Earnings call transcript Q2 2023

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Operator

Good day, everyone. Thank you for standing by. Welcome to Xperi's Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. I would now like to turn the call over to Mike Iburg, Xperi Head of Investor Relations. ahead. go please Mike,

Michael Iburg

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

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

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

the noted, I quarter would note to prior comparisons in same First, to year. that unless the all are otherwise like

addition, second a Adeia. as on Corporation Xperi's Xperi In the was Holding quarter calculated known Corporation carve-out separation of on Holding October XXXX Xperi now to X, XXXX. basis prior is from

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

discussed results Form the For our materially our from more and section recent MD&A including could that SEC we information please the in on filings, actual our differ to Factors uncertainties and today, most refer XX-Q. cause risks what Risk to

arising note this company does not circumstances these forward-looking intend call. Please statements to that events or update or reflect to the alter after

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

turn be call call on this at conference a website CEO, will I conclusion available call. Xperi's Jon over replay the this of now Lastly, of the our to Kirchner. would shortly

Jon Kirchner

another of solid second quarter but let everyone, for pleased significant you, strategic moment, on I'll and us details touch a XXXX to Robert financial just and you let results. our revenue We're and Mike, walk through in on you, thank me Thank rates. progress earnings growth call. quarter the deliver joining

included a benefit, excluding $XXX imaging in Consumer but you a from recall, significant year would QX mobile quarter Car. and as revenue. due growth million, have from onetime X% Platform customer, XX% the this in strong Media may When in last year-over-year some of to been was benefit growth year's Revenue Connected of up impacting the prior excess Electronics

growth revenue net Investor at discussed was Day Media our consistent last with Pay Our year we rapidly, The showing achieve result half and outlook. of with Connected track underway first Platform Car to coupled the first that modest and rate with performance, down mid-single we September, full projections remain TV half our our Consumer is Electronics growth initiatives on digits. growing expect and

momentum particularly Lastly, to growth we're strategic and pleased see areas of continue Connected Platform Media car. business, in key in our

to on we're are focused These key combines viewing. smart system monetize making offer automotive Connected metadata growth ad-supported progress our in power we TiVo are X efforts broadcast operating TV where and radio, significant TVs to the each. enhance cabin experience. In areas, AutoStage entertainment, where DTS and advertising, video Our and our Internet

our cabin improve convenience combines industry-leading IPTV, where content and safety, automotive monitoring, DTS our technology offer where video comfort imaging platform. and to we machine In broadband and first over AutoSense learning

call. expected shift entertainment is cause earnings TiVo. Sharp to OEM our advertising the second announced to today, some the of you to is walk and significant as by since methods. these be TVs we Within and earlier ubiquitous expand of Media through that is Platform, accomplishments over Internet consumer new connectivity, Each powered to several our markets dollars streaming expectations next like I'd delivery more years last powered rapidly by to TV

starting expected in unit year. multimillion to TV to on We're Sharp with relationship ship partnering excited is be next multiyear, Europe a that

XXXX OEMs with U.S. and TV We importantly in now product In expect in have the have we smart TiVo integrate to to third we TV OEM to and addition, signed X both OS. ship distribution a Europe plans

of the robust, by remains This anticipate under this OEMs tremendous strong we pipeline other contract having Our and is year. of strategy. and a validation end our accomplishment

quarter's last for market the by the an powered Vestel to we TVs season. shipments outlined in important step. TiVo call, expect As have upcoming initial These on first European are holiday

of as However, TVs the monetization these footprint grows users content. build engage will and our with

our supported over discovery Xperi Sony, partner addition, within of and time. search pathway and enabling creating longtime their ad smart technology In an a content, content deploy will monetization web lineup TV additional browser to

very and the pleased Platform long of progress prospects. independent with we're strategy our Media Overall, growth its term

saw momentum the continued Our in also Connected Car quarter. business

industry automotive as the making more entertainment in seen, experience. in-cabin the cars investments is likely dramatically you've is altering making connected extensive As connectivity Internet

