(PXLW) 2022 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Pixelworks, Inc.'s Fourth Quarter 2022 Earnings Conference Call. I will be your operator for today's call. (Operator Instructions) This conference call is being recorded for replay purposes.

女士們先生們，美好的一天，歡迎來到 Pixelworks, Inc. 的 2022 年第四季度收益電話會議。我將是您今天電話的接線員。 （操作員說明）正在錄製此電話會議以供重播。

I would now like to turn the call over to Brett Perry of Shelton Group Investor Relations.

我現在想把電話轉給 Shelton Group Investor Relations 的 Brett Perry。

Thank you, Andrew. Good afternoon, and thank you for joining today's call. With me on the call are Pixelworks President and CEO, Todd DeBonis; and Chief Financial Officer, Haley Aman. The purpose of today's conference call is to supplement the information provided in Pixelworks' press release issued earlier today announcing the company's financial results for the fourth quarter of 2022.

謝謝你，安德魯。下午好，感謝您參加今天的電話會議。與我通話的還有 Pixelworks 總裁兼首席執行官 Todd DeBonis；和首席財務官 Haley Aman。今天電話會議的目的是補充 Pixelworks 今天早些時候發布的新聞稿中提供的信息，該新聞稿宣布了公司 2022 年第四季度的財務業績。

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 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, February 9, 2023. 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, our annual report on Form 10-K for the year ended December 31, 2021, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results.

在我們開始之前，我想提醒您，我們在本次電話會議上發表的各種評論，包括有關預計未來財務業績、經濟和市場趨勢以及競爭地位的評論，均構成前瞻性陳述。這些前瞻性陳述和在本次電話會議上做出的所有其他非歷史事實的陳述都受到許多風險和不確定性的影響，這些風險和不確定性可能導致實際結果存在重大差異。所有前瞻性陳述均基於公司截至 2023 年 2 月 9 日（星期四）的信念。公司不承擔更新任何此類陳述以反映今天之後發生的事件或情況的義務。請參閱今天的新聞稿、我們截至 2021 年 12 月 31 日的 10-K 表格年度報告以及隨後提交給美國證券交易委員會的文件，了解可能導致前瞻性陳述與實際結果存在重大差異的因素的描述。

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 expense, net loss, net loss per share. Non-GAAP measures exclude amortization of acquired intangible assets and stock-based compensation expense, as well as the tax effect of the non-GAAP adjustments and the impact of non-GAAP adjustments to redeemable non-controlling interest. The company uses these non-GAAP measures internally to assess operating performance. We believe these non-GAAP measures provide a meaningful perspective into core operating results and underlying cash flow dynamics. We caution investors to consider these measures in addition to, and not as a substitute for, nor superior to, the company's consolidated financial results as presented in accordance with GAAP. Also note, throughout the company's press release and management statements during this conference call, we refer to net loss attributable to Pixelworks, Inc. as simply net loss. For additional details and a reconciliation 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.

此外，公司在本次電話會議期間的新聞稿和管理層聲明將包括以 GAAP 和非 GAAP 條款討論某些措施和財務信息，包括毛利率、運營費用、淨虧損、每股淨虧損。非 GAAP 措施不包括所收購無形資產的攤銷和基於股票的補償費用，以及非 GAAP 調整的稅收影響和非 GAAP 調整對可贖回非控股權益的影響。公司在內部使用這些非 GAAP 指標來評估經營業績。我們相信，這些非 GAAP 措施為了解核心經營業績和潛在現金流動態提供了有意義的視角。我們提醒投資者考慮這些措施，而不是替代或優於公司根據 GAAP 提出的綜合財務業績。另請注意，在本次電話會議期間公司的新聞稿和管理層聲明中，我們將歸因於 Pixelworks, Inc. 的淨虧損簡稱為淨虧損。有關更多詳細信息以及 GAAP 與非 GAAP 淨虧損和 GAAP 淨虧損與調整後 EBITDA 的對賬，請參閱公司今天早些時候發布的新聞稿。

With that, it's now my pleasure to turn the call over to Todd for his opening remarks. Please go ahead.

有了這個，現在我很高興將電話轉給托德，讓他發表開場白。請繼續。

Thank you, Brett, and good afternoon to those participating on the call. I'm pleased to be joining you today from a morning in Shanghai. I've recently been catching up with the team and our customers.

謝謝布雷特，下午好，參加電話會議的人。我很高興今天早上在上海與大家會面。我最近一直在跟上團隊和我們的客戶。

Let me start with a few observations that I've made over the last 2 weeks here in China. First, with the rollback of China's strict COVID policies in mid-November, what many might not realize is that, a majority of people here, including nearly all of the employees throughout China, our employees, spent December at home with COVID and then recovery, making it a very weak month in terms of productivity. It wasn't until the turn of the calendar year that real normalization began and increased productivity in the return of the consumer engagement. And having personally witnessed the tail end of the recent Chinese Lunar New Year holiday, it is readily apparent that people are enthusiastic about getting back to normal, traveling locally and spending again. At a high level, these are encouraging and positive signs, not only for our China-based employees and their families, but also for Pixelworks' overall business, as well as the global macro environment -- macroeconomic environment.

讓我從過去兩週在中國所做的一些觀察開始。首先，隨著 11 月中旬中國嚴格的 COVID 政策的回滾，許多人可能沒有意識到，這裡的大多數人，包括幾乎所有在中國的員工，我們的員工，在 12 月都在家裡度過了 COVID，然後康復，就生產力而言，這是一個非常疲軟的月份。直到日曆年開始，真正的正常化才開始，並在消費者參與的回歸中提高了生產力。親眼目睹了最近中國農曆新年假期的尾聲，很明顯，人們對恢復正常、在當地旅行和再次消費充滿熱情。從較高的層面來看，這些都是令人鼓舞和積極的跡象，不僅對我們在中國的員工及其家人，而且對 Pixelworks 的整體業務，以及全球宏觀環境——宏觀經濟環境。

Turning to a recap of our financial results. For the fourth quarter, both top and bottom line were slightly lower than the midpoint of our guidance. Total revenue was up 2% year-over-year as our team continued to execute well in the face of growing macro and end market-specific challenges. Looking at the full year, we delivered double-digit growth across each of our target end markets, and total revenue growing 27% over the prior year, and this was following our annual growth of 35% in 2021.

回顧一下我們的財務業績。對於第四季度，頂線和底線均略低於我們指引的中點。面對日益增長的宏觀和終端市場特定挑戰，我們的團隊繼續表現出色，總收入同比增長 2%。縱觀全年，我們在每個目標終端市場實現了兩位數的增長，總收入比上年增長 27%，這是繼 2021 年 35% 的年增長率之後。

During what has been a challenging period for most of the semiconductor industry, this solid growth, combined with Pixelworks' history of technology leadership in visual processing, has served us well in the local private capital markets here in China. In late December, we completed the agreement to take another strategic investment in our Shanghai subsidiary, which was fully closed and funded in early February. The latest capital investment, which was funded by 2 previous investors, as well as Pixelworks Shanghai employees, generated proceeds equivalent to approximately $15.7 million in exchange for just over 3% equity interest in the subsidiary.

在對大多數半導體行業來說充滿挑戰的時期，這種穩健的增長，加上 Pixelworks 在視覺處理領域的技術領先歷史，為我們在中國當地私人資本市場提供了良好的服務。 12 月下旬，我們完成了對上海子公司的另一項戰略投資協議，該子公司已於 2 月初完全關閉並獲得資金。最新的資本投資由 2 位先前的投資者以及 Pixelworks 上海員工提供資金，產生的收益相當於約 1570 萬美元，以換取該子公司略高於 3% 的股權。

Recalling that some U.S. investors were skeptical when we announced the first private placement in Pixelworks Shanghai in October of 2020. I would highlight that this third round of strategic investment valued the subsidiary at more than $500 million. And today, Pixelworks, Inc., continues to hold a majority equity interest of approximately 78%. Collectively, these strategic investments are a testament to the recognized value of Pixelworks' technology in China, as well as the future growth opportunity of the business. These transactions have also served to fund our ongoing growth initiatives, as well as properly capitalized Pixelworks Shanghai in advance of applying for a local listing later this year.

回想一下，當我們於 2020 年 10 月宣布對 Pixelworks Shanghai 進行首次私募時，一些美國投資者持懷疑態度。我要強調的是，第三輪戰略投資對這家子公司的估值超過 5 億美元。如今，Pixelworks, Inc. 繼續持有約 78% 的多數股權。總的來說，這些戰略投資證明了 Pixelworks 技術在中國的公認價值，以及業務未來的增長機會。這些交易還為我們持續的增長計劃提供了資金，並在今年晚些時候申請在本地上市之前對 Pixelworks Shanghai 進行了適當的資本化。

Shifting to the end markets and starting with mobile. The industry-wide inventory correction in smartphones, coupled with softer consumer demand in China continued to play out as expected, resulting in lower mobile revenue in the fourth quarter. As discussed on our last conference call, we've kept internal inventory of our visual processor ICs lean, while reducing our channel inventory back to normal levels. For Pixelworks in Q4, the impact is largely a derivative of the current market dynamics. With mobile OEMs slowing the pace of new smartphone launches, rescheduling various other models and canceling certain programs as they prioritize working down excess component inventory. Although the gap in OEM launches of next-gen smartphone models has temporarily paused our quarterly growth, our mobile business still had a very solid year in spite of the weaker overall smartphone market.

