Xperi Corp Stock price
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $286.78m | Revenue (TTM) = $456.84m
Market Cap = $286.78m | Estimated Revenue = $466.86m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $236.19m | Revenue (TTM) = $456.84m
Enterprise Value = $236.19m | Forward Revenue = $466.86m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Xperi Corp Stock Analysis
Analyst Opinions
11 Analysts have issued a Xperi Corp forecast:
Analyst Opinions
11 Analysts have issued a Xperi Corp forecast:
Xperi Corp Events
Past Events
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AUG
5
Q2 2026 Earnings Call
about one month ago
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MAY
6
Q1 2026 Earnings Call
4 months ago
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FEB
25
Q4 2025 Earnings Call
7 months ago
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NOV
5
Q3 2025 Earnings Call
11 months ago
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StocksGuide Free
Xperi Corp — Q2 2026 Earnings Call
1. Management Discussion
Good day, everyone, and thank you for standing by. Welcome to the Xperi Second Quarter 2026 Earnings Conference Call. [Operator Instructions]
I would now like to turn the call over to Sam Levenson from Arbor Advisory Group. Sam, please go ahead.
Good afternoon, and thank you for joining us as Xperi reports its second quarter 2026 financial results. With me on today's call are Jon Kirchner, Chief Executive Officer; and Robert Andersen, Chief Financial Officer. In addition to today's earnings release, there is an earnings presentation on our Investor Relations website at investor.xperi.com. We encourage you to download the presentation and follow along with today's commentary.
Before we begin, I would like to provide a few reminders. First, I would like to note that unless otherwise stated, all comparisons are to the same period in the prior year. Second, today's discussion contains forward-looking statements about our anticipated business and financial performance as well as market and industry dynamics that are predictions, projections or other statements about future events, which are based on management's current expectations and beliefs and therefore, subject to risks, uncertainties and changes in circumstances.
For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discuss today, please refer to the Risk Factors and MD&A sections in our SEC filings, including our Form 10-K for the year ended December 31, 2025, and our Form 10-Q for the quarter ended June 30, 2026, to be filed with the SEC. Please note, the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call.
Third, we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to their most directly comparable GAAP measures, which can be found in the Investor Relations section of our website. Last, a replay of this conference call will be available on our website shortly after the conclusion of this call.
I'll now turn the call over to Xperi's CEO, Jon Kirchner.
Thank you, Sam, and thank you, everyone, for joining us on our second quarter 2026 earnings call. The results of the second quarter clearly demonstrate strong execution against our strategic plan, including accelerated advertising and related revenue growth of over 50%. We continue to scale our platforms in both the home and automotive markets, which we believe provides sustainable competitive differentiation and drives long-term growth.
During the quarter, we continued to expand our TiVo One footprint, advanced our advertising capabilities and partner integrations and saw continued momentum in our growth areas within Media Platform, Connected Car and Pay TV. Turning to our financial results for the quarter. We were pleased with our performance. Let me summarize a few of the achievements.
Overall, revenue grew 8% year-over-year to finish at $114 million. Non-GAAP operating expenses decreased by 6%. Adjusted EBITDA finished at 21% of revenue, up 7 percentage points from last year. Non-GAAP earnings per share finished at $0.28, more than double last year's number, and the company generated $15 million of operating cash flow. Let me now go through each of our 4 business areas, starting with Media Platform.
TiVo One monthly active users totaled 6.3 million at quarter end, representing approximately 70% year-over-year footprint growth. Media Platform revenue grew 44% year-over-year, driven primarily by continued progress in advertising and related revenue. The trailing 12-month ARPU for TiVo One was $6.70, down slightly from the first quarter as a result of the trailing 12-month footprint growth rate exceeding the revenue growth rate. We expect ARPU to increase later this year as anticipated advertising and related revenue growth accelerates and continue to expect we will achieve our goal of exiting the year with an ARPU above $10.
From an advertising perspective, we successfully executed homepage video campaigns in the U.S. and Europe, with global advertising brands ranging from the entertainment, insurance, automotive and technology industries. We also saw advanced integration of the TiVo One ad platform with key partners, including Teads and Kargo to enable seamless transactions for our unique homepage Hero video inventory.
Recent industry events continue to reinforce the strategic value of the TV homepage as one of the most important discovery and monetization points in the entertainment ecosystem. The industry increasingly recognizes that TV operating systems, first-party data and direct access to consumers at the start of their entertainment journey are becoming critical strategic assets. We believe this dynamic is driving greater interest from advertisers, content owners and distribution partners in working with independent TV OS platforms like TiVo One that can help them reach consumers before viewing decisions are made.
We successfully expanded our content with the launch of TiVo channels, adding free ad-supported local content across more than 20 countries, which we are confident further enhances the consumer experience and supports potential future monetization opportunities. In terms of data related to advertising, we launched a new TiVo viewership and audience insights data solution in the U.K. market, expanding the capabilities we can offer to advertisers and partners.
Importantly and separately, in the U.S., we achieved a significant milestone and began licensing listening data and analytics to broadcasters through the broadcaster portal product that sits on top of our AutoStage platform. Given this is advertising and related revenue, we will be classifying it under Media Platform rather than within Connected Car.
Moving to Connected Car. The momentum in Connected Car continued with 42% year-over-year footprint growth in the second quarter. We exceeded 17 million cumulative vehicles shipped with DTS AutoStage across 13 automotive brands, and BYD joined the AutoStage program as our 14th automotive brand, committing to deploy our audio and video solution across export models in its portfolio. We also expanded DTS AutoStage Video powered by TiVo, now available in 100 countries across major OEM brands, including BMW, Mercedes-Benz and Audi, further establishing AutoStage Video as a leading connected car video platform.
As previously mentioned, in Media Platform, we had an important win for our DTS AutoStage broadcaster portal. Cumulus is one of the largest U.S. broadcasters and operators of AM/FM radio stations and has signed as our first licensed customer. The portal gives broadcasters a clear data-driven view of listener behavior powered by large-scale aggregated in-car listening data. This enables more accurate audience insights, more informed programming decisions and stronger alignment with advertiser needs.
In another win supporting the long-term adoption of our technologies, we signed a multiyear HD Radio program with a large Asian Tier 1 supplier to enable future HD Radio shipment growth. Additionally, automotive brands, including BMW, Toyota, Mercedes-Benz and Volkswagen launched new vehicle models with HD Radio in the United States, Canada and Mexico.
