PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP  FINANCIAL  INFORMATION *
(In thousands, except per share data)
(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2023

2023

2022

2023

2022

Reconciliation of GAAP and non-GAAP gross profit

GAAP gross profit

$                 8,976

$                 6,882

$                 8,974

$               25,709

$               35,881

Stock-based compensation

22

21

21

89

41

Amortization of acquired intangible assets

—

—

—

—

72

Total reconciling items included in gross profit

22

21

21

89

113

Non-GAAP gross profit

$                 8,998

$                 6,903

$                 8,995

$               25,798

$               35,994

Non-GAAP gross profit margin

44.8 %

43.1 %

53.3 %

43.2 %

51.3 %

Reconciliation of GAAP and non-GAAP operating expenses

GAAP operating expenses

$               13,104

$               14,528

$               11,982

$               54,345

$               52,698

Reconciling item included in research and development:

Stock-based compensation

396

452

556

1,866

2,351

Reconciling items included in selling, general and administrative:

Stock-based compensation

701

779

583

2,841

2,806

Amortization of acquired intangible assets

—

—

—

—

18

Total reconciling items included in operating expenses

1,097

1,231

1,139

4,707

5,175

Non-GAAP operating expenses

$               12,007

$               13,297

$               10,843

$               49,638

$               47,523

Reconciliation of GAAP and non-GAAP net loss attributable to Pixelworks, Inc.

GAAP net loss attributable to Pixelworks Inc.

$               (3,744)

$               (6,999)

$               (1,934)

$             (26,176)

$             (16,030)

Reconciling items included in gross profit

22

21

21

89

113

Reconciling items included in operating expenses

1,097

1,231

1,139

4,707

5,175

Tax effect of non-GAAP adjustments

—

—

3

—

—

Non-GAAP net loss attributable to Pixelworks Inc.

$               (2,625)

$               (5,747)

$                  (771)

$             (21,380)

$             (10,742)

Non-GAAP net loss attributable to Pixelworks Inc. per share - basic and diluted

$                 (0.05)

$                 (0.10)

$                 (0.01)

$                 (0.38)

$                 (0.20)

Non-GAAP weighted average shares outstanding - basic and diluted

56,895

56,410

54,974

56,163

54,335

*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be
considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial
Measures" in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP
measures provide useful information for investors.