iRobot Corporation

2020 Global Industrial Conference

Julie Zeiler, EVP and CFO
November 11, 2020

November 11, 2020 1

Forward Looking Statements

• Certain statements made in this presentation that are not based on historical information are forward-looking
statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995.
• These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many
of which are beyond our control, which could cause actual results to differ materially from those contemplated in
these forward-looking statements.
• Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the
date hereof. iRobot Corporation undertakes no obligation to update or revise the information contained in this
presentation, whether as a result of new information, future events or circumstances or otherwise.
• For additional disclosure regarding these and other risks faced by iRobot Corporation, see the disclosure contained
in our public filings with the Securities and Exchange Commission.

November 11, 2020 2

Non-GAAP Financial Metrics
Regulation G Disclosure
This presentation contains references to the non-GAAP financial measures as defined by SEC Regulation G, including non-GAAP gross profit and non-GAAP
gross profit margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP operating income margin, non-GAAP income tax expense,
non-GAAP net income (earnings) and non-GAAP net income (earnings) per share. These non-GAAP financial measures should not be considered a
substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and
reconciliations from these results should be carefully evaluated.

Non-GAAP gross profit removes expenses related to the amortization of acquired intangible assets and stock-based compensation while non-GAAP gross
profit margin is calculated as non-GAAP gross profit divided by revenue for the applicable period. Non-GAAP operating expenses excludes the amortization
of acquired intangible assets, stock-based compensation, net merger, acquisition and divestiture (income) expense, and net IP litigation expense. Non-GAAP
operating income removes the aforementioned non-GAAP operating expenses while non-GAAP operating income margin is calculated as non-GAAP
operating income divided by revenue for the applicable period. Non-GAAP income tax expense reflects the tax effect of the non-GAAP adjustments,
calculated using the appropriate statutory tax rate for each adjustment. Non-GAAP net income includes the aforementioned items related to non-GAAP
income from operations, and also removes gain or loss on strategic investments. Non-GAAP net income (earnings) per share is calculated by dividing non-
GAAP net income (earnings) by the number of diluted shares used in per share calculations for the applicable period. Definitions of each item and why they
are used in calculating non-GAAP financial measures is detailed in the appendix of this presentation.

We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with
useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items
may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar
non-GAAP financial measures. The reconciliation of these non-GAAP metrics to the comparable GAAP metrics are set forth in the accompanying tables in the
appendix of this presentation and are available on our website at https://investor.irobot.com/.

November 11, 2020 3

Investment Highlights
Category creator, innovator and leader in Robotic Floor Care & AI NASDAQ:
• Strong revenue growth with continued runway
• Cutting-edge robotic AI and home understanding
IRBT
• Consistent innovation, category leadership and portfolio expansion

Accelerating strategic initiatives aimed at

• Differentiating the cleaning experience
• Building direct relationships with ~8m connected, engaged owners Market Cap:
• Nurturing lifetime value of customer relationships
$2.4B*
Resilience and growth despite challenging market conditions
• Expect 2020 financial performance will exceed our original targets
• Focused on sustaining strong growth and navigating profitability headwinds in 2021
• Strong financial foundation to fund continued growth
Headquarters in
Bedford, MA

* Based on stock price as of 11/6/20

November 11, 2020 4
Category Creator, Innovator & Leader $1B+
in 2019 sales
Global category leader well positioned for future expansion
12M+
connected
Broadened portfolio over the past two years
robots
~8M
with innovative new products
Consistent innovation across the portfolio connected
30M+ consumers
to widen competitive moat

Global $ Segment Share (RVC+, +$200)

units sold
10% 11% 9% Others
19% 1% 1% Dyson
2% 1%
1%
3% 2% 5%
1% 1%
4%
3% 3% Samsung
2% 1% 3% 3%
3%
2% 4%
3% Panasonic
4% 8%
10% 5%
Cecotec
11% 4%
Neato
14% 14% Shark
Roborock
Mi
Ecovacs

64% 62% 52% 52%

iRobot

CY'16 CY'17 CY'18 CY'19

*Source: Global market size for Vacuum
Cleaners >$200 (Third-Party Market Data November 11, 2020 5
and iRobot internal estimates).
An Expanding Global Franchise
Double-digit revenue growth since 2014 anticipated to continue into 2020 Revenue by Geography

