Investors might want to bet on Xperi (XPER) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.The power of a changing e ...

Core Insights - Xperi Inc. has appointed Matt Milne as President of TiVo Ads, a newly created role aimed at enhancing the company's cross-platform advertising capabilities [1][2][3] Company Overview - Xperi Inc. is an entertainment technology company that develops technologies for extraordinary experiences, with brands like DTS, HD Radio, and TiVo integrated into consumer devices globally [5][6] TiVo Ads Development - TiVo Ads consists of a mix of Xperi executives and new talent from major companies, focusing on expanding the digital entertainment monetization platform [2] - The TiVo One advertising platform has over 4.8 million monthly active users and has formed partnerships with industry leaders such as Comscore and Titan Ads [2][3] Leadership and Strategy - Jon Kirchner, CEO of Xperi, emphasized the importance of Milne's leadership in aligning and accelerating advertising sales efforts, which are seen as a significant growth opportunity [3] - Matt Milne expressed excitement about leveraging TiVo Ads' unique reach and data capabilities to enhance advertising effectiveness across various platforms [3] Advertising Opportunities - TiVo Ads offers a range of advertising options with unduplicated reach across Pay TV and Connected Television, along with a robust metadata offering for enhanced program identification [2][3] - The company is also collaborating with audio media companies in the U.S. and U.K. to launch targeted advertising trials on the DTS AutoStage platform, which serves over 13 million cars globally [2][3]

Core Insights - The collaboration between Danghong Technology and Xperi aims to enhance the application and market expansion of the DTS AutoStage in the Chinese automotive industry [1] Company Collaboration - Danghong Technology and Xperi held a joint event in Hangzhou on November 12 to announce their deep cooperation in the automotive overseas ecosystem [1] - The partnership focuses on promoting the DTS AutoStage in Chinese automotive companies' international ventures [1]

Core Insights - Hangzhou Donghong Technology Co., Ltd. has partnered with Xperi Inc. to enhance the in-car entertainment experience for Chinese automakers entering overseas markets [1][2] - The collaboration aims to address the challenges faced by Chinese car manufacturers in accessing mainstream content services abroad, thereby improving the functionality of in-car entertainment systems [1][2] - The DTS AutoStage platform aggregates global content and supports various entertainment formats, providing a unified management system for in-car content [1][2] Group 1 - The partnership provides a global content aggregation platform for Chinese automakers, reducing the need for individual negotiations and adaptations for different markets [2] - Donghong Technology leverages its video enhancement technology to improve the display quality of in-car screens, offering a cinema-like audio-visual experience [2] - The 5D immersive smart cockpit developed by Donghong Technology enhances the in-car entertainment experience, providing realistic spatial audio effects [2][3] Group 2 - The first mass-produced vehicle equipped with DTS AutoStage, the Jishi ADAMAS, was showcased at the event, highlighting the successful collaboration between Donghong Technology and Xperi [3] - The integration of leading in-car entertainment solutions with development capabilities is crucial for supporting Chinese automakers in expanding their overseas presence [3] - The competition in the new energy vehicle market has shifted towards user experience, making in-car audio and video capabilities a core competitive advantage [3]

