Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | XPERI INC. | |
Trading Symbol | XPER | |
Entity Central Index Key | 0001788999 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 42,023,632 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-41486 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-4470363 | |
Entity Address, Address Line One | 2190 Gold Street | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95002 | |
City Area Code | 408 | |
Local Phone Number | 519-9100 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Security12b Title | Common Stock (par value $0.001 per share) | |
Security Exchange Name | NYSE |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue: | $ 121,637 | $ 117,732 | $ 366,728 | $ 361,738 |
Operating expenses: | ||||
Cost of revenue, excluding depreciation and amortization of intangible assets | 31,403 | 32,301 | 85,689 | 87,983 |
Research and development | 57,070 | 49,975 | 158,641 | 144,371 |
Selling, general and administrative | 56,702 | 46,109 | 156,894 | 148,087 |
Depreciation expense | 4,990 | 6,486 | 15,697 | 17,058 |
Amortization expense | 16,613 | 27,829 | 46,166 | 83,266 |
Goodwill impairment | 354,000 | 354,000 | ||
Total operating expenses | 520,778 | 162,700 | 817,087 | 480,765 |
Operating loss | (399,141) | (44,968) | (450,359) | (119,027) |
Other income (expense), net | (527) | 144 | (301) | 512 |
Loss before taxes | (399,668) | (44,824) | (450,660) | (118,515) |
Provision for income taxes | 2,024 | 2,834 | 12,500 | 8,161 |
Net loss | (401,692) | (47,658) | (463,160) | (126,676) |
Less: net loss attributable to noncontrolling interest | (890) | (1,310) | (2,706) | (2,826) |
Net loss attributable to the Company | $ (400,802) | $ (46,348) | $ (460,454) | $ (123,850) |
Loss per share attributable to the Company: | ||||
Basic loss per share | $ (9.54) | $ (1.10) | $ (10.96) | $ (2.95) |
Diluted loss per share | $ (9.54) | $ (1.10) | $ (10.96) | $ (2.95) |
Number of Basic shares outstanding | 42,024 | 42,024 | 42,024 | 42,024 |
Number of Diluted shares outstanding | 42,024 | 42,024 | 42,024 | 42,024 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (401,692) | $ (47,658) | $ (463,160) | $ (126,676) |
Other comprehensive loss, net of tax: | ||||
Change in foreign currency translation adjustment | (914) | (596) | (4,363) | (1,585) |
Comprehensive loss | (402,606) | (48,254) | (467,523) | (128,261) |
Less: comprehensive loss attributable to noncontrolling interest | (890) | (1,310) | (2,706) | (2,826) |
Comprehensive loss attributable to the Company | $ (401,716) | $ (46,944) | $ (464,817) | $ (125,435) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 180,118 | $ 120,695 |
Accounts receivable, net | 63,968 | 79,494 |
Unbilled contracts receivable, net | 52,081 | 50,962 |
Other current assets | 40,133 | 25,985 |
Total current assets | 336,300 | 277,136 |
Long-term unbilled contracts receivable | 4,418 | 3,825 |
Property and equipment, net | 51,783 | 57,477 |
Operating lease right-of-use assets | 56,062 | 61,758 |
Intangible assets, net | 280,063 | 270,934 |
Goodwill | 250,555 | 536,512 |
Other long-term assets | 31,711 | 21,070 |
Total assets | 1,010,892 | 1,228,712 |
Current liabilities: | ||
Accounts payable | 18,735 | 7,362 |
Accrued liabilities | 97,385 | 84,404 |
Deferred revenue | 26,106 | 28,211 |
Total current liabilities | 142,226 | 119,977 |
Deferred revenue, less current portion | 19,079 | 23,663 |
Long-term deferred tax liabilities | 21,374 | 14,428 |
Long-term debt, net | 50,000 | |
Noncurrent operating lease liabilities | 41,743 | 49,017 |
Other long-term liabilities | 5,307 | 5,670 |
Total liabilities | 279,729 | 212,755 |
Commitments and contingencies (Note 14) | ||
Company stockholders' equity: | ||
Net Parent company investment | 1,025,838 | |
Preferred stock: $0.001 par value; 6,000 shares authorized; no shares issued and outstanding | ||
Common stock: $0.001 par value; 140,000 shares authorized; 42,024 and no shares issued; 42,024 and no shares outstanding, respectively | 42 | |
Additional paid-in capital | 1,121,297 | |
Accumulated other comprehensive loss | (5,039) | (676) |
Accumulated deficit | (371,805) | |
Total Company stockholders' equity | 744,495 | 1,025,162 |
Noncontrolling interest | (13,332) | (9,205) |
Total equity | 731,163 | 1,015,957 |
Total liabilities and equity | $ 1,010,892 | $ 1,228,712 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 6,000,000 | 6,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 140,000,000 | 140,000,000 |
Common stock, shares issued (in shares) | 42,024,000 | 0 |
Common stock, shares outstanding (in shares) | 42,024,000 | 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (463,160) | $ (126,676) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation of property and equipment | 15,697 | 17,058 |
Amortization of intangible assets | 46,166 | 83,266 |
Stock-based compensation expense | 29,761 | 24,363 |
Goodwill impairment | 354,000 | |
Deferred income taxes | (451) | 3,459 |
Other | (146) | 2,601 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 18,990 | 13,401 |
Unbilled contracts receivable | 623 | 2,274 |
Other assets | (14,884) | 6,255 |
Accounts payable | 10,504 | (1,419) |
Accrued and other liabilities | (824) | (37,408) |
Deferred revenue | (7,609) | (1,235) |
Net cash from operating activities | (11,333) | (14,061) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (10,514) | (14,788) |
Purchases of intangible assets | (110) | (3,352) |
Net cash paid for acquisitions | (50,473) | (12,400) |
Net cash from investing activities | (61,097) | (30,540) |
Cash flows from financing activities: | ||
Net proceeds from Parent capital contributions | 83,235 | |
Net transfers from Parent | 52,802 | 63,188 |
Net cash from financing activities | 136,037 | 63,188 |
Effect of exchange rate changes on cash and cash equivalents | (4,184) | 2,803 |
Net increase in cash and cash equivalents | 59,423 | 21,390 |
Cash and cash equivalents at beginning of period | 120,695 | 85,624 |
Cash and cash equivalents at end of period | 180,118 | 107,014 |
Supplemental disclosure of cash flow information: | ||
Debt issued in connection with acquisition | 50,000 | |
Income taxes paid, net of refunds | $ 9,460 | $ 8,559 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Net Parent Company Investment | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest |
Beginning balance at Dec. 31, 2020 | $ 1,080,183 | $ 1,084,630 | $ 1,311 | $ (5,758) | |||
Net loss | (126,676) | (123,850) | (2,826) | ||||
Other comprehensive loss | (1,585) | (1,585) | |||||
Issuance of equity to noncontrolling interest | 12 | 12 | |||||
Net transfers from Parent | 87,540 | 87,540 | |||||
Ending balance at Sep. 30, 2021 | 1,039,474 | 1,048,320 | (274) | (8,572) | |||
Beginning balance at Jun. 30, 2021 | 1,062,484 | 1,069,434 | 322 | (7,272) | |||
Net loss | (47,658) | (46,348) | (1,310) | ||||
Other comprehensive loss | (596) | (596) | |||||
Issuance of equity to noncontrolling interest | 10 | 10 | |||||
Net transfers from Parent | 25,234 | 25,234 | |||||
Ending balance at Sep. 30, 2021 | 1,039,474 | 1,048,320 | (274) | (8,572) | |||
Beginning balance at Dec. 31, 2021 | 1,015,957 | 1,025,838 | (676) | (9,205) | |||
Net loss | (463,160) | (88,649) | $ (371,805) | (2,706) | |||
Other comprehensive loss | (4,363) | (4,363) | |||||
Issuance of equity to noncontrolling interest | (1,421) | (1,421) | |||||
Net transfers from Parent | 100,915 | 100,915 | |||||
Issuance of common stock and reclassification of net transfers from Parent (in shares) | 42,024,000 | ||||||
Issuance of common stock and reclassification of net transfers from Parent | $ 42 | $ 1,038,062 | (1,038,104) | ||||
Net capital contributions from Parent | 83,235 | 83,235 | |||||
Ending balance at Sep. 30, 2022 | 731,163 | $ 42 | 1,121,297 | (5,039) | (371,805) | (13,332) | |
Ending balance (in shares) at Sep. 30, 2022 | 42,024,000 | ||||||
Beginning balance at Jun. 30, 2022 | 1,014,347 | 1,029,487 | (4,125) | (11,015) | |||
Net loss | (401,692) | (28,997) | (371,805) | (890) | |||
Other comprehensive loss | (914) | (914) | |||||
Issuance of equity to noncontrolling interest | (1,427) | (1,427) | |||||
Net transfers from Parent | 37,614 | 37,614 | |||||
Issuance of common stock and reclassification of net transfers from Parent (in shares) | 42,024,000 | ||||||
Issuance of common stock and reclassification of net transfers from Parent | $ 42 | 1,038,062 | $ (1,038,104) | ||||
Net capital contributions from Parent | 83,235 | 83,235 | |||||
Ending balance at Sep. 30, 2022 | $ 731,163 | $ 42 | $ 1,121,297 | $ (5,039) | $ (371,805) | $ (13,332) | |
Ending balance (in shares) at Sep. 30, 2022 | 42,024,000 |
The Company and Basis of Presen
The Company and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION Xperi Spin-Off On December 18, 2019, Xperi Corporation (“Pre-Merger Xperi”) entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with TiVo Corporation (“Pre-Merger TiVo”) to combine in an all-stock merger of equals transaction (the “Mergers”). Immediately following the consummation of the Mergers on June 1, 2020 (the “Merger Date”), Xperi Holding Corporation (“Xperi Holding” or “Parent”), a Delaware corporation founded in December 2019 under the name “XRAY-TWOLF HoldCo Corporation,” became the parent company of both Pre-Merger Xperi and Pre-Merger TiVo. Following the Mergers, Xperi Holding announced plans to separate into two independent publicly-traded companies (the “Separation”), one comprising its intellectual property (“IP”) licensing business and one comprising its product business. On October 1, 2022, Xperi Holding completed the separation and distribution (the “Spin-Off”) through a pro-rata distribution (the “Distribution”) of all the outstanding common stock of its product-related business (formerly known as Xperi Product, and hereinafter “Xperi Inc.”, “Xperi” or the “Company”) to the stockholders of record of Xperi Holding as of the close of business on September 21, 2022 , the record date (the “Record Date”) for the Distribution. Each Xperi Holding stockholder of record received four shares of Xperi common stock, $ 0.001 par value, for every ten shares of Xperi Holding common stock, $ 0.001 par value, held by such stockholder as of the close of business on the Record Date. Cash was paid in lieu of any fractional shares of Xperi common stock. Xperi Holding distributed 42,023,632 shares of Xperi common stock in the Distribution, which became effective on October 1, 2022. As a result of the Distribution, Xperi became an independent, publicly-traded company and its common stock is listed under the symbol “XPER” on the New York Stock Exchange (“NYSE”). In connection with the Separation and the Distribution, Xperi Holding was renamed and continues as Adeia Inc. (“Adeia”) and also changed its stock symbol to “ADEA” on the Nasdaq Global Select Market. The Parent is referred to as “Xperi Holding” throughout this Form 10-Q as that was its name during all time periods presented. Description of Business Xperi is a leading consumer and entertainment technology company. The Company creates extraordinary experiences at home and on the go for millions of consumers around the world, elevating content and how audiences connect with it in a way that is more intelligent, immersive and personal. Powering smart devices, connected cars, entertainment experiences and more, the Company has created a unified ecosystem that reaches highly engaged consumers, uncovering significant new business opportunities, now and in the future. The Company’s technologies are integrated into billions of consumer devices and media platforms worldwide, driving increased value for partners, customers and consumers. The Company currently operates in one reportable business segment and groups its business into four categories based on the markets served: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The amounts as of December 31, 2021 have been derived from the Company’s annual audited combined financial statements for the year ended December 31, 2021, included in the Form 10 filed with the SEC on September 14, 2022 (the “Form 10”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022 or any future period and the Company makes no representations related thereto. These financial statements should be read in conjunction with the annual audited combined financial statements and notes thereto as of and for the year ended December 31, 2021, included in the Form 10. During the three months ended September 30, 2022, all of the assets and liabilities of the Xperi Product business had been transferred to a legal entity under the common control of Xperi. Subsequent to this transfer, the financial statements and accompanying notes of the Xperi Product business are prepared on a consolidated basis and include the financial statements of Xperi and its subsidiaries in which Xperi has a controlling financial interest. All intercompany balances and transactions are eliminated in consolidation. Prior to the transfer, the financial statements and accompanying notes of the Xperi Product business were prepared on a combined basis as the Company was not historically held by a single legal entity. Net Parent company investment is presented within equity on a combined basis in lieu of share capital. Total net Parent company investment represents Parent’s total interest in the recorded net assets of the Company prior to the transfer. All intercompany transactions within the combined businesses of the Company have been eliminated. The Condensed Consolidated Balance Sheets of Xperi and its subsidiaries include Parent assets and liabilities that are specifically identifiable or otherwise attributable to the Company. In the fourth quarter of 2018, the Company funded a new subsidiary, Perceive Corporation (“Perceive”), which was created to focus on delivering edge inference solutions. As of September 30, 2022, the Company owned approximately 77.1 % of the outstanding equity interest of Perceive. The operating results of Perceive have been included in the Company’s consolidated financial statements since the fourth quarter of 2018. Prior to the separation, the Company was dependent on Parent for all of its working capital and financing requirements as Parent used a centralized approach to cash management and financing its operations. Financial transactions relating to the Company were accounted for as equity contributions from the Parent on the Condensed Consolidated Balance Sheets. Accordingly, none of Parent’s cash and cash equivalents were allocated to the Company for any of the periods presented, unless those balances were directly attributable to the Company. The Company reflects transfers of cash to and from Parent’s cash management system within equity as a component of net Parent investment on a combined basis and as a component of net Parent capital contribution on a consolidated basis. Other than the debt incurred in connection with the acquisition of Vewd Software Holdings Limited (“Vewd”) discussed in Note 9, Parent’s long-term debt has not been attributed to the Company for any of the periods presented because Parent’s borrowings are not the legal obligation of the Company. The cash and cash equivalents, including the Company’s capitalization from Parent on September 30, 2022 will be sufficient to support its operations, capital expenditures and income tax payments, in addition to any investments and other capital allocation needs for at least the next 12 months. The Condensed Consolidated Statements of Operations and Comprehensive Loss of the Company reflect allocations of general corporate expenses from Parent, including, but not limited to, executive management, sales and marketing, finance, legal, information technology, employee benefits administration, stock-based compensation, treasury, risk management, procurement and other shared services. These allocations were made on a direct usage basis when identifiable, with the remainder allocated on a pro rata basis of billing, revenue, headcount or other measures as deemed appropriate. Management of the Company and Parent consider these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, the Company. The allocations may not, however, reflect the expenses the Company would have incurred as a standalone company for the periods presented. Actual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, such as the chosen organizational structure, whether functions were outsourced or performed by employees and decisions with respect to areas such as facilities, information technology and operating infrastructure. Parent maintains various benefit and stock-based compensation plans at a corporate level. The Company’s employees participated in those programs and a portion of the cost of those plans is included in the Company’s Condensed Consolidated Financial Statements. The Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Equity do not include any benefit plan obligations or any equity related to stock-based compensation plans. See “Note 11 – Stock-Based Compensation Expense” for a description of the accounting for stock-based compensation. The Company’s fiscal year ends on December 31. The Company employs a calendar month-end reporting period for its quarterly reporting. Earnings Per Share Basic and dilutive net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of the Company’s common stock outstanding during the period. The weighted average number of shares of common stock outstanding for the basic and diluted net loss per share is based on 42,023,632 shares of the Company’s common stock distributed on October 1, 2022 in connection with the Spin-Off and assumes these shares have been outstanding as of the beginning of the earliest period presented. There are no potentially dilutive common stock equivalents prior to the Spin-Off on October 1, 2022. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no significant changes in the Company’s significant accounting policies during the nine months ended September 30, 2022, as compared to the significant accounting policies described in the Form 10. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging, and subjective judgment include the estimation of licensees’ quarterly royalties prior to receiving the royalty reports, the determination of stand-alone selling price and the transaction price in an arrangement with multiple performance obligations, the assessment of the recoverability of goodwill, the assessment of useful lives and recoverability of other intangible assets and long-lived assets, recognition and measurement of current and deferred income tax assets and liabilities, the assessment of unrecognized tax benefits, and purchase accounting resulting from business combinations. Actual results experienced by the Company may differ from management’s estimates. The COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company business. The impact to date has included periods of significant volatility in markets the Company serves, in particular the automotive and broad consumer electronics markets. Additionally, the pandemic has caused some challenges and delays in acquiring new customers and executing license renewals. These factors may result in an impairment of our long-lived assets, including goodwill, increased credit losses and impairments of investments in other companies. The Company’s operations and those of its customers have also been negatively impacted by certain trends arising from the COVID-19 pandemic, including labor market constraints, shortage of semiconductor components and manufacturing capacities, and delays in shipments, product development and product launches. Moreover, the COVID-19 pandemic, its related impact, and United States federal, state and foreign government policies enacted to combat the pandemic have contributed to a recent rise of inflation that may increase the cost of the Company’s operations and reduce demand for the Company’s products and services and those of its customers, which may adversely affect the Company’s financial performance. The impact of the pandemic on the Company’s overall results of operations remains uncertain for the foreseeable future and will depend on various factors outside the Company’s control. Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, “ Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”), which amends the guidance in ASC 805 to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (“Topic 606”). As a result of the amendments, it is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its preacquisition financial statements. ASU 2021-08 is effective for public business entities for fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company elected to early adopt the new standard on January 1, 2022 . The adoption did no t have an impact on the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848)” (“ASU 2021-01”), which provides further clarification on the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modifications made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. The Company does not expect ASU 2020-04 and ASU 2021-01 to have a material impact on its condensed consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 3 – REVENUE Revenue Recognition General Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, which may include various combinations of goods and services which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of sales taxes collected from customers which are subsequently remitted to governmental authorities. Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the individual performance obligations are separately accounted for if they are distinct. In an arrangement with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative stand-alone selling price basis. The determination of stand-alone selling price considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. When observable prices are not available, stand- alone selling price for separate performance obligations is based on the cost-plus-margin approach, considering overall pricing objectives. When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of technology or when a license of technology is the predominant item to which the variable consideration relates, revenue is recognized at the later of when the subsequent sale or usage occurs or the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied or partially satisfied. Description of Revenue-Generating Activities The Company derives the majority of its revenue from licensing its technology and solutions to customers. These arrangements are summarized as Technology License arrangements and Technology Solutions arrangements. For Technology License arrangements, the customer obtains rights to the technology delivered at the commencement of the agreement. For Technology Solutions arrangements, the customer receives access to a platform, media or data that includes frequent updates, where access to such updates is critical to the functionality of the technology. The timing of when performance obligations are satisfied, as well as the fee arrangements underlying each agreement, determine when revenue is recognized. Technology License Arrangements The Company licenses its audio, digital radio and imaging technology to consumer electronics (“CE”) manufacturers, automotive manufacturers or their supply chain partners. The Company generally recognizes royalty revenue from licenses based on units shipped or manufactured. Revenue is recognized in the period in which the customer’s sales or production are estimated to have occurred. This may result in an adjustment to revenue when actual sales or production are subsequently reported by the customer, generally in the month or quarter following sales or production. Estimating customers’ quarterly royalties prior to receiving the royalty reports requires the Company to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities shipped or manufactured by customers, which could have a material impact on the amount of revenue it reports on a quarterly basis. Certain customers enter into fixed fee or minimum guarantee agreements, whereby customers pay a fixed fee for the right to incorporate the Company’s technology in the customer’s products over the license term. In arrangements with a minimum guarantee, the fixed fee component corresponds to a minimum number of units or dollars that the customer must produce or pay, with additional per-unit fees for any units or dollars exceeding the minimum. The Company generally recognizes the full fixed fee as revenue at the beginning of the license term when the customer has the right to use the technology and begins to benefit from the license, net of the effect of any significant financing components calculated using customer-specific, risk-adjusted lending rates, with the related interest income being recognized over time on an effective rate basis. For minimum guarantee agreements where the customer exceeds the minimum, the Company recognizes revenue relating to any additional per-unit fees in the periods it believes the customer will exceed the minimum and adjusts the revenue based on actual usage once that is reported by the customer. Technology Solutions Arrangements Technology Solutions customers are primarily multi-channel video service providers, CE manufacturers, and end consumers. Technology Solutions revenue is primarily derived from licensing the Company’s Pay-TV solutions, Personalized Content Discovery, enriched Metadata, and viewership data; selling TiVo-enabled devices like the TiVo Stream 4K and advertising. For Technology Solutions, the Company provides on-going media or data delivery, hosting and access to its platform, and software updates. For these solutions, the Company generally receives fees on a per-subscriber per-month basis or as a fixed fee, and revenue is recognized during the month in which the solutions are provided to the customer. For most of the Technology Solutions offerings, substantially all functionality is obtained through the Company’s continuous hosting and/or updating of the data and content. In these instances, the Company typically has a single performance obligation related to these ongoing activities in the underlying arrangement. For those arrangements that include multiple performance obligations, the Company allocates the consideration as described above and recognizes revenue for each distinct performance obligation when control of the promised goods or services is transferred to the customer. The Company also generates revenue from non-recurring engineering (“NRE”) services, advertising, and hardware products, each of which was less than 10% of total revenue for all periods presented. Practical Expedients and Exemptions The Company applies a practical expedient to not perform an evaluation of whether a contract includes a significant financing component when the timing of revenue recognition differs from the timing of cash collection by one year or less. The Company applies a practical expedient to expense costs to obtain a contract with a customer as incurred as a component of selling, general and administrative expenses when the amortization period would have been one year or less. The Company applies a practical expedient when disclosing revenue expected to be recognized from unsatisfied performance obligations to exclude contracts with customers with an original duration of one year or less; amounts attributable to variable consideration arising from (i) a sales-based or usage-based royalty of a technology license or (ii) when variable consideration is allocated entirely to a wholly unsatisfied performance obligation; or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. Revenue Details The following information depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors by disaggregating revenue by product category, market and geographic location. Revenue disaggregated by product category was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Technology Licensing $ 53,786 $ 41,683 $ 161,943 $ 140,923 Technology Solutions 67,851 76,049 204,785 220,815 Total revenue $ 121,637 $ 117,732 $ 366,728 $ 361,738 Revenue disaggregated by market was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Pay-TV $ 58,378 $ 65,891 $ 182,903 $ 196,795 Consumer Electronics 33,561 21,235 101,145 75,054 Connected Car 20,224 20,448 60,798 65,869 Media Platform 9,474 10,158 21,882 24,020 Total revenue $ 121,637 $ 117,732 $ 366,728 $ 361,738 A significant portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., principally in Asi a, Europe and the Middle East, and it is expected that this revenue will continue to account for a significant portion of total revenue in future periods. The following table presents the Company’s revenue disaggregated by geographic area (in thousands): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 U.S. $ 65,173 54 % $ 62,133 53 % $ 203,253 55 % $ 182,759 51 % Japan 13,801 11 17,614 15 45,844 13 55,799 16 China 12,713 11 3,557 3 27,168 7 14,989 4 Europe and Middle East 10,722 9 14,379 12 29,458 8 40,901 11 South Korea 8,011 6 7,300 6 18,887 5 26,736 7 Other 11,217 9 12,749 11 42,118 12 40,554 11 $ 121,637 100 % $ 117,732 100 % $ 366,728 100 % $ 361,738 100 % Contract Balances Contracts Assets Contract assets primarily consist of unbilled contracts receivable that are expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed. The amount of unbilled contracts receivable may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Contract assets also include the incremental costs of obtaining a contract with a customer, principally sales commissions when the renewal commission is not commensurate with the initial commission, and deferred engineering costs for significant software customization or modification and set-up services to the extent deemed recoverable. Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, 2022 December 31, 2021 Unbilled contracts receivable $ 52,081 $ 50,962 Other current assets 576 724 Long-term unbilled contracts receivable 4,418 3,825 Other long-term assets 836 1,043 Total contract assets $ 57,911 $ 56,554 Contract Liabilities Contract liabilities are mainly comprised of deferred revenue related to technology solutions arrangements, multi-period licensing, and other offerings for which the Company is paid in advance while the promised good or service is transferred to the customer at a future date or over time. Deferred revenue also includes amounts received related to professional services to be performed in the future. Deferred revenue arises when cash payments are received, including amounts which are refundable, in advance of performance obligations being completed. Allowance for Credit Losses The allowance for credit losses, which includes the allowance for accounts receivable and unbilled contracts receivable, represents the Company’s best estimate of lifetime expected credit losses inherent in those financial assets. The Company’s lifetime expected credit losses are determined using relevant information about past events (including historical experience), current conditions, and reasonable and supportable forecasts that affect collectability. The Company monitors its credit exposure through ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. In addition, the Company performs routine credit management activities such as timely account reconciliations, dispute resolution, and payment confirmations. The Company may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. The Company’s long-term unbilled contracts receivable is derived from fixed-fee or minimum-guarantee arrangements, primarily with large well-capitalized companies. It is generally considered to be of high credit quality due to past collection history and the nature of the customers. The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended Three Months Ended Accounts Receivable Unbilled Contracts Receivable Accounts Receivable Unbilled Contracts Receivable Beginning balance $ 1,805 $ 306 $ 3,206 $ 1,604 Provision for credit losses 99 7 428 76 Recoveries/charge-off ( 133 ) — ( 1,274 ) — Balance at end of period $ 1,771 $ 313 $ 2,360 $ 1,680 Nine Months Ended Nine Months Ended Accounts Receivable Unbilled Contracts Receivable Accounts Receivable Unbilled Contracts Receivable Beginning balance $ 2,245 $ 480 $ 6,454 $ 1,414 Provision for (reversal of) credit losses 69 ( 167 ) 523 306 Recoveries/charge-off ( 543 ) — ( 4,617 ) (1) ( 40 ) Balance at end of period $ 1,771 $ 313 $ 2,360 $ 1,680 (1) The charge off of accounts receivable during the nine months ended September 30, 2021 was primarily related to a customer whose account had been substantially reserved for credit losses in 2020 due to deteriorating financial condition and delinquent payment history. Additional Disclosures The following table presents additional revenue and contract disclosures (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue recognized in the period from: Amounts included in deferred revenue at the beginning of $ 5,112 $ 4,957 $ 19,713 $ 20,264 Performance obligations satisfied in previous periods (true $ 4,435 $ 539 $ 25,301 (2) $ 7,159 (1) True ups represent the differences between the Company’s quarterly estimates of per-unit royalty revenue and actual production/sales-based royalties reported by licensees in the following period. Licensee reporting adjustments represent corrections or revisions to previously reported per-unit royalties by licensees, generally resulting from the Company’s inquiries or compliance audits. Settlements represent resolutions of litigation during the period for past royalties owed. (2) Amount includes past royalty revenue from the set tlement of a contract dispute with a large mobile imaging customer, and the execution of a long-term license agreement with a leading consumer electronics and over-the-top (“OTT”) service provider. The long-term license agreement is effective as of the expiration of the prior agreement. The Company recorded revenue from both the settlement and the license agreement, referred to above, in the second quarter of 2022 and expects to record revenue from both the settlement and the license agreement in future periods. Remaining revenue under contracts with performance obligations represents the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) under certain of the Company’s fixed fee or minimum guarantee arrangements and engineering services contracts. The Company’s remaining revenue under contracts with performance obligations was as follows (in thousands): As of September 30, 2022 December 31, 2021 Revenue from contracts with performance obligations expected to be satisfied in: 2022 (remaining 3 months) $ 13,556 $ 51,201 2023 48,964 37,696 2024 25,715 13,314 2025 23,140 6,274 2026 4,278 2,226 Thereafter 2,225 399 Total $ 117,878 $ 111,110 |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | NOTE 4 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Other current assets consisted of the following (in thousands): September 30, 2022 December 31, 2021 Prepaid expenses $ 18,148 $ 15,283 Inventory* 9,069 5,102 Other 12,916 5,600 Total $ 40,133 $ 25,985 *All inventory is finished goods. Property and equipment, net, consisted of the following (in thousands): September 30, 2022 December 31, 2021 Equipment, furniture and other $ 75,585 $ 64,237 Building and improvements 18,331 18,331 Land 5,300 5,300 Leasehold improvements 21,665 22,064 Property and equipment, gross 120,881 109,932 Less: accumulated depreciation and amortization ( 69,098 ) ( 52,455 ) Total $ 51,783 $ 57,477 Other long-term a ssets consisted of the following (in thousands): September 30, 2022 December 31, 2021 Long-term deferred tax assets $ 2,067 $ 1,847 Other assets 29,644 19,223 Total $ 31,711 $ 21,070 Accrued liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Employee compensation and benefits $ 36,119 $ 33,685 Third-party royalties 6,650 4,428 Accrued expenses 23,376 21,147 Accrued severance 1,762 1,834 Current portion of operating lease liabilities 15,969 14,725 Other 13,509 8,585 Total $ 97,385 $ 84,404 Other long-term liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Long-term income tax payable $ 768 $ 462 Other 4,539 5,208 Total $ 5,307 $ 5,670 Accumulated other comprehensive loss consisted of the following (in thousands): September 30, 2022 December 31, 2021 Foreign currency translation adjustment, net of tax $ ( 5,039 ) $ ( 676 ) Total $ ( 5,039 ) $ ( 676 ) |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | NOTE 5 – FINANCIAL INSTRUMENTS Non-marketable Equity Securities As of September 30, 2022 and December 31, 2021, other long-term assets included equity securities accounted for under the equity method with a carrying amount of $ 4.1 million and $ 4.8 million, respectively, and equity securities without a readily determinable fair value with a carrying amount of $ 0.1 million and $ 0.1 million, respectively. No impairments or adjustments to the carrying amount of the Company’s equity securities without a readily determinable fair value were recognized in the three and nine months ended September 30, 2022 and 2021, respectively. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | NOTE 6 – FAIR VALUE The Company follows the authoritative guidance for fair value measurement and the fair value option for financial assets and financial liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets. Level 2 Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. There were no marketable securities required to be measured at fair value on a recurring basis as of September 30, 2022 or December 31, 2021. Financial Instruments Not Recorded at Fair Value The Company’s long-term debt is carried at amortized cost and is measured at fair value on a quarterly basis for disclosure purposes. The carrying amounts and estimated fair values are as follows (in thousands): September 30, 2022 December 31, 2021 Carrying Estimated Carrying Estimated Senior Unsecured Promissory Note (1) $ 50,000 $ 49,300 $ — $ — (1) See “Note 9 – Debt ” for additional information. The fair values of the Company’s debt instruments were estimated based on Level 2 inputs, including credit market data of debt instruments rated similarly to the Company’s. Non-Recurring Fair Value Measurements For purchase accounting related fair value measurements, see “Note 7 – Business Combinations .” For goodwill impairment related fair value measurements, see “Note 8 – Goodwill And Identified Intangible Assets .” |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Business Combinations | NOTE 7 – BUSINESS COMBINATIONS MobiTV On May 31, 2021, the Company completed its acquisition of certain assets and assumption of certain liabilities of MobiTV, Inc. (“MobiTV”, and the acquisition, the “MobiTV Acquisition”), a provider of application-based Pay-TV video delivery solutions. The acquisition expanded the Company’s IPTV Managed Service capabilities, which is expected to grow the addressable market for the Company’s IPTV products and further secure the Company’s position as a leading provider of Pay-TV solutions. The net purchase price for the MobiTV Acquisition was $ 12.4 million in cash. Purchase Price Allocation The MobiTV Acquisition has been accounted for as a business combination, using the acquisition method. The following table presents the allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on the fair values at the acquisition date, with any excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded to goodwill, all of which is expected to be deductible for tax purposes. The following table sets forth the final purchase price allocation with no measure period adjustments identified ($ in thousands): Estimated Useful Final Other current assets $ 390 Property and equipment 9,223 Operating lease right-of-use assets 1,186 Identifiable intangible assets: Technology 6 3,260 Goodwill 4,059 Other long-term assets 115 Accrued liabilities ( 5,288 ) Noncurrent operating lease liabilities ( 545 ) Total purchase price $ 12,400 The results of operations and cash flows relating to the business acquired pursuant to the MobiTV Acquisition have been included in the Company’s condensed consolidated financial statements for periods subsequent to May 31, 2021, and the related assets and liabilities were recorded at their estimated fair values in the Company’s Condensed Consolidated Balance Sheet as of May 31, 2021. Revised Pro Forma Financial Information During the third quarter of 2022, the Company identified errors in the previously reported Supplemental Pro Forma Information related to the MobiTV Acquisition. The Company previously reported pro forma revenue for the three and six months ended June 30, 2021 to be $ 223.4 million and $ 447.7 million, respectively, rather than $ 121.5 million and $ 247.9 million, respectively. In addition, the Company previously reported net loss attributable to the Company for the three and six months ended June 30, 2021 to be $ 8.6 million and $ 14.9 million, respectively, rather than $ 42.4 million and $ 93.3 million, respectively. The Company has correctly reflected the pro forma operating results reported for the three and nine months ended September 30, 2021 included in the below disclosures. Supplemental Pro Forma Information The following unaudited pro forma financial information assumes the MobiTV Acquisition was completed as of January 1, 2020. The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information. This is not necessarily indicative of the results of operations that would have been achieved if the MobiTV Acquisition had taken place on January 1, 2020, nor is it necessarily indicative of future results. Consequently, actual results could differ materially from the unaudited pro forma financial information presented below. The following table presents the pro forma operating results as if the acquired operations of MobiTV had been included in the Company’s Condensed Consolidated Statements of Operations as of January 1, 2020 (unaudited, in thousands): Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Revenue $ 117,732 $ 365,597 Net loss attributable to the Company $ ( 46,271 ) $ ( 139,371 ) The unaudited supplemental pro forma information above includes the following pro forma adjustments: removal of certain elements of the historical MobiTV business that were not acquired, elimination of inter-company transactions between MobiTV and the Company, adjustments for transaction related costs, and adjustments to reflect the impact of purchase accounting adjustments. The unaudited supplemental pro forma information above does not include any cost saving synergies from operating efficiencies. Vewd Software Holdings Limited On July 1, 2022, the Company completed the acquisition of Vewd Software Holdings Limited (“Vewd,” and the “Vewd Acquisition”). Vewd is a leading global provider of OTT and hybrid TV solutions. The acquisition establishes the Company as a leading independent streaming m edia platform through its TiVo brand and the largest independent provider of Smart TV middleware globally. The total consideration was approximately $ 102.9 million, consisting of approximately $ 52.9 million of cash and $ 50.0 million of debt. Refer to “Note 9 – Debt ” for additional information on this debt. Preliminary Purchase Price Allocation The Vewd Acquisition has been accounted for as a business combination, using the acquisition method. The following table presents the preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on the fair values at the acquisition date ($ in thousands): Estimated Useful Estimated Cash and cash equivalents $ 2,684 Accounts receivable 3,341 Unbilled contracts receivable 2,335 Other current assets 1,208 Property and equipment 443 Operating lease right-of-use assets 2,020 Identifiable intangible assets: Technology 7 28,050 Customer relationships – large 7 4,900 Customer relationships – small 4 3,500 Non-compete agreements 2 870 Trade name 5 830 Total identifiable intangible assets 38,150 Goodwill 68,115 Other long-term assets 977 Accounts payable ( 869 ) Accrued liabilities ( 4,777 ) Deferred revenue ( 920 ) Long-term deferred tax liabilities ( 8,393 ) Noncurrent operating lease liabilities ( 1,094 ) Other long-term liabilities ( 307 ) Total preliminary purchase price $ 102,913 The above preliminary purchase price allocation, including the purchase consideration, was based on preliminary valuations and assumptions and is still subject to change within the measurement period as additional information is received, including potential changes to prepaid income taxes, current and non-current income taxes payable, deferred taxes, and other working capital adjustments. The final purchase price allocation is expected to be completed as soon as practicable, but not later than one year from the date of the acquisition. The following is a description of the methods used to determine the fair values of significant assets and liabilities. Identifiable Intangible Assets Identifiable intangible assets primarily consist of technology, customer relationships, non-compete agreements and trade name. In determining the fair value, the Company utilized various forms of the income and cost approaches depending on the asset being valued. The estimation of fair value required significant judgment related to cash flow forecasts, discount rates reflecting the risk inherent in each cash flow stream, competitive trends, market comparables and other factors. Inputs were generally determined using historical data supplemented by current and anticipated market conditions, and growth rates. The technology was valued using the excess earnings method. Significant assumptions used under this method include forecasted revenues and growth, estimated technology obsolescence, contributory asset charges, and the discount rate. The customer relationships were valued using the cost approach, based on estimated customer acquisition costs. Goodwill The excess of the consideration transferred over the fair value of assets acquired and liabilities assumed was recognized as goodwill. The goodwill is generated from operational synergies and cost savings the Company expects to achieve from the consolidated operations, as well as the expected benefits from future technolog ies that do not meet the definition of an identifiable intangible asset and Vewd’s knowledgeable and experienced workforce. Approximately $ 0.4 million of the acquired goodwill is expected to be deductible for tax purposes. Vewd Results of Operations The results of operations and cash flows relating to the Vewd Acquisition have been included in the Company’s condensed consolidated financial statements for periods subsequent to July 1, 2022, and the related assets and liabilities were recorded at their estimated fair values in the Company’s Condensed Consolidated Balance Sheet as of July 1, 2022. For the three and nine months ended September 30, 2022, the acquired Vewd business contributed $ 2.5 million of revenue and $ 10.1 million of operating loss, respectively, to the Company’s operating results. Transaction and Other Costs In connection with the Vewd Acquisition, the Company incurred significant one-time expenses such as transaction related costs and severance and retention costs. For the three and nine months ended September 30, 2022, transaction related costs including transaction bonuses, legal and consultant fees, were $ 4.0 million and $ 6.0 million, respectively. For the three and nine months ended September 30, 2022, severance and retention costs associated with the Vewd Acquisition were $ 2.1 million. Supplemental Pro Forma Information The following unaudited pro forma financial information assumes the Vewd Acquisition was completed as of January 1, 2021. The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information. This is not necessarily indicative of the results of operations that would have been achieved if the Vewd Acquisition had taken place on January 1, 2021, nor is it necessarily indicative of future results. Consequently, actual results could differ materially from the unaudited pro forma financial information presented below. The following table presents the pro forma operating results as if the acquired operations of Vewd had been included in the Company's Condensed Consolidated Statements of Operations as of January 1, 2021 (unaudited, in thousands): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Revenue $ 121,637 $ 121,757 $ 373,057 $ 371,450 Net loss attributable to the Company $ ( 394,691 ) $ ( 50,779 ) $ ( 468,457 ) $ ( 145,928 ) The unaudited supplemental pro forma information above includes the following pro forma adjustments: adjustments for transaction related costs and severance and retention costs, adjustments for amortization of intangible assets, and elimination of inter-company transactions between Vewd and the Company. The unaudited supplemental pro forma information above does not include any cost saving synergies from operating efficiencies. |
Goodwill and Identified Intangi
Goodwill and Identified Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Identified Intangible Assets | NOTE 8 – GOODWILL AND IDENTIFIE D INTANGIBLE ASSETS Goodwill The chang es to the carrying value of goodwill from January 1, 2022 through September 30, 2022 are reflected below (in thousands): December 31, 2021 $ 536,512 Goodwill adjustment related to Mergers in prior periods (1) ( 72 ) Vewd Acquisition (2) 68,115 Impairment charge (3) ( 354,000 ) September 30, 2022 $ 250,555 (1) Related to an immaterial measurement period adjustment. (2) Related to the Vewd Acquisition completed in July 2022. For more information regarding the transaction, see “Note 7 - Business Combinations .” (3) See discussion below. Goodwill is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. During the three months ended September 30, 2022, indicators of potential impairment for the Product reporting unit were identified such that management concluded it was more-likely-than-not that goodwill was impaired and a quantitative interim goodwill impairment assessment should be performed as of September 30, 2022. Indicators of potential impairment included a sustained decline in Xperi Holding’s stock price during the second half of the third quarter of 2022 reflective of rising interest rates and continued decline in macroeconomic conditions. The Company proceeded to perform a fair value analysis of the Product reporting unit using the market capitalization approach. Under this approach, management estimated the fair value of the Product reporting unit as of September 30, 2022 using quoted market prices of Xperi’s common stock, over its first ten trading days following the Separation, and a control premium representing the synergies a market participant would achieve upon obtaining control of Xperi. As a result of the fair value analysis, the Company recognized a goodwill impairment charge of $ 354.0 million during the three months ended September 30, 2022. The Company also assessed the recoverability of indefinite-lived intangible assets related to the Product reporting unit, and concluded that no impairment existed as of September 30, 2022 as their projected undiscounted net cash flows exceeded their carrying amounts. No impairment indicators were identified with respect to other long-lived assets. Identified Intangible Assets Identified intangible assets consisted of the following (in thousands): Average September 30, 2022 December 31, 2021 Life Gross Accumulated Net Gross Accumulated Net Finite-lived intangible assets Acquired patents / core technology 3 - 10 $ 22,189 $ ( 5,613 ) $ 16,576 $ 5,258 $ ( 5,215 ) $ 43 Existing technology / content database 5 - 10 240,696 ( 186,216 ) 54,480 212,765 ( 173,420 ) 39,345 Customer contracts and related relationships 3 - 9 501,874 ( 326,164 ) 175,710 494,026 ( 297,867 ) 196,159 Trademarks/trade name 4 - 10 39,613 ( 28,478 ) 11,135 38,783 ( 24,796 ) 13,987 Non-competition agreements 1 2,231 ( 2,231 ) — 2,231 ( 2,231 ) — Other key employee non-compete agreements 2 870 ( 108 ) 762 — — — Total finite-lived intangible assets 807,473 ( 548,810 ) 258,663 753,063 ( 503,529 ) 249,534 Indefinite-lived intangible assets TiVo tradename/trademarks N/A 21,400 — 21,400 21,400 — 21,400 Total intangible assets $ 828,873 $ ( 548,810 ) $ 280,063 $ 774,463 $ ( 503,529 ) $ 270,934 As of September 30, 2022, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands): 2022 (remaining 3 months) $ 16,066 2023 57,767 2024 43,340 2025 34,693 2026 31,472 2027 30,629 Thereafter 44,696 $ 258,663 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9 – DEBT In connection with the Vewd acquisition as fully disclosed in Note 7, on July 1, 2022, TiVo Product Holdco LLC, which was subsequently renamed to Xperi Inc., issued a senior unsecured promissory note (the “Promissory Note”) to the sellers of Vewd in a principal amount of $ 50.0 million. The issuer’s obligations under the Promissory Note were guaranteed by Xperi Holding prior to the Spin-Off. Indebtedness outstanding under the Promissory Note bears an interest rate of 6.00 % per annum, payable in cash on a quarterly basis. If a certain qualified spin-off transaction occurs, the interest rate will be increased to the greater of (a) 6.00 % and (b) the sum of (i) the highest interest rate payable under any credit facility or bonds, debentures, notes or similar instruments where the issuer or any guarantor borrows money or guarantees obligations on a secured basis on or after the date of such spin-off transaction, plus (ii) 2.00 %. The Promissory Note will mature on July 1, 2025 . The issuer may, at any time and on any one or more occasions, prepay all or any portion of the outstanding principal amount, plus accrued and unpaid interest, if any, under the Promissory Note without premium or penalty. In addition, the Promissory Note has mandatory prepayment provisions upon certain change of control or asset sale events. The Promissory Note includes certain covenants that restrict the issuer and each guarantor’s ability to, among other things, incur certain indebtedness or engage in any material line of business substantially different from those lines of business conducted by such entities on the closing date of the acquisition. The Promissory Note does not contain any financial covenants. As of September 30, 2022, $ 50.0 million in principal balance was outstanding. Interest expense on the Promissory Note was $ 0.8 million and $ 0.8 million for the three and nine months ended September 30, 2022, respectively. The Company did not incur any debt prior to July 1, 2022. As of September 30, 2022, future minimum principal payments for the Promissory Note are summarized as follows (in thousands): 2022 (remaining 3 months) $ — 2023 — 2024 — 2025 50,000 2026 — Thereafter — Total $ 50,000 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 10 – NET LOSS PER SHARE On October 1, 2022, the date of the Spin-Off, 42,023,632 shares of the common stock of Xperi were distributed to Xperi Holding shareholders of record as of the record date of September 21, 2022 . This share amount is utilized for the calculation of basic and diluted loss per share for all periods presented prior to the spinoff. For the three and nine months ended September 30, 2022 and 2021, these shares are treated as issued and outstanding for purposes of calculating historical loss per share. For periods prior to the Spin-Off, it is assumed that there are no dilutive equity instruments as there were no equity awards of Xperi outstanding prior to the Spin-Off. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense | NOTE 11 – STOCK-BASED COMPENSATION EXPENSE Certain of the Company’s employees participate in equity-based compensation plans sponsored by Parent. Parent’s equity-based compensation plans include equity incentive plans and an employee stock purchase plan (“ESPP”). All awards granted under the plans are based on shares of Parent’s common stock and, as such, are reflected in Parent’s Consolidated Statements of Stockholders’ Equity and not in the Company’s Condensed Consolidated Statements of Equity. The following disclosures of stock-based compensation expense recognized by the Company are based on the awards and terms granted to the Company’s employees. Accordingly, the amounts presented are not necessarily indicative of future awards and do not necessarily reflect the results that the Company would have experienced as an independent company for the periods presented. Equity Incentive Plans The 2020 EIP In connection with the Mergers and immediately prior to June 1, 2020, Parent adopted the Xperi Holding Corporation 2020 Equity Incentive Plan (the “2020 EIP”). Under the 2020 EIP, Parent may grant equity-based awards to employees, non-employee directors, and consultants for services rendered to Parent (or any subsidiary) in the form of stock options, stock awards, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and performance awards (or any combination thereof). A total of 16,800,000 shares have been reserved for issuance under the 2020 EIP provided that each share issued pursuant to “full value” awards (i.e., stock awards, restricted stock awards, restricted stock units, performance awards and dividend equivalents) are counted against shares available for issuance under the 2020 EIP on a 1.5 to 1 ratio. The 2020 EIP provides for option grants designed as either incentive stock options or non-statutory options. Options are granted with an exercise price not less than the value of the common stock on the grant date and have a term of ten years from the date of grant and vest over a four-year period. The vesting criteria for restricted stock awards and restricted stock units is generally the passage of time or meeting certain performance-based objectives, and continued employment through the vesting period generally over four years for time-based awards. Assumed Plans On June 1, 2020, Parent assumed all then-outstanding stock options, awards, and shares available and reserved for issuance under all legacy Equity Incentive Plans of Pre-Merger TiVo (collectively, the “Assumed Plans”). Stock options assumed from the Assumed Plans generally have vesting periods of four years and a contractual term of seven years . Awards of restricted stock and restricted stock units assumed from the Assumed Plans are generally subject to a four-year vesting period. The number of shares subject to stock options and restricted stock unit awards outstanding under these plans are included in the tables below. Shares reserved under the Assumed Plans will be available for future grants. As of September 30, 2022, there were 6.1 million shares reserved for future grants under both the 2020 EIP and the Assumed Plans. A summary of the stock option activity is presented below (in thousands, except per share amounts): Options Outstanding Number of Weighted Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Balance at December 31, 2021 186 $ 25.41 3.69 $ 48.64 Options exercised ( 2 ) $ 15.21 Options canceled / forfeited / expired ( 14 ) $ 23.66 Balance at September 30, 2022 170 $ 25.69 3.25 — Vested and expected to vest at September 30, 2022 170 $ 25.69 3.25 — Balance at September 30, 2022 170 $ 25.69 3.25 — Restricted Stock Awards and Units Parent grants equity-based compensation awards from the 2020 EIP that permits the grant of restricted stock and restricted stock units (“restricted stock awards”) and similar types of equity awards to employees, officers, directors and consultants of the Company. Restricted stock awards are considered outstanding at the time of grant as holders are entitled to voting rights on Parent matters. Options and restricted stock awards granted under this plan generally have a term of ten years from the date of grant and vest over a four-year period. The vesting criteria for restricted stock awards and units is generally the passage of time or meeting certain performance-based objectives, and continued employment through the vesting period generally over four years . Performance Awards and Units Performance awards and units may be granted to employees or consultants based upon, among other things, the contributions, responsibilities and other compensation of the particular employee or consultant. The value and the vesting of such performance awards and units are generally linked to one or more performance goals or certain market conditions determined by the Company, in each case on a specified date or dates or over any period or periods determined by the Company, and may range from zero to 200 percent of the grant. For performance awards subject to a market vesting condition (“market-based PSUs”), the fair value per award is fixed at the grant date and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of achievement of the market condition. Information with respect to outstanding restricted stock awards and units (including both time-based vesting and performance-based vesting) as of September 30, 2022 is as follows (in thousands, except per share amounts): Restricted Stock and Restricted Stock Units Number of Number of Total Weighted Balance at December 31, 2021 4,689 252 4,941 $ 19.15 Employees transferred to IP Licensing business ( 23 ) — ( 23 ) $ 17.31 Awards and units granted 3,080 141 3,221 $ 16.59 Awards and units vested / earned ( 1,447 ) — ( 1,447 ) $ 18.60 Awards and units canceled / forfeited ( 496 ) — ( 496 ) $ 17.94 Balance at September 30, 2022 5,803 393 6,196 $ 18.05 Employee Stock Purchase Plans Parent’s 2020 ESPP allows eligible employees to purchase shares of the Parent’s common stock at a discount through payroll deductions. The ESPP consists of up to four consecutive six-month purchase periods within a twenty-four-month offering period. Employees purchase shares each purchase period at the lower of 85 % of the market value of Parent’s common stock at either the beginning of the offering period or the end of the purchase period. As of September 30, 2022, there were 5.5 million shares reserved for grant under the Company’s 2020 ESPP. The following table summarizes the stock-based compensation expense attributable to the Company’s operations for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue, excluding depreciation and amortization of intangible assets $ 779 $ 525 $ 2,177 $ 1,377 Research and development 5,515 4,604 16,295 12,808 Selling, general and administrative 4,291 2,991 11,289 10,178 Total stock-based compensation expense 10,585 8,120 29,761 24,363 Tax effect on stock-based compensation expense ( 17 ) ( 55 ) ( 80 ) ( 163 ) Net effect on net loss $ 10,568 $ 8,065 $ 29,681 $ 24,200 Stock-based compensation expense categorized by various equity components for the three and nine months ended September 30, 2022 and 2021 is summarized in the table below (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Restricted stock awards and units $ 10,001 $ 7,244 $ 27,370 $ 21,892 Employee stock purchase plan 584 854 2,391 2,409 Employee stock options — 22 — 62 Total stock-based compensation expense $ 10,585 $ 8,120 $ 29,761 $ 24,363 In addition, for the three months ended September 30, 2022 and 2021 $ 2.4 million and $ 2.0 million respectively, and for the nine months ended September 30, 2022 and 2021, $ 6.9 and $ 6.3 million, respectively, of stock-based compensation expense was recognized in operating results as part of the corporate and shared functional employees expenses allocation. Stock-based compensation is measured at the grant date based on the estimated fair value of the award and is recognized as expense on a straight-line basis, net of estimated forfeitures, over the requisite service or performance period. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. Historical data is used to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. Parent uses the closing trading price of its common stock on the date of grant as the fair value of awards of restricted stock units (“RSUs”), and performance stock units (“PSUs”) that are based on company-designated performance targets. For performance stock units that are based on market conditions, or market-based PSUs, fair value is estimated by using a Monte Carlo simulation on the date of grant. Parent uses the Black-Scholes option pricing model to determine the estimated fair value of options. The fair value of each option grant is determined on the date of grant and the expense is recorded on a straight-line basis. The assumptions used in the model include expected life, volatility, risk-free interest rate, and dividend yield. The Company estimates the grant-date fair value of stock options and stock to be issued under the ESPP using the Black-Scholes pricing model. There were no stock options granted during the three and nine months ended September 30, 2022 and 2021, and the outstanding options are fully vested as of September 30, 2022. The following assumptions were used to value the restricted stock units subject to market conditions granted during the period: April 2022 March 2021 Expected life (years) 3.0 3.0 Risk-free interest rate 2.8 % 0.3 % Dividend yield 1.2 % 1.0 % Expected volatility 40.9 % 47.9 % The following assumptions were used to value the ESPP shares: March 2022 September 2021 March 2021 Expected life (years) 2.0 2.0 2.0 Risk-free interest rate 1.3 % 0.2 % 0.1 % Dividend yield 1.1 % 0.9 % 1.2 % Expected volatility 48.5 % 52.0 % 52.0 % |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 12 – INC OME TAXES For the three months ended September 30, 2022, the Company recorded an income tax expense of $ 2.0 million on pretax loss of $ 399.7 million, which resulted in an effective tax rate of ( 0.5 )%. The income tax expense for the three months ended September 30, 2022 was primarily related to foreign withholding taxes and state income taxes, partially offset by a tax benefit due to an impairment of goodwill. For the nine months ended September 30, 2022, the Company recorded an income tax expense of $ 12.5 million on pretax loss of $ 450.7 million, which resulted in an effective tax rate of ( 2.8 )%. The income tax expense was primarily related to foreign withholding taxes, state income taxes, and foreign income tax expense partially offset by a tax benefit due to an impairment of goodwill. For the three months ended September 30, 2021, the Company recorded an income tax expense of $ 2.8 million on pretax loss of $ 44.8 million, which resulted in an effective tax rate of ( 6.3 )%. The income tax expense for the three months ended September 30, 2021 was primarily related to foreign withholding taxes and foreign income taxes. For the nine months ended September 30, 2021, the Company recorded an income tax expense of $ 8.2 million on pretax loss of $ 118.5 million, which resulted in an effective tax rate of ( 6.9 )%. The income tax expense was primarily related to foreign withholding taxes and foreign and U.S. state income taxes. As of September 30, 2022, gross unrecognized tax benefits increased $ 0.8 million to $ 9.2 million compared to $ 8.4 million as of December 31, 2021. This was included in long-term deferred tax and other long-term liabilities on the Condensed Consolidated Balance Sheets. Of this amount, $ 0.8 million would affect the effective tax rate if recognized. The Company is unable to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease. It is the Company’s policy to classify accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company recognized no interest and penalties related to unrecognized tax benefits for the three months ended September 30, 2022 and 2021, respectively. Accrued interest and penalties were zero as of both September 30, 2022 and December 31, 2021. As of September 30, 2022, the Company’s 2017 through 2021 tax years are generally open and subject to potential examination in one or more jurisdictions. In addition, in the United States, any net operating losses or credits that were generated in prior years but not yet fully utilized in a year that is closed under the statute of limitations may also be subject to examination. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | NOTE 13 – LE ASES The Company leases office and research facilities, data centers and office equipment under operating leases which expire through 2029. The Company’s leases have remaining lease terms of one year to seven years , some of which may include options to extend the leases for five years or longer, and some of which may include options to terminate the leases within the next 6 years or less. Leases with an initial term of 12 months or less are not recorded on the balance sheets ; expense for these leases is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred and are not included within the lease liability and right-of-use assets calculation. As a practical expedient, the Company elected, for all office and facility leases, not to separate non lease components (e.g., common-area maintenance costs) from lease components (e.g., fixed payments including rent) and instead to account for each separate lease component and its associated non-lease components as a single lease component. As most of the leases do not provide an implicit rate, the Company generally, for purposes of discounting lease payments, uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Company subleases certain real estate to third parties. The sublease portfolio consists of operating leases for previously exited office space. Certain subleases include variable payments for operating costs. The subleases are generally co-terminus with the head lease, or shorter. Subleases do not include any residual value guarantees or restrictions or covenants imposed by the leases. Income from subleases is recognized as a reduction to selling, general and administrative expenses. The components of operating lease costs were as follows (in thousands): Three Months Ended, Nine Months Ended, 2022 2021 2022 2021 Fixed lease cost (1) $ 5,133 $ 5,111 $ 15,057 $ 15,030 Variable lease cost 1,593 1,171 4,076 3,246 Less: sublease income ( 2,293 ) ( 2,051 ) ( 7,105 ) ( 7,397 ) Total operating lease cost $ 4,433 $ 4,231 $ 12,028 $ 10,879 (1) Includes short-term leases, which were immaterial. Other information related to leases was as follows (in thousands, except lease term and discount rate): Three Months Ended, Nine Months Ended, 2022 2021 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,982 $ 5,190 $ 14,882 $ 15,501 ROU assets obtained in exchange for new lease liabilities: Operating leases $ 5,268 $ 78 $ 8,371 $ 3,556 September 30, December 31, 2021 Weighted-average remaining lease term (years): Operating leases 3.74 4.48 Weighted-average discount rate: Operating leases 5.0 % 4.9 % Future minimum lease payments and related lease liabilities as of September 30, 2022 were as follows (in thousands): Operating Lease Payments (1) Sublease Income Net Operating Lease Payments 2022 (remaining 3 months) $ 3,907 $ ( 1,881 ) $ 2,026 2023 19,229 ( 7,618 ) 11,611 2024 16,929 ( 7,610 ) 9,319 2025 14,419 ( 7,386 ) 7,033 2026 6,424 ( 935 ) 5,489 Thereafter 2,823 — 2,823 Total lease payments 63,731 ( 25,430 ) 38,301 Less: imputed interest ( 6,019 ) — ( 6,019 ) Present value of lease liabilities: $ 57,712 $ ( 25,430 ) $ 32,282 Less: current obligations under leases (accrued liabilities) ( 15,969 ) Noncurrent operating lease liabilities $ 41,743 (1) Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOT E 14 – COMMITMENTS AND CONTINGENCIES Purchase and Other Contractual Obligations In the ordinary course of business, the Company enters into contractual agreements with third parties that include non-cancelable payment obligations, for which it is liable in future periods. These arrangements primarily include unconditional purchase obligations to service providers. As of September 30, 2022, the Company’s total future unconditional purchase obligations were approximately $ 109.8 million. Inventory Purchase Commitment The Company uses contract manufacturers to provide manufacturing services for its products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, the Company enters into agreements with its contract manufacturers that either allow them to procure inventory based on criteria as defined by the Company or that establish the parameters defining the Company’s requirements. A significant portion of the Company’s purchase commitments arising from these agreements consist of firm, non-cancelable and unconditional purchase commitments. In certain instances, these agreements allow the Company the option to cancel, reschedule or adjust the Company’s requirements based on its business needs prior to firm orders being placed. As of September 30, 2022, the Company had total purchase commitments for inventory of $ 3.2 million, of which $ 0.7 million was accrued in the Condensed Consolidated Balance Sheet. Indemnifications In the normal course of business, the Company provides indemnifications of varying scopes and amounts to certain of its licensees, customers, and business partners against claims made by third parties arising from the use of the Company's products, intellectual property, services or technologies. The Company cannot reasonably estimate the possible range of losses that may be incurred pursuant to its indemnification obligations, if any. Variables affecting any such assessment include, but are not limited to: the scope of the contractual indemnification obligation; the nature of the third party claim asserted; the relative merits of the third party claim; the financial ability of the third party claimant to engage in protracted litigation; the number of parties seeking indemnification; the nature and amount of damages claimed by the party suing the indemnified party; and the willingness of such party to engage in settlement negotiations. The Company has received requests for indemnification, but to date none has been material and no liability has been recorded in the Company’s financial statements. As permitted under Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company believes, given the absence of any such payments in the Company’s history, and the estimated low probability of such payments in the future, that the estimated fair value of these indemnification agreements is immaterial. In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable the Company to recover any payments under the indemnification agreements, should they occur. Contingencies At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of losses is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company is currently unable to predict the final outcome of lawsuits to which it may become a party and therefore cannot determine the likelihood of loss nor estimate a range of possible losses. An adverse decision in any such proceedings could significantly harm the Company’s business and consolidated financial position, results of operations or cash flows. The Company and its subsidiaries have been involved in litigation matters and claims in the normal course of business. In the past, the Company or its subsidiaries have litigated to enforce their respective patents and other intellectual property rights, to enforce the terms of license agreements, to determine infringement or validity of intellectual property rights, and to defend themselves or their customers against claims of infringement or breach of contract. The Company expects it or its subsidiaries will be involved in similar legal proceedings in the future, including proceedings to ensure proper and full payment of royalties by licensees under the terms of their license agreements. Legal actions may harm the Company’s business. For example, legal actions could cause an existing licensee or strategic partner to cease making royalty or other payments to the Company, or to challenge the validity and enforceability of patents owned by the Company’s subsidiaries, or the scope of license agreements with the Company or its subsidiaries, or could significantly damage the Company’s relationship with such licensee or strategic partner and, as a result, prevent the adoption of the Company’s technologies by such licensee or strategic partner. Litigation could also severely disrupt or shut down the business operations of the Company or its subsidiaries, or licensees or strategic partners of the Company’s subsidiaries, which in turn would significantly harm ongoing relations with licensees or partners and cause the Company to lose royalty revenue. The costs associated with legal proceedings are typically high, relatively unpredictable, and not completely within the Company’s control. These costs may be materially higher than expected, which could adversely affect the Company’s operating results and lead to volatility in the price of its common stock. Whether or not determined in the Company’s favor or ultimately settled, litigation diverts managerial, technical, legal, and financial resources from the Company’s business operations. Furthermore, an adverse decision in any legal actions could result in a loss of the Company’s proprietary rights, subject the Company to significant liabilities, require the Company to seek licenses from others, limit the value of the Company’s licensed technology or otherwise negatively impact the Company’s stock price or its business and consolidated financial results |