FY16
Revenue
($ in millions)
$1,600 $1,365 APAC
22%
to Americas
53%
+12% $1,375* EMEA
$1,400 to 25%
+13%
+11% $1,214
$1,200
$1,093
$203
FY19
$1,000 +24% $171
$884

$800 $154
$358 APAC
$312 17% Americas
$656 +35% 54%

$600 $141 $242

EMEA
29%
$166
$400

$610 $653
$488
$200
$349

$-
2016 2017 2018 2019 2020e

Americas EMEA APAC * As of October 21, 2020

November 11, 2020 6
 Continued Runway to Support Expansion
RVCs Gaining Momentum with Consumers but Household Penetration Remains Low

2012: ~$5B Market

RVC
Immediate addressable market
13%
~1.5X current installed base

Non-RVC
87%
90MM
HH’s
2019: $11B Market
128MM
11.5% CAGR
HH’s
RVC:
22% CAGR
RVC
24%
15MM - 17MM HH’s
12% - 13% of Total 22MM
Non-RVC: HH’s
9% CAGR

Installed Base Addressable Market Longer Term Potential Total U.S. HH's
Non-RVC
76%

November 11, 2020 7

*Source: Global market size for Vacuum Cleaners >$200 Source: iRobot estimate of U.S. market at the end of 2019
(Third-Party Market Data and iRobot internal estimates).
State-of-the-Art Robot AI and Home Understanding
iRobot Genius™ Home Intelligence

greater control of where, when

& how their robots clean

homes
A level of personalization and control for unique schedules
cleaning preferences
smart home integrations
November 11, 2020 8
Consistent innovation, category leadership and portfolio expansion

with Clean Base™

Automatic Dirt Disposal (i3+ only),
holds up to 60 days of dirt and debris

AeroForce 3-stage cleaning

system with 10x suction power
and Dirt Detect™ Technology and
Systematic navigation with
charge & resume

Alexa & Google Home compatible

and the iRobot Home App with
personalized recommendation

iRobot Confidential 2020 | 9

Robust Product Portfolio Spans Range of Price Points
ROOMBA s9+
iRobot Genius™ ROOMBA i7+

May 2019
Introduced in
Home Intelligence

Sept. 2018
Introduced in

BEST
BRAAVA JET M6
ROOMBA i3+

May 2019
Introduced in

Sept. 2020
Introduced in
PERSONALIZED CONTROL

ROOMBA E5
CLEANING EFFICACY

BETTER
Sept. 2018
Introduced in
AUTONOMY

ROOMBA 675

GOOD
BRAAVA JET 240 BRAAVA JET 380T

in flagship product across lower price point products

$ $$$ $$$$$
November 11, 2020 10
 Mix Shifts Toward Higher-End Products
ROOMBA s9+ ROOMBA i7+ BRAAVA JET M6

Product Revenue Mix

100%

90%
High-end
80%

70%

60%
Roomba i7 & s9 and Braava m6
Mid-tier continue to Gain Recognition as
50%
GAME-CHANGING ROBOTS
40%

30%

20%
Entry
10%

0%
FY16 FY17 FY18 FY19 FY20 YTD

Entry Mid-tier High-end

RVCs $200+ (based on MSRP)

High-end defined as $500+
Mid-tier defined as $300-$500 Best Health Innovations
Entry defined as $200-$300 For The Home 2019
November 11, 2020 11
Fortifying and Expanding Our Segment Leadership …

~7m engaged, connected

customers who want to
hear from us
THREE STRATEGIC GOALS:

“A focus on elevating the

cleaning experience
through digital capabilities
that enable users to
customize how, when and
where our robots clean.”
Integration into the Consumer’s Lifestyle

November 11, 2020 14

“We can uniquely identify
both our customers’ true
needs, and what parts of the
experience enabled by our
robots they value the most.”
Driving Personalization of the Experience
You can tell Roomba to go to specific spots to clean up messes
right away:

