XPER - Earnings call 4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

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

Michael Iburg

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

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

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

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

In quarters to on separation on addition, X as a carveout Holding from Corporation Adeia. calculated the XXXX were known Xperi first of Holding is XXXX. basis Xperi October now Corporation prior Xst, Xperi

will to year As a in full result, carveout be all the comparisons financials prior year.

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

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

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

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

Jon Kirchner

for and fourth Mike, us full year Thank thank our everyone, XXXX you, call. earnings on you, quarter and joining

financial X% in prior a compared few the touch you Adjusted our let from year let was progress the on in EBITDA moment, the to both details highlights. quarter me first a revenue, full the Revenue XX% for for while the during million $X.X quarter in up priorities prior make year. just delivering through to I'll the of million Robert continued We million, walk quarter. financial profitability results quarter, and or $XXX solid the strategic on year. was $XX.X but

to margin. milestone addition the new flow ended year strong we improved $XX quarterly in This results profitability, operating These and for In revenue, the for EBITDA, we as the cash had breakeven of Xperi EBITDA demonstrates reach adjusted and a highs operating adjusted significant flow. at represent efforts million of the quarter, for at cash the of have on separation geopolitical our and uncertainties, outlined in the with fall future. profitability progress revenue mid-single goal of and growth transformation our business pleased digit despite some XXXX. our improved economic well delivered and and positions we in are XXXX strategy to for us Consistent

about Before sale business. a talk let our address AutoSense strategy imaging of me we and related in recently completed moment take the the to XXXX,

driver and For the opportunity monitoring. imaging leverages specifically occupant that deep inside we've cabin years, our an expertise, pursuing automotive been

an Our meaningfully the growth by attractive Xperi. that and for belief XXXX and was present opportunity develop market would margin

impacted new While changes XX Xperi. have opportunity very important over there within at the we've business the that X customers, this successful been months been past for have winning long-term

strategy. our hard that This justify systems, our core increased of provide. to was of they wanted the expectations growing to cost the importance support to these is resulted as in for OEM their partners due a scope business to that increased for structure products a not First, critical safety has long-term significantly us

original impacted negatively increasingly pricing competitive projections. compared our the to Second, has environment

had anticipated. timeline in business beyond this investment attractive was what our for pushed As out achieving a on we result, the returns

technologies with the the in align reached technology thorough $XX strategy that to solutions agreement the last minimum of automotive up sales expected entertainment Given and more we our decided safety. sell Tobii $XX including and a some generate business. After focused to strategy, out ultimately The a are publicly-traded we long-term attractive flow began proceeds Sweden opportunities in with company are imaging payments spring, Xperi history and paid providing that over an long which transaction, to cash to of structured were a million, business. platforms time Tobii consistent earnouts, from process with related and would million with from independent a of to be based the technology a media AB, Tobii's

result, us high-growth, on the a while our attention of the still upside automotive future safety of allows and the the deal in higher-return entertainment solutions dollars focus market. to As structure investment participating

on video Going and connected combines These advertising, linear of long-term focused radio, experience TiVo automotive drive growing TVs to and is we're Internet potential growth where rapidly double differentiation. our an as we solutions is entertainment forward, broadcast platform over these the power industry-leading X monetization; markets customers' strong and TiVo Video-Over-Broadband, AutoStage households, TV for we ad-supported where next to viewing; well and video roughly IPTV streaming X broadband-only offer as where see content-first DTS in-cabin metadata, monetize offer and system Smart expected we years. the households. operating to Each where enhance are and our

cars platform. TVs XX strengthen million we'll million these DTS Video-Over-Broadband our with have the footprint active targets. and households core these endpoints each the and Xperi with subscribers, reflect our XX AutoSense to least If our update X of at provides and the with positioned are divestiture recent TiVo million end and XXXX, is we cars million updated through of running OS, in have to the monetizable progress of achieve position on at AutoStage. million slide million a X.X our least XX XX which market goal targets, entertainment expand. We well to change markets We to provide an By increasingly end to revenue of continue X-year XXXX, our this our grow in no as

