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pixelworks® Pixelworks Reports Third Quarter 2021 Financial Results November 9 , 2021 Revenue Increases Sequentially and More than 85 % Year - over - Year , Driven by Record Mobile Sales and Continued Recovery in Projector Business SAN JOSE , Calif . , Nov. 9 , 2021 / PRNewswire / -- Pixelworks , Inc. ( NASDAQ : PXLW ) , a leading provider of innovative video and display processing solutions , today announced financial results for the third quarter ended September 30 , 2021 . Third Quarter and Recent Highlights • Mobile revenue increased sequentially for the fifth consecutive quarter and was up nearly 3.5x year - over - year to a record , driven by expanded customer adoption of both hardware and software - based visual processing solutions • vivo launched its high - end iQO0 8 series of smartphones , incorporating Pixelworks ' X5 Pro visual processor to enable ultra - premium display performance and support for variable frame rates of up to 120 Hz • Pixelworks ' Shanghai subsidiary entered collaboration agreement with Unity Technologies China to synchronize and deliver advanced visual display solutions across the mobile gaming ecosystem • Projector revenue increased over 6 % sequentially and 84 % year - over - year , reflecting a continued recovery in customer and end market demand • Closed previously announced investments in Pixelworks ' Shanghai subsidiary by a combination of private equity and new strategic investors as well as from employee stock ownership platforms , adding total capital net proceeds equivalent to approximately $ 40 million USD • Ended the quarter with $ 66.6 million in cash and cash equivalents " During the quarter , we extended our recent momentum with sequential growth in each of our end markets and total revenue increased more than 85 % year - over - year , " stated Todd DeBonis , President and CEO of Pixelworks . " Mobile revenue increased for the fifth consecutive quarter to reach another quarterly record , and a sustained recovery in the projector market resulted in the highest quarterly revenue since the onset of the pandemic . Gross margin also expanded sequentially , and we were able to hold operating expenses roughly flat to the prior quarter , contributing to another quarter of sequential and year - over - year improvement in our bottom - line results . " Additionally , we continued to execute on our strategic realignment to establish our Shanghai subsidiary as a profit center and significantly strengthened our balance sheet with $ 40 million of invested capital at a premium valuation . These actions have been well received by our partners and employees in Asia , while also successfully positioning the Company for accelerated growth and fueling expanded customer engagement , particularly with leading mobile OEMs . Looking ahead , we have strong bookings across each of our end markets and a growing number of mobile design - ins that include follow - on wins with existing tier - one customers and a first win with our third tier - one mobile OEM . Acknowledging the ongoing challenges associated with a supply - constrained environment , we believe the underlying market trends in mobile and increasing demand for higher performance displays will continue to result in expanded adoption of Pixelworks ' visual display technology and drive sustained long - term growth . " Third Quarter Fiscal 2021 Financial Results Revenue in the third quarter of 2021 was $ 15.2 million , compared to $ 14.1 million in the second quarter of 2021 and $ 8.2 million in the third quarter of 2020. The sequential and year - over - year increase in third quarter revenue reflected the sustained recovery of demand in the projector market combined with continued growth and record revenue in the mobile market . On a GAAP basis , gross profit margin in the third quarter of 2021 was 52.5 % , compared to 50.6 % in the second quarter of 2021 and 48.5 % in the third quarter of 2020. Third quarter 2021 GAAP operating expenses were $ 11.9 million , compared to $ 11.6 million in the second quarter of 2021 and $ 12.1 million in the year - ago quarter . On a non - GAAP basis , third quarter 2021 gross profit margin was 53.1 % , compared to 52.7 % in the second quarter of 2021 and 55.6 % in the year - ago quarter . Third quarter 2021 non - GAAP operating expenses were $ 10.1 million , compared to $ 10.1 million in the second quarter of 2021 and $ 8.9 million in the year - ago quarter . For the third quarter of 2021 , the Company recorded a GAAP net loss of $ 4.1 million , or ( $ 0.08 ) per share , compared to a GAAP net loss of $ 4.4 million , or ( $ 0.08 ) per share , in the second quarter of 2021 , and a GAAP net loss of $ 8.1 million , or ( $ 0.20 ) per share , in the year - ago quarter . Note , the Company refers to " net loss attributable to Pixelworks Inc. " as " net loss " . For the third quarter of 2021 , the Company recorded a non - GAAP net loss of $ 2.2 million , or ( $ 0.04 ) per share , compared to a non - GAAP net loss of $ 2.6 million , or ( $ 0.05 ) per share , in the second quarter of 2021 , and a non - GAAP net loss of $ 4.5 million , or ( $ 0.11 ) per share , in the third quarter of 2020 . Adjusted EBITDA in the third quarter of 2021 was a negative $ 1.6 million , compared to a negative $ 1.8 million in the second quarter of 2021 and a negative $ 3.5 million in the year - ago quarter . Cash and cash equivalents at the end of the third quarter of 2021 were $ 66.6 million , compared to $ 23.6 million at the end of the second quarter of 2021 . Business Outlook The Company's current business outlook , including guidance for the fourth quarter of 2021 , will be provided as part of the scheduled conference call . Conference Call Information Pixelworks will host a conference call today , November 9 , 2021 , at 2:00 p.m . Pacific Time , which can be accessed by calling 1-877-359-9508 and using passcode 7737029. A live audio webcast of the call can also be accessed by visiting the Company's investor page at www.pixelworks.com . For those unable to listen to the live webcast , it will be archived for approximately 90 days . A replay of the conference call will also be available through Tuesday , November 16 , 2021 , and can be accessed by calling 1-855-859-2056 and using passcode 7737029 . About Pixelworks , Inc. Pixelworks provides industry - leading content creation , video delivery and display processing solutions and technology that enable highly authentic viewing experiences with superior visual quality , across all screens - from cinema to smartphone and beyond . The Company has a 20 - year history of delivering image processing innovation to leading providers of consumer electronics , professional displays , and video streaming services . Pixelworks is headquartered in San Jose , CA. For more information , please visit the company's web site at www.pixelworks.com . Note : Pixelworks , the Pixelworks logo and Motion Engine are registered trademarks of Pixelworks , Inc. Non - GAAP Financial Measures This earnings release makes reference to non - GAAP gross profit margins , non - GAAP operating expenses , non - GAAP net loss and non - GAAP net loss per share , which exclude amortization of acquired intangible assets , stock - based compensation expense , and restructuring expenses , which are all required under GAAP as well as the tax effect of the non - GAAP adjustments and the impact of non - GAAP adjustments to redeemable non - controlling interest . The press release also makes reference to and reconciles GAAP net loss and adjusted EBITDA , which Pixelworks defines as GAAP net loss attributable to Pixelworks Inc. before interest income and other , net , income tax provision , depreciation and amortization , as well as the specific items listed above . Pixelworks management uses these non - GAAP financial measures internally to understand , manage and evaluate the business and establish its operational goals , review its operations on a period to - period basis , for compensation evaluations , to measure performance , and for budgeting and resource allocation . Pixelworks management believes it is useful for the Company and investors to review , as applicable , both GAAP information and non - GAAP financial measures to help assess the performance of Pixelworks ' continuing business and to evaluate Pixelworks ' future prospects . These non - GAAP measures , when reviewed together with the GAAP financial information , provide additional transparency and information for comparison and analysis of operating performance and trends . These non - GAAP measures exclude certain items to facilitate management's review of the comparability of our core operating results on a period - to - period basis . Because the Company's non - GAAP financial measures are not calculated in accordance with GAAP , they may not necessarily be comparable to similarly titled measures employed by other companies . These non - GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read only in conjunction with the Company's consolidated financial results as presented in accordance with GAAP . A reconciliation between GAAP and non - GAAP financial measures is included in this earnings release which is available in the investor relations section of the Pixelworks ' website . Safe Harbor Statement This release contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933 , as amended , and Section 21E of the Securities Exchange Act of 1934 , as amended .