Unique
Partnerships

Smart Home
Integrations

Roomba learns your routine and makes suggestions that fit your life
Data science driving richer personalization
Home
Understanding

Personalization

November 11, 2020 16

Strong Growth of Engaged, Connected Customer Base*
Continual OTA updates help drive growth of owners who opt-in to receive digital communications

As Roomba
becomes
increasingly
integrated into the
5.3M owner’s life,
it solidifies
iRobot’s
relationship with
the owner
2017. 2018 2019 2020 YTD

*Connected customers defined as robot owners who have registered to receive digital communications (in-app messaging, email or both). Prior figures reflected robot owners who subscribed to in-app messaging. November 11, 2020 17
“With increased
loyalty comes
increased
opportunity.”
Potential to Scale Direct-to-Consumer Sales Channel

Direct to Consumer Revenue

• Increase transactional velocity for ($ in millions)

product upgrades and cross-selling $100 20%

• Leverage robust usage data to drive $82.4

accessory sales $75

+47% $70.5 15%

• Pilot new offerings to increase purchase

flexibility and create new recurring +30%
revenue streams $48.0
+107%
$50 10%

̶ Care as a Service
$39.1 9%
$36.8

̶ Digital as a Service $25 5%

6%
5%
̶ Robotic Cleaning as a Service 4% 4%

$- 0%
2017 2018 2019 YTD19 YTD20

Direct to Consumer Direct to Consumer %

November 11, 2020 19

Chief Supply Chain Officer?
COVID-19 PANDEMIC

RESILIENCE & GROWTH WHILE NAVIGATING

CHALLENGING MARKET CONDITIONS
$$ $ $ $ $

COMPETITION TARIFFS $
$ $ $ $
 2020 Brings Unprecedented Change, Challenges & Resilience

Major Milestones & Developments

COVID-19 disrupts Executed cost- Tariff exclusion Delivering high- Strong Q2 and Q3
supply chain and reduction initiative granted & extended impact innovation results
sales activities
• $60m refund from prior • Introduced iRobot • Maintaining a clean
• Impacts Q120 revenue • Reduced headcount 5% tariffs paid Genius home takes on a higher
• Continues to slow our • Shifted R&D resources to • Extended from August • Introduced the i3 / i3+, priority
efforts to expand software 7 through until • Stronger-than-expected
Malaysia production • Suspended Terra robot December 31, 2020 Q2 and Q3 revenue
mower launch • Profitability benefits
• Accelerated direct-to- from strong top-line
consumer initiatives plus higher-than-
expected gross margin
and prudent spending
November 11, 2020 21
 Optimism for a Strong Finish to 2020

• iRobot’s global year-to-date sell-through growth rate on Week 40* has

accelerated further from Q2 levels
̶ YTD sell-through growth rate in the U.S. has more than tripled since mid-April
̶ In EMEA, our YTD sell-through growth rate has improved modestly into the low
double-digit range since the end of July
̶ YTD sell-through growth rate in Japan turned negative as we lapped an extremely
strong September 2019 period
̶ Inventory levels at retailers in good shape entering Q420
• Expect 2020 revenue between $1.365 billion to $1.375 billion – 12%
to 13% growth over 2019 revenue of $1.214 billion
• Anticipate 2020 operating profit margin to be approximately 9% with
full-year 2020 EPS ranging from $3.43 to $3.53
• Position the business to navigate looming profitability headwinds in
2021 associated with the reinstatement of tariffs, scaling production in
Malaysia and building out the infrastructure to support growth in our
* As measured in units through week 40 using third- direct-to-consumer channel
party market data and iRobot internal estimates.
Comparison with 2019 sell-through levels exclude November 11, 2020 22
2019 Prime Day units.
Framework for
DRIVING
IMPROVED
GROSS
CROSS-SELL & UPSELL
MARGIN
SUBSCRIPTIONS FULFILLMENT SCALE &
EFFICIENCY
Direct-to-Consumer Channel

OVER
TIME
SCALE VOLUME IN HIGHER SOFTWARE CONTENT & MANUFACTURING SUPPLY
MALAYSIA COST-OPTIMIZED HARDWARE CHAIN EFFICIENCY
November 11, 2020 23
Summary
Category creator, innovator and leader in Robotic Floor Care & AI NASDAQ:
• Strong revenue growth with continued runway
• Cutting-edge robotic AI and home understanding IRBT
• Consistent innovation, category leadership and portfolio expansion

