Community Adjusted EBITDA
The Community Adjusted EBITDA is essentially EBITDA excluding the cost of sales. It is a gauge devised by WeWork to measure net income before not only the interest, taxes, depreciation, and amortization, but also "building and community level operating expenses," such as rent and tenancy expenses, utility, salaries of the building staff, and the cost of building amenities. This non-GAAP measure is a controversial financial metric that includes management expenses for active WeWork buildings.
CONTROVERSY
The community adjusted EBITDA is created and publicly used by the co-working company WeWork.
It is considered by many professionals to be a made-up and/or creative accounting term to serve WeWork's benefits.
Some say that this term makes the company look more profitable than it really is, masking the fact that WeWork was losing money (2018) according to standard accounting metrics.
“I’ve never seen the phrase ‘community adjusted Ebitda’ in my life,” said Adam Cohen, founder of Covenant Review, a bond research company.