Pixelworks, Inc. (NASDAQ:PXLW) shares are trading lower after the company's soft second-quarter guidance.
Revenue for the first quarter increased 61% Y/Y to $16.05 million, marginally beating the consensus of $16.00 million, driven by strong growth in mobile revenue.
Mobile revenue grew almost 3x Y/Y to $9.8 million, reflecting increased shipments of X-series visual processors for smartphones and an expanded number of TrueCut Motion engagements.
Adjusted gross profit margin stood at 50.7%, up from 44.1% a year ago quarter, reflecting a revenue mix comprised of newer-generation mobile visual processors.
Adjusted EBITDA stood at negative $(3.2) million, compared to negative $(7.8) million in the year-ago quarter. Adjusted EPS of $(0.07) beat the consensus of $(0.08).
Cash and cash equivalents at the end of the first quarter of 2024 stood at $46.2 million.
Todd DeBonis, President and CEO said, "Our recently announced mobile wins, including Transsion's Infinix GT 20 Pro smartphone and vivo's newly launched iQOO Z9 Turbo, represent notable traction on our two-pronged strategy aimed at increased penetration of the mid- to lower-tier device market as well as expanded adoption in smartphone models targeted for outside of China."
Outlook: Pixelworks expects second-quarter revenue of $8 million-$9 million (vs. $16.5 million) and an adjusted EPS loss of $(0.16)-$(0.13) vs. an estimate of $(0.07).
The company also warned about the near-term headwinds in its mobile business. Meanwhile, Pixelworks emphasized that it believes the headwinds impacting second-quarter mobile revenue are near-term and expects a return to sequential growth in the second half of the year.
Price Action: PXLW shares are down 27.3% at $1.36 premarket at the last check Wednesday.
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