Pixelworks, Inc. Stock price
Is Pixelworks, Inc. a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $33.03m | Revenue (TTM) = $9.97m
Market Cap = $33.03m | Estimated Revenue = $1.12m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $-19.86m | Revenue (TTM) = $9.97m
Enterprise Value = $-19.86m | Forward Revenue = $1.12m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders or uses to reduce debt relative to its market capitalization. It goes beyond dividend yield by also including share buybacks and debt reduction.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. Companies can also return capital through share buybacks, while reducing debt can strengthen the balance sheet. Shareholder Yield combines all three components into one metric, giving investors a broader view of how a company uses its capital.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield generally indicates more capital being returned to shareholders or used to reduce debt.
- The mix matters: dividends, buybacks, and debt reduction can affect shareholders in different ways.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends, buybacks, and debt reduction are sustainable over time.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Pixelworks, Inc. Stock Analysis
Analyst Opinions
7 Analysts have issued a Pixelworks, Inc. forecast:
Analyst Opinions
7 Analysts have issued a Pixelworks, Inc. forecast:
Pixelworks, Inc. Events
Past Events
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AUG
11
Q2 2026 Earnings Call
2 months ago
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MAY
20
Shareholder/Analyst Call - Pixelworks, Inc.
5 months ago
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MAY
14
Q1 2026 Earnings Call
5 months ago
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MAR
12
Q4 2025 Earnings Call
7 months ago
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DEC
31
Shareholder/Analyst Call - Pixelworks, Inc.
10 months ago
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NOV
11
Q3 2025 Earnings Call
11 months ago
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StocksGuide Free
Pixelworks, Inc. — Q2 2026 Earnings Call
1. Management Discussion
Thank you. Good day, ladies and gentlemen, and welcome to Pixelworks, Inc. Second Quarter 2026 Earnings Conference Call. I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. withdraw your question, please press star 11 again.
As a reminder, this conference call is being recorded for replay purposes. now like to turn the call over to Brett Curry with Shelton Group Investor Relations.
Thank you. Good afternoon and thank you for joining us on today's call. With me on the call are Pixelworks Chairman and CEO Todd DeBonis and Chief Financial Officer Haley Amon. 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 second quarter of 2026. Before we begin, I'd like to remind you that you that various remarks we make on this call, including those about 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, Tuesday, August 11, 2026. The company undertakes no obligation to update any statements to reflect events or circumstances occurring after today. refer to today's press release, the company's annual report on Form 10-K for the year ended December 31, 2025, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results.
Please note throughout the company's press release and management statements during this call, we refer to net loss attributable to Pixelworks as simply net loss. With that, I'd now like to turn the call over to Pixelworks Chairman and CEO, Todd DePonis. Please go ahead, Todd.
Thanks, Brett. Good afternoon and welcome to everyone joining us on today's conference call. Having completed our strategic transformation of PIX Works earlier this year, Q2 represented our first full quarter of operations as a pure play technology licensing company. The entire organization, its resources and our team are now focused on building and scaling our global licensing business centered around True Cut Motion Platform and the visualization enhancement solutions. As previously conveyed, we expect quarter-to-quarter revenue to be lumpy in the near term as we build our theatrical pipeline and begin to scale the business over time. Although not a significant amount, revenue for the quarter was consistent with our internal expectations. Revenue will be higher in the third quarter, but again, it will continue to be lumpy until we achieve increased scale. I also want to re-emphasize that we are now a very lean organization with minimal overhead and a relatively low threshold to reach break even.
After successfully monetizing our prior semiconductor business and restructuring the remaining company, we are also well capitalized and ended the second quarter with $53 million in cash and zero debt. This is net of the company's repurchase of common stock, which was the single largest use of cash during the second quarter. Our overarching strategy is to be an enabler of truly differentiated viewing experiences. Anchored by our industry-leading TrueCut Motion platform and motion grading services, We are also committed to continuing to expand Pixelworks core strengths in visualization enhancement solutions and pursuing complementary licensing initiatives. Our True Cut Motion platform remains the only commercially validated, scalable, and filmmaker-endorsed end-to-end solution for creating and delivering the premium clarity of high frame rate imaging while preserving the intended cinematic look and feel. When first conceived, TrueCut Motion and the concept of motion grading content were ahead of their time and well ahead of the industry's broad acceptance of high frame rate cinematic content and premium format displays. Following steady incremental adoption of high frame rate content by leading filmmakers, coupled with growing consumer demand for differentiated high quality cinematic experiences, the the broader industry is rapidly moving to embrace and deliver premium large format experiences.
The primary motivation for this shift by studios and exhibitors is straightforward. Premium large format theaters are increasingly capturing a disproportionate share of box office revenue. As evidence, I want to share a few excerpts of recent public comments made by leading exhibitors and related technology providers. On its most recent earnings call, AMC highlighted that roughly 750 premium and extra large format auditoriums, representing only 8% of total screens, generated more than half of gross ticket sales for major releases such as the Odyssey. They also outline plans to add 100 to 250 additional premium large format and Excel screens over the next two to four years. IMAX delivered record second quarter results driven by exceptional demand for its premium experience, with the company citing the Odyssey as contributing to the highest global opening weekend in the company's history. Additionally, Dolby continues to expand its premium Dolby Cinema footprint and has reported strong year-over-year growth in domestic box office from the format.
So far in 2026, premium formats accounted for almost 20% of total domestic box office from a approximately 4% of total screens. As further evidence, I would point to Disney's launch of its Infinity Vision certification program for premium large format theaters. Developed in collaboration with a group of exhibition partners, Infinity Vision is designed to help audiences identify auditoriums that meet rigorous technical standards for the biggest screens, laser projection for superior brightness and clarity, and premium immersive audio. This further validates the entire industry's growing emphasis on premium large format experiences and the higher margin revenue they generate. With our True Cut Motion platform, we are uniquely positioned to help filmmakers, studios, and exhibitors deliver authentic, high-fidelity motion across these premium large format venues. In support of driving adoption, we are focused on continued expansion of the True Cut Motion ecosystem of premium large format exhibitors and a growing pipeline of high quality motion graded content During the second quarter, we secured Kannapolis Group's endorsement and preferred exhibition of traditional Chinese medicine. True Cut Motion enhanced versions for the theatrical titles on Kannapolis Laser Ultra large format screens across Europe and North America.
We also formally announced a partnership with CINITY, expanding the True Cut Motion ecosystem and prioritizing advanced True Cut Motion grading technology in CINITY's premium large format theaters. Notably, CineD is both a pure play operator of premium large format theaters while also specializing in the development and deployment of advanced PLF projection and LED systems. integrating 4K, high frame rate, high brightness, HDR, wide color gamut, and immersive audio into venues operated by exhibitors across China and increasingly internationally. CineD's decision to prioritize TrueCut Motion enhanced content across its growing network represents a strong validation of our platform's ability to deliver a more immersive experience in their advanced premium large format environments. These announcements build on previously disclosed collaborative relationships with Marcus Theatres, Odeon Cinemas Group, and VIEW, strengthening our network of leading exhibitors committed to bringing true cut motion to premium screens spanning key international markets. In terms of content, we have a solid and growing pipeline of True Cut Motion enhanced titles, including work currently underway on multiple projects in support of targeted releases over the coming months and through the early part of next year. As in the past, we will announce our involvement with individual titles as they are released. In summary, I want to iterate or reiterate that we are now operating as a fully repositioned and well-capitalized global technology licensing company. that is nimble, scalable, and asset light.
Our stated objective for 2026 has consistently been to build out the theatrical exhibitor ecosystem and expand the availability of premium true cut motion content. To date, we've made significant headway on expanding our network of premium exhibitors. We also remain on track to grow the slate of TrueCut Motion enhanced content with multiple titles planned for future releases. We expect to demonstrate further momentum in the second half of the year. And over time, we anticipate successful theatrical adoption to direct drive increasing pull from studios and eventually unlocking growing home entertainment and device opportunities. Speaking of device opportunities, I do have one more important update to share. We recently secured a new agreement with a large device manufacturer.
