Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Xperi Inc (XPER, Financial) achieved strong performance in Connected Car and IPTV segments.
- The company successfully streamlined its product portfolio with the divestiture of AutoSense, leading to cost reductions.
- Non-GAAP adjusted operating expense declined by 15% from the prior year due to cost optimization efforts.
- Xperi Inc (XPER) expanded its board of directors with two highly qualified candidates, enhancing expertise in Ad Tech, monetization, automotive, and capital allocation.
- The company signed multiple license agreements with HP and Tencent Music Entertainment, expanding its market reach.
Negative Points
- Total revenue for the second quarter was down 6% from last year's reported revenue.
- Consumer electronics revenue declined by 40% due to multi-year license renewals and market-based softness.
- Media platform revenue decreased by 25% year-over-year, primarily due to a decline in advertising revenue.
- The company is still in the process of evaluating strategic alternatives for Perceive, indicating potential uncertainty.
- Pay TV revenue was essentially flat for the first half of the year, showing limited growth in this segment.
Q & A Highlights
Q: Jon, maybe we can start with the AutoStage pipeline. What's your confidence level in getting those deals by the end of the year? Were there any deals that got pushed into the back half of the year?
A: Steve, no deals unexpectedly pushed out. We're working a robust pipeline for both AutoStage audio and video elements. We feel good about hitting our metrics for the year and building a footprint that will set the stage for long-term monetization.
Q: You mentioned a DTS codec win in the automotive space in Asia. What's the use case for that? Is it primarily video or music?
A: Primarily video.
Q: I know it's early days on TiVo OS, but can you give us some learnings from the early units in the market? What do you think you've done right, and where do you need to make improvements?
A: Our primary focus is ensuring maximum customer satisfaction in terms of engagement and viewership. We're working closely with partners to optimize the process and ensure smooth rollouts. We're learning how to optimize content and drive monetization as our footprint grows.
Q: Could you talk about your pipeline for consumer electronics and your expectations for 2025?
A: The audio-related markets are reasonably mature, and revenue can be lumpy due to multi-year deals. We expect growth to return in 2025, driven by ongoing discussions with partners and the growth of programs like IMAX Enhanced.
Q: Are you seeing any competitive landscape changes in the auto sector, given what's going on in Europe and the US?
A: No significant changes. The automotive business is mixed, but our efforts to develop and build market share around AutoSense and video efforts are going extremely well.
Q: You commented on early TiVo OS takeaways. Are you seeing what you want in terms of consumer engagement and activation?
A: We're encouraged by what we're seeing. Europe is fragmented, but as we build bigger footprints, we'll have more insights into optimizing user experience and driving long-term monetization.
Q: Any updated views on the market appetite for AutoStage video and the adoption curve?
A: We're talking to most major automakers about video. Some are interested in moving sooner, potentially through OTA updates, while others are planning for the future. We expect to land at least one more video customer by year-end.
Q: Can you clarify the timeline for North American OEMs launching TiVo OS?
A: We've signed an additional partner and expect to have one or two in the market in the shorter term. We're building a pipeline of US-based potential TV OS footprints, with more shape expected in 2025.
Q: How far down the path are you in signing OEMs for TiVo OS?
A: There's still plenty of interest and pipeline. We're focused on ramping up with our current partners, but we're also engaging with new potential customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
