Reconciliation of GAAP to Non-GAAP Operating Results
(in thousands, except percentages and per ADS data, unaudited)

	For the Three Months Ended
	Jun. 30,  2017  ($)		Mar. 31, 2018  ($)		Jun. 30, 2018  ($)
Gross profit (GAAP)	64,611		62,554		65,581
Gross margin (GAAP)	48.7	%	48.0	%	47.5	%
Stock-based compensation expense (A)	2		59		5
Gross profit (non-GAAP)	64,613		62,613		65,586
Gross margin (non-GAAP)	48.7	%	48.0	%	47.5	%
Operating expenses (GAAP)	34,340		37,701		31,617
Stock-based compensation expense (A)	(982	)	(3,078	)	(712	)
Amortization of intangible assets	(526	)	(741	)	(741	)
Litigation expense	-		(13	)	(8	)
Operating expenses (non-GAAP)	32,832		33,869		30,156
Operating profit (GAAP)	30,271		24,853		33,964
Operating margin (GAAP)	22.8	%	19.1	%	24.6	%
Total adjustments to operating profit	1,510		3,891		1,466
Operating profit (non-GAAP)	31,781		28,744		35,430
Operating margin (non-GAAP)	23.9	%	22.1	%	25.7	%
Non-operating income (expense) (GAAP)	886		2,347		298
Foreign exchange loss (gain), net	65		(1,076	)	933
Loss (gain) on equity-method investment	-		-		205
Non-operating income (expense) (non-GAAP)	951		1,271		1,436
Net income (GAAP)	24,033		23,061		30,728
Total pre-tax impact of non-GAAP adjustments	1,575		2,815		2,604
Income tax impact of non-GAAP adjustments	(173	)	(243	)	(138	)
Net income (non-GAAP)	25,435		25,633		33,194
Earnings per diluted ADS (GAAP)	$0.67		$0.64		$0.85
Earnings per diluted ADS (non-GAAP)	$0.71		$0.71		$0.92
Shares used in computing earnings per diluted ADS (GAAP)	35,801		36,119		36,151
Non-GAAP Adjustments	51		55		38
Shares used in computing earnings per diluted ADS (non-GAAP)	35,852		36,174		36,189
(A)  Excludes stock-based compensation as follows:
Cost of Sales	2		59		5
Research & development	315		1,868		227
Sales & marketing	596		659		433
General & administrative	71		551		52

Silicon Motion Technology Corporation