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]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $114 million, a decrease of 4% from $119 million in the previous year, and a 2% decrease when adjusting for divestitures [20] - Adjusted EBITDA was $16 million, representing a margin of 14%, which is over 200% increase compared to $5 million in the prior year [8][22] - Non-GAAP earnings per share improved to $0.16 from a loss of $0.05 per share in the previous year [22] Business Line Data and Key Metrics Changes - Pay TV revenue was $50 million, down 12%, with strong growth in IPTV (up 25%) offset by declines in core pay TV business [20] - Consumer Electronics revenue decreased by 5% to $23 million, primarily due to lower production volumes [20] - Connected Car revenue rose 37% to $33 million, driven by licensing agreements for HD Radio [20] - Media Platform revenue was $8 million, down 30% due to lower middleware revenue and timing shifts in advertising commitments [21] Market Data and Key Metrics Changes - IPTV subscriber households increased to over 2.75 million, a 36% year-over-year growth [16] - The Connected Car segment finished the quarter with a footprint of 11 million vehicles across over 130 countries [16] Company Strategy and Development Direction - The company is focused on three growth solutions: Connected TV advertising, in-cabin entertainment, and TiVo video over broadband [8] - The TiVo One ad platform aims to maximize engagement and monetization on streaming devices [10] - The company is expanding its partnerships with TV manufacturers and expects to add 1-2 new partners this year [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year growth goals despite macroeconomic uncertainties [6] - The company maintains its financial outlook for the year, indicating modest impacts from tariffs [25][42] - Management expects to see positive cash flow in the second half of the year [32] Other Important Information - The company completed a financing arrangement with PNC Bank for a $55 million line of credit [23] - Operating cash usage was $22 million, primarily due to the paydown of accrued liabilities [24] Q&A Session Summary Question: Regarding IPTV and user base growth - Management indicated that improvements in subscribership revenue will be seen throughout the year, with ongoing efforts to assist deployments [26] Question: Capacity to handle increased IPTV customers - Management confirmed that they are staging deployments and have the capacity to manage the increase over time [30] Question: Positive cash flow expectations - Management stated that while Q1 is typically the weakest quarter, they expect positive cash flow for the remainder of the year, particularly in the second half [32] Question: Additional OEMs in the pipeline for TV companies - Management expects to add at least one to two new TV partners this year beyond the existing eight [36] Question: Active user targets and tariff impacts - Management remains on track to reach 5 million monthly active users by year-end and anticipates reaching 7 million by the end of next year, with tariffs having a modest impact [38]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $122 million, down 11% from $137 million in the previous year, but up 2% when adjusted for divestitures [30] - Adjusted EBITDA for the quarter was $23 million, representing a 19% margin compared to $13 million in the prior year [10][37] - For the full year 2024, adjusted EBITDA was $74 million, yielding a margin of 15%, more than doubling from the previous year [38] Business Line Data and Key Metrics Changes - Pay TV revenue decreased by 8%, while IPTV revenue increased by 35%, offsetting declines in core pay TV [30] - Consumer Electronics revenue was up 2% when excluding divestitures, driven by strong unit volumes for game consoles [30] - Connected Car revenue increased by 9% as reported and 42% when excluding divested businesses, attributed to minimum guarantee deals [31] - Media Platform revenue decreased by 15% due to a decline in linear ad campaigns and prior year minimum guarantee deals [32] Market Data and Key Metrics Changes - The company ended 2024 with 2.6 million IPTV subscriber households, exceeding the year-end goal of 2.4 million [21] - The connected car business achieved a footprint of over 10 million vehicles, surpassing the original goal of 7 million [19] - HD Radio technology is now implemented in over 110 million vehicles, with penetration approaching 60% of new vehicles in North America [20] Company Strategy and Development Direction - The company is focused on three growth solutions: Connected TV advertising, in-cabin entertainment, and TiVo Video over Broadband [12] - Goals include achieving a monetizable footprint of at least 7 million active devices in homes and over 15 million cars for DTS AutoStage [14] - The strategy emphasizes expanding partnerships with TV manufacturers and enhancing monetization through the TiVo One platform [18][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business transformation and its impact on profitability despite a challenging market environment [8] - The outlook for 2025 anticipates revenue in the range of $480 million to $500 million, with a focus on media platform growth and slight declines in pay TV revenue [42][44] - Management acknowledged ongoing macroeconomic uncertainties but noted improved clarity in market conditions compared to previous quarters [73] Other Important Information - The company completed a refinancing of $50 million of outstanding debt and ended the year with $131 million in cash and equivalents [11][38] - Non-GAAP tax expense for the quarter was $1 million, lower than planned due to a valuation allowance reversal [37] Q&A Session Summary Question: How does the company plan to balance adding new OEM partners versus growing volume with existing partners? - Management intends to pursue both strategies, focusing on expanding production share with current partners while also exploring new partnerships [48] Question: What are the expectations for ARPU and trends in North America versus Europe? - The company anticipates a combination of growth in ARPU as the year progresses, leveraging both North American and European markets [52] Question: What is the status of delayed TiVo OS smart TVs? - Management reported that shipments have ramped up, with several partners expected to increase shipments in the spring [59] Question: What are the critical variables for success in the media platform business? - Key metrics include active user growth and monetization, which are expected to improve as the year progresses [61][64] Question: How has the market changed since the last earnings call? - Management noted that while uncertainties remain, there is more clarity in market conditions, allowing for a more moderated guidance range [73] Question: Will 2025 be a free cash flow positive year? - The company guided for slightly positive operating cash flow, with potential for free cash flow positivity depending on performance [80] Question: What are the steps to rollout TiVo One? - The rollout involves updating existing devices and working with partners to ensure software updates are implemented effectively [87] Question: What is the competitive environment in the media platform space? - The competitive landscape remains strong, with significant barriers to entry for new players, but the company is confident in its position and strategy [90][92]