轉向終端市場並從移動開始。智能手機行業範圍內的庫存調整，加上中國消費者需求疲軟，繼續如預期般發揮作用，導致第四季度移動收入下降。正如我們在上次電話會議上討論的那樣，我們保持了視覺處理器 IC 的內部庫存，同時將我們的渠道庫存減少到正常水平。對於第四季度的 Pixelworks，影響主要是當前市場動態的衍生產品。隨著移動原始設備製造商放慢新智能手機的發布速度，重新安排其他各種型號並取消某些計劃，因為他們優先考慮減少過剩的組件庫存。儘管 OEM 推出下一代智能手機型號的差距暫時停止了我們的季度增長，但儘管整體智能手機市場疲軟，但我們的移動業務在這一年仍然非常穩健。

For the full year, mobile revenue was up 17% over 2021, which was up 200% over 2020. With our visual processing solutions incorporated in 20 newly launched smartphone models in '22, our mobile customers continue to include nearly all of the Tier 1 handset OEMs and their affiliate premium brands in China. And despite taking a little longer than originally targeted, I'm confident we will announce models from the fourth Tier 1 for our visual processor lineup in 2023. Underpinning our expanded penetration of these Tier 1s has been our commitment to maintaining a deep level of engagement with the customers and deliver uniquely differentiated visual performance, as well as our ongoing strategic initiatives to cultivate a more collaborative mobile display ecosystem.

全年，移動收入比 2021 年增長了 17%，比 2020 年增長了 200%。隨著我們的視覺處理解決方案在 20 世紀 20 年代新推出的 20 款智能手機型號中得到應用，我們的移動客戶繼續包括幾乎所有的第一層中國的手機原始設備製造商及其附屬優質品牌。儘管花費的時間比最初的目標稍長，但我相信我們將在 2023 年為我們的視覺處理器系列發布第四個一級模型。我們對保持深度參與的承諾是我們擴大這些一級產品滲透率的基礎與客戶一起提供獨特差異化的視覺性能，以及我們持續的戰略計劃，以培養更具協作性的移動顯示生態系統。

As highlighted on previous calls, we made multiple groundbreaking achievements over the last year in our efforts to champion a comprehensive and engaged ecosystem for mobile gaming. This included our first-ever direct collaboration with multiple leading gaming engine platforms and design studios, which we expect to yield the release of a series of additional top mobile games over the coming year that are specifically designed to support the rendering accelerator in our X7 visual processor. As the most recent example of our broader ecosystem efforts, in November, we announced an expanded collaboration with MediaTek to incorporate Pixelworks' visual processing Pro software into their latest Dimensity 9200 5G smartphone chipset. This new cooperation specifically targeted the enabling of precision color in high frame rate displays, ensuring that smartphones built on the Dimensity 9200 platform are capable of delivering a true next-gen flagship gaming experience. This ongoing technical collaboration will serve to further improve the gaming experience and encourage broader market adoption of high frame rate mobile gaming models and the content.

正如之前的電話會議所強調的那樣，我們在過去一年中取得了多項突破性成就，致力於為移動遊戲打造一個全面且參與度高的生態系統。這包括我們與多個領先的遊戲引擎平台和設計工作室的首次直接合作，我們希望在來年發布一系列額外的頂級手機遊戲，這些遊戲專門設計用於支持我們的 X7 視覺中的渲染加速器處理器。作為我們更廣泛的生態系統努力的最新例子，我們在 11 月宣布擴大與聯發科的合作，將 Pixelworks 的視覺處理 Pro 軟件整合到他們最新的 Dimensity 9200 5G 智能手機芯片組中。這項新合作專門針對在高幀率顯示器中實現精確色彩，確保基於 Dimensity 9200 平台的智能手機能夠提供真正的下一代旗艦遊戲體驗。這種正在進行的技術合作將有助於進一步改善遊戲體驗，並鼓勵更廣泛的市場採用高幀率移動遊戲模型和內容。

Briefly highlighting a few recent announced mobile wins. In late December, the Honor 80 GT and iQOO Neo 7 Racing Edition smartphones were both launched incorporating Pixelworks upgraded X5 Plus visual processor. Each of these phones are built on Qualcomm's recently released Snapdragon 8+ Gen 1 mobile platform, and they support 120 hertz refresh rate, while leveraging Pixelworks' X5 series of our patented MotionEngine technology, HDR enhancement and multiple other dimensions of visual effect enhancement, all of which are tailored to provide a superior high frame rate gaming experience.

簡要強調一些最近宣布的移動勝利。 12月下旬，榮耀80 GT和iQOO Neo 7競速版雙雙發布，搭載Pixelworks升級版X5 Plus視覺處理器。這些手機均基於高通近期發布的驍龍8+ Gen 1移動平台，支持120赫茲刷新率，同時利用Pixelworks X5系列的專利MotionEngine技術、HDR增強等多維度視覺效果提升，其中專為提供卓越的高幀率遊戲體驗而設計。

In January, OnePlus launched its latest flagship smartphone, the OnePlus 11, incorporating Pixelworks' X7 visual processor, as one of the first phones launched with our newest generation X7 series. The OnePlus 11 redefines the meaning of visual excellence for mobile gaming. Built on the Snapdragon 8 Gen 2 mobile platform, this smartphone sports an eye-catching 6.7-inch 2K curve display with the real LTPO 3.0 technology, while simultaneously supporting refresh rates of up to 120 hertz. Following the first-of-its-kind in-depth collaboration with OnePlus on this flagship, this smartphone leverages the core technologies in our X7 chipset and features our new ultra-low latency MotionEngine for high frame rate, together with low-power super resolution for simultaneous display in 2K resolution. Earlier this week, OnePlus followed up with the launch of the OnePlus Ace 2 smartphone, also incorporating our X7 chipset. The OnePlus Ace 2 is built on a Snapdragon 8+ Gen 1 mobile platform and comes with a 1.5K AMOLED screen supporting refresh rates up to 120 hertz. This model similarly features our X7' new ultra-low latency MotionEngine and low-power super resolution, together with always on HDR and industry-leading color calibration. Also noteworthy is that, Pixelworks ultra-low latency MotionEngine technology in both the OnePlus 11 and the OnePlus Ace 2 smartphones, have now been optimized for over 100 of the most popular mobile games.

1 月，OnePlus 推出了其最新的旗艦智能手機 OnePlus 11，它採用了 Pixelworks 的 X7 視覺處理器，是我們最新一代 X7 系列推出的首批手機之一。 OnePlus 11 重新定義了移動遊戲視覺卓越的含義。這款智能手機基於 Snapdragon 8 Gen 2 移動平台打造，擁有醒目的 6.7 英寸 2K 曲線顯示屏和真正的 LTPO 3.0 技術，同時支持高達 120 赫茲的刷新率。繼與 OnePlus 在此旗艦產品上進行史無前例的深度合作之後，這款智能手機利用了我們 X7 芯片組的核心技術，並採用了我們全新的超低延遲 MotionEngine 以實現高幀率，以及低功耗超分辨率以 2K 分辨率同時顯示。本週早些時候，OnePlus 隨後推出了 OnePlus Ace 2 智能手機，該智能手機也採用了我們的 X7 芯片組。 OnePlus Ace 2 基於 Snapdragon 8+ Gen 1 移動平台構建，配備 1.5K AMOLED 屏幕，支持高達 120 赫茲的刷新率。該型號同樣具有我們 X7 的全新超低延遲 MotionEngine 和低功耗超分辨率，以及始終開啟的 HDR 和行業領先的色彩校準。另外值得注意的是，OnePlus 11 和 OnePlus Ace 2 智能手機中的 Pixelworks 超低延遲 MotionEngine 技術現已針對 100 多種最流行的手機遊戲進行了優化。

Turning to the latest developments of our TrueCut Motion platform. Following the release of Lightstorm Entertainment', Avatar in September, I can now confirm that Pixelworks TrueCut Motion grading was also utilized in James Cameron's newly released Avatar: The Way of Water. This long-awaited sequel frequently referred to as Avatar 2, was distributed globally to theaters by 20th Century in 4K HDR high frame rate, and uniquely shown in cinematic high frame rate. When I first looked, the film had surpassed gross box office sales of $2.1 billion, ranking it among the top 5 highest grossing movies of all time in less than 2 months. Equally amazing, whether they realize it or not, is that tens of millions of people from around the world have now personally experienced TrueCut Motion. Most importantly, this extremely successful and highly praised release proved that there is a global ecosystem in place capable of supporting cinematic high frame rate, paving the way for expanded industry adoption. As previously announced, TrueCut Motion will also be featured in the re-release of Titanic, remastered in 4K HDR later this month. These 3 high-profile titles have significantly heightened the interest and awareness of our TrueCut Motion platform. We aim to continue building on the strong momentum in 2023 by assembling a critical mass of theatrical titles together while growing a global home entertainment ecosystem.

