Pixelworks Inc (PXLW) 2024 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Pixelworks, Inc.'s third-quarter 2024 earnings conference call.

女士們先生們，美好的一天，歡迎參加 Pixelworks, Inc. 的 2024 年第三季財報電話會議。

I will be your operator for today's call.

我將擔任您今天通話的接線生。

(Operator Instructions) This conference call is being recorded for replay purposes.

（操作員說明）本次電話會議正在錄音以供重播。

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

我現在想將電話轉給謝爾頓集團投資者關係部門的布雷特·佩里 (Brett Perry)。

Please go ahead.

請繼續。

Thank you, Lalla.

謝謝你，拉拉。

Good afternoon, and thank you for joining today's conference call.

下午好，感謝您參加今天的電話會議。

With me on the call are Pixelworks' President and CEO, Todd DeBonis; and Chief Financial Officer, Haley Aman.

與我一起參加電話會議的有 Pixelworks 總裁兼執行長 Todd DeBonis；財務長 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 2024.

今天召開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，公佈該公司 2024 年第三季度的財務業績。

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 our competitive position, constitute forward-looking statements.

在開始之前，我想提醒您，我們在這次電話會議上發表的各種言論，包括有關預計未來財務業績、經濟和市場趨勢以及我們的競爭地位的言論，均構成前瞻性陳述。

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.

這些前瞻性陳述以及本次電話會議中所做的所有其他非歷史事實的陳述均受到許多風險和不確定性的影響，可能導致實際結果出現重大差異。

All forward-looking statements are based on the company's beliefs as of today, Tuesday, November 12, 2024.

所有前瞻性陳述均基於本公司截至今天（2024 年 11 月 12 日星期二）的信念。

The company undertakes no obligation to update any such statements to reflect events or circumstances occurring after today.

本公司沒有義務更新任何此類聲明以反映今天之後發生的事件或情況。

Please refer to today's press release, the company's annual report on Form 10-K for the year ended December 31, 2023, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results.

請參閱今天的新聞稿、本公司截至 2023 年 12 月 31 日的 10-K 表格年度報告以及隨後向 SEC 提交的文件，以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 both GAAP and non-GAAP terms, including gross margin, operating expenses, net loss, and net loss per share.

此外，該公司在本次電話會議期間的新聞稿和管理層聲明將包括對公認會計準則和非公認會計準則術語中的某些措施和財務資訊的討論，包括毛利率、營運費用、淨虧損和每股淨虧損。

Non-GAAP measures exclude restructuring costs and stock-based compensation expense.

非公認會計準則指標不包括重組成本和股票補償費用。

The company uses these non-GAAP measures internally to assess operating performance.

本公司在內部使用這些非公認會計準則衡量標準來評估營運績效。

We believe these non-GAAP measures provide a meaningful perspective into core operating results and underlying cash flow dynamics.

我們相信，這些非公認會計準則指標為核心經營績效和潛在現金流動態提供了有意義的視角。

We caution investors to consider these measures in addition to, not as a substitute for nor superior to, the company's consolidated financial results as presented in accordance with US GAAP.

我們提醒投資者，除了考慮這些措施外，不能取代或優於公司根據美國公認會計原則提交的綜合財務表現。

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.

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 Pixelworks, Inc. 的淨虧損簡稱為淨虧損。

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.

有關 GAAP 與非 GAAP 淨虧損以及 GAAP 淨虧損與調整後 EBITDA 的更多詳細資訊和調整表，請參閱該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 Pixelworks' CEO.

現在，我很高興將電話轉給 Pixelworks 的執行長。

Todd, please go ahead.

托德，請繼續。

Thank you, Brett.

謝謝你，布雷特。

Good afternoon, and welcome to everyone on the phone and the webcast.

下午好，歡迎大家透過電話和網路廣播。

We appreciate you joining us on today's call.

我們感謝您參加今天的電話會議。

As reported in our press release earlier today, our third-quarter results were consistent with our prior expectations for moderate sequential improvement.

正如我們今天早些時候的新聞稿中所報導的，我們第三季的業績與我們先前對適度連續改善的預期一致。

Revenue was at the midpoint of guidance, primarily reflecting steady demand in home and enterprise as we continue to work through the near-term headwinds in our mobile business.

收入處於指引的中點，主要反映了家庭和企業的穩定需求，因為我們繼續努力克服行動業務的近期阻力。

Gross margin expanded sequentially and year over year to over 51%, mainly due to a product mix during the quarter.

毛利率環比和同比增長至 51% 以上，這主要歸功於本季度的產品組合。

Additionally, operating expenses decreased from the prior quarter as we began to realize initial benefits of our previously implemented cost reductions.

此外，隨著我們開始實現先前實施的成本削減的初步效益，營運費用較上一季有所下降。

To briefly recap our recent and ongoing cost actions as well as expected benefits.

簡單回顧一下我們最近和正在進行的成本行動以及預期收益。

At the end of the second quarter, we initiated a broad series of actions to reduce expenses and focus on operational efficiencies to better align operating expenses with anticipated near-term revenue levels.

在第二季末，我們啟動了一系列廣泛的行動來減少開支並專注於營運效率，以更好地使營運支出與預期的近期收入水準保持一致。

This included a reduction in headcount effective June 30, resulting in expected annualized cost savings of approximately $4 million.

其中包括自 6 月 30 日起生效的員工人數減少，預計年化成本節省約 400 萬美元。

Due to certain one-time expenses incurred in the third quarter, we expect to realize a more significant reduction in operating expenses beginning in the fourth quarter.

由於第三季產生了某些一次性費用，我們預計從第四季開始營運費用將實現更大幅度的減少。

Together with our cost containment measures that we have taken, we continue to believe our collective actions will contribute to total cost savings of approximately $10 million over six quarters through year-end 2025.

