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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 12, 2025

PIXELWORKS, INC.
(Exact name of registrant as specified in its charter)
 
Oregon 000-30269 91-1761992
(State or other jurisdiction
of incorporation)		 (Commission File Number) (I.R.S. Employer
Identification No.)
 
16760 SW Upper Boones Ferry Rd., Suite 101
Portland, OR 97224
(503) 601-4545
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockPXLWThe Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company   ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐




Item 2.02    Results of Operations and Financial Condition.

On February 12, 2025, Pixelworks, Inc. (the “Company”) issued a press release announcing financial results for the three and twelve month periods ended December 31, 2024 and held a conference call to discuss the Company's financial results. The press release and conference call contain forward-looking statements regarding the Company and include cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

A copy of the press release announcing the financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Exhibit 99.1 shall be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall be incorporated by reference in all appropriate filings under the Securities Act of 1933, as amended (the “Securities Act”), except for the final two paragraphs under the header “Fourth Quarter and Recent Highlights”, each of which shall be “furnished” and not “filed.”

The Company’s conference call script discussing the financial results is furnished herewith as Exhibit 99.2 and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in such filing.

Item 8.01 Other Events.

The Company is providing as Exhibit 99.3 to this Current Report on Form 8-K, which is incorporated herein by reference, an update regarding that certain Capital Increase Agreement dated August 21, 2021 by and among the Company, certain private equity and strategic investors based in China, and certain entities which collectively are owned by approximately 75% of the employees of Pixelworks Semiconductor Technology (Shanghai) Co., Ltd. and its subsidiaries, as amended.
Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits.
    









SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 PIXELWORKS, INC.
(Registrant)
Dated:February 12, 2025/s/ Haley F. Aman
 
Haley F. Aman
Chief Financial Officer







Exhibit 99.1
pixelworkslogo24a.jpg

Pixelworks Reports Fourth Quarter and Fiscal Year 2024 Financial Results

PORTLAND, Ore., February 12, 2025 – Pixelworks, Inc. (NASDAQ: PXLW), a leading provider of innovative video and display processing solutions, today announced financial results for the fourth quarter and fiscal year ended December 31, 2024.
Fourth Quarter and Recent Highlights
•Total revenue of $9.1 million, with revenue from the home & enterprise market increasing 14% sequentially and 5% year-over-year
•Pixelworks Shanghai subsidiary awarded $1.8 million in cash subsidies associated with its previous certification and ongoing participation in China’s “Little Giant” program
•vivo launched the iQOO Z9 Turbo L smartphone incorporating Pixelworks’ X5 Turbo visual processor, enabling optimized high-frame-rate gaming with reduced power consumption to the mid-tier device market
•Pixelworks continued to advance its in-depth review of potential strategic options related to inbound interest in the Company’s Pixelworks Shanghai subsidiary
“Fourth quarter results reflected our expectations, with all financial metrics being within or better than our guided range,” stated Todd DeBonis, President and CEO of Pixelworks. “Revenue from the home and enterprise market increased sequentially and year-over-year, helping to partially offset the anticipated product transition in our mobile business. Gross margin expanded for the fourth consecutive quarter to nearly 55%, and our previously implemented cost reduction actions contributed to achieving meaningfully lower operating expenses for the quarter.
“During the fourth quarter and entering 2025, we have remained focused on positioning for a return to growth in our mobile business. We continue to be engaged on multiple customer programs to utilize our latest mobile visual processor solutions in new smartphone models targeted for launch this year. These program engagements include opportunities with our new cost-down visual processor solution targeting mid- and entry-level smartphones, representing expansion of our served target markets. We expect the start of renewed mobile growth in the first quarter, followed by an accelerating ramp of production shipments beginning in the second quarter. We are also encouraged by the growing mindshare and engagement activity with our TrueCut Motion platform and believe we are poised to demonstrate further ecosystem and commercial traction in 2025.
“In summary, we’ve made significant progress on reducing our overall cost structure, and we plan to further these efforts during the first half of 2025 as we simultaneously continue to execute on and deliver renewed growth in mobile. Together with multiple newly targeted revenue opportunities, including customer engagements for ASIC design services as well as IP licensing, we believe that our Pixelworks Shanghai subsidiary is on a clear path to achieve profitability for the full year 2025.”
Fourth Quarter and Fiscal Year 2024 Financial Results
Revenue in the fourth quarter of 2024 was $9.1 million, compared to $9.5 million in the third quarter of 2024 and $20.1 million in the fourth quarter of 2023. The sequential and year-over-year decrease in fourth quarter revenue was driven by lower sales in the Company’s mobile business, partially offset by increased sales in the home and enterprise market. For the full year 2024, total revenue was $43.2 million compared to $59.7 million in 2023. The year-over-year decrease primarily reflected lower revenue contribution from the Company’s mobile business.