X As part decision a to good deploy year rapidly. series AutoStage DTS AutoStage more is is continue. X X in-cabin DTS automotive progress. of globally, expect expanding to and this million in is deployed cars in example this the of video we BMW's TiVo their entertainment platform brands powered our now later across momentum by transformation, service than our AutoStage

addition expect Zealand. North upselling. creating and to radio monetization expansion, by the X,XXX stations Europe, and further improve we To and the the Australia success recently In broadcast groups representing of over we geographic combined rapidly, opportunity to with long-term New footprint AutoStage, driven model signed across feature agreements grow user America, initial advertising experience, this for

by guide with sending This combine of as album will experience such in-cabin to that content stations. additional user and the on personalized Internet AutoStage mark, what metadata currently is lyrics, recommendations network include will Enhancements experience. extensive real-time content a showing other additional enrich broadcasters playing enhance the

plans during in late model year. a continued with X Turning into the different to contract automotive DTS OEM XXXX top have initial X production automotive wins now encompassing AutoSense, quarter. to over models. 'XX for signed design our We occupant system go with in-cabin the momentum driver brands We XX from and monitoring new a its

to in our to addition we well-established continue platforms, business. next-gen HD progress In these make Radio

in-cabin of markets are growth. the for increasing stage American and Connected entertainment XX seeing we're share for models HD This Radio meaningful long-term double additional over market, The launched monitoring the been to more years, X North quarter, our on our and revenue today production. expected success the Car sets next car solution has the than new

Within the continues in helping TV steady Pay subscribers. decline linear mitigate progress, Pay TV make IPTV to secular the business, to

adoption Our our offering growth, XXX,XXX IPTV to bundle. double-digit driven being broadband of adding more our and IPTV with IPTV had in healthy providers quarter is in solutions create new they new IPTV time subscriber service The broadband than services momentum package a another together the subscribers more of net the their services consecutive increasing customers at velocity solution QX. as continued by attractive

also ad supported where content channels viewing fee of for ad-supported through we content. we television monetize the offer nearly In addition TiVo+, to collecting a XXX monthly subscriber free IPTV, of

service is market the provider content are TiVo+ or the being to expand our customers whether consumed, fast more options As video increasingly entertainment only to video. their offering shifting towards broadband subscribers,

video continues the line, the to XX availability our TiVo+ technology monetization discovery footprint. and providers of additional service momentum with enhancing bringing our of quarter, customers we to more licensed scale search engagement. product to drive In across consumer ability recommendation expansion lastly, And during this element our their our

heritage AI with and content our applying our U.S. footprint additional significantly we During the video demonstrating our millions households quarter, relationship to deep service by of personalized discovery. of increasing a X value provider top the expanded of

Play-Fi into to electronics Electronics, These products manufacturers. Turning technologies continue and consumer the electronics to audio technologies. market manufacturers for and DTS Consumer major license signed several agreements with next of these wireless the integrating we consumer innovative several years, allow their appeal validating renewals longevity

In DTS. of addition, we celebrated the XXth anniversary

now Jurassic in technology first XXXX deployed immersive Park devices. mobile and film the Our pervasive classic consumer electronics audio across

out quarter the path to Perceive. Turning and tremendous backdrop last large-scale year We're sent revenue AI. down continuing this interest first expect we the in of against

we're efforts continue our its We customers language technology application and engaged Recognizing partners help deploying the progress models our accelerate magnitude path partnering or this to to are with compression of scale options to exploring and make strategic to our development for market. LLM. large in to opportunity on

to expect quarters. coming progress the additional We report over

In many quarter from perspectives. a summary, it was successful

strategy. and both targets. our long-term reaffirm our remain hit on specific financial solutions milestones track validate to continue that achieve and objectives We strategic to our We

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

Robert Andersen

Jon. Thanks,

Mike second a revenue the year. As from customer. year's against million, up Last X% all earlier, the prior mentioned mobile same from benefit the $XXX year. significant are Total revenue QX included otherwise was noted, prior comparisons unless quarter imaging for the quarter in a