Over the past six months, they completed an extensive evaluation of True Cut Motion, our motion grading technology, and existing TrueCut motion titles. This led to signing a multi-year device certification agreement, which will result in certification of a family of devices. Additionally, they will help to bring new motion graded content to their platform. We are not ready to name them yet because we are currently targeting an announcement in conjunction with this partner's product plans for later this year. This partner represents our first major device licensee. We are excited to be ahead of our planned timeline with respect to our device licensing program. In addition, this partnership will result in accelerating the pipeline of immersive, true-cut, motion-graded content.
With that, I'll turn the call to Haley to provide some additional financial details on the quarter.
Thank you, Todd. As reported in our press release today, revenue for the second quarter of 2026 was approximately $64,000, bringing first six months total revenue to $510,000. For context, full year 2025 revenue from True Cut Motion and related motion grading services was approximately $690,000. Gross profit margin for the second quarter was 60.9% compared to 56.7% in the previous Total gap operating expenses for the second quarter were $3.4 million compared with $5.2 million in the first quarter of 2026. The $1.8 million sequential decrease reflects the completion of our restructuring plan and streamlining actions taken in the first quarter. Turning to the balance sheet, the company ended the second quarter with cash and cash equivalents of approximately $53 million. The sequential net change in the cash balance from the prior quarter was primarily comprised of approximately $1.7 million used from operations and approximately $3.2 million used to repurchase shares of Pixelworks common stock during the second quarter. We remain committed to maintaining a strong balance sheet and we continue to believe the existing cash and cash equivalence balance provides ample runway and flexibility to execute our strategy of building a pure play technology licensing business.
Finally, although we are not providing formal quarterly guidance, we do expect revenue to increase sequentially in the third quarter based on currently booked business, including licensing and related motion grading services. That said, I would also like to reiterate our previously provided high-level operating model. Consistent with our second quarter results, we expect to maintain cash operating expenses of less than $2.5 million per quarter through the remainder of 2026. Additionally, based on the company's existing cash balance and the current interest rate environment, we expect to generate interest income of between $400,000 and $500,000 quarterly. That completes our prepared remarks and we look forward to taking your questions. Operator, please proceed with the Q&A session.
Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone. Then wait for your name to be announced. To withdraw your question, please press star 11 again. Please. stand by while we compile the Q&A roster. Our first question comes from the line of Suji DeSilva with Wask Capital. Your line is open.
Hi Todd, hi Haley. Maybe just a housekeeping question first. How much is left on the buyback after the 3.2 million you've done?.
Maybe Suji's not with us today. I hear you, Suji. Can you hear us?.
Can you hear me? I can. Oh, great. Todd, can you hear me? Oh. Oh.
Kelly, should I drop back in? Right. Okay. Well, first of all, let me answer your question. 1.8 is what's left. 1.8 million. Okay.
I could try asking the questions, I'm not talking to them, you know. Brent, do you... Hang on a second. For some reason, I did not hear you, Suji. Can you hear me now, Doug? I can hear you now. Excellent. Great. Great. Just in time. So for the bigger picture question, for the group of ecosystem partners and stakeholders that you're working with right now, which of those are the most critical in the next six months to...
Can I get over the line to get the flywheel going here? Well, I mean, I think we're still very focused. There's a movement going on with... major studios and the larger exhibitors of migrating. I mean, you can see where the revenue is coming in. It's coming from premium large format theaters, and they want to tailor the experience for that. And so I think that's very important that we continue to participate and are at the forefront of that. But... This deal was somewhat unexpected. They approached us. It is a...
They're making a major investment in trying to have a immersive premium home entertainment experience on these devices, and they are making an effort, this particular device partner, on bringing content to the platform. And so I think it's important, and they believe, that motion grading will enhance the experience of the student. that immersive content. So I think it's important that we execute on both. Up until this device manufacturer approaches, I was very focused on the theatrical experience. both are important in the next six months. And you will hear more about each of them in the next six months.
Okay. Todd, on the device manufacturer, I know you can't say much, but can you talk about what geography that device manufacturer is from or focuses on? Okay.
Well, they're consumers are global. The global consumer. Okay, got it.
And then last question, as we look ahead to the licensing, like the deal you announced, which of the ones have the most, the royalty trading opportunity would be baked into it?.
Well, we have what we call a device certification agreement, right? Which has certification fees, which are like royalty, right? We today, all theatrical releases, We do not gain any revenue from the theatrical release. We do motion grading and we get motion grading services, but it's really to build up the pipeline of content. So the one that will have the shortest term impact on our revenue will be the device certification partner. But to me, if you really want to have a broad acceptance of the technology and broad understanding announcement of multiple device partners. It's about quality content and it's about reproducing the premium theatrical experience. okay thanks Todd thanks thank you.
Ladies and gentlemen, I'm sure no further questions in the queue. I would now like to turn the call back over to Todd for closing remarks.
All right. Well, thanks for those that did participate in today's call. Very exciting time for Pixelworks, given the transition to pure play licensing and, frankly, being ahead of where we thought we would be with device licensing in 2026. So I look forward to giving you an update in a quarter.
That concludes today's conference call. You may now disconnect.
This live transcript is auto-generated without human intervention or review.
[Call has ended.]
Pixelworks, Inc. — Shareholder/Analyst Call - Pixelworks, Inc.
1. Management Discussion
Good day, ladies and gentlemen. This is Haley Aman, Chief Financial Officer of Pixelworks. On behalf of the Board of Directors and officers of the company, I want to welcome you to this Annual Meeting of Shareholders, and thank you for your attendance.
Our annual meeting is being held today for the purpose of electing 5 directors, approving an amendment to the 2006 Stock Incentive Plan, to hold an advisory vote on executive compensation, ratifying the appointment of Grant Thornton LLP as Pixelworks' independent registered public accounting firm for the current fiscal year and transacting such other business as may properly come before the annual meeting.
Before we cover the business matters of today's meeting, I'd like to introduce the members of the Board, senior management and special guests in attendance today. I am pleased to introduce the current members and nominees for our Board of Directors; Todd DeBonis, Chairman of the Board, who is also our CEO; Dean Butler, Lead Independent Director; Douglas Darrow, Scott Gibson, and Daniel Heneghan.
I would also like to introduce Greg Zafiris, Pixelworks' Chief Legal Officer; Leah Grant, who will be serving as Inspector of Elections; and Rimma Tabakh from Grant Thornton LLP.
The agenda for this meeting will be as follows: one, election of directors; two, approval of amendment to the 2006 Stock Incentive Plan; three, advisory vote on executive compensation; four, ratification of the appointment of Grant Thornton LLP as Pixelworks' independent registered public accounting firm for the current fiscal year; five, vote count; six, formal meeting adjournment; and seven, question-and-answer period.
Notice of this meeting was properly mailed on April 17, 2026, and to the shareholders of record at March 16, 2026. Broadridge has been appointed by the Board of Directors as Inspector of Elections. They will determine the number of votes represented here in person or by proxy, the validity of proxies, the existence of a quorum and the number of votes cast on all matters. The Inspector of Elections has advised me that we have a quorum. I, therefore, declare this annual meeting lawfully convened, and we will proceed to the first proposal.
The first proposal is the election of 5 directors. The nominees for election to the Board of Directors are as follows: Todd DeBonis, Dean Butler, Douglas Darrow, Scott Gibson and Dan Heneghan. Our bylaws require nominations by shareholders to have been received prior to the date of this meeting and no such nominations were received.
Proposal #2 is to approve an amendment to the 2006 Stock Incentive Plan. The proxy statement for the annual meeting, which was mailed to shareholders on April 17, 2026, contains detailed information on this proposal.
Proposal 3 is an advisory vote on executive compensation. The proxy statement contains detailed information on the proposal.
And finally, Proposal 4 is to ratify the appointment of Grant Thornton LLP as Pixelworks' independent registered public accounting firm for the current fiscal year.
We did not receive notice from any shareholders of their intent to attend the meeting and vote telephonically during the meeting, so the polls are now closed.
