Earnings call transcript Q4 2022

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Operator

Good day, everyone. Thank you for standing by. Welcome to Xperi Fourth Quarter and Full Year 2022 Earnings Conference Call.

During today’s presentation, all participants will be in a listen only mode.

Following the presentation, the call will be open for questions.

to of call Investor like Iburg, to now Head Xperi's Relations. would turn over the Mike I Mike, please go ahead.

Mike Iburg

results. full Good afternoon. reports XXXX call and Xperi Chief Kirchner, Robert Chief Officer. us joining on Executive financial are year Officer; Jon And thank its you fourth for With today’s me Andersen, and as Financial quarter

webcast earnings site be accessed can In today's addition which Web earnings to Relations with release, on this presentation, at Investor there investor.xperi.com. is an our along

a provide to reminders. like would I begin, we few Before

First, carve I that prior full for Adeia. would Xperi Xperi like to our XXXX. Corporation results periods X, from Holding year note as include results is Holding presented XXXX October known Corporation to the out financial Xperi separation on on a basis now

statements uncertainties predictions, statements are circumstances. discussion changes Second, expectations projections are on forward-looking risks, today's future about beliefs management's contains to and other and subject based current which events, in therefore and and that

filings, uncertainties to more that please the For risks MD&A our risk discussed SEC factors materially update sections to our refer alter what intend the not differ actual company today, to forward-looking registration to after note Form or statement does Please including XX. statements circumstances and events information we reflect cause that could our from call. the of these on arising or the on this and results

GAAP which be reconciliations site. detailed investor are can non measures, section the in release financial measures, certain most their our to by relations to directly and in Web earnings refer accompanied we comparable Third, found of which the GAAP

of site our will call Lastly, shortly this be a conference of after conclusion the call. on Web this available replay

over turn CEO, to now Jon Kirchner. the Xperi I call will

Jon Kirchner

prior announce of And Revenue joining $XXX full an financial million, increase our company. you X% as independent an the strong thank quarter to results in call. earnings us Thank was year. the and on We're our for quarter from for excited Mike. first you, year XXXX fourth everyone quarter

the representing will total from revenue was moment. in of For million, traction year. areas Recent XXXX, infotainment Robert a has a Amlogic, design integrating momentum. our include full key Smart been our platform, provide car. increased detailed performance TV $XXX to material such technologies platform and and our for increase latest announcements, review X% experience IPTV into media just connected examples expanded incremental prior prime in related with making financial We're and DTS in OS are a more of progress in year growth the our of as chipsets which AutoStage, TV TiVo’s connected our win car the video their

expand expected refer in and that are the stable over more mature We several these are growth other at horizon. discussed rapidly over a entertainment car. to improve Investor of solutions Four our range last users extraordinary experiences safety, that convenience As fall’s years, markets core relatively end create longer in markets solutions as term we next while the well for offer in as of respectively. to designed are solutions areas to and to the as are Day, and comfort wide

unbiased areas; growth increase. advertising, More market to shift to as strategy have to driving expected broadband media that projected marketing on With The revenue trend the infotainment, content TV consumer by as vehicles next four that IPTV, independent next is into more to Our personalized The in is expected is continues XXXX, of broadband us capable platforms focused expected XX% trend advertisers broadband to is we TV brought double advertising of connect and than license growing allow decades be provide the investments key toward a growth the are five revenue variety than vehicles video five Internet will connectivity to attributes market these connected believe to new than household also through experience, double a fees years share IPTV in-vehicle in-vehicle tailored in-cabin monitoring. of and consumed. as rapidly streaming. for over in the a We monetization. and their combination years capture wider consumption differentiated, is to video, of over XX% to over expected experience. the is and With more of a is more drive to the connected of market expand continue. infotainment market and home

Lastly, place. expanding make safer the occupant the as to and in-vehicle aim markets monitoring are and regulators driver a vehicle quickly the industry

Diving each markets. of a these deeper little into

to Our as strategy OS. platform view be the we’ll advertising market OEMs capture TV. content, of a consuming conduit portion TVs revenue the they incorporating as to ad to bring supported connected to able TV TiVo ad generated TV our the for of With is in life over by work Smart the with consumers our content

in not TV a with particular OS content We search at we shipping that this TVs discovery media live demos for Vestel was production TVs, by OEMs. begin independent impressed heard, environment and or of a by later It the first you these offer TiVo. to at powered running platform key see influenced unbiased the TiVo advantages TV platform provider are is exciting have advertiser. with has to As expected CES year, smart full several may truly scale. The which a

based business customer TVs, are product. OEM TiVo unique the life Smart OEMs and the aren’t TVs brand usage in to of branded ownership retain experience, powered TiVo. enables they These model economics Our participate over by TV the

