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

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2024

2024

2023

2024

2023

Reconciliation of GAAP and non-GAAP gross profit

GAAP gross profit

$                 4,879

$                 4,326

$                 6,882

$               17,319

$               16,733

Stock-based compensation

13

10

21

41

67

Restructuring

—

16

—

16

—

Total reconciling items included in gross profit

13

26

21

57

67

Non-GAAP gross profit

$                 4,892

$                 4,352

$                 6,903

$               17,376

$               16,800

Non-GAAP gross profit margin

51.3 %

51.0 %

43.1 %

50.9 %

42.4 %

Reconciliation of GAAP and non-GAAP operating expenses

GAAP operating expenses

$               13,511

$               15,068

$               14,528

$               42,186

$               41,241

Reconciling item included in research and development:

Stock-based compensation

327

316

452

973

1,470

Reconciling items included in selling, general and administrative:

Stock-based compensation

702

599

779

2,028

2,140

Restructuring

90

1,403

—

1,493

—

Total reconciling items included in operating expenses

1,119

2,318

1,231

4,494

3,610

Non-GAAP operating expenses

$               12,392

$               12,750

$               13,297

$               37,692

$               37,631

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

GAAP net loss attributable to Pixelworks Inc.

$               (8,141)

$             (10,149)

$               (6,999)

$             (23,356)

$             (22,432)

Reconciling items included in gross profit

13

26

21

57

67

Reconciling items included in operating expenses

1,119

2,318

1,231

4,494

3,610

Tax effect of non-GAAP adjustments

74

—

—

—

Non-GAAP net loss attributable to Pixelworks Inc.

$               (7,083)

$               (7,731)

$               (5,747)

$             (18,805)

$             (18,755)

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

$                 (0.12)

$                 (0.13)

$                 (0.10)

$                 (0.32)

$                 (0.34)

Non-GAAP weighted average shares outstanding - basic and diluted

58,717

58,151

56,410

58,116

55,917

*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.