XPER - Earnings call transcript Q1 2024

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Operator

Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Xperi First Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the conference to Mike Iburg, Head of Investor Relations. your begin may you conference. Mike,

Michael Iburg

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

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

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

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

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

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

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

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

Jon Kirchner

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

moment, growth on and results few let first initiatives. me touch you a financial the let several across Robert highlights. the just continuing transformation first to We our continue advance our progress a quarter, in delivering details to solid through walk but I'll on strategic make financial areas key in

markets, X% broadband video connected operating adjusting AutoSense quarter, progress Growth we Revenue helped quarter across $XXX strong platform, due key from and of growth X% consumer our media revenue adjusted or expected and adjusted Non-GAAP expenses electronics down and our in declines the was to car in prior to the the pay year the in X% QX over core areas. declined cost resulting TV During million. for on offset imaging saw our basis. mainly ongoing in optimization divestiture recent the an divestiture without efforts. and

we remain to metadata X% was opportunities offer million the expected system Looking radio, Adjusted X expect X TVs DTS broadband, we viewing. as connected and and where the of Internet monetize or focused broadcast continue forward, These We to see years. double are automotive combines organization. in TiVo and our $X IPTV we expense strong In-cabin TV offer ad-supported of advertising, X drive video optimize over content-first and revenue. on key next these AutoStage further to industry-leading to differentiation. enhance households. Each or power smart and platform we video linear for long-term potential over where streaming roughly quarter broadband-only an the EBITDA monetization; reductions markets experience the we growth XXXX is over entertainment to and operating for where TiVo

revenue market We position strengthen well as and our to continue positioned each our grow markets to these we increasingly in believe are expand.

to XXXX. the goal revenue platform. of generate million doing by core million the our end XX monetizable $XXX of growth Xperi is have entertainment provides in XXXX, million XX nearly to with households XXXX points As mentioned at In cars X XX which in incremental end relative these last to we so, million least quarter, expect and initiatives

are a a delivering to hosting the broadband. major The under share house is smart along you one our retailer, me with progress. broadcasters, showcasing we're powered to major Media the shipping launch UEFA month, under XX. Separately, U.K. Within system in in incorporate industry TVs reflect that TiVo expand pleased that has Let achievements an Platform, service we most event Vestel brands. walk which operating our by recent of the to different our of powered later U.K. through Euro freely TVs London, OEMs, TiVo announce by XXXX, countries some that retail TiVo this to pleased content public stores across TiVo June streaming TVs retailers, prior and brand new smart in partners, an to over TVs advertisers. additional now their Argos, continues Europe begins Britain's are to first Bush by today We're and and distribution providers into the is key including the smart expected number European launch U.K. of Japanese online backed TVs brand. live a and stores dozen service TV by powered global Argos

are partners to In with growing countries. and focused us TiVo additional summary, expand into working we're footprint, OS European rapidly on closely our our

Our is countries encouraging. Within additional has markets the requirements form positive radio demands during and for across user DTS radio its rapidly AutoStage, ability able experience consumer to language, momentum of a popular content, regulations. HD entertainment localized adjacent Car, dynamic most interest entertainment and is access their broadcast our with TV, in in while Radio. for prominent time Overall, addressing saw continued Traditional by TiVo driven we scale better and the of amount and launch created the demand extended still by live meeting we've spend platform quickly the cloud-native initial services has interface move countries stations, and been is which in-vehicle tertiary cars. AutoStage facilitated to into many been to through quarter. people secondary subscription across Connected the very specific various services regional

Radio XXXX, By in of XX%. more the the within market. In a Radio cars car is As American XXXX, all adopt produced that for America. increased North HD steadily had XX% was its more standard end to increasing AutoStage, and North manufacturers HD penetration feature of number

North all recent Hyundai Radio that we domestic and further. believe and the example work AutoStage is months as penetration Genesis brands standard automotive vehicles will than the thousands continue of increase is cars in X with for of Service We over is X million cars include in HD increase across progress HD now our can Video and market. deployed of built Radio the in A X good last a to our worldwide, more hundreds powered American Today, AutoStage deployed XX% by now TiVo of countries.

