Pixelworks, Inc. reports 80.7% EBITDA decline in 2018 and 4.1 pp EBITDA Margin decline from 5.2% to 1.1%
02/07/2019 • About Pixelworks, Inc. (
$PXLW) • By InTwits
Pixelworks, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pixelworks, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -3.6%
- Pixelworks, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $3m in 2018, $1m in 2017, $3m in 2016, $8m in 2015, $4m in 2014
- The company has unprofitable business model: ROIC is -10.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Pixelworks, Inc.'s Revenue decreased on 5.1%. Annual revenue decline showed slowdown in 18Q4 - revenue jumped on 11.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.1 pp from 5.2% to 1.1% in 2018.
Gross Margin showed almost no change in 2018. SG&A as a % of Revenue increased slightly on 0.70 pp from 25.4% to 26.1% in 2018.
Net Income margin decreased slightly on 0.86 pp from -5.2% to -6.0% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.7% in 2018. Pixelworks, Inc. showed decline in CAPEX/Revenue of 2.3 pp from 5.1% in 2015 to 2.7% in 2018. It's average level of CAPEX/Revenue for the last three years was 3.3%. Pixelworks, Inc. has spent a lot to CAPEX (260% of EBITDA) which didn't stop revenue from falling. CAPEX as a % of Revenue stuck to a declining trend at -0.59 pp per annum in 2014-2018.
Return on investment
The company operates at negative ROIC (-10.6%) and ROE (-11.0%). ROIC decreased on 4.3 pp from -6.2% to -10.6% in 2018. ROE increased on 3.3 pp from -14.3% to -11.0% in 2018. ROE grew at 12.9 pp per annum in the last 5 years.
Leverage (Debt)
The company paid down all the debt in 2018. Cash dropped on 34.8%.
Management team
Pixelworks, Inc.'s CEO is Todd A Debonis. Todd A Debonis is a founder and has 3 years tenure with the company. The company's CFO Steven L Moore has spent 12 years with the company.
Financial and operational results
FY ended 12/31/2018
Pixelworks, Inc. ($PXLW) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 60.923 | 59.517 | 53.390 | 80.637 | 76.554 | -5.1% |
| Gross Profit | 31.781 | 29.293 | 25.068 | 41.764 | 39.478 | -5.5% |
| SG&A | 15.434 | 14.453 | 13.770 | 20.450 | 19.953 | -2.4% |
| EBITDA | -4.435 | -5.541 | -6.880 | 4.174 | 0.806 | -80.7% |
| Net Income | -9.960 | -10.570 | -11.107 | -4.173 | -4.621 | |
Balance Sheet
|
|---|
| Cash | 17.926 | 26.591 | 19.622 | 27.523 | 17.944 | -34.8% |
| Short Term Debt | 3.000 | 3.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 6.069 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 2.861 | 3.012 | 2.144 | 2.484 | 2.096 | -15.6% |
Ratios
|
|---|
| Revenue growth | 26.6% | -2.3% | -10.3% | 51.0% | -5.1% | |
| EBITDA growth | 19.0% | 24.9% | 24.2% | -160.7% | -80.7% | |
|
|---|
| Gross Margin | 52.2% | 49.2% | 47.0% | 51.8% | 51.6% | -0.2% |
| EBITDA Margin | -7.3% | -9.3% | -12.9% | 5.2% | 1.1% | -4.1% |
| SG&A, % of revenue | 25.3% | 24.3% | 25.8% | 25.4% | 26.1% | 0.7% |
| Net Income Margin | -16.3% | -17.8% | -20.8% | -5.2% | -6.0% | -0.9% |
| CAPEX, % of revenue | 4.7% | 5.1% | 4.0% | 3.1% | 2.7% | -0.3% |
|
|---|
| ROIC | -43.1% | -40.1% | -42.3% | -6.2% | -10.6% | -4.3% |
| ROE | -57.5% | -50.3% | -48.9% | -14.3% | -11.0% | 3.3% |
| Net Debt/EBITDA | | | | -5.1x | -22.3x | -17.1x |
Pixelworks, Inc. ($PXLW) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 15 | 19 | 21 | 21 | | -32.7% | -7.1% | 14.5% | 11.3% |
| EBITDA | 0 | -1 | 2 | -0 | | -98.7% | -121.3% | | |
| Net Income | -1 | -2 | 0 | -2 | | -121.2% | -293.2% | | |
Balance Sheet
|
|---|
| Cash | 21 | 17 | 18 | 18 | | 4.9% | -45.9% | -31.4% | -34.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 1 | 0 | 0 | 0 | | | | -100.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 51.0% | 49.5% | 52.3% | 53.1% | | -3.5% | -4.5% | 4.3% | 3.4% |
| EBITDA Margin | 0.3% | -4.6% | 8.7% | -1.1% | | -18.1% | -24.8% | 26.5% | 3.4% |
| Net Income Margin | -3.9% | -12.7% | 1.1% | -8.0% | | -16.3% | -18.8% | 26.2% | 11.3% |
Peers in Semiconductors
Below you can find Pixelworks, Inc. benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 9.7% | 5.2% | 10.9% | 5.0% |
|---|
| Pixelworks, Inc. ($PXLW) | | -2.3% | -10.3% | 51.0% | -5.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 48.0% | 48.6% | 50.4% |
|---|
| Pixelworks, Inc. ($PXLW) | 52.2% | 49.2% | 47.0% | 51.8% | 51.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.5% | 9.2% | 10.7% | 10.0% |
|---|
| Pixelworks, Inc. ($PXLW) | -7.3% | -9.3% | -12.9% | 5.2% | 1.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.6% |
|---|
| Pixelworks, Inc. ($PXLW) | 4.7% | 5.1% | 4.0% | 3.1% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.7% | 3.2% | 5.2% |
|---|
| Pixelworks, Inc. ($PXLW) | -43.1% | -40.1% | -42.3% | -6.2% | -10.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.2x | 0.4x | 0.3x |
|---|
| Pixelworks, Inc. ($PXLW) | | | | -5.1x | -22.3x |