On a GAAP basis, gross profit margin in the fourth quarter of 2024 was 54.6%, compared to 51.2% in the third quarter of 2024 and 44.7% in the fourth quarter of 2023. GAAP gross profit margin for the full year 2024 was 51.6% compared to 43.1% in the prior year. Fourth quarter 2024 GAAP operating expenses were $11.5 million, compared to $13.5 million in the third quarter of 2024 and $13.1 million in the year-ago quarter. For the full year 2024, GAAP operating expenses were $53.6 million compared to $54.3 million in the prior year.
On a non-GAAP basis, fourth quarter 2024 gross profit margin was 54.8%, compared to 51.3% in the third quarter of 2024 and 44.8% in the year-ago quarter. Non-GAAP gross profit margin for the full year 2024 was 51.7% compared to 43.2% in the prior year. Fourth quarter 2024 non-GAAP operating expenses were $10.4 million, compared to $12.4 million in the third quarter of 2024 and $12.0 million in the year-ago quarter. Non-GAAP operating expenses for the full year 2024 were $48.1 million compared to $49.6 million in the prior year.
For the fourth quarter of 2024, the Company recorded a GAAP net loss of $5.4 million, or ($0.09) per share, compared to a GAAP net loss of $8.1 million, or ($0.14) per share, in the third quarter of 2024, and a GAAP net loss of $3.7 million, or ($0.07) per share, in the year-ago quarter. GAAP net loss for the full year 2024 was $28.7 million, or ($0.49) per share, compared to a net loss $26.2 million, or ($0.47) per share, in the prior year. Note, the Company refers to “net loss attributable to Pixelworks, Inc.” as “net loss”.
For the fourth quarter of 2024, the Company recorded a non-GAAP net loss of $4.3 million, or ($0.07) per share, compared to a non-GAAP net loss of $7.1 million, or ($0.12) per share, in the third quarter of 2024, and a non-GAAP net loss of $2.6 million, or ($0.05) per share, in the fourth quarter of 2023. For the full year 2024, non-GAAP net loss was $23.1 million, or ($0.40) per share, compared to a non-GAAP net loss of $21.4 million, or ($0.38) per share, in the prior year.
Adjusted EBITDA in the fourth quarter of 2024 was a negative $3.6 million, compared to a negative $6.3 million in the third quarter of 2024 and a negative $1.9 million in the year-ago quarter. For the full year 2024, adjusted EBITDA was a negative $20.1 million compared to a negative $18.8 million in the prior year.
Business Outlook
The Company’s current business outlook, including guidance for the first quarter of 2025, will be discussed as part of the scheduled conference call.
Conference Call Information
Pixelworks will host a conference call today, February 12, 2025, at 2:00 p.m. Pacific Time. Analysts and investors are invited to join the Company’s conference call using the following information:
Fourth Quarter and Fiscal 2024 Conference Call
Date: Wednesday, February 12, 2025
Time: 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time)
Live Webcast Link: Click Here
Dial-in Participation Registration Link: Click Here
Advanced registration is required for dial-in participants. Please complete the linked registration form above to receive a dial-in number and dedicated PIN for accessing the conference call by phone. A live and archived audio webcast of the conference call will also be accessible via the investors section of Pixelworks’ website: www.pixelworks.com.



Pixelworks, Inc.
Pixelworks provides industry-leading content creation, video delivery and display processing solutions and technology that enable highly authentic viewing experiences with superior visual quality, across all screens – from cinema to smartphone and beyond. The Company has a 20-year history of delivering image processing innovation to leading providers of consumer electronics, professional displays, and video streaming services. For more information, please visit the company's web site at www.pixelworks.com.
Note: Pixelworks, TrueCut Motion and the Pixelworks logo are trademarks of Pixelworks, Inc.

