Vestel Now Shipping TVs with TiVo OS
Xperi Signs Fourth Smart TV OEM
BMW Cars with DTS AutoStage Video Service in
Showrooms and on the Road
Xperi Inc. (NYSE: XPER) (the “Company” or “Xperi”), an
entertainment technology company that invents, develops, and
delivers technologies that enable extraordinary experiences, today
announced financial results for the third quarter ended September
30, 2023.
“Today’s results reflect the completion of our first year as a
standalone company – a year highlighted by significant design wins
and strong business momentum across our key growth areas, coupled
with solid financial performance, including comparable 6% revenue
growth over the prior year trailing twelve months,” said Jon
Kirchner, chief executive officer of Xperi. “We are entering a
particularly exciting phase as our business momentum is translating
into tangible operational milestones, such as video services
powered by TiVo now shipping in Vestel Smart TVs, as well as in BMW
cars. When taken together with ongoing efforts to drive cost
transformation, these milestones are important steps toward
delivering on our strategic vision, improving profitability, and
achieving significant long-term revenue growth,” added
Kirchner.
Financial Highlights
GAAP Highlights ($ millions, except per
share data)
Q3 FY23
Q3 FY22
Revenue
$130.4
$121.6
GAAP Operating Loss
($31.1)
($399.1)
GAAP Loss per Share
($0.96)
($9.54)
Non-GAAP Highlights ($ millions, except
per share data)1
Q3 FY23
Q3 FY22
Revenue
$130.4
$121.6
Non-GAAP Operating Income/(Loss)
$4.3
($5.9)
Adjusted EBITDA
$9.3
($0.3)
Non-GAAP Loss per Share
($0.08)
($0.22)
1
For further information on supplemental
non-GAAP metrics, refer to the “Non-GAAP Financial Measures” and
GAAP to non-GAAP Reconciliations provided in the financial
statement tables included below.
Recent Key Operating
Achievements
Media Platform
- Vestel is now shipping Smart TVs Powered by TiVo under the JVC
brand to retailers in Europe.
- Signed a fourth Smart TV OEM to integrate the TiVo Operating
System into its 2024 European TV lineup.
- Won three “Best of IFA” awards for TiVo OS at Europe’s largest
consumer electronics tradeshow held in September.
Connected Car
- DTS AutoStage Video Service, Powered by TiVo, has been
integrated into the new generation BMW 5-Series. These vehicles are
now in showrooms across the United States, Germany, United Kingdom,
Italy, France, Spain, and South Korea. BMW will expand the
AutoStage Video rollout in these regions to a broad range of
additional models across various vehicle segments.
- Won a second DTS AutoStage Video Service program with another
major European automotive OEM. This deployment in multiple models
will begin initially in Asia for the 2025 model year.
- Won a new HD Radio and DTS AutoStage program with Ford Motor
Company for its new radio platform unveiled at the North American
Auto Show earlier this fall. This program is now in production for
certain North American vehicles.
- Reached a major milestone of 100 million cars incorporating HD
Radio.
Pay TV
- Posted double-digit year-over-year IPTV subscriber growth for
the 17th consecutive quarter.
- Over 100 service providers have now selected TiVo’s IPTV
solutions for their customers.
- Signed 5 new video service providers for the TiVo+ streaming
service, which offers up to 160 channels of content curated from
over 800 free ad-supported channels. TiVo+ is now deployed by 30
video service providers in the U.S.
Consumer Electronics
- Signed several multi-year license renewals with major consumer
electronics manufacturers, including Sony, Vestel, and Skyworth,
for DTS audio or Play-Fi wireless solutions, demonstrating the
market appeal and longevity of these solutions.
- Signed a Top-3 global PC OEM to deploy DTS:X audio solution
across a wide range of consumer PCs and laptops.
- Won three “Best of IFA” awards for DTS Play-Fi, a whole-house
wireless speaker solution.
Perceive
- Signed license agreement with a Big Tech customer and
recognized revenue in the quarter, validating Perceive’s approach
to low-power AI at the edge.
- Additional revenue will be recognized under this agreement over
the next few years as Perceive technology is delivered and products
ship.
Financial Outlook
The Company is narrowing its fiscal 2023 outlook ranges to the
following:
Category ($ in millions)
GAAP Outlook
Non-GAAP Outlook
Revenue
$518 to $532
$518 to $532
Adjusted EBITDA Margin1,2
n/a
6% to 8%
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 third quarter 2023 earnings conference
call at 2:00 PM Pacific Time (5:00 PM Eastern Time) on Monday,
November 13, 2023. To access the call toll-free, please dial
1-888-660-6513, otherwise dial 1-929-203-0876. 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: Q3 2023 Earnings Call Webcast.