加上我們已採取的成本控制措施，我們仍然相信，我們的集體行動將有助於在截至 2025 年底的六個季度內節省約 1000 萬美元的總成本。

For a review of end markets, starting with our mobile business.

對於終端市場的回顧，從我們的行動業務開始。

Revenue was down by 7% sequentially and 76% year over year, reflecting the expected multi-quarter impact from the headwinds that I discussed last quarter.

營收季減 7%，年減 76%，反映了我上季討論的不利因素對多個季度的預期影響。

Mobile revenue in the quarter was primarily comprised of shipments of prior-generation mobile visual processors in support of smartphones initially launched by customers in the first half of the year.

本季的行動收入主要包括上一代行動視覺處理器的出貨量，以支援客戶在今年上半年首次推出的智慧型手機。

Due to the previously communicated delay of our next-generation visual processor and the missed design cycle window for new device launches in the second half of this year, our primary focus has been on positioning for a return to growth in 2025.

由於先前通報的下一代視覺處理器的延遲以及錯過了今年下半年新設備發布的設計週期窗口，我們的主要重點是定位於 2025 年恢復成長。

In support of achieving this renewed growth, we are focused on three key strategic objectives.

為了支持實現新的成長，我們將重點放在三個關鍵策略目標。

First is the continued expansion of our IRX-branded gaming ecosystem.

首先是我們 IRX 品牌遊戲生態系統的持續擴展。

Second is to secure significant targeted design wins for our next-generation flagship visual processor, which I will provide an update in a moment.

其次是確保我們的下一代旗艦視覺處理器取得重大的有針對性的設計勝利，我將立即提供更新。

And third is to expand our available market in mobile by driving more meaningful penetration of visual processing technology in mid-tier and entry-level smartphones.

第三，透過推動視覺處理技術在中階和入門級智慧型手機中更有意義的滲透，擴大我們在行動領域的可用市場。

For the mobile market, but particularly across Asia and in China, mobile gaming consistently ranks among the top influencing factors for consumers when choosing which smartphone to purchase.

對於行動市場，尤其是在亞洲和中國，行動遊戲一直是消費者選擇購買智慧型手機時的首要影響因素之一。

Recognizing this and the increasing influence of mobile gaming in the design and marketing of newly launched smartphones, our IRX gaming ecosystem continues to be a fundamental part of our mobile strategy.

認識到這一點以及行動遊戲在新推出的智慧型手機的設計和行銷中日益增長的影響力，我們的 IRX 遊戲生態系統仍然是我們行動策略的基本組成部分。

As highlighted on prior conference calls, Pixelworks' unique IRX rendering acceleration represents both a proven and practical solution to dramatically enhance visual performance for mobile gaming.

正如先前的電話會議所強調的那樣，Pixelworks 獨特的 IRX 渲染加速代表了一種經過驗證且實用的解決方案，可顯著增強行動遊戲的視覺性能。

More specifically, it enables simultaneous high image resolution and ultra-high frame rate with desktop level photorealism, while also overcoming the device temperature and power consumption challenges frequently associated with mobile gaming.

更具體地說，它能夠同時實現高影像解析度和超高幀速率以及桌面級照片級真實感，同時也克服了與行動遊戲經常相關的裝置溫度和功耗挑戰。

By design, the differentiated visual display and device performance that IRX brings to mobile gaming further elevates the core value proposition of our mobile visual processors.

透過設計，IRX 為行動遊戲帶來的差異化視覺顯示和裝置效能進一步提升了我們行動視覺處理器的核心價值主張。

A larger and growing IRX ecosystem makes this value proposition even more compelling and we believe, further increases the incentive for smartphone OEM customers to adopt our visual processors across a broader range of new models.

更大且不斷發展的 IRX 生態系統使這一價值主張更加引人注目，我們相信，這會進一步增加智慧型手機 OEM 客戶在更廣泛的新型號中採用我們的視覺處理器的動力。

As such, we are continuing towards expanding the size and awareness of the IRX gaming ecosystem.

因此，我們正在繼續擴大 IRX 遊戲生態系統的規模和知名度。

This includes our team's work, ongoing, with leading game studios -- leading gaming studios on additional IRX-certified mobile games, as well as continuing to grow the existing list of over 100 games that we have IRX-qualified.

這包括我們團隊與領先的遊戲工作室正在進行的合作——領先的遊戲工作室開發更多 IRX 認證的手機遊戲，以及繼續擴大我們擁有 IRX 認證的 100 多種遊戲的現有清單。

Regarding an update on our next-generation flagship mobile visual processor.

關於我們下一代旗艦行動視覺處理器的更新。

Following our engineering team's incorporation of the requisite design changes, during the quarter, we received new samples of our next-gen device and conducted further extensive testing and verification.

在我們的工程團隊納入必要的設計變更後，在本季度，我們收到了下一代設備的新樣品，並進行了進一步廣泛的測試和驗證。

Today, I'm pleased to report that we recently completed production qualification of our new flagship mobile processor, with it successfully meeting or exceeding all qualifications criteria and targeting performance metrics.

今天，我很高興地向大家報告，我們最近完成了新型旗艦行動處理器的生產認證，它成功滿足或超過了所有認證標準和目標性能指標。

We have since delivered early production samples and are now engaged with multiple customers on smartphone programs targeted for launch in the coming year.

此後，我們已經交付了早期生產樣品，目前正在與多個客戶合作開發預計在明年推出的智慧型手機專案。

As Pixelworks' first-ever visual processor utilizing 12-nanometer process technology and specifically architected to fully leverage the advantages of our IRX gaming ecosystem, we continue to believe our new flagship mobile visual processor stands to be a disruptive force within the mobile gaming market.

