XPER - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Mandeep, and I'll be your operator today. At this time, I'd like to welcome everyone to the Xperi Q2 2024 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Mike Iburg, Head of Investor Relations.

begin. may You

Michael Iburg

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

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

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

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

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

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

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

Kirchner. like now the I would CEO, over to turn Xperi's call to Jon

Jon Kirchner

we efforts a fruition designed revenue expected. Many and call. to on steps positive margin we second and growth Thank of transformation, quarter are coming you, us our to taken XXXX thank decisions earnings on Adeia, our from and now you, and Since we've the our business we've yielding drive expansion. everyone, results made joining for the multiyear separation Mike, focused

benefit improved from simplify systems portfolio steps organizational growth with We've reductions. and the of to taken the the improve have our areas. key transformational and success. associated position AutoSense, support actions which also to these streamlined milestones accomplished for growth and markets our the key initiatives alignment allowing our to making contributed processes, company our investments greater has better while We with profitability. cost to in us divestiture strategic Today, initiatives achieving targeted have remove These product major been providing complexity, long-term

with this effort allocation. our transformation In Rod Gorman next expanded in insights we've and Jeremi automotive have hit of qualified with in for ground who X value growth, Randall, tech, conjunction running, Directors adding expertise with cycle and candidates preparation the and our the Board monetization, their capital of addition of highly ad and

These expected unique media were multiyear of and walk you details first in in me quarter. deals electronics a by were Car ad in year. Robert Strong closed let and to offset the I'll performance on the highlights. consumer number IPTV the year softness the in let a Connected due few decline highlights moment, a the platform touch last large due buy financial just last initial to through but

year of declined XX% the Non-GAAP revenue provided Adjusted the $XX both our from and on tripling when million from X% million our from or year cost or and XX% commentary recent ongoing consistent AutoSense $XX from year of quarter. also approximately QX EBITDA was $XXX call. to divestiture nearly result was and up operating the revenue, due X% with efforts. down mainly ago divestiture, prior net The the the million, prior adjusted last for optimization expense the sequentially adjusting sequentially quarter

DTS monetize where are TVs their other we broadcast potential power devices TV where TiVo strong broadband to radio, advertising smart our these AutoStage to X where and We Connected growth TiVo remain And Each and focused entertainment, to streaming access Media over Internet opportunities the combines These on content video-over-broadband, our video and X key next we see offer where Platform usage. metadata we In-cabin to expected platform automotive years. first experience X provide markets to enhance is double subscribers households. monetization. IPTV and industry-leading of linear roughly long-term drive for and the broadband-only differentiation. and

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

in end past to million cars. and XX communications, is other endpoints active usage XXXX, solutions, the ad-supported XX down, expect our of monetizable X including million from video-over-broadband TiVo broadband Platform. goal comes million the by of ARPU we an of Consistent this footprint in have our Breaking of devices viewing Media million of XX our and where the approximately consisting devices, TVs with of and connected comprised devices content home

will and approximately features we where million fees, lastly, cars, our license per we utilizing Additionally, expect expect on primarily households subscription X to video-over-broadband IPTV upselling monetize DTS earn advertising. solution, through we household we a And basis. in million AutoStage XX which revenue have

We expect XXXX generate to nearly in million to of revenue monetizable incremental these million $XXX XX XXXX. endpoints relative

that number our event Within you at the operating London TiVo me industry May, recent some in system Let through media reflect very platform, showcasing launch progress. walk the successful we our the cross-screen as summary achievements of hosted including One end a of and on advertisers. our The of available well Investor is website. partners, platform. retailers, event recently ad launch providers key OEMs, a Relations as of our announced content video A TiVo included

smart seventh lineup. by announced in the The TVs in smart partner. is into Panasonic sixth smart to into top were recently, now We TV integrate May, latest with TiVo Panasonic partner U.S. we market a referred as Panasonic in brand. TVs previously More earnings in are powered their the TiVo to a next plans supplier week to TVs Japanese our X global earnings TiVo Europe. OS OS of partner materials spring. our available after they reported TV This U.S. by our powered signed launch we TiVo Smart

