Good day, ladies and gentlemen, and welcome to Pixelworks, Inc.'s first quarter 2022 earnings conference call. I will be your operator for today's call. At this time, all participants are in a listen only mode. Following management's prepared remarks, instructions will be given for the question and answer session. This conference call is being recorded for replay purposes. I would now like to turn the call over to Brett Perry of Shelton Group Investor Relations. Thank you, Gigi. Good afternoon, and thank you for joining today's call. With me on the call is Pixelworks President and CEO, Todd DeBonis, and Chief Financial Officer, 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 first quarter of 2022. 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. These forward-looking statements and all other statements made on this call that are not historical fact are subject to a number of risks and uncertainties that may cause actual results to differ materially. All forward-looking statements are based on the company's beliefs as of today, Tuesday, May 10th, 2022. The company undertakes no obligation to update any such statements to reflect events or circumstances occurring after today. Please refer to today's press release, our annual report on Form 10-K for the year ended December 31, 2021, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms, including gross margin, operating expense, net loss, and net loss per share. Non-GAAP measures exclude amortization of acquired intangible assets and stock-based compensation expense. The company uses these non-GAAP measures internally to assess operating performance. We believe these non-GAAP measures provide a meaningful perspective on core operating results and underlying cash flow dynamics. We caution investors to consider these measures in addition to and not as a substitute nor superior to the company's consolidated financial results as presented in accordance with GAAP. Also note throughout the company's press release and management statements during this conference, we refer to net loss attributable to Pixelworks, Inc. as simply net loss. 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. With that, it's my pleasure to turn the call over to Todd for his opening remarks. Please go ahead. Thanks, Brett. Good afternoon to everyone joining us on the phone and webcast. Starting with the Q1 results, we've had a great start to the year with the momentum we had exiting last year continuing into the first quarter. Total revenue increased 79% year-over-year with strong growth across all of our target end markets, and sales of our hardware-based mobile visual processors growing sequentially and year-over-year to another quarterly record. Gross profit also came in strong at 53% of revenue, together with OPEX and bottom line results in the first quarter that were better than the midpoint of guidance. Given the recent headlines regarding COVID-related lockdowns, I wanted to begin by addressing the status of our business operations in China and how our Pixelworks Shanghai subsidiary has been navigating this difficult situation. First, I want to highlight that we have offices located in multiple provinces, and our China-based employees are not exclusively in Shanghai. Our office in Pudong has approximately 135 employees, which is a little over 50% of our global workforce. The imposed restrictions often vary by specific region, therefore, any potential impacts are not universal. I would also emphasize that our operations team and supply chain partners are located in Taiwan, and as of today, there has been no associated impact on our ability to fulfill planned shipments to our customers. Having said that, the reported lockdowns have presented temporary challenges for a certain number of our employees, and our office in Pudong is working with local officials to reopen over the next couple of weeks. The team has done a great job remaining productive, and we've done our best to accommodate those employees. The organization in China has demonstrated incredible agility and dedication to maintaining program deadlines and supporting customer engagements, whether in the office or at our customers' facilities, or working remotely from home due to local restrictions. To date, we have sustained all operational and R&D activities, including development work on our next generation mobile and projector products. These projects remain on track. We are continuing to monitor the situation daily and remain prepared to mitigate any future potential impacts on our day-to-day operations. I applaud the perseverance of our team during what has been a challenging time, but one that we will get through together. Turning to a review of activity across our primary end markets. Our mobile business had another strong quarter with the launch of several notable smartphones by tier one customers and revenue increasing 40% year-over-year. As previously mentioned, sales of our visual processor hardware increased sequentially, marking a seventh consecutive quarter of growth. Briefly highlighting several of the announced wins since our last conference call, in February, our long-standing partner, OPPO, launched the Find X5 series smartphones, which included three models that all utilize Pixelworks' patented high-efficiency color calibration software. Two of the models are built on a Qualcomm Snapdragon platform, while the third model, the OPPO Find X5 Dimensity Edition, was the world's first smartphone to leverage MediaTek's newly released Dimensity 9000 AP. This unique introduction of series utilizing different application processor platforms provides increased flexibility and choice of hardware configurations to best satisfy different use cases for individual customers. The Find X5 series served as an excellent opportunity to extend our relationship with OPPO while also achieving a notable