Good day, ladies and gentlemen, and welcome to Pixelworks, Inc.'s 4th 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, Andrew. Good afternoon, and thank you for joining today's call. With me on the call are 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 fourth 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 competitive position, constitute forward-looking statements. These forward-looking statements and all other statements made on this call that are not historical facts 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, Thursday, February 9, 2023. 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 31st December 2021, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results. 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, as well as the tax effect of the non-GAAP adjustments and the impact of non-GAAP adjustments to redeemable non-controlling interests. The company uses these non-GAAP measures internally to assess operating performance. We believe these non-GAAP measures provide a meaningful perspective into core operating results and underlying cash flow dynamics. We caution investors to consider these measures in addition to, and not as a substitute for, 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 call, we refer to net loss attributable to Pixelworks Inc. as simply net loss. For additional details and a reconciliation 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 now my pleasure to turn the call over to Todd for his opening remarks. Please go ahead. Thank you, Brett, and good afternoon to those participating on the call. I'm pleased to be joining you today from a morning in Shanghai. I've recently been catching up with the team and our customers. Let me start with a few observations that I've made over the last two weeks here in China. First, with the rollback of China's strict COVID policies in mid-November, what many might not realize is that a majority of people here, including nearly all of the employees throughout China, our employees, spent December at home with COVID and then recovering, making it a very weak month in terms of productivity. It wasn't until the turn of the calendar year that real normalization began and increased productivity and the return of the consumer engagement. Having personally witnessed the tail end of the recent Chinese Lunar New Year holiday, it is readily apparent that people are enthusiastic about getting back to normal, traveling locally, and spending again. At a high level, these are encouraging and positive signs, not only for our China-based employees and their families, but also for Pixelworks' overall business as well as the global macroeconomic environment. Turning to a recap of our financial results. For the fourth quarter, both top and bottom line were slightly lower than the midpoint of our guidance. Total revenue was up 2% year-over-year as our team to continue to execute well in the face of growing macro and end market-specific challenges. Looking at the full year, we delivered double-digit growth across each of our target end markets, and total revenue growing 27% over the prior year. This was following our annual growth of 35% in 2021. During what has been a challenging period for most of the semiconductor industry, this solid growth, combined with Pixelworks' history of technology leadership and visual processing, has served us well in the local private capital markets here in China. In late December, we completed the agreement to take in another strategic investment in our Shanghai subsidiary, which was fully closed and funded in early February. The latest capital investment, which was funded by two previous investors, as well as Pixelworks Shanghai employees, generated proceeds equivalent to approximately $15.7 million in exchange for just over 3% equity interest in the subsidiary. Recalling that some U.S. investors were skeptical when we announced the first private placement in Pixelworks Shanghai in October of 2020, I would highlight that this third round of strategic investment valued the subsidiary at more than $500 million. Today, Pixelworks Inc. continues to hold a majority equity interest of approximately 78%. Collectively, these strategic investments are a testament to the recognized value of Pixelworks technology in China, as well as the future growth opportunity of the business. These transactions have also served to fund our ongoing growth initiatives as well as properly capitalize Pixelworks Shanghai in advance of applying for a local listing later this year. Shifting to the end markets and starting with mobile. The industry-wide inventory correction in smartphones, coupled with softer consumer demand in China, continued to play out as expected, resulting in lower mobile revenue in the fourth quarter. As discussed on our last conference call, we've kept internal inventory of our visual processor ICs lean while reducing our channel inventory back to normal levels. For Pixelworks in Q4, the impact is largely a derivative of the current market dynamics, with mobile OEMs slowing the pace of new smartphone launches, rescheduling various other models, and canceling certain programs as they prioritize working down excess component inventory. Although the gap in OEM launches of next-gen smartphone models has temporarily paused our quarterly growth, our mobile business still had a very solid year in spite of the weaker overall