video-on-demand, quick partners, offering. a new subscription to be including IPTV video operators some from make This of base. of low-cost an growth. premium progress, ad-supported subscribers. content our and variety broadband-only utilizes Pay a access in our over the secular decline several TV, trend its overview their broadband, to subscriber quarter they I to continuing content Broadband broadband-only offer TiVo helping our pay TiVo X to Within double-digit package solutions. We've thought core mentioned a operator's to video content-first now, this streaming and channels million gives network customer-specific continues This steady it solution, the helpful of popular surpassing free interface households user deliver of in to TV might TiVo+, customer times our can to linear provide Broadband offset is and content

video partnership the we and higher key ad who of customer churn. viewing with recognize the the operator remain subscriber that content support to offering customers services much ability content supported, our lower have to of monetize is per a that in Given that ARPU

available monetization. a we new to serviceable broadband of During X Broadband quarter, than Broadband, million Midco, representing providers Buckeye operators, signed the our and and potential more U.S. X bringing footprint for X TiVo Bluepeak total households number of

sound. TCL, several DTS the There that signed now DTS:X recently with than Consumer with the consumer immersive Further global of with This of collaboration are film into renewals fan along multiyear available sound portfolio the Turning integration from DTS. including Montreal, Electronics. streaming Hisense portfolios. immersive film, and electronics our Marvel TV partner's will of supports IMAX Enhanced we with AV with IMAX Enhanced to streaming featuring Disney+ decoder XX point, Disney+ most and IMAX manufacturers, DTS XXX on our DTS:X. The format movies Xiaomi. available Queen announced for in important premiere favorite titles, in Enhanced DTS:X major more to ever, Rock soon IMAX IMAX concert be titles and in successful the license expanded

look end Partners Centerview executed and new Perceive to is we recent engaged continue independent expand MSI, completed February. by decoder We adviser DTS:X to the Board is announced, was financial of back we of our its strategic to progressing be for onto That process the to the review in in as opportunities an the with summer. agreements X quarter, Perceive, as to to business expected most previously DTS assist global decoder integrate with their footprint, ASUS license and and motherboards. With respect our manufacturers, PC

to see revenue, ongoing, we big and performance Platform, Perceive While significantly metrics also a through want I'd technology provide cash by business year-end. intend Within all to use made and list has reduced on product on generate process its that quarter, track for of large efforts to burn advancing tech language deliver is partner commercialization. Perceive is compression. Last model its we a provided to continues market major by like the update progress the European Media XXXX. quarter. X to on first TVs countries to to the our we measure in an in U.S. TiVo in powered steady we've remains

the largest European into and shipping to currently are partners of countries Our expand. most continue

to plans later the in remain launch for this U.S. our market track In year. addition, on

added We our an million progress with that the pleased expected with and progressing, partner. we've as on footprint TVOS our have to exit TV I TV forward least global on a sixth through look year. Negotiations brand you a to of TiVo partners we our updating as X active additional footprint and devices. goal Japanese accelerate next OS I'm TVOS to partners XXXX at X are share is our call. move to

is XX to within than exit more deliver TiVo million subscribers. goal X.X video-over-broadband TV and XXXX Pay Our wins with Broadband additional

mentioned achieve and us I these targets. surpassed subscriber million households added earlier, keeps on we to which track partners quarter, new during As Broadband X first TiVo the X

our to leverage we financials. positioned deliver outlined transformation X build. With well to installed call and ongoing and beyond. With flow with automotive and are with Robert operating additional with turn Today, XXXX to video X vehicles. outlook, and of base Car, key announced is AutoStage X improved to we with business For our Conversations discuss Connected at goal the coupled these efforts, OEMs in growth to I'll over growth our progress accelerate the million that in cash including progressing, million XXXX deliver our XXXX the continues expect revenue exit an now AutoStage over we profitability to consistent Robert? in initiatives, pipeline vehicles. and remain deployed X wins against and is least that,