milestone in our collaboration with MediaTek as the first smartphone based on MediaTek's Dimensity 5G open architecture platform to incorporate Pixelworks visual quality technology. In February, we were able to confirm the name of our previously indicated win with a third Tier 1 mobile OEM following the launch of HONOR's Magic4 series smartphones. This initial engagement with HONOR ultimately resulted in wins on two models in the series with the Magic4 Pro and the Magic4 Ultimate, both incorporating Pixelworks' X5 Plus advanced visual processor. In addition to being one of the fastest-growing brands, HONOR actively seeks to position itself in the premium market. In the company's own words, they aim to reshape the high-end flagship market with powerful performance and excellent visual enjoyment. Our X5+ visual processor proved to be critical to HONOR's achievement in these aspirations as they recognize the X5's unique value of not only enabling superior visual quality, but also a distributor architecture that could offload visual processing from the GPU and reduce overall system power consumption. In March, OPPO's affiliate, realme, launched the realme GT Neo 3, also incorporating our X5 series visual processor. This win represented the first realme-branded smartphone to utilize our technology. Additionally, it was the first ever smartphone to incorporate Pixelworks hardware-based visual processing technology in a device built on MediaTek's Dimensity 8100 platform. As a result, now both our software-only and visual processor-based solutions have been successfully utilized in commercially launched smartphones based upon Qualcomm and MediaTek AP platforms. In April, vivo launched the iQOO Neo6 premium smartphone with a design focused on high-performance mobile gaming and incorporating our X5 Plus visual processor. This device and its features build upon the combined success of the iQOO Neo5S and its predecessor, the Neo5, which was our first ever win with the vivo iQOO series. Unique to the latest iQOO Neo6, it incorporates a number of advanced gaming filters to enhance visual display effects, including dedicated filters for specific games, as well as customized filters that independently adjust the display contrast, saturation, hue, and brightness. Enabled by Pixelworks' X5 processor and our ongoing collaboration with vivo, these extensive filter options provide end users with advanced capability to choose and personalize their own immersive gaming experience. Most recently, we extended our successful partnership with OnePlus with the launch of the OnePlus Ace smartphone, also incorporating our X5 Pro processor and leveraging Pixelworks' full suite of visual quality and performance capabilities. The OnePlus Ace is built on MediaTek's latest 8100-MAX flagship-light 5G mobile platform, which utilizes TSMC's 5nm process technology. Together with other expanded cutting-edge technologies, this smartphone received recognition for both its design appearance and performance configuration. The OnePlus Ace is also designated as the official phone for the 2022 Peacekeeper Elite League and League of Legends Pro League, further solidifying OnePlus market leadership for mobile devices used in esports tournaments. Collectively, these wins underscore the continued traction and momentum of our differentiating visual processing technology across multiple tier one smartphone designs and AP platforms. Additionally, these leading mobile customers are making visual display quality and performance a centerpiece of their device marketing campaigns. Although they don't always attribute the capability to us by name, tier one customers are choosing to highlight and differentiate their brands based upon features and performance that they simply cannot replicate going forward without using Pixelworks. One of the objectives of our mobile growth strategy that we highlighted on a previous call was to cultivate and expand an ecosystem that further positions Pixelworks technology as the default solution. At that time, we were in an active collaboration and testing with Unity on its game engine platform. In April, we announced that Pixelworks is now a Unity verified solutions partner or VSP. This means our SDK has now been fully vetted and optimized, making our high frame rate Rendering Accelerator readily available to leading mobile game developers and studios that utilize Unity's game engine platform. Together with this designation, we have also increased direct engagement with the game content studios as part of establishing a mutually beneficial ecosystem for more immersive high frame rate mobile gaming. As a reminder, our Rendering Accelerator that's now available to developers was specifically designed and optimized for utilizing unique and advanced capabilities that incorporate into our newest generation X7 visual processor. This will enable mobile game developers and studios to take full advantage of the X7 processor, including the ability to elevate content frame rate by pre-processing motion vectors more precisely and efficiently to deliver optimal and smooth animation, while simultaneously offloading the GPU to extend the length of gameplay and lowering the operating temperature of mobile devices. With continued engagement and buy-in from the ecosystem, we believe the combination of our Rendering Accelerator and X7 visual processor has the potential to completely redefine the industry standard and specs for mobile gaming performance. We currently have multiple lead customers engaged and in advanced stages of evaluation and design-in, and we expect the first smartphone models incorporating our X7 visual processor will be launched in the second half of this year. Shifting to TrueCut, we've recently demonstrated steady progress on our ongoing efforts to cultivate and build out a supporting ecosystem for our TrueCut Motion