轉向我們 TrueCut Motion 平台的最新發展。繼 Lightstorm Entertainment 的《阿凡達》9 月發布後，我現在可以確認 Pixelworks TrueCut Motion 調色也被用於詹姆斯·卡梅隆新發布的《阿凡達：水之道》。這部期待已久的續集通常被稱為《阿凡達 2》，到 20 世紀以 4K HDR 高幀率在全球上映，並以電影級高幀率獨特地放映。當我第一次看到時，這部電影的總票房收入已超過 21 億美元，在不到 2 個月的時間裡躋身有史以來票房收入最高的 5 部電影之列。同樣令人驚奇的是，無論他們是否意識到，來自世界各地的數以千萬計的人現在已經親身體驗了 TrueCut Motion。最重要的是，這個極其成功且廣受好評的版本證明了全球生態系統能夠支持電影級高幀率，為擴大行業採用鋪平了道路。正如之前宣布的那樣，TrueCut Motion 也將出現在本月晚些時候以 4K HDR 格式重新製作的泰坦尼克號重製版中。這 3 款備受矚目的產品顯著提高了我們 TrueCut Motion 平台的興趣和知名度。我們的目標是在 2023 年繼續保持強勁的發展勢頭，將大量的戲劇作品聚集在一起，同時發展全球家庭娛樂生態系統。

Shifting to our projector business. Demand remained relatively steady through the back half of the year, with revenue in the fourth quarter increasing more than 13% year-over-year. For the full year, revenue was up 23% as projector customers placed significant orders in response to very tight supply environment. Generally speaking, projector OEMs have continued to see the gradual improvement in their supply chains. However, supply lead times and pricing on certain components have yet to fully normalize. Combined with 2 consecutive years of roughly 20% growth, the current consensus among these customers has been to moderate their orders and expectations entering 2023 until they have better visibility into the global macro trends and end market demand. More specific to Pixelworks, in the fourth quarter, I'm pleased to report that the team successfully completed a significant milestone on our co-development project with our largest projector customer. As a result of this milestone, we recognized an R&D credit, reducing our OpEx for the quarter. All remaining activity associated with this co-development project remains on track, and we currently expect this new SoC chip to be available for the production at the end of this year.

轉向我們的投影儀業務。下半年需求保持相對穩定，第四季度收入同比增長超過 13%。全年，由於投影機客戶為應對非常緊張的供應環境下了大量訂單，收入增長了 23%。一般來說，投影機原始設備製造商繼續看到他們的供應鏈逐漸改善。然而，某些組件的供應交貨時間和定價尚未完全正常化。結合連續 2 年約 20% 的增長，這些客戶目前的共識是在進入 2023 年之前降低他們的訂單和預期，直到他們對全球宏觀趨勢和終端市場需求有更好的了解。更具體到 Pixelworks，在第四季度，我很高興地報告說，該團隊成功地完成了我們與最大的投影儀客戶共同開發項目的一個重要里程碑。作為這一里程碑的結果，我們確認了研發信用，減少了本季度的運營支出。與此聯合開發項目相關的所有剩餘活動仍在進行中，我們目前預計這款新的 SoC 芯片將在今年年底投入生產。

Briefly following on my comments last quarter related to end of life, we implemented a group of legacy IC products. We have historically sold in the very niche video delivery applications. As previously discussed, these applications typically require unique packaging and lower unit volumes, making them increasingly difficult to source materials for and supply efficiently. We received solid customer response on the last time purchase orders for the fourth quarter, which contributed to a sizable one-time increase in revenue. The EOL of these non-strategic products will lower the quarterly revenue contribution from video delivery going forward. However, it will also eliminate operational inefficiencies and enable a more productive reallocation of our team and resources. Although going forward, we will address a relatively small legacy market in which we will continue to market and sell a selective series of our transcoder ICs for consumer applications in Japan and as well as OTA devices in the U.S.

根據我上個季度關於生命週期結束的評論，我們實施了一組遺留 IC 產品。我們一直在銷售非常小眾的視頻傳輸應用程序。如前所述，這些應用通常需要獨特的包裝和更小的單位體積，這使得它們越來越難以高效地採購材料和供應。我們在第四季度的最後一次採購訂單中收到了良好的客戶響應，這有助於一次性大幅增加收入。這些非戰略性產品的停產將降低未來視頻傳輸的季度收入貢獻。然而，它也將消除運營效率低下的問題，並使我們的團隊和資源能夠更有效地重新分配。儘管展望未來，我們將針對一個相對較小的傳統市場，在該市場中，我們將繼續營銷和銷售精選系列的轉碼器 IC，用於日本的消費應用以及美國的 OTA 設備。

In summary, the team has done a good job of mitigating the impacts of both the macro and industry-specific headwinds over the past couple of quarters. Although we expect market conditions to remain challenging in the current quarter, the entire organization is now well capitalized to continue executing on our longer-term strategic initiatives. This includes ongoing efforts to further expand the ecosystem in support of mobile gaming, including an aggressive visual processor road map and our TrueCut Motion platform. While we continue to prepare our Pixelworks Shanghai subsidiary to apply for a STAR Market listing. We believe we are well positioned for the market recovery in mobile and are currently seeing channel inventories and design activity support this with a growing pipeline of design-ins for our X7 visual processor. In addition, we are on target to introduce a new mobile visual processor in the second half of this year and sample our new projector SoC in Q2 of this year.

總之，在過去幾個季度中，該團隊在減輕宏觀和行業特定逆風的影響方面做得很好。儘管我們預計本季度的市場狀況仍將充滿挑戰，但整個組織現在都擁有充足的資本來繼續執行我們的長期戰略計劃。這包括不斷努力進一步擴展支持移動遊戲的生態系統，包括積極的視覺處理器路線圖和我們的 TrueCut Motion 平台。同時，我們繼續籌備我們的Pixelworks上海子公司申請科創板上市。我們相信我們已做好準備迎接移動市場的複蘇，並且目前看到渠道庫存和設計活動支持這一點，我們的 X7 視覺處理器的設計管道不斷增加。此外，我們的目標是在今年下半年推出一款新的移動視覺處理器，並在今年第二季度對我們的新投影儀 SoC 進行抽樣。

Lastly, we also continue to field significant inbound interest and are evaluating multiple prospective strategic license engagements that represent the potential for expanded growth opportunities, spanning both our existing and new adjacent end markets. Taking all together, I firmly believe that we can achieve renewed momentum and resume our recent growth trajectory in the coming quarters of 2023.

最後，我們還繼續關注大量的入境興趣，並正在評估多個潛在的戰略許可協議，這些協議代表了擴大增長機會的潛力，涵蓋我們現有的和新的相鄰終端市場。綜上所述，我堅信我們能夠在 2023 年的未來幾個季度重振旗鼓，恢復近期的增長軌跡。

With that, I'll hand the call to Haley to review the financials and provide our guidance for the first quarter.

有了這個，我會把電話轉給海莉來審查財務狀況並提供我們對第一季度的指導。

Thank you, Todd. Revenue for the fourth quarter of 2022 was $16.9 million. Our top line results in the quarter were primarily driven by continued year-over-year growth in the projector market, combined with an increase in revenue contribution from video delivery related to increased sales of end of life products. The breakdown of revenue in the fourth quarter was as follows: revenue from mobile was approximately $3.6 million, representing 22% of total revenue in the fourth quarter; revenue from projector was approximately $9.2 million; video delivery revenue in the fourth quarter increased to approximately $4 million, reflecting the last time purchase orders for specific end of life products. Following the EOL in the fourth quarter, we anticipate lower quarterly revenue contribution from sales into the video delivery market. As such, beginning with the first quarter of 2023, the revenue breakout that I just provided, will group revenue contributions from projector and video delivery into a single market category called Home and Enterprise.