Non-GAAP Financial Measures
This earnings release makes reference to non-GAAP gross profit margins, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per share, which exclude stock-based compensation expense and restructuring expense which are both required under GAAP as well as the tax effect of the non-GAAP adjustments. The press release also makes reference to and reconciles GAAP net loss and adjusted EBITDA, which Pixelworks defines as GAAP net loss attributable to Pixelworks before interest income and other, net, income tax provision, depreciation and amortization, as well as the specific items listed above.
Pixelworks management uses these non-GAAP financial measures internally to understand, manage and evaluate the business and establish its operational goals, review its operations on a period-to-period basis, for compensation evaluations, to measure performance, and for budgeting and resource allocation. Pixelworks management believes it is useful for management and investors to review, as applicable, both GAAP information and non-GAAP financial measures to help assess the performance of Pixelworks’ continuing business and to evaluate Pixelworks’ future prospects. These non-GAAP measures, when reviewed together with the GAAP financial information, provide additional transparency and information for comparison and analysis of operating performance and trends. These non-GAAP measures exclude certain items to facilitate management’s review of the comparability of our core operating results on a period-to-period basis.
Because the Company’s non-GAAP financial measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read only in conjunction with the Company’s consolidated financial results as presented in accordance with GAAP. A reconciliation between GAAP and non-GAAP financial measures is included in this earnings release which is available in the investor relations section of the Pixelworks website.




Safe Harbor Statement
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by use of terms such as “begin,” “continue,” “will,” “expect”, “believe,” “anticipate” and similar terms or the negative of such terms, and include, without limitation, statements about adoption rates for our mobile visual processor solutions, expected traction for and ramping of production of our mobile products, launch dates of any mobile product, continued adoption of our TrueCut Motion platform, expected revenue from ASIC design services and IP licensing, results of cost savings, and expected path to profitability for Pixelworks Shanghai. All statements other than statements of historical fact are forward-looking statements for purposes of this release, including any projections of revenue or other financial items or any statements regarding the plans and objectives of management for future operations. Such statements are based on management's current expectations, estimates and projections about the Company's business. These statements are not guarantees of future performance and involve numerous risks, uncertainties and assumptions that are difficult to predict. Actual results could vary materially from those contained in forward looking statements due to many factors, including, without limitation: the actual adoption of TrueCut Motion platform; the actual performance of the smartphone market; our ability to execute on our strategy; competitive factors, such as rival chip architectures, introduction or traction by competing designs, or pricing pressures; the success of our products in new or expanding markets; current global economic challenges; changes in the digital display and projection markets; seasonality in the consumer electronics market; our efforts to achieve profitability from operations; our limited financial resources; and our ability to attract and retain key personnel. More information regarding potential factors that could affect the Company's financial results and could cause actual results to differ materially from those discussed in the forward-looking statements is included from time to time in the Company's Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the year ended December 31, 2023, as well as subsequent SEC filings.
The forward-looking statements contained in this release are as of the date of this release, and the Company does not undertake any obligation to update any such statements, whether as a result of new information, future events or otherwise.

[Financial Tables Follow]




PIXELWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20242024202320242023
Revenue, net$9,090 $9,527 $20,074 $43,206 $59,677 
Cost of revenue (1)4,124 4,648 11,098 20,921 33,968 
Gross profit4,966 4,879 8,976 22,285 25,709 
Operating expenses:
Research and development (2)6,916 8,405 6,953 31,337 30,878 
Selling, general and administrative (3)4,425 5,016 6,151 20,697 23,467 
Restructuring115 90 — 1,608 — 
Total operating expenses11,456 13,511 13,104 53,642 54,345 
Loss from operations(6,490)(8,632)(4,128)(31,357)(28,636)
Government subsidies received1,100 — — 1,100 — 
Interest income and other, net141 296 435 1,198 2,050 
Total other income, net1,241 296 435 2,298 2,050 
Loss before income taxes(5,249)(8,336)(3,693)(29,059)(26,586)
Provision for income taxes216 125 39 478 357 
Net loss(5,465)(8,461)(3,732)(29,537)(26,943)
Less: Net (income) loss attributable to non-controlling interests and redeemable non-controlling interests102 320 (12)818 767 
Net loss attributable to Pixelworks Inc.$(5,363)$(8,141)$(3,744)$(28,719)$(26,176)
Net loss attributable to Pixelworks Inc. per share - basic and diluted$(0.09)$(0.14)$(0.07)$(0.49)$(0.47)
Weighted average shares outstanding - basic and diluted59,228 58,717 56,895 58,395 56,163 
——————
(1) Includes:
Stock-based compensation12 13 22 53 89 
Restructuring— — — 16 — 
(2) Includes stock-based compensation266 327 396 1,239 1,866 
(3) Includes stock-based compensation638 702 701 2,666 2,841 




PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION *
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20242024202320242023
Reconciliation of GAAP and non-GAAP gross profit
GAAP gross profit$4,966 $4,879 $8,976 $22,285 $25,709 
Stock-based compensation12 13 22 53 89 
Restructuring— — — 16 — 
Total reconciling items included in gross profit12 13 22 69 89 
Non-GAAP gross profit$4,978 $4,892 $8,998 $22,354 $25,798 
Non-GAAP gross profit margin54.8 %51.3 %44.8 %51.7 %43.2 %
Reconciliation of GAAP and non-GAAP operating expenses
GAAP operating expenses$11,456 $13,511 $13,104 $53,642 $54,345 
Reconciling item included in research and development:
Stock-based compensation266 327 396 1,239 1,866 
Reconciling items included in selling, general and administrative:
Stock-based compensation638 702 701 2,666 2,841 
Restructuring 115 90 — 1,608 — 
Total reconciling items included in operating expenses1,019 1,119 1,097 5,513 4,707 
Non-GAAP operating expenses$10,437 $12,392 $12,007 $48,129 $49,638 
Reconciliation of GAAP and non-GAAP net loss attributable to Pixelworks, Inc.
GAAP net loss attributable to Pixelworks Inc.$(5,363)$(8,141)$(3,744)$(28,719)$(26,176)
Reconciling items included in gross profit12 13 22 69 89 
Reconciling items included in operating expenses1,019 1,119 1,097 5,513 4,707 
Tax effect of non-GAAP adjustments— (74)— — — 
Non-GAAP net loss attributable to Pixelworks Inc.$(4,332)$(7,083)$(2,625)$(23,137)$(21,380)
Non-GAAP net loss attributable to Pixelworks Inc. per share - basic and diluted$(0.07)$(0.12)$(0.05)$(0.40)$(0.38)
Non-GAAP weighted average shares outstanding - basic and diluted59,228 58,717 56,895 58,395 56,163 
*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.



PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP NET LOSS PER SHARE
(Figures may not sum due to rounding)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20242024202320242023
Dollars per shareDollars per shareDollars per shareDollars per shareDollars per share
BasicDilutedBasicDilutedBasicDilutedBasicDilutedBasicDiluted
Reconciliation of GAAP and non-GAAP net loss attributable to Pixelworks, Inc.
GAAP net loss attributable to Pixelworks Inc.$(0.09)$(0.09)$(0.14)$(0.14)$(0.07)$(0.07)$(0.49)$(0.49)$(0.47)$(0.47)
Reconciling items included in gross profit— — — — — — — — — — 
Reconciling items included in operating expenses0.02 0.02 0.02 0.02 0.02 0.02 0.09 0.09 0.08 0.08 
Tax effect of non-GAAP adjustments— — — — — — — — — — 
Non-GAAP net loss attributable to Pixelworks Inc.$(0.07)$(0.07)$(0.12)$(0.12)$(0.05)$(0.05)$(0.40)$(0.40)$(0.38)$(0.38)
*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.




PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP GROSS PROFIT MARGIN *
(Figures may not sum due to rounding)
(Unaudited)
Three Months EndedTwelve Months Ended
December, 31September 30,December 31,December 31,December 31,
20242024202320242023
Reconciliation of GAAP and non-GAAP gross profit margin
GAAP gross profit margin54.6 %51.2 %44.7 %51.6 %43.1 %
Stock-based compensation0.1 0.1 0.1 0.1 0.1 
Restructuring— — — — — 
Total reconciling items included in gross profit0.1 0.1 0.1 0.2 0.1 
Non-GAAP gross profit margin54.8 %51.3 %44.8 %51.7 %43.2 %
*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.