Safe Harbor Statement
This press release contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. 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,” 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” and elsewhere in
the documents we file with the Securities and Exchange Commission
from time to time. The Company does not assume any obligation 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 and partnerships (DTS®, HD Radio™, TiVo®), and by its
startup, Perceive, and IMAX Enhanced, an IMAX and DTS partnership,
are integrated into billions of consumer devices and media
platforms worldwide, powering smart devices, connected cars and
entertainment experiences. Xperi has created a unified ecosystem
that reaches highly engaged consumers driving increased value for
partners and customers.
Xperi, DTS, HD Radio, Perceive, TiVo, and their respective logos
are trademarks or registered trademarks of affiliated companies and
partners of Xperi Inc. in the United States and other countries.
All other company, brand and product names may be trademarks or
registered trademarks of their respective companies.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in
accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”), the Company’s earnings 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
transaction fees, integration costs, severance, facility closures,
and retention bonuses; 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 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue
$
130,390
$
121,637
$
384,101
$
366,728
Operating expenses:
Cost of revenue, excluding depreciation
and amortization of intangible assets
26,413
31,403
85,061
85,689
Research and development
56,436
57,070
166,993
158,641
Selling, general and administrative
59,620
56,702
173,893
156,894
Depreciation expense
4,248
4,990
12,543
15,697
Amortization expense
14,724
16,613
44,349
46,166
Goodwill impairment
-
354,000
-
354,000
Impairment of long-lived assets
-
-
1,096
-
Total operating expenses
161,441
520,778
483,935
817,087
Operating loss
(31,051
)
(399,141
)
(99,834
)
(450,359
)
Other expense, net
(1,336
)
(527
)
(60
)
(301
)
Loss before taxes
(32,387
)
(399,668
)
(99,894
)
(450,660
)
Provision for income taxes
9,685
2,024
14,481
12,500
Net loss
(42,072
)
(401,692
)
(114,375
)
(463,160
)
Less: net loss attributable to
noncontrolling interest
(646
)
(890
)
(2,554
)
(2,706
)
Net loss attributable to the Company
$
(41,426
)
$
(400,802
)
$
(111,821
)
$
(460,454
)
Net loss per share attributable to the
Company - basic and diluted
$
(0.96
)
$
(9.54
)
$
(2.61
)
$
(10.96
)
Weighted-average number of shares used in
net loss per share calculations - basic and diluted
43,316
42,024
42,774
42,024
XPERI INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
September 30,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
131,530
$
160,127
Accounts receivable, net
64,171
64,712
Unbilled contracts receivable, net
61,148
65,251
Prepaid expenses and other current
assets
38,946
42,174
Total current assets
295,795
332,264
Unbilled contracts receivable,
noncurrent
21,926
4,289
Property and equipment, net
44,600
47,827
Operating lease right-of-use assets
43,969
52,901
Intangible assets, net
220,356
264,376
Deferred tax assets
2,465
2,096
Other noncurrent assets
35,122
33,158
Total assets
$
664,233
$
736,911
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
15,575
$
14,864
Accrued liabilities
109,924
110,014
Deferred revenue
25,979
25,363
Total current liabilities
151,478
150,241
Long-term debt
50,000
50,000
Deferred revenue, noncurrent
19,050
19,129
Operating lease liabilities,
noncurrent
34,497
42,666
Deferred tax liabilities
12,246
12,899
Other noncurrent liabilities
10,507
12,990
Total liabilities
277,778
287,925
Commitments and contingencies
Equity:
Preferred stock
-
-
Common stock
43
42
Additional paid-in capital
1,189,289
1,136,330
Accumulated other comprehensive loss
(5,493
)
(4,119
)
Accumulated deficit
(780,656
)
(668,835
)
Total Company stockholders’ equity
403,183
463,418
Noncontrolling interest
(16,728
)
(14,432
)
Total equity
386,455
448,986
Total liabilities and equity
$
664,233
$
736,911
XPERI INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended September
30,
2023
2022
Cash flows from operating
activities:
Net loss
$
(114,375
)
$
(463,160
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation of property and equipment
12,543
15,697
Amortization of intangible assets
44,349
46,166
Stock-based compensation expense
51,681
29,761
Goodwill impairment
-
354,000
Impairment of long-lived assets
1,096
-
Deferred income taxes
(1,022
)
(451
)
Other
(162
)
(146
)
Changes in operating assets and
liabilities:
Accounts receivable
188
18,990
Unbilled contracts receivable
(13,556
)
623
Prepaid expenses and other assets
1,264
(14,884
)
Accounts payable
87
10,504
Accrued and other liabilities
(3,229
)
(824
)
Deferred revenue
537
(7,609
)
Net cash used in operating activities
(20,599
)
(11,333
)
Cash flows from investing
activities:
Purchases of property and equipment
(9,432
)
(10,514
)
Purchases of intangible assets
(149
)
(110
)
Net cash paid for acquisition
-
(50,473
)
Net cash used in investing activities
(9,581
)
(61,097
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
under employee stock purchase plan
5,850
-
Withholding taxes related to net share
settlement of equity awards
(4,313
)
-
Net proceeds from Former Parent capital
contributions
-
83,235
Net transfers from Former Parent
-
52,802
Net cash provided by financing
activities
1,537
136,037
Effect of exchange rate changes on cash
and cash equivalents
46
(4,184
)
Net (decrease) increase in cash and cash
equivalents
(28,597
)
59,423
Cash and cash equivalents at beginning of
period
160,127
120,695
Cash and cash equivalents at end of
period
$
131,530
$
180,118
Supplemental disclosure of cash flow
information:
Interest paid
$
2,244
$
-
Income taxes paid, net of refunds
$
15,504
$
9,460
Debt issued in connection with
acquisition
$
-
$
50,000
XPERI INC.