作為 Pixelworks 首款採用 12 奈米處理技術並經過專門設計以充分利用 IRX 遊戲生態系統優勢的視覺處理器，我們仍然相信我們的全新旗艦行動視覺處理器將成為行動遊戲市場的顛覆力量。

Complementing this now production-ready flagship solution for a high-end segment of the market, we are simultaneously focused on addressing a larger served market, with a cost-down version of a prior-generation visual processor, specifically targeting higher unit volume opportunities in the mid- and entry-level smartphones.

為了補充這項針對高階市場的現已投入生產的旗艦解決方案，我們同時專注於透過上一代視覺處理器的成本降低版本來解決更大的服務市場，特別是針對更高單位產量的機會中端和入門級智慧型手機。

Leveraging a cost-down derivative of our prior-generation X5 visual processor, we have worked closely with one of our Tier 1 customers to increase several high frame-rate graphical use cases in addition to high frame-rate mobile gaming.

利用我們上一代 X5 視覺處理器的低成本衍生產品，我們與我們的一級客戶密切合作，除了高幀率行動遊戲之外，還增加了幾種高幀率圖形用例。

As a display technology has evolved faster than a display pipeline in lower-end application processors, the OEMs have a very challenging time utilizing the high frame-rate capabilities of the display.

由於顯示技術的發展速度快於低階應用處理器中的顯示管道，因此 OEM 在利用顯示器的高幀速率功能方面面臨著巨大的挑戰。

This mismatch has created an opportunity for a new tier of visual processors from Pixelworks.

這種不匹配為 Pixelworks 的新一代視覺處理器創造了機會。

We are currently engaged in customer evaluations of this new solution on programs targeted for launch in the first half of next year.

我們目前正在對此新解決方案進行客戶評估，計劃於明年上半年推出。

In addition, our visual processor product road map has now prioritized this new low-cost graphical-focused solution.

此外，我們的視覺處理器產品路線圖現已優先考慮這種新的低成本圖形解決方案。

Turning to an update on our TrueCut Motion platform.

轉向 TrueCut Motion 平台的更新。

Our team continues to focus on cultivating new and expanding ecosystem partnerships.

我們的團隊繼續專注於培養新的和擴大的生態系統合作夥伴關係。

The progress we are making from this persistent activity and its contribution towards new commercial engagement is difficult to assess externally.

我們從這項持續活動中取得的進展及其對新商業參與的貢獻很難從外部評估。

However, we believe there are growing indications of a dramatic shift in perception, with broader industry recognition that motion grading is required for new theatrical and home entertainment displays that are being introduced, and that TrueCut is the only solution for cinematic motion grading.

然而，我們相信，越來越多的跡象表明人們的觀念正在發生巨大轉變，業界更廣泛地認識到，正在推出的新影院和家庭娛樂顯示器需要運動分級，而TrueCut 是電影運動分級的唯一解決方案。

As evidence of this evolving perception, during the quarter, we announced a multiyear agreement with Universal Pictures to utilize our industry-leading motion grading technology to enhance the visual experience for major theatrical releases of future Universal titles.

作為這種不斷變化的觀念的證據，在本季度，我們宣布與環球影業達成一項多年協議，利用我們行業領先的運動分級技術來增強未來環球影業主要影院發行的視覺體驗。

This multi-title commitment by one of the world's largest movie studios represented another tangible milestone.

世界上最大的電影製片廠之一的這一多部電影承諾代表著另一個切實的里程碑。

Unlike previous announcements of a single title, this agreement demonstrated recognition in advance that multiple planned future releases would benefit from using TrueCut Motion technology.

與先前宣布的單一遊戲不同，該協議表明我們提前認識到未來計劃的多個版本將受益於使用 TrueCut Motion 技術。

In September, DreamWorks Animation's The Wild Robot became the first major title released as part of this agreement.

九月，夢工廠動畫公司的《狂野機器人》成為根據協議發布的第一款主要作品。

The movie was released globally in TrueCut Motion format on over 300 of the world's highest-grossing premium large-format screens and achieved domestic opening box office of $35 million.

這部電影以 TrueCut Motion 格式在全球 300 多個全球票房最高的優質大螢幕上上映，並取得了 3500 萬美元的國內首映票房。

The Wild Robot movie has recently received universally high praise from both critics and audiences.

最近，《野生機器人》電影受到評論家和觀眾的普遍好評。

It has since succeeded in grossing over $270 million in worldwide box office on an estimated $78 million production budget.

此後，該片的全球票房收入已超過 2.7 億美元，製作預算預計為 7,800 萬美元。

In addition to TrueCut being endorsed by two of the largest global premium large-format exhibitors, we are also seeing growing interest from top post-production companies.

除了 TrueCut 得到全球最大的兩家優質大幅面參展商的認可外，我們還看到頂級後製公司的興趣日益濃厚。

Independent of work on any specific title or studio, we are exploring how post-production shops could add TrueCut Motion grading to their existing service offerings.

獨立於任何特定作品或工作室的工作，我們正在探索後製商店如何將 TrueCut Motion 分級添加到其現有的服務產品中。

This concept is still in early discussion.

這個概念仍處於早期討論中。

However, it could effectively bring motion grading upstream as part of the standard post-production process.

然而，它可以有效地將動作分級帶入上游，作為標準後製流程的一部分。

It would then be more readily accessible to a broader group of filmmakers, contributing to accelerated adoption.

這樣，更廣泛的電影製作人群體就可以更容易地使用它，有助於加速採用。

The simple fact that these types of conversations are taking place with leading post-production companies is further evidence that the film industry is moving in the direction of motion grading becoming a future standard practice.