smartphone market. For the full year, mobile revenue was up 17% over 2021, which was up 200% over 2020. With our visual processing solutions incorporated in 20 newly launched smartphone models in 2022, our mobile customers continue to include nearly all of the Tier One handset OEMs and their affiliate premium brands in China. Despite taking a little longer than originally targeted, I'm confident we will announce models from the fourth Tier one for our visual processor lineup in 2023. Underpinning our expanded penetration of these Tier ones has been our commitment to maintaining a deep level of engagement with the customers and deliver uniquely differentiated visual performance, as well as our ongoing strategic initiatives to cultivate a more collaborative mobile display ecosystem. As highlighted on previous calls, we've made multiple groundbreaking achievements over the last year in our efforts to champion a comprehensive and engaged ecosystem for mobile gaming. This included our first ever direct collaboration with multiple leading gaming engine platforms and design studios, which we expect to yield the release of a series of additional top mobile games over the coming year that are specifically designed to support the Rendering Accelerator in our X7 visual processor. As the most recent example of our broader ecosystem efforts, in November, we announced an expanded collaboration with MediaTek to incorporate Pixelworks Visual Processing Pro software into their latest Dimensity 9200 5G smartphone chipset. This new cooperation specifically targeted the enabling of precision color and high frame rate displays, ensuring that smartphones built on the Dimensity 9200 platform are capable of delivering a true next gen flagship gaming experience. This ongoing technical collaboration will serve to further improve the gaming experience and encourage broader market adoption of high frame rate mobile gaming models and content. Briefly highlighting a few recent announced mobile wins. In late December, the HONOR 80 GT and iQOO Neo7 Racing Edition smartphones were both launched incorporating Pixelworks upgraded X5 plus visual processor. Each of these phones are built on Qualcomm's recently released Snapdragon 8+ Gen 1 mobile platform, and they support 120 Hz refresh rate while leveraging Pixelworks X5 series of our patented MotionEngine technology, HDR enhancement, and multiple other dimensions of visual effect enhancement, all of which are tailored to provide a superior high frame rate gaming experience. In January, OnePlus launched its latest flagship smartphone, the OnePlus 11, incorporating Pixelworks X7 visual processor. As one of the first phones launched with our newest generation X7 series, the OnePlus 11 redefines the meaning of visual excellence for mobile gaming. Built on the Snapdragon 8 Gen 2 mobile platform, this smartphone sports an eye-catching 6.7-inch 2K curved display with the Real LTPO 3.0 technology while simultaneously supporting refresh rates of up to 120 hertz. Following the first of its kind in-depth collaboration with OnePlus on this flagship, this smartphone leverages the core technologies in our X7 chipset and features our new ultra-low latency MotionEngine for high frame rate together with low power super resolution for simultaneous display in 2K resolution. Earlier this week, OnePlus followed up with the launch of the OnePlus Ace 2 smartphone, also incorporating our X7 chipset. The OnePlus Ace 2 is built on a Snapdragon 8+ Gen 1 mobile platform and comes with a 1.5K AMOLED screen supporting refresh rates up to 120 hertz. This model similarly features our X7's new ultra-low latency MotionEngine and low power super resolution together with always-on HDR and industry-leading color calibration. Also noteworthy is that Pixelworks' ultra-low latency MotionEngine technology in both the OnePlus 11 and the OnePlus Ace 2 smartphones have now been optimized for over 100 of the most popular mobile games. Following the release of Lightstorm Entertainment's Avatar in September, I can now confirm that Pixelworks' TrueCut Motion grading was also utilized in James Cameron's newly released Avatar: The Way of Water. This long-awaited sequel, frequently referred to as Avatar 2, was distributed globally to theaters by 20th Century in 4K HDR high frame rate and uniquely shown in cinematic high frame rate. When I first looked, the film had surpassed gross box office sales of $2.1 billion, ranking it among the top five highest grossing movies of all time in less than two months. Equally amazing, whether they realize it or not, is that tens of millions of people from around the world have now personally experienced TrueCut Motion. Most importantly, this extremely successful and highly praised release proved that there is a global ecosystem in place capable of supporting cinematic high frame rate, paving the way for expanded industry adoption. As previously announced, TrueCut Motion will also be featured in the re-release of Titanic, remastered in 4K HDR later this month. These three high-profile titles have significantly heightened the interest and awareness of our TrueCut Motion platform. We aim to continue building on the strong momentum in 2023 by assembling a critical mass of theatrical titles together while growing a global home entertainment ecosystem. Shifting to our projector business. Demand remained relatively steady through the back half of