquisitions. The most common adjustment at companies that have grown by buying others.
Restructuring charges: layoffs, closures and other reorganizing costs.
Stock-based compensation: left out by many technology companies, even though it's a real cost to shareholders. Stock-based compensation covers it.
Gains and losses on investments, litigation and impairments, and the tax effect of all of the above.

Some measures have no GAAP line at all, like EBITDA, free cash flow and organic growth. They're non-GAAP too.

Reported and adjusted EPS side by side

Company	Quarter	Reported diluted EPS	Adjusted diluted EPS	Difference
Thermo Fisher	Q3 2026	$4.64	$6.68	$2.04
Micron	Q4 fiscal 2026	$32.87	$33.42	$0.55
RTX	Q3 2026	$1.89	$2.26	$0.37
PepsiCo	Q3 fiscal 2026	$2.23	$2.34	$0.11
Procter & Gamble	Q1 fiscal 2027	$1.97	$2.00	$0.03
Boeing	Q3 2026	−$0.26	−$0.34	−$0.08

From each company's earnings release, as recapped on Ticker Sage; company names link to the recap and quarters to the release itself. Every company defines its own adjusted figure, so the rows aren't comparable with each other.

Adjusted EPS is usually higher, because most adjustments remove costs. It can be lower when a company removes a gain. The size of the gap, and whether it shows up every quarter, tells you how much of the reported result the company is asking readers to look past.

The rules that apply

Regulation G says that whenever a company publicly discloses a non-GAAP measure, it must also present the most directly comparable GAAP measure and a reconciliation between the two, and the measure can't be misleading. In SEC filings, Item 10(e) of Regulation S-K adds that the GAAP measure must be given equal or greater prominence. The SEC staff's questions and answers on non-GAAP measures spell out what it objects to, such as leaving out normal, recurring cash operating expenses.

How to read the two together

Find the reconciliation table in the release. It lists every adjustment and its amount.
Check which adjustments recur. A charge that shows up every year is part of the cost of doing business, whatever it's called.
Compare with the company's own past releases, not with another company's adjusted figure, since definitions differ.
Go back to the GAAP numbers in the 10-Q or 10-K. One-time items shows how much they can move net income.

Common questions

What does non-GAAP mean?

A financial measure that isn't calculated under generally accepted accounting principles, usually a company's adjusted version of earnings, EPS or margins, or a measure such as EBITDA or free cash flow.

Why is adjusted EPS usually higher than GAAP EPS?

Because most adjustments remove costs, such as amortization of acquired intangibles, restructuring charges or stock-based pay. It can be lower when the company removes a gain.

Are non-GAAP numbers allowed?

Yes, with conditions. Regulation G requires the most directly comparable GAAP figure and a reconciliation, and the measure can't be misleading. In SEC filings the GAAP figure must be at least as prominent.

Which EPS does Ticker Sage use?

Company pages and Learn pages use reported (GAAP) EPS from the 10-K. Earnings recaps show adjusted EPS next to it only when the release reports both.

Is EBITDA a GAAP measure?

No. EBITDA isn't a line in GAAP statements, so companies calculate it in different ways. Depreciation, amortization and EBITDA shows the arithmetic.

Disclosures

Editor holdings: The editor holds no position in any company named on this page. As of Nov 11, 2026.
Compensation: Nobody paid for this page. No affiliate links on this page.
Sources: Each company's own SEC filings, linked next to each number.
Last updated: Nov 9, 2026

General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.

More in Learn and Tools · Methodology & Disclosures explains where every number comes from.