QX benefit, revenue was down we in would onetime decline greater Pay this TV, compared year-over-year saw our X% been XX%. revenue QX. growth largest Excluding to improvement the than X%, have category our an

helped core the to mitigate we to Play-Fi year. due helped both revenue performance quarter in Electronics our saw for audio and that DTS overall TV Electronics. Consumer during the declines XX%, renewals primarily during was within product IPTV Consumer Nonetheless, in event last down quarter onetime to lines. Pay the bolster traction in the solid growth Strong

to production following unit high HD issues. up increased HD due volume several of supply volume was Car chain Connected years -- unit XX%, manufacturers as primarily car Radio

As our saw Vewd the AutoSense half revenue than monetization and combined this we the due AutoStage rest revenue customer for to to due of growth Platform advance, with the our a more programs up solutions. in doubling of was XXX% from acquisition. Media also incremental increase and

within on consistent And year detail, at growth deep performance we slide by last Investor year articulated the first of with the a full won't unit expected Day our is although go half has the in results. range revenue well revenue broadly us first in through included business this I've and half rates I our outlook. our

shift Electronics margin or Our by year, but year's a imaging was a the Media up points Non-GAAP due last Consumer that X% approximately XX%, expense from adjusted decrease quarter $XX to mobile in driven financials, $XX platform down prior to sequentially. non-GAAP for of million, the occurred was the from operating contribution margin from carve-out X% last gross basis for onetime million, high-margin quarter primarily revenue year. customer XXX the

EBITDA an million EBITDA adjusted adjusted of margin $X in resulting Our was X%.

tax for loss $X.XX. non-GAAP per accounting and was expense, share our After interest

million the balance cash slight in ended company increase $XXX cash sheet. with the QX. a and equivalents, to The from Moving quarter

quarter from in million to flow modest Our due changes capital. cash the usage was of a $X in operations working

cash be flow due have to from cash, execution uptick receivables half is in multiyear an cash sufficient DSOs year in operating full expected Overall, currently we the unbilled second the to comfortable run be deals. strong usage and expect the increase business. remain in We primarily to of in while year we the an positive that a of to

our financial Turning XXXX. outlook to for

are and following our ranges the We providing commentary. reaffirming guidance previous

margin the of $XXX expect to range million be We continue revenue full XX%. year range EBITDA the X% to $XXX to and to in in adjusted to be million of

We estimate million non-GAAP from to million. our million to year approximately tax $XX $XX are full lowering $XX

to state taxes. and expense federal and year, throughout not Our certain the the tax due is timing primarily linear foreign withholding of

approximately approximately $XX non-GAAP half, approximately distributed the we diluted So our for to count while the count the share still half the equally was year be between the remarks. million Basic first expected XX quarters. and tax is to year. million million average in That the to remaining concludes is for fully expect XX prepared million second X expected share average $X

Operator? the open now call Let's for questions.

Operator

Instructions]. [Operator

Securities. Your Rosenblatt from comes from Frankel first question Steven

Steven Frankel

little mobile should we of Jon, an how more upfront Was Was Kind catch-up? just transaction. that last -- how can about on a do that get imaging a I year's think that anomaly? detail payment? characterize you

Jon Kirchner

the of coupled a of a license. prior, execution dated with few contractual matter was It back a resolution years go-forward that the

Steven Frankel

that's you focus like and you Could North in tells that it progress the entering TiVo America? talked quarter tell the had things sounds now us the about you to made going going going OS or some American then on North with they're that you forward, whether to And new OEM market. one more good from important you

Jon Kirchner

with year, that's to think I going Steve. can for end up we're and really And think say all next reasons. multiple North competitive players America I strategic I in

Steven Frankel

about learning And way what maybe TV early Is Where the it you rolls monetizing OS helps that front out? you monetization the thinking as you from it stage? be? this TiVo on are think business it at -- Pay the you're should

