PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP  FINANCIAL  INFORMATION *
(In thousands, except per share data)
(Unaudited)

Three Months Ended

March 31,

December 31,

March 31,

2023

2022

2022

Reconciliation of GAAP and non-GAAP gross profit

GAAP gross profit

$                  4,367

$                  8,974

$                  8,763

Stock-based compensation

24

21

8

Amortization of acquired intangible assets

—

—

72

Total reconciling items included in gross profit

24

21

80

Non-GAAP gross profit

$                  4,391

$                  8,995

$                  8,843

Non-GAAP gross profit margin

44.1 %

53.3 %

53.2 %

Reconciliation of GAAP and non-GAAP operating expenses

GAAP operating expenses

$                14,738

$                11,982

$                12,644

Reconciling item included in research and development:

Stock-based compensation

491

556

583

Reconciling items included in selling, general and administrative:

Stock-based compensation

651

583

458

Amortization of acquired intangible assets

—

—

18

Total reconciling items included in operating expenses

1,142

1,139

1,059

Non-GAAP operating expenses

$                13,596

$                10,843

$                11,585

Reconciliation of GAAP and non-GAAP net loss attributable to
Pixelworks, Inc.

GAAP net loss attributable to Pixelworks Inc.

$                 (9,396)

$                 (1,934)

$                 (4,592)

Reconciling items included in gross profit

24

21

80

Reconciling items included in operating expenses

1,142

1,139

1,059

Tax effect of non-GAAP adjustments

—

3

Non-GAAP net loss attributable to Pixelworks Inc.

$                 (8,230)

$                    (771)

$                 (3,456)

Non-GAAP net loss attributable to Pixelworks Inc. per share - basic and diluted

$                   (0.15)

$                   (0.01)

$                   (0.06)

Non-GAAP weighted average shares outstanding - basic and diluted

55,720

54,974

53,680

*

Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to ""Non-GAAP Financial Measures" in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.