與領先的後期製作公司進行此類對話的簡單事實進一步證明，電影業正在朝著動態分級成為未來標準做法的方向發展。

Shifting to our home and enterprise business, predominantly consisting of our visual processor system-on-a-chips for 3LCD digital projector market, revenue increased sequentially and was consistent with expected positive seasonality for the third-quarter projector shipments.

轉向我們的家庭和企業業務，主要包括我們用於 3LCD 數位投影機市場的視覺處理器片上系統，收入連續增長，並且與第三季度投影機出貨量的預期積極季節性相一致。

The overall demand for digital projector SoCs has remained reasonably stable in recent quarters, although end market demand for projector systems has continued to be relatively flat, primarily reflecting the prolonged period of macroeconomic uncertainty in China as well as the US and European education markets.

儘管投影機系統的終端市場需求持續相對平穩，但近幾季數位投影機 SoC 的整體需求保持相當穩定，主要反映了中國以及美國和歐洲教育市場的宏觀經濟長期不確定性。

As indicated last quarter, we've received initial purchase orders for our co-developed next-generation projector [SoC] from our lead customer.

如上季所示，我們已從我們的主要客戶那裡收到了共同開發的下一代投影機 [SoC] 的初始採購訂單。

We have since begun initial volume production and remain on schedule to deliver the first production shipments of this new projector SoC during the fourth quarter.

此後，我們已開始初始批量生產，並按計劃在第四季度交付這款新型投影機 SoC 的第一批產品。

Based on previews of our customers' planned product introductions, we continue to anticipate gradual but healthy incremental adoption of our newest projector solution throughout 2025 and beyond.

根據對客戶計劃推出的產品的預覽，我們繼續預計 2025 年及以後我們最新的投影機解決方案將逐步但健康地被採用。

Lastly, related to home and enterprise.

最後，與家庭和企業有關。

During the third quarter, we began a process to end-of-life our small remaining portfolio of consumer transcoding products.

在第三季度，我們開始結束我們剩餘的少量消費者轉碼產品組合的生命週期。

Collectively, these legacy video delivery products have consistently amounted to less than 5% of our total revenue in recent years.

總的來說，這些傳統視訊傳輸產品近年來一直占我們總收入的不到 5%。

As unit volumes of these products declined, it became increasingly difficult and prohibitively expensive to source the required substrate and packaging capabilities to support their continued production.

隨著這些產品的單位產量下降，採購所需的基材和封裝能力以支持其持續生產變得越來越困難且昂貴。

We expect to fulfill a relatively small number of last-time purchase orders for these EOL products during the fourth quarter.

我們預計第四季將完成這些停產產品的最後採購訂單數量相對較少。

The end-of-life of these legacy products will also further streamline our home and enterprise business to be primarily comprised of our digital projection solutions, contributing to more optimized allocation of our resources and improved operational efficiencies.

這些遺留產品的停產也將進一步簡化我們的家庭和企業業務，使其主要由我們的數位投影解決方案組成，有助於更優化地分配我們的資源並提高營運效率。

Switching gears, I want to briefly highlight a couple of recent developments related to our Pixelworks Shanghai subsidiary.

言歸正傳，我想簡單介紹一下與 Pixelworks 上海子公司相關的一些最新進展。

As a reminder, for those newer to our story, several years ago, we restructured the entire organization to operate all of our semiconductor business through our Shanghai-based subsidiary.

提醒一下，對於那些剛接觸我們故事的人來說，幾年前，我們重組了整個組織，透過我們位於上海的子公司經營我們所有的半導體業務。

There were several strategic reasons for adopting the structure, including the majority of our employees are based in China, in addition to our largely Asia-centric customer base.

採用這種結構有幾個策略性原因，包括我們的大多數員工都在中國，以及我們主要以亞洲為中心的客戶群。

We also previously leveraged the structure to secure additional equity capital at a time when valuations were very attractive in China.

先前，當中國的估值非常有吸引力時，我們也利用該結構來獲得額外的股本。

Today, the US parent company, Pixelworks, Inc., continues to hold 78.7% equity interest in our subsidiary.

如今，美國母公司 Pixelworks, Inc. 繼續持有我們子公司 78.7% 的股權。

Of note, our Pixelworks Shanghai subsidiary was recently awarded with the designation of Little Giant, contributing to both provincial and national level recognition within China.

值得注意的是，我們的 Pixelworks 上海子公司最近榮獲「小巨人」稱號，為中國省級和國家級的認可做出了貢獻。

The designation Little Giant is part of an ambitious government program overseen by China's Ministry of Industry and Information Technology, with the purpose of identifying and issuing formal certification to outstanding small- and medium-sized enterprise-based businesses on a series of strict criteria.

「小巨人」頭銜是中國工業和資訊化部監督的一項雄心勃勃的政府計劃的一部分，其目的是根據一系列嚴格的標準識別優秀的中小企業並向其頒發正式認證。

In addition to completing an extensive application process to be considered, certification requires undergoing multiple stages of in-depth business reviews that a majority of applying companies fail to pass.

除了完成廣泛的申請流程外，認證還需要經過多個階段的深入業務審查，而大多數申請公司都未能通過。

Designated Little Giants benefit from the increased local and national prominence, having been recognized by the Chinese government as a leading company with unique strengths in areas such as innovation and R&D capabilities, as well as having -- as for having significant growth potential.

指定小巨人受益於當地和國家知名度的提高，被中國政府認定為在創新和研發能力等領域擁有獨特優勢並具有巨大成長潛力的領先公司。

Also notable, these designations qualify enterprises to apply for various forms of government-mandated subsidies, including grants and R&D credits.