Related Party Transactions and
Related Party Transactions and Net Parent Company Investment | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Net Parent Company Investment | NO TE 15 – RELATED PARTY TRANSACTIONS AND NET PARENT COMPANY INVESTMENT The Condensed Consolidated Financial Statements have been prepared on a standalone basis and were derived from the consolidated financial statements and accounting records of Parent. The following disclosure summarizes activity between the Company and Parent, including the affiliates of Parent that were not part of the Separation. Allocation of corporate expenses Prior to Separation, the Condensed Consolidated Financial Statements included expenses for certain management and support functions which were provided on a centralized basis within Parent, as described in Note 1 – T he Company and Basis of Presentation. These management and support functions include, but are not limited to, executive management, sales and marketing, finance, legal, information technology, employee benefits administration, stock-based compensation, treasury, risk management, procurement and other shared services. These allocations were made on a direct usage basis when identifiable, with the remainder allocated on a pro rata basis of billing, revenue, headcount or other measures of the Company and Parent. The amount of these allocations from Parent was $ 16.8 million, which included $ 0.8 million for depreciation expenses and $ 16.0 million for selling, general and administrative for the three months ended September 30, 2022, and $ 13.9 million, which included $ 1.3 million for depreciation expenses and $ 12.6 million for selling, general and administrative for the three months ended September 30, 2021. The amount of these allocations from Parent was $ 47.6 million, which included $ 3.0 million for depreciation expenses and $ 44.6 million for selling, general and administrative for the nine months ended September 30, 2022, and $ 45.9 million, which included $ 3.4 million for depreciation expenses and $ 42.5 million for selling, general and administrative for the nine months ended September 30, 2021. Management believes these cost allocations are a reasonable reflection of the utilization of services provided to, or the benefit derived by, the Company during the periods presented. The allocations may not, however, be indicative of the actual expenses that would have been incurred had the Company operated as a standalone public company. Actual costs that may have been incurred if the Company had been a standalone public company would depend on a number of factors, such as the chosen organizational structure, whether functions were outsourced or performed by Company’s employees, and strategic decisions made in areas such as selling, information technology and infrastructure. Net Parent company investment Net Parent company investment on the Condensed Consolidated Balance Sheets and Statements of Equity represents Parent’s historical investment in the Company, the net effect of transactions with and allocations from Parent and the Company’s accumulated deficit . Parent company investments after the date the Company began consolidating its financial results, as described in Note 1, are reported as net proceeds from Parent capital contributions on the Condensed Consolidated Statements of Cash Flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 - SUBS EQUENT EVENTS Xperi Spin-off On October 1, 2022, Xperi Holding (subsequently renamed to “Adeia Inc.”) completed the previously announced Spin-Off of Xperi in a transaction intended to be tax free for U.S. federal income tax purposes, which was accomplished by the distribution of 100 % of the outstanding common stock of Xperi to Xperi Holding stockholders as of the close of business on September 21, 2022 , the record date for the distribution. Xperi Holding stockholders received four shares of Xperi common stock for every ten shares of Xperi Holding common stock held at the close of business on the record date. Xperi is now an independent, publicly traded company, and on October 3, 2022, regular way trading of Xperi Inc.’s common stock commenced on the NYSE under the ticker symbol “XPER.” Prior to the consummation of the Spin-Off, the Board of Directors and shareholder of the Company adopted and approved the 2022 Equity Incentive Plan (“the 2022 EIP”) and the 2022 Employee Stock Purchase Plan (“the 2022 ESPP”), which became effective on October 1, 2022, the effective date of the Spin-Off. Under the 2022 EIP, a total of 10,100,000 shares was reserved and may be issued in the form of incentive stock options, non-statutory stock options, restricted stock grants, performance awards, dividend equivalents, restricted stock units, stock payments and stock appreciation rights. Under the 2022 ESPP, a total of 5,000,000 shares was reserved and may be issued to Xperi employees who participate in the 2022 ESPP. The 2022 EIP and 2022 ESPP are filed as exhibits to the Company’s Registration Statement on Form 10 previously filed with the SEC and which became effective on September 19, 2022. In connection with the Separation, the Company entered into several agreements with Adeia, including a separation and distribution agreement that sets forth certain agreements with Adeia regarding the principal actions taken to complete the Spin-Off, including the assets and rights transferred, liabilities assumed and related matters. It also sets forth other agreements that govern certain aspects of Adeia’s relationship with the Company following the Spin-Off. Other agreements that the Company and Adeia entered into that govern aspects of their relationship following the Separation include: Tax Matters Agreement The tax matters agreement (“Tax Matters Agreement”) governs the parties’ respective rights, responsibilities and obligations with respect to taxes, including taxes arising in the ordinary course of business, and taxes, if any, incurred as a result of the failure of the Distribution (and certain related transactions) to qualify for tax-free treatment for U.S. federal income tax purposes. The Tax Matters Agreement also sets forth the respective obligations of the parties with respect to the filing of tax returns, the administration of tax contests and assistance and cooperation on tax matters. Employee Matters Agreement The employee matters agreement (“Employee Matters Agreement”) governs each company’s respective compensation and benefit obligations with respect to current and former employees, directors and consultants. The Employee Matters Agreement identifies employees and employee-related liabilities (and attributable assets) allocated (either retained, transferred, and accepted, or assigned and assumed, as applicable) to Adeia and Xperi as part of the separation of Adeia into two companies, and describes when and how the relevant transfers and assignments occur. Cross Business License Agreement The cross-business license agreement (“CBLA”) sets forth the terms under which Adeia licenses to Xperi certain patents owned by Adeia or its affiliates that are necessary or useful in Xperi’s business. There are no restrictions preventing Adeia from establishing operations in entertainment-related products or services or on Xperi from establishing operations in intellectual property licensing activities after the separation. Transition Services Agreement The transition services agreement (“Transition Services Agreement”) sets forth the terms under which Xperi and its subsidiaries will provide to Adeia and its subsidiaries various services for a transitional period. The services to be provided include back office functions and assistance with regard to administrative tasks relating to day-to-day activities as needed, including finance, accounting and tax activities, IT services, customer support, facilities services, human resources, and general corporate support, as well as pass-through services provided by certain vendors. Data Sharing Agreement The data sharing agreement (“Data Sharing Agreement”) entered into between Adeia and Xperi provides a binding framework for the sharing of data between Xperi and its subsidiaries and Adeia and its subsidiaries. The Data Sharing Agreement sets forth the rights and obligations of the parties with respect to the retention and care of records, the handling of requests for information and the sharing of data in a legally compliant manner. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The amounts as of December 31, 2021 have been derived from the Company’s annual audited combined financial statements for the year ended December 31, 2021, included in the Form 10 filed with the SEC on September 14, 2022 (the “Form 10”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022 or any future period and the Company makes no representations related thereto. These financial statements should be read in conjunction with the annual audited combined financial statements and notes thereto as of and for the year ended December 31, 2021, included in the Form 10. During the three months ended September 30, 2022, all of the assets and liabilities of the Xperi Product business had been transferred to a legal entity under the common control of Xperi. Subsequent to this transfer, the financial statements and accompanying notes of the Xperi Product business are prepared on a consolidated basis and include the financial statements of Xperi and its subsidiaries in which Xperi has a controlling financial interest. All intercompany balances and transactions are eliminated in consolidation. Prior to the transfer, the financial statements and accompanying notes of the Xperi Product business were prepared on a combined basis as the Company was not historically held by a single legal entity. Net Parent company investment is presented within equity on a combined basis in lieu of share capital. Total net Parent company investment represents Parent’s total interest in the recorded net assets of the Company prior to the transfer. All intercompany transactions within the combined businesses of the Company have been eliminated. The Condensed Consolidated Balance Sheets of Xperi and its subsidiaries include Parent assets and liabilities that are specifically identifiable or otherwise attributable to the Company. In the fourth quarter of 2018, the Company funded a new subsidiary, Perceive Corporation (“Perceive”), which was created to focus on delivering edge inference solutions. As of September 30, 2022, the Company owned approximately 77.1 % of the outstanding equity interest of Perceive. The operating results of Perceive have been included in the Company’s consolidated financial statements since the fourth quarter of 2018. Prior to the separation, the Company was dependent on Parent for all of its working capital and financing requirements as Parent used a centralized approach to cash management and financing its operations. Financial transactions relating to the Company were accounted for as equity contributions from the Parent on the Condensed Consolidated Balance Sheets. Accordingly, none of Parent’s cash and cash equivalents were allocated to the Company for any of the periods presented, unless those balances were directly attributable to the Company. The Company reflects transfers of cash to and from Parent’s cash management system within equity as a component of net Parent investment on a combined basis and as a component of net Parent capital contribution on a consolidated basis. Other than the debt incurred in connection with the acquisition of Vewd Software Holdings Limited (“Vewd”) discussed in Note 9, Parent’s long-term debt has not been attributed to the Company for any of the periods presented because Parent’s borrowings are not the legal obligation of the Company. The cash and cash equivalents, including the Company’s capitalization from Parent on September 30, 2022 will be sufficient to support its operations, capital expenditures and income tax payments, in addition to any investments and other capital allocation needs for at least the next 12 months. The Condensed Consolidated Statements of Operations and Comprehensive Loss of the Company reflect allocations of general corporate expenses from Parent, including, but not limited to, executive management, sales and marketing, finance, legal, information technology, employee benefits administration, stock-based compensation, treasury, risk management, procurement and other shared services. These allocations were made on a direct usage basis when identifiable, with the remainder allocated on a pro rata basis of billing, revenue, headcount or other measures as deemed appropriate. Management of the Company and Parent consider these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, the Company. The allocations may not, however, reflect the expenses the Company would have incurred as a standalone company for the periods presented. Actual costs that may have been incurred if the Company had been a standalone company would depend on a number of factors, such as the chosen organizational structure, whether functions were outsourced or performed by employees and decisions with respect to areas such as facilities, information technology and operating infrastructure. Parent maintains various benefit and stock-based compensation plans at a corporate level. The Company’s employees participated in those programs and a portion of the cost of those plans is included in the Company’s Condensed Consolidated Financial Statements. The Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Equity do not include any benefit plan obligations or any equity related to stock-based compensation plans. See “Note 11 – Stock-Based Compensation Expense” for a description of the accounting for stock-based compensation. The Company’s fiscal year ends on December 31. The Company employs a calendar month-end reporting period for its quarterly reporting. |
Earnings Per Share | Earnings Per Share Basic and dilutive net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of the Company’s common stock outstanding during the period. The weighted average number of shares of common stock outstanding for the basic and diluted net loss per share is based on 42,023,632 shares of the Company’s common stock distributed on October 1, 2022 in connection with the Spin-Off and assumes these shares have been outstanding as of the beginning of the earliest period presented. There are no potentially dilutive common stock equivalents prior to the Spin-Off on October 1, 2022. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging, and subjective judgment include the estimation of licensees’ quarterly royalties prior to receiving the royalty reports, the determination of stand-alone selling price and the transaction price in an arrangement with multiple performance obligations, the assessment of the recoverability of goodwill, the assessment of useful lives and recoverability of other intangible assets and long-lived assets, recognition and measurement of current and deferred income tax assets and liabilities, the assessment of unrecognized tax benefits, and purchase accounting resulting from business combinations. Actual results experienced by the Company may differ from management’s estimates. The COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company business. The impact to date has included periods of significant volatility in markets the Company serves, in particular the automotive and broad consumer electronics markets. Additionally, the pandemic has caused some challenges and delays in acquiring new customers and executing license renewals. These factors may result in an impairment of our long-lived assets, including goodwill, increased credit losses and impairments of investments in other companies. The Company’s operations and those of its customers have also been negatively impacted by certain trends arising from the COVID-19 pandemic, including labor market constraints, shortage of semiconductor components and manufacturing capacities, and delays in shipments, product development and product launches. Moreover, the COVID-19 pandemic, its related impact, and United States federal, state and foreign government policies enacted to combat the pandemic have contributed to a recent rise of inflation that may increase the cost of the Company’s operations and reduce demand for the Company’s products and services and those of its customers, which may adversely affect the Company’s financial performance. The impact of the pandemic on the Company’s overall results of operations remains uncertain for the foreseeable future and will depend on various factors outside the Company’s control. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, “ Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”), which amends the guidance in ASC 805 to require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (“Topic 606”). As a result of the amendments, it is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its preacquisition financial statements. ASU 2021-08 is effective for public business entities for fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company elected to early adopt the new standard on January 1, 2022 . The adoption did no t have an impact on the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848)” (“ASU 2021-01”), which provides further clarification on the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modifications made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. The Company does not expect ASU 2020-04 and ASU 2021-01 to have a material impact on its condensed consolidated financial statements. |