different TiVo by in the economies available XX are brands. countries under including powered Europe, TVs smart across Today, XX largest

increasing satisfaction with engagement this production accelerating. focus At the daily ensure with primary smart is activation TVs are of user Our TV volumes by rollout, and TiVo. powered the stage maximum our is to OS customer

data from activated active study to our million to steps ability and receiving target achieve ad-supported us platform and to our consumer of over behaviors time. devices. progress These engagement will to monetize validate allow value and we're we're remain by maximize initial units, us content. allowing our connected year-end track Importantly, on encouraged X Overall, viewership

platform positive multiyear of DTS major were Asia-based aversive over continued millions integrate planned vehicles into deployment Within to our during Connected the automotive with next entertainment codec into years. X the saw Car, awarded a program supplier audio we quarter. momentum We a several Tier for their

make Motors, American We continue and penetration progress Volvo, OEMs, to automotive Ford, HD Radio General in in incorporate Lotus the Radio as Mazda additional Acura, including Audi, into models. furthering North HD market

over the worldwide, later AutoStage growing million increase for cars is the we begin production XXXX now fall. market of The months, than X deployed OEMs million to in vehicles an this expect automotive models of rapidly. X and this is footprint last in in-cabin more grow as entertainment

to customer and potential. expand this we steps will footprint which Our necessary near-term to our to market revenue to position take and believe maximize satisfaction engagement, us end-user strategically is enhance the long-term the approach

X.X rapidly to solution, some the is quarter year-end steady over-broadband, core our closing video target progress, on of subscribers. decline million offset our helping households million Pay our in X.XX surpassing make TV of in subscriber to continues IPTV secular Within This TV, and Pay the solutions. in

providers adding Canada. our also by renewing not Broadband. video footprint TiVo expanded our and but brings total XX TiVo to we increases Cablevision, This of only Additionally, HTC the relationship significantly active with IPTV devices both Service number the our over agreements TiVo broadband operators, and Electric Broadband in X and of Eastlink U.S. available

legacy we the VTR Pay solutions. and products, within renewals Latin TV signed legacy in Liberty These Claro of instrumental guides multiyear longevity our ensuring transactions classic Lastly, America. are with our

agreements Turning to integrate HyperX electronics. HP to multiple Headphone:X the commercial for PCs our solution to and We consumer their in license expanding to decoder into commitment brand. signed division's DTS:X addition laptops HP's our with

and Music their and headset. We also agreement selected Dream, sound leading from post-processing has Tencent QQ platform, reality signed immersive our entertainment for esports And for Tencent with a to Music. technology a DTS-encoded IMAX with Entertainment Play provide virtual content to DTS license Enhanced

we reduced a its significantly remain and the by we in this of and complete process Perceive strategic burn to big Meanwhile, commercialization. Perceive, alternatives, review evaluating on to for has be technology summer. cash partner expect track to respect the deliver With product remains end of to tech

active we're X to year. and devices We and expect the Against announced our we announced market later last have media countries million and in on partner our OS the this our X to are platform, largest in approximately sixth believe we within TiVo European quarter today, track year-end by U.S. year-end. now seventh objectives be

track TiVo this Within on Pay and least add to wins year. XX at announced so far we TV, broadband additional X are

million households. Our IPTV at footprint X.XX currently subscriber stands

of exceed to our million expect We target year-end subscribers. X.X

we Connected footprint. to age as will in is the pipeline AutoStage AutoStage and For to deployed opportunities least over additional on continue with Car, active to drive X million specific auto and by aggressively wins year-end. conversations X including expect cars, one now expand deliver video as possible remain at our in we

ahead. transformation and the In profitability summary, profitability with we to accelerate progress, our efforts, and achieve operational allow growth will years ongoing business XXXX objectives expect coupled in us our in