同樣值得注意的是，這些指定使企業有資格申請各種形式的政府規定的補貼，包括贈款和研發信貸。

Pixelworks Shanghai was recently awarded one such subsidy.

Pixelworks 上海最近獲得了一項此類補助。

And our team is now in the process of applying for other potential financial awards as part of the Little Giant program.

作為小巨人計劃的一部分，我們的團隊目前正在申請其他潛在的財務獎勵。

Separately, I want to briefly highlight on another new and ongoing development in China.

另外，我想簡單強調中國正在進行的另一項新的發展。

We recently received inbound strategic interest in our Pixelworks Shanghai subsidiary.

我們最近收到了對 Pixelworks 上海子公司的入境策略興趣。

And we have formally retained Morgan Stanley as a financial adviser to assist with reviewing various potential strategic options specific to our Shanghai entity.

我們已正式聘請摩根士丹利擔任財務顧問，協助審查針對我們上海實體的各種潛在策略選擇。

I want to emphasize that we are still just beginning a comprehensive review process.

我想強調的是，我們才剛開始全面審查過程。

Given the recent designation of Little Giant and the inbound interest, we continue to have strong confidence in our Shanghai-based subsidiary and its highly innovative technology, as well as its long-term growth potential.

鑑於最近被指定為「小巨人」以及入境興趣，我們仍然對我們位於上海的子公司及其高度創新的技術及其長期成長潛力充滿信心。

We are evaluating different ownership and collaboration structures that could enhance and accelerate this potential.

我們正在評估可以增強和加速這一潛力的不同所有權和合作結構。

In summary, our teams continued to execute well toward overcoming recent challenges.

總之，我們的團隊在克服最近的挑戰方面繼續表現出色。

And we believe our mobile business is well positioned for a return to growth in 2025.

我們相信我們的行動業務已做好準備，可以在 2025 年恢復成長。

We have a strong pipeline of new program opportunities for our latest mobile solutions, including our newest flagship visual processor as well as the cost-down derivative solution that we are particularly excited about.

我們為最新的行動解決方案提供了強大的新專案機會，包括我們最新的旗艦視覺處理器以及我們特別興奮的降低成本的衍生解決方案。

We expect to sustain a high level of customer engagement activity over the next several quarters, particularly as we target an expanded served market for our visual processing solutions in mid- to entry-level smartphones.

我們預計在未來幾季將維持高水準的客戶參與活動，特別是當我們的目標是擴大中入門級智慧型手機視覺處理解決方案的服務市場時。

Moreover, we remain committed to optimizing near-term operational efficiencies in order to reduce the financial impact of temporarily lower revenue.

此外，我們仍致力於優化近期營運效率，以減少收入暫時下降的財務影響。

Coupled with our previous and ongoing cost reduction actions, we expect to realize meaningful improvement in our operating results as we drive renewed top-line momentum in mobile in the coming year.

結合我們先前和正在進行的成本削減行動，隨著我們在來年推動行動領域新的營收成長勢頭，我們預計我們的營運業績將實現有意義的改善。

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

接下來，我將致電 Haley，以審查財務狀況並提供我們對第四季度的指導。

Thank you, Todd.

謝謝你，托德。

Revenue for the third quarter of 2024 was $9.5 million, which was at the midpoint of our guidance and compared to $8.5 million in the second quarter and $16 million in the third quarter of 2023.

2024 年第三季的營收為 950 萬美元，處於我們指引的中位數，而 2023 年第二季的營收為 850 萬美元，第三季的營收為 1,600 萬美元。

The sequential increase in third quarter revenue was driven by increased sales in the home and enterprise market, while the year-over-year decline primarily reflected the previously discussed headwinds in mobile.

第三季營收的環比成長是由家庭和企業市場銷售成長所推動的，而年減主要反映了先前討論的行動領域的不利因素。

The breakdown of revenue in the third quarter was as follows.

第三季的收入明細如下。

Revenue from mobile was approximately $2 million.

行動收入約 200 萬美元。

Home and enterprise revenue was approximately $7.5 million. Third-quarter non-GAAP

家庭和企業收入約為 750 萬美元。第三季非公認會計準則

gross profit margin expanded 30 basis points sequentially to 51.3% from 51% in the second quarter of 2024 and increased 820 basis points from 43.1% in the third quarter of 2023.

毛利率從2024年第二季的51%較上季擴大30個基點至51.3%，從2023年第三季的43.1%增加820個基點。

The significant year-over-year expansion in gross margin reflects a more favorable product mix and our ongoing focus to drive healthy margins.

毛利率年比大幅成長反映出更有利的產品組合以及我們持續致力於推動健康的利潤率。

Non-GAAP operating expenses decreased to $12.4 million in the third quarter from $12.8 million in the prior quarter and $13.3 million in the third quarter of 2023.

第三季非 GAAP 營運費用從上一季的 1,280 萬美元和 2023 年第三季的 1,330 萬美元減少至 1,240 萬美元。

The sequential and year-over-year decrease in third-quarter operating expenses reflected the initial benefit from the cost reduction actions implemented at the end of the second quarter, however, were partially offset by a one-time expense associated with the design revisions completed on our next-generation mobile visual processor.

第三季營運費用環比和同比下降反映了第二季末實施的成本削減行動帶來的初步效益，但部分被與已完成的設計修改相關的一次性費用所抵消在我們的下一代行動視覺處理器上。

We continue to expect to realize approximately $4 million in annualized savings from our previously taken cost reduction measures.

我們仍然預計，透過先前採取的成本削減措施，每年可節省約 400 萬美元。

On a non-GAAP basis, third-quarter 2024 net loss was $7.1 million or a loss of $0.12 per share compared to a net loss of $7.7 million or a loss of $0.13 per share in the prior quarter and a net loss of $5.7 million or a loss of $0.10 per share in the third quarter of 2023.

