Summary of Xperi (XPER) FY Conference Call - August 27, 2025 Company Overview - Xperi is a technology and solutions provider operating in markets such as connected car, pay TV, consumer electronics, and media platforms, leveraging brands like TiVo, DTS, and IMAX Enhanced [2][4] Core Business Segments 1. **Pay TV** - Xperi provides software and services to cable operators, including interactive programming guides and personalized content discovery [2][3] - Revenue model primarily based on subscriber fees from cable operators in North America and Latin America [3] 2. **Consumer Electronics** - Focuses on audio licensing through DTS, one of the major audio licensors globally [3] - Revenue generated from per unit licensing fees for embedding solutions in various devices [3] 3. **Connected Car** - Offers HD Radio, the sole digital terrestrial radio standard in North America, with licensing fees on a per car basis [4] - Recently developed AutoStage for in-cabin entertainment, targeting advanced advertising and monetization [4][15] 4. **Media Platform** - Developed TiVo OS for smart TVs, focusing on content aggregation and monetization through advertising [5][10] - The TiVo One ad platform connects smart TVs and set-top boxes to monetize consumer engagement [9][10] Growth Potential - The media platform segment is expected to drive significant growth, with a goal of reaching 5 million monthly active users and a $10 average revenue per user (ARPU) [14] - IPTV subscriber growth over 30% in North America and Latin America, with a target of 3 million subscribers by year-end [16] - New product Clear Dialogue, an AI-based dialogue enhancement technology, set to launch in the first half of next year [17] Financial Performance - Revenue for Q3 showed a decline due to minimum guarantees from the previous year, but operating expenses decreased significantly, leading to a slight increase in adjusted EBITDA year-over-year [24][25] - Cash flow is expected to be neutral for the year, with a revenue goal set between $440 million and $460 million [26][27] - Adjusted EBITDA margin target revised to 15-17% due to macroeconomic impacts [27] Strategic Outlook - Xperi aims to build a durable competitive position through its technology-centric business model, leveraging decades of expertise and channel relationships [30] - The company is focused on driving growth in media consumption and enhancing advertiser reach through its platforms [29][30] Key Highlights - Xperi has signed new OEM programs for AutoStage, expanding its footprint in the connected car market [15] - The company has added 80 new broadcasters to support HD Radio, enhancing its automotive ecosystem [15] - Continued relevance of DTS sound technology with contract renewals from major brands like Sony and TCL [16] Conclusion - Xperi is well-positioned for future growth across its diverse business segments, with a strong focus on monetization strategies and technological innovation [30][31]

Group 1 - Xperi (XPER) has experienced a significant decline of 22.9% over the past four weeks, but it is now in oversold territory, indicating a potential for a trend reversal [1] - The Relative Strength Index (RSI) for XPER is currently at 29.82, suggesting that the heavy selling pressure may be exhausting, which could lead to a rebound [5] - There is a strong consensus among sell-side analysts that XPER will report better earnings than previously predicted, with a 119% increase in the consensus EPS estimate over the last 30 days [7] Group 2 - XPER holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8]

[Note About Forward-Looking Statements](index=3&type=section&id=Note%20About%20Forward-Looking%20Statements) This report contains forward-looking statements subject to risks and uncertainties under the safe harbor provisions - This Quarterly Report contains forward-looking statements, identified by words like "expects," "anticipates," and "plans," which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[8](index=8&type=chunk) - Forward-looking statements are based on management's good faith judgment but are inherently subject to risks, uncertainties, and changes in conditions, as discussed in the "Risk Factors" section of the Form 10-K and other SEC filings[9](index=9&type=chunk) - Readers are cautioned not to place undue reliance on these statements and are urged to review the disclosures regarding risks and factors affecting the business[9](index=9&type=chunk) [PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited financial statements and management's discussion and analysis of financial condition [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the period [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company's revenue decreased while net loss improved for the three and six months ended June 30, 2025 | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $105,933 | $119,591 | $219,966 | $238,435 | | Operating Loss | $(11,133) | $(21,907) | $(27,573) | $(54,234) | | Net Loss | $(14,781) | $(30,631) | $(33,147) | $(44,002) | | Net Loss Attributable to the Company | $(14,781) | $(30,299) | $(33,147) | $(43,419) | | Net Loss Per Share (Basic & Diluted) | $(0.32) | $(0.67) | $(0.73) | $(0.97) | - Revenue decreased by **11%** for the three months and **8%** for the six months ended June 30, 2025, compared to the prior year[13](index=13&type=chunk) - Net loss attributable to the Company significantly improved, decreasing from **$30.3 million** to **$14.8 million** for the three months and from **$43.4 million** to **$33.1 million** for the six months ended June 30, 2025[13](index=13&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss was reduced due to a significant unrealized gain on cash flow hedges in the current period | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(14,781) | $(30,631) | $(33,147) | $(44,002) | | Unrealized gain (loss) on cash flow hedges | $2,295 | $(396) | $4,453 | $(1,187) | | Comprehensive Loss | $(12,475) | $(30,968) | $(28,649) | $(45,514) | | Comprehensive Loss Attributable to the Company | $(12,475) | $(30,636) | $(28,649) | $(44,931) | - The company reported a significant unrealized gain on cash flow hedges of **$2.3 million** for the three months and **$4.5 million** for the six months ended June 30, 2025, contrasting with losses in the prior year[15](index=15&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities decreased as of June 30, 2025, driven by changes in cash and debt structure | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $95,148 | $130,564 | | Total Current Assets | $283,661 | $304,872 | | Total Assets | $629,220 | $667,760 | | Short-term Debt | $0 | $50,000 | | Long-term Debt | $40,000 | $0 | | Total Current Liabilities | $113,425 | $185,349 | | Total Liabilities | $209,393 | $238,683 | | Total Equity | $419,827 | $429,077 | - Cash and cash equivalents