PIXELWORKS, INC.
RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL INFORMATION *
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31,September 30,December 31,December 31,December 31,
20242024202320242023
Reconciliation of GAAP net loss attributable to Pixelworks Inc. and adjusted EBITDA
GAAP net loss attributable to Pixelworks Inc.$(5,363)$(8,141)$(3,744)$(28,719)$(26,176)
Stock-based compensation916 1,042 1,119 3,958 4,796 
Restructuring115 90 — 1,624 — 
Tax effect of non-GAAP adjustments— (74)— — — 
Non-GAAP net loss attributable to Pixelworks Inc.$(4,332)$(7,083)$(2,625)$(23,137)$(21,380)
EBITDA adjustments:
Depreciation and amortization$691 $920 $1,076 $3,779 $4,287 
Interest income and other, net(141)(296)(435)(1,198)(2,050)
Non-GAAP provision for income taxes216 199 39 478 357 
Adjusted EBITDA$(3,566)$(6,260)$(1,945)$(20,078)$(18,786)

*Set forth above are reconciliations of the non-GAAP financial measure to the most directly comparable GAAP financial measure. The non-GAAP financial measure disclosed by the company has limitations and should not be considered a substitute for, or superior to, the financial measure prepared in accordance with GAAP, and the reconciliations from GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Non-GAAP Financial Measures” in this document for an explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors




PIXELWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31,
2024		December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents$23,647 $47,544 
Accounts receivable, net5,804 10,075 
Inventories4,210 3,968 
Prepaid expenses and other current assets1,191 3,138 
Total current assets34,852 64,725 
Property and equipment, net6,500 5,997 
Operating lease right of use assets3,368 4,725 
Other assets, net945 2,115 
Goodwill18,407 18,407 
Total assets$64,072 $95,969 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND
SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$1,400 $2,416 
Accrued liabilities and current portion of long-term liabilities6,581 9,692 
Current portion of income taxes payable365 189 
Total current liabilities8,346 12,297 
Long-term liabilities, net of current portion375 1,373 
Deposit liability13,109 13,781 
Operating lease liabilities, net of current portion1,450 2,567 
Income taxes payable, net of current portion914 939 
Total liabilities24,194 30,957 
Redeemable non-controlling interest27,396 28,214 
Total Pixelworks, Inc. shareholders’ equity(10,568)12,541 
Non-controlling interest23,050 24,257 
Total shareholders' equity12,482 36,798 
Total liabilities, redeemable non-controlling interest and shareholders’ equity$64,072 $95,969 



Contacts:
Investor Contact
Shelton Group
Brett Perry
P: +1-214-272-0070
E: bperry@sheltongroup.com

Company Contact
Pixelworks, Inc.
Haley Aman
P: +1-503-601-4540
E: haman@pixelworks.com



Exhibit 99.2


Pixelworks, Inc. 4Q 2024 Conference Call
Wednesday, February 12, 2025

Operator
Good day ladies and gentlemen, and welcome to Pixelworks Inc.’s fourth quarter 2024 earnings conference call. I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, instructions will be given for the question-and-answer session. This conference call is being recorded for replay purposes. I would now like to turn the call over to Brett Perry with Shelton Group Investor Relations.
Brett Perry
Good afternoon and thank you for joining today’s call. With me on the call are Pixelworks’ President and CEO, Todd DeBonis, and Chief Financial Officer, Haley Aman. The purpose of today's conference call is to supplement the information provided in Pixelworks' press release issued earlier today announcing the Company's financial results for the fourth quarter and fiscal year of 2024.
Before we begin, I would like to remind you that various remarks we make on this call, including those about our projected future financial results, economic and market trends and our competitive position constitute forward-looking statements. These forward-looking statements and all other statements made on this call that are not historical facts are subject to a number of risks and uncertainties that may cause actual results to differ materially.
All forward-looking statements are based on the Company's beliefs as of today, Wednesday, February 12, 2025. The Company undertakes no obligation to update any such statements to reflect events or circumstances occurring after today. Please refer to today's press release, the Company’s annual report on Form 10-K for the year ended December 31, 2023, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results.
Additionally, the Company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms, including gross margin, operating expenses, net loss, and net loss per share. Non-GAAP measures exclude restructuring costs and stock-based compensation expense.
The Company uses these non-GAAP measures internally to assess its operating performance. We believe these non-GAAP measures provide a meaningful perspective on our core operating results and underlying cash flow dynamics. We caution investors to consider these measures in addition to, and not as a substitute for nor superior to, the Company's consolidated financial results as presented in accordance with GAAP.
Also note, throughout the Company's press release and management statements during this conference, we refer to net loss attributable to Pixelworks, Inc. as simply net loss. For additional details and reconciliations of GAAP to non-GAAP net loss and GAAP net loss to adjusted EBITDA, please refer to the Company’s press release issued earlier today.
With that, I will now turn the call over to Pixelworks’ CEO, Todd DeBonis, for his opening remarks.
Todd DeBonis
Thank you, Brett. Good afternoon and welcome to everyone on the phone and webcast. We appreciate you joining today’s conference call.
Starting with a brief recap of fourth quarter financial results. Revenue was within the range of guidance, with sequential growth in Home & Enterprise helping to offset the anticipated product transition in our Mobile business. Gross margin exceeded expectation, expanding over 340 basis points sequentially and nearly 1,000 basis point year-over-year. Combined with the realized benefits from our previously implemented and ongoing initiatives to reduce costs and increase operational efficiencies, we exited the year with significant improvement in our bottom-line quarterly results.
Now, for those accustomed to the typical format of commentary on our previous conference calls, the flow of information and updates on today’s call will be a little different. More specifically, given the strategic review process currently underway with our Pixelworks Shanghai subsidiary, I’ll begin with comments on our TrueCut Motion business in the U.S., then provide a detailed update on developments specific to our majority owned subsidiary in China.
Today, Pixelworks’ TrueCut Motion platform remains the industry’s leading - and in fact only - platform for the creation and delivery of motion graded content.


