Pixelworks, Inc. Q4 FY2025 earnings call

1. Sale of Shanghai subsidiary: In October 2025, signed a definitive purchase agreement to sell the Shanghai semiconductor subsidiary to Verisilicon, and closed the transaction in January 2026, resulting in net cash proceeds of approximately $51 million. The sale unlocked value for shareholders, repositioned Pixelworks as a global technology licensing business, and strengthened the balance sheet. 2. Post-transaction transformation: Transformed into a lean, asset-light, global technology licensing company with less than 25 full-time employees, 60% dedicated to R&D. Focused on cinematic visualization solutions, with TrueCut Motion platform used in notable releases. Pursuing partnerships with premium exhibitors like Marcus Theaters and Odeon Cinemas Group. Advanced algorithm team working on expanding motion grading tool capabilities and leveraging AI. 3. Financial position: Ended 2025 with approximately $11.2 million in cash and cash equivalents. After sale of Shanghai subsidiary, had approximately $62 million, expecting $58 million cash balance by March 31, 2026. Took restructuring actions, expect cash used for operating expenses to be approximately $2 million per quarter starting in second quarter, and anticipate at least $1.5 million of interest income annually.

1. Anticipate cash-in-cash equivalence balance as of March 31st to be approximately $58 million. 2. Expect cash used for operating expenses to be approximately $2 million per quarter beginning in the second quarter. 3. Anticipate at least $1.5 million of interest income annually from the cash held on the balance sheet.

Q: Sujita Silva of Roth Capital asked about near-term opportunities to drive revenue, the margin structure, pipeline tracking, cash burn, patent sales recurrence, top priorities in 2026, and if cash is in the U.S.

A: Todd and Haley responded that revenue will come from home entertainment ecosystem, margins are high, track progress by expanding exhibitor footprint and content delivered, expect cash used for operating expenses to be ~$2 million per quarter starting second quarter, patent sales are not recurring, top priorities are getting technology to be licensed and developing demand profile, and cash is in the U.S. since mid-January