decreased by **$35.4 million** from December 31, 2024, to June 30, 2025[18](index=18&type=chunk) - Short-term debt of **$50.0 million** was repaid and replaced with **$40.0 million** in long-term debt (AR Facility), leading to a significant reduction in total current liabilities[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) A net decrease in cash resulted from operating and financing activities, including debt restructuring | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(12,151) | $(51,921) | | Net Cash Used in Investing Activities | $(8,986) | $(8,443) | | Net Cash Used in Financing Activities | $(14,279) | $(1,601) | | Net Decrease in Cash and Cash Equivalents | $(35,416) | $(61,953) | | Cash and Cash Equivalents at End of Period | $95,148 | $92,481 | - Net cash used in operating activities significantly improved, decreasing from **$51.9 million** in 2024 to **$12.2 million** in 2025[20](index=20&type=chunk) - Financing activities for the six months ended June 30, 2025, included a **$50.0 million** repayment of short-term debt and **$40.0 million** in proceeds from long-term debt[20](index=20&type=chunk) [Condensed Consolidated Statements of Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity decreased due to net loss, partially offset by stock-based compensation and hedging gains | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Equity (Jan 1, 2025 / Jan 1, 2024) | $429,077 | $387,135 | | Net Loss (Six Months) | $(33,147) | $(44,002) | | Stock-based Compensation (Six Months) | $22,429 | $30,060 | | Unrealized Gain (Loss) on Cash Flow Hedges (Six Months) | $4,453 | $(1,187) | | Total Equity (June 30, 2025 / June 30, 2024) | $419,827 | $370,080 | - Total equity decreased by **$9.25 million** from January 1, 2025, to June 30, 2025, primarily due to the net loss of **$33.1 million**, partially mitigated by **$22.4 million** in stock-based compensation and **$4.45 million** in unrealized gains on cash flow hedges[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures for the condensed consolidated financial statements [NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%201%20%E2%80%93%20DESCRIPTION%20OF%20BUSINESS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Xperi operates as a single-segment consumer and entertainment technology company under GAAP - Xperi Inc operates as a leading consumer and entertainment technology company, focusing on smart devices, connected cars, and entertainment experiences, with revenue categorized into Pay-TV, Consumer Electronics, Connected Car, and Media Platform[30](index=30&type=chunk) - The company's financial statements are prepared on a consolidated basis in accordance with GAAP, with all intercompany accounts and transactions eliminated[31](index=31&type=chunk) - Key accounting estimates include licensee royalty estimations, standalone selling price determination, fair value of notes receivable and deferred consideration from divestitures, assessment of useful lives and recoverability of assets, and recognition of income tax assets and liabilities[35](index=35&type=chunk) [NOTE 2 – REVENUE](index=12&type=section&id=NOTE%202%20%E2%80%93%20REVENUE) Total revenue decreased due to declines in Pay-TV and Connected Car, partially offset by growth in other areas | Revenue Category (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Pay-TV | $49,937 | $60,752 | $99,801 | $117,558 | | Consumer Electronics | $18,763 | $17,164 | $41,561 | $43,292 | | Connected Car | $25,105 | $31,423 | $58,391 | $55,771 | | Media Platform | $12,128 | $10,252 | $20,213 | $21,814 | | Total Revenue | $105,933 | $119,591 | $219,966 | $238,435 | - Revenue is primarily derived from licensing technologies and solutions in Pay-TV, Consumer Electronics, Connected Car, and Media Platform categories[47](index=47&type=chunk) - Total revenue decreased by **11%** for the three months and **8%** for the six months ended June 30, 2025, primarily due to declines in Pay-TV and Connected Car revenue, partially offset by increases in Media Platform and Consumer Electronics[63](index=63&type=chunk) [NOTE 3 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS](index=19&type=section&id=NOTE%203%20%E2%80%93%20COMPOSITION%20OF%20CERTAIN%20FINANCIAL%20STATEMENT%20CAPTIONS) This note details changes in key balance sheet accounts, including assets and accrued liabilities | Account (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepaid expenses and other current assets | $35,756 | $32,488 | | Property and equipment, net | $46,927 | $44,473 | | Accrued liabilities | $78,158 | $94,420 | - Capitalized internal-use software increased from **$23.4 million** at December 31, 2024, to **$30.8 million** at June 30, 2025[69](index=69&type=chunk) - Employee compensation and benefits within accrued liabilities decreased from **$33.4 million** to **$21.5 million**[70](index=70&type=chunk) [NOTE 4 – FINANCIAL INSTRUMENTS](index=20&type=section&id=NOTE%204%20%E2%80%93%20FINANCIAL%20INSTRUMENTS) The company uses foreign currency forward contracts to hedge cash flow exposure from currency fluctuations | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fair value—foreign exchange contract assets, net | $2,595 | $0 | | Fair value—foreign exchange contract liabilities, net | $0 | $1,858 | | Net derivative assets (liabilities) | $2,595 | $(1,858) | - The company utilizes foreign currency forward contracts as cash flow hedges to mitigate variability in anticipated cash flows from local currency expenses[72](index=72&type=chunk)[73](index=73&type=chunk) - Accumulated other comprehensive loss (AOCL) related to cash flow hedges shifted from a beginning balance of **$(1.9 million)** to an ending balance of **$2.6 million** for the six months ended June 30, 2025, reflecting a net current period other comprehensive gain of **$4.5 million**[76](index=76&type=chunk) [NOTE 5 – FAIR VALUE](index=21&type=section&id=NOTE%205%20%E2%80%93%20FAIR%20VALUE) This note outlines the company's fair value measurement practices and hierarchy for financial instruments | Financial Instrument (in thousands) | Carrying Amount (June 30, 2025) | Estimated Fair Value (June 30, 2025) | Carrying Amount (Dec 31, 2024) | Estimated Fair Value (Dec 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | Note receivable, noncurrent | $30,857 | $33,253 | $29,702 | $28,223 | | Deferred consideration from divestitures | $19,029 | $21,219 | $18,217 | $18,342 | | Senior unsecured promissory note | $0 | $0 | $50,000 | $50,000 | | AR Facility | $40,000 | $40,000 | $0 | $0 | - The company applies fair value measurement guidance, maximizing the use of observable inputs and minimizing unobservable inputs, classifying instruments into Level 1, Level 2, or Level 3[78](index=78&type=chunk)[79](index=79&type=chunk)[83](index=83&type=chunk) - The fair value of the note receivable and deferred