Pixelworks 2025 Q1 Earnings Misses Targets as Net Loss Widens 55.3%

Pixelworks (PXLW) reported its fiscal 2025 Q1 earnings on May 14th, 2025. The results were mixed, with a revenue beat but an increased net loss compared to expectations. Pixelworks posted revenue of $7.09 million, surpassing the Zacks Consensus Estimate by 5.41%. However, the company's net loss widened significantly to $-8.02 million, a 55.3% increase from the previous year's first quarter. For the second quarter, the company anticipates revenue between $8 million and $9 million, with a projected non-GAAP EPS loss of $0.11 to $0.08 per share. Despite ongoing challenges, Pixelworks remains focused on executing its strategic objectives in a dynamic macroeconomic environment.

Revenue

Pixelworks reported a revenue decline of 55.8% to $7.09 million for Q1 2025, compared to $16.05 million in Q1 2024, marking a significant year-over-year decrease.

Earnings/Net Income

Pixelworks's losses deepened to $0.13 per share in 2025 Q1 from a loss of $0.09 per share in 2024 Q1. The EPS figures highlight worsening financial performance.

Price Action

The stock price of Pixelworks has edged down 0.88% during the latest trading day, jumped 9.84% during the most recent full trading week, and edged up 2.64% month-to-date.

Post-Earnings Price Action Review

Pixelworks saw a revenue beat, with revenues of $7.09 million for the quarter ending March 2025, surpassing the Zacks Consensus Estimate by 5.41%. This indicates a strong performance in the company's core business, which could lead to short-term price appreciation as the market reacts positively to the earnings beat. The market often rewards companies that exceed earnings expectations with a surge in stock price. Given that Pixelworks has beaten revenue estimates, the stock could experience a positive movement in the immediate term. Holding the stock for 30 days could capture this potential price increase. Pixelworks' CEO, Todd DeBonis, highlighted ongoing momentum in the TrueCut Motion business and progress in cost structure streamlining, which could bolster the company's long-term growth prospects. However, investors should remain vigilant to potential risks and adjust their strategy accordingly, considering broader market conditions that may impact the stock's short-term performance.

CEO Commentary

"First quarter results were consistent with our expectations, as revenue reflected anticipated first quarter seasonality in the home and enterprise market, partially offset by an initial recovery and sequential growth in mobile business," commented Todd DeBonis, President and CEO of Pixelworks. He highlighted the company's focus on driving renewed growth in mobile, emphasizing the depth of engagements with mobile OEM customers. DeBonis noted that the strategic partnership for TrueCut Motion with a market-leading post-production company would facilitate broader industry adoption and expressed optimism about reaching profitability in the Shanghai subsidiary in the second half of 2025.

Guidance

For the second quarter of 2025, Pixelworks expects revenue between $8 million and $9 million, with a non-GAAP EPS loss projected to be between $0.11 and $0.08 per share. The company anticipates continued challenges but remains focused on executing its strategic and operational objectives in a dynamic macroeconomic environment.

Additional News

Recently, Pixelworks announced a strategic collaboration with PerfDog, introducing a new 'Frame Generation' benchmarking tool to boost mobile gaming performance. Additionally, the company formalized a partnership with a leading post-production company to expand its TrueCut Motion platform ecosystem, aiming for broader industry adoption. Pixelworks also continues to advance discussions on strategic options for its Shanghai subsidiary, with expectations of achieving profitability there in the second half of 2025. These initiatives reflect Pixelworks' focus on innovation and growth in key markets.