I now recognize Leah Grant, our Inspector of Elections, who will present the preliminary voting results.
Thank you, Haley. The preliminary results of voting are as follows: for proposal 1, the election of 5 directors, each nominee received more than 87% of the votes cast.
For proposal 2, more than 90% of votes were cast in favor of the approval of the amended and restated 2006 Stock Incentive Plan.
For proposal 3, more than 89% of votes were cast in favor of the advisory vote to approve the company's executive compensation.
And finally, for proposal 4, more than 98% of votes were cast in favor of the ratification of the company's independent registered public accounting firm.
I, therefore, declare that the Board of Directors, 5 nominees for election of directors, Todd DeBonis, Dean Butler, Douglas Darrow, Scott Gibson and Daniel Heneghan have been duly elected and proposal numbers 2, 3 and 4 have been duly approved.
This completes the formal business to come before this annual meeting. There being no formal business, this annual meeting stands adjourned.
Pixelworks, Inc. — Q1 2026 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen, and welcome to Pixelworks' First Quarter 2026 Earnings Conference Call. I will be your operator for today's call. [Operator Instructions] As a reminder, 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.
Thank you, Victor. Good afternoon, and thank you for joining us on today's call. With me on the call are Pixelworks' Chairman 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 first quarter of 2026.
Before we begin, I'd like to remind you that various remarks we make on this call, including those about projected future financial results, economic and market trends and 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 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, Thursday, May 14, 2026. 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, 2025, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results. Please note that throughout the company's press release and management statements during this conference call, we refer to net loss attributable to Pixelworks as simply net loss.
With that, it's now my pleasure to turn the call over to Pixelworks' Chairman and CEO. Todd, please go ahead.
Thank you, Brett. Good afternoon, and welcome to everyone joining us for today's conference call. As previewed on the previous conference call in February, Q1 was a transformational quarter for Pixelworks. After closing the sale of our Shanghai-based semiconductor subsidiary and receiving the net cash proceeds from the transaction in early January, we completed a series of planned restructuring actions to streamline the remaining organization and cost structure. The onetime severance and other related costs resulting from these actions were recognized during the first quarter, and we expect to realize a significantly lower run rate for operating expenses beginning in the second quarter.
Also during the quarter, we settled all remaining cash outlays associated with the sale of our Shanghai subsidiary. And we ended the first quarter with cash balance of $58 million and $0 debt. Taken together, we exited the first quarter as a repositioned, well-capitalized and focused company with our entire team supporting the go-forward strategy of building a global technology licensing business.
As a reminder, post transaction, we continue to have ownership of salient intellectual property, including over 60 issued and pending patents anchored by our industry-leading TrueCut Motion platform and motion grading services. Our strategy is centered on enabling a truly differentiated viewing experience while continuing to expand our core strengths in visualization enhancement solutions and pursuing new and existing licensing initiatives.
Today, our TrueCut Motion platform continues to be utilized by leading filmmakers to enhance the cinematic experience across premium theatrical screens. We recently completed work on one of our most complex motion grading projects to date in support of the most technically ambitious theatrical release of the year, Billie Eilish: Hit Me Hard and Soft - The Tour Live in 3D. Directed by Billie Eilish and Academy Award-winning James Cameron and distributed globally by Paramount Pictures, the film was released to premium large-format 3D theaters on May 8, where it generated an estimated worldwide box office of $20 million in the opening weekend, effectively recouping the film's full production budget in a matter of days.
Working in postproduction alongside Lightstorm and multiple contributing technology providers, our TrueCut Motion platform was tasked with overcoming unprecedented motion-grading challenges, including novel world-first camera systems and multiple source frame rates. The end result was a stunning and immersive concert experience in which TrueCut Motion enabled the creative team to preserve the raw energy of live performances while delivering perfect cinematic motion clarity.
The New York Times review summed it up as the pure quality of image and visceral sense of 3D immersion is spectacular. This high-profile collaboration and highly technical implementation of TrueCut Motion grading further validates the unique value proposition of our core cinematic solution, positioning Pixelworks as a recognized enabler of next-generation immersive entertainment experiences.
In addition, there continues to be consistent indications by both the studios and theater operators shifting towards premium large-format experiences. At the Annual CinemaCon Conference held in April, the atmosphere was observably upbeat with year-to-date box office sales tracking approximately 20% higher over the same period in 2025. Leading studios expressed renewed volume of theatrical releases and commitments to longer exhibition exclusivity periods with Paramount committing to 30 films annually and Amazon MGM scaling to 15 targeted releases, while also endorsing a 45-day theatrical window that establishes a stable pipeline of content for exhibitors.
Also in conjunction with CinemaCon, Disney launched its new Infinity Vision certification aimed at expanding consumer awareness of premium large-format screens, underscoring the increased importance of higher-margin revenue from premium large-format content and experience-based pricing. Collectively, these observed trends at the world's largest show for global motion picture industry continue to validate our thesis and the industry's increasing emphasis on premium large-format theatrical experiences.
As part of our strategy to accelerate expanded adoption of our TrueCut Motion platform, our near-term focus is on supporting the theatrical release of premium visually stunning films. This includes broadening our direct engagement with leading premium exhibitors who share our motivation to encourage both studios and filmmakers to consistently make more premium format content available.
Following the collaborative ecosystem partnerships that we announced with Marcus Theatres and Odeon Cinemas Group earlier this year and in addition to our previously launched collaboration with CINITY, we recently added another published endorsement with Vue, the largest privately owned cinema operator in Europe to bring our advanced TrueCut Motion grading technology to their premium theaters.
This includes prioritizing TrueCut content as part of Vue's most advanced EPIC brand cinema experience, featuring world-leading HDR laser projection by Barco and advanced light steering technology that delivers up to 6x the brightness of standard cinema screens.
With TrueCut Motion's unique and commercially proven capability to enable the most authentic high-fidelity viewing experience, you will see us continue to expand our TrueCut Motion ecosystem of leading premium exhibitors. As we grow this ecosystem, it will naturally drive increasing market demand for premium large-format content from filmmakers and studios. And while our R&D team continues to expand on the existing capabilities and increasing productivity of our TrueCut Motion grading tools, we are also simultaneously pursuing compelling adjacent market opportunities to deliver enhanced visualization solutions, leveraging our core technology and expertise. I look forward to elaborating on these efforts and complementary opportunities as they evolve and mature over the coming quarters.
In closing, I want to reiterate that during the quarter, we completed all targeted restructuring and streamlining actions following the closed sale of our prior Shanghai semiconductor subsidiary. As a result, we exited the first quarter fully repositioned as a global technology licensing company with a unified organization that's more nimble, scalable and asset-light and focused on delivering highly differentiated cinematic and visualization enhancement solutions. We are well capitalized to execute on our strategic growth objectives and are committed to maintaining a robust balance sheet as we continue to build a broader and highly profitable licensing business centered around cinematic and visual enhancement solutions.
With that, I'll turn the call over to Haley to provide some additional financial details for the quarter, including our current balance sheet position.
Thank you, Todd. As Todd previously discussed, on January 6, 2026, we completed the transaction to sell all equity interest and associated assets of our Pixelworks Shanghai semiconductor business. The contribution from our previous Shanghai subsidiary to operating results in the first quarter of 2026 prior to the close of the sale was determined to be immaterial. Therefore, the company's reported financial results contained in today's press release do not include discontinued operations activity from the first several days of January 2026 before the sale closed.
Starting with a review of the balance sheet. Upon closing the sale of Pixelworks Shanghai semiconductor subsidiary in early January, Pixelworks received cash proceeds net of transaction costs and withholding taxes paid in China, totaling approximately $51 million. After the transaction closed, we paid out the remaining transaction expenses during the first quarter, including accounting, legal and advisory fees as well as bonuses. We also completed a series of planned restructuring actions to streamline the remaining organization, resulting in the recognition of onetime severance costs.
After accounting for all nonrecurring cash items related to the sale transaction and our associated restructuring actions, the company ended the first quarter with cash and cash equivalents of approximately $58 million, consistent with our previously communicated expectations.