the year, with revenue in the fourth quarter increasing more than 13% year-over-year. For the full year, revenue was up 23% as projector customers placed significant orders in response to very tight supply environment. Generally speaking, projector OEMs have continued to see the gradual improvement in their supply chains. Supply lead times and pricing on certain components have yet to fully normalize. Combined with two consecutive years of roughly 20% growth, the current consensus among these customers has been to moderate their orders and expectations entering 2023 until they have better visibility into the global macro trends and end market demand. More specific to Pixelworks in the fourth quarter, I'm pleased to report that the team successfully completed a significant milestone on our co-development project with our largest projector customer. As a result of this milestone, we recognized an R&D credit, reducing our OpEx for the quarter. All remaining activity associated with this co-development project remains on track, and we currently expect this new SoC chip to be available for production at the end of this year. Briefly following on my comments last quarter related to end of life, we implemented a group of legacy IC products. We have historically sold in the very niche video delivery applications. As previously discussed, these applications typically require unique packaging and lower unit volumes, making them increasingly difficult to source materials for and supply efficiently. We received solid customer response on the last time purchase orders for the fourth quarter, which contributed to a sizable one-time increase in revenue. The EOL of these non-strategic products will lower the quarterly revenue contribution from video delivery going forward. It will also eliminate operational inefficiencies and enable a more productive reallocation of our team and resources. Going forward, we will address a relatively small legacy market in which we will continue to market and sell a selective series of our transcoder ICs for consumer applications in Japan and as well as OTA devices in the U.S. In summary, the team has done a good job of mitigating impacts of both the macro and industry-specific headwinds over the past couple of quarters. Although we expect market conditions to remain challenging in the current quarter, the entire organization is now well capitalized to continue executing on our longer-term strategic initiatives. This includes ongoing efforts to further expand the ecosystem in support of mobile gaming, including an aggressive visual processor roadmap and our TrueCut Motion platform, while we continue to prepare our Pixelworks Shanghai subsidiary to apply for a Star Market listing. We believe we are well positioned for the market recovery in mobile and are currently seeing channel inventories and design activities support this with a growing pipeline of design-ins for our X7 visual processor. In addition, we are on target to introduce a new mobile visual processor in the second half of this year and sample our new projector SoC in Q2 of this year. Lastly, we also continue to field significant inbound interest and are evaluating multiple prospective strategic license agreement engagements that represent the potential for expanded growth opportunities, spanning both our existing and new adjacent end markets. Taking all together, I firmly believe that we can achieve renewed momentum and resume our recent growth trajectory in the coming quarters of 2023. With that, I'll hand the call to Haley to review the financials and provide our guidance for the first quarter. Thank you, Todd. Revenue for the fourth quarter of 2022 was $16.9 million. Our top line results in the quarter were primarily driven by continued year-over-year growth in the projector market. Combined with an increase in revenue contribution from video delivery related to increased sales of end-of-life products. The breakdown of revenue in the fourth quarter was as follows. Revenue from mobile was approximately $3.6 million, representing 22% of total revenue in the fourth quarter. Revenue from projector was approximately $9.2 million. Video delivery revenue in the fourth quarter increased to approximately $4 million, reflecting the last time purchase orders for specific end-of-life products. Following the EOL in the fourth quarter, we anticipate lower quarterly revenue contribution from sales into the video delivery market. As such, beginning with the first quarter of 2023, the revenue breakout that I just provided will group revenue contributions from projector and video delivery into a single market category called Home and Enterprise. Non-GAAP gross profit margin was 53.3% in the fourth quarter of 2022, compared to 49.8% in the third quarter of 2022, and compared to 55% in the fourth quarter of 2021. Non-GAAP OpEx were $10.8 million in the fourth quarter compared to $12.2 million last quarter and $11 million in the fourth quarter of 2021. As indicated on our previous conference call, during the quarter, we completed the next milestone related to our co-development agreement, and as a result, we recognized a $2.5 million credit to R&D, which reduced our total OpEx for the fourth quarter. On a non-GAAP basis, fourth quarter 2022 net loss was approximately $800,000 or a loss of $0.01 per share, compared to a net loss of $3.2 million or a loss of $0.06 per share in the