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

Robert Andersen

Thanks, Jon.

that, listeners are usual, adjusting through prior that down Before all Total year. quarter's occurred was quarter comments from as down for my second revenue X% when the solutions AutoSense comparisons X% earlier the the let remind year. imaging quarter reported me approximately related $XXX year's to and I the last same this in in divestiture revenue million, the go and results, for

-- this TV, the first that QX primarily was year. was Latin which Pay apples-to-apples, America, with to me compared essentially Classic Claro year's divestiture. and was up market VTR X%, largest results, in increase XX% order first growth, half to which TV Liberty by our from driven along revenue revenues last quarter's let and bringing IPTV excluding revenue up the to year-over-year, compare Pay in compare Jon half The Guides by last against revenue mind, With earlier. of renewals mentioned category, flat

the the which a past IPTV the appendix revenue the IPTV a TV growth the as category included strategic importance provides quarters. of Given earnings X initiative, disclosure supplemental of presentation, we've Pay for within in

level additional on plan of we this forward, provide a to basis. quarterly disclosure Going

Car down an supplier revenue rules that QX upfront. where revenue primarily recognize XX%, was end codec with in-cabin products. from Connected our Asian-based Electronics in required significant renewals lower to accounting program with X all automotive multiyear due primarily DTS softness occurred Tier certain to XX%, market-based multiyear a along due last Consumer year for up royalty to was in license us

customer the that primarily Media revenue last advertising Platform due XX% from year. in down a occurred was with decline a initial unique year-over-year, to ad-buy

of Additionally, the align the that with the moved is portion a to programming later to Guides well in footprint legacy associated certain year. business advertisers due to shifting as Classic reduced our better advertising decline as spend with

While are in the business, platform the trends within Video Media of as growth footprint currently ad quarters. TiVo and legacy Pay online products, media by TV over the comes we coming our OS future remain over-broadband our confident Platform the driven

help is which included growth lower the to legacy TV Pay modestly year, decline to the with have first revenue the will Pay in Pay comparisons. business that overall flat consistent of to provide perspective offsets revenue IPTV we in X the various Similar be most half first essentially expectations flat would a months, TV. the just mentioned TV as is through our last slide, I which

strong the Consumer half, in Car return before broadly growth XXXX. for for half the the for we line earlier. based continued in to multiyear due of the Meanwhile, first volumes with QX. to the our mentioned half Media on XXXX Platform was down in growth noted down HD and first Connected expectations X% in XX% revenue Asia show see significant Electronics was first increased to radio XX% deal begin for items

QX we of expands, overall begin in Guides as business Media footprint devices grow the Classic monetization should from the offset this TV Platform early year. our expect and to to decline advertising As as these connected

was gross and non-GAAP a a result prior quarter $XX essentially year, margin, the XX.X% recent our flat down ongoing yielding to from from for transformation Our a efforts. $XX largely quarter prior million, basis from Non-GAAP the on XX% as cost divestiture margin million, of operating year. adjusted also due optimization business percentage expense the the the was for

million. This estimate. in to to the expectation in than $XX the be of $X tax of lower the Non-GAAP quarter year million timing our was the range expect certain Nonetheless, within still non-GAAP was elements the somewhat we for taxes due tax

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

the $XX balance cash million in equivalents. $X million company to capital of flow items. use a cash, quarter was ended The by sheet. changes Operating primarily and and the onetime Moving driven cash working with cash of

our outlook guidance the XXXX, to no changes provided. to making Moving for we ranges are previously

prepared That remarks. concludes our

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

Operator

Instructions] Our from Steve question Frankel line first the with [Operator comes Rosenblatt. of

Steven Frankel

year? got in deals were to the the out pushed into that getting goal can into guys a level AutoStage part Jon, what's quarter deals pipeline. the expected the those half end get year, kind any getting know by maybe And had there with of confidence that the start the of you of laid year? maybe back the we in this and you later of your I