Revenue Recognition | Revenue Recognition General Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, which may include various combinations of goods and services which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of sales taxes collected from customers which are subsequently remitted to governmental authorities. Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the individual performance obligations are separately accounted for if they are distinct. In an arrangement with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative stand-alone selling price basis. The determination of stand-alone selling price considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. When observable prices are not available, stand- alone selling price for separate performance obligations is based on the cost-plus-margin approach, considering overall pricing objectives. When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of technology or when a license of technology is the predominant item to which the variable consideration relates, revenue is recognized at the later of when the subsequent sale or usage occurs or the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied or partially satisfied. Description of Revenue-Generating Activities The Company derives the majority of its revenue from licensing its technology and solutions to customers. These arrangements are summarized as Technology License arrangements and Technology Solutions arrangements. For Technology License arrangements, the customer obtains rights to the technology delivered at the commencement of the agreement. For Technology Solutions arrangements, the customer receives access to a platform, media or data that includes frequent updates, where access to such updates is critical to the functionality of the technology. The timing of when performance obligations are satisfied, as well as the fee arrangements underlying each agreement, determine when revenue is recognized. Technology License Arrangements The Company licenses its audio, digital radio and imaging technology to consumer electronics (“CE”) manufacturers, automotive manufacturers or their supply chain partners. The Company generally recognizes royalty revenue from licenses based on units shipped or manufactured. Revenue is recognized in the period in which the customer’s sales or production are estimated to have occurred. This may result in an adjustment to revenue when actual sales or production are subsequently reported by the customer, generally in the month or quarter following sales or production. Estimating customers’ quarterly royalties prior to receiving the royalty reports requires the Company to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities shipped or manufactured by customers, which could have a material impact on the amount of revenue it reports on a quarterly basis. Certain customers enter into fixed fee or minimum guarantee agreements, whereby customers pay a fixed fee for the right to incorporate the Company’s technology in the customer’s products over the license term. In arrangements with a minimum guarantee, the fixed fee component corresponds to a minimum number of units or dollars that the customer must produce or pay, with additional per-unit fees for any units or dollars exceeding the minimum. The Company generally recognizes the full fixed fee as revenue at the beginning of the license term when the customer has the right to use the technology and begins to benefit from the license, net of the effect of any significant financing components calculated using customer-specific, risk-adjusted lending rates, with the related interest income being recognized over time on an effective rate basis. For minimum guarantee agreements where the customer exceeds the minimum, the Company recognizes revenue relating to any additional per-unit fees in the periods it believes the customer will exceed the minimum and adjusts the revenue based on actual usage once that is reported by the customer. Technology Solutions Arrangements Technology Solutions customers are primarily multi-channel video service providers, CE manufacturers, and end consumers. Technology Solutions revenue is primarily derived from licensing the Company’s Pay-TV solutions, Personalized Content Discovery, enriched Metadata, and viewership data; selling TiVo-enabled devices like the TiVo Stream 4K and advertising. For Technology Solutions, the Company provides on-going media or data delivery, hosting and access to its platform, and software updates. For these solutions, the Company generally receives fees on a per-subscriber per-month basis or as a fixed fee, and revenue is recognized during the month in which the solutions are provided to the customer. For most of the Technology Solutions offerings, substantially all functionality is obtained through the Company’s continuous hosting and/or updating of the data and content. In these instances, the Company typically has a single performance obligation related to these ongoing activities in the underlying arrangement. For those arrangements that include multiple performance obligations, the Company allocates the consideration as described above and recognizes revenue for each distinct performance obligation when control of the promised goods or services is transferred to the customer. The Company also generates revenue from non-recurring engineering (“NRE”) services, advertising, and hardware products, each of which was less than 10% of total revenue for all periods presented. Practical Expedients and Exemptions The Company applies a practical expedient to not perform an evaluation of whether a contract includes a significant financing component when the timing of revenue recognition differs from the timing of cash collection by one year or less. The Company applies a practical expedient to expense costs to obtain a contract with a customer as incurred as a component of selling, general and administrative expenses when the amortization period would have been one year or less. The Company applies a practical expedient when disclosing revenue expected to be recognized from unsatisfied performance obligations to exclude contracts with customers with an original duration of one year or less; amounts attributable to variable consideration arising from (i) a sales-based or usage-based royalty of a technology license or (ii) when variable consideration is allocated entirely to a wholly unsatisfied performance obligation; or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated by Product Category and Market | The following information depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors by disaggregating revenue by product category, market and geographic location. Revenue disaggregated by product category was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Technology Licensing $ 53,786 $ 41,683 $ 161,943 $ 140,923 Technology Solutions 67,851 76,049 204,785 220,815 Total revenue $ 121,637 $ 117,732 $ 366,728 $ 361,738 Revenue disaggregated by market was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Pay-TV $ 58,378 $ 65,891 $ 182,903 $ 196,795 Consumer Electronics 33,561 21,235 101,145 75,054 Connected Car 20,224 20,448 60,798 65,869 Media Platform 9,474 10,158 21,882 24,020 Total revenue $ 121,637 $ 117,732 $ 366,728 $ 361,738 |
Schedule of Geographic Revenue Information | The following table presents the Company’s revenue disaggregated by geographic area (in thousands): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 U.S. $ 65,173 54 % $ 62,133 53 % $ 203,253 55 % $ 182,759 51 % Japan 13,801 11 17,614 15 45,844 13 55,799 16 China 12,713 11 3,557 3 27,168 7 14,989 4 Europe and Middle East 10,722 9 14,379 12 29,458 8 40,901 11 South Korea 8,011 6 7,300 6 18,887 5 26,736 7 Other 11,217 9 12,749 11 42,118 12 40,554 11 $ 121,637 100 % $ 117,732 100 % $ 366,728 100 % $ 361,738 100 % |
Schedule of Contract Assets | Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands): September 30, 2022 December 31, 2021 Unbilled contracts receivable $ 52,081 $ 50,962 Other current assets 576 724 Long-term unbilled contracts receivable 4,418 3,825 Other long-term assets 836 1,043 Total contract assets $ 57,911 $ 56,554 |
Schedule of Allowance for Credit Losses | The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended Three Months Ended Accounts Receivable Unbilled Contracts Receivable Accounts Receivable Unbilled Contracts Receivable Beginning balance $ 1,805 $ 306 $ 3,206 $ 1,604 Provision for credit losses 99 7 428 76 Recoveries/charge-off ( 133 ) — ( 1,274 ) — Balance at end of period $ 1,771 $ 313 $ 2,360 $ 1,680 Nine Months Ended Nine Months Ended Accounts Receivable Unbilled Contracts Receivable Accounts Receivable Unbilled Contracts Receivable Beginning balance $ 2,245 $ 480 $ 6,454 $ 1,414 Provision for (reversal of) credit losses 69 ( 167 ) 523 306 Recoveries/charge-off ( 543 ) — ( 4,617 ) (1) ( 40 ) Balance at end of period $ 1,771 $ 313 $ 2,360 $ 1,680 (1) The charge off of accounts receivable during the nine months ended September 30, 2021 was primarily related to a customer whose account had been substantially reserved for credit losses in 2020 due to deteriorating financial condition and delinquent payment history. |
Schedule of Revenue Recognized in Period | The following table presents additional revenue and contract disclosures (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenue recognized in the period from: Amounts included in deferred revenue at the beginning of $ 5,112 $ 4,957 $ 19,713 $ 20,264 Performance obligations satisfied in previous periods (true $ 4,435 $ 539 $ 25,301 (2) $ 7,159 (1) True ups represent the differences between the Company’s quarterly estimates of per-unit royalty revenue and actual production/sales-based royalties reported by licensees in the following period. Licensee reporting adjustments represent corrections or revisions to previously reported per-unit royalties by licensees, generally resulting from the Company’s inquiries or compliance audits. Settlements represent resolutions of litigation during the period for past royalties owed. (2) Amount includes past royalty revenue from the set tlement of a contract dispute with a large mobile imaging customer, and the execution of a long-term license agreement with a leading consumer electronics and over-the-top (“OTT”) service provider. The long-term license agreement is effective as of the expiration of the prior agreement. The Company recorded revenue from both the settlement and the license agreement, referred to above, in the second quarter of 2022 and expects to record revenue from both the settlement and the license agreement in future periods. |
Schedule of Remaining Performance Obligations | The Company’s remaining revenue under contracts with performance obligations was as follows (in thousands): As of September 30, 2022 December 31, 2021 Revenue from contracts with performance obligations expected to be satisfied in: 2022 (remaining 3 months) $ 13,556 $ 51,201 2023 48,964 37,696 2024 25,715 13,314 2025 23,140 6,274 2026 4,278 2,226 Thereafter 2,225 399 Total $ 117,878 $ 111,110 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following (in thousands): September 30, 2022 December 31, 2021 Prepaid expenses $ 18,148 $ 15,283 Inventory* 9,069 5,102 Other 12,916 5,600 Total $ 40,133 $ 25,985 *All inventory is finished goods. |
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following (in thousands): September 30, 2022 December 31, 2021 Equipment, furniture and other $ 75,585 $ 64,237 Building and improvements 18,331 18,331 Land 5,300 5,300 Leasehold improvements 21,665 22,064 Property and equipment, gross 120,881 109,932 Less: accumulated depreciation and amortization ( 69,098 ) ( 52,455 ) Total $ 51,783 $ 57,477 |
Schedule of Other Long Term Assets | Other long-term a ssets consisted of the following (in thousands): September 30, 2022 December 31, 2021 Long-term deferred tax assets $ 2,067 $ 1,847 Other assets 29,644 19,223 Total $ 31,711 $ 21,070 |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Employee compensation and benefits $ 36,119 $ 33,685 Third-party royalties 6,650 4,428 Accrued expenses 23,376 21,147 Accrued severance 1,762 1,834 Current portion of operating lease liabilities 15,969 14,725 Other 13,509 8,585 Total $ 97,385 $ 84,404 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Long-term income tax payable $ 768 $ 462 Other 4,539 5,208 Total $ 5,307 $ 5,670 |
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss consisted of the following (in thousands): September 30, 2022 December 31, 2021 Foreign currency translation adjustment, net of tax $ ( 5,039 ) $ ( 676 ) Total $ ( 5,039 ) $ ( 676 ) |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amounts and Estimated Fair Values | The carrying amounts and estimated fair values are as follows (in thousands): September 30, 2022 December 31, 2021 Carrying Estimated Carrying Estimated Senior Unsecured Promissory Note (1) $ 50,000 $ 49,300 $ — $ — (1) See “Note 9 – Debt ” for additional information. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
MobiTV | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value that Allocated to Assets and Liabilities | The following table sets forth the final purchase price allocation with no measure period adjustments identified ($ in thousands): Estimated Useful Final Other current assets $ 390 Property and equipment 9,223 Operating lease right-of-use assets 1,186 Identifiable intangible assets: Technology 6 3,260 Goodwill 4,059 Other long-term assets 115 Accrued liabilities ( 5,288 ) Noncurrent operating lease liabilities ( 545 ) Total purchase price $ 12,400 |
Schedule of Unaudited Pro Forma Financial Information | The following table presents the pro forma operating results as if the acquired operations of MobiTV had been included in the Company’s Condensed Consolidated Statements of Operations as of January 1, 2020 (unaudited, in thousands): Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Revenue $ 117,732 $ 365,597 Net loss attributable to the Company $ ( 46,271 ) $ ( 139,371 ) |
Vewd | |
Business Acquisition [Line Items] | |
Schedule of Estimated Fair Value that Allocated to Assets and Liabilities | The following table presents the preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed based on the fair values at the acquisition date ($ in thousands): Estimated Useful Estimated Cash and cash equivalents $ 2,684 Accounts receivable 3,341 Unbilled contracts receivable 2,335 Other current assets 1,208 Property and equipment 443 Operating lease right-of-use assets 2,020 Identifiable intangible assets: Technology 7 28,050 Customer relationships – large 7 4,900 Customer relationships – small 4 3,500 Non-compete agreements 2 870 Trade name 5 830 Total identifiable intangible assets 38,150 Goodwill 68,115 Other long-term assets 977 Accounts payable ( 869 ) Accrued liabilities ( 4,777 ) Deferred revenue ( 920 ) Long-term deferred tax liabilities ( 8,393 ) Noncurrent operating lease liabilities ( 1,094 ) Other long-term liabilities ( 307 ) Total preliminary purchase price $ 102,913 |
Schedule of Unaudited Pro Forma Financial Information | The following table presents the pro forma operating results as if the acquired operations of Vewd had been included in the Company's Condensed Consolidated Statements of Operations as of January 1, 2021 (unaudited, in thousands): Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Revenue $ 121,637 $ 121,757 $ 373,057 $ 371,450 Net loss attributable to the Company $ ( 394,691 ) $ ( 50,779 ) $ ( 468,457 ) $ ( 145,928 ) |
Goodwill and Identified Intan_2
Goodwill and Identified Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes to Carrying Value of Goodwill | The chang es to the carrying value of goodwill from January 1, 2022 through September 30, 2022 are reflected below (in thousands): December 31, 2021 $ 536,512 Goodwill adjustment related to Mergers in prior periods (1) ( 72 ) Vewd Acquisition (2) 68,115 Impairment charge (3) ( 354,000 ) September 30, 2022 $ 250,555 (1) Related to an immaterial measurement period adjustment. (2) Related to the Vewd Acquisition completed in July 2022. For more information regarding the transaction, see “Note 7 - Business Combinations .” (3) See discussion below. |
Identified Intangible Assets | Identified intangible assets consisted of the following (in thousands): Average September 30, 2022 December 31, 2021 Life Gross Accumulated Net Gross Accumulated Net Finite-lived intangible assets Acquired patents / core technology 3 - 10 $ 22,189 $ ( 5,613 ) $ 16,576 $ 5,258 $ ( 5,215 ) $ 43 Existing technology / content database 5 - 10 240,696 ( 186,216 ) 54,480 212,765 ( 173,420 ) 39,345 Customer contracts and related relationships 3 - 9 501,874 ( 326,164 ) 175,710 494,026 ( 297,867 ) 196,159 Trademarks/trade name 4 - 10 39,613 ( 28,478 ) 11,135 38,783 ( 24,796 ) 13,987 Non-competition agreements 1 2,231 ( 2,231 ) — 2,231 ( 2,231 ) — Other key employee non-compete agreements 2 870 ( 108 ) 762 — — — Total finite-lived intangible assets 807,473 ( 548,810 ) 258,663 753,063 ( 503,529 ) 249,534 Indefinite-lived intangible assets TiVo tradename/trademarks N/A 21,400 — 21,400 21,400 — 21,400 Total intangible assets $ 828,873 $ ( 548,810 ) $ 280,063 $ 774,463 $ ( 503,529 ) $ 270,934 |
Estimated Future Amortization Expense | As of September 30, 2022, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands): 2022 (remaining 3 months) $ 16,066 2023 57,767 2024 43,340 2025 34,693 2026 31,472 2027 30,629 Thereafter 44,696 $ 258,663 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Summarize of Future Minimum Principal Payments for the Promissory Note | As of September 30, 2022, future minimum principal payments for the Promissory Note are summarized as follows (in thousands): 2022 (remaining 3 months) $ — 2023 — 2024 — 2025 50,000 2026 — Thereafter — Total $ 50,000 |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Stock Option Activity | A summary of the stock option activity is presented below (in thousands, except per share amounts): Options Outstanding Number of Weighted Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Balance at December 31, 2021 186 $ 25.41 3.69 $ 48.64 Options exercised ( 2 ) $ 15.21 Options canceled / forfeited / expired ( 14 ) $ 23.66 Balance at September 30, 2022 170 $ 25.69 3.25 — Vested and expected to vest at September 30, 2022 170 $ 25.69 3.25 — Balance at September 30, 2022 170 $ 25.69 3.25 — |
Summary of Restricted Stock Awards and Units | Information with respect to outstanding restricted stock awards and units (including both time-based vesting and performance-based vesting) as of September 30, 2022 is as follows (in thousands, except per share amounts): Restricted Stock and Restricted Stock Units Number of Number of Total Weighted Balance at December 31, 2021 4,689 252 4,941 $ 19.15 Employees transferred to IP Licensing business ( 23 ) — ( 23 ) $ 17.31 Awards and units granted 3,080 141 3,221 $ 16.59 Awards and units vested / earned ( 1,447 ) — ( 1,447 ) $ 18.60 Awards and units canceled / forfeited ( 496 ) — ( 496 ) $ 17.94 Balance at September 30, 2022 5,803 393 6,196 $ 18.05 |