以非公認會計準則計算，2024 年第三季淨虧損為710 萬美元，即每股虧損0.12 美元，而上一季淨虧損為770 萬美元，即每股虧損0.13 美元，上一季淨虧損為570 萬美元，即每股虧損570 萬美元。

Adjusted EBITDA for the third quarter of 2024 was a negative $6.3 million compared to a negative $7 million in the prior quarter and a negative $5 million in the third quarter of 2023.

2024 年第三季調整後 EBITDA 為負 630 萬美元，上一季為負 700 萬美元，2023 年第三季為負 500 萬美元。

Turning to the balance sheet.

轉向資產負債表。

We ended the third quarter with cash and cash equivalents of $28.8 million compared to $37.8 million at the end of the second quarter.

第三季末，我們的現金和現金等價物為 2,880 萬美元，而第二季末為 3,780 萬美元。

The cash used in the third quarter included approximately $3.6 million in one-time severance and related cash payments associated with the restructuring implemented at the end of June, as well as a one-time expense associated with the design revision completed on our next-generation mobile visual processor that I just mentioned.

第三季使用的現金包括約 360 萬美元的一次性遣散費和與 6 月底實施的重組相關的相關現金付款，以及與下一代產品完成的設計修改相關的一次性費用。視覺處理器。

Absent these nonrecurring cash expenses, we expect to realize significantly lower cash burn in the fourth quarter of 2024.

如果沒有這些非經常性現金支出，我們預計 2024 年第四季的現金消耗將顯著降低。

Shifting to our current expectations and guidance for the fourth quarter of 2024.

轉向我們目前對 2024 年第四季的預期和指導。

Based on existing backlog and anticipated order trends, we currently expect total revenue for the fourth quarter to be in a range of between $9 million and $10 million.

根據現有積壓訂單和預期訂單趨勢，我們目前預計第四季的總營收將在 900 萬美元至 1,000 萬美元之間。

In terms of gross profit margin for the fourth quarter, we expect non-GAAP gross profit margin to be between 49% and 51%.

就第四季的毛利率而言，我們預期非公認會計準則毛利率在49%至51%之間。

With respect to operating expenses, we expect to realize incremental benefits from our previously implemented cost reduction actions.

在營運費用方面，我們期望從先前實施的成本削減行動中實現增量效益。

So specific to the fourth quarter, we anticipate operating expenses to range between $10 million and $11 million on a non-GAAP basis.

具體到第四季度，我們預計以非 GAAP 計算，營運費用將在 1,000 萬美元至 1,100 萬美元之間。

Lastly, we expect fourth-quarter non-GAAP EPS to range between a loss of $0.08 per share and a loss of $0.11 per share.

最後，我們預計第四季非 GAAP 每股盈餘將在每股虧損 0.08 美元到每股虧損 0.11 美元之間。

That completes our prepared remarks, and we look forward to taking your questions.

我們準備好的演講到此結束，我們期待回答您的問題。

Operator, please proceed with the Q&A session.

接線生，請繼續進行問答環節。

Thank you.

謝謝。

(Operator Instructions) Nick Doyle, Needham & Company.

（操作員說明）Nick Doyle，Needham & Company。

Yes.

是的。

Thanks for taking my questions.

感謝您回答我的問題。

Great to see you guys completed production and qualification with the next-gen processor.

很高興看到你們完成了下一代處理器的生產和認證。

Can you talk about what customer interest has been like and engagements for this product, and expand on what the expected timeline is from initial samples to design wins to revenue?

您能否談談客戶對該產品的興趣和參與度，並詳細說明從初始樣品到設計獲勝再到收入的預期時間表？

Thanks.

謝謝。

Yeah.

是的。

I don't want to get into too much detail, Nick.

我不想透露太多細節，尼克。

But I will say that we have sample -- engineering samples, but they are production qualified to several Tier 1 customers.

但我要說的是，我們有樣品——工程樣品，但它們對幾個一級客戶來說是合格的生產。

And we're going through a thorough analysis.

我們正在進行徹底的分析。

I mean, one thing to note with this device is we incorporated features that -- all the previous features we've had in our visual processors are included.

我的意思是，該設備需要注意的一件事是我們合併了一些功能——我們之前在視覺處理器中擁有的所有功能都包含在內。

But in addition, we've included features that can only be enabled with our IRX-certified gaming partners.

但此外，我們也加入了只能由我們的 IRX 認證遊戲合作夥伴啟用的功能。

And so when we go through these evaluations with the customer, it's evaluating three sets of things: the performance of the existing set of features on a new 12-nanometer device; the performance of new features that are still one-sided, new features that we've incorporated that the OEM can enable without the support of the IRX ecosystem; and then the third set is features that can only be supported if the IRX gaming ecosystem have enabled them.

因此，當我們與客戶一起進行這些評估時，它會評估三組內容：新 12 奈米設備上現有功能集的性能；新功能的效能仍然是片面的，我們已經整合了 OEM 可以在沒有 IRX 生態系統支援的情況下啟用的新功能；第三組是只有 IRX 遊戲生態系統啟用後才能支援的功能。

So this evaluation process will take some time.

所以這個評估過程需要一些時間。

We do expect decisions for new programs will be made.

我們確實預計將做出新計劃的決定。

We are still strongly encouraged that they'll be made positively.

我們仍然對它們的積極進展感到強烈鼓舞。

But there's no guarantee of that within the next several months.

但並不能保證在接下來的幾個月內做到這一點。

But that's just for programs that they have to make a decision for midyear.

但這只是他們必須在年中做出決定的計劃。

We expect this solution to be a valid solution for -- through 2026.

