Signed Seventh TV Partner to Integrate TiVo
OS into Their Smart TV Line-up
Expands TiVo Broadband with the Signing of
Three New Operators
Xperi Inc. (NYSE: XPER) (the “Company” or “Xperi”), an
entertainment technology company that invents, develops, and
delivers technologies that enable extraordinary experiences, today
announced second quarter 2024 financial results for the three-month
period ended June 30, 2024.
“Our Q2 progress is a clear example of the positive effects of
our continued business transformation efforts. We delivered solid
financial results with improved profitability while continuing to
execute on our strategic growth initiatives. Our growing TiVo OS
and video-over-broadband footprint is setting the stage for future
monetization, and we expect this will be a core element of our
long-term revenue growth and margin expansion,” said Jon Kirchner,
chief executive officer of Xperi.
Mr. Kirchner continued, “Shortly after our annual meeting in
late May, we welcomed Jeremi Gorman and Rod Randall to our board.
The addition of these two highly qualified board members, with
their expertise in ad-tech, monetization, automotive and capital
allocation, will be instrumental as we look to accelerate revenue
in our key growth markets.”
Financial Highlights
GAAP Highlights ($ millions, except per
share data)
Q2 FY24
Q2 FY23
Revenue
$119.6
$126.91
GAAP operating loss
($21.9)
($35.2)
GAAP net loss2
($30.3)
($38.4)
GAAP loss per share2
($0.67)
($0.90)
Non-GAAP3 Highlights ($ millions, except
per share data)
Q2 FY24
Q2 FY23
Revenue
$119.6
$126.91
Non-GAAP operating income/(loss)
$8.3
($1.2)
Non-GAAP net income/(loss)2
$5.6
($3.7)
Non-GAAP earnings/(loss) per share2
$0.12
($0.09)
Adjusted EBITDA
$14.6
$5.2
1
The contribution from AutoSense and the
related imaging business, which was divested on January 31, 2024,
accounted for $4.5 million of revenue in Q2 2023.
2
Attributable to the Company.
3
For further information on supplemental
non-GAAP metrics included in this press release, refer to the
“Non-GAAP Financial Measures” description and “GAAP to Non-GAAP
Reconciliations” provided in the financial statement tables.
Recent Key Operating
Achievements
Media Platform
- Signed the seventh TiVo OS partner, a top 5 supplier of smart
TVs into the U.S. market, with plans to launch TVs “Powered by
TiVo” in the U.S. in spring of 2025.
- Smart TVs “Powered by TiVo” are now available across 15
European countries, including the largest economies, under 17
different brands.
- TiVo OS production volumes are increasing with daily
activations accelerating, remains on track to achieve two million
active connected devices by year end.
- Panasonic was announced in May as the sixth TiVo OS partner;
previously referred to as a “Japanese global brand.”
Connected Car
- Awarded multi-year program with an Asia-based Tier 1 automotive
supplier to integrate DTS immersive audio codec in vehicles.
- HD Radio penetration continues to increase and is being
deployed in additional models from Ford, GM, Audi, Volvo, Acura,
Mazda, and Lotus.
- DTS AutoStage is now deployed in more than seven million
vehicles globally, adding over a million vehicles in the last
quarter.
Pay-TV
- Ended Q2 2024 with over 2.25 million video-over-broadband
(IPTV) subscriber households, continuing the trend of consecutive
quarters of double-digit year-over-year subscriber growth.
- Expanded TiVo Broadband with the signing of three new
operators: Service Electric Cablevision, Eastlink, and HTC,
bringing the total number of TiVo Broadband providers to ten.
- Executed Classic Guides renewals with key customers Claro VTR
and Liberty Latin America.
Consumer Electronics
- Signed multiple license agreements with HP, Inc. to integrate
our DTS audio solutions into the Commercial division’s laptops and
PCs, and expand our Headphone:X solution in HP’s HyperX brand.
- Signed license agreement with Tencent Music Entertainment to
provide DTS encoded content and post-processing technologies to
Tencent and QQ Music.
- Signed IMAX® Enhanced licensing deal with Play For Dream, a
leading eSports entertainment platform, for VR headset
implementation of the IMAX® Enhanced experience.
Perceive
- Perceive, our subsidiary focused on edge inference hardware and
software technologies, remains on track to deliver technology to a
big tech partner.
- The Company’s strategic review of Perceive continues to
progress.
Financial Outlook
The Company makes no change to the 2024 outlook ranges
previously provided:
Category
GAAP Outlook
Non-GAAP Outlook
Revenue
$500M to $530M
$500M to $530M
Adjusted EBITDA Margin1,2
n/a
12% to 14%
1
See discussion of “Non-GAAP Financial
Measures” below.