consideration from divestitures are estimated using income and market approaches, classified within **Level 2** of the fair value hierarchy[81](index=81&type=chunk) [NOTE 6 – DIVESTITURES](index=23&type=section&id=NOTE%206%20%E2%80%93%20DIVESTITURES) The company completed two divestitures to streamline its business and focus on entertainment markets - The Perceive Transaction, completed in October 2024, involved selling assets and liabilities of Perceive Corporation for **$80.0 million** in cash, including a **$12.0 million** holdback[84](index=84&type=chunk) - The AutoSense Divestiture, completed in January 2024, involved selling the in-cabin safety business for **$44.3 million**, comprising cash, a **$27.7 million** note receivable, and **$15.0 million** in deferred consideration (fair value **$5.8 million**)[89](index=89&type=chunk) - A pre-tax gain of **$22.9 million** was recognized upon the completion of the AutoSense Divestiture in 2024[92](index=92&type=chunk) [NOTE 7 – INTANGIBLE ASSETS, NET](index=25&type=section&id=NOTE%207%20%E2%80%93%20INTANGIBLE%20ASSETS%2C%20NET) The net carrying value of intangible assets decreased primarily due to amortization of finite-lived assets | Intangible Asset Category (in thousands) | Net Carrying Value (June 30, 2025) | Net Carrying Value (Dec 31, 2024) | | :--- | :--- | :--- | | Acquired patents | $10,490 | $11,594 | | Existing technology / content database | $20,304 | $25,871 | | Customer contracts and related relationships | $92,329 | $104,434 | | Trademarks/trade name | $332 | $415 | | TiVo tradename/trademarks (Indefinite-lived) | $21,400 | $21,400 | | Total Intangible Assets | $144,855 | $163,714 | - The total net carrying value of intangible assets decreased by **$18.9 million** from December 31, 2024, to June 30, 2025, primarily due to amortization of finite-lived assets[101](index=101&type=chunk)[102](index=102&type=chunk) - Estimated future amortization expense for finite-lived intangible assets is projected to be **$16.0 million** for the remaining six months of 2025 and **$31.5 million** in 2026[102](index=102&type=chunk) [NOTE 8 – DEBT AND RECEIVABLES SECURITIZATION](index=26&type=section&id=NOTE%208%20%E2%80%93%20DEBT%20AND%20RECEIVABLES%20SECURITIZATION) The company established a new AR Facility and repaid its outstanding Vewd Promissory Note - Xperi established a **$55.0 million** AR Facility with PNC Bank in February 2025, secured by trade receivables, with interest accrued at monthly Term SOFR Rate plus 1.90%[103](index=103&type=chunk)[105](index=105&type=chunk) - The company repaid the full **$50.0 million** outstanding principal of the Vewd Promissory Note in February 2025, using **$40.0 million** from the new AR Facility and cash on hand[110](index=110&type=chunk) - As of June 30, 2025, **$40.0 million** was borrowed under the AR Facility, and the company was in compliance with all debt covenants[107](index=107&type=chunk) [NOTE 9 – NET LOSS PER SHARE](index=27&type=section&id=NOTE%209%20%E2%80%93%20NET%20LOSS%20PER%20SHARE) Net loss per share improved year-over-year, with potentially dilutive securities excluded from calculations | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss Attributable to the Company | $(14,781) | $(30,299) | $(33,147) | $(43,419) | | Weighted-average shares (basic & diluted) | 45,846 | 45,331 | 45,313 | 44,926 | | Net Loss Per Share (basic & diluted) | $(0.32) | $(0.67) | $(0.73) | $(0.97) | - Net loss per share improved from **$(0.67)** to **$(0.32)** for the three months and from **$(0.97)** to **$(0.73)** for the six months ended June 30, 2025[112](index=112&type=chunk) - Potentially dilutive shares, totaling **7.5 million** for 2025 and **8.1 million** for 2024, were excluded from diluted EPS calculations because their effect would be anti-dilutive due to the net loss[113](index=113&type=chunk) [NOTE 10 – STOCKHOLDERS' EQUITY AND STOCK-BASED COMPENSATION](index=28&type=section&id=NOTE%2010%20%E2%80%93%20STOCKHOLDERS'%20EQUITY%20AND%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense decreased due to lower RSU valuations and reduced headcount | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Stock-Based Compensation Expense | $10,327 | $15,303 | $22,429 | $30,060 | | RSUs | $8,266 | $11,160 | $18,138 | $20,345 | | PSUs | $1,954 | $2,775 | $2,994 | $7,029 | | ESPP | $107 | $1,368 | $1,297 | $2,686 | - As of June 30, 2025, approximately **4.7 million** shares were reserved for future grants under the 2022 Equity Incentive Plan (EIP), and **2.1 million** shares under the 2022 Employee Stock Purchase Plan (ESPP)[115](index=115&type=chunk)[118](index=118&type=chunk) - Unrecognized stock-based compensation expense related to unvested equity awards totaled **$51.9 million** as of June 30, 2025, with a weighted-average recognition period of **1.9 years** for RSUs and **2.0 years** for PSUs[125](index=125&type=chunk) [NOTE 11 – INCOME TAXES](index=30&type=section&id=NOTE%2011%20%E2%80%93%20INCOME%20TAXES) The company recorded income tax expenses despite pretax losses, primarily due to foreign taxes | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Loss before taxes | $(10,145) | $(21,365) | $(25,022) | $(30,464) | | Provision for income taxes | $4,636 | $9,266 | $8,125 | $13,538 | | Effective tax rate | (45.7)% | (43.4)% | (32.5)% | (44.4)% | - Income tax expense for both periods in 2025 and 2024 was primarily driven by foreign withholding taxes and foreign income taxes[126](index=126&type=chunk)[127](index=127&type=chunk) - Gross unrecognized tax benefits were **$15.3 million** as of June 30, 2025, with **$1.2 million** affecting the effective tax rate if recognized[128](index=128&type=chunk) [NOTE 12 – LEASES](index=31&type=section&id=NOTE%2012%20%E2%80%93%20LEASES) The company maintains various operating leases for facilities and equipment with stable total costs | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Operating Lease Cost | $3,154 | $2,999 | $6,376 | $6,407 | - The company leases office and research facilities, data centers, and office equipment under operating leases, with terms extending through 2032[131](index=131&type=chunk) - As of June 30, 2025, the weighted-average remaining lease term for operating leases was **4.5 years**, with a weighted-average discount rate of **6.7%**[134](index=134&type=chunk) [NOTE 13 – COMMITMENTS AND CONTINGENCIES](index=33&type=section&id=NOTE%2013%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The company has future purchase obligations and is involved in various legal proceedings - As of June 30, 2025, the company's total future unconditional purchase obligations amounted to approximately **$128.3 million**[135](index=135&type=chunk) - Xperi provides indemnifications to licensees, customers, business partners, officers, and directors, but has not recorded any material liability to