我們預計該解決方案將在 2026 年之前成為有效的解決方案。

Okay.

好的。

Yeah, that makes sense.

是的，這是有道理的。

Thank you for that.

謝謝你。

And then kind of the same questions for the cost-down version.

然後對於成本降低版本也有相同的問題。

I mean, any details on the type of engagements you're having and potential timeline?

我的意思是，有關於您正在進行的活動類型和潛在時間表的詳細資訊嗎？

Thank you.

謝謝。

So that engagement is right now specific to one Tier 1 customer.

因此，這種參與現在僅限於一個一級客戶。

We know that if we introduce this solution, the way we are collaborating with this customer, it will get broad interest.

我們知道，如果我們推出這個解決方案，以及我們與該客戶合作的方式，它將引起廣泛的興趣。

I think as a reminder to everyone on the call, our flagship gaming processors targeted either what they call flagship killers or flagship devices of these Chinese Tier 1 OEMs.

我想提醒大家，我們的旗艦遊戲處理器的目標要不是他們所謂的旗艦殺手，就是這些中國一級 OEM 的旗艦設備。

They're very good phones.

它們是非常好的手機。

They don't sell a ton of them.

他們不賣很多。

Their total market share compared to Apple and Samsung is quite small when you look at phones over $500.

當你查看 500 美元以上的手機時，與蘋果和三星相比，它們的總市場份額相當小。

We do participate in those.

我們確實參與了這些活動。

We've done -- I think in our best year, we probably shipped over 12 million units into a market that may absorb all of the premium phones and maybe 50 million units from these Tier 1s combined, if you don't include Huawei.

我們已經做到了——我認為在我們最好的一年裡，我們可能向一個可能吸收所有高端手機的市場運送了超過1200 萬部手機，如果不包括華為的話，這些一級手機的出貨量可能達到5000 萬部。

So going after this broader market, you're going after where the majority of the volume from Chinese Tier 1s comes from.

因此，在追求這個更廣闊的市場時，你要追求的是中國一級供應商大部分銷售的來源。

The majority of their volume shipped comes from phones that are under $250 and as low as $100.

他們的大部分出貨量來自 250 美元以下和低至 100 美元的手機。

And so this is the range that we're targeting this new low-cost derivative product, and it's not just mobile gaming.

因此，這就是我們針對這種新的低成本衍生產品的目標範圍，而不僅僅是行動遊戲。

It's how do you enable several use cases for high frame-rate experience on one of these lower-end phones.

這就是如何在其中一款低階手機上啟用多個用例以獲得高幀速率體驗。

Thank you.

謝謝。

(Operator Instructions) Richard Shannon, Craig-Hallum.

（操作員說明）Richard Shannon，Craig-Hallum。

Hi, Todd and Haley.

嗨，托德和海莉。

Thanks for taking my questions as well.

也感謝您回答我的問題。

Maybe I'll follow up on the topic in the past questions here in the mobile space and maybe just kind of take a big top-down here.

也許我會在行動領域的過去的問題中跟進這個主題，也許只是在這裡進行一次自上而下的大討論。

I know, Todd, I'm probably asking you to look a little far ahead when the mobile business, generally, doesn't allow you to look too far forward without a lot of confidence.

我知道，托德，我可能會要求您看得長遠一些，而行動業務通常不允許您在沒有足夠信心的情況下看得太遠。

But when you're starting to add processors for the lower end part of the market, how do you think your revenue and unit profile balances out when you've kind of got both product families humming at once?

但是，當您開始為低階市場添加處理器時，當您同時擁有兩個產品系列時，您認為您的收入和單位概況如何平衡？

I mean, is this something where the premium or the higher end is still the majority, a clear majority?

我的意思是，這是否是高端或高端產品仍佔多數、明確佔多數的情況？

Or can the low end be a majority of your business over time?

或者隨著時間的推移，低端產品會成為您的主要業務嗎？

I would say if you look in the near term, which is '25, first half of '26, I would still -- maybe it could be 50/50.

我想說，如果你看看近期，也就是 25 年、26 年上半年，我仍然會——也許可能是 50/50。

But I'm still leaning on the high end right now.

但我現在還是偏向高端。

But I think beyond that, the low end will -- if we're successful, the low end will be a much bigger part of the business.

但我認為除此之外，低端市場將會——如果我們成功的話，低端市場將成為業務的重要組成部分。

Okay.

好的。

And what's the relative ASP we're talking about between these two?

我們談論的這兩者之間的相對 ASP 是多少？

Is it more than half the price or something (multiple speakers) you can characterize?

是超過一半的價格還是你可以描述的東西（多個揚聲器）？

About half -- probably about half the price.

大約一半——可能是價格的一半左右。

Okay.

好的。

Okay.

好的。

And then just any thought process on how to think about the trajectory and timing of inflection point of your mobile business back.

然後是關於如何思考移動業務拐點的軌跡和時間的任何思考過程。

I know we had a bit of a delay with the product development, and it sounds like you're back on track here.

我知道我們的產品開發有點延遲，但聽起來您又回到了正軌。

But obviously, it takes, I would assume, a number of months here to get there.

但顯然，我認為需要幾個月的時間才能到達那裡。

When do you start -- when do you expect to see that inflection point in your mobile business start?

您什麼時候開始－您預計行動業務的拐點什麼時候開始？

Well, first step is to secure the design wins.

嗯，第一步是確保設計獲勝。

The next step is -- I mean, we've already started some preproduction runs so that we'll have inventory and be ready to go, so we can move fairly quickly.

下一步是——我的意思是，我們已經開始了一些預生產，以便我們擁有庫存並做好準備，這樣我們就可以相當快地行動。

So I expect, probably, the earliest you could see substantial contributing revenue would be late Q1, Q2.