2
With respect to Adjusted EBITDA Margin,
the Company has determined that it is unable to provide a
quantitative reconciliation of this forward-looking non-GAAP
measure to the most directly comparable forward-looking GAAP
measure with a reasonable degree of confidence in its accuracy
without unreasonable effort, as items including restructuring and
impacts from discrete tax adjustments and tax law changes are
inherently uncertain and depend on various factors, many of which
are beyond the Company's control.
Conference Call Information
The Company will hold its second quarter 2024 earnings
conference call at 2:00 PM Pacific Time (5:00 PM Eastern Time) on
Monday, August 5, 2024. To access the call toll-free, please dial
1-888-596-4144, otherwise dial 1-646-968-2525. The conference ID is
5483252. All participants should dial in 15 minutes prior to the
start of the call using the conference ID listed above.
Alternatively, the call can be accessed via the following webcast
link: Q2 2024 Earnings Call Webcast.
Safe Harbor Statement
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding: expectations regarding our future results of operations
and financial position, margin expansion and overall growth,
including, without limitation, expectations regarding acceleration
of revenue in our key growth markets and Adjusted EBITDA margin
growth, the deployment by third parties of their products that use
our technology, objectives for future operations, and ongoing
strategies and operating initiatives, including, without
limitation, expansion expectations, reduction of expenses and our
pursuit of strategic alternatives for Perceive. These
forward-looking statements are based on information available to
the Company as of the date hereof, as well as the Company’s current
expectations, assumptions, estimates and projections that involve
risks and uncertainties. In some cases, you can identify
forward-looking statements by the words “expect,” “anticipate,”
“intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,”
“would,” “might,” “potentially,” “estimate,” “continue,” “expect,”
“target,” and similar expressions or the negatives of these words
or other comparable terminology that convey uncertainty of future
events or outcomes. These statements involve risks, uncertainties
and other factors that may cause actual results, levels of
activity, performance, or achievements to be materially different
from the information expressed or implied by these forward-looking
statements. These risks, uncertainties and other factors are
described under the captions “Risk Factors” and “Management's
Discussion and Analysis of Financial Condition and Results of
Operations” in our Annual Report on Form 10-K for the year ended
December 31, 2023, filed with the Securities and Exchange
Commission (the “SEC”) and our other filings with the SEC from time
to time. Any forward-looking statements speak only as of the date
of this press release and are based on information available to the
Company as of the date of this press release, and the Company does
not assume any obligation to, and does not intend to, publicly
provide revisions or updates to any forward-looking statements,
whether as a result of new information, future developments or
otherwise, should circumstances change, except as otherwise
required by securities and other applicable laws.
About Xperi Inc.
Xperi invents, develops, and delivers technologies that enable
extraordinary experiences. Xperi technologies, delivered via its
brands (DTS®, HD Radio™, TiVo®), and by its startup, Perceive, are
integrated into billions of consumer devices and media platforms
worldwide, powering smart devices, connected cars and entertainment
experiences, including IMAX® Enhanced, a certification and
licensing program operated by IMAX Corporation and DTS, Inc. Xperi
has created a unified ecosystem that reaches highly engaged
consumers, driving increased value for partners, customers and
consumers.
©2024 Xperi Inc. All Rights Reserved. Xperi, TiVo, DTS, HD
Radio, DTS Play-Fi, Perceive and their respective logos are
trademark(s) or registered trademark(s) of Xperi Inc. or its
subsidiaries in the United States and other countries. IMAX is a
registered trademark of IMAX Corporation. All other trademarks and
content are the property of their respective owners.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in
accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”), the Company’s press release contains non-GAAP financial
measures adjusted for either one-time or ongoing non-cash acquired
intangibles amortization charges; amortization of capitalized cloud
computing costs; costs related to actual or planned acquisitions,
financing, and divestitures including, without limitation,
transaction fees, integration costs, severance, facility closures,
and retention bonuses; restructuring costs; separation costs; all
forms of stock-based compensation; impairment of assets and
goodwill; other items not indicative of our ongoing operating
performance, and related tax effects for each adjustment.
Management believes that the non-GAAP measures used in this press
release provide investors with important perspectives into the
Company’s ongoing business and financial performance and provide a
better understanding of our core operating results reflecting our
normal business operations. The non-GAAP financial measures
disclosed by the Company should not be considered a substitute for,
or superior to, financial measures calculated in accordance with
GAAP. Our use of non-GAAP financial measures has certain
limitations in that the non-GAAP financial measures we use may not
be directly comparable to those reported by other companies. For
example, the terms used in this press release, such as adjusted
EBITDA, do not have a standardized meaning. Other companies may use
the same or similarly named measures, but exclude different items,
which may not provide investors with a comparable view of our
performance in relation to other companies. We seek to compensate
for the limitation of our non-GAAP presentation by providing a
detailed reconciliation of the non-GAAP financial measures to the
most directly comparable GAAP financial measures in the tables
attached hereto. Investors are encouraged to review the related
GAAP financial measures and the reconciliation of these non-GAAP
financial measures to their most directly comparable GAAP financial
measures. All financial data is presented on a GAAP basis except
where the Company indicates its presentation is on a non-GAAP
basis.
