PORTLAND, Ore., Jan. 6, 2026 /PRNewswire/ -- Pixelworks, Inc. (NASDAQ: PXLW) ("Pixelworks" or the "Company"), a leading provider of innovative video and display processing solutions, today announced the successful closing of the Company's previously announced transaction to sell its shares in Pixelworks Semiconductor Technology (Shanghai) Co., Ltd., a company organized under the laws of the People's Republic of China and a subsidiary of Pixelworks ("Pixelworks Shanghai", or "PWSH"), to a special purpose ent ...

Meeting Overview - The special meeting of Pixelworks was convened on November 26, 2025, and has been reconvened multiple times, with the latest being on December 19, 2025 [1] - The meeting is chaired by the Chief Financial Officer of Pixelworks, Haley Green [1] Agenda Items - The agenda includes a vote on Proposal 1 regarding the sale of common stock of Pixelworks Semiconductor Technology (Shanghai) Co. Ltd. held by a subsidiary [2] - An advisory vote on Proposal 2 concerning compensation for executive officers related to the sale in Proposal 1 is also included [2] - The agenda will conclude with a vote count and formal adjournment of the meeting [2] Proposal Details - Proposal 1 focuses on the sale of common stock of Pixelworks Shanghai, which is held indirectly by the company [3] - Proposal 2 is an advisory vote on the compensation that may be paid to executive officers in connection with the sale referenced in Proposal 1 [4]

When the Special Meeting was reconvened on December 19, 2025, approximately 98% of the proxies that have been received had been voted in favor of Proposal 1, but represented only approximately 61% of the shares of common stock outstanding on the record date for the Special Meeting. The Board of Directors continues to believe that the approval of Proposal 1 is in the best interests of the Company and its shareholders, and the Board of Directors and both leading independent proxy voting advisory groups, Insti ...

Meeting adjourned because the approval by 67% of outstanding common shares on Proposal 1 was not received Votes must be received by 11:59 p.m. Eastern time on December 18, 2025, to be counted. After this time, votes can only be cast by record holders as of October 17, 2025, during the adjourned Special Meeting on December 19, 2025, at 9:00 a.m. Pacific time at 1-855-206-1342 or via email at [email protected]. Forward-Looking Statements This press release contains "forward-looking statements" that involve su ...

Core Points - Pixelworks, Inc. has adjourned its Special Meeting of Stockholders to December 8, 2025, due to insufficient votes for Proposal 1, which seeks to authorize the sale of its subsidiary, Pixelworks Semiconductor Technology (Shanghai) [1][2] - Approximately 98% of the votes cast were in favor of Proposal 1, but this only accounted for about 57% of the total outstanding shares required for approval [2] - The Board of Directors believes that the approval of Proposal 1 is in the best interests of the Company and its shareholders, with recommendations from leading independent proxy voting advisory groups to vote in favor [2] Voting Information - Shareholders who have not yet voted are encouraged to do so by December 7, 2025, at 11:59 p.m. Eastern time [4][6] - The adjourned Special Meeting will be held virtually, allowing shareholders to participate and vote by dialing a designated number [3] - Votes must be received by the specified deadline to be counted, and record holders can vote during the reconvened meeting [6] Company Background - Pixelworks, Inc. specializes in video and display processing solutions, providing technology that enhances viewing experiences across various screens [12]

Core Viewpoint - Pixelworks (PXLW) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Pixelworks Earnings Outlook - For the fiscal year ending December 2025, Pixelworks is expected to earn -$3.63 per share, unchanged from the previous year, but analysts have raised their earnings estimates by 6% over the past three months [8]. - The upgrade to Zacks Rank 2 reflects an improvement in Pixelworks' underlying business, which is likely to drive the stock price higher as investors respond to this trend [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Only the top 20% of Zacks-covered stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Core Viewpoint - Pixelworks, Inc. is actively engaging with investors by participating in the ROTH Technology Conference, indicating a focus on investor relations and potential growth opportunities in the video and display processing sector [1][2]. Company Overview - Pixelworks, Inc. specializes in innovative video and display processing solutions, providing technology that enhances viewing experiences across various screens, including cinema and smartphones [3]. - The company has over 20 years of experience in delivering image processing innovations to major players in consumer electronics, professional displays, and video streaming services [3]. Event Participation - Todd DeBonis, President and CEO of Pixelworks, will host one-on-one investor meetings at the ROTH Technology Conference on November 19, 2025, in New York [1]. - Investors interested in meeting with the company can request a meeting through the conference event website or by contacting their ROTH representative [2].