Summary of Stock-Based Compensation Expense | The following table summarizes the stock-based compensation expense attributable to the Company’s operations for the three and nine months ended September 30, 2022 and 2021 (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Cost of revenue, excluding depreciation and amortization of intangible assets $ 779 $ 525 $ 2,177 $ 1,377 Research and development 5,515 4,604 16,295 12,808 Selling, general and administrative 4,291 2,991 11,289 10,178 Total stock-based compensation expense 10,585 8,120 29,761 24,363 Tax effect on stock-based compensation expense ( 17 ) ( 55 ) ( 80 ) ( 163 ) Net effect on net loss $ 10,568 $ 8,065 $ 29,681 $ 24,200 |
Stock-Based Compensation Expense Categorized by Equity Components | Stock-based compensation expense categorized by various equity components for the three and nine months ended September 30, 2022 and 2021 is summarized in the table below (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Restricted stock awards and units $ 10,001 $ 7,244 $ 27,370 $ 21,892 Employee stock purchase plan 584 854 2,391 2,409 Employee stock options — 22 — 62 Total stock-based compensation expense $ 10,585 $ 8,120 $ 29,761 $ 24,363 |
Employee Stock Purchase Plan | |
Schedule of Assumptions Used to Value Awards Granted | The following assumptions were used to value the ESPP shares: March 2022 September 2021 March 2021 Expected life (years) 2.0 2.0 2.0 Risk-free interest rate 1.3 % 0.2 % 0.1 % Dividend yield 1.1 % 0.9 % 1.2 % Expected volatility 48.5 % 52.0 % 52.0 % |
Restricted Stock Units | |
Schedule of Assumptions Used to Value Awards Granted | The following assumptions were used to value the restricted stock units subject to market conditions granted during the period: April 2022 March 2021 Expected life (years) 3.0 3.0 Risk-free interest rate 2.8 % 0.3 % Dividend yield 1.2 % 1.0 % Expected volatility 40.9 % 47.9 % |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Costs | The components of operating lease costs were as follows (in thousands): Three Months Ended, Nine Months Ended, 2022 2021 2022 2021 Fixed lease cost (1) $ 5,133 $ 5,111 $ 15,057 $ 15,030 Variable lease cost 1,593 1,171 4,076 3,246 Less: sublease income ( 2,293 ) ( 2,051 ) ( 7,105 ) ( 7,397 ) Total operating lease cost $ 4,433 $ 4,231 $ 12,028 $ 10,879 (1) Includes short-term leases, which were immaterial. |
Schedule of Other Information Related to Leases | Other information related to leases was as follows (in thousands, except lease term and discount rate): Three Months Ended, Nine Months Ended, 2022 2021 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 4,982 $ 5,190 $ 14,882 $ 15,501 ROU assets obtained in exchange for new lease liabilities: Operating leases $ 5,268 $ 78 $ 8,371 $ 3,556 September 30, December 31, 2021 Weighted-average remaining lease term (years): Operating leases 3.74 4.48 Weighted-average discount rate: Operating leases 5.0 % 4.9 % |
Schedule of Future Minimum Lease Payments and Related Lease Liabilities | Future minimum lease payments and related lease liabilities as of September 30, 2022 were as follows (in thousands): Operating Lease Payments (1) Sublease Income Net Operating Lease Payments 2022 (remaining 3 months) $ 3,907 $ ( 1,881 ) $ 2,026 2023 19,229 ( 7,618 ) 11,611 2024 16,929 ( 7,610 ) 9,319 2025 14,419 ( 7,386 ) 7,033 2026 6,424 ( 935 ) 5,489 Thereafter 2,823 — 2,823 Total lease payments 63,731 ( 25,430 ) 38,301 Less: imputed interest ( 6,019 ) — ( 6,019 ) Present value of lease liabilities: $ 57,712 $ ( 25,430 ) $ 32,282 Less: current obligations under leases (accrued liabilities) ( 15,969 ) Noncurrent operating lease liabilities $ 41,743 (1) Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes. |
The Company and Basis of Pres_2
The Company and Basis of Presentation - Additional Information (Details) | 9 Months Ended | ||||
Oct. 01, 2022 shares | Sep. 21, 2022 $ / shares shares | Dec. 18, 2019 | Sep. 30, 2022 Business Segment $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Organization Consolidation And Presentation [Line Items] | |||||
Effective date of merger | Jun. 01, 2020 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Common stock shares distributed | 42,024,000 | 0 | |||
Number of reportable business segments | Segment | 1 | ||||
Number of business category | Business | 4 | ||||
Xperi Holding | |||||
Organization Consolidation And Presentation [Line Items] | |||||
Number of independent publicly traded companies | Business | 2 | ||||
Number of intellectual property licensing business | Business | 1 | ||||
Number of product business | Business | 1 | ||||
Perceive Corporation | |||||
Organization Consolidation And Presentation [Line Items] | |||||
Ownership interest, percentage | 77.10% | ||||
Spin-Off | Xperi Holding | |||||
Organization Consolidation And Presentation [Line Items] | |||||
Number of shares received for every ten common stock shares held on record date | 4 | ||||
Number of common stock shares considered as one unit for issue of shares in spinoff | 10 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||
Subsequent Event | Spin-Off | |||||
Organization Consolidation And Presentation [Line Items] | |||||
Potentially dilutive common stock equivalents | 0 | ||||
Subsequent Event | Spin-Off | Xperi Holding | |||||
Organization Consolidation And Presentation [Line Items] | |||||
Record date of outstanding common stock distribution for spinoff | Sep. 21, 2022 | ||||
Number of shares received for every ten common stock shares held on record date | 4 | ||||
Number of common stock shares considered as one unit for issue of shares in spinoff | 10 | ||||
Common stock shares distributed | 42,023,632 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - Accounting Standards Update 2021-08 | Sep. 30, 2022 |
Summary of Significant Accounting Policies [Line Items] | |
Change in accounting principle, accounting standards update, adopted [true false] | true |
Change in accounting principle, accounting standards update, early adoption [true false] | true |
Change in accounting principle accounting standards update adoption date | Jan. 01, 2022 |
Change in accounting principle, accounting standards update, immaterial effect [true false] | true |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - Maximum | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition [Line Items] | |
Practical expedient, timing of revenue recognition differs from the timing of cash collection, period | 1 year |
Revenue recognition practical expedient amortization period | 1 year |
Practical expedient revenue expected to be recognized from unsatisfied performance obligations, duration | 1 year |
Revenue - Schedule of Revenue D
Revenue - Schedule of Revenue Disaggregated by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 121,637 | $ 117,732 | $ 366,728 | $ 361,738 |
Technology Licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 53,786 | 41,683 | 161,943 | 140,923 |
Technology Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 67,851 | $ 76,049 | $ 204,785 | $ 220,815 |
Revenue - Schedule of Revenue_2
Revenue - Schedule of Revenue Disaggregated by Market (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 121,637 | $ 117,732 | $ 366,728 | $ 361,738 |
Pay TV | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 58,378 | 65,891 | 182,903 | 196,795 |
Consumer Electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 33,561 | 21,235 | 101,145 | 75,054 |
Connected Car | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 20,224 | 20,448 | 60,798 | 65,869 |
Media Platform | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 9,474 | $ 10,158 | $ 21,882 | $ 24,020 |
Revenue - Schedule of Geographi
Revenue - Schedule of Geographic Revenue Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 121,637 | $ 117,732 | $ 366,728 | $ 361,738 |
Total Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk, percentage (or more) | 100% | 100% | 100% | 100% |
U.S. | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 65,173 | $ 62,133 | $ 203,253 | $ 182,759 |
U.S. | Total Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk, percentage (or more) | 54% | 53% | 55% | 51% |
Japan | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 13,801 | $ 17,614 | $ 45,844 | $ 55,799 |
Japan | Total Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk, percentage (or more) | 11% | 15% | 13% | 16% |
China | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 12,713 | $ 3,557 | $ 27,168 | $ 14,989 |
China | Total Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk, percentage (or more) | 11% | 3% | 7% | 4% |
Europe and Middle East | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 10,722 | $ 14,379 | $ 29,458 | $ 40,901 |
Europe and Middle East | Total Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk, percentage (or more) | 9% | 12% | 8% | 11% |
South Korea | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 8,011 | $ 7,300 | $ 18,887 | $ 26,736 |
South Korea | Total Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk, percentage (or more) | 6% | 6% | 5% | 7% |
Other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 11,217 | $ 12,749 | $ 42,118 | $ 40,554 |
Other | Total Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk, percentage (or more) | 9% | 11% | 12% | 11% |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Unbilled contracts receivable | $ 52,081 | $ 50,962 |
Other current assets | 576 | 724 |
Long-term unbilled contracts receivable | 4,418 | 3,825 |
Other long-term assets | 836 | 1,043 |
Total contract assets | $ 57,911 | $ 56,554 |
Revenue - Schedule of Allowance
Revenue - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Accounts Receivable | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Beginning balance | $ 1,805 | $ 3,206 | $ 2,245 | $ 6,454 | |
Provision for credit losses | 99 | 428 | 69 | 523 | |
Recoveries/charge-off | (133) | (1,274) | (543) | (4,617) | [1] |
Balance at end of period | 1,771 | 2,360 | 1,771 | 2,360 | |
Unbilled Contracts Receivable | |||||
Accounts Notes And Loans Receivable [Line Items] | |||||
Beginning balance | 306 | 1,604 | 480 | 1,414 | |
Provision for credit losses | 7 | 76 | (167) | 306 | |
Recoveries/charge-off | (40) | ||||
Balance at end of period | $ 313 | $ 1,680 | $ 313 | $ 1,680 | |
[1] The charge off of accounts receivable during the nine months ended September 30, 2021 was primarily related to a customer whose account had been substantially reserved for credit losses in 2020 due to deteriorating financial condition and delinquent payment history. |
Revenue - Schedule of Revenue R
Revenue - Schedule of Revenue Recognized in Period (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |||
Revenue from Contract with Customer [Abstract] | ||||||
Amounts included in deferred revenue at the beginning of the period | $ 5,112 | $ 4,957 | $ 19,713 | $ 20,264 | ||
Performance obligations satisfied in previous periods (true ups, licensee reporting adjustments and settlements) | [1] | $ 4,435 | $ 539 | $ 25,301 | [2] | $ 7,159 |
[1] True ups represent the differences between the Company’s quarterly estimates of per-unit royalty revenue and actual production/sales-based royalties reported by licensees in the following period. Licensee reporting adjustments represent corrections or revisions to previously reported per-unit royalties by licensees, generally resulting from the Company’s inquiries or compliance audits. Settlements represent resolutions of litigation during the period for past royalties owed. Amount includes past royalty revenue from the set tlement of a contract dispute with a large mobile imaging customer, and the execution of a long-term license agreement with a leading consumer electronics and over-the-top (“OTT”) service provider. The long-term license agreement is effective as of the expiration of the prior agreement. The Company recorded revenue from both the settlement and the license agreement, referred to above, in the second quarter of 2022 and expects to record revenue from both the settlement and the license agreement in future periods. |
Revenue - Schedule of Remaining
Revenue - Schedule of Remaining Performance Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 117,878 | $ 111,110 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 51,201 | |
Performance obligations expected to be satisfied, expected timing | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 13,556 | |
Performance obligations expected to be satisfied, expected timing | 3 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 48,964 | $ 37,696 |
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 25,715 | $ 13,314 |
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 23,140 | $ 6,274 |
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 4,278 | $ 2,226 |
Performance obligations expected to be satisfied, expected timing | 1 year | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2027-01-01 | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 2,225 | $ 399 |
Performance obligations expected to be satisfied, expected timing |
Revenue - Schedule of Remaini_2
Revenue - Schedule of Remaining Performance Obligations (Details 1) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligations | $ 117,878 | $ 111,110 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 18,148 | $ 15,283 |
Inventory | 9,069 | 5,102 |
Other | 12,916 | 5,600 |
Total | $ 40,133 | $ 25,985 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 120,881 | $ 109,932 |
Less: accumulated depreciation and amortization | (69,098) | (52,455) |
Total | 51,783 | 57,477 |
Equipment, furniture and other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 75,585 | 64,237 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 18,331 | 18,331 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,300 | 5,300 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 21,665 | $ 22,064 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Captions - Schedule of Other Long Term Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Long-term deferred tax assets | $ 2,067 | $ 1,847 |
Other assets | 29,644 | 19,223 |
Total | $ 31,711 | $ 21,070 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Captions -Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Employee compensation and benefits | $ 36,119 | $ 33,685 |
Third-party royalties | 6,650 | 4,428 |
Accrued expenses | 23,376 | 21,147 |
Accrued severance | 1,762 | 1,834 |
Current portion of operating lease liabilities | 15,969 | $ 14,725 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total | |
Other | 13,509 | $ 8,585 |
Total | $ 97,385 | $ 84,404 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Captions - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Long-term income tax payable | $ 768 | $ 462 |
Other | 4,539 | 5,208 |
Total | $ 5,307 | $ 5,670 |
Composition of Certain Financ_8
Composition of Certain Financial Statement Captions - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Foreign currency translation adjustment, net of tax | $ (5,039) | $ (676) |
Total | $ (5,039) | $ (676) |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - T I V O Merger - Non-marketable Equity Securities - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Schedule Of Investments [Line Items] | |||||
Equity securities accounted for under equity method | $ 4,100,000 | $ 4,100,000 | $ 4,800,000 | ||
Equity securities without a readily determinable fair value | 100,000 | 100,000 | $ 100,000 | ||
Non-marketable equity securities, without a readily determinable fair value, impairments or adjustments | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values (Details) - Recurring - Senior Unsecured Promissory Note $ in Thousands | Sep. 30, 2022 USD ($) |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Total long-term debt, net - Carrying Amount | $ 50,000 |
Total long-term debt, net - Estimated Fair Value | $ 49,300 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Jul. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | May 31, 2021 | |
Business Acquisition [Line Items] | ||||||||
Revenue: | $ 121,637 | $ 117,732 | $ 366,728 | $ 361,738 | ||||
Operating loss | (399,141) | (44,968) | (450,359) | (119,027) | ||||
MobiTV | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 12,400 | |||||||
Net loss | (46,271) | $ (42,400) | $ (93,300) | (139,371) | ||||
Revenue | 117,732 | 121,500 | 247,900 | 365,597 | ||||
Vewd | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 102,913 | |||||||
Cash included in the total consideration | 52,900 | |||||||
Debt included in the total consideration | 50,000 | |||||||
Goodwill, Expected tax deductible amount | $ 400 | |||||||
Revenue: | 2,500 | 2,500 | ||||||
Operating loss | (10,100) | (10,100) | ||||||
Transaction related costs including transaction bonuses, legal and consultant fees | 4,000 | 6,000 | ||||||
Severance and retention costs | 2,100 | 2,100 | ||||||
Net loss | (394,691) | (50,779) | (468,457) | (145,928) | ||||
Revenue | $ 121,637 | $ 121,757 | $ 373,057 | $ 371,450 | ||||
Previously Reported | MobiTV | ||||||||
Business Acquisition [Line Items] | ||||||||
Net loss | (8,600) | (14,900) | ||||||
Revenue | $ 223,400 | $ 447,700 |
Business Combinations - Schedul
Business Combinations - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Jul. 01, 2022 | May 31, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Identifiable intangible assets: | ||||
Goodwill | $ 250,555 | $ 536,512 | ||
Non-competition agreements | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (years) | 1 year | |||
MobiTV | ||||
Business Acquisition [Line Items] | ||||
Other current assets | $ 390 | |||
Property and equipment | 9,223 | |||
Operating lease right-of-use assets | 1,186 | |||
Identifiable intangible assets: | ||||
Goodwill | 4,059 | |||
Other long-term assets | 115 | |||
Accrued liabilities | (5,288) | |||
Noncurrent operating lease liabilities | (545) | |||
Total purchase price | $ 12,400 | |||
MobiTV | Technology | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (years) | 6 years | |||
Identifiable intangible assets: | ||||
Identifiable intangible assets | $ 3,260 | |||
Vewd | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 2,684 | |||
Accounts receivable | 3,341 | |||
Unbilled contracts receivable | 2,335 | |||
Other current assets | 1,208 | |||
Property and equipment | 443 | |||
Operating lease right-of-use assets | 2,020 | |||
Identifiable intangible assets: | ||||
Identifiable intangible assets | 38,150 | |||
Goodwill | 68,115 | |||
Other long-term assets | 977 | |||
Accounts payable | (869) | |||
Accrued liabilities | (4,777) | |||
Deferred revenue | (920) | |||
Long-term deferred tax liabilities | (8,393) | |||
Noncurrent operating lease liabilities | (1,094) | |||
