Xperi signs seventh TV partner to integrate TiVo OS

Xperi Inc. Announces Second Quarter 2024 Results

SAN JOSE, Calif. — 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.

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 loss                                        ($30.3)  ($38.4)
GAAP loss per share                                  ($0.67)  ($0.90)

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.

Earnings Call

On the Q2 2024 earnings call, Jon Kirchner, Chief Executive Officer, said: “We remain focused on three key growth opportunities where we see strong potential and differentiation.

These are connected TV advertising, where we offer our TiVo media platform to power smart TVs and other broadband devices and monetize their usage. In cabin entertainment, where DTS AutoStage combines broadcast radio, internet metadata and video to enhance the automotive experience and drive long-term monetization, and TiVo video-over-broadband, where we provide subscribers access to our industry-leading content-first streaming platform for broadband only and IPTV linear households.

Each of these markets is expected to roughly double over the next five to seven years. We continue to strengthen our position in each market and believe we’re increasingly well positioned to grow our revenue as these markets expand. Consistent with past communications, our goal is to have 20 million monetizable endpoints by the end of 2025, consisting of approximately 10 million devices in the home and 10 million in cars.

Breaking this down, we expect an active footprint of seven million devices comprised of connected TVs and other broadband devices, including our video-over-broadband solutions where ARPU comes from the viewing of ad-supported content and usage of our TiVo media platform.

Additionally, we expect approximately three million IPTV households utilizing our video-over-broadband solution where we primarily earn subscription revenue on a per household basis. Lastly, we expect to have DTS AutoStage in 10 million cars, which we will monetize through license fees, upselling features and advertising.

We expect these 20 million monetizable endpoints to generate nearly $200 million of incremental revenue in 2026 relative to 2023. Let me walk you through some of our recent achievements that reflect our progress. Within media platform we hosted a very successful industry launch event in London at the end of May showcasing the TiVo operating system as well as our recently announced TiVo One cross-screen ad platform.

The launch included a number of key partners including OEMs, retailers, content providers and advertisers. A video summary of the event is available on our investor relations website. A week after we reported earnings in May, Panasonic announced they were our sixth TiVo OS partner. We previously referred to Panasonic in our earnings materials as a Japanese global brand.

Panasonic smart TVs powered by TiVo are now available in Europe. More recently, we signed our seventh smart TV partner to integrate TiVo OS into their smart TV lineup. This latest partner is a top five supplier of smart TVs into the US market, with plans to launch TVs powered by TiVo in the US next spring.

Today, smart TVs powered by TiVo are available in 15 countries across Europe, including the largest economies under 17 different brands. Our TiVo OS production volumes are increasing with daily activations accelerating. At this stage of the rollout our primary focus is to ensure maximum customer satisfaction and user engagement with these smart TVs powered by TiVo.

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