Accelerating strategic initiatives aimed at

• Differentiating the cleaning experience
• Building direct relationships with ~8m connected, engaged owners Market Cap:
• Nurturing lifetime value of customer relationships
$1.7B*
Resilience and growth despite challenging market conditions
• Expect 2020 financial performance will exceed our original targets
• Focused on sustaining strong growth and navigating profitability headwinds in 2021
• Strong financial foundation to fund continued growth Headquarters in
Bedford, MA,

November 11, 2020 24

Thank you!

Any questions?

November 11, 2020 25

APPENDIX

November 11, 2020 26

Non-GAAP Financial Measures
Our non-GAAP financial measures reflect adjustments based on the following items.

• Amortization of acquired intangible assets: Amortization of acquired intangible assets consists of amortization of intangible assets including completed technology, customer relationships,
and reacquired distribution rights acquired in connection with business combinations. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are
significantly impacted by the timing and valuation of our acquisitions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating
performance and comparisons to our past operating performance.

• Net Merger, Acquisition and Divestiture (Income) Expense: Net merger, acquisition and divestiture (income) expense primarily consists of transaction fees, professional fees, and transition
and integration costs directly associated with mergers, acquisitions and divestitures. It also includes business combination adjustments including adjustments after the measurement period
has ended. The occurrence and amount of these costs will vary depending on the timing and size of these transactions. We exclude these charges from our non-GAAP measures to
facilitate an evaluation of our current operating performance and comparisons to our past operating performance.

• Stock-Based Compensation: Stock-based compensation is a non-cash charge relating to stock-based awards. We exclude this expense as it is a non-cash expense, and we assess our
internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies.

• IP Litigation Expense, Net: IP litigation expense, net relates to legal costs incurred to litigate patent, trademark, copyright and false advertising infringements, or to oppose or defend
against interparty actions related to intellectual property. Any settlement payment or proceeds resulting from these infringements are included or netted against the costs. We exclude
these costs from our non-GAAP measures as we do not believe these costs have a direct correlation to the operations of our business and may vary in size depending on the timing and
results of such litigations and settlements.

• Gain/Loss on Strategic Investments: Gain/loss on strategic investments includes fair value adjustments, realized gains and losses on the sales of these investments and losses on the
impairment of these investments. We exclude these items from our non-GAAP measures because we do not believe they correlate to the performance of our core business and may vary
in size based on market conditions and events. We believe that the exclusion of these gains or losses provides investors with a supplemental view of our operational performance.

• Income tax adjustments: Income tax adjustments include the tax effect of the non-GAAP adjustments, calculated using the appropriate statutory tax rate for each adjustment. We reassess
the need for any valuation allowance recorded based on the non-GAAP profitability and have eliminated the effect of the valuation allowance recorded in the U.S. jurisdiction. We also
exclude certain tax items that are not reflective of income tax expense incurred as a result of current period earnings. These certain tax items include, among other non-recurring tax items,
impacts from the Tax Cuts and Jobs Act of 2017 and stock-based compensation windfalls/shortfalls. We believe disclosure of the income tax provision before the effect of such tax items is
important to permit investors' consistent earnings comparison between periods.

November 11, 2020 27

GAAP-Non-GAAP Reconciliation
Q3 and First 9 Months 2020 GAAP Actuals to Q3 and First 9 Months 2019 Non-GAAP Actuals
iRobot Corporation
Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals
(in thousands, except per share amounts)
(unaudited)
For the three months ended For the nine months ended
For the three months ended For the nine months ended
September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019 September 26, 2020 September 28, 2019

GAAP Revenue $ 413,145 $ 289,399 $ 885,563 $ 787,232 GAAP Net Income $ 93,252 $ 35,532 $ 133,733 $ 65,259
Amortization of acquired intangible assets 481 3,351 2,459 10,079

GAAP Gross Profit $ 198,841 $ 136,841 $ 454,808 $ 374,557 Stock-based compensation 9,843 4,284 20,904 18,742

Amortization of acquired intangible assets 225 3,095 1,695 9,283 Tariff refunds - - (40,017) -

Stock-based compensation 331 337 1,150 1,120 Net merger, acquisition and divestiture expense (income) - 32 (1,241) 328

Tariff refunds - - (40,017) - IP litigation expense, net 1,607 (157) 3,360 (365)

Non-GAAP Gross Profit $ 199,397 $ 140,273 $ 417,636 $ 384,960 Restructuring and other 200 - 2,063 -
Gain on strategic investments (43,480) - (43,567) (572)
Non-GAAP Gross Profit Margin 48.3 % 48.5 % 47.2 % 48.9 %
Income tax effect 11,829 (1) 16,730 (9,150)
Non-GAAP Net Income $ 73,732 $ 43,041 $ 94,424 $ 84,321
GAAP Operating Expenses $ 117,847 $ 94,286 $ 323,756 $ 304,489
Amortization of acquired intangible assets (256) (256) (764) (796)
GAAP Net Income Per Diluted Share $ 3.27 $ 1.24 $ 4.69 $ 2.27
Stock-based compensation (9,512) (3,947) (19,754) (17,622)
Amortization of acquired intangible assets 0.02 0.12 0.08 0.35
Net merger, acquisition and divestiture (expense) income - (32) 566 (328)
Stock-based compensation 0.34 0.15 0.73 0.65
IP litigation expense, net (1,607) 157 (3,360) 365
Tariff refunds - - (1.40) -
Restructuring and other (200) - (2,063) -
Net merger, acquisition and divestiture expense (income) - - (0.04) 0.01
Non-GAAP Operating Expenses $ 106,272 $ 90,208 $ 298,381 $ 286,108
IP litigation expense, net 0.06 (0.01) 0.12 (0.01)
Non-GAAP Operating Expenses as a % of Non-GAAP Revenue 25.7 % 31.2 % 33.7 % 36.3 %
Restructuring and other - - 0.07 -
Gain on strategic investments (1.52) - (1.53) (0.02)
GAAP Operating Income $ 80,994 $ 42,555 $ 131,052 $ 70,068
Income tax effect 0.41 - 0.59 (0.32)
Amortization of acquired intangible assets 481 3,351 2,459 10,079
Non-GAAP Net Income Per Diluted Share $ 2.58 $ 1.50 $ 3.31 $ 2.93
Stock-based compensation 9,843 4,284 20,904 18,742
Tariff refunds - - (40,017) -
Number of shares used in diluted per share calculation 28,539 28,650 28,502 28,759
Net merger, acquisition and divestiture expense (income) - 32 (566) 328
IP litigation expense, net 1,607 (157) 3,360 (365)
Restructuring and other 200 - 2,063 -
Section 301 Tariff Costs
Non-GAAP Operating Income $ 93,125 $ 50,065 $ 119,255 $ 98,852
Section 301 tariff costs $ - $ 7,466 $ - $ 15,966
Non-GAAP Operating Margin 22.5 % 17.3 % 13.5 % 12.6 % Impact of Section 301 tariff costs to gross and operating margin (GAAP &
non-GAAP) -% (2.6)% -% (2.0)%
GAAP Income Tax Expense $ 29,982 $ 7,923 $ 39,156 $ 8,522 Impact of Section 301 tariff costs to net (loss) income per diluted share
(GAAP & non-GAAP) $ - $ (0.26) $ - $ (0.56)
Tax effect of non-GAAP adjustments (12,119) (132) (15,842) 3,490
Other tax adjustments 290 133 (888) 5,660
Supplemental Information
Non-GAAP Income Tax Expense $ 18,153 $ 7,924 $ 22,426 $ 17,672
Days sales outstanding 40 53
Days in inventory 93 152

November 11, 2020 28

GAAP-Non-GAAP Reconciliation
2020 Outlook
FY-20
GAAP Gross Profit $649 - $657 million
Amortization of acquired intangible assets ~$2 million
Stock-based compensation ~$2 million
Tariff refunds ~($40 million)
Total adjustments ~($36 million)
Non-GAAP Gross Profit $613 - $621 million