Jon Kirchner

that infrastructure and spades you through One aspects monetization TiVo and -- need millions that have I video serving you the think IPTV. couple there's of about households as are long-term business of think Well, important. we meaningful OS of in up Pay tens TV our is service a

looking various sit players We in also at bit in have quite and various on and coming our data through off these software a TVs of that's the boxes that experience field. IPTV history

to to enable know that segments I will interest, direct various that experience are and us And partners. of data we think advertising prepare from our

time have and to So I business been back-end it on obviously some working the essential is of have. we think and it the is really, I is for monetization on over the turning and infrastructure scaling something accelerating reflection engine time that really think, then a we

think players we And and getting as that in of margins the this which faster rates. expect market to you out attractive coming over 'XX, online think we to market slice is multiple will in ramp. have be 'XX, there, I into it build key And good a the as both exit begin us that us see And 'XX as time. footprint and is as issue certainly, for generates well long-term attractive monetization growth positions at very I to well get that

Operator

Your comes of Financial. next from BWS the line question Khorsand with Hamed

Hamed Khorsand

into of in So you of was for are seeing what had competitively share all and feel about in of revenue are you the the losing the first you come any form I or AutoSense more winning the this to Auto, timing do how question share competitive when landscape you? from and anyone

Jon Kirchner

responding Well, existing we find I design kind various I of reverse time the into will think as Hamed, their our wins models it customers have. order, over in think, across way build

And As for a around broader models of that industry we now that routinely some monitoring and we unique nearly OMS in-cabin monitoring I or we shoot-outs have monitoring. occupancy solutions. result, technology terms as very a in-cabin said, are we the think uses contracted There's I support have different bunch -- XX winning think technology. are And it. to our

long-term And business for so the I that was think good. prognosis the

we posture imaging recognition many, Tier out the are that Tier that don't that Xs a decades facial of losing certainly mobile detailed work bring matter, for I comes as and working building there also of things certainly, the is our bring and work business so to partially game expertise that years. There all But through done And the see on we unique substantial the really some are of out us many others Xs imaging are solutions. around potentially there in space. one body we've competitive

it expertise bedrock car. both in I for in as it data think well apply is showing And process. think of as well now the of as to so the working we've And years we're we I competitive space. pitching been a very couple have a to that And

Hamed Khorsand

X what the second would revenue out looking of almost first the segments? looked expecting the in then the like? And half looks of into half, you some to sort breakdown Are pickup similar X

Robert Andersen

of at for breakdown in or this when I profile we is expect similar the timing when the that pretty we to think we -- year, Well, rather look the the Robert, the actually look of last revenue the the remainder year. revenue year is

to for going QX was of QX forecast from one percentage basis. I the as QX a if out think it pattern follows the So and kind QX revenue aggregate, and in

seen of that's the year that last of from you were the X% remainder think if the and along Platform or there. Connected Consumer for expected X% as you'd strength we in Electronics. get with at, business continued mix, progress what I Media as were think in well even raising car contribution Automotive, I by year terms of And what about you we've getting kind probably

Hamed Khorsand

then one that regarding broaden is purely question Europe? Or that regions? out final Sharp, to will And for other is

Jon Kirchner

It think Europe, starts have to relationship we'll in broadening I more time. say initially that about over and

Operator

next question Galinko Matthew from Group. the Your comes from Maxim

Matthew Galinko

Can maybe we what past. you've little the the think of OS relative a unexpected American signaled I in entry for North -- to maybe idea TiVo

either -- that your in than the become or changed what's positioning curious I'm addressable guess has U.S. other the more has I regions? become So market America or North

