Pixelworks Q3 2026 Earnings Results & Report

Pixelworks EPS Results

• Actual EPS: -$0.46
• Consensus EPS: -$0.26
• Beat/Miss: Missed by -$0.20
• One Year Ago EPS: N/A
• EPS Beat Rate: 6 of last 8 quarters

Pixelworks Revenue Results

• Actual Revenue: $378 thousand
• Expected Revenue: $300 thousand
• Beat/Miss: Beat by +$78.00 thousand
• YoY Revenue Growth: N/A

Pixelworks (NASDAQ:PXLW) is a semiconductor and software company that develops visual-processing technologies for consumer electronics. Its solutions are designed to improve image quality, color accuracy, contrast, motion performance and power efficiency in devices such as smartphones, tablets, monitors, televisions, projectors and other digital displays.

The company’s product portfolio has included dedicated visual-processing chips, mobile display processors and software-based technologies. Pixelworks’ offerings include the Iris family of mobile processors and its TrueCut Motion platform, which is intended to enhance motion presentation and provide a consistent viewing experience across compatible displays and content.

Founded in 1997 and headquartered in San Jose, California, Pixelworks serves device manufacturers and technology partners in international consumer-electronics markets. Its business has historically focused on licensing and supplying visual-processing solutions that can be integrated into products manufactured by third-party electronics companies.

Pixelworks Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Third-quarter revenue rose more than 50% year over year to approximately $378,000, and Pixelworks recognized its first device-licensing revenue ahead of schedule. Licensing also lifted gross margin to 92.1%, although revenue remains modest in absolute terms.
• Positive Sentiment: Pixelworks announced a multi-year agreement with Meta to certify multiple VR devices for TrueCut Motion, marking its first direct certification deal with a premium home-device manufacturer. Management said the agreement could accelerate demand for new and library content, but did not disclose financial terms.
• Positive Sentiment: The company cited a growing pipeline of motion-grading titles and expects 2027 to be a breakthrough year for theatrical TrueCut Motion content; it also plans to expand its premium-theater partnerships. These are management expectations, not guaranteed results.
• Negative Sentiment: Pixelworks used approximately $1.8 million in operating cash during the quarter, while GAAP operating expenses were $3.8 million against $378,000 of revenue. It ended the quarter with about $50 million in cash and no debt, and expects quarterly cash burn to fall below $1 million by the end of 2027.

Presentation

[Operator]

Good day, ladies and gentlemen, and welcome to Pixelworks Inc.'s third 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 a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. 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. You may begin.

[Brett Perry, VP of Investor Relations at Shelton Group]

Thank you, Towanda. 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 third quarter of 2026. Before we begin, I'd like to remind you that various remarks we make on today's call, including those about our 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 a number of risks and uncertainties that may cause actual results to differ materially. All forward-looking statements are based on the company's beliefs as of today, Wednesday, November 11, 2026.

[Brett Perry, VP of Investor Relations at Shelton Group]

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 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.

[Todd DeBonis, Chairman and CEO at Pixelworks]

Thank you, Brett. Good afternoon, and welcome to everyone joining us on today's conference call. Following the strategic transformation in early 2026, including the prudent exit and monetization of our previous semiconductor business, we are continuing to execute and make significant progress on our effort of building and scaling a pure-play technology licensing business. Anchored by our industry-leading TrueCut Motion platform and advanced visualization solutions, we are positioning Pixelworks to be an enabler of truly differentiated viewing experiences. During the quarter, we continued to make steady progress toward our near-term objectives of growing the TrueCut Motion ecosystem of premium large-format exhibitors and expanding the availability of cinematic TrueCut Motion-graded content. Revenue for the third quarter was sequentially higher and increased more than 50% year-over-year, and we recognized our first revenue contribution from device licensing, well ahead of our original timeline.

[Todd DeBonis, Chairman and CEO at Pixelworks]

We have also continued to be diligent with OpEx spending to reduce the cash used from operations, and we repurchased an additional $1.2 million of the company's outstanding common stock during the quarter. As a reminder and context for today's discussion, I want to briefly reiterate our strategic path for scaling the business. Driving broad adoption of our TrueCut Motion platform begins with the theatrical experience by partnering with leading premium large-format exhibitors and studios to enable high-fidelity, immersive, motion-graded content for display in their premium theaters. This not only builds a growing library of TrueCut Motion titles, but it also establishes an ecosystem and the consumer awareness of premium viewing experience. As awareness expands, we believe studios will want to further monetize the TrueCut Motion-graded content and deliver the same authentic cinematic experience to consumers' homes.

[Todd DeBonis, Chairman and CEO at Pixelworks]

This, in turn, provides a foundation for consumer device certification, where we will work with premium device manufacturers to play TrueCut Motion content as it was intended to be viewed. Each step along this path, from professional services for theatrical content through device certification, represents an incremental revenue opportunity for Pixelworks. Today, the broad theatrical market landscape is more constructive and naturally aligned than it has ever been in terms of our TrueCut Motion strategy. Year-to-date, the domestic box office has reached approximately $8.5 billion, representing a more than 20% increase over the same period in 2025. Recent industry forecasts suggest that the full-year 2026 domestic box office is on pace to exceed $10 billion for the first time since the pre-pandemic peak in 2019.