Our progress exiting in XXXX us increased gives confidence to XXXX. achieve our these ability in targets

million revenue of in generate we X XXXX. these As initiatives $XXX we do so, growth expect over to

into through Let our with reflect resonate Our total some OS TiVo with our continue countries Media their expanding TV of signed to of X, TiVo TiVo the top a of TV Operating underscored OEMs brings continues Telefunken, XXXX manufacturer, the additional partnership This number currently me balance global throughout you plans dozen recent to manufacturers. XX Smart U.K. TiVo OS and JVC, these than and recently the European countries, achievements into under Vestel Platform, to OEMs, such more our shipping integrating global the System by that TV including Vestel. progress. integrate by XXXX of with with to top which being value X Germany, powered Within brands TVs proposition Skyworth, a walk is XX TV is X as into TV lineup.

growth U.K. and with Argos, and it media brand and for prospects. Electronics long-term powered to Sharp have of Smart quarter launching Argos by stores TiVo leading our execution a spring by across Additionally, great TiVo Consumer the driving expect Europe powered Overall, independent was strategy Bush. for TVs under retail house our platform TVs a U.K., retailer, this in their

select BMW's quarter. the DTS Connected The also BMW service on was its new Our in deployment continued of rapid during model roll through in also to vehicles TiVo update. and Car service intention shared the momentum road cars video brand out video late powered already the an business highlight has AutoStage their of certain future. over-the-air Mini to across vehicles AutoStage production saw positive by

X awarded were we automotive partners. wins the new Asian addition, In major quarter in AutoStage with and European design

over XXXX QX considering for million. Connected the XXXX, an report of unit. Car to year the pleased AutoSense reported we to XX% a greater business the total $XXX business the end At level we shared dollar divestiture, the we even estimate Connected committed current than that of when Finally, of committed ago, value of revenue are Car grew

at consistent Pay core TV secular rates the broader progress, business, to the decline to our expected This the make is steady IPTV which Within our generating helping in in from offset solution, decline continue continues with million solutions, to TV XXXX. Pay revenue $XX market. Video-Over-Broadband,

by the full Pay XXXX, year X%, down TV Video-Over-Broadband. of strong in less supported the than For overall was growth

several electronics Electronics, manufacturers, Hisense Xgimi. Consumer important signed consumer license and IMAX Enhanced to including with agreements multiyear major we Turning

us executed decoder DTS:X with new a we house agreement their major for brand products. addition, retailer a In consumer electronics certain of

Perceive renewal Masimo, leading Technology, technology with year, advancing and development to to a big with have to our audio the for commercialization, brands work provider such initiated to a large do. with efforts language also a major of continue compression. also with our large language Marantz, deliver lot signed explore while but models Denon, a alternatives tech for future for of we to strategical of Perceive, the we regard the Perceive investment, we equipment, magnitude Polk on recognize efforts We past Definitive as partner model Partners. We've and continued more Centerview have opportunity process that over a we accomplished Recognizing help the need the Audio. With

TiVo to U.S. Media outlook market powered end. our you X progress business metrics gauge to by all I European a and XXXX, want Before using by major provide Robert walks Within be our TVs through to in the year. few financial want we'll see for Platform, in countries this year we

addition, the OEM team TV least this new year. sign at one In to I'm pushing

goal X million OS and Our deliver to X.X is from X goal of and more XX TV TiVo is million X.X our OEMs to exit up today. million additional Within TiVo XXXX broadband subscribers, sets. with TV, XXXX with exit an wins the Pay active than footprint

in X including of improved business Robert XXXX XXXX. and delivering exit revenue growth vehicles. to in Robert? business discuss cash we'll transformation and profitability to additional leverage over the one, Connected growth much I'm at By For video, on and wins efforts, installed call positioned coupled beyond. With and we deliver Car, financials. continued accelerate the key operating initiatives, that, with better I'll with flow with to X turn least XXXX be million an challenging AutoStage these our base expect to Further,