Revenue Performance - Revenue for the three months ended September 30, 2025, was $132.9 million, a decrease of $21.3 million, or 16%, compared to the same period in 2024, primarily due to a $31.9 million decline in Pay-TV revenue[158] - Revenue for the nine months ended September 30, 2025, was $331.6 million, a decline of $39.7 million, or 11%, primarily due to divestitures and a decrease in Pay-TV revenue[161] Expense Management - Total operating expenses for the three months ended September 30, 2025, were $113.0 million, a decrease of $38.5 million, or 25%, compared to the same period in 2024[163] - Research and development expenses for the three months ended September 30, 2025, were $29.9 million, a decrease of $23.7 million, or 44%, primarily due to lower spending following the Perceive Transaction[168] - Selling, general and administrative expenses for the three months ended September 30, 2025, were $42.5 million, a decrease of $14.0 million, or 25%, attributed to reduced employee headcount and lower stock-based compensation expenses[171] - Stock-based compensation (SBC) expense decreased by $5.6 million (37%) to $9.6 million for the three months ended September 30, 2025, compared to $15.2 million in the same period of 2024[173] - Depreciation expense increased by $0.6 million (19%) to $3.5 million for the three months ended September 30, 2025, compared to $2.9 million in the same period of 2024[174] - Amortization expense decreased by $2.9 million (27%) to $7.8 million for the three months ended September 30, 2025, compared to $10.7 million in the same period of 2024[176] Strategic Actions - The company completed the divestiture of its AutoSense in-cabin safety business in January 2024, enhancing focus on entertainment markets[152] - The company sold substantially all assets of Perceive Corporation for $80.0 million in cash, completed in October 2024, allowing a focus on entertainment-based solutions[153] - The company approved a restructuring plan on November 1, 2025, to reduce its global workforce by approximately 250 employees, expecting annualized cost savings of $30.0 million to $35.0 million[155] - A restructuring plan was approved on November 1, 2025, to reduce the global workforce by approximately 250 employees, with estimated charges between $16.0 million and $18.0 million[202] Cash Flow and Liquidity - Cash and cash equivalents decreased by $33.8 million to $96.8 million as of September 30, 2025, from $130.6 million as of December 31, 2024[189] - Net cash used in operating activities was $4.6 million for the nine months ended September 30, 2025, compared to $56.6 million in the same period of 2024[192] - Net cash used in investing activities was $14.6 million for the nine months ended September 30, 2025, compared to $12.9 million in the same period of 2024[195] - The company believes its current cash and cash equivalents, along with borrowings under the AR Facility, will be sufficient for at least the next 12 months[203] - The company may need to supplement cash and cash equivalents with additional outside sources as part of its liquidity strategy[203] - Poor financial results or unanticipated expenses could lead to additional financing requirements sooner than expected[204] - The company is monitoring its earnings and cash flow to assess its ability to access capital markets as needed[205] Debt and Interest Rate Exposure - The company issued a senior unsecured promissory note of $50.0 million in connection with the acquisition of Vewd, with an interest rate of 6.00% per annum, maturing on July 1, 2025[199] - On February 21, 2025, the company borrowed $40.0 million under the AR Facility, with expected interest payments of approximately $2.6 million for the next 12 months[201] - The company is exposed to interest rate risk, with $40.0 million of indebtedness under the AR Facility subject to variable interest rates, estimating a 1% increase in SOFR would raise interest expense by approximately $0.4 million annually[210] - The AR Facility is scheduled to terminate on February 21, 2028, unless terminated earlier[200] Financial Health Indicators - The current ratio improved to 2.4 as of September 30, 2025, compared to 1.6 as of December 31, 2024, indicating better short-term financial health[189] - There were no significant changes in critical accounting estimates during the nine months ended September 30, 2025[206]

Core Viewpoint - Xperi reported quarterly earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.25 per share, but down from $0.51 per share a year ago, indicating a mixed performance in earnings despite a positive surprise this quarter [1][2]. Financial Performance - The company achieved revenues of $111.63 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.02%, but down from $132.89 million year-over-year [2]. - Over the last four quarters, Xperi has surpassed consensus EPS estimates three times, but has only topped revenue estimates once [2]. Stock Performance - Xperi shares have declined approximately 38% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [3]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $117.4 million, and for the current fiscal year, it is $0.84 on revenues of $447.87 million [7]. - The outlook for the Technology Services industry, where Xperi operates, is relatively strong, ranking in the top 39% of over 250 Zacks industries, indicating potential for better performance compared to lower-ranked industries [8].