prior quarter, and a net loss of $1.4 million or a loss of $0.03 per share in the fourth quarter of 2021. Adjusted EBITDA for the fourth quarter of 2022 was -$1 million compared to -$2.1 million last quarter and -$1.1 million in the fourth quarter of 2021. Turning to the balance sheet. We ended the quarter with cash and cash equivalents of $56.8 million. I'd like to point out that the cash balance at quarter end does not include the proceeds from the most recent sale of equity interest in our Shanghai subsidiary, which we announced in late December. As Todd mentioned, we successfully closed this transaction after the end of the quarter, and the proceeds will be included in the company's reported cash balance for the first quarter of 2023. Shifting to our current expectations and guidance for the first quarter of 2023. Based on current order trends and backlog, we expect a weaker than normal first quarter. In addition to historical seasonality in the projector market, we are also expecting projector customers to continue to work through existing inventory in the first quarter. Also, as Todd mentioned, we expect the first quarter to reflect the trough of the inventory correction in the smartphone market. With that, we anticipate total revenue in the first quarter to be in a range of between $9 million and $11 million. We believe this quarter will be the low point for the year, with revenue beginning to recover in the second quarter, followed by an anticipated return to year-over-year growth in the H2 of the year. Non-GAAP gross profit margin in the first quarter is expected to be between 43% and 45%. This anticipated gross margin range reflects product mix and reduced absorption rate associated with lower revenue. As unit sales of ICs and total revenue recover, we expect those margins to return to our targeted historical range in the low fifties. We expect operating expenses in the first quarter to range between $twelve and a half million and $thirteen and a half million on a non-GAAP basis. As a reminder, operating expenses in the fourth quarter benefited from a $2.5 million milestone credit to R&D related to our co-development project. Excluding this credit, anticipated first quarter operating expenses at the midpoint would be approximately flat to down compared to the fourth quarter. Lastly, we expect first quarter non-GAAP EPS to range between a loss of $0.18 per share and a loss of $0.14 per share. That completes our prepared remarks, and we look forward to taking your questions. Operator, please proceed with the Q&A session. Thank you. Certainly. Ladies and gentlemen, if you have a question at this time, please Press Star one one on your telephone and wait for your name to be announced. To withdraw your question, please Press Star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Rajvindra Gill with Needham & Company. Yes, thank you for taking my questions. I appreciate it. Just wondering in terms of the commentary in the Chinese smartphone, you're indicating that it will bottom in Q1. I'm just wondering if you could maybe elaborate a little bit further in terms of where the channel inventory is right now. You know, you talked about kind of growth in the second quarter. Is this based on kind of, you know, feedback you're getting from customers? Are they starting to, you know, plan for that? Just any issues on the, any questions on the mobile China segment? You know, I think you're getting all kinds of feedback, Raji, from all different companies that are exposed like we are. In our particular case, we keep lean. The next thing is to keep an eye on the channel inventories. Our channel inventories peaked in Q3 for mobile. They came down reasonably well in Q4, but part of that was the, you know, was a down revenue quarter for mobile in Q4. We will see another down quarter in Q1, but as of today, our mobile inventories are either back to normal levels or I would suggest, given the ramp we're gonna see in the back half of the year, they're lean. The customer inventory levels I would say is a mixed bag. I have one customer that overbought the older processor. You'll see more phone launches from them out of the older processor as they digest that inventory, but they're sitting on that inventory, right? That customer will probably get through that inventory Q2 into early Q3. The rest of the customers, I would say are at normal inventory levels today. If they are leaning on our new processor, they don't have inventory. We're ramping those inventories. You know, for example, OnePlus, you've already seen some models come out of them. You'll probably see more models come out of them. They're all X7 related. They were not sitting on inventory of X7, right? If you put the whole thing together, our mobile inventories, I would suggest are back to normal or below normal, the growth going forward, Q2, Q3, Q4, will purely depend on how successful we are with new phone launches, then the volume of those phone launches. Probably to give you one more layer of granularity there, in the first two weeks. These two OnePlus launches, have been well-received. They have upticked their forecast from us in the first two weeks. I appreciate all that color, Todd. Thank you. Just staying on the topic of China, if I can, what's been the feedback in terms of, you know, the customer forecast? I know you mentioned the OnePlus kinda upticking their forecast. When you kinda