date[136](index=136&type=chunk)[137](index=137&type=chunk) - The company is involved in litigation matters and claims in the normal course of business, but management does not anticipate a material effect on its business or consolidated financial statements from the disposition of these matters[138](index=138&type=chunk)[139](index=139&type=chunk) [NOTE 14 - SEGMENT RELATED INFORMATION](index=33&type=section&id=NOTE%2014%20-%20SEGMENT%20RELATED%20INFORMATION) Xperi operates as a single operating and reportable segment with performance assessed on a consolidated basis | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $105,933 | $119,591 | $219,966 | $238,435 | | Consolidated Net Loss | $(14,781) | $(30,631) | $(33,147) | $(44,002) | - The company operates in one operating and reportable segment, with its Chief Executive Officer identified as the chief operating decision maker (CODM)[140](index=140&type=chunk) - The CODM assesses performance and allocates resources based on consolidated net income (loss) and total consolidated assets[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, condition, and operational results [Business Overview](index=35&type=section&id=Business%20Overview) Xperi is a leading consumer and entertainment technology company operating in a single reportable segment - Xperi Inc is a leading consumer and entertainment technology company, enhancing experiences across smart devices, connected cars, and entertainment platforms[144](index=144&type=chunk) - The company operates in a single reportable business segment, with revenue divided into Pay-TV, Consumer Electronics, Connected Car, and Media Platform[144](index=144&type=chunk) - Xperi has approximately **1,620 employees** and over 35 years of operating experience, with headquarters in Silicon Valley and global operations[144](index=144&type=chunk) [Divestitures](index=35&type=section&id=Divestitures) Two significant divestitures were completed to streamline the business and focus on entertainment markets - The AutoSense in-cabin safety business was sold to Tobii AB in January 2024, streamlining Xperi's focus on entertainment markets[145](index=145&type=chunk) - Perceive Corporation, a subsidiary focused on edge inference hardware and software, was sold to Amazon.com Services LLC in October 2024 for **$80.0 million**, further concentrating Xperi on entertainment-based solutions[146](index=146&type=chunk) [Macroeconomic Conditions](index=35&type=section&id=Macroeconomic%20Conditions) Macroeconomic conditions have negatively impacted the company's revenue and operations - Macroeconomic conditions such as increased inflation, interest rates, and recessionary fears have adversely impacted Xperi's business and customers[147](index=147&type=chunk) - The changing macroeconomic environment created increased uncertainty for customers in Q2 2025, negatively impacting revenue and results of operations for the quarter[147](index=147&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Revenue decreased but operating loss improved due to significant reductions in operating expenses [Revenue](index=36&type=section&id=Revenue) Revenue decreased due to declines in Pay-TV and Connected Car, partially offset by growth in other segments | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $105,933 | $119,591 | $(13,658) | (11)% | | Pay-TV Revenue | $49,937 | $60,752 | $(10,815) | (18)% | | Connected Car Revenue | $25,105 | $31,423 | $(6,318) | (20)% | | Media Platform Revenue | $12,128 | $10,252 | $1,876 | 18% | | Consumer Electronics Revenue | $18,763 | $17,164 | $1,599 | 9% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $219,966 | $238,435 | $(18,469) | (8)% | | Pay-TV Revenue | $99,801 | $117,558 | $(17,757) | (15)% | | Connected Car Revenue | $58,391 | $55,771 | $2,620 | 5% | - The six-month revenue decrease was also impacted by the divestitures of AutoSense and Perceive[154](index=154&type=chunk) [Operating Expenses](index=37&type=section&id=Operating%20Expenses) Total operating expenses decreased significantly due to reductions in R&D and SG&A expenses [Cost of Revenue, Excluding Depreciation and Amortization of Intangible Assets](index=37&type=section&id=Cost%20of%20Revenue%2C%20Excluding%20Depreciation%20and%20Amortization%20of%20Intangible%20Assets) Cost of revenue increased due to higher costs associated with advertising revenue | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cost of Revenue | $33,549 | $28,953 | $4,596 | 16% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cost of Revenue | $63,148 | $58,709 | $4,439 | 8% | - The increase in cost of revenue was primarily due to higher costs related to advertising revenue, with some offset from the Perceive and AutoSense divestitures[158](index=158&type=chunk)[159](index=159&type=chunk) [Research and Development](index=37&type=section&id=Research%20and%20Development) R&D expense decreased significantly, driven by divestitures and reduced employee headcount | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | R&D Expense | $29,783 | $45,123 | $(15,340) | (34)% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | R&D Expense | $69,332 | $95,562 | $(26,230) | (27)% | - Key drivers for the decrease include lower R&D spend from the Perceive and AutoSense divestitures, reductions in R&D employee headcount, and lower bonus expenses[161](index=161&type=chunk)[162](index=162&type=chunk) [Selling, General and Administrative](index=38&type=section&id=Selling%2C%20General%20and%20Administrative) SG&A expenses decreased due to reduced headcount, lower bonuses, and decreased stock-based compensation | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | SG&A Expense | $41,142 | $53,102 | $(11,960) | (23)% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | SG&A Expense | $89,840 | $109,455 | $(19,615) | (18)% | - The decrease in SG&A was primarily driven by reduced employee headcount, lower bonus expenses, decreased stock-based compensation, and certain one-time transaction costs[164](index=164&type=chunk)[165](index=165&type=chunk) [Stock-based Compensation](index=38&type=section&id=Stock-based%20Compensation) Total stock-based compensation expense decreased due to lower RSU valuations and reduced headcount | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total SBC Expense | $10,327 | $15,303 | $(4,976) | $22,429 | $30,060 | $(7,631) | - The decrease in SBC expense was primarily driven by RSUs granted over time at lower valuations, lower expense for performance-based restricted stock units, and reduced employee headcount[166](index=166&type=chunk) [Depreciation Expense](index=38&type=section&id=Depreciation%20Expense) Depreciation expense fluctuated due to capitalized software costs and fully depreciated assets | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Depreciation Expense | $3,448 | $3,278 | $170 | 5% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Depreciation Expense | $6,353 | $6,862 | $(509) | (7)% | - The increase in depreciation for the three-month period was primarily due to increased capitalized internal-use software costs over the past 12 months[167](index=167&type=chunk) [Amortization Expense](index=38&type=section&id=Amortization%20Expense) Amortization expense decreased as certain intangible assets became fully amortized | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Amortization Expense | $9,144 | $11,042 | $(1,898) | (17)% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Amortization Expense | $18,866 | $22,081 | $(3,215) | (15)% | - The decrease was primarily due to certain intangible assets becoming fully amortized over the past 12 months, though amortization expenses are expected to remain significant in future years[169](index=169&type=chunk)[170](index=170&type=chunk) [Interest and Other Income, Net](index=40&type=section&id=Interest%20and%20Other%20Income%2C%20Net) Interest and other income increased significantly, driven by higher foreign currency transaction gains | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Interest and Other Income, Net | $1,747 | $1,290 | $457 | 35% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Interest and Other Income, Net | $4,042 | $2,332 | $1,710 | 73% | - The increase was principally due to higher foreign currency transaction gains[171](index=171&type=chunk)[172](index=172&type=chunk) [Interest Expense—Debt](index=40&type=section&id=Interest%20Expense%E2%80%94Debt) Interest expense on debt remained relatively constant compared to the prior year | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Interest Expense - Debt | $(759) | $(748) | $(11) | 1% | | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Interest Expense - Debt | $(1,491) | $(1,496) | $5 | (0)% | - The interest expense on debt remained constant across the comparable periods[173](index=173&type=chunk) [Gain on Divestiture](index=40&type=section&id=Gain%20on%20Divestiture) A pre-tax gain of $22.9 million was recognized from the AutoSense Divestiture in the prior year | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Gain on Divestiture | $0 | $22,934 | $(22,934) | (100)% | - A pre-tax gain of **$22.9 million** was recognized in the six months ended June 30, 2024, from the AutoSense Divestiture[174](index=174&type=chunk) - No divestitures occurred during the three and six months ended June 30, 2025[175](index=175&type=chunk) [Provision for Income Taxes](index=40&type=section&id=Provision%20for%20Income%20Taxes) The company recorded income tax expenses despite pretax losses, primarily due to foreign taxes | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Provision for Income Taxes | $4,636 | $9,266 | $8,125 | $13,538 | | Effective Tax Rate | (45.7)% | (43.4)% | (32.5)% | (44.4)% | - Income tax expense for both periods in 2025 and 2024 was primarily related to foreign withholding taxes and foreign income taxes[176](index=176&type=chunk)[177](index=177&type=chunk) - The company maintains valuation allowances on federal, certain state, and certain foreign deferred tax assets, as their recoverability is not considered more-likely-than-not[178](index=178&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased due to operations and debt repayment, but liquidity is expected to be sufficient [Stock Repurchase Program](index=42&type=section&id=Stock%20Repurchase%20Program) The company has $80.0 million remaining under its stock repurchase program, with no repurchases in Q2 2025 - The Board authorized a **$100.0 million** stock repurchase program in April 2024[183](index=183&type=chunk) - As of June 30, 2025, approximately **2.2 million** shares had been repurchased for **$20.0 million**, leaving **$80.0 million** available under the program[183](index=183&type=chunk) - No common stock was repurchased during the three and six months ended June 30, 2025[183](index=183&type=chunk) [Cash Flows](index=42&type=section&id=Cash%20Flows) Cash decreased due to operating and financing activities, though operating cash flow improved significantly [Cash Flows from Operating Activities](index=42&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Net cash used in operating activities improved significantly due to a reduced net loss | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(12,151) | $(51,921) | - The decrease in cash used in operating activities was primarily due to a lower net loss and reduced changes in operating assets and liabilities, partially offset by non-cash items like stock-based compensation and amortization[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) [Cash Flows from Investing Activities](index=44&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Net cash used in investing activities remained stable, driven primarily by capital expenditures | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Investing Activities | $(8,986) | $(8,443) | - Investing activities primarily involved capital expenditures, including capitalized internal-use software[187](index=187&type=chunk) [Capital Expenditures](index=44&type=section&id=Capital%20Expenditures) Capital expenditures are expected to be approximately $20.0 million in 2025 - Capital expenditures primarily include purchases of computer hardware and software, capitalized internal-use software, and information systems[188](index=188&type=chunk) - Expected capital expenditures for 2025 are approximately **$20.0 million**, to be funded by existing cash and cash equivalents[188](index=188&type=chunk) [Cash Flows from Financing Activities](index=44&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Net cash used in financing increased due to debt repayment partially offset by new loan proceeds | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Financing Activities | $(14,279) | $(1,601) | - Key financing activities in 2025 included a **$50.0 million** repayment of the Vewd promissory note, **$6.3 million** in withholding taxes, **$40.0 million** in loan proceeds from the AR Facility, and **$3.3 million** from the ESPP[189](index=189&type=chunk) [Long-Term Debt Financing](index=44&type=section&id=Long-Term%20Debt%20Financing) The company repaid a $50.0 million note and borrowed $40.0 million under a new AR Facility - On February 21, 2025, Xperi fully repaid the **$50.0 million** Vewd senior unsecured promissory note[191](index=191&type=chunk) - Concurrently, the company borrowed **$40.0 million** under a new AR Facility with PNC, which matures on February 21, 2028, and has a variable interest rate[192](index=192&type=chunk)[193](index=193&type=chunk) - The company was in compliance with all covenants under the AR Facility as of June 30, 2025[193](index=193&type=chunk) [Liquidity](index=44&type=section&id=Liquidity) Current cash and available borrowings are expected to provide