[Todd DeBonis, Chairman and CEO at Pixelworks]

This performance has been driven by multiple visual exquisite titles, including "Spider-Man: Brand New Day," which is slated to become the highest-grossing film of all time domestically, along with other notable releases such as "The Odyssey" and "Toy Story 5." More importantly for TrueCut Motion, the industry is continuing to place increasing value on premium large-format experiences. The increased economic value of PLF venues is clearly demonstrated in the recently reported results of several leading exhibitors and related technology providers. For example, AMC reported its PLF and XL auditoriums, representing only 8% of their U.S. screens, generated 31% of U.S. admissions revenue in the third quarter, with premium auditorium revenue growing 62% year-over-year. Cinemark noted that premium formats accounted for 18% of its total box office from just 6% of the screens, with PLF ticket revenue increasing 50% year-over-year.

[Todd DeBonis, Chairman and CEO at Pixelworks]

Also, IMAX delivered record third-quarter revenue with its screens capturing 6.7% share of the global box office, despite representing less than 1% of worldwide screens. With PLF consistently accounting for roughly 20% of the domestic box office revenue from only 4% of the total screens, the industry is responding. Exhibitors are prioritizing capital investments and pushing studios towards increased availability of PLF content to take advantage of this increasingly disproportionate share of box office revenue. Our TrueCut Motion platform remains uniquely positioned to enable filmmakers, studios, and exhibitors to deliver immersive experiences in these premium large-format venues that feature high frame rate, brighter screens, and advanced projector technologies. To date, we've announced formal collaborations with Marcus Theatres, ODEON Cinemas Group, Vue, Kinepolis Group, and Cineworld. Each of these partners is prioritizing endorsing TrueCut Motion-enhanced presentations on their most advanced laser, HDR, and premium large-format screens.

[Todd DeBonis, Chairman and CEO at Pixelworks]

In addition, TrueCut Motion content has been released and displayed in both IMAX and Dolby theaters. We have ongoing efforts to further expand our network of leading exhibitors, and we expect to announce additional partners committed to bringing TrueCut Motion content to the premium screens over the coming months and quarters. Also fundamental to driving broader adoption of our TrueCut platform is increasing the availability of premium TrueCut Motion-graded content. We remain engaged with a combination of studios and content creators on a growing pipeline of TrueCut Motion-enhanced titles. Most recently, we worked with Universal Pictures on DreamWorks Animation's original animated feature, "Forgotten Island," which was released to theaters in late September.

[Todd DeBonis, Chairman and CEO at Pixelworks]

The film received strong reviews from both critics and audiences, and we are proud of our team's motion grading work on both the 2D and 3D versions of the film in support of the creator's vision to deliver a highly immersive experience. We currently have numerous titles targeting releases over the next four quarters, and based on the existing lineup of anticipated motion grading titles, we believe that 2027 will be a breakthrough year for new theatrical TrueCut Motion content. Shifting to our announced collaboration with Meta earlier this week, this multi-year agreement is a major milestone for our first certification agreement directly with a premium home entertainment device manufacturer.

[Todd DeBonis, Chairman and CEO at Pixelworks]

The agreement with Meta will bring the same TrueCut Motion experience for immersive cinematic content targeting premium large-format theaters to Meta's VR devices, including the upcoming Meta VR Glasses, thus preserving director-intended creative choices while also eliminating motion artifacts that can otherwise disrupt an immersive viewing experience. From our perspective, this collaboration marks a major turning point for ecosystem adoption. We expect this partnership to meaningfully accelerate our existing pipeline of TrueCut Motion-graded titles, including demand for both planned new theatrical releases and the conversion of existing library content. This commercial proof of the ability to reproduce the premium quality of a theatrical experience on certified devices should increasingly motivate studios and creators towards delivering consistent premium viewing experiences across both theatrical and device environments.

[Todd DeBonis, Chairman and CEO at Pixelworks]

As Meta devices and associated streaming services are commercially launched, we will be able to provide additional details about the scope of the content that TrueCut Motion is enabling for these devices. In summary, our focus for 2026 has been to continue the expansion of premium large-format exhibitor ecosystem and bring expanded availability of immersive TrueCut Motion-graded content to these unique premium experience theaters. In addition, we will be working with Meta to bring both new immersive and bespoke library content to their VR devices. We will do this while maintaining a lean organization with relatively low threshold to reach positive cash flow. Coupled with approximately $50 million in cash and 0 debt at quarter end, we believe that we have ample flexibility to execute on our strategy and successfully scale what has the potential to be a highly valuable licensing business.

[Todd DeBonis, Chairman and CEO at Pixelworks]

With that, I will turn the call to Haley to provide some additional financial details on the quarter.