Financial Performance - Net revenue for Q3 2025 was $8.8 million, a decrease of 8% from $9.5 million in Q3 2024, and for the first nine months of 2025, it was $24.1 million, down 29% from $34.1 million in the same period of 2024[119] - Integrated circuit (IC) product sales in Q3 2025 were $8.5 million, while engineering services and other revenue contributed $0.2 million; in Q3 2024, IC sales were $9.5 million with $0.1 million from other sources[120] - The decrease in IC revenue was primarily due to a 43% decline in Mobile market sales in Q3 2025 compared to Q3 2024, and a 74% decrease in the first nine months of 2025 compared to the same period in 2024[122] - Gross profit margin for Q3 2025 was 50%, down from 51% in Q3 2024, and for the first nine months of 2025, it was 48%, compared to 51% in the same period of 2024[123] Expenses and Cost Management - Research and development expenses for Q3 2025 were $5.7 million, a decrease of 32% from $8.4 million in Q3 2024, and for the first nine months of 2025, expenses were $18.2 million, down 25% from $24.4 million in the same period of 2024[128] - Selling, general and administrative expenses decreased by $0.7 million, or 15%, in Q3 2025 compared to Q3 2024, and by $2.9 million, or 18%, in the first nine months of 2025 compared to the same period in 2024[131] - The company executed a restructuring plan in May 2025, resulting in a 4% reduction in workforce, primarily in research and development[133] - The company recorded a restructuring expense of $1.1 million for the nine months ended September 30, 2025, related to the May and February 2025 restructuring plans[135] Cash Flow and Liquidity - Total cash and cash equivalents decreased by $9.0 million to $14.6 million as of September 30, 2025, primarily due to $14.1 million used in operating activities[137] - As of September 30, 2025, the company had cash and cash equivalents of $14.6 million, which is expected to be adequate to fund operating needs for at least the next twelve months[149] Strategic Initiatives - Pixelworks plans to focus on cinematic visualization solutions, including its TrueCut Motion platform, following the anticipated sale of its subsidiary PWSH for an equity value of RMB 950 million (approximately $133 million USD)[114] - The company entered into a loan agreement allowing PWSH to borrow up to RMB 10 million (approximately $1.4 million USD), with the full amount borrowed as of September 30, 2025[117] - The company has an intellectual property portfolio of 201 patents related to visual display technology as of October 22, 2025[114] - The company has restructured its Mobile and Home & Enterprise businesses to better serve Asia-centered customers, operating as a full profit-and-loss center under PWSH[113] - The company anticipates pursuing acquisitions that may require additional capital, which could dilute existing shareholders[150] Inventory and Receivables - Accounts receivable, net decreased to $5.7 million as of September 30, 2025, with the average days sales outstanding increasing to 58 days from 48 days[139] - Inventories decreased to $3.1 million as of September 30, 2025, with inventory turnover decreasing to 4.8 from 5.1[140] Capital Raising - The company raised approximately $3.0 million in net proceeds from the sale of 347,559 shares under the 2024 ATM Program during the first nine months of 2025[142] - The company received net proceeds of approximately $1.3 million from a registered direct offering of 164,176 shares at a price of $8.832 per share[143] Revenue Trends - Pixelworks experienced seasonal revenue fluctuations, with higher revenue typically in Q3 for digital projectors and in Q4 for the mobile market[118]

