Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

U.S. Dollars in thousands, except per share amounts

Three months ended

Six months ended

June 30

June 30

2017

2016

2017

2016

Unaudited

GAAP net income

$3,908

$2,711

$8,015

$4,511

Equity-based compensation expense included in cost of revenue

114

54

205

114

Equity-based compensation expense included in research and development expenses

972

775

1,843

1,421

Equity-based compensation expense included in sales and marketing expenses

370

255

659

502

Equity-based compensation expense included in general and administrative expenses

722

525

1,420

1,046

Income tax benefit related to equity-based compensation expenses

(69)

(53)

(184)

(97)

Amortization of intangible assets related to RivieraWaves transaction

309

309

618

618

Non-GAAP net income

$6,326

$4,576

$12,576

$8,115

GAAP weighted-average number of Common Stock used in computation of diluted net income  per share (in thousands)

22,563

21,371

22,376

21,149

Weighted-average number of shares related to outstanding  stock-based awards (in thousands)

269

344

Weighted-average number of Common Stock used in computation of diluted earnings per share, excluding the above (in thousands )

22,832

21,715

22,691

21,546

GAAP diluted net income per share

$0.17

$0.13

$0.36

$0.21

Equity-based compensation expense, net of taxes

$0.10

$0.07

$0.16

$0.14

Amortization of intangible assets related to RivieraWaves transaction

$0.01

$0.01

$0.03

$0.03

Non-GAAP diluted net income  per share

$0.28

$0.21

$0.55

$0.38