platform. Since our formal launch of the platform in December, we've had two named foundational partners join the ecosystem. On the device side, TCL joined and endorsed the TrueCut Motion ecosystem in January in conjunction with CES as the first device manufacturer. At CinemaCon in late April, we announced Pixelogic as a certified services partner for the TrueCut Motion ecosystem. Pixelogic is a leading provider of global content mastering, localization, and distribution for the media and entertainment industry, including many major studios and digital content platforms. As a certified ecosystem partner, Pixelogic will provide TrueCut Motion mastering for theatrical and streaming titles as part of their standard process for new and existing customers. In partnership with Pixelogic, we recently demonstrated our TrueCut Motion platform to industry participants at CinemaCon. With express permission from the production company, we showcased selected clips from The Hobbit remastered with TrueCut Motion. While this was exclusively a demonstration, it showed how TrueCut Motion can bring a cinematic look to a high frame rate production like The Hobbit. Specific to content, we are actively working on multiple titles that are planned for theatrical release later this year. We believe that these initial titles will encourage additional title and ecosystem growth as we go into 2023. Turning to the projector business. The recovery began in the first half of 2021 is continuing to play out in 2022, and market demand has generally continued to outpace the projector OEMs' ability to source supply of all necessary components in recent quarters. As a result of longer lead times for some components, we've seen some customer order patterns become more linear from quarter to quarter. Projector revenue in the first quarter was effectively flat compared to the fourth quarter, a sharp contrast from the traditional first quarter seasonality we usually see. As further evidence of the ongoing recovery in the projector market, first quarter revenue nearly doubled year-over-year and matched the pre-pandemic revenue levels reported in the first quarter of 2020. Specific to Pixelworks' ability to supply projector customers, capacity has remained tight. However, we continue to work closely with both our foundry and back-end partners to fulfill customer demand. The latest feedback from our projector customers supports continued expectations for double-digit growth in 2022, together with modest improvement in component supply constraints towards the second half of the year. Separately, I also want to briefly acknowledge the activity of our next-generation co-development project with our largest projector customer. It is going well and remains on schedule. Once development is complete toward the end of the year, this new SoC will begin to ramp production in late 2023. In summary, we had a great first quarter highlighted by strong top-line growth year-over-year, a record quarter for our mobile visual processors, the achievement of significant ecosystem milestones for both mobile and TrueCut, and continued recovery in the projector market. Finally, solid execution despite a portion of the team, our team dealing with the COVID lockdown challenges. Looking forward to the second quarter, we are comfortably positioned with considerable bookings and secured capacity allocation to deliver double-digit sequential revenue growth, primarily driven by what we expect to be a record quarter for our mobile business. I'll now turn the call over to Haley to review the financials and provide our detailed guidance for the second quarter. Thank you, Todd. Revenue for the first quarter of 2022 was $16.6 million, essentially flat with $16.6 million in the fourth quarter of 2021 and representing an increase of 79% from $9.3 million in the first quarter of 2021. As Todd previously mentioned, our sequentially flat top-line results reflected demand that was significantly above the traditional first quarter seasonality. The year-over-year increase was driven by strong growth across all of the company's target end markets, highlighted by the ongoing recovery in the projector market and continued expansion of design wins and customers in the mobile market. The breakdown of revenue in the first quarter was as follows. Revenue from mobile was $5.7 million, representing 34% of total revenue. We would like to highlight that revenue contribution from mobile visual display processors in Q1 grew 24% sequentially and increased over 50% year-over-year to a new quarterly record. Revenue from digital projection was approximately $7.9 million, down 3% sequentially and up more than 90% year-over-year, reflecting the significant and ongoing recovery in customer and end market demand. Video delivery revenue was approximately $3.1 million in the first quarter. Non-GAAP gross profit margin was 53.2% in the first quarter of 2022, compared to 55% in the fourth quarter of 2021, which benefited from higher licensing revenue from mobile software solutions, and compared to 43.7% in the first quarter of 2021. First quarter gross margin reflected our ongoing efforts to both mitigate and pass through higher material costs to customers. Non-GAAP operating expenses were $11.6 million in the first quarter, compared to $11 million last quarter and $10.2 million in the first quarter of 2021. On a non-GAAP basis, first quarter 2022 net loss was $3.5 million or a loss of $0.06 per share, compared to a net loss of $1.4 million or a loss of $0.03 per share in the prior quarter, and a net loss of $6.4 million or a loss of $0.12 per share in the first quarter of 2021. Adjusted EBITDA for the first quarter of 2022 was -$2.2 million compared to -$1.1 million in the fourth quarter of 2021 and -$5.2 million in the first quarter of 2021. Turning to the balance sheet, we ended the quarter with cash and