謝謝你，托德。 2022 年第四季度的收入為 1690 萬美元。我們本季度的收入主要受投影機市場持續同比增長以及與報廢產品銷量增加相關的視頻傳輸收入貢獻增加的推動。第四季度收入明細如下：移動端收入約為360萬美元，佔第四季度總收入的22%；來自投影儀的收入約為 920 萬美元；第四季度視頻交付收入增加至約 400 萬美元，反映了特定報廢產品的最後一次採購訂單。在第四季度停產之後，我們預計視頻傳輸市場銷售對季度收入的貢獻會降低。因此，從 2023 年第一季度開始，我剛剛提供的收入明細將把投影儀和視頻傳輸的收入貢獻歸入一個稱為家庭和企業的單一市場類別。

Non-GAAP gross profit margin was 53.3% in the fourth quarter of 2022 compared to 49.8% in the third quarter of 2022 and compared to 55% in the fourth quarter of 2021. Non-GAAP operating expenses were $10.8 million in the fourth quarter compared to $12.2 million last quarter and $11 million in the fourth quarter of 2021. As indicated on our previous conference call, during the quarter, we completed the next milestone related to our co-development agreement. And as a result, we recognized a $2.5 million credit to R&D, which reduced our total operating expenses for the fourth quarter.

2022 年第四季度非美國通用會計準則毛利率為 53.3%，2022 年第三季度為 49.8%，2021 年第四季度為 55%。第四季度非美國通用會計準則運營費用為 1080 萬美元，相比之下上個季度增加到 1220 萬美元，2021 年第四季度增加到 1100 萬美元。正如我們之前的電話會議所指出的那樣，在本季度，我們完成了與共同開發協議相關的下一個里程碑。因此，我們確認了 250 萬美元的研發信貸，這減少了我們第四季度的總運營費用。

On a non-GAAP basis, fourth quarter 2022 net loss was approximately $800,000 or a loss of $0.01 per share compared to a net loss of $3.2 million or a loss of $0.06 per share in the prior quarter, and a net loss of $1.4 million or a loss of $0.03 per share in the fourth quarter of 2021.

按非公認會計準則計算，2022 年第四季度淨虧損約為 800,000 美元或每股虧損 0.01 美元，而上一季度淨虧損為 320 萬美元或每股虧損 0.06 美元，淨虧損為 140 萬美元或2021 年第四季度每股虧損 0.03 美元。

Adjusted EBITDA for the fourth quarter of 2022 was a negative $1 million compared to a negative $2.1 million last quarter and a negative $1.1 million in the fourth quarter of 2021.

2022 年第四季度調整後的 EBITDA 為負 100 萬美元，上一季度為負 210 萬美元，2021 年第四季度為負 110 萬美元。

Turning to the balance sheet. We ended the quarter with cash and cash equivalents of $56.8 million. I'd like to point out that the cash balance at quarter end does not include the proceeds from the most recent sale of equity interest in our Shanghai subsidiary, which we announced in late December. As Todd mentioned, we successfully closed this transaction after the end of the quarter, and the proceeds will be included in the company's reported cash balance for the first quarter of 2023.

轉向資產負債表。本季度末，我們的現金和現金等價物為 5680 萬美元。我想指出的是，季度末的現金餘額不包括我們在 12 月下旬宣布的最近出售我們上海子公司股權的收益。正如托德所說，我們在本季度末成功完成了這筆交易，所得款項將計入公司報告的 2023 年第一季度現金餘額。

Shifting to our current expectations and guidance for the first quarter of 2023. Based on current order trends and backlog, we expect a weaker than normal first quarter. In addition to historical seasonality in the projector market, we are also expecting projector customers to continue to work through existing inventory in the first quarter. Also, as Todd mentioned, we expect the first quarter to reflect the trough of the inventory correction in the smartphone market. With that, we anticipate total revenue in the first quarter to be in a range of between USD9 million and USD11 million. We believe this quarter will be the low point for the year with revenue beginning to recover in the second quarter, followed by an anticipated return to year-over-year growth in the second half of the year.

轉向我們目前對 2023 年第一季度的預期和指導。根據當前的訂單趨勢和積壓，我們預計第一季度將弱於正常水平。除了投影機市場的歷史季節性因素外，我們還預計投影機客戶將在第一季度繼續處理現有庫存。此外，正如托德所提到的，我們預計第一季度將反映智能手機市場庫存調整的低谷。因此，我們預計第一季度的總收入將在 900 萬美元至 1100 萬美元之間。我們認為本季度將是今年的低點，第二季度收入開始復蘇，預計下半年將恢復同比增長。

Non-GAAP gross profit margin in the first quarter is expected to be between 43% and 45%. This anticipated gross margin range reflects product mix and reduced absorption rate associated with lower revenue. As unit sales of ICs and total revenue recover, we expect gross margin to return to our targeted historical range in the low-50s.

第一季度的非美國通用會計準則毛利率預計在 43% 至 45% 之間。這一預期的毛利率範圍反映了產品組合和與較低收入相關的吸收率降低。隨著 IC 的單位銷售額和總收入的恢復，我們預計毛利率將回到我們設定的 50 多歲的歷史目標範圍內。

We expect operating expenses in the first quarter to range between USD12.5 million and USD13.5 million on a non-GAAP basis. As a reminder, operating expenses in the fourth quarter benefited from a $2.5 million milestone credit to R&D related to our co-development projects. Excluding this credit, anticipated first quarter operating expenses at the midpoint would be approximately flat to down compared to the fourth quarter.

我們預計第一季度的運營費用在非美國通用會計準則基礎上介於 1250 萬美元和 1350 萬美元之間。提醒一下，第四季度的運營費用受益於與我們的共同開發項目相關的研發的 250 萬美元里程碑信貸。不計入這一信貸，與第四季度相比，預計第一季度的中點運營費用將大致持平或下降。

Lastly, we expect first quarter non-GAAP EPS to range between a loss of $0.18 per share and a loss of $0.14 per share.

最後，我們預計第一季度非 GAAP 每股收益介於每股虧損 0.18 美元和每股虧損 0.14 美元之間。

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

我們準備好的發言到此結束，我們期待著回答您的問題。接線員，請繼續進行問答環節。謝謝。

(Operator Instructions) And our first question comes from the line of Raji Gill with Needham & Company.

（操作員說明）我們的第一個問題來自 Needham & Company 的 Raji Gill。

Yes. I appreciate it. Just wondering in terms of the commentary on the Chinese smartphone, you're indicating that it will bottom in Q1. I'm just wondering if you could maybe elaborate a little bit further in terms of where the channel inventory is right now. You talked about kind of growth in the second quarter. Is this based on kind of feedback you're getting from customers, are they starting to plan for that? Just any issues on the -- any questions on the mobile China segment.

是的。我很感激。只是想知道關於中國智能手機的評論，你表示它將在第一季度觸底。我只是想知道您是否可以就渠道庫存現在的位置進一步詳細說明。你談到了第二季度的增長。這是否基於您從客戶那裡獲得的反饋，他們是否開始為此計劃？關於移動中國部分的任何問題。

So I think there's -- you're getting all those kinds of feedback, Raji, from all different companies that are exposed like we are. In our particular case, we (technical difficulty) lean. So then the next thing is to keep an eye on the channel inventories. Our channel inventories peaked in Q3 for mobile. And they came down reasonably well in Q4, but part of that was a down revenue quarter for mobile in Q4. We will see another down quarter in Q1. But as of today, our mobile inventories are either back to normal levels, or I would suggest, given the ramp we're going to see in the back half of the year, they're lean.

所以我認為 - 你從所有像我們一樣暴露的不同公司那裡得到了各種各樣的反饋，Raji。在我們的特殊情況下，我們（技術難度）精益求精。那麼接下來就是關注渠道庫存了。我們的移動渠道庫存在第三季度達到頂峰。他們在第四季度的表現相當不錯，但部分原因是第四季度移動收入下降。我們將在第一季度看到另一個下滑的季度。但截至今天，我們的移動設備庫存要么恢復到正常水平，要么我建議，鑑於我們將在今年下半年看到的增長，它們是精簡的。

Now, the customer inventory levels, I would say, it's a mixed bag. I have one customer that overbought the older processor, you'll see more phone launches from them out of the older processor as they digest that inventory, but they're sitting on that inventory, right? They're working through that inventory. They'll -- that customer will probably get through that inventory Q2 into early Q3. But the rest of the customers, I would say, are at normal inventory levels today. And if they are leaning on our new processor, they don't have inventory. We're ramping those inventories. So, for example, OnePlus, you've already seen some models come out of them. You'll probably see more models come out of them. They're all X7 related. They were not sitting on inventory of X7, right? So if you put the whole thing together, our mobile inventories, I would suggest are back to normal or below normal. And so, the growth going forward, Q2, Q3, Q4 will purely depend on how successful we are with new phone launches and then the volume of those phone launches.

現在，客戶庫存水平，我會說，這是一個混合包。我有一個客戶超買舊處理器，當他們消化庫存時，你會看到他們從舊處理器中推出更多手機，但他們坐在那個庫存上，對吧？他們正在處理該清單。他們會 - 該客戶可能會通過第二季度的庫存進入第三季度初。但我想說，其餘客戶今天的庫存水平處於正常水平。如果他們依賴我們的新處理器，他們就沒有庫存。我們正在增加這些庫存。因此，例如，OnePlus，您已經看到了一些模型。您可能會看到更多模型來自它們。他們都是X7相關的。他們沒有坐在 X7 的庫存上，對吧？因此，如果你把整個事情放在一起，我建議我們的移動庫存恢復正常或低於正常水平。因此，未來第二季度、第三季度、第四季度的增長將完全取決於我們在新手機發布方面的成功程度，以及這些手機發布的數量。

And probably to give you one more layer of granularity there, in the first 2 weeks -- so these 2 OnePlus launches have been well received. They have upticked their forecast from us in the first 2 weeks.