And higher is revenue the manufacturers, we of the the TV TVs volumes OEM relationships path ad to smart monetization relatively began build believe portion stronger we can to As drive with time. with TV a ship, straightforward. by sharing over OS to

of million three years, approximately We expect million margin an at $XXX over meaningful time. while run revenue footprint which powered rate annualized have to a TiVo by within would TVs X expansion delivering yield least of

entertainment and business best Pay platform has video TV providers. within We for seen service Our and broadband based our rapid class IPTV offer a cloud success. offering sits in

agnostic superior engagement is to where and to with all content offerings. bring approach Our entertainment that consumers a watch experience alternative provides find, we together enjoy personalized

expand to our modest base year in IPTV Pay total offsetting households. revenue modestly and through subscriber providers ended Pay across new being continue growth million year-over-year. the the service resulting strong with was Americas larger fourth more We in quarter, X.X the the declines markets, subscriber in IPTV TV mature TV higher

million. IPTV three grow the we million expect approximately from to Over next $XXX over to years, $XX revenue

DTS Within is car AutoSense our monitoring. as We Internet solutions. connected The connected two in personal and infotainment infotainment opportunities, growth with in-vehicle into extensive is have in-cabin investments the significant connectivity space. cabin we these opportunities namely business, car AutoStage DTS our industry making turning entertainment automotive a and address

solution We search and have we video deployed have over capabilities vehicles. our longstanding and adopted vastly And now entertainment TiVo’s to HD experience. in solutions our improved who relationships leveraging with Radio XX discovery provide in-cabin are metadata, our a legendary media million automotive manufacturers incorporating platform

As anyone familiar take nature. to understands, long term are with contracts long and the market in these a win automotive time

million And in at million posted we $XX over to perspective, committed year As be that's than and year. $XXX $XXX put end, that of revenue that in several our next over look business recognized on we years. to million last connected the at have more revenue business a car

new of continues pipeline opportunities to our Importantly, automotive grow.

this This with design in-car major later incorporating will infotainment the stage systems, to video win program recently into set long Also occupant and TiVo’s which in our be During offering, quarter, term a we AutoStage our design growth. these large OEM. awarded platform. the car, to meaningful Together, the into into first our for monitoring for platform awarded winning we connected bring most production wins AutoSense, revenue wins year, a car continue automotive in-car Asian center driver goes were console. connected video continue

expect approximately over years, significant XX% key represent growth in areas four We our today. revenue total XX% of from these a increase to three

licensing year more smart TiVo includes business and monetization Our program to launching generates existing By powered on acquired annually participating about TVs quadruple by $XXX a the timeframe. of data, million million supported and advertising our to in licensing revenue monetization ad content, guides our three annually. in this than we technologies expect of viewership business, Vewd over recently $XX the which

generating IPTV fees. currently of paid from subscriber having our primarily Next, million recurring exceeded revenue is households, annually, TiVo X.X subscriber million $XX approximately platform

more revenue per increased next we annual to the years, three and to expect to double over than $XXX revenue Over household. growth million subscriber due

AutoStage Our accelerating contracts expect continue to platforms win growth revenue go for into new and contracts and years AutoSense future we these production. as model

which for platform, In addition, incorporate another opportunity downstream. revenue into ad will AutoStage monetization to create we the plan growth

the we seven previously in long million three this million substantial a in revenue year term net in expect approximately years, car, revenue. coming more connected $XX with revenue of grow As $XXX is to play key to annually $XX $X from discussed, range. five years, from to where three million Altogether, IPTV $XXX over areas new expect we to our and of million million grow high margin approximately growth contributing monetization to

to turning Perceive. Lastly,

XXXX. included revenue annual to revenue in and We our occur expect first perceived due some there uncertainty no around amount, Though is to timing guidance. in

a to value the use Edge. for machine option continue We represents believe significant as learning cases Perceive to creation move

models, the example, large For machine results. delivering are the large power language industry awareness of such of impressive in that learning models increasing there's as

large language at networks what longer model software We devices. industry. at intend as based will generate continue on distinctive to clear we to CES, features at we prospective Edge evaluate navigate the over believe the significant represents running scope data anyone is to on we investment large on and applications value invest our return customer and of the of to Thus, power running and on highest center demonstrated to edge and best Edge the our tools how a sparking believe networks a as than interest. approach move evaluate be prudently the we the our they proposition that in for run. significant Notably, class large lower continue We customers provide implementation a platform, their

to With Robert that, over call Robert? to I'll turn discuss our the financials.