cash equivalents of $55.2 million. Shifting to our current expectations and guidance for the second quarter of 2022. We expect continued top line growth in the second quarter, with total revenue anticipated to be in a range of between $18 million and $20 million. At the midpoint of this range, we anticipate sequential growth to be driven primarily by mobile and with revenue contribution from mobile representing a new quarterly record. Non-GAAP gross margin in the second quarter is anticipated to be between 49% and 51%. Second quarter gross margin is expected to reflect a larger mix of mobile chip revenue as compared to the most recent quarter. We expect operating expenses in the second quarter to range between $13 million and $14 million on a non-GAAP basis. Compared to the previous quarter, anticipated operating expenses for the second quarter reflect a combination of planned hiring and timing of expense related to simultaneous development of both a mobile chip and a projector chip. We expect our operating expenses to be uneven throughout 2022 due to the timing of the recognition of the credits associated with our co-development agreement with an existing projector customer. Lastly, we expect second quarter non-GAAP EPS to be in a range of between a loss of $0.10 per share and a loss of $0.06 per share. That completes our prepared remarks, and we look forward to taking a few of your questions. Operator, please proceed with the Q&A session. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Suji Desilva from Roth Capital. Your line is now open. Hi, Todd. Hi, Haley. Just to clarify, Todd, the China lockdowns, obviously you talked a lot about the offices and the limited impact there. In terms of the end demand for the smartphone customer in China, can you just talk about the order patterns you've seen, whether you've seen more cautious order ordering or whether the demand remains steady through the China lockdowns? We've certainly seen customers hesitate, I would say, with you know, there's a lot of churn in their model lineup, how they wanna configure their model lineup, what price points they wanna go after. I would say it's not as committed as it was this time last year for sure. We've also reached a point where our value proposition where we come in is no longer, I would say, something they're speculating on. We're pretty much a proven technology now. If they wanna target a certain demographic where mobile gaming and visual performance is a requirement, we are in every discussion. I would say, yes, I've seen the ordering patterns change. For us, I would still say the orders are stronger. Supply is my biggest issue. Okay. That color definitely helps that. Then, can you talk specifically about the pairing up with MediaTek versus typically Qualcomm basebands? What does that open up a newer market for you, or is that just kind of a broadening of the footprint you already have? Just help us understand there. Well, you know, it's not just MediaTek versus Qualcomm. It's also MediaTek has, over the last two years, made a conscious effort to focus on flagship performance. As you can imagine, the volume are on lower end APs. The margin, the profit margin is on flagship quality or high-performance quality APs. MediaTek is very ambitious at going after Qualcomm's market share in that particular area. With that said, if you look at the phones that we're in, we're either in the flagship or sub-flagship series, and so I think it's a perfect combination for MediaTek and ourselves to collaborate. You know, for us, you know, some of the programs we've been in with MediaTek are higher volume than the Qualcomm because they've been at a slightly lower ASP. I expect those guys to move up the food chain over the next two years. That's helpful to understand. Perhaps a question for Haley. Haley, could you clarify the comments you had about, I know the overall mobile TrueCut category was down sequentially, but you talked about mobile being up, I think it was sequentially. Just help us understand the kind of dynamics of that segment, as you expect mobile to grow again in the second quarter. Well, yeah. I think what I noted is that our hardware sales are up in mobile, sequentially, and we expect that trend to continue into Q2. Okay, great. Just because it declined sequentially, I'm curious what the offset was there. Declined sequentially? The mobile TrueCut was $6.2 million in Q4 and $5.7 million. Yeah. In the fourth quarter, it included that big Soft Iris deal, which we consider mobile. It's like a license for Soft Iris in Q4. This is why we're making the distinction this quarter that hardware grew, hardware sales, chip sales grew mobile, on the mobile side. Q4 did include the Soft Iris, which bumped up Q4 in total mobile. Great. Haley, that was the clarification I'm looking for. Thanks. Lastly, Todd, you know, you talked about TrueCut and The Hobbit, and then some motion pictures in the second half where you're gonna play a bigger role in. Can you clarify or update the revenue model you're seeing there and, you know, how the customer wins factor into that, your inclusion in those titles? Thanks. Yeah. That's a long answer to that question, which I'm probably not gonna go into right now. Thanks for the question, Suji. I'll give you this. It is very important for us to be tied to what we would consider marquee theatrical releases. One of the things that happened at CinemaCon, besides us just announcing our relationship with Pixelogic and demoing high frame rate cinematic versions of The Hobbit, was that there was an announcement by Lightstorm Entertainment. Jon Landau was there, and James Cameron gave a video about the new upcoming Avatar Two to be delivered to the theaters in high frame rate and have the theaters get ready for high frame rate theatrical releases. The reason I bring this up is because this is really