Moving to our Pay TV business. As noted earlier, our IPTV subscriber household base continued to grow, reaching 3.4 million global IPTV subscriber households at quarter end, representing 13% year-over-year growth. We also expanded our advertising reach by executing a partnership for programmatic dynamic ad insertion with NCTC, with 3 of its members, Summit Broadband, EPB and Buckeye, adopting TiVo as their platform. In addition, we signed 3 new operators for TiVo managed service IPTV and closed multiple renewals across our IPTV and Discovery solutions, demonstrating continued partner commitment to the TiVo platform.
Importantly, as operators increasingly look to build their business across the broadband spectrum, they are looking for video solutions that help drive customer retention and enhance their offerings with lighter and different bundles of content from their historical Pay TV solutions. TiVo has continued to achieve wins with operators as we've developed a range of solutions to meet their needs. This will continue to drive IPTV and broadband-related growth in the Pay TV business.
Moving to our consumer electronics business. During the quarter, we continued to secure renewals and commitments that support the ongoing adoption of our consumer audio technologies. We closed a multiyear renewal for DTS audio solutions, including new commitments for DTS Clear Dialogue across multiple TV and PC brands. We also renewed DTS agreements with leading TV, audio and video receiver brands, including Sony, Yamaha, Pioneer and Insignia. In addition, we renewed DTS agreements for PC and mobile devices with MSI and Tecno Reallytek. Overall, these renewals reflect our strong market position with unique audio technologies across a broad range of consumer electronics categories.
As we look at our progress against the 2026 growth goals we outlined earlier this year, we remain encouraged by the trajectory of the business. TiVo One monthly active users reached 6.3 million at quarter end, closing in on our target of more than 7 million by year-end. Media Platform revenue again grew at a very strong rate of 44%, reflecting continued progress in advertising and related revenue as our footprint scales and our product capabilities expand.
In Connected Car, AutoStage continued to exceed our original footprint goals and the addition of BYD as our 14th automotive brand further expands the long-term opportunity for our Connected Car platform. Importantly, we're also beginning to see tangible evidence of demand for the data and analytics capabilities as demonstrated by our first customer for the AutoStage broadcaster portal. Taken together, our second quarter progress reinforces our confidence in the strategic direction of the business and our ability to execute against our goals for the year.
Let me now turn the call over to Robert to discuss our financial results in more detail. Robert?
Thanks, Jon. Let me start by reviewing the revenue results for the quarter. Overall, revenue finished at $114 million, an increase of 8% year-over-year and consistent with our expectations. Media Platform revenue grew 44% year-over-year to $18 million, driven primarily by continued growth in advertising and related revenue from a host of sources, including homepage video campaigns, new advertising clients and the scaling of our ad-related capabilities.
Our Connected Car revenue grew 60% year-over-year to $40 million due primarily to the signing of 2 significant minimum guarantee deals in the second quarter that represent additional long-term commitments to our HD Radio platform. Pay TV revenue decreased 11% as expected to finish at $45 million driven by a decrease in core Pay TV revenue, partially offset by continued growth from our IPTV solutions revenue. IPTV revenue increased 10% year-over-year to $26 million.
Lastly, Consumer Electronics recorded $12 million of revenue, an expected decrease of 35% year-over-year due to minimum guarantee arrangements for Kodak and audio solutions that were recorded in last year's revenue. Given the significant growth within Media Platform from advertising and related revenue, we have surpassed an accounting threshold of 10% of total revenue this quarter and will now be separately reporting advertising and related revenue along with the associated cost of revenue on our income statement going forward. It is important to note that the cost of advertising and related revenue includes a fixed cost base that will be amortized over time.
Thus, while we currently show an 8% negative gross margin for the advertising and related revenue category, we expect margin to turn positive as we enter 2027 and then to be accretive growth contributor going forward as we move toward comparable industry Media Platform margins in the 60% range.
Looking at overall financial results, our GAAP operating expenses, excluding cost of revenue, improved 10% year-over-year and non-GAAP adjusted operating expense improved 6% year-over-year due primarily to workforce reductions that have occurred over the past year. We posted non-GAAP adjusted EBITDA of $24 million, an improvement of over 60% compared to last year. On a percentage basis, adjusted EBITDA was 21% of revenue, an improvement of 7 percentage points from last year. GAAP net loss was $1.5 million or a net loss of $0.03 per share and non-GAAP earnings per share was $0.28.
Turning now to the balance sheet and statement of cash flow. We finished the second quarter of 2026 with $91 million of cash and cash equivalents, an increase of $20 million from last quarter and keeping us on solid financial footing. Operating cash flow was $15 million in the second quarter of 2026, an improvement of $5 million from the second quarter of 2025. We had $8 million of free cash flow in the quarter, an improvement of $3 million from last year. Also at the beginning of the quarter, we received the final $12 million payment related to the sale of Perceive to Amazon, of which $11.3 million was categorized as cash flow from financing activities within our statement cash flows and the balance was classified within operating activities.
In terms of financial outlook for the year, we are maintaining our annual outlook as previously disclosed with 2 updates. First, we are adjusting our capital expenditure outlook from a range of $15 million to $20 million to approximately $25 million. This change is primarily due to longer persistent issues in the memory market that have caused customers to request our engineering team to modify our software platforms to reduce memory requirements. We're also seeing significant memory-related cost increases in the purchase of necessary capital equipment. As a result, we expect these investments will position TiVo OS to continue to take market share as a highly cost-efficient Media Platform for our OEM partners.
Second, we are lowering our stock-based compensation outlook from approximately $31 million to approximately $29 million. This change is primarily due to recent workforce reductions that have reduced the forecasted stock-based compensation expense below our original expectation.
Let me now turn the call back over to Jon for a few closing remarks before we go to Q&A.
Thanks, Robert. Overall, we're very pleased with the continued strong execution against our strategic growth plan. In 2026, we're making a decisive pivot from years of investment in building our foundation toward accelerated monetization of our Connected TV and automotive audiences. With over 6 million TiVo One monthly active users, over 3 million global IPTV households and over 17 million vehicles equipped with DTS AutoStage, we believe we have a unique and sustainable competitive advantage to leverage our increasingly scaling first-party data and empowering advertisers to monetize these significant audiences.