Robert Andersen

Thanks, Jon.

a and revenue in well mobile large represented to customer. as and a the before essentially fourth financials, first and against I technologies up prior by Similar as devices, Media audio in mobile by we the driven product company. XX% last earlier, core mentioned our our XX% are quarter and the that half fourth to offset car primarily which was revenue fully the guides quarter mobile year. for monetization as businesses. And TV Total to increase prior revenue mention of declines and our and of although, million, into all in was of like approximately driven as was hardware. unit that summer. the fees AutoSense total Pay platform increase X% This total in Jon IPTV up revenue Pay as PC solutions. quarter consumer from Vewd primarily media occurred as electronics includes at head was classic walked extend through modest represent of total earnings and of represented driven consumer from to our comparisons license due was independent lines, Consumer AutoStage platform, acquisition, TV automotive enhancement As growth video addition up progress more and was made our our we've XX% primarily X%. production an quarters, in flat growth audio same our strong in the quarter by $XXX I'd Connected total revenue, XX%, DVR electronics XX%, only incremental such

incremental declined car large by mobile increased and Connected in PC in Media monetization. growth and year Pay driven guides full to as to a acquisition XXXX, mature stronger impacted platform business classic strong lower more declined customer electronics from by XX% fees production X% revenue. the mostly declines were volumes by increased X%, of that For HD Vewd due the and Radio primarily license IPTV. primarily offset mobile the penetration. TV due consumer and growth XX% automobile

year Our benefit the $X.XX, Non-GAAP was the impacted was expense tax was $XX favorably a management they the margin tax XX%. for was gross million. share by strong operating in non-GAAP earnings million $XXX an income EBITDA a and by Non-GAAP created for trip per end quarter $X.X quarter million expense or adjusted and quarter.

balance the $XXX and with to Moving the cash company million of ended equivalents. sheet, quarter the cash

million as and goodwill of As booked to optimize of and to additional facilities non-cash a a $X impairment million related goodwill an assets, building for charge office seek redundant part of closing review we our footprint. our we year end $XXX fixed

estate real of related we forward, incur goals. additional Looking expect part to our optimization as charges business

an in increase from flow working million. business associated mostly operations by capital to million approximately cash changes a $X $XX quarter in driven in negative the Our of million onetime due was and with of separation $XX unbilled the expenses receivables

following we In the and terms of our XXXX financial commentary. providing ranges outlook, are

in $XXX to to the revenue in $XXX Day full the we in gross our We provided expect September. with year million, estimate Investor million range at be of line

our growth this connected to and expect We come businesses. car media primarily from platform

cadence, expense $XX revenue is to comparable to estimate that of of wins affected terms slightly US in percentage we and to implemented margin expected cash prior $XX This Note taxes year in be and lower in is September. to fiscal year tax a recently in the that investments the incremental estimate due changes. we tax each follow adjusted 'XX for momentum provided tax with In midpoint OS XX%. accelerated similar fiscal range than design range AutoSense pattern showing be the million law quarterly accounts two quarter. the the our recent range expect a to We X% business and Full TV increase for of to million. year 'XX EBITDA by from to seasonal AutoStage, non-GAAP in the quarter

First, requirement required capitalize taxable we is five XXXX. this during repealed income. course whether be certain the are will our more years, has R&D which the It or impact costs US increasing of of to unclear over

taxes expected we the operating middle we At approximately and cash Second, deduct share EBITDA approximately to incurred the to million share year. have not XX various is the the can of ranges, expect breakeven fully adjusted revenue US withholding average year average guidance expected XX longer and does million diluted count flow our with tax a countries which treaty. to for the no count year. for be for Basic is in

our prepared concludes That remarks.

to the Let's now open call Operator? your questions.