Robert Andersen

Thanks, Jon.

in in due comparisons the certain all reported partially decline related through solutions. was XX% business this quarter, results, driven the Platform similar IPTV that, our quarter's call. quarter's to down year, Electronics quarter imaging noted approximately compare grow strong me occurred that which was we in revenue order the QX to Total in strength prior for and agreements. year. X% of that a consumer core by including I continue in primarily solutions, divestiture. last DVR Before was due our was of the from up primarily apples, last in was quarter the declines usual, comments to due our expected AutoStage Pay the solutions. timing decline revenue The as prior down of Radio of to growth go results, our due the earnings renewals to was year. TV last TV, by to last compare apples at are growth category, revenue which and in million, XX%, year. With change multiyear in remind This Car HD from was down section middleware XX%, to my last to me year's up AutoSense our X% solutions to the rates. Consumer significant excluding double-digit let license mind TVOS the and video-over-broadband Pay against half from year's $XXX largest revenue listeners the solutions, as offset number well of let which in guidance in Connected as the revenue, market by was both same Media during

result to compared a was approximately different the or year. decrease prior Our for prior million XX%, year mix due operating quarter $XX for to the of adjusted Non-GAAP somewhat is a tax due non-GAAP our primarily to decline quarter X% due points certain expense elements than the for This recent was still our of basis optimization million. gross cost down margin from the prior largely from the of XXX was the to revenue the estimate. the the tax was $XX within in in ongoing be quarter of year and a lower year, million, also business $XX taxes quarter. from as we divestiture timing expectation million. efforts. Non-GAAP expect the $X transformation Nonetheless, non-GAAP range This the to

Our and share adjusted million, interest an loss of $X tax was X%. $X.XX. EBITDA resulting for EBITDA non-GAAP adjusted accounting per After was in expense, our margin

of The company Moving the and of use to of which $XX compensation cash, was costs. quarter had ended in line expectations million XX% the due divestiture-related events. the the the and along paid we X offset related compensation primary collections, cash more in variable of timing $XX year, payment drivers first cash equivalents. cash, tax, variable cash than within million seasonal in sheet. was a severance balance timing This the and the spending core cash a usage to our last quarter, of changes flow cash $XX quarter to and use The Compared increased the Operating higher of and of with were cash-based of a which capital. was by with reduced in billings amount million of business. was reduction working with amount

$XX our in $XX we generation for the million expect We on with to in cash typically in in use we to to cash of is call, million $XXX by started cash As as continue subsequent of quarters XXXX. on QX operating the flow million our range cash equivalents the sheet. and highlighted year be last flow the over followed balance cash a

going business grows. We as positive and also have forward flow cash the expectation both year of the for this

for With along perspective, to Directors with $XXX of to capitalization Board noncore mind, prior approximately authorization these of up our million $XXX share operating cash for a recently the inflow we provided plan. utilization assets, to any repurchases cash of of of in maintain possible a repurchase million. From from purposes balance plan the divestiture

expect balanced to begin capital shareholders, we we approach to business As take and debt return for growth needs paydown. the to capital that considers a

our to outlook for now Moving XXXX.

the of and our We last listeners the commentary. guidance on ranges are call remind prior provided reaffirming

expected QX of the expect be normalized XXXX We expect second over of to accelerating in this half to of in monetizing XXXX. this of in million. Because full certain $XXX to be TVOS the million slightly down XXXX, begin the range At year approximately revenue along with midpoint, to footprint our the agreements, a $XXX relatively flat growth represents and to with QX X% expected is year QX. timing from modest growth in growth we

non-GAAP margin range expect the XX%. EBITDA to XX% be of adjusted We in to

year. second efforts the transformation expect the revenue we EBITDA lower through and half of to of growth meaningfully drive business impact Importantly, in the costs higher

Our remain outlook for gross CapEx flow, cash margin, share count OpEx, taxes, and same. the