The results of our efforts are bearing fruit. Q2 advertising and related revenue increased 54% year-over-year. We began monetization of our automotive audience in the quarter by licensing Cumulus as our inaugural launch partner for advanced analytics in our DTS AutoStage broadcaster portal. And we added BYD as our 14th automotive OEM with DTS AutoStage. These are just a few of the tangible examples of the operational and financial progress that we're achieving, and they demonstrate the continued progress we've made thus far in 2026.
I'd like to take this opportunity to thank the entire global Xperi team for their commitment to our success and to working to drive long-term shareholder value. With that, let me now turn the call over to the operator so that we can take your questions. Operator?
[Operator Instructions] And our first question comes from the line of Jason Kreyer with Craig-Hallum.
2. Question Answer
So Jon, I wanted to get your thoughts on the recent acquisition of Roku. It seems like with the takeout of Roku and VIZIO getting taken up before that, there's a void in this industry for an independent OS platform. Just wondering if you think that creates opportunity for expansion at TiVo, whether that be more OEMs that want to partner or perhaps just shifting a greater mix of their inventory into TiVo. So wondering if your outlook for the opportunity changes at all.
I think yes to all of the above is the short answer, Jason. I think that -- the Fox's acquisition of Roku really validates the strategic value of the TV OS, the home screen, having first-party CTV data and direct-to-consumer access at the start of the entertainment journey. And I think we are uniquely positioned as an independent who has a business model that aligns well with -- in terms of incentives across OEMs and advertisers, content providers, et cetera, where I think we're going to see as the market narrows in some places to create more strategic opportunity for us. So not dissimilar from some of the other industry changes we've seen over the past 2 years. I think in many ways, it only bolsters the case that we're not only making but continuing to advance in the marketplace.
And perhaps that goes a step further with Robert's recent comment about memory and kind of the low memory requirements of the TiVo platform, correct?
Correct. And I think historically, we have been one of the most efficient TV OS implementations. We've got a lot of technical expertise as to how to do this. That being said, the memory crunch and the cost element of that has people looking at everything saying, we need to figure out how to have this delivered for even lower BOM costs, lower memory usage, et cetera. So given that we have both demand saying, hey, look, if you can help us figure this out, there's more business potentially going to come your direction, we have jumped all over that in order to support our partner and customer base as best we can. And I think that these efforts, these investments in the near term will really prove to be very beneficial as we get into '27 and beyond.
Okay. And then as a follow-up, I wanted to pivot to automotive. We've seen a bunch of volatility in the automotive sector over the last year or 2. Can you just talk about in your discussions, your view of the landscape in automotive and perhaps just what demand looks like today for that premium infotainment solution that you provide?
I don't think there's any question that across the board, infotainment remains an area of focus and a point of differentiation for automakers. I think our continued signing of longer-term multiyear deals around things like HD Radio and the adoption of AutoStage as well as implementing AutoStage beyond just the audio features, but into video, I think, evidences that, that is a point of differentiation for our customers. So while I think the ultimate unit volumes in automotive naturally are impacted by a bunch of trends, inflation, tariffs, trade as well as some of the supply chain/memory type issues, I think the reality that the in-cabin experience is a key differentiator in the purchase journey remains very strong. I think we are very well positioned in that.
And I think uniquely, if I link maybe your 2 questions together a little bit, we are truly unique in that we are building a Media Platform that has very unique first-party data coverage coming out of not only the living room in terms of CTV, but inside the cabin. And that data set is increasingly of interest to advertisers, certainly has gotten, I think, a ton of interest within the radio world as people look for better targeting as well as measurement and better understanding what's happening actually inside the car in a world that has largely been somewhat limited in terms of its data access.
So I think all of what's happening in car plus kind of the continued advancement of what's happening in the living room bodes well for the business strategy that we laid out and how we're going to differentiate ourselves in what is a highly competitive, highly valuable market.
That's a great point you made.
And our next question comes from the line of Matthew Galinko with Maxim Group.
Maybe my first is around the Cumulus deal. Can you maybe go into a little bit more detail on maybe how long you were working on that, what the structure might look like and if it increases the likelihood of signing additional partners in that area?
Maybe going in reverse. Matt, I think absolutely, do I expect there to be more? I think we have a very robust pipeline of interest. It's something we've been working on for some time, partially as we have developed the broadcaster portal product in conjunction with working with our customers and our broadcast partners, identifying what their real needs were and where the gaps were in terms of the information coming off radio in general and out of the car. So it's been a product that was designed very, let's call it, interactively with a number of our key customers.
Cumulus has been part of that. We're very proud to have them as our first customer. The business model is licensing subscriptions, access to information based on the number of stations and the amount of coverage across the U.S. that are relevant. It's priced on that basis. So I think the deals will range in size in part based on some of those attributes with fellow broadcasters. But I do fully expect that we will have a number of others. And I think there is growing intensity in and around the amazing near real-time data people are getting off our vehicles as we now approach 17 million worldwide and well more than half that active in the U.S. It's just people are seeing data they've never seen before. And I think that is a tremendous position for us to be in.
And I guess maybe just as a follow-up, specifically on the Pay TV business. I think this was a relatively steeper drop on the core side of it than maybe in prior quarters, but maybe an acceleration on the IPTV side. Can you maybe go a little bit deeper into the trends that we're seeing on the 2 sides of the Pay TV business and that kind of a run rate we should be thinking about for the coming quarters? Or was there anything anomalous in Q2?
This is Robert. I'm not sure if there was anything specific in Q2 from a comparability standpoint. I think if we look at it overall, that core part does continue to decline. And that's -- that also has been impacted to some extent by us exiting the hardware business and the attendance subscriptions that would ultimately go with it. So that's continued to decrease year-over-year. And I think we've seen, as you noted, pretty good positive growth still in the double digits for IPTV.
I think maybe the broader question is when do those start to balance each other. And I think as we've looked out over the next year or 2, we do see a balancing equation whereby we expect the legacy Pay TV business would be balanced by the growth in IPTV probably in the mid-'27 to mid-'28 time frame, somewhere along those lines. But I don't think anything specific to your original question around this quarter, it can vary a little bit.
