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,

2024

2023

2023

Reconciliation of GAAP and non-GAAP gross profit

GAAP gross profit

$                 8,114

$                 8,976

$                 4,367

Stock-based compensation

18

22

24

Non-GAAP gross profit

$                 8,132

$                 8,998

$                 4,391

Non-GAAP gross profit margin

50.7 %

44.8 %

44.1 %

Reconciliation of GAAP and non-GAAP operating expenses

GAAP operating expenses

$               13,607

$               13,104

$               14,738

Reconciling item included in research and development:

Stock-based compensation

330

396

491

Reconciling items included in selling, general and administrative:

Stock-based compensation

727

701

651

Total reconciling items included in operating expenses

1,057

1,097

1,142

Non-GAAP operating expenses

$               12,550

$               12,007

$               13,596

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

GAAP net loss attributable to Pixelworks Inc.

$               (5,066)

$               (3,744)

$               (9,396)

Reconciling items included in gross profit

18

22

24

Reconciling items included in operating expenses

1,057

1,097

1,142

Non-GAAP net loss attributable to Pixelworks Inc.

$               (3,991)

$               (2,625)

$               (8,230)

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

$                 (0.07)

$                 (0.05)

$                 (0.15)

Non-GAAP weighted average shares outstanding - basic and diluted

57,472

56,895

55,720

*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.