Pixelworks(US:PXLW)2025-05-13 22:00Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $7.1 million, down from $9.1 million in Q4 2024 and $16.1 million in Q1 2024, reflecting anticipated seasonality and previous higher sales of end-of-life products [21] - Non-GAAP gross profit margin for Q1 2025 was 49.9%, compared to 54.8% in Q4 2024 and 50.7% in Q1 2024, primarily due to product mix shifts [21][22] - Non-GAAP operating expenses were $10.4 million, flat sequentially but down $2.2 million year-over-year, with expectations for a total year-over-year decrease of approximately $10 million for 2025 [22][23] - Non-GAAP net loss for Q1 2025 was $6.5 million, or a loss of $0.11 per share, compared to a net loss of $4.3 million in Q4 2024 and $4 million in Q1 2024 [24] Business Line Data and Key Metrics Changes - Home and Enterprise revenue was approximately $5.8 million, while mobile revenue was approximately $1.3 million in Q1 2025 [21] - Mobile revenue increased sequentially in Q1 2025, driven by shipments of visual processors for previously launched smartphone models [12] - Projector revenue was effectively flat year-over-year, with no significant impacts noted from the global macro environment [15] Market Data and Key Metrics Changes - The film industry is showing signs of recovery, with an uptick in activity from filmmakers and studios, indicating a positive shift from previous headwinds [8] - The exhibition ecosystem for TrueCut Motion includes over 1,500 premium theaters, with significant capital investments from exhibitors [10] Company Strategy and Development Direction - The company is focused on expanding the TrueCut Motion ecosystem and achieving critical mass for broader adoption in both theaters and home entertainment devices [20] - The strategic review process for Pixelworks Shanghai is nearing closure, with expectations for a clear strategic direction within 90 days [18] Management's Comments on Operating Environment and Future Outlook - The first half of 2025 is expected to be challenging from a revenue perspective, but the company is well-positioned to benefit from diverse opportunities for growth [17][19] - Management remains optimistic about reaching profitability for Pixelworks Shanghai in the second half of 2025 [19] Other Important Information - The company has engaged in a formal review process for Pixelworks Shanghai after receiving strategic interest, with ongoing due diligence with several parties [18] - The company anticipates continued benefits from cost reduction measures implemented over the past year [23] Q&A Session Summary Question: What revenue levels might Pixelworks Shanghai achieve for profitability? - Management indicated that operating expenses for Pixelworks Shanghai could be around $7 million per quarter, with a mix of revenue sources needed to reach profitability [29][30] Question: Are the device discussions for TrueCut with Chinese brands or global OEMs? - Management clarified that the focus is on global home entertainment devices, primarily targeting North America and Europe [37] Question: Can you provide a framework for sizing ASIC design services opportunities? - Management explained that revenue size depends on the extent of design services provided, with potential costs ranging from $10 million to $20 million for full turnkey services [41] Question: How are mobile engagements lining up for revenue levels? - Management noted that replicating 2023 revenue levels in mobile would be challenging, with expectations closer to 2024 year-over-year levels [44] Question: Can you elaborate on the collaboration with the post-production house for TrueCut? - Management confirmed a signed agreement with a large post-production house, emphasizing the benefits of motion grading for premium large format experiences [48]