Robert Andersen

during X Thanks, to this Jon. areas cover call. I plan main

within go for results certain and the the quarter year, First, results. through financial I'll on the commentary including items the

was and financial with revenue down Total Second, fourth listeners prior results, comments in for provide category, my comparisons the fiscal same quarter largest than up remind the for TV, quarter less the quarter's $XXX in period. guidance all X%. Pay revenue the are million, XXXX. Beginning was let X%. me that I'll our commentary to

year-over-year to quarter, Connected primarily TV IPTV our solutions we During as Platform XX%, Perceive. AutoSense minimum a Smart recognized to in for primarily with solutions. due from relating to Car in was revenue development connection and our middleware revenue growth strikes from in solutions, strong decline up XX%, pushed as contribution and XX% is declines revenue Electronics business, an was well up our fall actors' prior saw a mobile Consumer the modest that by milestone. Media contract Pay partially XXXX. core to premieres declines down in offset year due due guarantee in in monetization writers' a growth Video-Over-Broadband the TV modest into

For Consumer growing low-to-mid with Car line growing digits, the full rates with Pay were revenue in XXXX, year growing modestly the Media declining. guidance Platform TV previously Connected provided, fastest, and growth teens, Electronics low-single

Given and more TV in the Pay the line growth vector as at hardware the TV trends. with subscriptions, we're products, a this of as $XX importance for year and a decline year Video-over-broadband occurred Xperi, than within view. of in our providing strong XX%, Video-Over-Broadband is industry to to offering by Video-Over-Broadband XXXX This the classic million, as guides, past annual growth discovery, business business which Core XX% $XX Pay $XXX XXXX the over finished year for doubled TiVo grew including prior more million. consumer million. detail between and well

was higher-margin adjusted This Non-GAAP shift prior from margin basis quarter million, an quarter Electronics non-GAAP operating for for the toward last Consumer due primarily efforts. $XXX improvement or increase is to approximately from within a the million, expense gross optimization Our year. year, was of $XX due cost the X% XXX XX%, points down mix products. to

was share the of than in the accounting foreign XX%. million margin one of due which our lower for tax earnings quarter to tax a expense, $XX resulting of After and was EBITDA adjusted release was an subsidiaries. EBITDA company's $X.XX. Non-GAAP adjusted non-GAAP million, interest was the valuation allowance $X one-time planned in per Our in

held of company entities and EBITDA in Tobii. being the held For was AutoSense classified of the our end or the It and non-GAAP to cash year, and related entities with $X.XX. The is the assets the transaction imaging Tobii sold legal to million million of for returned quarter million, full including that $XX the sale in include was with mid-February. sold. equivalents, business balance adjusted important legal EPS cash did following $XX to highlight at revenue, of to $XXX sale, X% cash as Xperi agreement closing January, the Thus, the sale ended was within not cash within cash the the

As in breakeven the quarter our flow earlier, the from operations resulting million working flow year. Jon due was capital, mentioned for strong management full to cash operating in $XX of cash

for go a and shows that through XXXX, pro reported. to of forma market outlook would business $X accounts end provide by Consumer The baseline purposes take These for as revenue imaging as category we imaging will comparison related we revenue remove and Connected numbers XXXX. shows the revenue by AutoSense the $XXX Electronics the use create view I which top a approximately numbers and table accompanying for the In reducing we adjustments XXXX moment that Before million for specifically during by the pro post and XXXX a AutoSense bottom forma the million, category revenue of divestiture. table the Car presentation, our revenue of $XX million. million, relative like $XX

to now our year. for outlook the Moving

We providing the and guidance commentary. are ranges following

XXXX. revenue year QX in XXXX, to ramp QX with of in half million the be TiVo this normalized and midpoint, XXXX, million. and range to QX. flat X% to monetization full the of Because accelerating $XXX QX in growth growth year over growth to represents in footprint expected the approximately $XXX the At expect expect are we OS be modest of of We a second relatively to this