Additionally, I want to highlight that all previously reported liabilities and commitments, including the redeemable noncontrolling interest associated with our prior Shanghai subsidiary were fully released in conjunction with the closed sale, and therefore, the company's reported financial statements for the first quarter of 2026 reflect the elimination of all such prior contingencies.
Finally, with respect to balance sheet, we believe the company's existing cash and cash equivalents balance provides ample runway and flexibility to execute our strategy of building a pure-play technology licensing business. As such, in early March, we elected to cancel our previously available but recently unused at-the-market stock facility. And then on March 30, the Board of Directors authorized a newly established stock repurchase program in the amount of $5 million. This authorization provides an initial 2-year window for the potential repurchase of shares of Pixelworks' common stock at the company's discretion beginning on May 15, 2026.
Turning to the income statement. Revenue for the first quarter of 2026 was approximately $450,000, comprised entirely of revenue from our TrueCut Motion platform and related motion grading services. For context, full year 2025 revenue from TrueCut Motion and related motion grading services was approximately $690,000. Gross profit for the first quarter of 2026 was $253,000 or 56.7% of revenue. Total operating expenses for the first quarter were $5.2 million, which included approximately $2 million of anticipated restructuring costs associated with streamlining the remaining organization following the completed sale and also approximately $360,000 of stock-based compensation expense.
I want to point out that reported operating expenses for the first quarter reflect only a partial period of the anticipated benefits from certain headcount reductions and other streamlining actions taken during the quarter. Although we are not providing quarterly financial guidance, I would like to reiterate our previously provided high-level framework for thinking about the company's anticipated near-term operating results. First, starting in the second quarter, we are targeting to maintain cash operating expenses of around $2 million. Additionally, based on the company's existing cash balance and the current interest rate environment, we expect to generate interest income of between $400,000 and $500,000 quarterly.
That completes our prepared remarks, and we look forward to taking your questions. Operator, please proceed with the Q&A session.
[Operator Instructions] Our first question will come from the line of Suji Desilva from ROTH Capital.
2. Question Answer
So a quick question for Haley. So the $2 million you expect in cash OpEx, I think that compares if I adjust the 1Q number to $2.9 million. Is that the right magnitude of savings from the streamlining efforts? Just want the ballpark level.
Yes. So did you take the $5.2 million minus the restructuring minus the stock comp?
Correct.
Yes. And then there's also some benefit in Q2 from like layoffs that happened in Q1 and there's just normal salaries. So yes, that would be the number.
Okay. So that's a good run rate to go forward then, $2 million roughly? [ Growth ] level?
Yes.
Okay. And Todd, let's see, the partner strategy, which of the partners you've already announced is most strategic to near-term revenue generation? And maybe what's your partnership plan going forward? Are we -- do you have the people in place? Or are there key partners you still need to secure to establish the licensing base? Hello?
Speaker, you are on mute.
Sorry about that Suji. I was muted. You there?
I'm here, yes, I didn't hear.
That's all right. I'll start over. So listen, for now, and I said this last call, we are focused on theatrical content, premium theatrical content going to our premium large-format exhibitor partners. We've announced, as I summarized here, a collection of 4 announced exhibitor partners. There's many more that we're targeting, okay? Most of -- if you go look at the exhibition landscape, most of the capital that they're spending is on premium large-format theaters, either upgrading older theaters or building new theaters but premium large format. It's very clear from IMAX, Dolby, CINITY Vue, Odeon, Marcus, Cinemark, Regal, AMC that when you have a compelling theatrical release coming to a premium large-format experience, the box office response, the amount of money they make in those premium large-format facilities versus non-premium is big. I mean it's like almost 10:1.
And so all capital is being targeted towards the premium experience. And what we're trying to do is go convince the studios and filmmakers don't just let the exhibitors carry the load through their capital investment of new facilities, bring them premium content that showcases those facilities. And so that's what we're working on. We're working on partners that are exhibitors, and we're working on studios to bring out visually stunning content that's been motion graded. And we're not going to make a ton of money off this initially, okay? We're greasing the skids, okay? And then at some point, you'll start to see us announce avenues for leveraging this content into licensing deals.
Okay. And then, Todd, you talked about adjacencies to TrueCut. I know you wanted to kind of wait until some of those came to light. But how should we think about just the areas that are in your purview beyond TrueCut just to understand where we might be going with the assets you already have in place?
Well, I mean -- so today, if you go look at what we do with TrueCut, I mean, we use -- we've been using AI trained motion modeling for the last 5 years. We fine-tuned our motion model and its expertise. And then how do you deliver that not only to 2D but 3D immersive environment. When you really look at some of the fundamental tools that we use to deliver that technology, they can be leveraged in many of these new up-and-coming AI-based segments that people are looking into. But I'm really not ready to talk about it in detail, Suji.
And then maybe last 2 questions. The -- you announced the switch from the ATM to the buyback. That's a good start there. Just wondering with the cash balance you have, what inorganic or other concepts? Just any color there would be helpful.
That's the first time in a long time that we have had the luxury of ample cash balances. So it gives you lots of opportunity. It gives you opportunity to pursue deals with companies that maybe we need to invest into technology, maybe we need to invest into content creation. It does leave M&A open if there's opportunity that would be supportive to our strategy. We're not viewing it as we're looking for a home for the money right now. We're just looking at it that it is ammunition to go out and pursue our strategy.
Okay. That helps. Yes. So the thought of joint development agreement sounds interesting, obviously. I hope you're not going to get into the streaming content creation business yourself, but we never know.
We're not that ambitious.
Good. Leave it to Amazon. So -- and then lastly, on org structure. I guess, is it clean now with all the restructuring you've done and the transactions that it's essentially one organization focused on TrueCut? Or maybe you can give us some picture of what -- how the organization is arranged now, that will be helpful to understand.
Well, so it's an organization today of approximately 25 people. In the way that this type of business works is we do leverage. One of the things about Hollywood. There are some very talented people that go project to project. And they're not permanent employees of any one studio, one technology provider, one special effects company, whatever it may be, but they're very talented and they go project by project. We do have these types of people available to us without bringing them in as employees.
So the 25 people is just our core employment base. But we have many of these contractors available to us from time to time on projects. So we will expand when needed and pull back. And this is the norm in this industry. Of the 25 permanent people, over half is R&D. So we're -- I mean, we -- if you look at our spend, it's not high. It's a couple of million a quarter. Most of it's going in tool development. We -- and we're not talking about tools that we're using today. We're talking about tools that we would introduce for either new features for our current market or new tools for a new market.
I'm not showing any further questions in the queue. I'd like to turn it back over to management for closing remarks.
Well, I think that's it for Q1 quarterly update. I look forward to giving you further updates to shareholders, further updates as we move along in our strategy. Thank you.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
Pixelworks, Inc. — Q4 2025 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen, and welcome to Pixelworks, Inc.'s Fourth Quarter 2025 Earnings Conference Call. I will be your operator for today's call. [Operator Instructions] As a reminder, 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. Please go ahead.
Thank you, Didi. Good afternoon, and thank you for joining us on today's call. With me on the call are Pixelworks' Chairman 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 fiscal year 2025.
Before we begin, I'd like to remind you that various remarks we make on this call, including those about 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, Thursday, March 12, 2026. 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, 2025, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results. Please note, throughout the company's press release and management statements during this conference call, we refer to net loss attributable to Pixelworks, Inc. as simply net loss.
With that, it's now my pleasure to turn the call over to Pixelworks' Chairman and CEO. Todd, please go ahead.
Thank you, Brett. Good afternoon, and welcome to everyone joining us on today's conference call. As a foundation for discussing our go-forward business and strategy, I want to begin today's call with a review of our recently completed sale of the company's Shanghai-based subsidiary. Following a roughly year-long process, in October, we signed a definitive purchase agreement to sell all of Pixelworks, Inc.'s ownership of its Shanghai semiconductor subsidiary to a special purpose entity controlled by VeriSilicon.