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

outlook concludes will or not taking the quarter are for annual here remarks. nominations our discuss business, we and regarding on the this be call questions our the meeting. That the that Given prepared to we

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

Operator

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

Hamed Khorsand

a was, I as timing is where seventh question first landing sixth that active sit as far of actually this up the do far TVs? how the your maybe Would getting as had TV And goal that as your brand, does go you count year? So concerned? as look given one

Jon Kirchner

an to Hamed, work potential say active that to join pipeline our continue I partners with have would we that ecosystem. we

uncertain bit what well would I comfortable that. think our the as the million always over have will I with market in the going we're to which a time, be we we're others. X think to that market But I the So that for there of be an seeing And hit as target we're that, distribution, as matter. X expect relatively will to quickly people begin year. sixth to Timing, brand, certainly, expand will coming contribute

Hamed Khorsand

revenue the I TV? faster is expecting. Pay comment And could Okay. you on That at least just declining was then than

the seen the as So degradation much making IPTV you're as not you've there up side? and on why

Robert Andersen

also in Yes, TV, the and last X% recall, year than if then within X%. QX was Pay less down year down you Hamed, ended

So be sitting to Pay from on today, TV where we're I'd say appears track.

the business. Over within video largely TV core the offset year, to expect the the over declines the of broadband we course help Pay will

Operator

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

Matthew Galinko

I mentioned is billing you timing think it touched there's seasonality I for of earlier the expecting kind assume before within U.S. this important on on kind or launch timing how TV of the how covered you a but kind you you challenging, households a the I know in get on year year affect brand of or get in kind for can -- the But in in Can QX. a maybe goal to obviously of would the in to ramp-up be touch year? would contingent of U.S.

Jon Kirchner

objective our to may for kind to buying holiday exactly. more strong have to closer, say we season. we partners of TVs it's have about obviously, And get Well, in work as the the retail with that

understand thing occur sets monetization are one begins sold after they're to in if even the think retail, I those and to ultimately is that installed.

to that we So of in XXXX installed into the revenue cycle, in monetization-related the through this to of primarily the that 'XX we course get coming will as monetization base as cumulative ramp. and we further expect then some European and of happening year and go the growing we begins move benefit be are all earlier of from installations expect

Matthew Galinko

is about Radio. Got HD it. And follow-up then my question

it mid-XX% looking into at next Is deployment? technology of what possible that of new the the the maybe of of penetration little over is Or kind American you of how kind think more North a we a expand rate mentioned from couple that kind AutoStage pulling years? range? auto. to bit for that Can I you HD are higher is strong pull drive Radio towards on

Jon Kirchner

I reasonable number that Well, people and what AutoStage partners perhaps in-cabin into now vehicle best-in-class experience said making extends ago that of we've vehicle and brand video our are chance a of differentiate are represent their does to a thought penetration. combines customers entertainment we you I Radio and to love And a purchases decisions once customers HD was long-term that and most target mid-XXs think Radio service, years about think a our as is really to HD the for platform, past further roughly gives our which extend get size. increasingly would seeing

also platform like. And does combined like the that think kind business You're with not just top great the a the effect of keep had on DAB. of I underlying infotainment One is of right? and is getting feel things in mind, system, platform it doing U.S. FM into about including has look the any that a what a of on differentiation run we're or AutoStage phenomenon, underlying Radio. But HD can radio some

and long-term footprint today, think us that being it's that expansion as gives builds I around world opportunity and deployed So globally. monetization the further

Operator

concludes Instructions] team closing will [Operator That for the turn I it our remarks. Xperi back now question-and-answer session. to

Jon Kirchner

and everyone, Thanks, call. joining thanks, for today's operator,

our concludes excited are and to to continue in our this customers like our thank with our look achieve forward today's objectives. I'd reviewing call. results and momentum, Operator, partners We for continued We QX August. employees, about strategic you to helping us

Operator

and call. conference Thank now for This your may concludes you today's you disconnect. participation,

Xperi (XPER) 8 May 242024 Q1 Earnings call transcript