Yes. I would just add to that, that you've got active cord cutting in certain parts of the market. You also have us exiting largely the consumer facing. That's the hardware and subscription piece. And as those tails kind of roll off, depending on the exact timing of how these things are hitting on a year-over-year basis, that's what you're seeing. But the big place we've been working towards achieving is when does that bottom out become stable. And then ultimately, you see the benefit of all the work you've done over the past few years in growing your IPTV business, which is strong and that continues to grow in support of our partners. So as that happens here in the not-too-distant future, I think the discussion of declines begins to fade into just what does neutral to growth look like.
And our next question comes from the line of Dave Storms with Stonegate.
Maybe I wanted to just start with TiVo monthly active users had a nice growth sequentially there. It looks like you're well on track to hit the 7 million stated goal. Just thinking about maybe the cadence of that, should we expect that to maybe be linear? Or is this going to be more dependent on any partnerships that might -- in the pipeline that might make that a little more lumpy? Just any commentary there would be great.
Yes. I think as you've seen it, it's not -- it doesn't tend to be linear. It kind of depends in part based on what territories activations are happening in, partner launches, retail timing, what sell-through looks like, et cetera. And so there's a bunch of factors. We obviously -- we knew kind of coming into this year that we might see a lighter early in the year and then we'd see a meaningful pickup. And I think at this point, we look ahead to year-end and feel like the 7 million goal that we set a couple of years ago will be achieved.
But I think this is an area where we continue to invest a lot of time because we believe that we can continue to grow that footprint over time. And then as we do so and continue to optimize what advertising and -- or what content engagement looks like on the platforms and ultimately attach the advertising to that with a useful life of 5-plus years for a lot of these TVs, there's a lot of revenue downstream that can come from that. So it's a good question, but it is not linear. It will bounce around.
That's a great commentary. I appreciate that. Similar question on the AutoStage vehicles. Great to see the add of BYD. It looks like you've been growing roughly 1 million or so vehicles per quarter for the last couple of quarters. How quickly could the integration from BYD accelerate that growth? Or could that maybe take some time from a logistics standpoint?
I think it will contribute meaningfully given the size of their current installed base and where they're going. There are some vehicles that are likely to be included in some over-the-air updates as well as new models. So while I don't have the -- and I'm not really at liberty to speak to the specific plans there, BYD is the world's largest electric vehicle manufacturer, and they've got quite the presence, of course, outside the United States.
So I think 2 things are important about that. A, is that volume obviously positively accrues to continued growth in AutoStage. Secondly, the fact that they have a very strong presence in Europe and we believe the AutoStage listening and analytics and data play has a lot of potential upside in Europe as well is a huge positive. And I would say, thirdly, it gives others in the marketplace that maybe are not adopting at the same level, seeing somebody like BYD making a critical strategic choice, which is to go all in on Xperi solutions for both AutoStage audio and video across the board, I think, sends a pretty strong message of industry progress and support.
And our final question comes from Hamed Khorsand with BWS Financial.
Could you just talk a little bit more about the minimum guarantees in auto that you were talking about for HD Radio, how that will play out for the rest of the year as far as your auto revenue is concerned?
Sure. This is Robert. We obviously had a very strong quarter from a Connected Car perspective, and that was indeed driven by minimum guarantees. I think as we generally think of the overall year and how we expect things to progress, certainly, we have other minimum guarantees that will occur in the second half of the year. Hard to say what the exact mix is going to be. But certainly, we expect automotive to be up for the year.
And generally speaking, around minimum guarantees, they've been historically in the low to mid-single digits. I think for this year, it's going to be a little bit weighted toward -- yes. So I think that kind of gives you a sense. It's probably mid-20s -- sorry, single digits, mid-20s for this year. Percentage of revenue.
And then the other question I had was just given how you have grown TiVo One subscribers so quickly, does that play a role as to what could happen as far as your ARPU is concerned as far as dilution because you are growing so rapidly on that count?
Yes. I think one of the things to understand when we talk about ARPU, there's 2 components, of course, revenue growth and footprint growth. And in periods where the footprint is growing faster than the revenue, it tends to drive down your ARPU. Until you're at a more normalized base state, you're just more in optimization mode with what you've got where the relative gains are, let's call it, smaller on a percentage. So that's kind of what you saw in this past quarter with a slight dip in ARPU as a function of the user base MAUs growing faster than the revenue.
However, as we think about it, for example, for '26, we expect to end the year around about 7 million units. And based on that and our expectation that we're going to have a very strong back half in terms of advertising, we think that will drive up ARPU consistent with our expectations right around $10.
So I think over time, though, I think you're going to continue to see us as we take regular steps to tweak and optimize kind of the platform, improving things like fill rates and as well as providing various data augmentation to drive up CPMs among other things to ultimately drive more value out of the inventory that we have. I think you'll see continued gains that are not dissimilar from what you've seen on other platforms that, if you will, cut their teeth and launched years ago and then they saw a similar ramp. I think we're kind of on that journey ourselves.
But the hardest thing to do, Hamed, is get footprint. It's a hypercompetitive market in part because that real estate is incredibly valuable. And I think we continue to do so very successfully. As an independent platform, I think we continue to have a lot of interest. And I think based on that, we're going to be able to increasingly monetize that over time.
And that concludes our question-and-answer session. I will now turn the conference back over to Mr. Jon Kushner for closing remarks.
Thanks, operator. As we move back into the back half of the year and continue to expect to see momentum in our business, we're grateful for the continued support of our customers, partners and shareholders. Our multiyear pivot is taking shape and the collection of assets we have spanning the home and the car is quite unique in the industry. We look forward to sharing further updates on our next quarterly conference call, and thanks, everyone, for joining today. Operator?
Ladies and gentlemen, this concludes today's call, and we thank you for your participation.
Xperi Corp — Q2 2026 Earnings Call
Xperi Corp — Q1 2026 Earnings Call
1. Management Discussion
Good day, everyone. Thank you for standing by. Welcome to the Xperi First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Sam Levenson from Arbor Advisory Group. Sam, please go ahead.
Yes. Thank you, Abby. Good afternoon, and thank you for joining us as Xperi reports its first quarter 2026 financial results. With me in today's call are Jon Kirchner, Chief Executive Officer; and Robert Anderson, Chief Financial Officer. In addition to today's earnings release, there's an earnings presentation on our Investor Relations website at investor.xperi.com. We encourage you to download the presentation and follow along with today's commentary.
Before we begin, I would like to provide a few reminders. First, I'd like to note that unless otherwise stated, all comparisons are to the same period in the prior year. Second, today's discussion contains forward-looking statements about our anticipated business and financial performance that are predictions, projections or other statements about future events, which are based on management's current expectations and beliefs and therefore, subject to risks, uncertainties and changes in circumstances.
