First Quarter and Recent Highlights
- Total revenue increased 61% year-over-year, driven by strong growth in mobile revenue
- Mobile revenue grew year-over-year to $9.8 million, reflecting increased shipments of X-series visual processors for smartphones and an expanded number of TrueCut Motion™ engagements
- GAAP gross margin expanded almost 600 basis points sequentially and 670 basis point year-over-year to 50.5%, primarily driven by revenue mix comprised of newer generation mobile visual processors
- Transsion, a global tier-one manufacturer of smart devices, launched the Infinix GT 20 Pro smartphone in emerging market geographies, incorporating Pixelworks' X5 Turbo visual processor
- vivo's newly launched iQOO Z9 Turbo smartphone incorporated the Pixelworks' X5 Turbo visual processor, extending a more immersive, high-frame-rate gaming experience to the mid-tier device market
- Diablo® Immortal™, co-developed by Blizzard Entertainment® and NetEase, became latest AAA mobile game to integrate Pixelworks' IRX Rendering Accelerator SDK for superior visual experiences on IRX certified devices
- Legendary Pictures' Godzilla x Kong: New Empire was released globally by Warner Bros. to select premium format theaters in TrueCut Motion format
- Universal Pictures released DreamWorks Animation's Kung Fu Panda 4 in TrueCut Motion format to both 3D and 2D premium theaters, showcasing the enhanced motion look of cinematic high-frame-rate
"First quarter revenue was slightly above the midpoint of guidance and reflected the anticipated March quarter seasonality following our record mobile revenue in the fourth quarter," stated Todd DeBonis, President and CEO of Pixelworks. "Year-over-year, mobile revenue was up almost 3x and represented a record 61% of total revenue for the quarter. Additionally, gross margin expanded nearly 600 basis points sequentially, which together with well managed operating expenses, resulted in minimal cash used from operations during the first quarter.
"Our recently announced mobile wins, including Transsion's Infinix GT 20 Pro smartphone and vivo's newly launched iQOO Z9 Turbo, represent notable traction on our two-pronged strategy aimed at increased penetration of the mid- to lower-tier device market as well as expanded adoption in smartphone models targeted for outside of China. With the Infinix GT 20 Pro smartphone, Transsion not only became our fifth tier-one handset customer, they are the first to introduce Pixelworks' visual processing technology to sub-$350 phones in emerging markets. Additionally, we continued to expand the ecosystem for our TrueCut Motion platform with additional industry-leading studios and new motion pictures released to premium format theaters in TrueCut Motion format.
"We remain focused on operational execution in a challenging environment, while also continuing to navigate a dynamic smartphone market in China. As part of our strategy, together with new product initiatives and broader gaming ecosystem engagements, we are driving to expand our targeted addressable market and the long-term growth potential of our mobile business. We look forward to achieving additional key milestones across our mobile and TrueCut Motion businesses throughout the balance of the year."
First Quarter 2024 Financial Results
Revenue in the first quarter of 2024 was $16.1 million, compared to $20.1 million in the fourth quarter of 2023 and $10.0 million in the first quarter of 2023. The year-over-year increase in first quarter revenue was driven by strong growth in the Company's mobile business, which expanded to 61% of total revenue for the quarter.
On a GAAP basis, gross profit margin in the first quarter of 2024 was 50.5%, compared to 44.7% in the fourth quarter of 2023 and 43.8% in the first quarter of 2023. First quarter 2024 GAAP operating expenses were $13.6 million, compared to $13.1 million in the fourth quarter of 2023 and $14.7 million in the year-ago quarter.
On a non-GAAP basis, first quarter 2024 gross profit margin was 50.7%, compared to 44.8% in the fourth quarter of 2023 and 44.1% in the year-ago quarter. First quarter 2024 non-GAAP operating expenses were $12.6 million, compared to $12.0 million in the fourth quarter of 2023 and $13.6 million in the year-ago quarter.
For the first quarter of 2024, the Company recorded a GAAP net loss of $5.1 million, or ($0.09) per share, compared to a GAAP net loss of $3.7 million, or ($0.07) per share, in the fourth quarter of 2023, and a GAAP net loss of $9.4 million, or ($0.17) per share, in the year-ago quarter. Note, the Company refers to "net loss attributable to Pixelworks, Inc." as "net loss".
For the first quarter of 2024, the Company recorded a non-GAAP net loss of $4.0 million, or ($0.07) per share, compared to a non-GAAP net loss of $2.6 million, or ($0.05) per share, in the fourth quarter of 2023, and a non-GAAP net loss of $8.2 million, or ($0.15) per share, in the first quarter of 2023.
Adjusted EBITDA in the first quarter of 2024 was a negative $3.2 million, compared to a negative $1.9 million in the fourth quarter of 2023 and a negative $7.8 million in the year-ago quarter.
Cash and cash equivalents at the end of the first quarter of 2024 were $46.2 million, compared to $47.5 million at the end of the fourth quarter of 2023 and $62.8 million at the end of the first quarter of 2023.