Financial Performance - Third quarter 2025 revenue was $8.8 million, a 6% increase from $8.3 million in Q2 2025, but a decrease from $9.5 million in Q3 2024[6] - The company recorded a GAAP net loss of $4.4 million, or ($0.81) per share, an improvement from a net loss of $6.7 million in Q2 2025 and $8.1 million in Q3 2024[8] - Adjusted EBITDA for Q3 2025 was a negative $3.6 million, an improvement from negative $4.3 million in Q2 2025 and negative $6.3 million in Q3 2024[8] - Non-GAAP net loss attributable to Pixelworks Inc. for Q3 2025 was $3,754,000, compared to $5,304,000 in Q2 2025 and $7,083,000 in Q3 2024[24] - GAAP net loss attributable to Pixelworks Inc. for Q3 2025 was $4,432,000, an improvement from a loss of $6,707,000 in Q2 2025 and $8,141,000 in Q3 2024[24] Margins and Expenses - GAAP gross margin for Q3 2025 was 49.8%, up 400 basis points from 45.8% in Q2 2025, and down from 51.2% in Q3 2024[8] - Non-GAAP gross margin for Q3 2025 was 49.9%, compared to 46.0% in Q2 2025 and 51.3% in Q3 2024[8] - Operating expenses decreased to $10.0 million in Q3 2025, down from $11.1 million in Q2 2025 and $13.5 million in Q3 2024[8] - Operating expenses totaled $9,993 million, with research and development expenses at $5,720 million, reflecting a decrease from $5,998 million in the previous quarter[20] - Stock-based compensation for Q3 2025 was $754,000, compared to $739,000 in Q2 2025 and $1,042,000 in Q3 2024[24] - Restructuring costs for Q3 2025 were $0, down from $643,000 in Q2 2025 and $90,000 in Q3 2024[24] Cash Flow and Assets - The company realized a $3 million cash inflow from the sale of non-strategic patents[7] - Total current assets decreased to $25,331,000 as of September 30, 2025, down from $34,852,000 as of December 31, 2024[26] - Cash and cash equivalents decreased to $14,611,000 as of September 30, 2025, compared to $23,647,000 as of December 31, 2024[26] - Total assets decreased to $50,521,000 as of September 30, 2025, from $64,072,000 as of December 31, 2024[26] - The company's total shareholders' equity deficit was $(1,152,000) as of September 30, 2025, compared to $12,482,000 as of December 31, 2024[26] Revenue Drivers and Market Performance - Sales growth was driven by increased demand in the home and enterprise markets[6] - For the three months ended September 30, 2025, Pixelworks reported net revenue of $8,771 million, a 6.3% increase from $8,250 million in the previous quarter[20] - Gross profit for the same period was $4,371 million, resulting in a gross profit margin of 49.9%, compared to 46.0% in the previous quarter[21][23] - Pixelworks received government subsidies amounting to $467 million during the quarter, contributing to the overall financial performance[20] - The company reported a total other income of $518 million for the three months ended September 30, 2025, compared to $867 million in the previous quarter[20] Corporate Actions - Pixelworks announced a definitive purchase agreement to sell all shares of its Pixelworks Shanghai subsidiary, pending shareholder approval[5] - The company completed a registered direct offering generating net proceeds of approximately $6.5 million[7]

Core Insights - Pixelworks reported a quarterly loss of $0.69 per share, better than the Zacks Consensus Estimate of a loss of $0.86, and an improvement from a loss of $1.44 per share a year ago, resulting in an earnings surprise of +19.77% [1] - The company generated revenues of $8.77 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.54% and down from $9.53 million year-over-year [2] - Pixelworks shares have declined approximately 30% year-to-date, contrasting with the S&P 500's gain of 16.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.74 on revenues of $10 million, and for the current fiscal year, it is -$3.90 on revenues of $34.3 million [7] - The estimate revisions trend for Pixelworks was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Electronics - Semiconductors industry, to which Pixelworks belongs, is currently ranked in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Ambarella, is expected to report quarterly earnings of $0.21 per share, reflecting a year-over-year increase of +90.9%, with revenues projected at $104.11 million, up 26% from the previous year [9][10]