PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP  GROSS PROFIT MARGIN *
(Figures may not sum due to rounding)
(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2023

2023

2022

2023

2022

Reconciliation of GAAP and non-GAAP gross profit margin

GAAP gross profit margin

42.9 %

40.3 %

50.1 %

42.3 %

50.5 %

Stock-based compensation

0.1 %

0.2 %

(0.3) %

0.2 %

0.0 %

Amortization of acquired intangible assets

— %

— %

— %

— %

0.1 %

Total reconciling items included in gross profit

0.1 %

0.2 %

(0.3) %

0.2 %

0.2 %

Non-GAAP gross profit margin

43.1 %

40.5 %

49.8 %

42.4 %

50.7 %

*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.

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

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2023

2023

2022

2023

2022

Reconciliation of GAAP net loss attributable to Pixelworks Inc. and
adjusted EBITDA

GAAP net loss attributable to Pixelworks Inc.

$            (6,999)

$            (6,037)

$            (4,496)

$          (22,432)

$          (14,096)

Stock-based compensation

1,252

1,259

1,294

3,677

4,038

Tax effect of non-GAAP adjustments

—

—

1

—

(3)

Amortization of acquired intangible assets

—

—

—

—

90

Non-GAAP net loss attributable to Pixelworks Inc.

$            (5,747)

$            (4,778)

$            (3,201)

$          (18,755)

$            (9,971)

EBITDA adjustments:

Depreciation and amortization

$              1,053

$              1,077

$              1,324

$              3,211

$              3,490

Non-GAAP interest income and other, net

(471)

(473)

(165)

(1,615)

(428)

Non-GAAP provision (benefit) for income taxes

158

126

(71)

318

248

Adjusted EBITDA

$            (5,007)

$            (4,048)

$            (2,113)

$          (16,841)

$            (6,661)