並且可能在前 2 週內為您提供更多的粒度 - 因此這 2 個 OnePlus 發布受到了好評。他們在前兩週提高了我們的預測。

I appreciate all that color, Todd. Just staying on the topic of China, if I can. What's been the feedback in terms of the customer forecast? I know you mentioned the OnePlus kind of upticking their forecast. When you kind of look at the China handset customers, as they -- and I appreciate somewhere kind of it's a mixed bag. But in general, when they're looking at their forecast for 2023 and then maybe even 2024, is there a conservative kind of rebuild that's being kind of felt in their forecast or -- because they're going to be more cautious for what happened last year? Or how do you think about that?

我很欣賞那種顏色，托德。如果可以的話，就只談中國這個話題。客戶預測方面的反饋是什麼？我知道你提到過 OnePlus 提高了他們的預測。當你看中國手機客戶時，他們——我在某種程度上欣賞它是一個混合包。但總的來說，當他們查看他們對 2023 年乃至 2024 年的預測時，他們的預測中是否有一種保守的重建方式，或者 - 因為他們會對發生的事情更加謹慎去年？或者你怎麼看？

So they're hard forecasts and their ordering patterns are cautious. My personal expectation is too cautious. I think they're going to get [bite] on the upside of demand in the back half of the year.

因此，他們的預測很艱難，他們的訂購模式也很謹慎。我個人的期望太謹慎了。我認為他們會在今年下半年的需求上行中受到影響。

And it's interesting. And then you talked a little bit about anecdotally and kind of what you're seeing in China. I guess, how would you describe, from your vantage point, the Chinese economy and the China consumer based on your conversations with folks there and talking to the employees as well? Is there an expectation that there's going to be more of a reopening and things are going to get back to normal relatively soon? Or is there still kind of caution there?

這很有趣。然後你談到了一些軼事和你在中國看到的一些事情。我想，根據您與那裡的人以及與員工的交談，從您的角度來看，您如何描述中國經濟和中國消費者？是否期望會有更多的重新開放並且事情會很快恢復正常？還是那裡仍然有某種謹慎？

Please standby I see we have -- Todd having some technical difficulties.

請稍候，我看到我們有 -- Todd 遇到了一些技術問題。

Okay.

好的。

(Operator Instructions)

（操作員說明）

(technical difficulty)

（技術難度）

(Operator Instructions)

（操作員說明）

(technical difficulty)

（技術難度）

Okay. Todd, I see you're now connected. Please continue. And Raji, you still on.

好的。托德，我看到你現在已連接。請繼續。拉吉，你還在繼續。

Raj, you still there?

拉吉，你還在嗎？

Yes, I am.

我是。

Okay. So I don't know where I dropped off. I think I dropped off somewhere. I was talking about the -- that they -- phone OEM customers had to do abnormal behavior, which is digest older technology inventory. And I think their end markets were soft. So this caused them to be cautious. They're hard forecasts and their ordering pattern is still cautious, right? I mean, in my particular case, these phones, they're upticking. But I would say, in general, they're still cautious. The dialogue, though, I can see them warming up. And it really has been -- they're trying to gauge it collectively all 4 Tier 1 OEMs. So I would suggest some are more exposed to the international markets than others. But collectively, 70% of their volume comes to China. And so, it's the main driver for them, and it's the main driver for their sentiment.

好的。所以我不知道我在哪裡下車。我想我在某個地方下車了。我說的是 - 他們 - 手機 OEM 客戶必須做異常行為，這是消化舊技術庫存。我認為他們的終端市場很疲軟。所以這才讓他們小心翼翼。他們是艱難的預測，他們的訂購模式仍然很謹慎，對吧？我的意思是，在我的特殊情況下，這些手機正在上漲。但我想說，總的來說，他們仍然很謹慎。不過，在對話中，我可以看到他們在熱身。確實如此——他們正試圖對所有 4 家一級 OEM 進行集體評估。所以我建議一些人比其他人更容易接觸國際市場。但總的來說，他們 70% 的銷量來自中國。因此，這是他們的主要驅動力，也是他們情緒的主要驅動力。

And if you just walk around, it is busy. People are not -- I figured they would be shell-shocked from what they went through for the last 12 months. They are not. They're just -- they're ready to get out and they're ready to resume their lives. And I think you'll start to see some -- the consumer come back. I think they'll be cautious. And I think that the phone OEMs are sort of warming up to that. I've talked to 3 of the 4 Tier 1s already in the first 2 weeks I've been here. They -- 2 of them are bullish. One of them is sanguine. Right. I mean, it's a mixed color. I think it's going to change. What -- I think what they're worried about is that, they're seeing a near-term uptick in business. They don't know if it's sustainable. They just don't know.

如果你只是四處走走，它很忙。人們不會——我認為他們會對過去 12 個月所經歷的事情感到震驚。他們不是。他們只是——他們已經準備好離開，他們已經準備好重新開始他們的生活。而且我認為你會開始看到一些——消費者回來了。我想他們會很謹慎。而且我認為手機原始設備製造商正在為此做好準備。在我來這裡的頭 2 週內，我已經與 4 個一級供應商中的 3 個進行了交談。他們 - 其中 2 個是看漲的。其中之一是樂觀的。正確的。我的意思是，它是一種混合色。我認為它會改變。什麼——我認為他們擔心的是，他們看到業務近期會好轉。他們不知道這是否可持續。他們只是不知道。

And in terms of the inventory of components that the Chinese handset customers are holding, do you think we're at bare bone levels? Is there any way to kind of quantify that relative to history?

就中國手機客戶持有的零部件庫存而言，您認為我們處於最低水平嗎？有什麼方法可以量化相對於歷史的這種情況嗎？

Well, like I said, different vendors, different situation, right? I've also met with -- I have many friends in the industry over here that represent other suppliers into the supply chain for mobile phones. And I had dinner with a gentleman 2 nights ago, and he represents a large supplier into the market. And their channel inventories are still at 6 to 8 months, and their customer inventories are at another 6 months. And so, in that particular supplier situation, I would call normal 4 months of customer inventory, maybe 3 months of customer inventory, depending if you're ramping or not. And 45 days of channel inventory. So, they're long ways from normal.

好吧，就像我說的，不同的供應商，不同的情況，對吧？我還遇到了 - 我在這裡有很多業內朋友代表其他供應商進入手機供應鏈。兩天前我和一位先生共進晚餐，他代表一家大型供應商進入市場。而且他們的渠道庫存還在6到8個月，他們的客戶庫存還有6個月。因此，在那個特定的供應商情況下，我會調用正常的 4 個月的客戶庫存，也許是 3 個月的客戶庫存，這取決於你是否在增加。以及45天的渠道庫存。因此，它們與正常情況相去甚遠。

Using those same numbers, I would say, our channel inventory is normal. In aggregate, our customer inventory is still a little bloated, which is why we do have the Q1 forecast. But the question for us is, how much does it bounce back in Q2. If I look at the long-term -- I mean, so the short-term, what is the market telling us? It's cautiously optimistic. And then in Pixelworks is, okay, is your strategic initiative to be adopted by more customers and then have those customers widen the exposure of the use of your visual processor and reinforce that use of your visual process by having the ecosystem come in and support your features. If I look at the back half of the year, our strategy is absolutely intact. We will expand our customers and expand the models within the customers, and we will announce ecosystem partners that previously had not supported our solution. So in our case, I'm bullish for the back half of the year, if the market comes back to normalize, I'm really bullish.

使用這些相同的數字，我會說，我們的渠道庫存是正常的。總的來說，我們的客戶庫存仍然有點臃腫，這就是我們有第一季度預測的原因。但我們的問題是，它在第二季度反彈了多少。如果我看長期 - 我的意思是，那麼短期，市場告訴我們什麼？這是謹慎樂觀的。然後在 Pixelworks 中，好吧，是你的戰略舉措被更多的客戶採用，然後讓這些客戶擴大視覺處理器使用的曝光度，並通過讓生態系統進入並支持你的視覺過程來加強視覺過程的使用特徵。如果我看下半年，我們的戰略絕對完好無損。我們將擴展我們的客戶並擴展客戶內部的模型，我們將宣布以前不支持我們解決方案的生態系統合作夥伴。因此，就我們而言，我看好下半年，如果市場恢復正常，我真的看好。

And our next question comes from the line of Suji Desilva with ROTH Capital.