To recap, over the past twelve months we achieved a number of key ecosystem milestones including a multi-year home entertainment agreement with Walt Disney Studios; a multi-year, multi-title theatrical agreement with Universal Pictures; five major titles from three different distribution studios; and a compelling global compatibility footprint of over 1,100 of the world’s highest grossing, premium large format theaters.
We are entering 2025 with momentum across both filmmakers and studios with commitments on an additional 5 major theatrical releases, and we are targeting to double that number by year-end. We are also working to expand our title growth and motion grading scalability through industry partnerships with post-production and visual effects companies.
Our long-term plan has always been to bring TrueCut Motion to the mass market through home entertainment devices and today, as a result of our momentum and foundational investments in the ecosystem, we are in active discussions or formal evaluations with 3 major device brands for potential incorporation of TrueCut Motion capability into their future devices.
While we still must execute and convert these engagements into contractual agreements, 2025 has the opportunity to be a transformational year for our TrueCut Motion business. As a reminder, our TrueCut platform solution as well as all associated intellectual property and tools are 100% owned and managed by the U.S. parent company, Pixelworks, Inc.
Turning to our Pixelworks Shanghai subsidiary, which we previously restructured to serve as the center of operations for all our semiconductor business, including our open market and co-developed visual display processing chips for the digital projector, mobile and video delivery markets. I want to start by highlighting a few new opportunities that our team is currently pursuing, then I’ll comment on our existing Mobile and Home and Enterprise business and provide an update on the strategic review process.
As part of our ongoing focus to drive renewed growth and position the company to achieve profitability, we recently established a new framework for selectively providing ASIC design services to customers. In addition to the incremental revenue opportunity, these services also provide the benefit of fully utilizing our highly skilled ASIC engineering team and Software resources. We are looking to secure our first customer engagement to provide a series of turnkey design services for a large international OEM. Also notable, the new program that we will be supporting includes the potential license of one or more blocks of display intellectual property. Based on its currently proposed scope, we believe this initial design services engagement could meaningfully contribute to our anticipated total revenue growth as soon as mid this year.
Separately, but with the same goal of further leveraging our existing available resources, we are also engaged in active discussions with several other unrelated parties around agreements to license specific intellectual property for use in their respective products. To the extent that these discussions result in an agreement, the potential proceeds would represent high margin, upside to the current forecast for our existing product businesses. Additionally, we believe that these engagements could significantly accelerate momentum with our mobile gaming ecosystem efforts.
And then lastly, we are also currently evaluating an opportunity with a prior transcoding customer, who recently approached us about placing a multi-million-dollar order for one of our legacy transcoding chips that was recently EOL’d and is no longer in production. Our team is working with our supply chain partners to confirm whether a large limited production run of this legacy device is technically feasible, however the initial assessment looks favorable. If we are ultimately able to accept and fulfill this customer’s order, it will contribute to significant revenue upside in the second half of this year.
Shifting gears to a review of the subsidiary’s end markets, starting with our Mobile business. As expected, mobile revenue in the quarter continued to reflect the previously articulated headwinds that impacted a majority of 2024. During the quarter, we announced our most recent win with vivo’s newly launched iQOO Z9 Turbo L smartphone. This phone is a refresh model following the success of the original iQOO Z9 Turbo launched earlier in the year, both of which incorporating our X5 Turbo visual processor and targeted at the mid-tier market segment.
Entering the new year, we remain focused on several leading customer engagements on smartphone programs targeted for launch over the coming quarters. Collectively, these new programs represent a combination of significant unit volume opportunities for both our newest-generation, flagship mobile visual processor as well as the cost-down derivative of our X5 series processor.
Specific to our cost-down X5 visual processor, we have been working closely with a lead customer since the middle of last year to enable an innovative graphics and animation accelerator solution, specifically targeted for mid- and entry-level smartphones. Additional OEMs have also expressed interest and are evaluating our derivative X5 processor to solve the frequent technology mismatch between lower-end Application Processors and the High Frame Rate capabilities of current-generation display panels. Consistent with my comments on our previous call, we expect to begin ramping production shipments of this solution to our lead smartphone customer in the second quarter.
Finally, with respect to our Home and Enterprise business predominantly comprised of our visual processor System-on-Chips for the 3LCD digital projector market. Revenue was up sequentially, driven by a combination of increased Projector SoC business as well as the anticipated contribution from our EOL of transcoding products. For the full year, Home and Enterprise