Jon Kirchner

has discussions time in I it partners. globally pipeline with different any Matt, for We've some that know kind recent event. been don't necessarily of been

for and content-neutral the believe independent to the to we TV. best platform who build and have and North exist the the becomes and the important long a don't provide therefore, amount the have it's tail platform in American substantial data monetization wide ability economics is OS back-end of European TiVo that I resources, of of TVs experience a share growing an can is the own, media customer about one the recognition think brands however, benefits their and that their markets user the offers, a that the all to and participating ultimately perhaps really that in there driving and that is, that really then that own brand's to

something the of more multiple And in we're a think is we've think, enjoy TV has proposition engagement of on more and I we success, the also And been these make sidelines I find, that with quality I to the kind the some players. now in solution have will lot as what instrumental think watch further getting solution it think higher I And I market gives and watching brands. that has clear that -- we're content, confidence. that want it's that that a the to very higher value revenue think sitting with us ever people resonance. think partnership coming have of that and potential I develop. consumers been And monetization the the comfortable easy got showing, and sharing with But

I So in what expected. it's think short, we

think it's we about very than up but to in very, trajectory we here less still quickly are I and lot or where in our a with years, outlined maybe we some last of the couple but have do, and moving end consistent what next September ways, more excited it better we even will Day Investor in expected, more sooner. the likely up ends completely work of

Matthew Galinko

of LLM you you a yes, strategic a in and can on might more little can or maybe in Or then you Perceive what bit just for detail? on accelerating that the terms opportunity? cover touch partner And do expand towards

Jon Kirchner

Sure.

these of deployment So as AI and you LLM market the larger look the wide-scale to solutions.

perhaps that whatnot. going to a be and given scale, and financial very for resources it's capabilities, clear, just scale opportunity think there's of additional resources need size distribution the that I

a is to value to do challenges I I And bring amount you And we're of tremendous that and to with technology. challenge, going models. it's has which consumers inherent mass, goodness as recognition engaged tap the how these -- interest large interesting the think conversation you strategic with in if I think really want you're conversations, there's of massively maximizing the in of scalability fundamental partners. the If to think deal that various the the made in

efficiency and that Perceive higher that think very compression ultimately looks focused I on think this. greater essential be to advanced as much technology power going that folks And to challenge performance one And bring bear. address is I and is to much ever can to scale

So that recognition to in it's we, short, And off technology as I be part a think a bring as technology likely partners player vast. a strategic the of will market we work with the is to or that best partner solution, opportunity with market.

Operator

[Operator Instructions].

question comes Zangler with Stephens. from next Nick Your

Nicholas Zangler

any did way, do have active XXXX? relationships on the to relative that million you maybe to wins? another there I relationships that have relationships is you $X for here, gets way well, any -- targeted feel Or TV you up, that that far the to congrats you that other, or said account these few more Is each still new totality in to just now you've guess, X thus you maybe need way size there cemented or number a might

Jon Kirchner

No.

And a certainly down couple what we get have, I to more think say we think on we'll the have with of this way. what quarters I Nick, laid as out topic, think achievable. we I is

Nicholas Zangler

discussed to utilized that but did understanding it, going TV commentary sorry exclusively the Platform deploy talking is if want was that you if Sony. a Sony the the OS -- about browser, within we're ask Sony And Google then is on Media already my to TV, I content and

You monetization. could mentioned if is happening I'm pathway what curious exactly out you So flesh another to here? just

elaborating on new So that as well. just mind you don't relationship if

Jon Kirchner

Sure.

a TVs. acquired Android recall, you'll deployed them last web various content systems, on has as browser Vewd been So year, that is we including

acquisition. it of we it's able of that Vewd with it, the of, more connection And that to in So let's the were use one some value I think is their through TVs. example call gain the just

Operator

the Q&A over remarks. closing I'll to call now for back This concludes the turn company session. the

Jon Kirchner

early momentum for I'd to today's helping to about like customers everyone, Thanks, look We're joining thank objectives. operator, excited and today's we continue and And performance. results employees, call. our our call. continued achieve This operating strategic you reviewing with you, solid for our to November. our forward in concludes QX thank and partners our us

Operator

Ladies all gentlemen, and thank you for joining.

disconnect. now may You

Xperi (XPER) 9 Aug 232023 Q2 Earnings call transcript