| PIXELWORKS, INC. | ||||||||||||||
| RECONCILIATION OF GAAP AND NON-GAAP GROSS PROFIT MARGIN * | ||||||||||||||
| (Figures may not sum due to rounding) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||
| Reconciliation of GAAP and non-GAAP gross profit margin | ||||||||||||||
| GAAP gross profit margin | 48.5 | % | 54.6 | % | 51.8 | % | 50.6 | % | 51.6 | % | ||||
| Amortization of acquired intangible assets | 3.6 | % | 3.2 | % | 1.7 | % | 2.9 | % | 1.7 | % | ||||
| Restructuring | 2.0 | % | - | % | - | % | 0.5 | % | - | % | ||||
| Stock-based compensation | 1.4 | % | 1.4 | % | 0.5 | % | 1.1 | % | 0.5 | % | ||||
| Inventory step-up and backlog amortization | - | % | - | % | - | % | - | % | 0.0 | % | ||||
| Total reconciling items included in gross profit | 7.1 | % | 4.6 | % | 2.1 | % | 4.5 | % | 2.2 | % | ||||
| Non-GAAP gross profit margin | 55.6 | % | 59.2 | % | 53.9 | % | 55.1 | % | 53.8 | % | ||||
| *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. | ||||||||||||||
