Good day, ladies and gentlemen, and welcome to Pixelworks, Inc.'s third quarter 2026 earnings conference call. I will be your operator for today's call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the call over to Brett Curry with Sheldon Group Investor Relations. You may begin.

Thank you, Tawanda. Good afternoon, and thank you for joining us on today's call. With me on the call are PixWorks Chairman and CEO Todd DeBonis and Chief Financial Officer Haley Aman. The purpose of today's conference call is to supplement the information provided in Pixelwork's press release issued earlier today announcing the company's financial results for the third quarter of 2026. Before we begin, I'd like to remind you the various remarks we make on today's call, including those about our 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, Wednesday, November 11, 2026. 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, the company's annual report on Form 10-K for the year ended December 31, 2025, and subsequent SEC filings for a description of factors that could cause forward-looking statements to differ materially from actual results. Please note that 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. With that, it's now my pleasure to turn the call over to Pixelworks Chairman and CEO, Todd, please go ahead.

Thank you, Brett. Good afternoon and welcome to everyone joining us on today's conference call. Following the strategic transformation in early 2026, including the prudent exit and monetization of our previous semiconductor business, we are continuing to execute and make significant progress on our effort of building and scaling a pure play technology licensing business. Anchored by our industry-leading TrueCut Motion platform, and Advanced Visualization Solutions. We are positioning Pixelworks to be an enabler of truly differentiated viewing experiences. During the quarter, we continued to make steady progress toward our near-term objectives of growing the TrueCut ecosystem of premium large format exhibitors and expanding the availability of cinematic TrueCut motion graded content. Revenue for the third quarter was sequentially higher and increased more than 50% year over year. And we recognized our first revenue contribution from device licensing well ahead of our original timeline. We have also continued to be diligent with OPEC spending to reduce the cash use from operations and we repurchased an additional $1.2 million of the company's outstanding common stock during the quarter. As a reminder and context for today's discussion, I want to briefly reiterate our strategic path for scaling the business. Driving broad adoption of our True Cut Motion platform begins with the theatrical experience. By partnering with leading premium large format exhibitors and studios to enable high fidelity, immersive, motion graded content for display in their premium theaters. This not only builds a growing library of True Cut Motion titles, but it also establishes an ecosystem and the consumer awareness of premium viewing experience. As awareness expands, we believe studios will want to further monetize the True Cut Motion graded content and deliver the same authentic cinematic experience to consumers' homes. This in turn provides a foundation for consumer device certification. where we will work with premium device manufacturers to play true cut motion content as it was intended to be viewed. Each step along this path from professional services for theatrical content through device certification represents an incremental revenue opportunity for Pixelworks. Today, the broad theatrical market landscape is more constructive and David Zafiris. Year to date, the domestic box office has reached approximately $8.5 billion, representing a more than 20% increase over the same period in 2025. Recent industry forecasts suggest that the full-year 2026 domestic box office is on pace to exceed $10 billion for the first time Since the pre-pandemic peak in 2019. This performance has been driven by multiple visual exquisite titles, including Spider-Man Brand New Day, which is slated to become the highest grossing film of all time domestically, along with other notable releases such as The Odyssey and Toy Story 5. More importantly for True Cut, the industry is continuing to place increasing value on premium large format experiences. The increased economic value of PLF venues is clearly demonstrated in the recently reported results of several leading exhibitors and related technology providers. For example, AMC reported its PLF and XL auditoriums representing only 8% of their US screens generated 31% of U.S. admissions revenue in the third quarter, with premium auditorium revenue growing 62% year over year. Cinemark noted that premium formats accounted for 18% of its total box office from just 6% of the screens, with PLF ticket revenue increasing 50% year over year. Also, IMAX delivered record third quarter revenue with its screens capturing 6.7% share of the global box office despite representing less than 1% of worldwide screens. With PLF consistently accounting for roughly 20% of the domestic box office revenue from only 4% of the total screens, the industry is responding. Exhibitors are prioritizing capital investments and pushing studios towards increased availability of PLF content to take advantage of this increasingly disproportionate share of box office revenue. Our True Cut Motion platform remains uniquely positioned to enable filmmakers, studios, and exhibitors to deliver immersive experiences in these premium large format venues that feature high frame rate, Brighter Screens, and Advanced Projector Technologies. To date, we've announced formal collaborations with Marcus Theaters, Odeon Cinemas Group, Vue, Kannapolis Group, and CineD. Each of these partners is prioritizing and endorsing True Cut Motion enhanced presentations on their most advanced laser, HDR, and premium large format screens. In addition, True Cut Motion content has been released and displayed in both IMAX and Dolby theaters. We have ongoing efforts to further expand our network of leading exhibitors, and we expect to announce additional partners committed to bringing True Cut Motion content to the premium screens over the coming months and quarters. Also fundamental to driving broader adoption of our True Cut platform is increasing the availability of premium True Cut Motion graded content. We remain engaged with a combination of studios and content creators on a growing pipeline of True Cut Motion enhanced titles. Most recently, we worked with Universal Pictures on DreamWorks Animation's original animated feature, Forgotten Island, which was released to theaters in late September. The film received strong reviews from both critics and audiences, and we're proud of our team's motion grading work on both the 2D and 3D versions of the film in support of the creator's vision to deliver a highly immersive experience. We currently have numerous titles targeting releases over the next four quarters, and based on the existing lineup of anticipated motion grading titles, we believe that 2027 will be a breakthrough year for new theatrical True Cut motion content. Shifting to our announced collaboration with Meta earlier this week, this multi-year agreement is a major milestone for our first certification agreement directly with the premium home entertainment device manufacturer. The agreement with Meta will bring the same true cut motion experience for immersive cinematic content targeting premium large format theaters to Meta's VR devices, including the upcoming Meta VR glasses. thus preserving director-intended creative choices while also eliminating motion artifacts that can otherwise disrupt an immersive viewing experience. From our perspective, this collaboration marks a major turning point for ecosystem adoption. We expect this partnership to meaningfully accelerate our existing pipeline of TrueCut Motion graded titles including demand for both planned new theatrical releases and the conversion of existing library content. This commercial proof of the ability to reproduce the premium quality of a theatrical experience on certified devices should increasingly motivate studios and creators towards delivering consistent premium viewing experiences across both theatrical and device environments. As meta devices and associated streaming services are commercially launched, we will be able to provide additional details about the scope of the content that True Cut Motion is enabling for these devices. In summary, our focus for 2026 has been to continue the expansion of premium large format exhibitor ecosystem and bring expanded availability of immersive True Cut Motion graded content to these unique premium experience theaters. In addition, we'll be working with Meta to bring both new immersive and bespoke library content to their VR devices. We will do this while maintaining a lean organization with relatively low threshold to reach positive cash flow. Coupled with approximately $50 million in cash and zero debt at quarter end, we believe that we have ample flexibility to execute on our strategy, and successfully scale what has the potential to be a highly valuable licensing business. With that, I'll turn the call to Haley to provide some additional financial details on the quarter.

