Pixelworks(PXLW) - 2025 Q2 - Quarterly Results

Pixelworks Second Quarter 2025 Financial Results Pixelworks reported its second quarter 2025 financial results, demonstrating sequential revenue growth, improved operating performance, and strategic advancements in its Shanghai subsidiary and TrueCut Motion business Second Quarter and Recent Highlights Pixelworks reported Q2 financial results within guidance, highlighted by a return to sequential revenue growth and improved operating results due to successful cost reduction measures - Financial results were within guidance, showing sequential revenue growth and significant improvement in operating results due to reduced operating expenses[4] - Strategic focus remains on the Shanghai subsidiary, pursuing mobile visual processor solutions, ASIC design services, and IP licensing[5] - The TrueCut Motion business is gaining momentum with new movie titles and a growing ecosystem of content and distribution partners[5][8] - The Pixelworks Shanghai subsidiary was awarded approximately $1.6 million in cash subsidies related to its participation in China's "Little Giant" program[8] - The company is evaluating non-binding term sheets from multiple parties regarding strategic interest in its Pixelworks Shanghai subsidiary[8] Second Quarter 2025 Financial Results In Q2 2025, Pixelworks generated $8.3 million in revenue, a 16% increase sequentially, driven by seasonal growth in the home and enterprise market, with improved GAAP and non-GAAP net losses Q2 2025 Financial Performance Summary (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Revenue | $8.3 million | $7.1 million | $8.5 million | | GAAP Gross Margin | 45.8% | 48.7% | 50.7% | | Non-GAAP Gross Margin | 46.0% | 49.9% | 51.0% | | GAAP Net Loss | ($6.7 million) | ($7.8 million) | ($10.1 million) | | GAAP EPS | ($1.27) | ($1.54) | ($2.09) | | Non-GAAP Net Loss | ($5.3 million) | ($6.5 million) | ($7.7 million) | | Non-GAAP EPS | ($1.00) | ($1.30) | ($1.60) | | Adjusted EBITDA | ($4.3 million) | ($5.8 million) | ($7.0 million) | - The sequential revenue increase of 16% was primarily driven by seasonal growth of product shipments in the home and enterprise market[6][8] - A one-for-twelve reverse stock split was executed on June 6, 2025, with all per-share data retroactively adjusted to reflect this change[9] Business Outlook and Conference Call The company will provide its business outlook and guidance for the third quarter of 2025 during its conference call scheduled for August 12, 2025 - The business outlook and guidance for Q3 2025 will be discussed during the conference call[10] - A conference call for analysts and investors is scheduled for August 12, 2025, at 2:00 p.m. Pacific Time[11] Financial Statements and Reconciliations This section provides the detailed unaudited financial tables for the second quarter and first six months of 2025, including the Consolidated Statements of Operations, Balance Sheets, and various reconciliations of GAAP to non-GAAP financial measures Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, Pixelworks reported revenues of $8.25 million, a gross profit of $3.78 million, and a net loss attributable to the company of $6.71 million Q2 2025 Statement of Operations (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue, net | $8,250 | $8,535 | | Gross profit | $3,779 | $4,326 | | Total operating expenses | $11,080 | $15,068 | | Loss from operations | ($7,301) | ($10,742) | | Net loss attributable to Pixelworks Inc. | ($6,707) | ($10,149) | | Net loss per share - basic and diluted | ($1.27) | ($2.09) | Condensed Consolidated Balance Sheets As of June 30, 2025, the company held $14.26 million in cash and cash equivalents, down from $23.65 million at the end of 2024, with total assets at $51.80 million and total liabilities at $23.45 million Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $14,255 | $23,647 | | Total current assets | $25,575 | $34,852 | | Total assets | $51,804 | $64,072 | | Total current liabilities | $9,141 | $8,346 | | Total liabilities | $23,453 | $24,194 | | Total Pixelworks, Inc. shareholders' equity (deficit) | ($22,436) | ($10,568) | GAAP to Non-GAAP Reconciliations The company provided detailed reconciliations from GAAP to non-GAAP metrics, showing a Q2 2025 non-GAAP net loss of $5.3 million and an Adjusted EBITDA loss of $4.3 million Q2 2025 GAAP to Non-GAAP Net Loss Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP net loss attributable to Pixelworks Inc. | ($6,707) | | Stock-based compensation | $739 | | Restructuring | $643 | | Tax effect of non-GAAP adjustments | $21 | | Non-GAAP net loss attributable to Pixelworks Inc. | ($5,304) | Q2 2025 Adjusted EBITDA Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | GAAP net loss attributable to Pixelworks Inc. | ($6,707) | | Stock-based compensation | $739 | | Restructuring | $643 | | Depreciation and amortization | $573 | | Interest income and other, net | ($66) | | Non-GAAP provision for income taxes | $470 | | Adjusted EBITDA | ($4,327) | Notes to Financials This section explains the company's use of non-GAAP financial measures and includes the Safe Harbor statement regarding forward-looking information Non-GAAP Financial Measures Pixelworks utilizes non-GAAP financial measures, such as non-GAAP gross profit margin and net loss, to help management and investors assess the performance of its core business - Management uses non-GAAP measures internally to evaluate the business, establish operational goals, and for budgeting and resource allocation[15] - Non-GAAP measures exclude stock-based compensation expense, restructuring expense, and the tax effect of these adjustments to facilitate period-to-period comparison of core operating results[14][15] Safe Harbor Statement The earnings release contains forward-looking statements concerning potential strategic options for its Shanghai subsidiary, new revenue opportunities, and the adoption of its TrueCut Motion technology - Forward-looking statements relate to potential strategic options for Pixelworks Shanghai, adjacent revenue opportunities, and the adoption of TrueCut Motion technology[17] - Key risks that could affect financial results include the actual adoption of the TrueCut Motion platform, smartphone market performance, competitive factors, and global economic challenges[17]