TACTILE SYSTEMS TECHNOLOGY INC

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA is referenced in this Proxy Statement and represents net income plus interest expense, net, less income tax benefit, plus depreciation and amortization, plus stock-based compensation expense, and less the change in fair value of earn-out. Adjusted EBITDA margin represents net income margin (net income divided by revenue) with the same items adjusted as in Adjusted EBITDA. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures and should not be considered as alternatives to, or superior to, net income or loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. The Company’s definition of these measure is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.

The following table contains a reconciliation of Net Income to Adjusted EBITDA:

The following table contains a reconciliation of Net Income Margin to Adjusted EBITDA Margin: