For all periods presented:
- Non-GAAP gross margin is calculated as non-GAAP gross profit divided by GAAP revenue. Non-GAAP gross profit consists of GAAP gross profit excluding the effects of stock-based compensation expense.
- Non-GAAP operating margin is calculated as non-GAAP (loss) income from operations divided by GAAP revenue. Non-GAAP (loss) income from operations consists of GAAP (loss) income from operations excluding the effects of stock-based compensation expense, amortization of intangible assets and acquisition related costs.
- Non-GAAP net (loss) income is calculated as GAAP net (loss) income excluding the effects of stock-based compensation expense, amortization of intangible assets, acquisition related costs, changes in the fair value of a common stock repurchase derivative liability, a tax benefit for the reversal of valuation allowance as a result of the IO Turbine acquisition, and non-cash interest expense related to changes in the fair value of a preferred stock warrant.
- Non-GAAP net (loss) income per diluted share is calculated as non-GAAP net (loss) income divided by non-GAAP weighted-average diluted shares outstanding for the three months ended December 31, 2011 and is calculated as non-GAAP net (loss) income divided by GAAP weighted-average diluted shares outstanding for the six months ended December 31, 2011. Non-GAAP weighted-average diluted shares outstanding is calculated as GAAP weighted average diluted shares outstanding including the dilutive impact due to stock options, a common stock warrant, restricted stock awards, and restricted stock units.
The accompanying tables provide more details on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures described above and the related reconciliations between these financial measures. With respect to our expectations under “Business Outlook” above, reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures. The effects of stock-based compensation expense specific to non-employee common stock options are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant impact on our GAAP financial results.
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