Thank you, Todd. As reported in today's press release, revenue for the third quarter of 2026 increased sequentially and year over year to approximately $378,000, bringing the first nine months total revenue to $888,000. For context, full year 2025 revenue associated with Truecut was approximately $690,000. Gross profit margin for the third quarter was 92.1% compared with 60.9% in the previous quarter. The higher gross margin primarily reflected increased revenue contribution from licensing in the third quarter. Total gap operating expenses for the third quarter were $3.8 million compared to 3.4 million in the prior quarter. The sequential increase was largely the result of certain non-recurring expenses, which we believe will contribute to further streamlining our business and expenses going forward. Turning to the balance sheet, the company ended the third quarter with cash, cash equivalents, and short-term marketable securities of approximately 50 million. The sequential change in the cash balance from the prior quarter was the result of approximately $1.8 million used from operations and approximately $1.2 million used to repurchase shares of Pixelworks common stock during the third quarter. We remain committed to maintaining a strong balance sheet, and we continue to believe our existing cash, cash equivalents, and short-term marketable securities balance provides ample flexibility to execute our strategy of building a pure play technology licensing business. Heading into 2027, we are encouraged by the growing pipeline for emotion grading services and early engagement with prospective licensing customers. We remain committed to maintaining disciplined and efficient operations to keep OpEx well controlled and stable. Together with what we believe are realistic revenue expectations, as well as the interest income from our invested cash, we anticipate sustained progress toward reducing cash burn to less than $1 million per quarter exiting 2027. That completes our prepared remarks, and we look forward to taking your questions. Operator, please proceed with the Q&A session.

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press Start11 on your telephone, then wait for your name to be announced. To withdraw your question, please press Start11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Suji DeSilva with Walsh Capital. Your line is open.

Hi, Todd. Hi, Haley. Congratulations on the progress here, particularly the META announcement here, Todd. So just to focus on that agreement you announced with META, is there any way to think about the terms of that arrangement for you and the opportunity for you? Or maybe you can talk more generally if you're limited on a framework of how a device manufacturer would work with you in the licensing process?

Well, you know, I would say, first of all, as a company, we're flexible on how we engage in these negotiations for device licenses. And what we try to do is achieve our objectives, but also align the contract with the objectives of the licensee. and so I can't really talk about the terms, et cetera, but I can say that together with Meta, we are aligned on those financial terms and it's a multi-year agreement to help them certify multiple devices and we are incentivized to bring as much content as we can to that platform.

Okay, great. Thanks, Todd. And then more specifically, you know, you said, and I can imagine, word of mouth, you know, Meta supporting this might get content creators to think about using this, but will Meta, you think, put any marketing budget or dollars toward building a content base to help their glasses? Is that something that might be on the table that would accelerate the flywheel faster in terms of content, true cut motion content?

I can't speak to their overarching strategy with their devices. I was at the keynote speech where this device was launched, and of course I'm working with them on a regular basis. And from what I can tell from what they released at that speech and what I think they will be releasing over the next couple several months prior to the launch of the VR glasses is they are absolutely incentivized to improving the cinematic experience on the new VR glasses as well as all their existing devices and making sure that quality immersive content for their target audience is available to that ecosystem. Okay.

So it's just content availability. That definitely helps out. And then my last question is maybe for Haley. The guidance toward reducing cash burn by exiting 27, what are the operating expense assumptions between now and then that are kind of embedded in that?

Well, on a non-GAAP basis, what we've said in the past is we're kind of expecting between $2 and $2.5 million on OSX. quarterly.

Per quarter, yeah.

Got it.

All right. Thanks, guys. I'll pass it along. Thanks.

Thank you, Suji. Appreciate the questions.

Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Todd for closing remarks.

All right. Thank you. And for all those listening to this call, thank you for attending. We are making major progress towards our goals. I look forward to updating all of you on the next quarterly call.

That concludes today's conference call. You may now disconnect.