Xperi (US:XPER)2023-08-10 00:52Financial Data and Key Metrics Changes - Total revenue for Q2 2023 was $127 million, up 1% from the prior year, with a significant one-time benefit from a mobile imaging customer in Q2 2022 impacting comparisons [9][27] - Excluding the one-time benefit, year-over-year growth would have exceeded 10% due to strong growth in Media Platform and Connected Car [9][27] - Non-GAAP gross margin for the quarter was $97 million, or 76%, a decrease of approximately 300 basis points from last year [31] - Adjusted EBITDA was $5 million, resulting in an adjusted EBITDA margin of 4% [31][32] Business Line Data and Key Metrics Changes - Pay TV, the largest revenue category, was down 4%, an improvement from a 6% decline in Q1 [27] - Consumer Electronics revenue decreased by 20%, primarily due to the one-time revenue event last year, but there was solid traction in audio renewals [28] - Connected Car revenue increased by 13%, driven by high HD Radio unit volume as car manufacturers increased production [29] - Media Platform revenue surged by 149%, with more than half of this increase attributed to growth in monetization and the rest from the Vewd acquisition [29] Market Data and Key Metrics Changes - IPTV solutions added over 150,000 net new subscribers in Q2, continuing healthy double-digit growth [21] - TiVo+ expanded availability across 25 additional video service providers during the quarter, enhancing monetization opportunities [23] Company Strategy and Development Direction - The company is focused on four key growth areas: Connected TV advertising, in-cabin entertainment, in-cabin monitoring, and IPTV [11][12] - Strategic momentum continues in Media Platform and Connected Car, with significant partnerships and product deployments expected to drive future growth [14][16] - The company is exploring strategic partnerships to accelerate the path to market for its AI compression technology [26] Management's Comments on Operating Environment and Future Outlook - Management remains on track to achieve full-year revenue guidance of $510 million to $540 million and adjusted EBITDA margin of 6% to 10% [34] - The company expects operating cash flow in the second half of the year to be positive, despite a full-year cash usage expectation due to increased DSOs and unbilled receivables [33] Other Important Information - The company celebrated the 30th anniversary of DTS, highlighting its long-standing presence in the audio technology market [25] - The company is engaged in discussions for strategic partnerships to enhance its AI technology offerings [52] Q&A Session Summary Question: Details on last year's mobile imaging transaction - The transaction was characterized as the resolution of a contractual matter from previous years, coupled with a go-forward license [37] Question: Progress with TiVo OS and North American market entry - Multiple players are expected in North America next year, indicating a growing competitive landscape [38] Question: Competitive landscape for AutoSense - The company is not losing business competitively and has a strong technology foundation that supports its market position [44] Question: Revenue breakdown expectations for the second half - Revenue profile for the remainder of the year is expected to be similar to last year, with continued strength in Automotive and Connected Car [46] Question: Sharp partnership details - The partnership with Sharp starts in Europe, with potential for broader regional expansion in the future [47] Question: North American entry for TiVo OS - The entry is driven by a growing recognition of the value of an independent media platform among brands lacking resources to build their own [49] Question: Strategic partnerships for Perceive - Strategic partners are sought to help maximize the value of AI technology and address scalability challenges [53] Question: Size of new TV relationships and target accounts - Current relationships are expected to help achieve the target of 7 million active accounts by 2025 [54] Question: Sony's deployment of a content browser - The web content browser from Vewd will be utilized in connection with Sony TVs, showcasing the value of the Vewd acquisition [56]