look at the China handset customers, as they. You know, and I, and I appreciate some are kinda it's a mixed bag, but in general, when they're looking at their forecast for 2023 and then maybe even 2024, is there a, you know, a conservative kinda, you know, rebuild that's being kinda felt in their forecast or, you know, because they're gonna be more cautious for what happened last year or how do you think about that? Their hard forecasts and their ordering patterns are cautious. Mm-hmm. My personal expectation is too cautious. Mm-hmm. I think they're gonna get bit on the upside of demand in the back half of the year. It's interesting. Then you talked a little bit about anecdotally kinda what you're seeing in China. I guess how would you describe, you know, from your vantage point, the Chinese economy and the China consumer based on your conversations with folks there and, you know, talking to the employees as well? Is there an expectation that there's gonna be more of a reopening and things are gonna get back to normal relatively soon, or is there still kinda caution there? The phone OEM customers had to do abnormal behavior, which is digest older technology inventory. I think their end markets were soft, this caused them to be cautious. Their hard forecasts and their ordering pattern is still cautious, right? I mean Yeah. In my particular case with these phones, they're upticking, but I would say in general, they're still cautious. The dialogue though, I can see them warming up, you know. It really has been. You know, they're trying to gauge, you know. Collectively, all four tier one OEMs sell, I would suggest some are more exposed to the international markets than others, but collectively, 70% of their volume comes to China. So it's the main driver for them, and it's the main driver for their sentiment. You know, if you just walk around, it is busy. People are not. I figured they would be shell-shocked from what they went through for the last 12 months. They are not. They're just, they're ready to get out, and they're ready to resume their lives. I think you'll start to see some, you know, the consumer come back. I think they'll be cautious, and I think that you know, the phone OEMs are sort of warming up to that. You know, I've talked to three of the four tier ones already in the first two weeks I've been here. two of them are bullish, one of them is sanguine. I mean, it's a mixed color. I think it's gonna change. I think what they're worried about is that they're seeing a near term uptick in business. They don't know if it's sustainable. I see. They just don't know. In terms of the inventory of components that the Chinese handset customers are holding, do you think we're at, you know, bare-bone levels? Is there any way to kind of quantify that relative to history? Well, like I said, different vendors, different situation, right? I've also met with. You know, I have many friends in the industry over here that represent other suppliers into the supply chain for mobile phones. You know, I had dinner with a gentleman two nights ago and he represents a large supplier into the market. Their channel inventories are still at 6 to 8 months, and their customer inventories are at another 6 months. Oh, wow. In that particular supplier situation, you know, I would call normal four months of customer inventory, maybe three months of customer inventory, depending if you're ramping or not, and, you know, 45 days of channel inventory. you know, they're a long ways from normal. I see. Appreciate all the color. Using those. Go ahead. Using those same numbers, I would say, you know, our channel inventory is normal. In aggregate, our customer inventory is still a little bloated, which is why we do have the Q1 forecast. The question for us is, how much does it bounce back in Q2? If I look at the long-term program. I I mean, so there's the short term, what is the market telling us? It's cautiously optimistic. In Pixelworks is, okay, is your strategic initiative to be adopted by more customers and then have those customers widen the exposure of the use of your visual processor and reinforce that use of your visual processor by having the ecosystem come in and support your features. If I look at the back half of the year, our strategy is absolutely intact. We will expand our customers and expand the models within the customers, we will announce ecosystem partners that previously had not supported our solution. In our case, I'm bullish for the back half of the year. If the market comes back to normalize, I'm really bullish. Appreciate it. Thank you. Thank you. Our next question comes from the line of Suji Desilva with Roth Capital. Hi, Todd. Hi, Haley. Maybe this question's a little hard, Todd, do you have any idea how far out the unit crossover is for X7 just to get an idea of how that would ramp up? Are there too many moving parts in that question to be able to answer that? Meaning that we ship more X7s than X5? Right. How, you know. Well, today we're shipping more X7s than X5. Oh, you already are? Yes. Okay. Now Got it. You gotta remember, I think collectively, we shipped last year all processors, which were predominantly X5, X6, and then the ramp up of X7, between nine and 10 million units, something like this. We had customers telling, you know, at the beginning of last year, telling us they were gonna consume way more than that. That was capacity