Then on January 6 of this year, we announced the successful closing of the transaction, which resulted in net cash proceeds to Pixelworks of approximately $51 million. The cash proceeds from the sale were received in early January, and with the approximate $11 million we had on hand at the end of 2025, our cash balance starting this year was approximately $62 million. In addition, there is still approximately $1.2 million in escrow for a tax dispute that looks to be resolved in our favor.
As outlined in my letter to shareholders last November, the rationale for the transaction was threefold. First, it unlocks significant value for our shareholders by monetizing a key asset that was exposed to increasingly complex business and geopolitical environments. In addition to repatriating the cash proceeds to the U.S., the transaction also completely eliminated all prior obligations of Pixelworks, Inc. to minority investors in the Shanghai subsidiary.
Second, with the exit of the semiconductor hardware business, we were able to reposition Pixelworks as a global technology licensing business, focused on cinematic visualization solutions, which I'll talk more about in a minute.
Lastly, the transaction meaningfully strengthened our balance sheet. increasing both the company's financial stability and flexibility. Without the financial and capital burdens associated with operating a resource-intensive semiconductor business in China, Pixelworks can focus on expanding our core strengths in visualization enhancement solutions, pursuing new and existing licensing initiatives and allocating capital to the highest ROI market opportunities.
Since the transaction closed in January, we have taken additional steps to transform the remaining organization. These included reducing headcount that primarily were supporting the Shanghai subsidiary as well as adding a few key hires, most notably the appointment of our new EVP of Business Development, Sevan Brown. We also made changes to Pixelworks' Board of Directors to better align with and support our go-forward strategy.
Having provided that background, I want to frame what our business looks like today post transaction. We have effectively transformed Pixelworks into a lean, asset-light global technology licensing company. We continue to have 100% ownership of a significant intellectual property portfolio, underpinned by over 60 issued and pending patents related to our TrueCut Motion grading platform as well as broader visual enhancement technologies.
As of today, the company is comprised of less than 25 full-time employees with roughly 60% being dedicated to R&D. To the extent we choose to grow the size of our team, it will be based upon demand for our technology as opposed to arbitrary growth targets.
Today and going forward, as a pure-play technology licensing company, we are focused on providing a combination of new and existing cinematic visualization solutions that enable truly differentiated viewing experiences. Our current portfolio of solutions is anchored by Pixelworks' TrueCut Motion platform, which continues to be utilized by leading filmmakers to enhance the cinematic experience across premium theatrical screens.
In 2025, we were accredited with several notable releases featuring TrueCut Motion, including DreamWorks Animation's The Bad Guys 2 and Universal Pictures' Nobody 2 released to worldwide premium large-format theaters. Additionally, Jurassic World Rebirth was showcased in TrueCut Motion format on CINITY premium screens. And then our motion grading technology was most recently used in Universal Pictures' theatrical release of Wicked: For Good.
As part of our refined strategy to accelerate expanded adoption of our TrueCut Motion platform, we are putting increased emphasis on supporting premium, visually stunning films that are released theatrically. Together with today's growing premium large-format theatrical experiences, these tent-pole titles generate an outsized share of the total theater box office sales.
Further validating this fact is the rapidly growing number of premium large format, or PLF, screens with the industry's largest exhibitors allocating a majority of their new CapEx spending to expand their premium theatrical experiences. As such, we are pursuing further direct engagement with the leading premium exhibitors who are naturally aligned with our objective of engaging studios and filmmakers to deliver more premium format content.
The initial results of these direct engagement efforts have been very positive. In January, we announced a partnership with Marcus Theatres to prioritize TrueCut Motion across their premium screens. For context, Marcus is the fourth largest theater chain in the United States, with nearly 1,000 screens across 78 cinema complexes operated under multiple different brands. Most recently, we secured a similar endorsement from Odeon Cinemas Group, the largest cinema operator in Europe and also affiliate of AMC, to bring additional titles to TrueCut Motion format to their premium auditoriums. We are currently in discussions with and expect to announce partnerships with additional leading premium exhibitors in the near future.
Collectively, we anticipate these collaborations with exhibitors will result in increased demand for our TrueCut Motion format. Our near-term objective is to be associated with many of the most visually impactful titles released to theaters in a given year, which we believe will accelerate our growth path towards increased market awareness and expanding ecosystem partnerships.
With TrueCut Motion's unique ability to enable the most authentic high-fidelity viewing experience and a growing number of premium screens, we continue to believe there is a large and compelling market opportunity for our motion grading technology and expertise. The primary focus of our advanced algorithm team is to further expand the capabilities of our motion grading tools, both for productivity and better picture quality.
Today, we are working on our most complex projects to date, which is providing us with real-time feedback from our motion grading supervisors. In addition to this activity, we identified adjacent opportunities for our motion processing technology. We, like others, are leaning into the benefits that AI technology can bring to our development process.
In summary, the successful exit from our previous semiconductor business has enabled us to transform the company into a more nimble, scalable and asset-light organization. That's well capitalized. Our immediate strategic focus is enabling additional premium large-format theatrical experiences and currently have a growing demand for our TrueCut Motion grading services.
I also want to emphasize that maintaining a robust balance sheet remains a high priority. We are committed to prudently managing resources and efficiently using our cash on operations as we work to build a broader and highly profitable licensing business centered around cinematic and visual enhancement solutions.
With that, I'll turn the call over to Haley to provide some additional information and details as well as our current balance sheet position.
Thank you, Todd. As Todd previously discussed, on January 6, 2026, we completed the transaction to sell all equity interests and associated assets of our Pixelworks Shanghai semiconductor subsidiary business.
In December, this business met all criteria to be considered held for sale, at which time the operating results of our Shanghai subsidiary became designated as discontinued operations. Therefore, the company's reported financial results contained in today's press release for fiscal years 2024 and 2025 represent the company's results on a continuing operations basis. With respect to the reported approximately $690,000 in revenue from continuing operations for fiscal year 2025, this is comprised entirely of revenue generated from our TrueCut Motion platform and related motion grading services.
With a large portion of our business prior to January 2026 now classified as discontinued operations, I will predominantly focus the remainder of my comments on continuing operations and the company's financial position subsequent to the sale of the subsidiary on January 6, 2026.
Starting with the balance sheet. I want to briefly review several items that contributed to our current and projected cash balance. Following our previously announced and completed registered direct offering and sale of nonstrategic patents during the fourth quarter, the continuing company ended the year with approximately $11.2 million in cash and cash equivalents.
Then, in January, we closed the sale of Pixelworks Shanghai semiconductor subsidiary, resulting in cash proceeds to Pixelworks, net of transaction costs and withholding taxes paid in China, totaling approximately $51 million. Hypothetically, had all of these items taken place before year-end, we would have entered 2026 with approximately $62 million.
Subsequent to closing the sale of our Pixelworks Shanghai subsidiary, we paid out all remaining transaction expenses, including accounting, legal and advisory fees as well as bonuses. We also completed a series of restructuring actions to streamline the remaining organization, which will result in recognizing certain severance costs in the first quarter.
Lastly, we believe that a previously pending tax matter in China has been fully resolved, and we expect an additional approximately $1.2 million of cash proceeds from the transaction to be released from escrow in the coming weeks. Taking all of these items into account, combined with expected results from continuing operations in the first quarter, we currently anticipate our cash and cash equivalents balance as of March 31 to be approximately $58 million. We believe this cash balance provides ample runway and flexibility to execute on our strategy of building a pure-play technology licensing business. As such, in early March, we elected to cancel our previously available but recently unused at-the-market stock facility.
Lastly, with respect to the balance sheet, I want to reiterate that all previously reported liabilities and commitments, including redeemable noncontrolling interest associated with our prior Shanghai subsidiary were fully released in conjunction with the closed sale. The elimination of these prior contingencies will be reflected in the company's reported financial statements for the first quarter ending March 31.
Another important change to our financial profile going forward relates to operating expenses. As mentioned earlier, during the first quarter, we took a number of actions to meaningfully reduce the company's overall cost structure and streamline the continuing operations portions of the business. These measures included a reduction in headcount and associated organizational expenses, reflecting our transition to focus on technology licensing. As a result, we expect cash used for operating expenses to be approximately $2 million per quarter beginning in the second quarter.