我們的下一個問題來自 Suji Desilva 與 ROTH Capital 的對話。

So maybe this question is a little hard. But Todd, do you have any idea how far out the unit crossovers for X7, just to get an idea of how that would ramp up? Or are there too many moving parts in that question to be able to answer that?

所以也許這個問題有點難。但是托德，你知道 X7 的單位交叉有多遠，只是想知道它會如何增加嗎？還是該問題中有太多活動部分無法回答？

Meaning that we ship more X7s than X5s?

這意味著我們出貨的 X7 多於 X5？

Right, yes.

對，是的。

Today, we're shipping more X7s than X5s.

今天，我們出貨的 X7 多於 X5。

You already are.

你已經是了。

Yes.

是的。

Okay. Got it.

好的。知道了。

Now, you got to remember, I think collectively, we shipped last year, all processors, which were predominantly X5, X6 and then the ramp up of X7, between 9 and 10 million units, something like this. We had customers telling -- at the beginning of last year, telling us they were going to consume way more than that. That was capacity limited, okay? Of course, coming into the back half of the year, some of those customers were not so bullish and they overbought. We held them accountable for their aggressive purchases. So those are the -- some of those customers, one of them, in particular, that's sitting on some -- they're burning through X5 inventory, right? But as far as -- and we still have some customers putting the X5 in new programs, it's not like it's dead. It's just because it's at a different cost point than X7.

現在，你必須記住，我認為我們去年共同出貨了所有處理器，主要是 X5、X6，然後是 X7，數量在 9 到 1000 萬台之間，類似這樣。我們有客戶告訴我們——在去年年初，他們告訴我們他們要消費的遠不止這些。那是容量有限，好嗎？當然，進入下半年，其中一些客戶並不那麼樂觀，他們超買了。我們讓他們對他們的激進購買負責。所以那些是 - 其中一些客戶，其中一個，特別是坐在一些 - 他們正在消耗 X5 庫存，對嗎？但就我們仍然有一些客戶將 X5 用於新程序而言，它並沒有死。這只是因為它與 X7 處於不同的成本點。

And -- but I would say on an ongoing basis, we've already crossed that point, and there are some people talking -- as we expand the models within the customers we've already announced, they usually start at flagship premium with us. And so, there's only so many flagship premium models. So that means to expand, sometimes you have to push down into mid-market to lower premium. And in those models, they are very price sensitive, right? So you could see an uptick -- if we're very successful there, you could see an uptick in X5 volume. I don't think it will cross back, but it could.

而且——但我要說的是，在持續的基礎上，我們已經跨越了那個點，有些人在談論——當我們在我們已經宣布的客戶中擴展模型時，他們通常從我們的旗艦溢價開始.因此，只有這麼多旗艦高級型號。所以這意味著要擴張，有時你必須進入中端市場以降低溢價。在那些模型中，它們對價格非常敏感，對嗎？所以你可以看到一個增長——如果我們在那裡非常成功，你可以看到 X5 數量的增長。我不認為它會回來，但它可以。

Okay. It sounds like a lot of X5s are already shipped and the customer is going to absorb it. And is the pricing on X7, Todd, still roughly 2x X5? Is that the way to think about it?

好的。聽起來很多 X5 已經出貨了，客戶要吸收它了。 Todd，X7 的定價是否仍約為 X5 的 2 倍？是這樣想的嗎？

I wouldn't say quite 2x. I would say, we've been aggressive, but it's significantly higher. It's between 50% and 80% higher than X5.

我不會說是 2 倍。我會說，我們一直很積極，但它要高得多。它比 X5 高出 50% 到 80%。

Great. And my last question is on licensing. You talked about in the prepared remarks, licensing opportunity. You weren't specific there. I'm wondering if that was a reference to TrueCut or whether the other core video licensing opportunities or projector somehow. And if TrueCut, I mean, what's the --. I'm sorry, go ahead.

偉大的。我的最後一個問題是關於許可的。你在準備好的言論中談到了許可機會。你在那裡沒有具體說明。我想知道這是否是對 TrueCut 的引用，或者是否是其他核心視頻許可機會或投影儀。如果是 TrueCut，我的意思是，那是什麼——。對不起，繼續。

Go ahead.

前進。

If it's TrueCut, if the pipeline there is coming in with the movie success and so forth to formalize sort of revenue opportunity there.

如果它是 TrueCut，如果那裡的管道隨著電影的成功而出現等等，以正式確定那裡的某種收入機會。

Okay. So to make sure we clear that up for everybody on the call. That was not a reference to TrueCut. I mean, our business model is to -- it's a service support and licensing model for the content creators so that they can use our technology to create 4K HDR high frame rate, cinematic content. With that engagement, they have the rights to distribute that content for theatrical releases. So there's no further licensing for theatrical releases beyond the initial engagement. But they don't have the right to distribute for home entertainment, that high frame rate content that they use TrueCut Motion with. So the business model is the distributors, whether they be streaming companies, et cetera, have to support the TrueCut Motion ecosystem and have the rights to distribute high frame rate -- TrueCut Motion high frame rate content. And the device manufacturers would have to have the rights to display TrueCut Motion content.

好的。因此，為了確保我們為通話中的每個人都澄清了這一點。那不是對 TrueCut 的引用。我的意思是，我們的商業模式是——這是一種面向內容創作者的服務支持和許可模式，這樣他們就可以使用我們的技術來創作 4K HDR 高幀率電影內容。通過這種參與，他們有權分發該內容以供影院上映。因此，除了最初的參與之外，沒有進一步的戲劇發行許可。但他們無權為家庭娛樂分發他們使用 TrueCut Motion 的高幀率內容。所以商業模式是分銷商，無論是流媒體公司等等，都必須支持 TrueCut Motion 生態系統並有權分發高幀率——TrueCut Motion 高幀率內容。設備製造商必須有權顯示 TrueCut Motion 內容。

What I was referring there from the previous statement was, it had nothing to do with TrueCut. But I wanted to take the opportunity to make sure everybody understood the business model with TrueCut because I think I've seen a lot of questioning on where people don't understand the business model. Well, that's the business model I just explained. I've asked all the analysts to not model revenue from TrueCut right now. Now, we clearly are getting some revenue. I just don't want to model it because until we really gain major support from large distributors, streaming companies, you're just looking at theatrical releases, which is not a big revenue. I mean, if it gets to the point where it's material, then I'll have you guys start to model it. Once we have a signed on distributor, the device OEMs are very excited about adding TrueCut Motion to their devices and using high frame rate content to illustrate their newest devices, whether they be TVs, phones, other visual devices, especially devices that can show 3D content. So I just didn't -- I just don't want you guys to model it until we get a little bit further ahead with the distribution part of that ecosystem. Once that happens, we're going to have to model it. We'll have to talk about it a lot more, okay?

我在前面的聲明中指的是，它與 TrueCut 無關。但我想藉此機會確保每個人都理解 TrueCut 的商業模式，因為我認為我已經看到很多關於人們不理解商業模式的問題。嗯，這就是我剛才解釋的商業模式。我已經要求所有分析師現在不要對 TrueCut 的收入進行建模。現在，我們顯然獲得了一些收入。我只是不想對其進行建模，因為在我們真正獲得大型發行商、流媒體公司的大力支持之前，你只是在看院線上映，這不是一筆大收入。我的意思是，如果它達到了重要的程度，那麼我會讓你們開始為它建模。一旦我們與經銷商簽約，設備原始設備製造商就會非常興奮地在他們的設備中添加 TrueCut Motion 並使用高幀率內容來展示他們的最新設備，無論是電視、電話還是其他視覺設備，尤其是可以顯示 3D 的設備內容。所以我只是沒有 - 我只是不希望你們在我們對該生態系統的分發部分取得進一步進展之前對其進行建模。一旦發生這種情況，我們將不得不對其進行建模。我們得多談談，好嗎？

So with that said, what I was referring to in the prepared remarks was, we have been approached by several companies, now that it is clear to me this distributed architecture approach for mobile gaming in China is here to stay, at least for the foreseeable future. And there are people working on the silicon solutions to address that market, and now they want to -- they've engaged with us to see if we would support them with a licensing of our Rendering Accelerator architecture. We are not in the IP business. But if, depending on who it is, and if it supports our overall strategy to get more devices in the market because the more devices in the market that support this, the more that the gaming ecosystem that enters the studios are willing to optimize their games to work with the hardware. It's a virtuous cycle. And so, if we could license our technology to somebody that -- there's 2 things. One, does it -- I don't want to take the err out of our market momentum. But 2, if it's additive, without taking the err out of the market momentum, it may make a lot of sense for us, not just from a financial standpoint of the licensing, but putting more devices out there in the long term, the more devices we have out there -- I mean, it's the #1 thing we talk to with the content people. How many phones does your processor going to be on today, tomorrow, next year, the following year, et cetera? The bigger those numbers are, the more they want to support us.