Financial Data and Key Metrics Changes - Consolidated revenue for the third quarter was $112 million, lower than the prior year due to a large minimum guarantee arrangement with Panasonic [9][20] - Non-GAAP adjusted operating expenses decreased approximately 20% year-over-year, primarily due to cost transformation efforts and the divestiture of the perceived business [9][22] - Non-GAAP earnings per share was 28 cents, compared to 51 cents in the same quarter last year [22] Business Line Data and Key Metrics Changes - The pay-TV business saw a revenue decrease of $32 million, or 39%, primarily due to the prior year's Panasonic agreement [20] - IPTV subscribers increased by 32% year-over-year, reaching 3.2 million households, with revenue up 18% [16][20] - The connected car segment's revenue grew by $9 million, or 36%, due to long-term arrangements [21] Market Data and Key Metrics Changes - The media platform business revenue was approximately flat year-over-year, indicating stability despite fluctuations in other segments [21] - The consumer electronics market revenue grew by $3 million, or 20%, driven by new agreements and higher per-unit revenue from audio technologies [21] Company Strategy and Development Direction - The company is focused on media monetization as a significant growth opportunity, with ongoing partner rollouts of the TiVo One CTV advertising platform [5][6] - The company aims to grow average revenue per user (ARPU) for TiVo One, which was calculated at $8.75, approaching a target of $10 by year-end [12][19] - The company is transitioning away from the DVR hardware business under the TiVo brand to focus on video over broadband and smart TV solutions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaching a key inflection point in business growth, particularly in the media platform and connected car markets [6][19] - The company reiterated its annual revenue guidance range of $440 to $460 million and an adjusted EBITDA margin of 15 to 17% for 2025 [26][27] - Management acknowledged the impact of minimum guarantee arrangements on revenue recognition and emphasized their strategic value [24][37] Other Important Information - The company announced a workforce reduction of approximately 250 employees, representing about 15% of its workforce, to improve profitability and cash flow generation [26] - The company expects to incur one-time restructuring charges of $16 to $18 million but anticipates annualized savings of $30 to $35 million from these reductions [26] Q&A Session Summary Question: What drives the initially lower gross margin in the media platform business? - Management indicated that semi-fixed costs and custom deals impact initial margins, but they expect margin acceleration as revenue scales [29] Question: Will targeted ads in automotive face similar fixed costs before achieving higher margins? - Management suggested that the costs are more amortized through the existing platform, allowing for a compelling solution for partners [30] Question: What was the TVO MAU progress last year? - Management noted that the previous MAU figures were significantly lower, in the low millions, and emphasized the growth achieved [31][32] Question: What is the critical mass needed for meaningful ad revenue on the TVO One platform? - Management expects material progress in 2026, with scale being important for advertisers [34] Question: When will platform revenue stabilize? - Management indicated that meaningful growth in 2026 would lead to less volatility in media revenue [38]

Financial Performance - Revenue reached $111632000, a decrease of 16% year-over-year[10] - GAAP operating expenses, including cost of revenue, decreased 25% year-over-year[10] - Non-GAAP adjusted operating expense decreased 20% year-over-year[10] - GAAP net loss attributable to the Company was ($6000000), while Non-GAAP Adjusted EBITDA was $23000000, representing 21% of revenue[10] - GAAP loss per share was ($013), and non-GAAP earnings per share was $028[10] Business Segment Highlights - TiVo One monthly active users increased by 30% to reach 48 million[7, 11] - The Connected Car platform expanded to more than 13 million vehicles on the AutoStage platform[7, 14] - IPTV subscribers increased 32% year-over-year, reaching 32 million households[7, 15] Revenue Breakdown by Market - Pay TV revenue was $49781000, a decrease of 39% year-over-year[22] - Connected Car revenue was $34612000, an increase of 36% year-over-year[22] - Consumer Electronics revenue was $18802000, an increase of 11% year-over-year[22]

Core Insights - Xperi Inc. reported a sequential growth of 30%, reaching 4.8 million monthly active users on the TiVo One platform [1][7] - The company signed its tenth TiVo OS partner and multiple advertising partnerships aimed at expanding its media platform in 2026 [1][2] - Xperi reiterated its full-year revenue guidance of $440-460 million and an adjusted EBITDA margin of 15-17% [1][9] Financial Performance - For Q3 FY25, Xperi's revenue was $111.6 million, down from $132.9 million in Q3 FY24 [3][9] - The GAAP operating loss improved to $1.4 million from a loss of $18.6 million year-over-year [3][9] - Non-GAAP operating income was $17.5 million, compared to $24.5 million in the same quarter last year [3][9] - Non-GAAP net income decreased to $12.8 million from $23.3 million year-over-year, with earnings per share at $0.28 compared to $0.51 [3][9] Strategic Developments - The company achieved significant milestones in its media platform and connected car segments, including over 13 million vehicles on the AutoStage platform [2][5] - Xperi's average revenue per user (ARPU) for the TiVo One platform was reported at $8.75 as of September 30, 2025 [7] - The company announced a workforce reduction of approximately 250 employees to enhance cost efficiency and align with long-term strategies, expecting annual savings of $30-35 million [8][9] Market Outlook - Xperi's financial outlook for fiscal year 2025 remains unchanged, with expected revenue between $440 million and $460 million [9] - The company anticipates a shift in revenue mix as its media platform expands, which may initially incur higher costs [8][9]

