CAVIUM, INC.

Unaudited Reconciliation of Non-GAAP Adjustments

(in thousands, except per share data and percentages)

Three Months Ended

September 30, 2017

June 30, 2017

Reconciliation of GAAP gross profit and margin to non-GAAP:

Net revenue

$

251,987

$

242,093

GAAP gross profit

137,532

129,489

GAAP gross margin

54.6

%

53.5

%

Stock-based compensation and related payroll taxes

879

718

Inventory charges

(18)

1,661

Amortization of acquisition related assets

27,947

27,706

Non-GAAP gross profit

$

166,340

$

159,574

Non-GAAP gross margin

66.0

%

65.9

%

Reconciliation of GAAP operating expenses to non-GAAP:

GAAP research and development expenses

$

93,860

$

94,758

Stock-based compensation and related payroll taxes

(17,437)

(18,298)

Amortization of acquisition related assets

(725)

(731)

Acquisition and integration related costs

(743)

(811)

Non-GAAP research and development expenses

74,955

74,918

GAAP sales, general and administrative expenses

43,184

40,791

Stock-based compensation and related payroll taxes

(9,035)

(9,363)

Amortization of acquisition related assets

(1,278)

(1,277)

Acquisition and integration related costs

(3,997)

(1,984)

Non-GAAP sales, general and administrative expenses

28,874

28,167

Total Non-GAAP operating expenses

$

103,829

$

103,085

Reconciliation of GAAP Income tax to non-GAAP:

GAAP provision for (benefit from) income tax

$

486

$

(1,049)

Acquisition related tax adjustments

-

2,605

Non-GAAP provision for income tax

$

486

$

1,556