Although we are not providing quarterly financial guidance, I would like to provide a high-level framework for thinking about the company's current cash position and anticipated near-term operating results. First, we expect to maintain cash operating expenses of $2 million or less again starting in the second quarter. Then based on the current interest rate environment, we expect to generate at least $1.5 million of interest income annually from the cash currently held on the balance sheet.
That completes our prepared remarks, and we look forward to taking your questions.
Operator, please proceed with the Q&A session.
[Operator Instructions] And our first question comes from Suji Desilva of ROTH Capital.
2. Question Answer
Congratulations on the transaction here and the go-forward opportunity. So maybe, Todd, you can start with sort of the big picture in terms of the media chain, from content creators to the end theaters and streaming guys in between. Where are the best near-term opportunities for you to drive revenue? Maybe we can start there and talk about the model for those given components -- for those...
I think I've been through this before. I think maybe people didn't focus in last year when we were in the middle of the transaction, but I'll bring it up again. So our business model is, first, we have advanced tools and technology where we create cinematic high frame rate or motion-graded content that's branded under the TrueCut Motion brand.
When we do this work, we get paid for it. But we usually don't charge what the cost structure is, okay? So even though we make revenue there, we do not want it to be an inhibitor for content creators to come to us. So all the revenue that we've had so far have come -- in the last couple of years, has come from this content creation, but it's in a subsidized format. We are as busy as we've ever been. We're working on more complex projects today. We're advancing the tools that work on these projects. And so you could probably see an increase in revenue. But once again, that will not be the primary source of revenue.
Then today, for those content creators and studios that engage with us, we give the theatrical rights to that content. for effectively free, right? It's included in the engagement to do the motion grading work. And so we encourage them and we encourage more theaters to bring cinematic high frame rate content, TrueCut Motion content to as many theaters and as many visually stunning pieces of content as possible.
We expect, and we've been in discussions with several people that as this continues to expand, studios and distributors of content will want to deliver this premium experience to premium home entertainment devices. We will engage with those studios and distributors that want to distribute the content, and we will engage with device manufacturers of premium devices that want to have that differentiated content on their device. They need to be certified. They need to meet certain criteria and needs to operate in a mode that effectively guarantees the creator's intent, will be shown on those devices. And so we expect most of the revenue to come from this home entertainment ecosystem.
TrueCut Motion is not the only technology we're working on. We're working on other licensing technologies. They may or may not use the same model as far as our revenue profile. But we're running pretty lean, Suji. And I believe if we execute on this, we will be profitable with TrueCut Motion stand-alone.
Okay. Maybe, Todd, you can help think about the margin structure of this as the revenue forms, where you think it will head and as a pathway to thinking about what the breakeven revenue opportunity might be so we can think about your runway there?
So our margin is very high, even on the content creation. But understand we put a lot of R&D investment in, and we have a lot of administrative costs in both marketing and as a small public company. And so those aren't always absorbed. So you'll see gross margins be very high. So most revenue, whether it comes from content creation or distribution licensing or device certification licensing will have extremely high margins.
Okay. And again, as we look forward, can you maybe talk about how we should think about your pipeline or how it's formed today and maybe some metrics we'd be using in the future to track your progress?
Yes. We're not going to go out and set that right. I mean I would say how we're going to track our progress is, today, we are -- clearly, we have a good cash position, okay? And as much as we're not subsidizing the content like some people have in the licensing business, they've gone out and subsidized the engagement early on prior to making money on it. We're not doing that, okay? We're being somewhat selective.
But the way to gauge this is how fast are we expanding the exhibitor footprint that's pulling and -- pulling the studios to deliver more premium content to them, TrueCut Motion content, and how much content do we deliver to those theatrical experiences. That's the best way. That's the best way to figure out how we're succeeding in the near term, right? And then you'll see announcements at some point from the home entertainment portion of the ecosystem.
Okay. Yes, that makes sense. And then, I think, Haley, I appreciate you giving us 1Q some guidance we can work with, the OpEx being less than $2 million, the interest income for the year. What was the cash burn number you gave? Was that -- did you give a 1Q expected cash flow from operations?
No. I just said we expect to end the quarter with $58 million approximately, March 31.
Did you imply an amount of cash used in the quarter or...
Well, so I mean, we're paying severances and bonuses and other transaction costs plus operating cash, and we started sort of with the $62 million number.
$62 million, right? That's the delta, right? Okay. And then I saw some patent sales. Was that -- maybe last year, was that a one-off? Or is that something that could recur, Todd or Haley?
No, that's not going to be recurring revenue. Recurring revenue is going to come from licensing. We're -- listen, we sold off some patents that were not really specific to our TrueCut business. If you go back and looked at pre-transaction of the subsidiary sale, I would say 60% of our total patent portfolio was in the subsidiary, so that went with the subsidiary and the sale. Of what remains from what we didn't sell with the subsidiary transaction or outright to this person that wanted to buy these other patents, I would say we have no real intention of selling any more patents, and we're actively trying to add to that patent portfolio specific to our go-forward business.
Right. Okay. And then Todd, I might well just ask this question I asked a lot of companies who are kind of embarking on newer paths. What are maybe, as an executive, your 2 or 3 top priorities to try to accomplish in 2026 to get this off and running in the right direction?
Well, I mean, first and foremost, today, our technology is only used by Pixelworks TrueCut Motion editors. We are working on getting the product in a place where we could actually license it. And so you could expand upon our own people working on the technology to where we have third parties doing motion grading work using our tools. So that's a big priority for us. And then developing the demand profile. Those are the 2 biggest issues I have right now.
And I mean, frankly, I was very focused on a transaction. I had a group of people running this. They gave me something. Now I'm very focused on this business. That was in a good place. It takes a long time to create an awareness for technology like this. And I would say that the awareness is strong. Now we need to convert that into pull and content.
Okay. Great. And just one quick housekeeping. Just to be 100% sure, the cash that you've gotten, it's all in the U.S. at this point. Is that correct?
Yes. It's been in the U.S. since mid-January.
Thank you. This concludes our question-and-answer session. I'd like to turn it back to management for closing remarks.
Yes. Thanks, everybody, for keeping up to speed on this transition of the company. From time to time, we'll have some more salient information to give to you. Thank you.
This concludes today's conference call. Thank you for participating, and you may now disconnect.
Pixelworks, Inc. — Shareholder/Analyst Call - Pixelworks, Inc.
1. Management Discussion
Good day, ladies and gentlemen, this is Haley Aman, Chief Financial Officer of Pixelworks. I'm acting as Chairperson of the special meeting in accordance with Section 5.7 of our bylaws. This meeting was lawfully convened on November 26, 2025, was reconvened on December 8, 2025 and reconvened again on December 19, 2025, at which time it was adjourned until 09:00 a.m. Pacific Time today and is hereby reconvened. Pursuant to the Oregon Business Corporation Act, a quorum continues to be present.
The agenda for this meeting is as follows: Vote on Proposal 1 to approve the sale of common stock of Pixelworks Semiconductor Technology (Shanghai) Co. Ltd., held by a subsidiary of Pixelworks; two, advisory vote on Proposal 2 to approve compensation that may be paid to Pixelworks executive officers in connection with the sale referenced in Proposal 1; three, vote count; four, formal meeting adjournment.
Proposal 1 is to vote on the sale of common stock of Pixelworks Shanghai held indirectly by the company. The proxy statement contains detailed information on this proposal.
Proposal 2 is an advisory vote on compensation that may be paid or become payable to the executive officers of the company relating to the sale referenced in Proposal 1. The proxy statement contains detailed information on this proposal. I now recognize Leah Grant, our Inspector of Elections, who will present the preliminary voting results.
Thank you, Haley. The preliminary results of voting are as follows: For proposal 1, approximately 60% of the total shares of Pixelworks common stock outstanding on the record date for the meeting were cast in favor of the sale of common stock of Pixelworks Shanghai.
For Proposal 2, approximately 89% of the total votes cast were cast in favor of approval of the company's executive officer compensation related to the sale referenced in Proposal 1.