Other long-term liabilities | (307) | |||
Total purchase price | $ 102,913 | |||
Vewd | Technology | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (years) | 7 years | |||
Identifiable intangible assets: | ||||
Identifiable intangible assets | $ 28,050 | |||
Vewd | Customer Relationships - Large | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (years) | 7 years | |||
Identifiable intangible assets: | ||||
Identifiable intangible assets | $ 4,900 | |||
Vewd | Customer Relationships - Small | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (years) | 4 years | |||
Identifiable intangible assets: | ||||
Identifiable intangible assets | $ 3,500 | |||
Vewd | Non-competition agreements | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (years) | 2 years | |||
Identifiable intangible assets: | ||||
Identifiable intangible assets | $ 870 | |||
Vewd | Trade name | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life (years) | 5 years | |||
Identifiable intangible assets: | ||||
Identifiable intangible assets | $ 830 |
Business Combinations - Sched_2
Business Combinations - Schedule of Unaudited Pro Forma Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
MobiTV | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | $ 117,732 | $ 121,500 | $ 247,900 | $ 365,597 | ||
Net loss attributable to the Company | (46,271) | $ (42,400) | $ (93,300) | (139,371) | ||
Vewd | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | $ 121,637 | 121,757 | $ 373,057 | 371,450 | ||
Net loss attributable to the Company | $ (394,691) | $ (50,779) | $ (468,457) | $ (145,928) |
Goodwill and Identified Intan_3
Goodwill and Identified Intangible Assets - Summary of Changes to Carrying Value of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, beginning | $ 536,512 | |
Goodwill adjustment related to Mergers in prior periods | (72) | |
Vewd Acquisition | 68,115 | |
Impairment charge | $ (354,000) | (354,000) |
Goodwill, ending | $ 250,555 | $ 250,555 |
Goodwill and Identified Intan_4
Goodwill and Identified Intangible Assets (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment | $ 354,000 | $ 354,000 |
Goodwill and Identified Intan_5
Goodwill and Identified Intangible Assets - Identified Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 828,873 | $ 774,463 |
Finite-lived intangible assets, Gross Assets | 807,473 | 753,063 |
Finite-lived intangible assets, Accumulated Amortization | (548,810) | (503,529) |
Intangible assets, net | 280,063 | 270,934 |
Finite-lived intangible assets, Net | 258,663 | 249,534 |
TiVo tradename/trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, Gross Assets | 21,400 | 21,400 |
Indefinite-lived intangible assets, Net | 21,400 | 21,400 |
Acquired patents / core technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | 22,189 | 5,258 |
Finite-lived intangible assets, Accumulated Amortization | (5,613) | (5,215) |
Finite-lived intangible assets, Net | $ 16,576 | 43 |
Acquired patents / core technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | |
Acquired patents / core technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 10 years | |
Existing technology / content database | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 240,696 | 212,765 |
Finite-lived intangible assets, Accumulated Amortization | (186,216) | (173,420) |
Finite-lived intangible assets, Net | $ 54,480 | 39,345 |
Existing technology / content database | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 5 years | |
Existing technology / content database | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 10 years | |
Customer contracts and related relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 501,874 | 494,026 |
Finite-lived intangible assets, Accumulated Amortization | (326,164) | (297,867) |
Finite-lived intangible assets, Net | $ 175,710 | 196,159 |
Customer contracts and related relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | |
Customer contracts and related relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 9 years | |
Trademarks/trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 39,613 | 38,783 |
Finite-lived intangible assets, Accumulated Amortization | (28,478) | (24,796) |
Finite-lived intangible assets, Net | $ 11,135 | 13,987 |
Trademarks/trade name | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 4 years | |
Trademarks/trade name | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 10 years | |
Non-competition agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 2,231 | 2,231 |
Finite-lived intangible assets, Accumulated Amortization | $ (2,231) | $ (2,231) |
Estimated Useful Life (years) | 1 year | |
Other key employee non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 870 | |
Finite-lived intangible assets, Accumulated Amortization | $ (108) | |
Estimated Useful Life (years) | 2 years | |
Finite-lived intangible assets, Net | $ 762 |
Goodwill and Identified Intan_6
Goodwill and Identified Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 (remaining 3 months) | $ 16,066 | |
2023 | 57,767 | |
2024 | 43,340 | |
2025 | 34,693 | |
2026 | 31,472 | |
2027 | 30,629 | |
Thereafter | 44,696 | |
Finite-lived intangible assets, Net | $ 258,663 | $ 249,534 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jul. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Promissory Note | |||
Line Of Credit Facility [Line Items] | |||
Interest expense | $ 0.8 | $ 0.8 | |
Vewd | Promissory Note | |||
Line Of Credit Facility [Line Items] | |||
Debt instrument, principal amount | $ 50 | ||
Interest rate | 6% | ||
Debt instrument, basis spread on variable rate | 2% | ||
Debt instrument, maturity date | Jul. 01, 2025 | ||
2021 Convertible Notes | |||
Line Of Credit Facility [Line Items] | |||
Borrowings | $ 50 | $ 50 |
Debt - Summarize of Future Mini
Debt - Summarize of Future Minimum Principal Payments for the Promissory Note (Details) - Promissory Note $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
2022 (remaining 3 months) | $ 0 |
2023 | 0 |
2024 | 0 |
2025 | 50,000 |
2026 | 0 |
Thereafter | 0 |
Total | $ 50,000 |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) - shares | Oct. 01, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock, shares issued (in shares) | 42,024,000 | 0 | |
Subsequent Event | Spin-Off | Xperi Holding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock, shares issued (in shares) | 42,023,632 | ||
Record date of outstanding common stock distribution for spinoff | Sep. 21, 2022 |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense recognized | $ | $ 10,585 | $ 8,120 | $ 29,761 | $ 24,363 |
Number of shares, options granted | shares | 0 | 0 | 0 | 0 |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 24 months | |||
Shares reserved for grant (in shares) | shares | 5,500,000 | 5,500,000 | ||
Purchase period | 6 months | |||
Purchase price of common stock, percent | 85% | |||
Stock-based compensation expense recognized | $ | $ 584 | $ 854 | $ 2,391 | $ 2,409 |
Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense recognized | $ | 22 | 62 | ||
Performance Shares | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance awards, percentage of grant available to vest | 0% | |||
Performance Shares | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance awards, percentage of grant available to vest | 200% | |||
Corporate and Shared Functional Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense recognized | $ | $ 2,400 | $ 2,000 | $ 6,900 | $ 6,300 |
2020 EIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation full value awards counted against shares available for issuance ratio | 1.5 | |||
Number of shares reserved for issuance | shares | 16,800,000 | 16,800,000 | ||
Expiration period | 10 years | |||
Vesting period | 4 years | |||
2020 EIP | Time-based Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
2020 EIP | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Assumed Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 7 years | |||
Vesting period | 4 years | |||
Assumed Plans | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
2020 EIP and Assumed Plans | Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for grant (in shares) | shares | 6,100,000 | 6,100,000 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Number of Shares Subject to Options | ||
Number of Shares, Beginning balance (shares) | 186 | |
Number of Shares, Options exercised (shares) | (2) | |
Number of Shares, Options canceled / forfeited / expired (shares) | (14) | |
Number of Shares, Ending balance (shares) | 170 | 186 |
Number of Shares, Vested and expected to vest (shares) | 170 | |
Weighted Average Exercise Price Per Share | ||
Weighted Average Exercise Price Per Share, Beginning balance (USD per share) | $ 25.41 | |
Weighted Average Exercise Price Per Share, Options exercised (USD per share) | 15.21 | |
Weighted Average Exercise Price Per Share, Options canceled / forfeited / expired (USD per share) | 23.66 | |
Weighted Average Exercise Price Per Share, Ending balance (USD per share) | 25.69 | $ 25.41 |
Weighted Average Exercise Price Per Share, Vested and expected to vest (USD per share) | $ 25.69 | |
Weighted Average Remaining Contractual Life (in years) and Aggregate Intrinsic Value | ||
Weighted Average Remaining Contractual Life (in years) | 3 years 3 months | 3 years 8 months 8 days |
Vested and expected to vest, Weighted Average Remaining Contractual Life (in years) | 3 years 3 months | |
Aggregate Intrinsic Value | $ 48,640 |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Summary of Restricted Stock Awards and Units (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Time-Based Restricted Stock Award and Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock awards and units, beginning balance (shares) | 4,689 |
Restricted stock awards and units, employees transferred to IP Licensing business (shares) | (23) |
Restricted stock awards and units, granted (shares) | 3,080 |
Restricted stock awards and units, vested / earned (shares) | (1,447) |
Restricted stock awards and units, canceled / forfeited (shares) | (496) |
Restricted stock awards and units, ending balance (shares) | 5,803 |
Performance-Based Restricted Stock Award and Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock awards and units, beginning balance (shares) | 252 |
Restricted stock awards and units, granted (shares) | 141 |
Restricted stock awards and units, ending balance (shares) | 393 |
Restricted Stock and Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock awards and units, beginning balance (shares) | 4,941 |
Restricted stock awards and units, employees transferred to IP Licensing business (shares) | (23) |
Restricted stock awards and units, granted (shares) | 3,221 |
Restricted stock awards and units, vested / earned (shares) | (1,447) |
Restricted stock awards and units, canceled / forfeited (shares) | (496) |
Restricted stock awards and units, ending balance (shares) | 6,196 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average grant date fair value per share of restricted stock and units, beginning balance (USD per share) | $ / shares | $ 19.15 |
Weighted average grant date fair value per share of restricted stock and units, employees transferred to IP Licensing business (USD per share) | $ / shares | 17.31 |
Weighted average grant date fair value per share of restricted stock and units, granted (USD per share) | $ / shares | 16.59 |
Weighted average grant date fair value per share of restricted stock and units, vested / earned (USD per share) | $ / shares | 18.60 |
Weighted average grant date fair value of restricted stock and units, canceled / forfeited (USD per share) | $ / shares | 17.94 |
Weighted average grant date fair value per share of restricted stock and units, ending balance (USD per share) | $ / shares | $ 18.05 |
Stock-Based Compensation Expe_6
Stock-Based Compensation Expense - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 10,585 | $ 8,120 | $ 29,761 | $ 24,363 |
Tax effect on stock-based compensation expense | (17) | (55) | (80) | (163) |
Net effect on net loss | 10,568 | 8,065 | 29,681 | 24,200 |
Cost of revenue, excluding depreciation and amortization of intangible assets | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 779 | 525 | 2,177 | 1,377 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 5,515 | 4,604 | 16,295 | 12,808 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 4,291 | $ 2,991 | $ 11,289 | $ 10,178 |
Stock-Based Compensation Expe_7
Stock-Based Compensation Expense - Stock-Based Compensation Expense Categorized by Equity Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 10,585 | $ 8,120 | $ 29,761 | $ 24,363 |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 584 | 854 | 2,391 | 2,409 |
Employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 22 | 62 | ||
Restricted Stock Awards and Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 10,001 | $ 7,244 | $ 27,370 | $ 21,892 |
Stock-Based Compensation Expe_8
Stock-Based Compensation Expense - Schedule of Assumptions Used to Value Awards Granted (Details) | 1 Months Ended | |||
Apr. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life (in years) | 2 years | 2 years | 2 years | |
Risk-free interest rate | 1.30% | 0.20% | 0.10% | |
Dividend yield | 1.10% | 0.90% | 1.20% | |
Expected volatility | 48.50% | 52% | 52% | |
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||||
Expected life (in years) | 3 years | 3 years | ||
Risk-free interest rate | 2.80% | 0.30% | ||
Dividend yield | 1.20% | 1% | ||
Expected volatility | 40.90% | 47.90% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Provision for (benefit from) income taxes | $ 2,024,000 | $ 2,834,000 | $ 12,500,000 | $ 8,161,000 | |
Effective tax rate (percent) | (0.50%) | (6.30%) | (2.80%) | (6.90%) | |
Income (loss) before taxes | $ (399,668,000) | $ (44,824,000) | $ (450,660,000) | $ (118,515,000) | |
Increase in gross unrecognized tax benefits | 800,000 | ||||
Gross unrecognized tax benefits | 9,200,000 | 9,200,000 | $ 8,400,000 | ||
Unrecognized tax benefits that would impact the effective income tax rate | 800,000 | 800,000 | |||
Interest and tax penalties related to unrecognized tax benefits | 0 | $ 0 | |||
Accrued interest and tax penalties related to unrecognized tax benefits | $ 0 | $ 0 | $ 0 | ||
Income tax examination description | As of September 30, 2022, the Company’s 2017 through 2021 tax years are generally open and subject to potential examination in one or more jurisdictions. |
Leases - Additional Information
Leases - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Lessee Lease Description [Line Items] | |
Operating lease existence of option to extend | true |
Operating lease description | The Company’s leases have remaining lease terms of one year to seven years, some of which may include options to extend the leases for five years or longer, and some of which may include options to terminate the leases within the next 6 years or less. Leases with an initial term of 12 months or less are not recorded on the balance sheets |
Minimum | |
Lessee Lease Description [Line Items] | |
Remaining lease term | 1 year |
Lessee term of period to extend | 5 years |
Maximum | |
Lessee Lease Description [Line Items] | |
Remaining lease term | 7 years |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Fixed lease cost | $ 5,133 | $ 5,111 | $ 15,057 | $ 15,030 |
Variable lease cost | 1,593 | 1,171 | 4,076 | 3,246 |
Less: sublease income | (2,293) | (2,051) | (7,105) | (7,397) |
Total operating lease cost | $ 4,433 | $ 4,231 | $ 12,028 | $ 10,879 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||||
Operating cash flows from operating leases | $ 4,982 | $ 5,190 | $ 14,882 | $ 15,501 | |
Operating lease, ROU assets obtained in exchange for new lease liabilities | $ 5,268 | $ 78 | $ 8,371 | $ 3,556 | |
Operating leases, weighted average remaining lease term (years) | 3 years 8 months 26 days | 3 years 8 months 26 days | 4 years 5 months 23 days | ||
Operating leases, weighted average discount rate | 5% | 5% | 4.90% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments and Related Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating Lease Payments | ||
2022 (remaining 3 months) | $ 3,907 | |
2023 | 19,229 | |
2024 | 16,929 | |
2025 | 14,419 | |
2026 | 6,424 | |
Thereafter | 2,823 | |
Total lease payments | 63,731 | |
Less: imputed interest | (6,019) | |
Present value of lease liabilities: | 57,712 | |
Less: current obligations under leases (accrued liabilities) | (15,969) | $ (14,725) |
Noncurrent operating lease liabilities | 41,743 | $ 49,017 |
Sublease Income | ||
2022 (remaining 3 months) | (1,881) | |
2023 | (7,618) | |
2024 | (7,610) | |
2025 | (7,386) | |
2026 | (935) | |
Total lease payments | (25,430) | |
Present value of lease liabilities: | (25,430) | |
Net Operating Lease Payments | ||
2022 (remaining 3 months) | 2,026 | |
2023 | 11,611 | |
2024 | 9,319 | |
2025 | 7,033 | |
2026 | 5,489 | |
Thereafter | 2,823 | |
Total lease payments | 38,301 | |
Less: imputed interest | (6,019) | |
Present value of lease liabilities: | $ 32,282 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments And Contingencies Disclosure [Line Items] | ||
Purchase commitments | $ 109,800 | |
Accrued liabilities | 97,385 | $ 84,404 |
Inventory | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Purchase commitments | 3,200 | |
Accrued liabilities | $ 700 |
Related Party Transactions an_2
Related Party Transactions and Net Parent Company Investment - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Depreciation expense | $ 4,990 | $ 6,486 | $ 15,697 | $ 17,058 |
Selling, general and administrative | 56,702 | 46,109 | 156,894 | 148,087 |
Parent | ||||
Related Party Transaction [Line Items] | ||||
Amount of allocations from parent | 16,800 | 13,900 | 47,600 | 45,900 |
Depreciation expense | 800 | 1,300 | 3,000 | 3,400 |
Selling, general and administrative | $ 16,000 | $ 12,600 | $ 44,600 | $ 42,500 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Xperi Holding - Spin-Off - shares | Oct. 01, 2022 | Sep. 21, 2022 |
Subsequent Event [Line Items] | ||
Number of shares received for every ten common stock shares held on record date | 4 | |
Number of common stock shares considered as one unit for issue of shares in spinoff | 10 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Percentage of outstanding common stock distributed in spinoff | 100% | |
Record date of outstanding common stock distribution for spinoff | Sep. 21, 2022 | |
Number of shares received for every ten common stock shares held on record date | 4 | |
Number of common stock shares considered as one unit for issue of shares in spinoff | 10 | |
Subsequent Event | 2022 Equity Incentive Plan | ||
Subsequent Event [Line Items] | ||
Common stock, shares were reserved for future issuance | 10,100,000 | |
Subsequent Event | Employee Stock Purchase Plan | ||
Subsequent Event [Line Items] | ||
Common stock, shares were reserved for future issuance | 5,000,000 |