These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding non-cash equity-based compensation provides meaningful supplemental information to investors, as well as management that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.

    (a)  Non-cash equity-based compensation expense related to the Company's
         adoption of SFAS No. 123 revised (123R) beginning July 1, 2005. For
         the fourth fiscal quarter ending June 30, 2007 of $1.6 million,
         allocated as follows:  $539,000 to research and development, $508,000
         to sales and marketing and $572,000 to general and administrative.
         For the third fiscal quarter ending March 31, 2007 of $2.3 million,
         allocated as follows:  $871,000 to research and development, $721,000
         to sales and marketing and $660,000 to general and administrative.
         For the fourth quarter of fiscal 2006 ending March 31, 2006 of $1.7
         million, allocated as follows:  $639,000 to research and development,
         $468,000 to sales and marketing and $562,000 to general and
         administrative.  Management believes that it is useful to investors
         to understand how the expenses associated with the adoption of SFAS
         123R are reflected in net income.



                           MIPS TECHNOLOGIES, INC.
    RECONCILIATION OF GAAP TO NON-GAAP NET INCOME and NET INCOME PER SHARE
                    (In thousands, except per share data)
                                 (unaudited)

                                     Twelve Months Ended   Twelve Months Ended
                                        June 30, 2007         June 30, 2006

        GAAP net income                        $8,483               $11,021
        Net income per basic share              $0.19                 $0.26
        Net income per diluted share            $0.18                 $0.25
    (a) Equity-based compensation expense
         under SFAS 123R (see note below)      $7,701                $8,279
    (b) Acquired in-process research and
         development (see note below)              --                  $570
        Non-GAAP net income                   $16,184               $19,870
        Non-GAAP net income per basic share     $0.37                 $0.46
        Non-GAAP net income per diluted share   $0.35                 $0.45
        Common shares outstanding - basic      43,516                42,894
        Common shares outstanding - diluted    45,891                44,611

These adjustments reconcile the Company's GAAP results of operations to the reported non-GAAP results of operations. The Company believes that presentation of net income and net income per share excluding non-cash equity- based compensation, acquired in-process research and development and restructuring costs provides meaningful supplemental information to investors, as well as management that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and budgeting purposes. These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results, and may be different than non-GAAP measures used by other companies.

    (a)  Non-cash equity-based compensation expense of $7.7 million in fiscal
         2007 related to the Company's adoption of SFAS No. 123 revised (123R)
         beginning in the first quarter of fiscal 2006, allocated as follows:
         $2.9 million to research and development, $2.3 million to sales and
         marketing and $2.5 million to general and administrative.  For fiscal
         2006 ending June 30, 2006 of $8.3 million, allocated as follows:
         $4.0 million to research and development, $1.9 million to sales and
         marketing and $2.4 million to general and administrative.
         Management believes that it is useful to investors to understand how
         the expenses associated with the adoption of SFAS 123R are reflected
         in net income.

    (b)  The charge of $570,000 for acquired in-process research and
         development expense related to the acquisition of First Silicon
         Solutions (FS2) completed in September 2005.  Management believes
         that excluding this charge facilitates comparisons to MIPS' core
         operating results during periods when there were no acquisitions.

Web site: http://www.mips.com/