Set forth below are reconciliations of the Company’s reported
GAAP to non-GAAP financial measures.
XPER-E
XPERI INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue
$
119,591
$
126,872
$
238,435
$
253,711
Operating expenses:
Cost of revenue, excluding depreciation
and amortization of intangible assets
28,953
30,856
58,709
58,648
Research and development
45,123
55,701
95,562
110,557
Selling, general and administrative
53,102
56,497
109,455
114,273
Depreciation expense
3,278
4,202
6,862
8,295
Amortization expense
11,042
14,798
22,081
29,625
Impairment of long-lived assets
-
-
-
1,096
Total operating expenses
141,498
162,054
292,669
322,494
Operating loss
(21,907
)
(35,182
)
(54,234
)
(68,783
)
Interest and other income, net
1,290
1,658
2,332
2,766
Interest expense—debt
(748
)
(750
)
(1,496
)
(1,490
)
Gain on divestiture
-
-
22,934
-
Loss before taxes
(21,365
)
(34,274
)
(30,464
)
(67,507
)
Provision for income taxes
9,266
5,090
13,538
4,796
Net loss
(30,631
)
(39,364
)
(44,002
)
(72,303
)
Less: net loss attributable to
noncontrolling interest
(332
)
(969
)
(583
)
(1,908
)
Net loss attributable to the Company
$
(30,299
)
$
(38,395
)
$
(43,419
)
$
(70,395
)
Net loss per share attributable to the
Company - basic and diluted
$
(0.67
)
$
(0.90
)
$
(0.97
)
$
(1.66
)
Weighted-average number of shares used in
net loss per share calculations - basic and diluted
45,331
42,770
44,926
42,499
XPERI INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
June 30,
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
92,481
$
142,085
Accounts receivable, net
56,866
55,984
Unbilled contracts receivable, net
80,679
64,114
Prepaid expenses and other current
assets
36,365
38,874
Assets held for sale
-
15,860
Total current assets
266,391
316,917
Note receivable, noncurrent
28,571
-
Deferred consideration from
divestiture
6,267
-
Unbilled contracts receivable,
noncurrent
23,504
18,231
Property and equipment, net
42,241
41,569
Operating lease right-of-use assets
34,756
39,900
Intangible assets, net
184,898
206,895
Deferred tax assets
4,950
5,093
Other noncurrent assets
27,669
32,781
Assets held for sale, noncurrent
-
12,249
Total assets
$
619,247
$
673,635
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
14,314
$
20,849
Accrued liabilities
90,469
109,961
Deferred revenue
27,728
28,111
Liabilities held for sale
-
6,191
Total current liabilities
132,511
165,112
Long-term debt
50,000
50,000
Deferred revenue, noncurrent
22,455
19,425
Operating lease liabilities,
noncurrent
24,401
30,598
Deferred tax liabilities
7,003
6,983
Other noncurrent liabilities
12,797
4,577
Liabilities held for sale, noncurrent
-
9,805
Total liabilities
249,167
286,500
Equity:
Common stock
46
44
Additional paid-in capital
1,241,931
1,212,501
Accumulated other comprehensive loss
(4,377
)
(2,865
)
Accumulated deficit
(848,867
)
(805,448
)
Total Company stockholders’ equity
388,733
404,232
Noncontrolling interest
(18,653
)
(17,097
)
Total equity
370,080
387,135
Total liabilities and equity
$
619,247
$
673,635
XPERI INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities:
Net loss
$
(44,002
)
$
(72,303
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Gain from divestiture
(22,934
)
-
Depreciation of property and equipment
6,862
8,295
Amortization of intangible assets
22,081
29,625
Stock-based compensation expense
30,060
34,059
Impairment of long-lived assets
-
1,096
Deferred income taxes
163
(736
)
Other
(2,001
)
(105
)
Changes in operating assets and
liabilities:
Accounts receivable
(2,903
)
(11,480
)
Unbilled contracts receivable
(22,027
)
(7,324
)
Prepaid expenses and other assets
4,909
1,106
Accounts payable
(5,360
)
(4,691
)
Accrued and other liabilities
(19,404
)
(20,428
)
Deferred revenue
2,635
(1,743
)
Net cash used in operating activities
(51,921
)
(44,629
)
Cash flows from investing
activities:
Purchases of property and equipment
(2,307
)
(2,470
)
Capitalized internal-use software
(5,825
)
(3,638
)
Purchases of intangible assets
(84
)
(91
)
Net cash used in divestiture
(227
)
-
Net cash used in investing activities
(8,443
)
(6,199
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
under employee stock purchase plan
4,328
5,850
Withholding taxes related to net share
settlement of equity awards
(5,929
)
(3,127
)
Net cash (used in) provided by financing
activities
(1,601
)
2,723
Effect of exchange rate changes on cash
and cash equivalents
12
137
Net decrease in cash and cash
equivalents
(61,953
)
(47,968
)
Cash and cash equivalents at beginning of
period
154,434
(1
)
160,127
Cash and cash equivalents at end of
period
$
92,481
$
112,159
(1) Including $12,349 of cash and cash
equivalents classified as held for sale at December 31, 2023.