sufficient liquidity for the next 12 months - Current cash and cash equivalents, along with the AR Facility, are expected to provide sufficient liquidity for at least the next 12 months[194](index=194&type=chunk) - Poor financial results, unanticipated expenses, or strategic investments could lead to additional financing requirements sooner than expected[195](index=195&type=chunk) - Access to capital markets may be constrained, and borrowing costs could increase under certain business and market conditions, including those driven by tariffs and economic uncertainties[195](index=195&type=chunk)[196](index=196&type=chunk) [Critical Accounting Estimates](index=46&type=section&id=Critical%20Accounting%20Estimates) There were no significant changes in critical accounting estimates during the period - No significant changes occurred in critical accounting estimates during the six months ended June 30, 2025[197](index=197&type=chunk) [Recent Accounting Pronouncements](index=46&type=section&id=Recent%20Accounting%20Pronouncements) The company is currently evaluating the impact of recently issued accounting standards - The company is evaluating ASU 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024[41](index=41&type=chunk) - Xperi is also evaluating ASU 2024-03, 'Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,' effective for its 2027 annual financial statements[42](index=42&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is interest rate risk from its variable-rate AR Facility [Interest Rate Risk](index=47&type=section&id=Interest%20Rate%20Risk) The company is exposed to interest rate risk from its $40.0 million variable-rate debt - Xperi is exposed to changes in interest rates due to its **$40.0 million** outstanding indebtedness under the variable-rate AR Facility, which is based on the secured overnight financing rate (SOFR)[201](index=201&type=chunk) - A **1%** increase in the applicable SOFR interest rate is estimated to result in an annual increase of approximately **$0.4 million** in interest expense[201](index=201&type=chunk) - Any significant increase in interest expense could negatively impact the company's results of operations and cash flows[201](index=201&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025 [Evaluation of Controls and Procedures](index=47&type=section&id=Evaluation%20of%20Controls%20and%20Procedures) Management evaluated and concluded that disclosure controls and procedures were effective - Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025[203](index=203&type=chunk) - Based on this evaluation, they concluded that the disclosure controls and procedures were effective at the reasonable assurance level[203](index=203&type=chunk) [Change in Internal Control over Financial Reporting](index=47&type=section&id=Change%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes were made to internal control over financial reporting during the last fiscal quarter - No material changes in internal control over financial reporting occurred during the last fiscal quarter covered by this Quarterly Report on Form 10-Q[204](index=204&type=chunk) [PART II - OTHER INFORMATION](index=48&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part provides supplementary information on legal proceedings, risk factors, and other corporate matters [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings that are not expected to have a material effect - Xperi is involved in legal proceedings related to enforcing license agreements, intellectual property rights, and defending against infringement claims[206](index=206&type=chunk) - Management does not anticipate a material effect on the company's results of operations, consolidated financial position, or liquidity from the disposition of these matters, despite considerable uncertainty[206](index=206&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from macroeconomic uncertainties and international operations - Macroeconomic uncertainties, including increased inflation, interest rates, and recessionary fears, have adversely impacted Xperi's business, results of operations, and financial condition, as evidenced by **negative impacts on Q2 2025 revenue**[208](index=208&type=chunk) - A significant reduction in original entertainment content or advertising expenditures could materially adversely affect the Media Platform solutions and overall growth[210](index=210&type=chunk) - Xperi is exposed to risks from international operations, including compliance with complex laws, foreign currency fluctuations, trade policies (e.g, tariffs on imports from China), and geopolitical factors, which could strain global supply chains and reduce demand for products incorporating its technologies[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares of its common stock during the three months ended June 30, 2025 - The company did not repurchase shares of its common stock during the three months ended June 30, 2025[218](index=218&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This section is marked as 'Not applicable'[219](index=219&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This section is marked as 'Not applicable'[221](index=221&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) No other information is reported, and no directors or officers modified trading arrangements - No other information is reported under sub-items (a) and (b)[222](index=222&type=chunk)[224](index=224&type=chunk) - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[225](index=225&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including agreements and certifications - Exhibits include the Asset Purchase Agreement for Perceive Corporation, Amended and Restated Certificate of Incorporation and Bylaws, and various stock award agreements[227](index=227&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) and 18 U.S.C Section 1350 are also included[227](index=227&type=chunk) - The filing also contains Inline XBRL Document Set for the condensed consolidated financial statements[227](index=227&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) This section contains the official signatures authorizing the report's submission - The report is duly signed on behalf of Xperi Inc by Robert Andersen, Chief Financial Officer, on August 7, 2025[230](index=230&type=chunk)[231](index=231&type=chunk)

Quarterly Review: Operations, Segment Moves, and Key Data About Xperi: Business and Focus Areas Xperi (XPER -0.70%), a technology licensing firm specializing in media platforms and connected devices, reported earnings for Q2 FY2025 on August 6, 2025. The company's results showed GAAP revenue of $105.9 million, missing analyst expectations of $113.01 million (non-GAAP) and marking an 11.5% drop from the prior year's quarter on a non-GAAP basis. Non-GAAP earnings per share came in at $0.11, falling short of t ...