[Haley Aman, CFO at Pixelworks]

Thank you, Todd. As reported in today's press release, revenue for the third quarter of 2026 increased sequentially and year-over-year to approximately $378,000, bringing the first nine months total revenue to $888,000. For context, full year 2025 revenue associated with TrueCut Motion was approximately $690,000. Gross profit margin for the third quarter was 92.1%, compared with 60.9% in the previous quarter. The higher gross margin primarily reflected increased revenue contribution from licensing in the third quarter. Total GAAP operating expenses for the third quarter were $3.8 million, compared to $3.4 million in the prior quarter. The sequential increase was largely the result of certain non-recurring expenses, which we believe will contribute to further streamlining our business and expenses going forward. Turning to the balance sheet. The company ended the third quarter with cash equivalents, and short-term marketable securities of approximately $50 million.

[Haley Aman, CFO at Pixelworks]

The sequential change in the cash balance from the prior quarter was the result of approximately $1.8 million used from operations and approximately $1.2 million used to repurchase shares of Pixelworks common stock during the third quarter. We remain committed to maintaining a strong balance sheet, and we continue to believe our existing cash equivalents, and short-term marketable securities balance provides ample flexibility to execute our strategy of building a pure play technology licensing business. Heading into 2027, we are encouraged by the growing pipeline for motion grading services and early engagement with prospective licensing customers. We remain committed to maintaining disciplined and efficient operations to keep OpEx well-controlled and stable. Together with what we believe are realistic revenue expectations, as well as the interest income from our invested cash, we anticipate sustained progress toward reducing cash burn to less than $1 million per quarter exiting 2027.

[Haley Aman, CFO at Pixelworks]

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

[Operator]

Thank you. Ladies and gentlemen, as a reminder to ask a question, please press star one one on your telephone, then wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Suji Desilva with Roth Capital. Your line is open.

[Suji Desilva, Analyst at Roth Capital]

Hi, Todd. Hi, Haley. Congratulations on the progress here, particularly the Meta announcement here, Todd. Just to focus on that agreement you announced with Meta, is there any way to think about the terms of that arrangement for you and the opportunity for you? Or maybe you can talk more generally if you're limited on a framework of how a device manufacturer would work with you in the licensing process.

[Todd DeBonis, Chairman and CEO at Pixelworks]

Well, I would say first of all, as a company, we're flexible on how we engage in these negotiations for device licenses. What we try to do is achieve our objectives, but also align the contract with the objectives of the licensee. I can't really talk about the terms, et cetera, but I can say that together with Meta, we are aligned on those financial terms, and it's a multi-year agreement to help them certify multiple devices, and we are incentivized to bring as much content as we can to that platform.

[Suji Desilva, Analyst at Roth Capital]

Okay. Great. Thanks, Todd. Then more specifically, you said, and I can imagine word of mouth, Meta supporting this might get content creators to think about using this, but will Meta, you think, put any marketing budget or dollars toward building a content base to help their glasses? Is that something that might be on the table that would accelerate the flywheel faster in terms of content, TrueCut Motion creator content?

[Todd DeBonis, Chairman and CEO at Pixelworks]

I can't speak to their overarching strategy with their devices. I was at the keynote speech where this device was launched.

[Todd DeBonis, Chairman and CEO at Pixelworks]

I'm working with them on a regular basis. From what I can tell, from what they released at that speech and what I think they will be releasing over the next several months prior to the launch of the Meta VR Glasses, is they are absolutely incentivized to improving the cinematic experience on the new Meta VR Glasses as well as all their existing devices.

[Todd DeBonis, Chairman and CEO at Pixelworks]

Making sure that quality immersive content for their target audience is available to that ecosystem.

[Suji Desilva, Analyst at Roth Capital]

Okay. They stress content availability. That definitely helps to know. My last question is maybe for Haley Aman. The guidance toward reducing cash burn by exiting 2027, what are the OpEx assumptions between now and then that are kind of embedded in that?

[Haley Aman, CFO at Pixelworks]

Well, on a non-GAAP basis, what we've said in the past is we're kind of expecting between $2 million and $2.5 million on OpEx, quarterly.

[Suji Desilva, Analyst at Roth Capital]

Per quarter. Got it. All right. Thanks, guys. I'll pass it along. Thanks.

[Todd DeBonis, Chairman and CEO at Pixelworks]

Thank you, Suji. Appreciate the questions.

[Operator]

Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Todd for closing remarks.

[Todd DeBonis, Chairman and CEO at Pixelworks]

All right. Thank you. For all those listening to this call, thank you for attending. We are making major progress towards our goals. I look forward to updating all of you on the next quarterly call.

[Operator]

That concludes today's conference call. You may now disconnect.

Participants

Executives

• Todd DeBonis, Chairman and CEO
• Haley Aman, CFO

Analysts

• Brett Perry, VP of Investor Relations at Shelton Group
• Suji Desilva, Analyst at Roth Capital