was effectively flat, reflecting relatively stable market dynamics and end demand for digital projectors. As anticipated, during the quarter we completed the first production shipments of our newest projector SoC to our large co-development customer, and we expect to gradually ramp additional shipments to this customer over the course of 2025. For our overall projector business, we expect historical double-digit seasonality in first quarter, followed by sequential growth beginning in the second quarter – consistent with the typical trends in seasonal demand. For the full year, we currently anticipate total projector business in 2025 to look similar to 2024.
Taken together, we do expect a slower start to the year in terms of total revenue, however we believe there are multiple drivers that will contribute to a sizeable rebound starting in the second quarter, including the beginning of a return to mobile revenue growth. Additionally, we have continued to identify areas to further reduce fixed costs and increase operational efficiencies. Once fully implemented, we expect an additional 10% reduction in our run-rate operating expenses. These savings will start toward the end of the first quarter and be fully captured by the end of Q2. Also we expect to benefit from additional subsidies during the year as is customary with the “little Giant” status our subsidiary has achieved. Combined with our current forecast for a return to top-line growth, we believe that our Pixelworks Shanghai subsidiary will achieve profitability for the full year 2025.
With that as a backdrop, I’ll provide a brief update on our ongoing strategic review process with our advisor, Morgan Stanley. As discussed on the previous conference call, we initiated a formal and comprehensive review process in the later part of last year after receiving inbound strategic interest in our Pixelworks Shanghai subsidiary. We have since fielded vetted indications of interest from additional parties, all of which are currently progressing through various stages of due diligence. Together with our financial advisor, we are simultaneously evaluating potential ownership and collaboration structures to determine the optimal path for both enhancing Pixelworks Shanghai’s long-term growth potential as well as maximizing value for shareholders. While today there is no definitive timeframe in which this process will be completed, we are encouraged by the progress and respective dialog to-date.
In summary. We believe we have made significant progress with regards to our cost structure over the last 6 months and will continue with that effort over the first half of this year. We expect initial evidence of our renewed traction in mobile during the first quarter, followed by the potential for an aggressive ramp of production shipments and revenue as we approach middle of the year. Additionally, with the recent push towards near-term adjacent revenue opportunities we’ve positioned our Shanghai subsidiary on a clear path to achieving profitability. And finally, our multi-year evangelism for Pixelworks’ TrueCut Motion grading platform continues to capture growing mindshare, and we expect this to contribute toward further substantive traction in 2025.
With that, I’ll turn the call over to Haley to review the financials and provide guidance for the first quarter.
Haley Aman
Thank you, Todd.
Revenue for the fourth quarter of 2024 was $9.1 million compared to $9.5 million in the third quarter and $20.1 million in the fourth quarter of 2023. The decrease in revenue primarily reflected the previously expected near-term headwinds in mobile.
The breakdown of revenue in the fourth quarter was as follows:
•Home and Enterprise revenue was approximately $8.5 million.
•Revenue from Mobile was approximately $550 thousand.
Fourth quarter non-GAAP gross profit margin expanded 350 basis points sequentially to 54.8%, from 51.3% in the third quarter of 2024, and increased 1,000 basis points from 44.8% in the fourth quarter of 2023. The improvement in gross margin for the fourth quarter and throughout 2024 reflects a more favorable product mix and our ongoing focus to drive healthy margins.
Non-GAAP operating expenses decreased to $10.4 million in the fourth quarter, from $12.4 million in the prior quarter and $12.0 million in the fourth quarter of 2023. The sequential and year-over-year decrease in fourth quarter operating expenses reflected our previously implemented cost reduction measures. As Todd mentioned, we have identified and plan to take additional cost reduction measures during the first quarter. This combined with the previous measures taken in mid-2024 is expected to contribute to a total year-over-year decrease in operating expenses of approximately $10.0 million for the full year of 2025.
Additionally, during the fourth quarter our Pixelworks Shanghai subsidiary received $1.8 million in cash subsidies as part of its certified status in China’s ‘Little Giant’ Program. These subsidies effectively serve as reimbursement for certain purchases of IP, design tools as well as various R&D and sales expenses. We recognized $1.1 million as Other Income in the fourth quarter, with the balance of the total subsidies allocated as offsetting credits to applicable expense and balance sheet items.