因此，我預計最早可能會在第一季末、第二季看到可觀的收入貢獻。

But we expect really to ramp in the back half of the year of '25.

但我們預計真正的成長將在 25 年下半年實現。

Okay.

好的。

Okay.

好的。

That was consistent with what I was thinking, I just wanted to make sure.

這與我的想法一致，我只是想確定一下。

Maybe a couple of last questions here.

也許還有最後幾個問題。

Just want to understand the financial model going forward here, especially on how to think about breakeven.

只是想了解這裡的財務模型，特別是如何考慮損益平衡。

I think you said $4 million annual expenses -- expense reductions here, but then I heard something about $10 million.

我想你說的是每年 400 萬美元的開支——這裡的開支減少了，但後來我聽到了大約 1000 萬美元的消息。

I wasn't sure where that came from.

我不確定那是從哪裡來的。

So I just want to make sure how to fit those two together.

所以我只是想確定如何將這兩者結合在一起。

So the $4 million is just referencing the reduction in workforce.

所以400萬美元只是指勞力的減少。

That was the cost savings for those salaries, period.

這就是這些工資節省的成本。

We have done other things beyond employee reductions that combined -- and that $4 million is over annually, right?

除了裁員之外，我們還做了其他事情——每年 400 萬美元已經超過了，對嗎？

So what I'm saying is $10 million over six quarters, right?

所以我說的是六個季度 1000 萬美元，對嗎？

It would suggest that just the employee reductions are about $6 million of the $10 million.

這意味著在這 1000 萬美元中，光是員工裁員就大約有 600 萬美元。

But we have identified another $4 million of reductions that we've implemented effectively, and so we will secure them.

但我們已經確定了另外 400 萬美元的削減，並已有效實施，因此我們將確保這些削減。

And actually, since that, we are now identifying further reductions.

事實上，從那時起，我們現在正在確定進一步的削減。

Okay.

好的。

Does that come out of OpEx mostly or other parts of the cost structure?

這主要來自營運支出還是成本結構的其他部分？

Predominantly OpEx.

主要是營運支出。

Okay.

好的。

That's helpful.

這很有幫助。

One last question for me.

最後一個問題要問我。

You mentioned engaging a banker for early interest in Pixelworks Shanghai.

您提到聘請銀行家來獲得對 Pixelworks 上海的早期興趣。

I guess, I just want to get a sense of the nexus of the situation here, where the interest is coming from.

我想，我只是想了解一下這裡情況的聯繫，興趣從何而來。

And does this mean anything about the lower prospects or at least near-term prospects of getting a STAR listing for that subsidiary?

這是否意味著該子公司獲得 STAR 上市的前景較低，或至少是短期內的前景？

Well, so understand, if you change the controlling interest structure, you would delay any public offering, right, okay?

嗯，所以明白了，如果你改變控股權結構，你就會推遲任何公開發行，對吧？

Possibly.

可能吧。

Right now, they're not really open for business, right, for IPOs.

目前，他們還沒有真正開放業務，對吧，首次公開募股。

So -- but by the rules of the STAR exchange, if you change controlling interest, then you set back yourself a year from filing for a public offering.

所以，但根據科創板交易所的規則，如果你改變控股權，那麼你就需要延後一年申請公開發行。

Because it would be the new controlling interest party that would be doing the filing.

因為將由新的控股方進行備案。

And all what they call a tutoring process would have to be redone with that entity, okay?

他們所說的所有輔導過程都必須與該實體重做，好嗎？

So frankly, if you're looking at a structural change, it's not because you think that you're about ready to go public.

坦白說，如果您正在考慮進行結構性變革，那並不是因為您認為自己已準備好上市。

It's because that you are being patient, and you think that changing the ownership structure, potentially, would give advantages to this entity to, one, fulfill its promise, dramatically grow revenue, become profitable, and then have a liquidity event.

這是因為你很有耐心，並且你認為改變所有權結構可能會給這個實體帶來優勢，一是履行其承諾，大幅增加收入，實現盈利，然後發生流動性事件。

Given the current geopolitical state that we're in, having a US public company and a US CEO of that public company be the chairman of the subsidiary and the US public company being the controlling shareholder with almost 80% interest, it creates challenges in the environment we're in that a different structure may alleviate.

鑑於我們目前所處的地緣政治狀況，由一家美國上市公司和該上市公司的美國首席執行官擔任子公司的董事長，而美國上市公司是擁有近80% 權益的控股股東，這給我們帶來了挑戰我們所處的環境不同的結構可能會緩解這種情況。

Okay.

好的。

Fair enough.

很公平。

That's something to noodle on.

那是可以吃麵的東西。

I think that's all the questions for me.

我想這就是我要問的所有問題。

I'll step out of the line.

我會走出隊伍。

Thank you.

謝謝。

Thanks, Richard.

謝謝，理查。

Seeing as we do not have any more questions at this time, I will now turn the call back over to management for closing remarks.

鑑於我們目前沒有更多問題，我現在將把電話轉回給管理層進行總結發言。

All right.

好的。

Well, thanks for attending this conference call.

好的，感謝您參加這次電話會議。

We look forward to updating you as we move forward in the fourth quarter.

隨著第四季的進展，我們期待向您通報最新情況。

A lot on our plate.

我們的盤子裡有很多東西。

As things happen, we will announce them.

當事情發生時，我們會宣布。

Thank you.

謝謝。

Ladies and gentlemen, that concludes today's call.

女士們、先生們，今天的電話會議到此結束。

Thank you, all, for joining.

謝謝大家的加入。

You may now disconnect.

您現在可以斷開連線。