For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discuss today, please refer to the Risk Factors and the MD&A sections in our SEC filings, including our Form 10-K for the year ended December 31, 2025, and our Form 10-Q for the quarter ended March 31, 2026, to be filed with the SEC.
Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. Third, we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to their most directly comparable GAAP measures, which can be found in the Investor Relations section of our website.
And last, a replay of this conference call will be available on our website shortly after the conclusion of this call. I'll now turn the call over to Xperi's CEO, Jon Kirchner.
Thank you, Sam, and thank you, everyone, for joining us on our first quarter 2026 earnings call. Overall, the first quarter results are evidence of the success we're achieving in delivering on our financial objectives and the notable progress we've made in delivering on our monetization strategy that we outlined for the year.
Let me first provide an overview of the progress we made during the quarter against our key goals and priorities, progress that gives us confidence in our ability to monetize our growing platform. During the quarter, our TiVo One footprint grew to exceed 5.5 million monthly active users, and our AutoStage footprint grew to over 16 million vehicles globally.
In addition to footprint growth, both our product feature set and ecosystem expanded, and we continue to add advertising partners and sellers to the TiVo One platform. Taken together, this progress combined to help us accelerate advertising monetization, resulting in Media Platform revenue growth of 45% year-over-year.
We've also started to reap benefits from the strategic investments made over the past few years as evidenced by our results. Turning to our financial results for the quarter. I'm very pleased with the strong start to the year, which reflects both solid execution against our strategic plan and earlier-than-planned contract signings within CE and Connected Car. As I said, I'm particularly pleased with the progress we're making on driving monetization across our business. Given these results, we reaffirm the guidance we gave for the full year.
Let me now go through each of our four business areas, starting with Media Platform. We recorded $12 million of revenue for Media Platform in the quarter, reflecting year-over-year growth of 45%, primarily driven by growth in advertising monetization. We experienced progress through our direct sales programs as we continue to execute campaigns across our owned and operated inventory and also began to benefit from our new partnerships.
As noted earlier, our footprint also continued to grow as TiVo One monthly active users more than doubled year-over-year to 5.5 million. Just after the end of the quarter, we signed a multiyear partnership with Samba TV, a television technology company that offers real-time insights and audience analytics. Through this partnership, we're adding intelligence and measurement capabilities to TiVo One Connected TV inventory. This collaboration bolsters our TiVo ads business by enriching our connected TV advertising platform with Samba's industry-leading data and analytics, thereby improving ad targeting and campaign performance measurement.
The relationship expands TiVo's ad sales and measurement capabilities, and we believe positions the TiVo One ad platform as an even more valuable cross-screen advertising solution for advertisers and agencies seeking better CTV audience targeting and comprehensive campaign insights.
Average revenue per user for TiVo One was $7.10, a slight decrease from the fourth quarter as over the trailing 12 months, the number of average monthly users grew faster than monetization revenue. As advertising monetization revenue accelerates, we expect ARPU to advance toward double-digit dollars in the second half of 2026.
Moving to Connected Car. AutoStage footprint expanded over 45% year-over-year, reaching over 16 million vehicles across 13 automotive brands. Just after quarter end, we launched AutoStage Broadcast Portal, a subscription service that we believe delivers unprecedented visibility and insights into audience behavior and listening metrics across 300 U.S. radio markets.
In addition, we signed multiyear HD Radio renewal agreements and launched HD Radio in new models, including from Audi, Honda, Mercedes and Toyota. We also continue to advance our connected car road map, including advanced sound features and expanding services that are expected to support broadcaster and OEM partner advertising monetization.
Moving to our Pay TV business. As noted earlier, our IPTV subscriber base continued to grow, increasing 19% year-over-year to reach 3.28 million subscriber households at quarter end. During the quarter, we signed the first agreements for new service offerings such as programmatic dynamic ad insertion and our native digital rights management. In addition, we delivered an innovative 4K sports experience with multi-view capability to IPTV households for the Winter Olympics and Super Bowl.
We also expanded our set-top box partnership with Kaon and executed a multiyear discovery agreement with DirecTV.
Moving to our consumer electronics business. During the quarter, we renewed DTS decoder and post-processing contracts with leading TV brands, including Vizio, Xiaomi, TCL and a major U.S. retailer. We also entered into a multiyear partnership with Tencent Music, China's leading music platform for DTS:X encoding of its music catalog, offering immersive audio as a premium feature to Tencent/QQ Music subscribers.
Overall, these renewals and partnerships support our focus on expanding the adoption of our consumer audio technologies. As we put our 2026 goals in context, we made strong progress toward our objectives in the first quarter. Our monthly active users on the TiVo One platform continued to grow, reaching 5.5 million at quarter end, more than doubling from the same period last year. We remain confident in reaching our target of over 7 million monthly active users by year-end.
On the monetization front, Media Platform's 45% year-over-year revenue growth was driven primarily by growth in advertising monetization. As our ecosystem and advertiser engagement expands, we believe we have a clear plan to reach our goal of doubling revenue to over $80 million. Also, as monetization revenue from advertising and data sales continues to grow in line with our expectations, we expect the TiVo One annual revenue per user, or ARPU, to finish the year above $10.
Lastly, we've seen some very exciting progress on AutoStage, our connected car platform. While footprint continued to expand well past all of our original goals, we are now seeing clear demand among broadcasters and advertisers for the data coming off our platform. The first data license agreements are expected in the second quarter with more to follow, and we plan to commence advertising trials with partners in the U.S. and Europe later this year.
Overall, we remain very pleased with our start to 2026. Let me now turn the call over to Robert to discuss our financial results in more detail. Robert?
Thanks, Jon. Let me start by reviewing the revenue results for the quarter. Overall, revenue finished at $114 million, essentially flat year-over-year. Pay TV revenue decreased 8% as expected to finish at $46 million, driven by a decrease in core Pay TV from classic guides and end-of-life of legacy consumer products that was partially offset by growth from our IPTV solution.
Consumer Electronics recorded $18 million of revenue, a decrease of 19%, primarily due to nonrecurring revenue from minimum guarantee arrangements and audit settlements in the same period last year as well as memory-related challenges in certain end product categories.