GAAP TO NON-GAAP
RECONCILIATIONS
(in thousands, except per
share amounts)
(unaudited)
Net loss attributable to the
Company:
Three Months Ended
Three Months Ended
September 30, 2023
September 30, 2022
GAAP net loss attributable to the
Company
$
(41,426
)
$
(400,802
)
Adjustments to GAAP net loss attributable
to the Company:
Stock-based compensation(1)
17,622
13,015
Amortization of intangible assets
14,724
16,613
Goodwill impairment
-
354,000
Transaction, separation, integration and
restructuring related costs:
Transaction, separation, integration and
other related costs(2)
1,904
7,181
Severance and retention(3)
1,149
2,390
Non-GAAP tax adjustment(4)
2,764
(1,818
)
Non-GAAP net loss attributable to the
Company
$
(3,263
)
$
(9,421
)
(1) Stock-based compensation included in
above line items:
Cost of revenue, excluding depreciation
and amortization of intangible assets
$
806
$
779
Research and development
$
6,584
$
5,515
Selling, general and administrative
$
10,232
$
6,721
(2) Transaction, separation, integration
and other related costs included in above line items:
Cost of revenue, excluding depreciation
and amortization of intangible assets
$
-
$
356
Research and development
$
-
$
1,772
Selling, general and administrative
$
1,904
$
5,053
(3) Severance and retention included in
above line items:
Cost of revenue, excluding depreciation
and amortization of intangible assets
$
-
$
-
Research and development
$
471
$
1,830
Selling, general and administrative
$
678
$
560
(4) The provision for income taxes is
adjusted to reflect the net direct and indirect income tax effects
of the various non-GAAP pretax adjustments.
Net loss per share attributable to the
Company:
Three Months Ended
Three Months Ended
September 30, 2023
September 30, 2022
GAAP net loss per share attributable to
the Company
$
(0.96
)
$
(9.54
)
Adjustments to GAAP loss per share
attributable to the Company:
Stock-based compensation
0.41
0.31
Amortization of intangible assets
0.34
0.40
Goodwill impairment
-
8.42
Transaction, separation, integration and
restructuring related costs
0.07
0.23
Non-GAAP tax adjustment
0.06
(0.04
)
Non-GAAP net loss per share attributable
to the Company
$
(0.08
)
$
(0.22
)
GAAP weighted average number of
shares-basic/diluted
43,316
42,024
Non-GAAP weighted average number of
shares-basic/diluted
43,316
42,024
XPERI INC.
GAAP TO NON-GAAP
RECONCILIATIONS
(in thousands)
(unaudited)
Three Months Ended September
30,
2023
2022
GAAP operating loss
$
(31,051
)
$
(399,141
)
Adjustments to GAAP operating loss:
Stock-based compensation
17,622
13,015
(5)
Amortization of intangible assets
14,724
16,613
Goodwill impairment
-
354,000
Transaction, separation, integration and
restructuring related costs:
Transaction, separation, integration and
related costs
1,904
7,181
Severance and retention
1,149
2,390
Non-GAAP operating income
(loss)
$
4,348
$
(5,942
)
(5) Includes $2.4 million of stock-based
compensation expense that was recognized in operating results as
part of the corporate and shared functional employee’s expenses
allocation during the three months ended September 30, 2022.
XPERI INC.
GAAP TO NON-GAAP
RECONCILIATIONS
(in thousands)
(unaudited)
Three Months Ended September
30,
2023
2022
GAAP net loss
$
(42,072
)
$
(401,692
)
Interest expense
770
750
Provision for income taxes
9,685
2,024
Depreciation expense
4,248
4,990
Amortization of intangible assets
14,724
16,613
Amortization of capitalized cloud
computing costs
1,316
435
Goodwill impairment
—
354,000
Transaction, separation, integration and
restructuring related costs:
Transaction, separation, integration and
other related costs
1,904
7,181
Severance and retention
1,149
2,390
Stock-based compensation
17,622
13,015
(6)
Non-GAAP Adjusted EBITDA
$
9,346
$
(294
)
(6) Includes $2.4 million of stock-based
compensation expense that was recognized in operating results as
part of the corporate and shared functional employee’s expenses
allocation during the three months ended September 30, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231113515962/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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