Xperi (US:XPER)2022-02-24 02:59Financial Data and Key Metrics Changes - In Q4 2021, total revenue was $214.4 million, down from $433.9 million in Q4 2020, primarily due to a large back payment from a Comcast agreement [35] - For the full year 2021, revenue was $877.7 million, a decrease of $269.7 million compared to 2020, attributed to significant Comcast back payments, larger Semi IP agreements recognized upfront in 2020, and more upfront revenue recognized in Consumer Electronics in 2020 [36] - Non-GAAP earnings per share for Q4 was $0.30, with full-year non-GAAP earnings per share expected to be approximately $2.06 for 2022 [37][41] Business Line Data and Key Metrics Changes - IP revenue in Q4 was $89.7 million, up almost 20% year-over-year when excluding prior period payments from Comcast [14] - Full-year IP revenue was $391.2 million, significantly exceeding the previously announced average annual baseline of $350 million [15] - Total product revenue in Q4 was $124.7 million, down 7% from $133.8 million a year ago, impacted by supply chain disruptions [22] Market Data and Key Metrics Changes - In the Pay-TV segment, Q4 revenue was $66.1 million, down 6% year-over-year, with expectations for flat to slightly down performance in 2022 [23] - Consumer Electronics revenue in Q4 was $24.5 million, down 13% year-over-year, driven by declines in the mobile business [26] - Connected Car revenue in Q4 was $22.4 million, down 10% year-over-year, with expectations for flat performance in 2022 [29] Company Strategy and Development Direction - The company plans to separate its IP and product businesses in the fall of 2022, aiming to create two standalone entities better positioned for growth [12] - A new brand for the IP Licensing business, Adeia, has been announced, reflecting the focus on licensing [21] - The company is pursuing growth in the OTT market, which is seen as a long-term growth driver [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the IP business's position, highlighting that it has generated over $9 billion in revenue over the past two decades [15] - The company anticipates revenue growth in 2022 to be between $910 million to $950 million, driven by the Micron deal and growth in the product business [39] - Management noted that supply chain disruptions continue to pose challenges but expect improvements in the latter half of 2022 [29] Other Important Information - The company launched its first ESG Annual Report, emphasizing its commitment to environmental and social issues [13] - The company is actively preparing for separation, with a focus on balancing capital allocation needs for both businesses [41] Q&A Session Summary Question: Can you discuss the Micron license agreement and its ongoing royalties? - The financial terms are confidential, but a significant amount of revenue is recognized upfront, with additional revenue expected in future periods [45] Question: What is the timeline for the 16 Connected Car models in trials? - Adoption is expected to accelerate into 2023-2025, but exact timing is uncertain [46] Question: Will the Media Platform segment contribute to earnings? - While profitability specifics are not disclosed, growth is expected to contribute meaningfully going forward [47] Question: How does the IP business's average annual baseline work? - The annual baseline is an average, with some years higher or lower, typically within a range of plus or minus 10% [64] Question: What is the expected growth in the product business for the year? - Low single-digit growth is forecasted, with improvements expected as supply chain issues are resolved [60] Question: Is the separation contingent on supply chain issues? - The company feels confident in executing the separation as planned in the fall, barring any unforeseen events [62] Question: When can we expect the first products from Perceive to market? - The first products are expected within the next 12 months, with ongoing evaluations by customers [67] Question: How close is the software stack to being release-ready? - The tools are nearing completion, setting up for a more aggressive market push [69]