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- **$50-60M Net Proceeds**: Sale of Shanghai subsidiary to VeriSilicon will provide liquidity to pivot to a technology licensing business.
- **TrueCut Motion Momentum**: Credited in four major theatrical releases this quarter, with consumer device licensing discussions nearing completion.
- **Cost Efficiency**: Sequential cash burn reduction to $3 million highlights operational turnaround.
- **Geopolitical Risk Mitigation**: Exit of China-focused semiconductor business reduces exposure to regulatory headwinds.

**【CEO Summary Section】**
- **Proposed Shanghai Subsidiary Sale**: Pixelworks signed a definitive agreement to sell its 78% stake in Pixelworks Shanghai to VeriSilicon for $133 million (RMB 950 million). Net proceeds to Pixelworks are expected to be $50-60 million after taxes, minority obligations, and transaction costs.
- **Transaction Rationale**: The sale aims to unlock value, reduce geopolitical risks in China, and pivot to a pure-play technology licensing business. Proceeds will fund growth in TrueCut Motion and other IP-based solutions.
- **Q3 Financial Highlights**: Revenue of $8.8 million (up 6% sequentially), gross margin of 49.9%, and operating expenses down $3.1 million YoY. Cash burn reduced to $3 million Q3 vs. $7.8 million YoY.
- **TrueCut Motion Progress**: Credited in three new theatrical releases (Jurassic World: Rebirth, The Bad Guys 2, Nobody 2) and set to launch in Wicked For Good on November 21. In late-stage discussions with a strategic partner for consumer device licensing.

**【CFO Financial Commentary】**
- **Q3 2025 Results**: GAAP net loss of $3.8 million (-$0.69 per share), improved from $5.3 million (-$1.00 per share) in Q2. Adjusted EBITDA negative $3.6 million, up from -$4.3 million in Q2.
- **Balance Sheet Strength**: Post-Q3, cash balance was $22 million (half tied to Shanghai subsidiary). Recent $10 million cash inflow from a registered direct offering and patent sale.
- **No Q4 Guidance**: With the Shanghai sale pending, management declined to provide forward-looking financials.

**【Q&A Key Highlights】**
- **Geopolitical Impact**: CEO noted increasing pressure on foreign semiconductor companies in China, with some customers prioritizing local suppliers. However, the sale announcement has already generated new business opportunities for the subsidiary.
- **Transaction Complexity**: 78% ownership sale includes redeeming minority investors who previously held preferred return rights. Withholding taxes and transaction costs reduce net proceeds to $50-60 million.
- **TrueCut Licensing Strategy**: Post-transaction, focus will shift to monetizing TrueCut Motion through device licensing agreements. Late-stage certification with a major ecosystem partner could accelerate consumer adoption.


Pixelworks, Inc. (PXLW) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PXLW

PXLW fundamentals

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