One Rental At A Time Are Tech Companies Playing Accounting Games AGAIN?
Nov 17, 2025
In this insightful discussion, guest Dan Bird, a former Fortune 500 accountant and market commentator, dives into how big tech companies might be using accounting tricks to inflate earnings per share. He explains how depreciation and non-GAAP adjustments can obscure a company's actual cash flow, illustrating with examples like extending server lifespans. The conversation also explores upcoming market catalysts, skepticism about AI models, and the impacts of social media on consumer sentiment, making for a thought-provoking listen.
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Earnings Can Mask Cash Burn
- Many big tech earnings growth reflects accounting choices rather than cash profits.
- Watch free cash flow instead of net income to see true company health.
Boardroom Experience With Earnings Choices
- The host recounts his boardroom experience manipulating EPS with accounting levers.
- He emphasizes these moves were legal but could create a house of cards.
Non-GAAP Adjustments Are Ubiquitous
- Non-GAAP adjustments now appear in over 90% of companies' reports.
- The gap between operating (non-GAAP) and GAAP earnings has widened, hiding true performance.