Pixelworks(US:PXLW)2019-08-02 02:20Financial Data and Key Metrics Changes - Revenue for Q2 2019 was $18 million, reflecting a year-over-year decline from $19.3 million in Q2 2018 but an increase from $16.6 million in Q1 2019 [10][36] - Non-GAAP gross profit margin improved to 54.1%, up from 52.7% in Q2 2018 and 53.3% in Q1 2019 [10][38] - Non-GAAP net loss was $97,000, breakeven on a per share basis, compared to a loss of $1.5 million in Q1 2019 and a net income of $31,000 in Q2 2018 [40] Business Line Data and Key Metrics Changes - Mobile revenue grew over 100% year-over-year in the first half of 2019, with Q2 revenue at approximately $820,000 [13][37] - Video Delivery revenue was approximately $3.6 million, growing more than 70% year-over-year, although it moderated slightly from Q1 [26][36] - Digital Projector revenue was approximately $13.6 million, showing a sequential growth of over 20% but down year-over-year due to a seasonal decline [29][36] Market Data and Key Metrics Changes - The mobile business has seen consistent growth, with six consecutive quarters of year-over-year revenue increases [13] - The Video Delivery business in Japan is experiencing a shift from set-top box demand to advanced personal video recorders, impacting revenue dynamics [27][28] - The Digital Projector market is facing a slowdown in demand, particularly in China, due to macroeconomic factors [30][58] Company Strategy and Development Direction - The company is focused on advancing growth initiatives in mobile while maintaining its position in projector and Video Delivery markets [11] - The expanded portfolio of visual processing solutions aims to meet specific customer needs and expand the total addressable market [12] - Strategic platform engagements are prioritized to leverage co-marketing resources and enhance market presence [33][34] Management's Comments on Operating Environment and Future Outlook - Management anticipates growth recovery in the Video Delivery business, particularly in the fourth quarter, driven by demand for 4K personal video recorders [46] - The company is optimistic about the mobile pipeline, indicating it is the best it has ever been, with increased hiring to support growth [60] - Management acknowledges challenges in the Digital Projector market due to reduced demand and economic conditions in China [30][58] Other Important Information - The TrueCut solution is gaining traction, with over 2,500 hours of video content available and more than 70 smartphone models supporting it [20][21] - The company received the Hollywood Professional Association's Engineering Excellence Award for its TrueCut Motion Grading tools, highlighting its technical capabilities [25] Q&A Session Summary Question: Insights on Video Delivery business growth recovery - Management expects growth to continue in Q4, driven by the 4K PVR market and OTA market improvements [46] Question: Customer preferences between Iris and Soft Iris - Customers are designing both solutions into single phones, with Soft Iris offering easier integration while Iris requires a full system engineering effort [47][50] Question: Progress with YouKu and TrueCut product - Management has seen significant early progress but refrained from providing specific timelines for financial impacts [51][52] Question: Sell-through basis for projectors - Demand has subsided considerably, influenced by infrastructure developments and currency fluctuations affecting Japanese exports to China [58] Question: Mobile pipeline quality compared to three months ago - The quality of the mobile pipeline is at an all-time high, with hiring ramping up to meet demand [60] Question: Competitive environment changes - The company maintains a competitive edge by offering more than just tone mapping, focusing on comprehensive visual processing solutions [61]