分组1 - Xperi reported quarterly earnings of $0.11 per share, matching the Zacks Consensus Estimate, but down from $0.12 per share a year ago [1] - The company's revenues for the quarter ended June 2025 were $105.93 million, slightly missing the Zacks Consensus Estimate by 0.01% and down from $119.59 million year-over-year [2] - Xperi shares have declined approximately 44.2% year-to-date, contrasting with the S&P 500's gain of 7.1% [3] 分组2 - The earnings outlook for Xperi is uncertain, with current consensus EPS estimates at $0.18 for the next quarter and $0.68 for the current fiscal year [7] - The Zacks Rank for Xperi is currently 4 (Sell), indicating expectations of underperformance in the near future [6] - The Technology Services industry, to which Xperi belongs, is ranked in the top 41% of Zacks industries, suggesting a favorable environment for stocks in the upper half of the rankings [8]

Financial Data and Key Metrics Changes - The company reported revenue of $106 million for Q2 2025, a decrease of 11% from $120 million in the same period last year [20] - Adjusted EBITDA rose 4% to $15 million, representing 14% of revenue, primarily due to business transformation efforts and cost management [6] - Non-GAAP earnings per share was $0.11, compared to $0.12 in Q2 2024 [23] - Operating cash flow was $10 million, a significant improvement from a cash outflow of $2 million in the previous year [24] Business Line Data and Key Metrics Changes - Pay TV revenue decreased by 18% to $50 million, largely due to minimum guarantee revenue recognized in the prior year [20] - IPTV solutions saw a revenue growth of 24%, reaching an installed base of over 3 million subscriber households [16] - Consumer electronics revenue increased by 23% to $19 million when excluding divestitures [21] - Connected car revenue decreased by $6 million due to fewer minimum guarantee agreements compared to last year [22] Market Data and Key Metrics Changes - IPTV solutions in North America and Latin America grew over 30% year over year [16] - The company expanded its DTS AutoStage solution, signing two new OEM programs and launching in several new car models [13] - The advertising market is experiencing uncertainty, impacting customer decisions and revenue forecasts [5][30] Company Strategy and Development Direction - The company is focused on strategic growth initiatives, including the TiVo ONE ad platform, connected car solutions, and IPTV services [4][9] - The goal for the TiVo ONE ad platform is to reach 5 million monthly active users by the end of 2025, with current users at 3.7 million [12] - The company aims to build partnerships and enhance its advertising revenue through increased user engagement and partnerships with major retailers [10][13] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging operating environment due to macroeconomic uncertainty, tariffs, and a weakening consumer environment [5] - The company expects slower IPTV subscriber growth and softer automotive production volumes in the second half of 2025 [24] - Despite revenue outlook reductions, management remains optimistic about business transformation efforts and long-term profitability [24][43] Other Important Information - The company has signed nine partners for the TiVo OS, nearing its goal of ten partners for 2025 [12] - Significant multiyear renewals were signed with key customers, including Liberty Latin America and Cable One [16] - The company is exploring stock buyback strategies as part of its capital allocation [41] Q&A Session Summary Question: Clarification on volatility between Q2 and Q3 - Management noted uncertainty in the near-term outlook led to customers being less likely to enter long-term deals, resulting in delays [29] Question: Dynamics of the ad platform and growth expectations - Management expects monthly active users to grow to 5 million, which will enhance advertising opportunities despite unit volume declines [37] Question: Commentary on stock buyback strategy - The company has authorization for stock buybacks and is discussing this with the board, particularly given current stock prices [41]

Q2 2025 Earnings August 6, 2025 Safe Harbor This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation 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 li ...

Core Insights - Xperi reported Q2 2025 results with non-GAAP revenue of $105.9 million, missing estimates by $10 million, and non-GAAP EPS of $0.11, two cents below consensus [1][2] - The company lowered its full-year guidance for revenue and margins due to a challenging macroeconomic environment [1][13] Financial Performance - Non-GAAP revenue decreased by 11.5% year-over-year from $119.6 million in Q2 2024 [2] - Non-GAAP EPS fell by 8.3% from $0.12 in Q2 2024 [2] - Non-GAAP operating income increased to $8.8 million, up 6.0% from $8.3 million in Q2 2024 [2] - Non-GAAP net income declined by 14.3% year-over-year to $4.8 million [2] - Adjusted EBITDA rose to $15.2 million, a 4.1% increase from $14.6 million in the previous year, with an adjusted EBITDA margin improvement to 14.4% from 12.2% [2][8] Business Overview - Xperi operates at the intersection of entertainment and technology, focusing on software platforms for Smart TVs and connected cars, with brands like TiVo and DTS [3][4] - The company aims to expand its independent media platform and DTS AutoStage infotainment system, emphasizing user growth and monetization through advertising and subscriptions [4][5] User and Device Growth - TiVo One's monthly active users increased from 2.5 million to 3.7 million, on track to exceed the goal of 5 million by the end of FY2025 [5] - DTS AutoStage expanded to 12 million vehicles, up from 11 million, with new partnerships with major automotive brands [6] Strategic Focus - Xperi's strategy includes developing technology platforms for partners, allowing them to monetize content and advertising effectively [9] - The TiVo One Advertising Platform is crucial for attracting advertising revenue, although specific financial metrics were not disclosed this quarter [10] Outlook and Guidance - Management revised FY2025 revenue guidance to $440–460 million from $480–500 million, citing increased uncertainty in the macroeconomic environment [13] - Non-GAAP adjusted EBITDA margin guidance was also lowered to a range of 15% to 17% [13]