setting the tone where you're going to see the movie industry move towards higher frame rate, higher resolution HDR theatrical releases. The remaining theater companies are actually upgrading all their theaters, not all of them, but many of them, to be able to show this content as it starts to come out. This trend that we have been pushing for a while, right, is now starting to merge both in theatrical releases, and we think it's gonna follow the streaming releases. I think it's very important for all. I'm not sure all of our investors understand this, but I think it's very important. If you see this trend hit, TrueCut Motion technology becomes very indispensable. Okay, great. That's probably what I'll talk about there. Okay? That's helpful. Thanks, Todd. Thanks, every- Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Our next question comes from the line of Richard Shannon from Craig-Hallum. Your line is now open. Great. Thanks, Todd and Haley, for taking my questions. Well, Todd, I guess, despite the fact you said you don't wanna talk more about TrueCut, I think that's exactly where I'll go, but I'll ask a pretty simple, straightforward question here, which is, you talked about multiple titles coming out later this year. Can we think of these as like a test case, that if deemed successful, that we might see a license being signed with, studios or streaming guys? Or how do we think about the implications of these titles coming out? Well, I mean, first, I just wouldn't get ahead of ourselves on what the implications are. First of all, I would say that these titles we're working on see the value of TrueCut Motion to providing a TrueCut master version of their content, and they believe that's the best way to demonstrate their content. I'm not gonna go into the details of the distribution licenses and tool licenses that we have in place with these customers, but assume these are formal engagements. Okay. All right. Great. Let me follow up on the topic within Mobile One, your third tier one customer, HONOR. What are you expecting here in terms of engagement relative to the first two tier ones you already have in the funnel? Repeat the question for me, Richard. What's the expected, you know, engagement over the next one to two years with HONOR, relative to the experience you've had with your first two Tier 1? Well, I mean, how about I speak about our experience so far engaged with them, which has probably been close to a year, okay? When they separated from Huawei, a great deal of their product management team and design team came with them. Their philosophy on how to strive for flagship excellence, I think, also came with them. The difference is the HONOR brand typically had not been pursuing top-tier flagship quality phones. Now they are, and so we're engaged with them on those models. Okay. Fair enough then. Let's jump over to the X7 processor. I think I heard you say that you're expecting the first phones launched in the second half of the year. I guess maybe and maybe if you'd like to tie this into any success, direct or indirect, with the Unity relationship there. You can kinda talk about what we should expect to see with X7 relative to adoption of the X5 and earlier processors. Do you expect to see something more rapid? And also just wanna confirm that you're still expecting ASPs to be on the order of double prior generations. Yes, the ASP is significantly higher than previous generations. We are engaged in several models simultaneously, either in evaluation or in design and stage. You know, the take-up will be a combination of how many of these evaluations get done early, what capacity we have, and resources to engage in them. I mean, I definitely. If you go back and look at X5 had a. You know, we were being. The features of X5 and motion processing were not fully digested by the first couple of models that we engaged with, when it was launched back in 2019. Then I think in 2020 and 2021, it started to gain momentum. Okay. I don't think we're gonna go through that same false start. I mean, Pixelworks' value proposition is now a known quantity to all these customers, so we don't have to go through that learning curve again. Two, the features and functionality of X7 are profound. You know, there is a lot of churn, as I previously talked about with Suji's question, not so much about Pixelworks and our technology, but about how the customers in China focus on product lineup. You know, target feature set, price points, demographics they're targeting. Do they wanna consolidate programs? Do they wanna expand programs? A lot of churn right now. Okay. Certainly understandable what's going on out there. One last question from me, and I'll jump out of line. Haley, can you talk about what kind of break-even model we should be thinking about here as we march towards that point here, assuming next year you've got OPEX is going up here and gross margins a little bit lower than the last couple of quarters. How do we think about this in a kind of a center point of a break-even model? I think you know going into, as I said, OPEX is kind of uneven and a little bit lumpy this year, elevated levels in Q2 and Q3, and then in Q4 back down maybe to, like, at or below Q1. Going into 2023, we would expect OPEX probably to be more in the range of Q1, Q4 this year. Margins probably staying around where I guided to for Q2. I would think a break even maybe around $23 million going into 2023. Okay. Perfect. That's all for me, Haley. Thanks. Thanks a lot. Thanks. Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to management for closing remarks. All right. For those of you attending the call today, thank you so much for your time and attention. We continue to move forward with our plan, with plotting execution. Thanks for your time. Bye-bye. This concludes today's conference call. Thank you for participating. You may now