In turning a $289 million GAAP net loss into a $74.4 million adjusted profit for 2023 Definitive Healthcare Corp. (DH), a maker of sales, marketing and product development software for the healthcare industry, excluded millions of dollars in expenses it suggests are one-time in nature even though they appear to be recurring.

Definitive’s Adjusted EBITDA metric adds back $4.87 million in expenses the company calls non-core items. Included in these items is an accrual for sales tax Definitive should have been collecting from customers but did not for the last several years.

The collection of sales tax is a recurring expense.

Likewise, the add-back also includes the cost of professional fees associated with the “filing delay and restatement” of Definitive’s financial statements for the quarter ended March 31, 2023.

The cost of restating Definitive’s financials is a recurring expense since Definitive has restated its financials every year it has been a public company.

In each of the previous three years, Definitive understated its net loss by:

—$1.9 million, or 8.6% in 2022
—$1 million, or 1.7% in 2021
—$1.4 million, or 2.8% in 2020

The annual restatements combined with the restated financials in the first quarter of 2023— just like the collection of sales tax— are recurring rather than one-time expenses and do not merit being added back to adjusted profit calculations.

Though tax compliance issues resulted in the latest restatement, Definitive awarded its auditor a 5,177% fee increase for tax compliance and advice services in 2022.

Notably, Definitive’s Chief Executive Officer Robert Musslewhite received $46.39 million in 2021 and 2022.

He gets nearly $20 million if Definitive is acquired.