calculated by adjusting net loss for net interest expense, income taxes, depreciation, amortization, stock-based compensation and preferred stock warrant fair market valuation ) for the third quarter of 2010 was $2.1 million compared to a loss of $2.7 million in the third quarter of 2009. For the nine months ended September 30, 2010, Adjusted EBITDA improved to $5.5 million from a loss of $6.2 million in the same period in 2009. The key driver of this improvement was a $7.1 million reduction in net loss.
In this press release, in addition to GAAP financial results, we present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA as a factor in evaluating management's performance when determining incentive compensation and to evaluate the effectiveness of our business strategies.
A reconciliation of GAAP net income (loss) to Adjusted EBITDA is included in the table below.
Codexis, Inc.Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA(Unaudited)(In Thousands)Three months endedSeptember 30,Nine months ended September 30,2010200920102009Net income (loss)
(15,109)Adjustments:Minus: Interest income
(61)(64)(135)(141)Plus: Interest expense
1303175241,078Plus: Income taxes
298(16)32479Plus: Depreciation and amortization
1,9601,6265,7004,434Plus: Stock-based compensation
2,5491,2866,4333,148Plus: Preferred stock warrant fair market valuation adjustment
-344677349 Adjusted EBITDA$ Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or cont
(6,162)Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are:
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