limited, okay? Of course, coming into the back half of the year, some of those customers were not so bullish, and you know, they overbought. We held them accountable for their aggressive purchases. There's some of those customers, one of them in particular, that's sitting on some. They're burning through X5 inventory, right? We still have some customers putting X5 in new programs. It's not like it's dead. It's just 'cause it's at a different cost point than X7. But I would say on an ongoing basis, we've already crossed that point. You know, there's some people talking if as we expand the models within the customers we've already announced. You know, they usually start at flagship premium with us. Mm-hmm. There's only so many flagship premium models. That means to expand, sometimes you have to push down into mid-market to lower premium. In those models, they're very price sensitive, right? You could see an uptick. If we're very successful there, you could see an uptick in X5 volume. I don't think it will cross back, but it could. Okay. Sounds like a lot of X5s are already shipped and the customers are gonna absorb it. Is the pricing on X7, Todd, still roughly 2x X5? Is that the way to think about it? I wouldn't say quite 2x. I would say, we've been aggressive, but it's significantly higher. You know, it's between. Okay. You know, 50% and 80% higher than... Okay. Next slide. Great. My last question is on licensing. You talked about in the prepared remarks, licensing opportunity. You weren't specific there. I'm wondering if that was referenced to TrueCut or whether there are other core video licensing opportunities or projectors somehow? If TrueCut, I mean. No. I'm sorry, go ahead. Go ahead. No, go ahead, finish. Oh, it's okay. Sorry to cut you off. If it's no, it's okay. If it's TrueCut, if it's the, if the pipeline there is coming in with the movie success and so forth to formalize. Sure. our revenue opportunity there. Yep. Okay. To make sure we clear that up for everybody on the call, that was not a reference to TrueCut. I mean, our business model is to, you know, it's a service support and licensing model for the content creators so that they can use our technology to create 4K HDR high frame rate cinematic content. With that engagement, they have the rights to distribute that content for theatrical releases. There's no further licensing for theatrical releases beyond the initial engagement. They don't have the right to distribute for home entertainment that high frame rate content that they use TrueCut Motion with. The business model is the distributors, whether they be streaming companies, et cetera, have to support the TrueCut Motion ecosystem and have the rights to distribute high frame rate, TrueCut Motion high frame rate content. The device manufacturers would have to have the rights to display TrueCut Motion content. What I was referring there in the previous statement was it had nothing to do with TrueCut, but I wanted to take the opportunity to make sure everybody understood the business model with TrueCut, because I think I've seen a lot of questioning on where people don't understand the business model. Well, that's the business model I just explained. I've asked all the analysts to not model revenue from TrueCut right now. Now, we clearly are getting some revenue. I just don't wanna model it because until we really gain major support from large distributors, streaming companies, you're just looking at theatrical releases, which is not a big revenue. I mean, if it gets to the point where it's material, then I'll have you guys start to model it. Once we have a signed on distributor, the device OEMs are very excited about adding TrueCut Motion to their devices and using high frame rate content to illustrate their newest devices, whether they be TVs, phones, other visual devices, especially devices that can show 3D content. I just didn't, you know, I just don't want you guys to model it until we get a little bit further ahead with the distribution part of that ecosystem. Once that happens, we're gonna have to model it. We'll have to talk about it a lot more, okay? With that said, what I was referring to in the prepared remarks was we have been approached by several companies now that it is clear to me this distributed architecture approach for mobile gaming in China is here to stay, at least for the foreseeable future. There are people working on silicon solutions to address that market, and now they want to. They've engaged with us to see if we would support them with a licensing of our Rendering Accelerator architecture. We are not in the IP business, but if, depending on who it is and if it supports our overall strategy to get more devices in the market. The more devices in the market that support this, the more that the gaming ecosystem that enter the studios are willing to optimize their games to work with the hardware. It's a virtuous cycle. If we could license our technology to somebody that there's two things. One, does it. I don't wanna take the air out of our market momentum. Two, if it's additive, without taking the air of the market momentum, it may make a lot of sense for us, not just from a financial standpoint of the licensing, but putting more devices out there in the long term. The more devices we have out there. I mean, it's the number one thing we talk to with the content people. How many phones is your processor gonna