因此，話雖如此，我在準備好的發言中指的是，我們已經有幾家公司接洽過，現在我很清楚這種用於中國移動遊戲的分佈式架構方法將繼續存在，至少在可預見的時間內是這樣未來。並且有人致力於針對該市場的矽解決方案，現在他們想要 - 他們已經與我們接洽，看看我們是否會通過渲染加速器架構的許可來支持他們。我們不從事知識產權業務。但是，如果取決於它是誰，並且它是否支持我們在市場上獲得更多設備的總體戰略，因為市場上支持這一點的設備越多，進入工作室的遊戲生態系統就越願意優化他們的遊戲與硬件一起工作。這是一個良性循環。因此，如果我們可以將我們的技術授權給某人——有兩件事。第一，是嗎——我不想從我們的市場勢頭中剔除錯誤。但是 2，如果它是附加的，不排除市場動力的錯誤，這對我們來說可能很有意義，不僅僅是從許可的財務角度來看，而且從長遠來看，投入更多的設備，越多我們擁有的設備——我的意思是，這是我們與內容人員交談的第一件事。您的處理器將在今天、明天、明年、下一年等等有多少部手機上使用？這些數字越大，他們就越想支持我們。

And our next question comes from the line of Richard Shannon with Craig-Hallum.

我們的下一個問題來自 Richard Shannon 和 Craig-Hallum 的對話。

Let's see here. I want to make sure I've heard some of your language here, specifically on how to think about the second half of the year. I think you said the first quarter is a bottom of growing in the second quarter. And did I hear you correctly that you're expecting year-on-year growth in the second half of the year? And so, does that mean each quarter or just collectively in the second half?

讓我們看看這裡。我想確保我在這裡聽到了您的一些語言，特別是關於如何考慮下半年的內容。我想你說第一季度是第二季度增長的底部。我沒聽錯嗎，您預計下半年會出現同比增長？那麼，這意味著每個季度還是下半年的集體？

So we expect, for sure, year-over-year growth for the mobile business. On still projector, I think you'll see a dip in Q1, but it will come back in the back half. Does it come back to the point where it shows strong year-over-year growth? I think that's yet to be seen. And then with video delivery, because we did this big end of life in the second half of this year, you won't see year-over-year growth in video delivery, okay? Now, if the mobile year-over-year growth is strong enough, you'll see corporate year-over-year growth in the second half.

因此，我們可以肯定地預計移動業務將實現同比增長。在靜態投影儀上，我想你會看到第一季度有所下降，但它會在後半段恢復。它會回到顯示出強勁的同比增長的地步嗎？我認為這還有待觀察。然後是視頻傳輸，因為我們在今年下半年完成了生命的大終結，你不會看到視頻傳輸的同比增長，好嗎？現在，如果移動設備同比增長足夠強勁，您將在下半年看到企業同比增長。

Okay. So that comment wasn't across the entire company, it's across specific segments? I just want to be clear.

好的。那麼這個評論不是針對整個公司的，而是針對特定部門的？我只想說清楚。

Yes. I think I made the growth comment specifically. I mean, Haley mentioned that we expect growth in the back half of the year, which is -- I mean, I think the mobile growth is going to be strong enough exiting the year that you'll see corporate year-over-year growth.

是的。我想我專門做了增長評論。我的意思是，Haley 提到我們預計今年下半年會出現增長，我的意思是，我認為移動增長將足夠強勁，屆時你會看到企業同比增長.

Okay. That's helpful. So how do we -- how do you think the distribution of mobile revenues is going to get through the -- into the second half of the year? How do you think this progresses? You talked specifically and hopefully, I caught your comments correctly about, just going up in my notes, expecting yield a series of [cut] little games in the next year supporting our Rendering Accelerator in X7. How do we think -- is this entirely driven by gaming? And how broad are we expecting the uptake here by all the Tier 1s targets you have in China?

好的。這很有幫助。那麼我們如何 - 你認為移動收入的分配將如何進入 - 進入下半年？你認為這進展如何？你說得特別有希望，我正確地抓住了你的評論，只是在我的筆記中，期待在明年產生一系列 [cut] 小遊戲，支持我們在 X7 中的渲染加速器。我們怎麼想——這完全是由遊戲驅動的嗎？我們期望您在中國擁有的所有一級目標在這裡採用的範圍有多廣？

I would say it's not entirely driven by gaming. So one of the things right now that we're doing is, many of the models we win, some of the OEMs will go out and market that model globally. But they will have a different SKU for China than they do internationally. We are -- gaming -- mobile gaming is -- if you really go look at how these guys are marketing their premium and flagship phones, they try to market the new utility that their new phones will give you and why you should spend money and upgrade your phone. And in China, mobile gaming is either the key utility that they're trying to bring you, depending on the model and the demographic they're targeting, or the second biggest feature they're targeting, which is, the first would be camera. And internationally -- and then consuming social and video content, which we also improve is further down on the list, as far as what utility they bring you.

我會說這並不完全是由遊戲驅動的。因此，我們現在正在做的一件事是，我們贏得的許多模型，一些原始設備製造商將在全球範圍內推廣該模型。但他們在中國的 SKU 將與國際不同。我們是——遊戲——手機遊戲是——如果你真的去看看這些人是如何營銷他們的高端和旗艦手機的，他們會試圖推銷他們的新手機會給你帶來的新功能，以及你為什麼應該花錢和升級你的手機。在中國，手機遊戲要么是他們試圖帶給你的主要實用工具，這取決於他們所針對的模型和人口統計，要么是他們所針對的第二大功能，即第一個是相機.在國際上——然後消費社交和視頻內容，我們也改進了這些內容，就它們為您帶來的實用性而言，它們在列表中的位置更靠後。

What we're trying to get these China mobile OEMs to do is take this expertise and differentiation that they've built into their China models, which is unique and market it internationally because that's what differentiates them in many of these international markets because you know who they [bought] up against in the international markets. And I'm talking about Android, I mean, they bought up against Samsung. So this gives all of those 4 Tier 1s a significant differentiation advantage and not just because of us, but because this is where mobile gaming content is King. And so, if they have optimized content and our visual processor in their models. Many of those studios that I just -- that I'm mentioning, so the miHoYo with Genshin Impact, Tencent with many of their games, NetEase. ByteDance has multiple studios developing games. Many of those game manufacturers given what's going on here in China are putting a great deal of effort to market their gaming content internationally. So we are trying to convince the mobile OEMs to start to do that. So that's another -- it's not just us getting in the models, but then that's convincing them to get into the international models.

我們試圖讓這些中國移動 OEM 做的是將他們在中國模式中建立的這種專業知識和差異化，這是獨一無二的，並將其推向國際市場，因為這就是他們在許多國際市場上的差異化，因為你知道他們在國際市場上[購買]了誰。我說的是 Android，我的意思是，他們收購了三星。因此，這為所有這 4 家一級供應商提供了顯著的差異化優勢，這不僅僅是因為我們，還因為這是移動遊戲內容為王的地方。因此，如果他們在模型中優化了內容和我們的視覺處理器。我剛才提到的許多工作室，比如 miHoYo 和 Genshin Impact，騰訊和他們的許多遊戲，網易。字節跳動擁有多個開發遊戲的工作室。考慮到中國的情況，許多遊戲製造商都在努力在國際市場上推廣他們的遊戲內容。所以我們正試圖說服移動原始設備製造商開始這樣做。所以這是另一個 - 不僅僅是我們進入模型，而是說服他們進入國際模型。

Now, the reason I bring all that up, [Richard], as you said, is it just mobile gaming. One of the things that they clearly recognize is that, internationally, the consumption of quality video content is higher on the rank than in China. And so, they asked us to provide improvements for consuming video -- long-form video content on their phone. And one of the features we put in X7, we haven't highlighted a lot is, we have a way to do a cinematic high frame rate conversion on the phone. This is not TrueCut Motion, okay? TrueCut Motion converts the content and makes it high frame rate content at the source. But what we do is have a feature to do cinematic high frame rate content conversion on the phone. And so, we are pushing that and specifically to expand into more international models here in China. But yes, with all that said, the reason we're really gaining momentum is mobile gaming, the ecosystem for mobile gaming, the performance of using our processor with that ecosystem in mobile gaming, targeting the Chinese consumer.

[理查德]，正如你所說，我提出這一切的原因只是手機遊戲。他們清楚地認識到的一件事是，在國際上，優質視頻內容的消費排名高於中國。因此，他們要求我們改進視頻消費——他們手機上的長視頻內容。我們在 X7 中加入的功能之一，我們沒有太多強調的是，我們有一種方法可以在手機上進行電影級高幀率轉換。這不是 TrueCut Motion，好嗎？ TrueCut Motion 轉換內容並使其成為源頭的高幀率內容。但我們所做的是有一個功能，可以在手機上進行電影級高幀率內容轉換。因此，我們正在推動這一點，特別是在中國擴展到更多國際模式。但是，是的，儘管如此，我們真正獲得動力的原因是移動遊戲，移動遊戲的生態系統，在移動遊戲中使用我們的處理器和該生態系統的性能，針對中國消費者。

Okay. So would it be fair to conclude from what you just said here that you think the biggest single factor and upside potential for your mobile business second half and going forward is the international introduction of your X7-enabled phones? Or is it some other single factor that you think is more important?