XPERI INC.
GAAP TO NON-GAAP
RECONCILIATIONS
(in thousands, except per
share amounts)
(unaudited)
Net income (loss) attributable to the
Company:
Three Months Ended June
30,
2024
2023
GAAP net loss attributable to the
Company
$
(30,299
)
$
(38,395
)
Adjustments to GAAP net loss attributable
to the Company:
Stock-based compensation(1)
15,303
18,091
Amortization of intangible assets
11,042
14,798
Transaction, separation, integration and
restructuring related costs:
Transaction, separation, integration and
restructuring costs(2)
4,003
622
Severance and retention(3)
308
435
Non-GAAP tax adjustment(4)
5,281
748
Non-GAAP net income (loss) attributable to
the Company
$
5,638
$
(3,701
)
(1) Stock-based compensation included in
above line items:
Cost of revenue, excluding depreciation
and amortization of intangible assets
$
858
$
927
Research and development
$
5,831
$
6,405
Selling, general and administrative
$
8,614
$
10,759
(2) Transaction, separation, integration
and restructuring related costs included in above line items:
Cost of revenue, excluding depreciation
and amortization of intangible assets
$
-
$
-
Research and development
$
-
$
-
Selling, general and administrative
$
3,588
$
622
Interest and other income, net
$
415
$
-
(3) Severance and retention included in
above line items:
Cost of revenue, excluding depreciation
and amortization of intangible assets
$
44
$
17
Research and development
$
146
$
172
Selling, general and administrative
$
118
$
246
(4) The provision for (benefit from)
income taxes is adjusted to reflect the net direct and indirect
income tax effects of the various non-GAAP pretax adjustments.
Net income (loss) per share
attributable to the Company:
Three Months Ended June
30,
2024
2023
GAAP net loss per share attributable to
the Company
$
(0.67
)
$
(0.90
)
Adjustments to GAAP loss per share
attributable to the Company:
Stock-based compensation
0.34
0.42
Amortization of intangible assets
0.24
0.35
Transaction, separation, integration and
restructuring related costs
0.09
0.02
Non-GAAP tax adjustment
0.12
0.02
Non-GAAP net income (loss) per share
attributable to the Company
$
0.12
$
(0.09
)
GAAP weighted average number of shares -
diluted
45,331
42,770
Non-GAAP weighted average number of shares
- diluted
45,494
42,770
XPERI INC.
GAAP TO NON-GAAP
RECONCILIATIONS
(in thousands)
(unaudited)
Three Months Ended June
30,
2024
2023
GAAP operating loss
$
(21,907
)
$
(35,182
)
Adjustments to GAAP operating loss:
Stock-based compensation
15,303
18,091
Amortization of intangible assets
11,042
14,798
Transaction, separation, integration and
restructuring related costs:
Transaction, separation, integration and
restructuring costs
3,588
622
Severance and retention
308
435
Non-GAAP operating
income/(loss)
$
8,334
$
(1,236
)
XPERI INC.
GAAP TO NON-GAAP
RECONCILIATIONS
(in thousands)
(unaudited)
Three Months Ended June
30,
2024
2023
GAAP net loss
$
(30,631
)
$
(39,364
)
Adjustments to GAAP net loss:
Interest expense
925
795
Provision for income taxes
9,266
5,090
Stock-based compensation
15,303
18,091
Depreciation expense
3,278
4,202
Amortization of intangible assets
11,042
14,798
Amortization of capitalized cloud
computing costs
1,124
485
Transaction, separation, integration and
restructuring related costs:
Transaction, separation, integration and
restructuring costs
4,003
622
Severance and retention
308
435
Non-GAAP adjusted EBITDA
$
14,618
$
5,154
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240805730607/en/
Xperi Investor Contact: Mike Iburg VP, Investor Relations
+1 408-321-3827 ir@xperi.com
Media Contact: Amy Brennan Senior Director, Corporate
Communications +1 949-518-6846 amy.brennan@xperi.com
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