Our Connected Car business grew 14% to $38 million due primarily to a multiyear minimum guarantee arrangement signed during the quarter. Lastly, Media Platform grew 45% to $12 million, driven primarily by growth in advertising monetization from a host of sources, including direct sold revenue, new partner revenue and a linear TV campaign spend.
Looking at overall financial results, our non-GAAP adjusted operating expense decreased 14% year-over-year due primarily to workforce reductions that have occurred over the past year as we have focused the business on our growth areas. We posted $25 million of adjusted EBITDA or 22% of revenue, an improvement of almost 8 percentage points over the prior year.
GAAP loss per share was $0.17 and non-GAAP earnings per share was $0.23. Turning to the balance sheet and statement of cash flow. We finished the first quarter of 2026 with $70 million of cash and cash equivalents. It is worth noting that in early April, we received the final $12 million payment related to the sale of Perceive to Amazon. As expected during our seasonally low first quarter, operating cash flow usage in the quarter was $18 million, an improvement of $4 million from the first quarter of 2025.
Cash usage in the quarter was primarily due to the payment of accrued compensation, which occurs in the first quarter of each year, along with $8 million of payments related to employee departures from the workforce reduction announced in November.
We had $23 million of free cash flow usage in the quarter, an improvement of $4 million from the same quarter last year. In terms of financial outlook for the year, we are reaffirming our annual guidance that was provided in February. As noted previously, our revenue range of $440 million to $470 million take into account our view of broader market risks across our business. In terms of revenue timing during the year, for Q1, we executed certain agreements earlier than we had planned, and we expect to see a similar trend in Q2.
Therefore, we now expect revenue for the first half and second half of the year to be relatively even as opposed to being slightly more back half weighted as previously projected.
Let me turn the call back over to Jon.
Thanks, Robert. To sum things up, we're very pleased with the results of the first quarter. Customers are engaging with us earlier in the year than anticipated, highlighting our relevance and growing momentum, which positions us for an even stronger start. Further, our results clearly demonstrate the progress we're making against our monetization strategy. That concludes our prepared remarks. Let's now open the call for questions. Operator?
[Operator Instructions] And our first question comes from the line of Jason Kreyer with Craig-Hallum Capital Group.
2. Question Answer
This is [ Thomas ] on for Jason. First, Jon, you called out in the PR that you guys are beginning to see an inflection point in monetization strategy. Can you sort of talk about what the drivers are that are catalyzing this inflection?
Well, I think a couple of things. First, we have worked for the last 2 years to begin to build a broad enough footprint to have the scale necessary to begin to attract advertisers and partners to our platform to reach unique audiences. And I think those efforts as we're now at 5.5 million MAUs is certainly a key part.
The second is that we have also worked in tandem to continue to build out and connect our TiVo One ad platform to the broader advertising ecosystem. And as that gets continually worked to, if you will, make sure all the plumbing is continually being optimized. I think that also enables more programmatic ad volume to flow.
And thirdly, as we are now making a bigger presence known and the uniqueness of some of what our platform offers in terms of audience engagement, that is driving advertiser interest. And through partnerships, we have more sellers out there beyond just our direct sales force. And I think all of which is kind of combining to really begin to drive this business, I think, quite positively, and it's why we expect this year to see Media Platform revenue doubled year-over-year. And so I think while there's still plenty of work, I'm very, very pleased with how this seems to be taking shape.
That's great. And maybe one follow-up. When we look at your operating expenses in Q1, does that sort of represent all the cost-cutting initiatives you put in place? Just kind of trying to determine if this is the right cost base to build off of for the remainder of the year as we sort of move forward?
Yes. Most of our work on the cost cutting is complete at this point. And I would warrant that Q1 is a good representation of the run rate for the remainder of the year.
And our next question comes from the line of Matthew Galinko with Maxim Group.
Maybe firstly, can you touch on how unit availability is today in the U.S. market and how kind of that user growth is shaping up between U.S. and Europe? And then I'll ask a follow-up.
Sure. So Matt, similar to what was the case last quarter, the majority of our TiVo One Connected devices are in Europe. I think on a relative basis, you're going to continue to see that grow faster than the U.S., the U.S. being a more competitive market, et cetera. We do expect, however, there to be more TV volume in the U.S. later this year. And we have both smart TVs and connected set-top boxes. There are operators that are -- the distinction is not important because they're all connected to our TiVo One ad platform. So this is all about managing the home screen and where content is being aggregated and ultimately being selected and the ability to advertise in stream and on homepage, et cetera, across these platforms.
So I would say you're probably looking at a balance, roughly 60% Europe, 40% U.S.
And just any thoughts on, I guess, the capital structure, particularly given the kind of the shift in pickup in the Media Platform business and the collection of the received payment. Does that change anything about your position towards debt on the balance sheet? Or how do you feel today?
Well I think we continue, like everyone, right, to be operating in an uncertain environment. I think nothing has fundamentally changed with our capital allocation policy. which is we carry a small amount of debt on the balance sheet. Obviously, we want to fund importantly, our growth initiatives as our first priority and then look to opportunistically return capital through buybacks as appropriate as you balance both the need for cash internally along with debt paydown and ultimately, that return of capital. So as we still -- as we sit here today on $80-some million in cash, I don't think our perspective broadly changes as we start to see more material growth as we go forward.
Obviously, it's a conversation that we and the Board have regularly. And to the extent that we want to dial up any element of that slightly more than another, certainly a matter of constant conversation.
[Operator Instructions] And our next question comes from the line of Hamed Khorsand with BWS Financial.
Could you just talk about -- you're making good advancement here on how many people are using your AutoStage, but why wouldn't that translate into higher Media Platform revenue for you right now?
Hamed, certainly, it ultimately will lead to more data and advertising-based monetization. But one of the things we have talked about is that in the course of this year, as we kind of exceeded the 10 million to, let's call it, 12 million units kind of mark that there'd be enough scale to attract both advertisers and people interested in that data more meaningfully. And so it's just simply a matter of timing. It's just where we are. You will, in fact, see, I think, a very, very valuable and interesting platform to both broadcasters and advertisers take shape where there's, we think, a meaningful amount of opportunity. And you'll kind of see it as we lean ahead with our first license -- data licenses happening in the broadcaster space likely this quarter.
And we have no further questions at this time. So I will now turn the conference back over to Mr. Jon Kirchner for closing remarks.