FY-20
GAAP Operating Income $127 - $132 million
Amortization of acquired intangible assets ~$3 million
Stock-based compensation ~$28 million
Tariff refunds ~($40 million)
Net merger, acquisition and divestiture expense (income) ~($1 million)
IP litigation expense, net ~$6 million
Restructuring and other ~$2 million
Total adjustments ~($2 million)
Non-GAAP Operating Income $125 - $130 million

FY-20
GAAP Net Income Per Diluted Share $4.52 - $4.62
Amortization of acquired intangible assets ~$0.10
Stock-based compensation ~$0.98
Tariff refunds ~($1.40)
Net merger, acquisition and divestiture expense (income) ~($0.04)
IP litigation expense, net ~$0.21
Restructuring and other ~$0.07
Gain on strategic investments ~($1.52)
Income tax effect ~$0.51
Total adjustments ~($1.09)
Non-GAAP Net Income Per Diluted Share $3.43 - $3.53

Number of shares used in diluted per share calculations ~28.6 million

November 11, 2020 29

GAAP-Non-GAAP Reconciliation
2019 GAAP Actuals to 2019 Non-GAAP Actuals
In thousands, except per share and % amounts
Unaudited For the twelve
For the three months ended months ended
March 30, September 28, December 31, December 31,
2019 June 29, 2019 2019 2019 2019
GAAP Revenue $ 237,661 $ 260,172 $ 289,399 $ 426,778 $ 1,214,010

GAAP Gross Profit 119,546 118,170 136,841 169,370 543,927

Amortization of acquired intangible assets 3,077 3,111 3,095 2,438 11,721
Stock-based compensation 378 405 337 366 1,486
Non-GAAP Gross Profit $ 123,001 $ 121,686 $ 140,273 $ 172,174 $ 557,134
Non-GAAP Gross Profit Margin 51.8 % 46.8 % 48.5 % 40.3 % 45.9 %

GAAP Operating Income $ 22,263 $ 5,250 $ 42,555 $ 16,550 $ 86,618

Amortization of acquired intangible assets 3,348 3,380 3,351 2,693 12,772
Stock-based compensation 6,864 7,594 4,284 5,001 23,744
1
Net merger, acquisition and divestiture (income) expense 152 143 32 138 466
IP litigation expense, net 1 469 (676) (157) 2,582 2,218
Non-GAAP Operating Income $ 33,096 $ 15,691 $ 50,065 $ 26,964 $ 125,818
Non-GAAP Operating Income Margin 13.9 % 6.0 % 17.3 % 6.3 % 10.4 %

GAAP Income Tax (Benefit) Expense $ 1,023 $ (424) $ 7,923 $ 5,011 $ 13,533
Tax effect of non-GAAP adjustments 1,824 1,797 (132) 1,159 4,648
Other tax adjustments 4,067 1,461 133 1,267 6,928
Non-GAAP Income Tax Expense $ 6,914 $ 2,834 $ 7,924 $ 7,437 $ 25,109

GAAP Net Income $ 22,520 $ 7,207 $ 35,532 $ 20,041 $ 85,300

Amortization of acquired intangible assets 3,348 3,380 3,351 2,693 12,772
Stock-based compensation 6,864 7,594 4,284 5,001 23,744
1
Net merger, acquisition and divestiture (income) expense 152 143 32 138 466
1
IP litigation expense, net 469 (676) (157) 2,582 2,218
(Gain)/loss on strategic investments 57 (629) - (8,332) (8,904)
Income tax effect (5,891) (3,258) (1) (2,426) (11,576)
Non-GAAP Net Income $ 27,519 $ 13,761 $ 43,041 $ 19,697 $ 104,020

GAAP Net Income Per Diluted Share $ 0.78 $ 0.25 $ 1.24 $ 0.70 $ 2.97
Amortization of acquired intangible assets 0.12 0.12 0.12 0.09 0.44
Stock-based compensation 0.24 0.26 0.15 0.18 0.83
Net merger, acquisition and divestiture (income) expense 1 - - - - 0.01
IP litigation expense, net 1 0.02 (0.02) (0.01) 0.09 0.08
(Gain)/loss on strategic investments - (0.02) - (0.29) (0.31)
Income tax effect (0.20) (0.11) - (0.08) (0.40)
Non-GAAP Net Income Per Diluted Share $ 0.96 $ 0.48 $ 1.50 $ 0.69 $ 3.62