Financial Performance - Revenue for Q3 FY25 was $111.6 million, compared to $132.9 million in Q3 FY24, reflecting a year-over-year decline of approximately 16%[4] - Non-GAAP net income for Q3 FY25 was $12.8 million, down from $23.3 million in Q3 FY24, representing a decrease of about 45%[4] - Non-GAAP adjusted EBITDA for Q3 FY25 was $23.1 million, with a margin of 20.7%, compared to $31.4 million and 23.7% in Q3 FY24[4] - The company expects full-year revenue guidance of $440 million to $460 million for FY25, with an adjusted EBITDA margin of 15% to 17%[10] - Revenue for the three months ended September 30, 2025, was $111,632,000, a decrease of 16% compared to $132,891,000 for the same period in 2024[28] - Operating loss for the three months ended September 30, 2025, was $(1,362,000), significantly improved from $(18,555,000) in the prior year[28] - Net loss attributable to the Company for the nine months ended September 30, 2025, was $(39,254,000), compared to $(63,833,000) for the same period in 2024, reflecting a 38.7% reduction[32] - Non-GAAP net income attributable to the Company for the three months ended September 30, 2025, was $12,790,000, compared to $23,307,000 in 2024, reflecting a decline of 45%[34] - GAAP net loss for Q3 2025 was $6,107, compared to a loss of $19,831 in Q3 2024[38] Cash Flow and Assets - Cash and cash equivalents decreased to $96,784,000 as of September 30, 2025, down from $130,564,000 at the end of 2024[30] - Total current liabilities decreased to $113,047,000 as of September 30, 2025, from $185,349,000 at the end of 2024, indicating improved liquidity management[30] - Total assets decreased to $628,819,000 as of September 30, 2025, from $667,760,000 at the end of 2024, indicating a contraction in the asset base[30] - The Company reported a net cash used in operating activities of $(4,615,000) for the nine months ended September 30, 2025, compared to $(56,569,000) in 2024, showing significant improvement[32] Workforce and Cost Management - The workforce reduction plan will impact approximately 250 employees, with expected annualized savings of $30 million to $35 million[8] - Stock-based compensation expense for the nine months ended September 30, 2025, was $32,069,000, down from $45,309,000 in the same period of 2024[32] User Metrics and Market Growth - Achieved 30% sequential growth, reaching 4.8 million monthly active users on the TiVo One platform[2] - Average Revenue Per User (ARPU) for the TiVo One platform was $8.75 as of September 30, 2025[9] - IPTV subscribers increased by 32% year-over-year, reaching 3.2 million households[9] - The AutoStage platform has expanded to over 13 million vehicles, indicating strong growth in the connected car market[3] Partnerships and Revenue Opportunities - The company signed multiple monetization partnerships, including agreements with Titan Ads and Comscore, to enhance revenue opportunities[9] Expense Management - Interest expense decreased to $934 in Q3 2025 from $1,123 in Q3 2024[38] - Provision for income taxes increased to $4,805 in Q3 2025 from $2,899 in Q3 2024[38] - Stock-based compensation decreased to $9,640 in Q3 2025 from $15,249 in Q3 2024[38] - Depreciation expense increased to $3,470 in Q3 2025 from $2,918 in Q3 2024[38] - Amortization of intangible assets decreased to $7,987 in Q3 2025 from $10,934 in Q3 2024[38] - Transaction, integration, and restructuring costs significantly reduced to $233 in Q3 2025 from $7,961 in Q3 2024[38] - Severance and retention costs decreased to $1,006 in Q3 2025 from $9,184 in Q3 2024[38]