Thanks, operator. With a great start to the year, we can see momentum building in our business, and I'd like to personally thank our customers and partners. In addition, I appreciate the commitment of the entire Xperi team as we continue to deliver on our plans and strategies. We look forward to sharing further updates on our next quarterly conference call, and thank you, everyone, for joining today.
And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.
Xperi Corp — Q1 2026 Earnings Call
Xperi Corp — Q4 2025 Earnings Call
1. Management Discussion
Good day, everyone. Thank you for standing by. Welcome to the Xperi Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions]
I would now like to turn the call over to Sam Levinson from Arbor Advisory Group. Sam, please go ahead.
Thank you, operator. Good afternoon, and thank you for joining us as Xperi reports its fourth quarter and full year 2025 financial results. With me on today's call are John Kirchner, Chief Executive Officer; and Robert Anderson, Chief Financial Officer.
In addition to today's earnings release, there's an earnings presentation on our Investor Relations website at investor.experi.com. We encourage you to download the presentation and follow along with today's commentary. Before we begin, I would like to provide a few reminders. First, I would like to note that unless otherwise stated, all comparisons are to the same period in the prior year. Second, today's discussion contains forward-looking statements about our anticipated business and financial performance that our predictions, projections or other statements about future events, which are based on management's current expectations and beliefs and, therefore, subject to risks, uncertainties and changes in circumstances.
For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discuss today, please refer to the Risk Factors and MD&A sections in our SEC filings, including our Form 10-K for the year ended December 31, 2025, to be filed with the SEC. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. Third, we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to the most directly comparable GAAP measures, which can be found in the Investor Relations section of our website. Last, a replay of this conference call will be available on our website shortly after the conclusion of this call. I'll now turn the call over to Xperi's CEO, Jon Kirchner.
Thank you, Sam, and thank you, everyone, for joining us on our fourth quarter and full year 2025 earnings call. As we finish the year, it seems an appropriate time to look at the investments made over the past few years. appreciate our recent progress in hitting key metrics that set the stage for future growth and discuss the next phase of focus for the business, substantive revenue increases through advertising and data monetization.
Let me first provide an overview of the progress we made during the quarter against this past year's goals. Progress that continues to give us confidence in our belief that we're reaching a key inflection point as a business. There are 3 key areas of progress over the past year. First, at the end of 2025, we reached 5.3 million monthly active users on our TiVo One Ad platform, surpassing the year's goal of $5 million and registering an increase of over 250% over the course of the year. As I've noted in the past, footprint growth is critical for us to reach larger scale in the U.S. and the larger European countries which in turn is expected to facilitate more effective monetization of our installed base.
Next, in the connected car market, our DTS AutoStage footprint also continued to grow, reaching over 14 million vehicles. 4% growth when compared to the prior year. We believe AutoStage is a unique platform, both in terms of scale and reach, and we are already seeing signs of the platform's value as we progress advertising and data monetization trials with ecosystem partners. And finally, in our Pay TV business, our video over broadband subscriber count grew 25% year-over-year to reach 3.25 million subscriber households. Subscription-based revenue from IPTV continues to build, which we believe will provide a balance within our Pay TV business as revenue from our older Pay TV products is expected to continue to decrease.
Thus, we expect the Pay TV business will level out over the next several years as our IPTV business continues to serve those customers that want a flexible IPTV streaming bundle in a modern, rich and compelling user interface. We also anticipate broadband households will provide additional streaming monetization opportunities. Turning to our summary financial results for the quarter. We recorded consolidated revenue of $117 million, a decrease of $6 million compared to last year as growth in media platform and connected car were more than offset by a combination of anticipated decrease in consumer electronics, driven by lower demand and memory cost and supply chain issues and Pay TV, which benefited from minimum guarantee arrangements recorded in 2024 that didn't occur in 2025.
During 2025, we proactively reduced non-GAAP adjusted operating expense lowering it by 13% compared to 2024. This change was primarily due to workforce reductions that were implemented over the past year. We achieved adjusted EBITDA of $22 million for the quarter, bringing the year's adjusted EBITDA to $77 million or 17% of revenue, which was at the high end of our outlook range for the year. We also recorded operating cash flow of $4 million in the quarter bringing operating cash flow close to neutral overall for the year. Let me now go through each of our 4 business areas, starting with Media platform.
As noted earlier, we reached a key milestone for our TiVo One Ad platform by hitting 5.3 million monthly active users at year-end, a remarkable achievement for both growth on the platform and acceptance of our TiVo operating system into the market. We continue to add new capabilities for the TiVo operating system, including the deployment of black nut cloud gaming and demonstrations of the operating system directly on high-end mini LED smart TVs, set-top boxes and sound bars. We also deployed a video-based homepage ad unit to provide advertisers with more ways to reach our audiences.
Within Media Platform, we achieved significant revenue growth in advertising when compared to a year ago, with average revenue per user for TVO One finishing the year at $7.80, down slightly from the prior quarter due to our user base growing faster than related monetization revenue. We expect ARPU to take a bit of time to normalize as both revenue and footprint growth are expected to accelerate on the platform. Advertising partnerships continue to be an important foundation for our goal of accelerating revenue growth and during the quarter, we entered into new agreements with Titan Ads, OpenGlass and Anoki, all well-known industry resellers of premium CTV inventory such as home screen video ads in the European and U.S. markets. We also launched FreeWheel as a new supply-side demand partner and began generating revenue through the partnership.
Our advertising business also saw progress through our direct sales efforts with home page ad campaigns executed for clients, including Hallmark Media, Freeform, NBC Universal and TNT. Moving to Connected Car. The momentum for DTS Auto Stage continued with the signing of Mercedes-Benz to launch DTS Auto Stage video service powered by TiVo. This win adds another major OEM launching on our connected car video platform, which we believe cements our position as a leading supplier of media platforms to automotive OEMs. We -- it's worth noting that Mercedes is the first car brand to offer all 4 of Xperi's connected car solutions, HD Radio, [ DTS:X ] immersive sound, Auto stage audio and video powered by TiVo.
As a leading brand that often sets direction for the automotive industry, we believe Mercedes support furthers momentum for our media platform and technology solutions. At year-end, Auto Stage had a footprint of over 14 million vehicles from many automotive brands. Also during the quarter, we added a significant number of radio broadcasters across the U.S., Europe, Australia, LatAm and Africa further expanding the global services connected to the Auto Stage platform. Our HD Radio solutions saw continued adoption with several new models from Toyota, Honda, Audi and others launching in the fourth quarter. We also signed a multiyear agreement with a large U.S.-based Tier 1 supplier that is expected to provide a cost-optimized HD Radio implementation over the next few years. which we believe will further propel the growth of HD Radio among major car brands.