Number of shares used in diluted per share calculation 28,763 28,763 28,650 28,563 28,735

Certain numbers may not total due to rounding

1
Net merger, acquisition and divestiture (income) expense and IP litigation, net are classified in General and Administrative
November 11, 2020 30
GAAP-Non-GAAP Reconciliation
2018 GAAP Actuals to 2018 Non-GAAP Actuals
For the twelve
In thousands, except per share and % amounts For the three months ended months ended
Unaudited March 31, September 29, December 29, December 29,
2018 June 30, 2018 2018 2018 2018
GAAP Revenue $ 217,068 $ 226,317 $ 264,534 $ 384,665 $ 1,092,584

GAAP Gross Profit 115,785 117,926 135,206 186,511 555,428

Amortization of acquired intangible assets 4,782 4,679 4,574 4,509 18,544
Stock-based compensation 341 347 347 372 1,407
Non-GAAP Gross Profit $ 120,908 $ 122,952 $ 140,127 $ 191,392 $ 575,379
Non-GAAP Gross Profit Margin 55.7 % 54.3 % 53.0 % 49.8 % 52.7 %

GAAP Operating Income $ 25,405 $ 13,355 $ 37,275 $ 29,787 $ 105,822

Amortization of acquired intangible assets 5,055 4,948 4,837 4,769 19,609
Stock-based compensation 5,946 6,431 6,592 6,835 25,804
Net merger, acquisition and divestiture (income) expense 1 (141) 164 - 115 138
IP litigation expense, net 1 2,571 759 187 39 3,556
Non-GAAP Operating Income $ 38,836 $ 25,657 $ 48,891 $ 41,545 $ 154,929
Non-GAAP Operating Income Margin 17.9 % 11.3 % 18.5 % 10.8 % 14.2 %

GAAP Income Tax (Benefit) Expense $ 5,523 $ 4,391 $ 5,683 $ 5,033 $ 20,630
Tax effect of non-GAAP adjustments 3,340 2,830 2,835 2,849 11,854
Other tax adjustments 712 (2,440) 2,667 1,170 2,109
Non-GAAP Income Tax Expense $ 9,575 $ 4,781 $ 11,185 $ 9,052 $ 34,593

GAAP Net Income $ 20,401 $ 10,471 $ 31,929 $ 25,191 $ 87,992

Amortization of acquired intangible assets 5,055 4,948 4,837 4,769 19,609
Stock-based compensation 5,946 6,431 6,592 6,835 25,804
Net merger, acquisition and divestiture (income) expense 1 (141) 164 - 115 138
IP litigation expense, net 1 2,571 759 187 39 3,556
(Gain)/loss on strategic investments 281 (682) 26 (61) (436)
Income tax effect (4,052) (390) (5,502) (4,019) (13,963)
Non-GAAP Net Income $ 30,061 $ 21,701 $ 38,069 $ 32,869 $ 122,700

GAAP Net Income Per Diluted Share $ 0.71 $ 0.37 $ 1.12 $ 0.88 $ 3.07
Amortization of acquired intangible assets 0.17 0.17 0.17 0.17 0.69
Stock-based compensation 0.20 0.23 0.23 0.24 0.90
Net merger, acquisition and divestiture (income) expense 1 - - - - -
IP litigation expense, net 1 0.09 0.03 0.01 - 0.13
(Gain)/loss on strategic investments 0.01 (0.02) - - (0.02)
Income tax effect (0.14) (0.01) (0.19) (0.14) (0.49)
Non-GAAP Net Income Per Diluted Share $ 1.04 $ 0.77 $ 1.34 $ 1.15 $ 4.28

Number of shares used in diluted per share calculation 28,923 28,337 28,506 28,579 28,640

Certain numbers may not total due to rounding

1
Net merger, acquisition and divestiture (income) expense and IP litigation, net are classified in General and Administrative
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