Pixelworks(US:PXLW)2025-05-13 22:02Financial 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 [22][25] - 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 [23][24] - Non-GAAP operating expenses were $10.4 million, flat sequentially but down $2.2 million year-over-year, with total expected reductions of approximately $10 million for the full year of 2025 [24][25] 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, with mobile showing sequential growth [22][23] - The TrueCut Motion platform is targeting to double the number of titles from five in 2024 to ten in 2025, indicating growth in the film industry [9][10] Market Data and Key Metrics Changes - The mobile business saw sequential revenue growth in Q1 2025, driven by shipments of visual processors for previously launched smartphone models [12][22] - The projector market remained stable, with no significant impacts noted from the global macro environment, and revenue expected to mirror 2024 levels [15][16] Company Strategy and Development Direction - The company is focused on expanding the TrueCut ecosystem and achieving critical mass for broader adoption in both theaters and home entertainment devices [21] - A strategic review process for the Pixelworks Shanghai subsidiary is underway, with potential outcomes expected within 90 days [19][20] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging first half of 2025 from a revenue perspective but is optimistic about engagements across diverse opportunities to drive growth [18][20] - The company expects Pixelworks Shanghai to reach profitability in the second half of 2025, contingent on various revenue streams materializing [19][20] Other Important Information - The company has engaged in a formal review process for its Shanghai subsidiary after receiving strategic interest, indicating potential changes in ownership or collaboration structures [19] - The company has implemented additional cost reduction measures since the beginning of 2025, which are expected to yield further benefits [24][26] Q&A Session Summary Question: What revenue levels might Pixelworks Shanghai achieve for profitability? - Management indicated that operating expenses for Shanghai could be around $7 million per quarter, with profitability achievable if a mix of revenue streams materializes as anticipated [29][30] Question: Are the device discussions for TrueCut with Chinese brands or global OEMs? - Management clarified that the certification testing mentioned is not with a Chinese brand, focusing instead on North American and European markets for home entertainment devices [32][38] Question: Can you provide a framework for sizing ASIC design services opportunities? - Management explained that revenue size for design services depends on the extent of involvement, with potential costs ranging from $10 million to $20 million for full turnkey services [39][42] Question: How are mobile engagements lining up for revenue expectations? - Management noted that replicating 2023 revenue levels in mobile would be challenging, with expectations closer to 2024 levels, but an uptick is anticipated in the second half of the year [46][47] Question: What is the status of the collaboration with the post-production house? - Management confirmed a signed agreement with a large post-production house, emphasizing the benefits of motion grading for premium large format experiences [50]