cash expect offset markets we to partially expected in and ASC certain the renewals by we Pay continued core Consumer the we were In of minimum serve, in This XXXX, under TV expected impacted and Car. declines multiyear Media growth by Connected which for required Video-Over-Broadband, generally XXX, revenue years guarantee upfront the growth we time. is but negatively in over CE recognize collect be to Electronics. Platform, is Within for prior timing which products

sign Let guarantee minimum revenue categorized approximately contracts, each create that customers. contracts by revenue from XX% year. of to we me Across commitments note XX% our which business, year guarantee include which each arrangements minimum point-in-time our represent longer-term total recognition,

to revenue growth be from reductions approximately to initiatives. the yield increase gross range the margin non-GAAP yielding margin XXXX is XX% expect adjusted EBITDA in EBITDA of with We The million to in expected transformation midpoint. our at compared of $XX to associated adjusted XX%, EBITDA due cost expanded ongoing adjusted profitable and

me beyond a few comments main Let these X provide other categories.

consistent be gross depending We mix, to expect XX%, non-GAAP margins XX% to largely in the range revenue of last year. with on

non-GAAP to We timing in being to other of transaction. the expense somewhat than in XXXX relative QX quarters expect expense the higher part AutoSense due with operating decline to X XXXX, the

a cash of operating million being being flow of source $XX in $XX year quarters cash usage We for expect to be million the the cash. with range to QX of the a remaining and

expense to we year. for linear million expect $XX year. is expense to $XX We expected Capital to and be category approximately the year for approximately this the expect tax non-GAAP the be million, for relatively be

Going treasury company to calculating stock conforming forward, the the for method dilution. share is

expected As XXXX GAAP count result, XX expected a year, count diluted shares year. average to and share the both fully XX in average for to for approximately basic million non-GAAP the share million and is is

comments. I'd to Jon? open back for additional questions, for few Jon to a hand like the it we Before call

Jon Kirchner

operating improved level, XXXX profitability outlook. the helpful we to are increased us the a accelerated Thanks, I'll I significantly through our if in flow success earlier for several transformation leverage 'XX years be we organization, Robert. by outlined business positive we expectations and today, At business streamline growth milestones in We've optimize revenue strategic key drive would the and our measured move will covered the and beyond. growth to I a the that as and set my a specific expect thought measuring to in began as ago the lot how level, cash we of initiatives up continue units which and call, On high it material deliver outlined be to Xperi for XXXX. be summarized

shareholder nominated of to may a serve you the company as our on Board. know, has Lastly, directors

and here we business, the regarding annual I'll that meeting. With on quarter to this or for questions call over call for be the the Given outlook operator taking our turn to the we're questions. discuss the that, not the nominations will Operator?

Operator

Instructions] [Operator from the from question Jason Your first Kreyer Craig-Hallum. comes line of

Jason Kreyer

side? process Is Jon, level the that an you're like just consumer? with look what broadband reset on start can broadband what the there monetization the expect maybe do What the maybe looks opt-out process for or to And to for TiVo is if you these strike does process? you out, can starting providers. set So or like there look opt-in there? an like timeline partnerships you

Jon Kirchner

going to Well, grow a is see offerings. broadband-based can service you're you're our going I customers give what attract of see partners virtue by to with subscribership video-related retain think and effort to our offering that our

of extension in recent been we broadly a build I think growth So we're as broadly to IPTV, the strong bit our that interest. quite offering I space. continued But an think IPTV and the is more on under for of within to we've and think, and there's what have heading a in momentum partners our doing that I we'll have, continue fits this pleased announcements, it

Jason Kreyer

several are been an seeing or Europe. maybe how things give you're then in And on side trends hardware specific I'm of now in what or feedback, you the the just TV there? on us things, any for progressing can or market months you've curious, update consumer