[Xperi Inc. Q2 2025 Preliminary Results and Outlook Update](index=1&type=section&id=Xperi%20Inc.%20Q2%202025%20Preliminary%20Results%20and%20Outlook%20Update) [Preliminary Second Quarter 2025 Financial Results](index=1&type=section&id=Preliminary%20Second%20Quarter%202025%20Financial%20Results) The company reported preliminary Q2 2025 revenue of $105.9 million, with an improved operating loss and positive cash flow Q2 2025 vs Q2 2024 Financial Highlights | Metric ($ millions, except per share) | Q2 FY25 | Q2 FY24 | | :--- | :--- | :--- | | **GAAP Results** | | | | Revenue | $105.9 | $119.6 | | GAAP Operating Loss | $(11.1) | $(21.9) | | GAAP Net Loss | $(14.8) | $(30.3) | | GAAP Diluted Loss Per Share | $(0.32) | $(0.67) | | **Non-GAAP Results** | | | | Non-GAAP Operating Income | $8.8 | $8.3 | | Non-GAAP Net Income | $4.8 | $5.6 | | Non-GAAP Earnings Per Share | $0.11 | $0.12 | | Non-GAAP Adjusted EBITDA | $15.2 | $14.6 | | Non-GAAP Adjusted EBITDA Margin | 14.4% | 12.2% | - The company generated **$10 million in positive operating cash flow** and **$5 million in free cash flow** during the second quarter[1](index=1&type=chunk) - Financial results were impacted by a changing macroeconomic environment creating increased customer uncertainty[2](index=2&type=chunk) [Fiscal Year 2025 Financial Outlook Update](index=2&type=section&id=Fiscal%20Year%202025%20Financial%20Outlook%20Update) The company lowered its full-year 2025 financial outlook due to macroeconomic uncertainty impacting customers Updated Fiscal Year 2025 Outlook | Category | Prior Outlook | Updated Outlook | | :--- | :--- | :--- | | Revenue | $480M to $500M | $440M to $460M | | Non-GAAP Adjusted EBITDA Margin | 16% to 18% | 15% to 17% | - The full-year financial outlook was updated due to the market backdrop and increased uncertainty for its customers[2](index=2&type=chunk) [Operational Highlights and Strategic Progress](index=1&type=section&id=Operational%20Highlights%20and%20Strategic%20Progress) The company reports continued progress on long-term growth initiatives, achieving key user and device milestones - The company continues to demonstrate progress on its longer-term growth goals and strategic initiatives, with key milestones including[3](index=3&type=chunk): - Surpassing **3.7 million TiVo One Monthly Active Users** - Reaching **three million global IPTV subscriber households** - Exceeding **12 million vehicles on the DTS AutoStage platform** [Non-GAAP Financial Measures and Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section defines non-GAAP financial measures and provides reconciliations to their comparable GAAP figures [Definition of Non-GAAP Measures](index=4&type=section&id=Definition%20of%20Non-GAAP%20Measures) Key non-GAAP metrics are defined by excluding specific items like stock-based compensation from GAAP measures - Non-GAAP measures provide perspective into ongoing business performance by excluding certain items[14](index=14&type=chunk)[15](index=15&type=chunk)[17](index=17&type=chunk): - **Non-GAAP Operating Income** excludes stock-based compensation, amortization, and transaction/restructuring costs - **Non-GAAP Net Income** excludes the same items as above and their related tax effects - **Non-GAAP Adjusted EBITDA** excludes interest, taxes, stock-based compensation, and depreciation/amortization from GAAP Net Income [GAAP to Non-GAAP Reconciliations](index=7&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) Detailed tables reconcile Q2 2025 GAAP Net Loss and Operating Loss to their non-GAAP counterparts Q2 2025 Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | **GAAP net loss** | **$ (14,781)** | | Interest expense | $ 915 | | Provision for income taxes | $ 4,636 | | Stock-based compensation | $ 10,327 | | Depreciation expense | $ 3,448 | | Amortization of intangible assets | $ 9,144 | | Amortization of capitalized cloud computing costs | $ 1,081 | | Transaction, integration and restructuring costs | $ 73 | | Severance and retention | $ 365 | | **Non-GAAP Adjusted EBITDA** | **$ 15,208** | Q2 2025 Reconciliation of GAAP Operating Loss to Non-GAAP Operating Income (in thousands) | Description | Amount | | :--- | :--- | | **GAAP operating loss** | **$ (11,133)** | | Stock-based compensation | $ 10,327 | | Amortization of intangible assets | $ 9,144 | | Transaction, integration and restructuring costs | $ 73 | | Severance and retention | $ 365 | | **Non-GAAP operating income** | **$ 8,776** | [Important Disclosures](index=2&type=section&id=Important%20Disclosures) This section contains a Safe Harbor Statement for forward-looking statements and a financial disclosure advisory - The financial data presented is **preliminary** and may differ from actual results upon completion of quarter-end review[9](index=9&type=chunk) - The press release contains **forward-looking statements** regarding future results and growth, which involve risks and uncertainties[8](index=8&type=chunk)

Business Transformation & Strategy - Xperi's core IP licensing business faced industry-driven challenges, leading to a transformation to focus on product-oriented businesses[8, 9] - The separation of Xperi and Adeia in 2022 created two standalone public companies, allowing for more focused strategies and better positioning for success[9] - Xperi is focused on leveraging its core expertise in attractive, growing markets: IPTV, in-cabin entertainment, and connected TV advertising[11] - The company expects key markets to deliver approximately $200 million in incremental revenue in 2026[101] Financial Performance & Outlook - Xperi's 2023 revenue was $521 million[13], with an adjusted EBITDA of $35 million[13], resulting in an adjusted EBITDA margin of 6.7%[33] - The company expects revenue between $500 million and $530 million in 2024[31], and an adjusted EBITDA margin between 12% and 14%[33] - Year-to-date total shareholder return is 13%[27], outperforming peers[27] Board & Governance - Rubric Capital is seeking to replace half of Xperi's independent directors, but has not offered meaningful ideas for improving the business[11] - The Board had identified two new exceptional candidates it intended to nominate this year just as Rubric began its activism campaign[11] - Rubric's nominees would not bring any relevant experience that incumbent directors do not already possess[36]