GAAP vs Non-GAAP

GAAP earnings follow Generally Accepted Accounting Principles, the standardized US rulebook auditors sign off on; non-GAAP (or "adjusted") earnings are the company's own recut that excludes items management deems non-representative, most commonly stock-based compensation, restructuring charges, and amortization of acquired intangibles.

SEC Regulation G forces companies to reconcile the two, and the reconciliation table is where the story hides. Some exclusions are legitimate one-offs; stock-based comp is not one of them, since it recurs every quarter and dilutes shareholders. When the gap between GAAP and non-GAAP EPS is persistently wide and growing, the adjusted number is doing marketing work.