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Appendix: Supplementary non-IFRS financial information

Inside Secure uses supplementary non-IFRS financial measures. These indicators are not defined under IFRS, and do not constitute accounting elements used to measure its financial performance. They should be considered in addition to, and not as a substitute for, any other operating and financial performance indicator of a strictly accounting nature, as presented in Inside Secure's consolidated financial statements and the corresponding notes. Inside Secure uses these indicators because it believes they are useful measures of its activity. Although they are widely used by companies operating in the same industry around the world, these indicators are not necessarily directly comparable to those of other companies, which may have defined or calculated their indicators differently to Inside Secure, even though they use similar terms.

Adjusted Revenue

Adjusted revenue is defined as revenue before non-recurring adjustments related to business combinations. It enables comparable revenue for future fiscal years.

In 2017, the combined entities would have generated a pro forma adjusted revenue of $119 million and a pro forma revenue of $116 million as Verimatrix recorded $3 million of deferred revenue as at December 31, 2016 which, in accordance with IFRS, cannot be recognized in the year following the acquisition.

EBITDA

EBITDA is defined as adjusted operating income before depreciation, amortization and impairment expenses not related to business combinations. Adjusted operating income/(loss) is defined as operating income/(loss) before (i) non-recurring adjustments on revenue related to business combinations (ii) amortization of intangible assets related to business combinations, (iii) any potential goodwill impairment, (iv) share-based payment expense and (v) non-recurring costs associated with restructuring and business combinations and divestiture undertaken by the company.

¹ Inside Secure uses supplementary non-IFRS financial measures (adjusted revenue and EBITDA) which are defined in Appendix
² Unaudited consolidated pro forma financial information; preliminary pro forma figures, based on available information
³ On an EBITDA and adjusted operating income basis, excluding purchase price allocation and restructuring charges
⁴ US GAAP, unaudited
⁵ Source: Statista Research – Global online TV and movie revenue lost through piracy, 2018
⁶ Excluding payment of transaction cost and fees
⁷ Assuming a redemption price equal to EUR 1.66
⁸ Unaudited consolidated pro forma financial information – Current and non-current financial debt portions, including the 2017 OCEANE convertible bonds, net of cash and cash equivalents

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