I therefore declare that proposal 1 has not received the approval of the holders of 67% of the total shares of Pixelworks' common stock outstanding on the record date as specified in the proxy statement for the special meeting, and that proposal 2 has been approved. The final vote count on proposals 1 and 2 will be reported under cover of Form 8-K filed with the SEC in due course.
This completes the formal business to come before this special meeting. There being no further formal business, this concludes the special meeting. Thank you.
Pixelworks, Inc. — Q3 2025 Earnings Call
1. Management Discussion
Good day, ladies and gentlemen, and welcome to Pixelworks, Inc's. Third Quarter 2025 Earnings Conference Call. I will be your operator for today's call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes.
I would now like to turn the call over to Brett Perry with Shelton Group Investor Relations. Please go ahead.
Thank you, Peter. Good afternoon, and thank you for joining today's conference call. With me today 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 third quarter of 2025.
Before we begin, I'd like to remind you that various remarks we make on this call, including those about 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, Tuesday, November 11, 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, 2024, 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 as well as the tax effect of the non-GAAP adjustments. The company uses these non-GAAP measures internally to assess its internal operating performance. We believe these measures -- we believe these non-GAAP measures provide a meaningful perspective on 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 U.S. GAAP.
Please note throughout the company's press release and management statements during this conference call, we refer to net loss attributable to Pixelworks, Inc. as simply net loss. Also note, on January 6, 2025, the company effected a 1-for-12 reverse stock split of the company's common stock and all shares of the company's common stock per share data and related information included in today's published condensed consolidated financial statements have been retroactively adjusted as though the reverse stock split had been affected prior to all periods presented. 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, it's now my pleasure to turn the call over to Pixelworks' CEO, Todd DeBonis, please go ahead.
Thank you, Brett. Good afternoon, and welcome to everyone on the phone and on the webcast. We appreciate you joining us for today's conference call. I'll start with a brief overview of the results for the quarter, and then I'll follow with the 2 primary objectives for today's call. The first is to review the background and rationale for the proposed transaction involving our Shanghai-based subsidiary. And second is to provide a preview of what the future Pixelworks will look like after the proposed transaction closes. With respect to results for the third quarter, both top and bottom line results were within our guidance.
Revenue grew by 6% sequentially, and and gross margin improved to approximately 50%, a little better than expected. We also realized continued benefits from our previous cost reduction actions with third quarter operating expenses decreasing sequentially and down $3.1 million year-over-year. Through a combination of our prior restructuring and ongoing cost reductions, we reduced cash burn from operations by more than 60% year-over-year to under $3 million in the third quarter.
Turning to our Pixelworks Shanghai subsidiary and the proposed transaction. As background, our Shanghai-based subsidiary was formed in 2021 as part of a comprehensive realignment of the larger Pixelworks organization. This included restructuring our Shanghai-based subsidiary to serve as the center of operations for all of Pixelworks semiconductor business and then securing investment from China-centric investors as well as our Pixelworks Shanghai employees. More specifically, this business comprises all generations of our open market and codeveloped visual display processing ships, for both digital projector and the mobile markets.
Today, the subsidiary represents a substantial amount of our operating revenue and expenses and also accounts for the majority of our employees. After several prior investment rounds in the subsidiary, Pixelworks ownership ended up at approximately 78%, which is where it is today. On October 15, 2025, we signed a definitive purchase agreement to sell all of Pixelworks, Inc's. ownership in the Pixelworks Shanghai subsidiary to a special purpose entity led by VeriSilicon. For those not familiar with this name, VeriSilicon is a well-established Chinese company that provides platform-based custom silicon services and semiconductor IP licensing services. Most participating on today's call are aware, however, I would like to emphasize that this proposed transaction did not come about suddenly nor without extensive deliberation and due diligence.
The recently entered definitive agreement is the result of a thorough strategic review process launched in the latter part of 2024. And that started with the engagement of Morgan Stanley as an adviser to evaluate potential alternative ownership structures for the Shanghai subsidiary, in a large part due to inpatients, from the subsidiaries China-based investors, escalating geopolitical tensions and capital market constraints within China and after evaluating all serious interest in the subsidiary. The Board and I unanimously concluded that the currently proposed transaction was in the best interest of our shareholders. Although still subject to the approval by Pixelworks, Inc. shareholders as well as other customary closing conditions and after satisfying agreed upon and contractually reduced obligations to minority equity holders of the subsidiary, transaction costs and withholding taxes.
The proposed transaction is expected to result in net cash proceeds to Pixelworks of between $50 million and $60 million upon closing. As outlined in my recent published letter to shareholders on November 4, the rationale for the proposed transaction is threefold. First, it unlocks significant value for shareholders while eliminating minority investor obligations, acknowledging the strategic and potential long-term value in our Pixelworks Shanghai subsidiary, this transaction captures the optimal realizable value in the current environment and allows the company to monetize a significant asset in the form of cash proceeds repatriated to the U.S. Second, it enables a renewed focus and expansion of core strengths, following a successful exit of the semiconductor hardware business, Pixelworks will be positioned as a global technology licensing business, specializing in cinematic visualization solutions.
As an asset-light, IP-rich company in this space the company will have competitive differentiation and compelling long-term growth potential. And third, it will achieve financial flexibility. The net cash proceeds from the transaction will significantly enhance the balance sheet. Pixelworks will have the flexibility to invest in growth opportunities support new and existing licensing initiatives and enable the allocation of capital to the highest return projects. As a reminder, shareholders as of October 17, record date have the right to vote. And I strongly encourage those investors to consider the published proxy materials and vote their shares for in support of the proposed transaction. Importantly, I want to emphasize that all current shareholders will have equal per share participation in the future growth opportunity and success of our transformed business going forward.
Having said that, I want to frame what this future transformed business looks like. Post-transaction, Pixelworks become a low head count pure-play technology licensing company. Specializing in cinematic visualization solutions. Our existing TrueCut Motion platform used by leading filmmakers to enhance the cinematic experience across premium theatrical and home screens will anchor a portfolio of proprietary imaging technologies extending beyond film and into high-growth enterprise, consumer visualization and entertainment markets. specific to TrueCut Motion. I want to reiterate that Pixelworks continues to own and control 100% of TrueCut Motion including all related assets and intellectual property.
Irrespective of the proposed transaction with our Shanghai subsidiary. Even though a majority of our recent TrueCut engagement activity with new prospective ecosystem partners has remained behind the scenes we are continuing to make tangible progress in support of expanded market awareness and adoption of our TrueCut Motion platform. As previously highlighted on our August conference call, during the third quarter, we were credited in 3 new theatrical releases. Universal Pictures drastic World rebirth, DreamWorks Animation, The Bad Guys 2; and Universal Pictures, Nobody 2.
Today, I can confirm the next theatrical release to feature our award-winning TrueCut Motion grading technology will be universal pictures [ with ] for good, which is slated to hit theaters on November 21. Earlier today, we confirmed that the TrueCut Motion version of [ WICED ] for good was selected for last night's U.K. Premier of the film. Separately, we believe we are getting close to completing an agreement with a strategic ecosystem partner to license the broader distribution of TrueCut Motion content to consumer devices in their home. This prospective partner is currently in the process of late-stage certification and if successful, we believe it can open and accelerate the path to device licensees. While we continue to be encouraged by this and other ongoing engagement activity, we see our TrueCut Motion platform as a foundation to build upon. Exiting the obligations associated with Pixelworks Shanghai's manufacturing and design business will free up the company's management and capital resources to grow an attractive high-margin licensing business. As we grow the post-transaction Pixelworks into a global technology licensing company, TrueCut Motion will not remain the company's exclusive offering.
Coupled with significantly lower head count and cost structure, we envision a post-transaction business model that will be inherently more scalable, less capital intensive, and has the potential to deliver high return on invested capital. With more than 2 decades of image processing innovation and our industry-leading TrueCut Motion platform serving as the flagship offering. We believe Pixelworks is poised to enable the most authentic high-fidelity viewing experiences across all screens, both today's and the advanced screens of the future.