Jon Kirchner

the has good. been think feedback I

aggressively the in program, the within sets part not I to but additional think I reason the think market. I of seeing distribution their people think prepare partners moving only that's for we're

ramping both distribution and we So production know up. is

end going year, with last expected towards consistent this broadly the we is into this what of think I year.

we'll through more a think team think job I the on to the continues way as So executing, feedback sit we now, here has work this our good. an year. topic have been I say lot outstanding do as But and we the to

Jason Kreyer

on an Perceive, expenses a moved around Because that's lastly, me, ago. think just where a operating on we then us think bit how And update from year how for today? about you I little Okay. into fits were give should can that we

expenses? that contributes And a strategic review, and does what so just with going from to last anything that year under change that

Robert Andersen

is This one. take I that Robert. can

several have in under to of this beginning second year, we continue have Perceive, Perceive recognize through For that year. the half started last things we've here. occurred One, revenue that and will

moderated have We our announced then think in we about within that we we a 'XX, spend extent. Perceive. And to are some strategic process for Perceive have fiscal as year

So, would expect think, middle I you conclude we the during to can year. looking this that be of

Jon Kirchner

a I think net not basis, impact putting in a have it on way Jason, terms low-single-digit millions. about likely of of it, of, another load. in it's on expense terms to Think material our

Robert Andersen

I correct. that's digits. Low-single Yes, think

Operator

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

Hamed Khorsand

first goal to harder related had Is want off, it you one? the So, team, the incrementally for out about Jon, OS set secure to becoming TV. Why to wins? you your I ask TV

Jon Kirchner

a No. and don't their license Well, think I there's systems. proprietary of develop people who universe own

there larger so, are that within and smaller And players. universe, certainly

our as on base. our could somewhere we a years ago million achieve felt parties, more a X, obviously we or objective are at in good that least subset think, of had I between we engaged think of installed got of said X terms and number to eyes couple we units of we a we that I X but with very have

achieving those very And I on core think we're so milestones. focused

continue that deliver that. think I ensure that, as clearly that can of specific here very engage milestones over the some and with we next up to out getting part we today, and upside But got there, I number one we've ticks we very so on plans sit set think previously there's we'll partners time. to as

Hamed Khorsand

at Okay. your a for it does this change at is TV of Does year TV improve revenue? product, broadband this event? all that And the or TiVo then 'XX offset on that more how of the all Pay anyway to scale

Jon Kirchner

it contributes growth think I broader all the to within Video-Over-Broadband/IPTV No, category.

to important recognize these that's thing a fair amount of services. infrastructure fixed there's with other running the is think I associated

as And that into incremental come volume more margin. at so you better network, see incremental ever can the deliver you

within scaled a this spent operating that, we've be working so our out able to the the more bear it'll properly move goals as program, be way towards time at of lot our add we real to back-end and as leverage. of simply X.X And to where we least contribute to think that subscribers, broader subscribers continue build And platform. see to we I million

Hamed Khorsand

monetization, Okay. an the was far I did of as not revenue question the concerned? the rest strike year in TV have then why is impact as your had last QX regarding and And the

Jon Kirchner

prior perspective, too, fair didn't that know happen don't was there, I market in things as QX seasonality I it of And entertainment news that recovery. softer from there a certainly, would it tend people in an characterize to shifting that are good were be oftentimes entertainment the to there is but 'XX. that the have market think into obviously is the showing certain things signs impact

broader the improve the but one as still market about that a will think think bit scatter soft too broader I thinks we time. over market, is

Operator

no closing the remarks. to further this Kirchner brief questions for will As I now have turn Jon call our queue, time, over in at we

Jon Kirchner

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

Operator

call. a This you may your day, nice Thank Have everyone. conference participation, concludes and disconnect. for now you today's

Xperi (XPER) 28 Feb 242023 Q4 Earnings call transcript