² Assumes all outstanding ordinary shares are represented by ADSs.  Each ADS represents four ordinary shares.

Silicon Motion Technology Corporation
Reconciliation of GAAP to Non-GAAP Operating Results
(in thousands, except percentages and per ADS data, unaudited)
	For the Three Months Ended
	Jun. 30, 2016 ($)				Mar. 31, 2017 ($)				Jun. 30, 2017 ($)
Gross profit (GAAP)		68,121				64,826				64,611
Gross margin (GAAP)		48.4	%			50.9	%			48.7	%
Stock-based compensation expense (A)		2				67				2
Gross profit (non-GAAP)		68,123				64,893				64,613
Gross margin (non-GAAP)		48.4	%			51.0	%			48.7	%
Operating expenses (GAAP)		31,908				34,842				34,340
Stock-based compensation expense (A)		(470	)			(3,068	)			(982	)
Amortization of intangible assets		(526	)			(526	)			(526	)
Litigation expense		(9	)			-				-
Operating expenses (non-GAAP)		30,903				31,248				32,832
Operating profit (GAAP)		36,213				29,984				30,271
Operating margin (GAAP)		25.7	%			23.6	%			22.8	%
Total adjustments to operating profit		1,007				3,661				1,510
Operating profit (non-GAAP)		37,220				33,645				31,781
Operating margin (non-GAAP)		26.5	%			26.4	%			23.9	%
Non-operating income (expense) (GAAP)		(27	)			401				886
Foreign exchange loss (gain), net		488				347				73
Non-operating income (expense) (non-GAAP)		461				748				959
Net income (GAAP)		29,047				23,511				24,033
Total pre-tax impact of non-GAAP adjustments		1,495				4,008				1,583
Income tax impact of non-GAAP adjustments		162				(2,386	)			(33	)
Net income (non-GAAP)		30,704				25,133				25,583
Earnings per diluted ADS (GAAP)	$	0.82			$	0.65			$	0.67
Earnings per diluted ADS (non-GAAP)	$	0.86			$	0.70			$	0.71
Shares used in computing earnings per diluted ADS (GAAP)		35,476				35,972				35,801
Non-GAAP Adjustments		63				79				51
Shares used in computing earnings per diluted ADS (non-GAAP)		35,539				36,051				35,852
(A)  Excludes stock-based compensation as follows:
Cost of Sales		2				67				2
Research & development		278				1,850				315
Sales & marketing		159				609				596
General & administrative		33				609				71

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