Jon Kirchner

I No out. no. Steve, would pushing unexpectedly say, deals,

pipeline as board robust video the the pretty as elements. a across AutoStage working we're well both think audio for I

set good hit metrics we're a our picture the bigger I combination building think stage and of for way. able our much license monetization downstream quite features ad-based we for believe, through being hit I that year. fees as So think in will terms the bigger to is of opportunities we a as a And upselling in feel ultimately, the well footprint subscription about really that fees,

think right about automotive now. the good very, what's in very So I happening space we feel

Steven Frankel

codec that use music Okay. mentioned What's music on video? the space And the in the that of drive will that? case Or the win use for the Is that codec in you Asia. side. there adoption primarily be DTS will automotive

Jon Kirchner

video. Primarily

Steven Frankel

you Okay. go? And right? where monetization to on from you done us early do I maybe make a you've then drive it couple you TiVo but think give of of what market, in the it's know where days you early improvements OS, to think And need learnings to lastly, units kind to want do

Jon Kirchner

Sure.

the primary mean, in So is ensure perspective, BXB that ultimately those I drive think, viewership will turn I our customer maximum foremost, key satisfaction with and I think because focus a terms are working engagement first in and ensuring of continue And monetization. ingredients from partners our them process behind getting client and the scenes and through roll and to to QA ultimately be software out the will ensure that the activated. aggressively working the accelerate of on our TVs will that to process with end footprint

revenue. from optimization is are more to and pace revenue as would to their But control meaningful need to the drive more some but obviously, to a with ultimate continue partners we're or with of and will what So active And can respect they're learning production. But an starting with outstanding to goal that team closely I I our X partners activations a at the much being well done time. so viewing, TVs a think and And process in out as then and watching that hit -- work we in as you million of them adjust year-end devices. have you're of times of really it job to these good of we have to obviously, and happening, working be needs. bigger meaningful teams feel our our people, to what's to of not kind how for schedule not the with I And the accelerating as say channel about they learning think ability very amounts there. and course, be our we're of optimize only through of position support activated continue footprint a long how becomes but get respect perspective

Operator

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

Hamed Khorsand

to year? 'XX about for how and your that your what grow to Could Electronics for Consumer present for it is pipeline not expectations it's you talk this -- is just

Jon Kirchner

a reasonably Well, audio-related are from bigger mature. I a picture, think there's number of markets that

you And bit ebb kind of flow industry, with we -- pretty you're so you wide have and -- of kind a and the penetration.

in what talked we which things One deals multiyear the in revenue cases, our rec. of rev the which can being trajectory cases some accelerate remarks, some that is is in prepared you've about cut, of impacts got, kind

of go expect always, part a then with lot 'XX, like CE absence happen of well bigger so partners through there's on various different things impact broadly come what going growth and things, of a to IMAX them, other Enhanced as spikes discussions in be. our of some then as lot also in and rates of our of growth the more in the as they we you the and that may programs periods back, these And although

So although part a digits, I you early to about -- the comment the to at if think -- wider too window in look business single may around expect in kind year-to-year, we what it's But over said the move we've outlook. time, specifically that's are as lumpiness on CE it way grow 'XX look over think we of it is, that because of to deals you lower at it and how structured.

Hamed, think, important. deals, some relationships further depth although only have the with they the because are also technology of of about one of partners, And the builds Multiyear not those lumpiness, dollar visibility it expand the where better last potentially opportunities have I content either build important, we their can drives to relationships we but technologies lead that many in available point maybe that's it of these on platforms further to content their on ways and inclusion on or long-term the platforms. our the course, solidifies

Hamed Khorsand

other the what's changes auto in automakers? different you was, as far and question given on seeing is are then Europe landscape as between competitive And going U.S. your my any Okay. concerned,

Jon Kirchner

mixed. is I from automotive bigger you business, the say as would know, picture a No. well

build majors some about as and program we video they're efforts think I news far of think how going well. the and our AutoSense out seen share about from around softness. talking the But extremely to develop our as come market recently we've As efforts, some

Operator

Our next Kreyer line Craig-Hallum. of question Jason comes with the from

Jason Kreyer

TiVo earlier. consumer curious You more engagement, around OS commented with just utilization, I'm early some kind of takeaways interaction.

