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 income (loss) from operations to non-GAAP income from operations:

GAAP income (loss) from operations

$

488

$

(6,060)

Stock-based compensation and related payroll taxes

27,351

28,379

Inventory charges

(18)

1,661

Amortization of acquisition related assets

29,950

29,714

Acquisition and integration related costs

4,740

2,795

Non-GAAP income from operations

$

62,511

$

56,489

Non-GAAP income from operations as a percentage of revenue

24.8

%

23.3

%

Reconciliation of GAAP net loss to non-GAAP net income:

GAAP net loss

$

(6,214)

$

(11,072)

Non-GAAP adjustments:

Stock-based compensation and related payroll taxes

27,351

28,379

Inventory charges

(18)

1,661

Amortization of acquisition related assets

29,950

29,714

Acquisition and integration related costs

4,740

2,795

Acquisition related tax adjustments

-

(2,605)

Total of non-GAAP adjustments

62,023

59,944

Non-GAAP net income

$

55,809

$

48,872

GAAP net loss per share, diluted

$

(0.09)

$

(0.16)

Non-GAAP adjustments detailed above

0.85

0.83

Non-GAAP net income per share, diluted

$

0.76

$

0.67

GAAP weighted average shares, diluted

68,675

68,199

Non-GAAP share adjustment

4,488

5,019

Non-GAAP weighted average shares, diluted

73,163

73,218