be on today, tomorrow, next year, the following year, et cetera? The bigger those numbers are, the more they wanna support us. Okay. Great color. Thanks, Todd. Thank you. Our next question comes from the line of Richard Shannon with Craig-Hallum. Well, hi Todd, Haley. Thanks for taking my questions and good morning to you, Todd. Let's see here. I wanna make sure I heard some of your language here, specifically on how to think about the second half of the year. I think, you said the first quarter is the bottom of growing in the second quarter. Did I hear you correctly that you're expecting year-over-year growth in the second half of the year? If so does that mean each quarter or just collectively in the second half? We expect for sure year-over-year growth for the mobile business. I'm still, you know, projector, I think you'll see a dip in Q1, but it'll come back in the back half. Does it come back to the point where it shows strong year-over-year growth? I think that's yet to be seen. You know, with video delivery, because we did this big end of life in the second half of this year, you won't see year-over-year growth in video delivery, okay? If the mobile year-over-year growth is strong enough, you'll see corporate year-over-year growth in the second half. Okay. That comment wasn't across the entire company, it's across specific segments. I just wanna be clear. Yes. I think I made the growth comment specifically. I mean, Haley mentioned that we expect growth in the back half of the year, which is true. I mean, I think the mobile growth is gonna be strong enough exiting the year that you'll see corporate year-over-year growth. Okay. That's helpful. How do we, how do you think this distribution of mobile revenues as we get into the second half of the year, how do you think this progresses? You've talked specifically, and hopefully I caught your comments correctly about... Sorry, I'm scrolling up on my notes. Expect to yield a series of top mobile games in the next year supporting our Rendering Accelerator in X7. How do we think. Is this entirely driven by gaming? How broad are we expecting the uptake here by all the tier one targets you have in China? I would say it's not entirely driven by gaming. you know, one of the things right now that we're doing is many of the models we win, some of the OEMs will go out and market that model globally, but they will have a different SKU for China than they do internationally. Gaming, mobile gaming is, you know, if you really go look at how these guys are marketing their premium and flagship phones, they're trying to market the new utility that their new phones will give you and why you should spend money and upgrade your phone. In China, mobile gaming is either the key utility that they're trying to bring you, depending on the model and the demographic they're targeting, or the second biggest feature they're targeting, which the first would be camera. Internationally, and then, I mean, and then, you know, consuming social and video content, which we also improve, is further down on the list as far as what new utility they bring you. What we're trying to get these China mobile OEMs to do is take this expertise and differentiation that they've built into their China models, which is unique, and market it internationally, because that's what differentiates them in many of these international markets, because you know who they butt up against in the international markets. You know, I'm talking about Android, and they butt up against Samsung. Mm-hmm. This gives all of those four tier ones a significant differentiation advantage. Not just because of us, but because this is where mobile gaming content is king. If they have optimized content and our visual processor in their models, many of those studios that I'm mentioning, so the miHoYo with Genshin Impact, Tencent with many of their games, NetEase, ByteDance has multiple studios developing games. Many of those game manufacturers, given what's going on here in China, are putting a great deal of effort to market their gaming content internationally. We are trying to convince the mobile OEMs to start to do that. That's, that's another. It's not just gets getting in the models, but then us convincing them to get into the international models. Now, the reason I bring all that up, CJ, is you said, is it just mobile gaming? One of the things that they clearly recognize is the, internationally, the consumption of quality video content is higher on the rank than in China. They ask us to provide improvements for consuming video, long-form video content on their phone. One of the features we put in X7 we haven't highlighted a lot is we have a way to do a cinematic high frame rate conversion on the phone. This is not TrueCut Motion, okay? TrueCut Motion converts the content and makes it high frame rate content at the source. What we do is have a feature to do cinematic high frame rate content conversion on the phone. We are pushing that and specifically to expand into more international models here in China. With all that said, the reason we're really gaining momentum is mobile gaming, the ecosystem for mobile gaming, the performance of using our processor with that ecosystem in mobile gaming, targeting the Chinese consumer. Would it be fair to conclude from what you just said here that you think the biggest single factor and upside potential for your mobile business