You're in XX now. countries European

So you activation? on devices to that what are just consumer want that market, are of you utilization in and longer-term out opportunity? see the And there seeing you curious, the monetization give encouragement the in terms does

Jon Kirchner

think would which is as what big bigger kind because a particularly knew large seeing. we going in, of say we're encouraged build we Europe that footprints, we're I fragmented, bit absolutely I X. by in Europe

Germany, into Italy, we'll the how monetization. goal Spain, think how fully learn insights care also of units U.K., used to we'll to populist ultimate I drive are but your the only also ultimately more have not build bigger it's drive units, experience, user think where long-term those and France, So being a more et content meaningful cells, can we but optimize best cetera, possible is

short think I are, where answer on we the yes. based near So term, in the

we're I we're seeing. think what by pleased

further I will only long able not we on we there's but footprints to to lot collect. obviously to grow, a think I we have make the because adjustments think run, only be a as over more be need And support it. some, better there we'll these not data handle meaningful also, will build monetize the have we'll but footprint, I think, a confidence that where

Jason Kreyer

or have curve updated better see as you what markets then What views in a think you like maybe what adoption appetite video? market for And could AutoStage do video? opportunity on out-of-stage look any the

Jon Kirchner

I engaged topic, we broader I are I the way video. better cases, would work. most you, people for some other. conversations. doing running say handle have well could of to a the how all we major on around those it they're they in would tests very talking in say one In tell would automakers the where are And to or

road I through they're those now. good. in all have Others in as what interested our think vehicles. interested on more we So conversations some able updates opportunity to the in more road customers' right have And planning of X, moving a doing years of I And product maps usual, going are potentially maps, are oftentimes OTA-type X existing video depending blend the sooner, the say intersect to line. and down would is long-term

we as land today's at But objectives remarks, they're the And in we in video I think to end the also in of customer well. more general, our I expect least would said previous year. going before say and one

Operator

[Operator with the line Instructions] comes Matthew Galinko Group. Our Maxim next of from question

Matthew Galinko

clarify OEMs guess, that another just can end understand to we it Is like that I OS. 'XX. I North that? spring are America? follow in on sounds -- in correctly? have of wanted North TiVo OEMs up X Or I It then with Do now launching just 'XX X targeting American and you

Jon Kirchner

we shorter Matt, in or we said signed to in and market them expected term. an one, the we've here X X have the of additional previously

into So of of we some pipeline beginning build are we more that think think take U.S.-based potential And I OS as get shape footprint. a to TiVo will I 'XX.

Matthew Galinko

Okay. still of into you process, far guess, terms in how And of the a towards work? or TiVo? OEMs signing then, are of the more kind as end is So for I coming follow-up, down there that path

Jon Kirchner

There the technology is product the the which and our more implement pipeline. satisfaction And I and think as have customer of sense been to people able a manufacturers stack. smoothness get see with

think there still I maybe the of to it. is way -- interest the say interest plenty pipeline, the best in there's

think So running potential I here. of we're don't customers necessarily out

can a bit and and ensure partners our really ended so you have think, meaningful But progress, have I build is to or X least beginning as think to there take every But are of conversations the at to others interested say find ramp, continue others. maybe clearly part would we will can a margin. are up look work we I who at our on beginning And they very with least volumes weren't engage represent footprint. oftentimes that to to very, continuing to that themselves to time, us because over of focus on allow the ton I team's you imagine, can

to we'll it. work So continue

Operator

Kirchner over our for turn back concludes I Q&A remarks. to closing will now session. That call the Jon

Jon Kirchner

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

Operator

call. This today's concludes

disconnect. now may You

Xperi (XPER) 5 Aug 242024 Q2 Earnings call transcript