On a non-GAAP basis, fourth quarter 2024 net loss was $4.3 million, or a loss of ($0.07) cents per share, compared to a net loss of $7.1 million, or a loss of ($0.12) cents per share, in the prior quarter, and a net loss of $2.6 million, or a loss of ($0.05) cents per share, in the fourth quarter of 2023.
Adjusted EBITDA for the fourth quarter of 2024 was a negative $3.6 million, compared to a negative $6.3 million in the prior quarter and a negative $1.9 million in the fourth quarter of 2023.
Turning to the balance sheet, we ended the fourth quarter with cash and cash equivalents of $23.6 million, compared to $28.8 million at the end of the third quarter. As previously mentioned, we are continuing to take actions to further reduce costs and preserve our existing cash balance. Together with a return to top-line growth, we expect to achieve significantly lower cash burn in 2025.
Shifting to our current expectations and guidance for the first quarter of 2025.
As Todd discussed, we anticipate our home and enterprise business to reflect typical first quarter seasonality as well as a decrease in revenue from the end of life of our transcoding products. We anticipate this seasonality to be partially offset by an initial recovery and sequential increase in mobile revenue in the first quarter. Based on our existing backlog, we currently expect total revenue for the first quarter to be in a range of between $7.0 million and $8.0 million.
For the first quarter, we expect non-GAAP gross profit margin to be between 49% and 51%. This range primarily reflects anticipated product mix and lower overhead absorption.
With respect to operating expenses, we expect first quarter operating expenses to be in a range of between $10.0 million and $11.0 million on a non-GAAP basis.
Lastly, we expect first quarter non-GAAP EPS to range between a loss of ($0.13) cents per share and a loss of ($0.10) cents per share.

That completes our prepared remarks, and we look forward to taking your questions. Operator, please proceed with the Q&A session. Thank you.

Exhibit 99.3
Capital Increase Agreement Update
On December 26, 2024, a representative for Qingdao Beyond Zhixin Venture Investment Partnership (Limited Partnership) (“Qingdao Beyond”), a shareholder of Pixelworks Semiconductor Technology (Shanghai) Co., Ltd (“PWSH”), requested that Pixelworks Semiconductor Technology Company LLC (“PWOR”), the Company’s wholly owned Oregon subsidiary through which the Company owns 78% of PWSH, make the necessary arrangements for a repurchase of those PWSH shares held by Qingdao Beyond for a price equal to the amount or paid by Qingdao Beyond, with no interest. PWOR and Qingdao Beyond are party to the Capital Increase Agreement dated August 21, 2021, as amended, and through that agreement Qingdao Beyond holds this option. Further details of this option are disclosed in the Company’s Form 10-Q filed on November 12, 2024. PWOR responded to this request on December 31, 2024, asserting that the repurchase option is currently suspended due to the impact of the COVID-19 pandemic and the decision of the relevant Chinese authorities to prevent PWSH from completing the filing of its application for an IPO in late 2023 despite PWSH being qualified to do so. Per Articles 6.1 and 10.1 of the Capital Interest Agreement, the repurchase is suspended until such time as PWSH is no longer prevented from pursuing its application, or the parties should negotiate some other economically equivalent adjustment to the agreement. As of the date of this letter, Qingdao Beyond has not responded. No other party to the 2021 Capital Increase Agreement that holds a similar option has provided Pixelworks with a written notice of election.

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