Operator

of the with Stephens. [Operator Zangler Instructions] Your line comes from first question Nick

Nick Zangler

the Congrats with win. I all quarter. car this great connected on news guess this I'll start

similar you OS there? well reformatted or to the car, Just well. looks car significant OS does keep as connected up, like just -- TiVo does And I to are on TV on differences of just the do on a the can maybe the get as look a OEM there what just TV to TiVo that's like side frame branding then you guess the like it kind the

TVs? economics there, just any share maybe potential the you software on If you you'll economics, thoughts the like there? do then the And ARPU early with that just see

Jon Kirchner

stages. think I it's early

to here kind respond what you is going to think bigger I'm give I be Nick, So able to to of picture.

you the to expect basis near So license on as we create the will, monetization do if a well subscribership term business fees, over opportunity as longer run.

deal from would a great obviously, has input perspective, Secondly, appear they I design video think the automaker the vehicle. the how a to in like on of services

say what living it So our see will identical to would be room. I in not you that

people will engagement that I a see vehicle in autonomous vehicles that think also and where this run increasing think I search sudden context use that cases the as of different at longer longer fact as of a room living semi in increase while in or about at consumed there. being you cetera, legendary TiVo’s autonomous cars the -- have an some uniquely have behind particularly not of going lead charged, deployed, you're elements content things driving you usage, front is relevant are vehicles, And all think and look However, the consumption. and amount recommendation, that the kind have you electric core, entertainment that cetera, you seat becoming and entertainment, all are stays, more et the to slightly car despite what's is metadata et all the given really it to create all personalized those unique experience,

early So super win. days, about the in excited short,

a the of living only doing think we more not think it towards we that shows began around to have a more working way the number we're the but on put in about as platform what term compromise we've in little number about business think experience car power shape does and as for entertainment of a lot And I years. space strategically that more a in discussions of the that it ongoing to room, of we'll where in ultimately, folks. we a mobile, long with do this I together been the say can economics bringing

Nick Zangler

but sure TiVo a shout out. on got if also other Roku aware, call day, not you're the I'm the

And with it just OEM all friendly? more their TiVo so had out your TV the TV, seems what I to within dynamics TiVo, powered TV has happening Curious OEM OEM this given engagement it compete TV industry, are OEM got now stands. to the and will ask, a bit effectively currently as is partners on building which by impact their own partners branded TV maybe that with in Roku little option, be interest potential their utilizing

Jon Kirchner

I that the had has I to independent independent but look would announcement further, think think, say announcement And as to need first that quite and for announcement platforms. foremost, we've some platform. underscores engage created around people media think engagement robust prior interest, I an I that

TV model, our revenue as helps where whatnot best search think and drive and rec partners term, what doing. long and model, interface as our I our business we're class with interest really there's So sharing well in in

and on in today think was question fascinating already the And I think based or other than with that around around the services. power in more that we I up, the million a I thing was question video know scale I that brought XX question scale. think, context households is

model that as to very over we're over large uniquely seen the platform. therein all participate win media be independent to the So lies they think us way a and OEMs an company service people to world, get own that key think TV own obviously all part economics. we data the customer, the they able of serve get we up are brand, of for share And that business are where by and a in get longtail independence a partner the has doing and to is recognizing a I I video being the positioned of the business, already credible as to the decades they to

Nick Zangler

one just for the of in guys adjusted the based the then upside quarter. And EBITDA It prior and expectations. to last on kind on on your the it side, that here out you expectations relative call, expense significant final a fundamentals the just to drove broad laid was me relative beat

you expense based. what there in broad roll looks thoughts we type So did? And next push it's place the they spread first, efforts took in mitigation to expected guys potentially expenses on to of the relative just where quarter? just curious, what it or at to had like into and alluded out and any But where guess is I year actually

Jon Kirchner

expect say, expense the good are made good we on quarter, toward very we would as of is optimizing good. quarter. that to progress I And cost the even company, continue I the think even in management progress would generally I But XXXX. call, our and making speaking, into I noted the structure during

So think forward. positive continue actually and EBITDA as we to that, adjusted a go our management I expected is we optimization efforts and expense numbers which supported

Operator

next Your from comes question Instructions] [Operator BWS Hamed Khorsand with Financial.

Hamed Khorsand

mobile you all? about in what's this you from? ago, customers? at just recurring this Is possibility And expand imaging on mobile talked revenue Could a couple generate the to more nature that quarters you adding the the revenue of customer related is

Jon Kirchner

entering XXXX, longer a settling early term with customer is, into on that arrangement and that a and referred during occurred call as customer is with this customer. to dispute we mobile a the also The that

the products. us both let's So a of considerable was, say, opportunity it see products in our through And from we CE mobile our still for best sort worlds. of

outlook future. So the there good growth in

Hamed Khorsand

platform? response advertisers how you are available, kind your And then getting monetization, are building what about inventory for the you from of ad