second half and going forward is international introduction of your X7-enabled phones? Or is it some other single factor that you think is more important? There's two. If we gain a 4th tier one, that's an uptick in market for us. If you see us announce with the one tier one we haven't announced yet, that's an uptick. Second, if we can expand all the customers from just targeting their, what they call their domestic models, their China-specific models, to expanding to their international model, you get to leverage the R&D work that's already done on that model, and you just get higher volume from the same R&D work. three, we're talking with customers to expand to higher volume, lower priced models, the gaming functionality and features. Their customers are pushing them and demanding it. We've had customers come to us and say, "We get a great deal of feedback, and they want to know why we don't have the display processor technology on this particular model," which is usually a lower end model. There are companies that are exploring whether they can put it on these higher volume models. Of course, their first approach is to come in and want me to sell it for, you know, cost. Our answer is no. Those are the three ways, right? Expand the customers, one. Expand the international models with the same targets we're doing, two. Expand the model lineup within the existing customers, three. Yeah. To that last point there, Todd, with this, with these lower priced models, would you expect any of them to be doing it with X7 or would that be mostly an X5 or even older opportunity? Different discussions with different OEMs. I mean, you know, they're gonna lean on the, you know, cost. They're very cost driven. If I was a betting person, I would say that some of these higher volumes, they're gonna try to go to the lowest cost technology we have. At the same time, we make such, you know... The actual visual improvement that you can see between X5 and X7 is palatable. It's noticeable. If you look at our roadmap, which we haven't announced yet, some of the tier one customers have seen it, you're gonna see another fundamental leap forward by 2024. ASPs will go up, not because we're just trying to extract more value, but to make these fundamental leaps in performance, we have to be more aggressive on how we do the technology. Which two fold, one, we're putting more transistors down, and two, we're moving to lower process nodes which are more expensive. Fair enough. That's great perspective, Todd. Last quick question for me. I haven't heard anything, any direct statement here about how you feel like the engagement with TrueCut Motion is going with, you know, potential streaming partners here. I'm guessing we're not close enough to have any sort of big announcement. Maybe if you just characterize the progress in the last quarter, any feedback you've gotten from Avatar two and potential other releases. Then how do we think about these other theatrical releases you're looking for this year? I mean, we've had discussions with major distributors about high frame rate technology. We continue to have those discussions. They are bullish, by the way, but they want to kick it off. They want more content. They're actually even helping us by making introductions to studios that they rely on for content. There, I would say that our streaming discussions are a positive thing. To get it to the point where they're ready to go out. Once they announce it, what do they have to do? They have to market it, and they have to go communicate to all their streaming customers the value proposition of TrueCut Motion. They wanna be sure that when they go spend all that energy and money, that they got enough content to follow through with the value proposition. Anytime they extend help to us, we take it. We were already spending a lot of time trying to cultivate more theatrical content because more theatrical content becomes a pool of content for distribution to home entertainment. I would say that, you know, the release of Way of the Water, put all of our technology, put high frame rate 3D out in thousands of theaters globally. You know, there's some people that review it and don't like it, but they're minor. They're a very small group of people. The grand majority of the people love the immersive effects that high frame rate 3D brought with that movie. They love the technology. They love the movie, which is a story and how it was delivered. James Cameron did a great job. They also love the technology he used to help deliver that story. That clearly has helped us be credible in trying to expand the use of that technology and get more people to bring out high frame rate theatrical content. That's all a work in progress, so no announcements to be made. A lot of work to be done. As always, Todd, I appreciate all the detail. I am all done. Thank you. Thank you, Richard. Thank you. I would now like to turn the call back over to management for any closing remarks. Well, it was a longer call today than I expected. I'm here for another couple of weeks. It's interesting times over here, and we get to see how the rest of the year unfolds. I would say in general, I am more positive today than I was two weeks ago when I arrived. With that said, everybody enjoy their evening. Thank you. Ladies and gentlemen, this concludes today's Conference Call. Thank you for participating, and you may now disconnect.