With that, I'll turn the call over to Haley to review the financials for the third quarter. As well as a couple of positive new balance sheet developments that took place subsequent to quarter end.
Thank you, Todd. Revenue for the third quarter of 2025 was $8.8 million compared to $8.3 million in the second quarter and $9.5 million in the third quarter of 2024. The sequential increase in third quarter revenue reflected growth across both of our end markets, led by increased sales in the home and enterprise market. The breakdown of revenue in the third quarter was as follows: Home and Enterprise revenue was approximately $7.4 million. Revenue from Mobile was approximately $1.4 million. Third quarter non-GAAP gross profit margin was 49.9%, compared to 46% in the second quarter of 2025 and 51.3% in the third quarter of 2024.
The sequential increase in gross profit margin primarily reflected a more favorable product mix on shipments into the home and enterprise market. Non-GAAP operating expenses were $9.2 million in the third quarter compared to $9.7 million in the prior quarter and $12.4 million in the third quarter of 2024. The sequential and year-over-year decrease in operating expenses reflects the ongoing realized benefits of our previously taken actions to reduce expenses. On a non-GAAP basis, third quarter 2025 net loss was $3.8 million or a loss of $0.69 per share compared to a net loss of $5.3 million or a loss of $1 per share in the prior quarter and a net loss of $7.1 million or a loss of $1.45 per share in the third quarter of 2024.
Adjusted EBITDA for the third quarter of 2025 was a negative $3.6 million compared to a negative $4.3 million in the prior quarter and a negative $6.3 million in the third quarter of 2024. With respect to our outlook, the company is [ looking ] not to provide financial guidance for the fourth quarter due to the previously announced definitive agreement to sell substantially all of the assets [indiscernible] or Shanghai. However, we want to highlight that in October 2025, we closed a registered direct offering and the sale of patents pertaining to technologies we no longer pursue collectively contributing approximately $10 million to our cash position. As of October 31, 2025, our cash and cash equivalents balance was approximately $22 million, of which roughly half is associated with Pixelworks Shanghai, and the other half is associated with it Pixelworks, Inc.
That completes our prepared remarks, and we look forward to taking your questions. Operator, please proceed with the Q&A session. Thank you.
[Operator Instructions] Our first question comes from the line of Suji Desilva of ROTH Capital.
2. Question Answer
Congratulations on the transformative transaction. So maybe you can start with the transaction itself. And maybe, Todd, you can help us bridge or Haley, the $133 million of consideration to the $50 million to $60 million you're going to get, just understanding what the amounts were and the circumstance of the, I guess, the minority shareholders receiving a portion of this?
I'll take it. I'll give you a rough guideline on how to. So first of all, we do only own 78% of the entity. So the value of the entire entity was valued at RMB 950 million or USD 133 million. Then we had obligations, either redemption obligations to like our employees, and we had actually preferred return obligations to all of the outstanding investors. As part of this transaction, they've all agreed to release the preferred return benefit in return for just redemption. So we're using some of our ownership to effectively redeem them at this lower valuation. I'll remind you that when we raised capital for the subsidiary, it was at significantly higher valuations than what we are selling the entity for.
In fact, the later stage investors, it was valued over USD 500 million. So that's the main reason why we're not getting 78% of returns because we're redeeming the shareholders. But in return, they're foregoing their preferred return, which would have been significantly higher. And then there's just your normal transaction costs and legal costs. The final step is that there is a -- withholding tax as we're selling a Chinese asset to a Chinese buyer in China to repatriate our cash, we have to pay withholding tax in China of approximately 10%. So once you go through all of that, you get to this net proceeds delivered in the U.S. between $50 million and $60 million.
Okay. Todd, I appreciate the detail there. Second question is really on the Shanghai subsidiary. Have you seen actual impact to the business in the last few weeks or months? Due to geopolitical just to understand that asset and this deal closing? Just to understand if there has been any impact there or whether it's more normal course?
It's hard to be definitive on this, but there is a delete a -- you could call it a policy, it's an undercurrent Delta a being Delete America. There is a big effort. And you can see this in the AR world right now where the government steps in and pushes the large buyers of semiconductors, so large equipment manufacturers to the smartphone manufacturers, et cetera, to -- they want a preferred preference on local semiconductor companies. We were a hybrid, Pixelworks Shanghai was effectively a little giant, it got subsidies, et cetera, but they knew it was 80% owned by a U.S. public entity. We felt it. We felt it for the last 18 months. We tried to sell through it. In some cases, we were successful in some cases, we weren't.
I can tell you since the deal was announced in public. I've seen several opportunities show up to the subsidiary that I do not think would have showed up to the subsidiary if we would have kept the existing ownership intact. Now whether the VeriSilicon will convert those opportunities or not remains to be seen, but you can feel it, Suji.
Right. No, that really helps. And then lastly, turning to the forward look, the TrueCut business you have here. Just maybe give me the before and after this transaction, how you are running that business? And what -- if this question makes sense, what this transaction unlocks and how you will run the TrueCut opportunity here differently going forward, whether it's capital employees, customer discussions, anything of color there would help to kind of look forward to the pro forma business?
That's a good question. I never really thought about it in running it differently, okay? I thought we were running it appropriately up to this point. And now we are going to focus on it and try to accelerate it. I do believe the nature of the business and the way we went to market, which is a very difficult way to go to market, where you have to bring the whole ecosystem together. So from content generation to theatrical distribution, then to home entertainment distribution and then device manufacturers. And you have to bring this whole ecosystem sort of forward together. It takes a lot of evangelism.
And so during that evangelism period, not always throwing money and resources accelerates it. And so since we sort of first [ won ] awards for this technology from HPA and other Hollywood technical bodies. We've been evangelizing -- could we have done more of it maybe with more capital and more focus. But for the most part, it took its own time. We see now that, that evangelism is starting to pay dividends. And so now might be the time to accelerate the investment and energy into the business. So I would say that's probably the only difference between then and now. I will say, as a public company, you're very focused on trying to be cash flow positive and earnings growth.
And so when we ran into headwinds in China, we definitely slowed down our investment in TrueCut. So maybe for the last year or so, it was artificially constrained.
Thank you. I would now like to turn the conference back to management for closing remarks.
Yes. So thanks, everybody. I once again would like to repeat, I encourage all shareholders of record to vote your proxy shares as an Oregon corporation we require 67% of all outstanding shareholders to vote for in order for this to pass. So I encourage you all to vote your shares. And thanks for your time.
This concludes today's conference call. Thank you for participating. You may now disconnect.
Financial data from Pixelworks, Inc.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 9.97 9.97 |
71%
71%
100%
|
|
| - Direct Costs | 4.63 4.63 |
72%
72%
46%
|
|
| Gross Profit | 5.34 5.34 |
69%
69%
54%
|
|
| - Selling and Administrative Expenses | 16 16 |
13%
13%
161%
|
|
| - Research and Development Expense | 12 12 |
58%
58%
116%
|
|
| EBITDA | -21 -21 |
20%
20%
-210%
|
|
| - Depreciation and Amortization | 1.33 1.33 |
56%
56%
13%
|
|
| EBIT (Operating Income) EBIT | -22 -22 |
24%
24%
-223%
|
|
| Net Profit | 51 51 |
282%
282%
510%
|
|
In millions USD.
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Pixelworks, Inc. Stock News
Company Profile
Pixelworks, Inc. engages in the design and development integrated circuits for use in electronic display devices. It offers consumer electronics and professional display products, as well as video delivery and streaming solutions for content service providers. Its product category comprises of ImageProcessor integrated circuits (ICs), video co-processor ICs, and transcode ICs. Its target markets include mobile such as smartphone, gaming, and tablet; home entertainment; content; and business and education. The company was founded by Allen H. Alley, Michael G. West, Kenneth Hunkins, Robert Y. Greenberg and Bradley A. Zenger on January 16, 1997 and is headquartered in San Jose, CA.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. DeBonis |
| Employees | 163 |
| Founded | 1997 |
| Website | www.pixelworks.com |