Jon Kirchner

that currently are across into to in connected we products to bring we our in I in very what have relates think we're they're able be insights table the TV. the people have as various certainly it TV and in interested to to are going conjunction that interested with audiences household,

these And and get And the we what sometimes side so the is, working infrastructure of directly, platform, embedded. as to got TVOS that TVs, monetization monetization has engine work plugged platform plug into that questions we and have demand supply on already -- have the we even that teams could other platform. if towards with a have we building already one side the and about advertisers you you're major monetization it is, answer into your we today model,

ready that turn biggest place footprint. the we're the to more short, we scale we on to been monetization in continue as have And the of of on overtime. the can the footprint course, So focus, scope get model primary and CTV size our it's impact to has, really because where

Hamed Khorsand

last models all the you generating car, had question of a XXX And event Where would lately I talking revenue that about event? or this those as you in connected 'XX from related more far models, talked AutoStage. lot release, press models been was to about your is for nearly those you've stand as 'XX

Jon Kirchner

I 'XX. think in even online in you're going again to see, 'XX, certainly some more and 'XX vehicles in more come

roll So then into begin larger usually then and models, expanded get particular these end manufacturer to umbrella. deals, some time under broader of they base models engineering a front a commonly on involve has that but

the recognized So we've it's and we that's and highlighted fantastically one winning things. at well doing building are We've business. of

years. in very And a with million is business that feel $XXX quite confident in will three, today as these excess connection give of one fully that you to won five, that the next pipeline things the seven and steps of we that have see bit years. world indicating years of the next more begins yet we programs ramp business move of is think how took of couple insight the committed next over to couple the we're One I I into try to a through over plus. business think was the provide of that can't But our

Hamed Khorsand

of models opportunity? is of you're new as HD concerned percentage those far Radio as What as displacement and brand percentage what is

Jon Kirchner

in sold Well, plus automotive we do brands, the States, do we the XX brands United brands. all business with

for HD a layer where HD Radio units on not it HD with not manufacturers or displacing a is because the Radio it who So those is shipping United other those in of tranche Radio, for top opportunities. say, let’s they're into Rather in example. are new we're Europe, really standard business the geographies is of States, not AutoStage licensing

and AutoStage of cases, brand So the those is deployment in the in markets. revenue new those AutoStage

and adder So States, an if revenue you the America. business net outside more will, extender, US of in it's the a as additional broadly combination North and an of being look and new United in you

Operator

Your is Group. of from Matthew Galinko next question the with Maxim The line

Matthew Galinko

there's exactly I'm So internally on that's internal just a has if much? and sounds work it Perceive it in result question when customers’ So work own when to how still that like little happen to to curious is the that market volatility on go on and of starts how and much that that or leads XXXX? your

Jon Kirchner

Matt, characterize a of it's fair think to bit as it, little I both.

and the cases things one expand think has ambitions, cycle. bears in starts cases -- that where done I their challenges It are some the nature of the think implementations. think more fits, to functionality that with or And ask assist they there's different in and larger and thinking enable also CE and deployment. around of what either of causing which people it's the interest of reassess driven also over sorts the people some and concern it's real the cost they're it to space the timing I invariably assess of part building models is lower of to this noting about in retail and it also I leads end I people competition some caused and in broader of functionality, kind that a at at uncertainty us think where has to been

the coming taking all differentiation going think highly through as fit very And the it things and that, market look working getting forward here the fall remains going perfect the and technical of I platform, the depend on around and that's convicted few exactly strong. So remain like to quarters. think that how when over I we're to course we is and what look interest of

Matthew Galinko

the that. of a potential use that think, Perceive’s talked the the, follow-up or adoption? the fall just to I previously emerge exploration market electronics been does guess With the sort up of consumer a increased opportunities against of to kind that's into you've as different some or engagement of stronger I that And is pipeline or of brushing about, second first has or there thrust general case

Jon Kirchner

up. about I looks is road Yes, is answer. think as to and general lot productive that the there's industrial, a -- to shows to always this where big other think going certainly But think CE automotive cases, just think I is discussions timing I and we various question lead the stuff having are as what of use There outcomes, -- like. that

Operator

There questions Instructions] to [Operator will are no time. further closing back over turn call I the for remarks. at this company the

Jon Kirchner

Have and these early results you Thanks in few We QX customers And strong and see achieve a for of We're now you May and Thanks, reviewing to our today's forward I'd everyone, call. partners thank excited growth between business. thanks day. about joining then. helping we'll in us momentum operator, employees, much. our and good a to our for our prospects and results. the continuing with sure we like look I'm in see so

Operator

Ladies for conference concludes you gentlemen, today's call. participating. thank and This

now You may disconnect.

Xperi (XPER) 21 Feb 232022 Q4 Earnings call transcript