好的。那麼，根據您剛才在這裡所說的話得出的結論是，您認為下半年和未來移動業務的最大單一因素和上升潛力是在國際上推出支持 X7 的手機，這是否公平？還是您認為更重要的其他單個因素？

Well, there's 2 -- so if we gain a fourth Tier 1, that's an uptick in market for us. So if you see us announce with the 1 Tier 1 we haven't announced yet, then that's an uptick. Second, if we can expand all the customers from just targeting their -- what they call their domestic models, their China-specific models to expand into their international model, you get to leverage the R&D work that's already done on that model and you just get higher volume from the same R&D work. And then 3, we are talking with customers to expand to higher-volume, lower-priced models, the gaming functionality and features. Their customers are pushing them and demanding it. We've had customers come to us and say, we get a great deal of feedback and they want to know why we don't have the display processor technology on this particular model, which is usually a lower-end model. And so, there are companies that are exploring whether they can put it on these higher-volume models. But, of course, their first approach is to come in and want me to sell it for cost. And our answer is, no. So those are the 3 ways, right?

好吧，有 2 個——所以如果我們獲得第四個 1 級，那對我們來說是一個市場增長。因此，如果您看到我們宣布我們尚未宣布的 1 級 1，那麼這是一個上升。其次，如果我們能夠將所有客戶從僅僅針對他們的——他們所謂的國內模型，他們的中國特定模型擴展到他們的國際模型，你就可以利用已經在該模型上完成的研發工作，你只需從相同的研發工作中獲得更高的產量。然後 3，我們正在與客戶討論將游戲功能和特性擴展到更高容量、更低價格的型號。他們的客戶正在推動他們並提出要求。我們有客戶來找我們說，我們收到了大量的反饋，他們想知道為什麼我們沒有在這個通常是低端型號的特定型號上使用顯示處理器技術。因此，有些公司正在探索是否可以將其應用於這些更高容量的模型。但是，當然，他們的第一個方法是進來要我以成本價出售它。我們的回答是，不。那麼這就是3種方式，對吧？

Expand the customers, one. Expand the international models with the same targets we're doing, two. And then expand the model lineup within the existing customers, three.

拓展客戶，一。以我們正在做的相同目標擴展國際模型，兩個。然後在現有客戶中擴展模型陣容，三個。

And to that last point there, Todd, with these lower-priced models, would you expect any of them be doing with X7 or is that be mostly in X5 or even older opportunity?

對於最後一點，托德，對於這些價格較低的型號，您是否希望它們中的任何一個都使用 X7 還是主要用於 X5 甚至更舊的機會？

Different discussions with different OEMs. I mean, they're going to lean on the cost. They're very cost-driven. So I would -- if I was a betting person, I would say that some of these higher volumes, they're going to try to go to the lowest cost technology we have. But at the same time, we make such -- the actual visual improvement that you can see between X5 and X7 is palatable. It's noticeable. And if you look at our road map, which we haven't announced yet, but some of the Tier 1 customers have seen it. You're going to see another fundamental leap forward by 2024. ASPs will go up, not because we're just trying to extract more value, but to make these fundamental leaps and performance, we have to be more aggressive on how we do the technology, which is twofold. One, we're putting more transistors down; and 2, we're moving to lower process nodes, which are more expensive.

與不同的 OEM 進行不同的討論。我的意思是，他們將依靠成本。他們非常注重成本。所以我會 - 如果我是一個賭徒，我會說其中一些更高的數量，他們將嘗試使用我們擁有的成本最低的技術。但與此同時，我們做出這樣的 - 您可以在 X5 和 X7 之間看到的實際視覺改進令人滿意。這很明顯。如果你看一下我們尚未公佈的路線圖，但一些一級客戶已經看到了。到 2024 年，您將看到另一個根本性的飛躍。ASP 將會上升，這不是因為我們只是想獲取更多價值，而是為了實現這些根本性的飛躍和性能，我們必須更加積極地開展工作技術，這是雙重的。第一，我們正在放下更多的晶體管； 2，我們正在轉向更昂貴的較低工藝節點。

Fair enough. That's a great perspective, Todd. Last quick question for me. I haven't heard any direct statements here about how you feel like the engagement with TrueCut is going with potential streaming partners here. But, I guess, we're not close enough to have any sort of big announcement, maybe if you could just characterize the progress in the last quarter. Any feedback you've gotten from Avatar 2 and potential other releases? And then how do we think about these other theatrical releases you're looking for this year?

很公平。這是一個很好的觀點，托德。我的最後一個快速問題。我在這裡沒有聽到任何關於您如何看待與這裡的潛在流媒體合作夥伴的 TrueCut 合作的直接聲明。但是，我想，我們還沒有接近到可以發布任何重大公告的程度，也許你可以描述一下上個季度的進展情況。您從《阿凡達 2》和其他可能發布的版本中得到什麼反饋？那麼我們如何看待您今年正在尋找的其他戲劇版本？

So, I mean, we've had discussions with major distributors about high frame rate technology. And we continue to have those discussions. They are bullish, by the way, but they want to kick it off, they want more content. Now, they are actually even helping us by making introductions to studios that they rely on for content. So there, I would say that the studio discussions are a positive thing. But to get it to the point where they're ready to go out and really -- so once they announce it, what do they have to do, they have to market it. And they have to go communicate to all their streaming customers, the value proposition of TrueCut Motion. And so, they want to be sure that when they go spend all that energy and money that they got enough content to follow through with the value proposition.

所以，我的意思是，我們已經與主要分銷商就高幀率技術進行了討論。我們將繼續進行這些討論。順便說一句，他們看漲，但他們想要開始，他們想要更多的內容。現在，他們甚至通過介紹他們依賴的內容工作室來幫助我們。所以在那裡，我會說工作室討論是一件積極的事情。但是要達到他們準備好走出去的地步——所以一旦他們宣布，他們必須做什麼，他們必須推銷它。他們必須向所有流媒體客戶傳達 TrueCut Motion 的價值主張。因此，他們希望確保在花費所有精力和金錢時，他們獲得足夠的內容來貫徹價值主張。

So with that said, any time they extend help to us, we take it. We were already spending a lot of time trying to cultivate more theatrical content because more theatrical content becomes a pool of content for distribution to home entertainment. And I would say that the release of Way of the Water put all of our technology, put high frame rate 3D out in thousands of theaters globally with -- there's some people that review it and don't like it, but they're minor. They're a very small group of people. The grand majority of the people love the immersive effects that high frame rate 3D brought with that movie. They love the technology. They love the movie, which is a story and how it was delivered, and James Cameron did a great job, but they also love the technology we used to help deliver that story. And that clearly has helped us be credible in trying to expand the use of that technology and get more people to bring out high frame rate theatrical content. But that's all the work in progress. So no announcements to be made, a lot of work to be done.

因此，話雖如此，只要他們向我們提供幫助，我們就會接受。我們已經花了很多時間嘗試培養更多的戲劇內容，因為更多的戲劇內容成為分發到家庭娛樂的內容池。我要說的是，水之道的發行運用了我們所有的技術，在全球數以千計的影院放映了高幀率 3D 並且——有些人評論它但不喜歡它，但他們是次要的.他們是非常小的一群人。大多數人都喜歡高幀率 3D 為該電影帶來的身臨其境的效果。他們喜歡這項技術。他們喜歡這部電影，這是一個故事以及它是如何傳遞的，詹姆斯卡梅隆做得很好，但他們也喜歡我們用來幫助傳遞這個故事的技術。這顯然幫助我們在嘗試擴大該技術的使用並讓更多人推出高幀率戲劇內容方面變得可信。但這就是所有正在進行的工作。所以沒有要發布的公告，還有很多工作要做。

Okay. Well, as always, Todd, I appreciate all the detail. I am all done.

好的。好吧，一如既往，托德，我很欣賞所有的細節。我都完成了。

Thank you. I would now like to turn the call back over to management for any closing remarks.

謝謝。我現在想把電話轉回給管理層，聽取任何結束語。

That was a longer call today than I expected. I'm here for another couple of weeks. It's interesting times over here, and then we get to see how the rest of the year unfolds. But I would say, in general, I am more positive today than I was 2 weeks ago when I arrived.

今天的通話時間比我預期的要長。我還要在這裡待幾個星期。這是有趣的時光，然後我們將看到今年餘下的時間如何展開。但我要說的是，總的來說，我今天比 2 週前剛來時更加積極。

So with that said, everybody enjoy the evening. Thank you.

所以話雖如此，每個人都喜歡這個晚上。謝謝。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.

女士們，先生們，今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接。