Finally, we also signed a multiyear DTS audio deal with a large Asian Tier 1 supplier which is expected to secure our DTS to code in a number of future programs. Moving to our Pay TV business. As noted earlier, our IPTV subscriber base continued to grow, increasing by 25% year-over-year to hit 3.25 million subscriber households at year-end. For our managed IPTV service, we posted wins with Prism Fiber in Mid-tel in the U.S. and with Celerity in MOPC in Canada. We also continue to grow our broadband only wins, including new deals with Bluestream fiber, Buckeye Prism Fiber, mid-tail, Carnegie Hickory and Velocity.
During the quarter, we signed multiyear agreements with ClaroVTR for IPTV services in Latin America and with Frontier Communications in the U.S. for content discovery services. In addition, we signed a notable multiyear agreement for classic guides technology with Canadian-based telecom operator, Cogeco. Moving to our consumer electronics business. During the quarter, we continue to expand the IMAX Enhanced program with new product categories such as high-end earbuds. We also saw adoption of the program by Yamaha and the signing of a key renewal with Onkyo.
Now all major audio video receiver manufacturers are participating in the IMAX Enhanced program, which we believe reflects its position as the premium audio video solution in the marketplace. We also signed a decoder and post-processing renewal with Sound United, which owns premium brands like Denon and Marantz. Lastly, we signed a multiyear agreement with a leader in the PC space covering sound technologies for consumer products as well as extending audio technology penetration into its commercial products. In a few moments, I'll turn to a discussion of our pivot to audience monetization, advertising and growth -- but let me first turn the call over to Robert to discuss our financial results in more detail.
Robert?
Thanks, John. Let me start by reviewing revenue results for the quarter. Overall, revenue finished at $117 million, lower by 5% when compared to last year. As John noted earlier, we had 15% revenue growth in Media Platform due to significant growth in advertising revenue, along with 5% growth in connected car revenue from higher minimum guarantee arrangements that were completed during the quarter.
This growth was more than offset by a 21% decrease in consumer electronics revenue, driven by lower customer demand due to memory cost and supply chain issues, along with a 7% decrease in pay TV revenue from minimum guarantee arrangements recorded in the prior year and due to lower revenue from our end-of-life consumer DVR business. Looking at overall financial results. Our non-GAAP operating expense for the quarter improved by $10 million or 13% compared to the same quarter of 2024 and due primarily to proactive personnel reductions implemented over the course of 2025. We posted $22 million of adjusted EBITDA or 19% of revenue essentially in line with last year's numbers.
Non-GAAP diluted earnings per share was $0.24, lower than the prior year by $0.15 due primarily to lower non-GAAP tax expense in the fourth quarter of 2024. Turning to the full year results. We finished 2025 with revenue of $448 million. This was a 9% decrease compared to the prior year due to 2 primary areas. First, we saw a 21% decrease in pay TV revenue due to an expected reduction in core pay TV revenue from overall industry trends, a challenging comparison with a significant multiyear minimum guarantee agreement that we recorded in 2024 and and from the ongoing reduction in our consumer business as our DVR products have entered end of life. And second, our consumer electronics business decreased by 5% and compared to 2024 due to disruptions in unit volumes from memory supply issues as well as the comparable of revenue from the divested perceived business that was sold in late 2024. We -- our Connected Car business posted 12% year-over-year growth due to a higher volume of minimum guarantee arrangements where the revenue is required to be recorded upfront.
Our Media Platform business was essentially flat year-over-year as growth in advertising revenue was offset by expected decreases in both middleware licensing and revenue from our Stream 4K device. Turning to overall financial results for the year. Our non-GAAP adjusted operating expense of $274 million improved by $60 million or 18% and compared with the prior year due primarily to reductions in head count implemented during the year, the divestiture of perceive at the end of 2024 and the shifting of certain operating expenses to cost of revenue as newer products have begun generating revenue. We finished the year with adjusted EBITDA of $77 million or 17% of revenue, resulting in growth of 2 percentage points when compared to 2024.
Turning now to the balance sheet and statement of cash flow. We finished the fourth quarter of 2025 with $97 million of cash and cash equivalents, which was level with our balance from the third quarter of 2025. And we generated $4 million of operating cash flow in the quarter, which was $3 million higher than the same quarter in 2024. For the full year, our operating cash flow was $0.5 million usage right in the middle of our updated guidance range of neutral operating cash flow, plus or minus $10 million. Notably, achieving essentially neutral operating cash usage for 2025 and demonstrates a significant improvement over prior year, where our operating cash usage was $55 million.
We had $2 million of free cash flow usage in the quarter, let me now turn the call back over to John to cover our key operating metrics and objectives going forward.
Thanks, Robert. 5 years ago, when we began the journey to combine TiVo and Xperi, we recognize that the product business would need to go through a meaningful transformation, significantly changing cost structure and operating model as viewership shifted from traditional media to streaming. As we close out 2025, a few years into our journey as a stand-alone independent company. I'm pleased to report that many of our previously stated long-term goals have either been achieved or we have direct line of sight to accomplishment in the next 12 months.
This includes our goal of growing our MAU platform from the more than 5.3 million users towards our goal of at least $7 million, something we expect to surpass during 2026. We also set an initial goal of 4 smart TV partners, which has now been exceeded for a total of 10 which we believe validates the market need for an independent TiVo OS platform. In addition, we sought to grow our IPTV subscriber base to at least 3 million subscriber households, a goal that has now been surpassed. In Connected Car, we had previously set a long-term goal of building the Auto Stage platform footprint to at least 15 million vehicles.
By year-end, we had surpassed $14 million and we have line of sight to meeting and exceeding our goal of 15 million vehicles in 2026. With that scale, we expect to progress auto monetization trials with broadcast and OEM vehicle partners with the goal of enabling monetization based revenue growth to accelerate in 2027 and beyond. So as we made multiyear investments and seen tremendous progress in building the critical foundations for long-term for a long-term monetization business in both the home and the connected car, we feel confident in our belief that we've reached an inflection point in our business with increasing amounts of audience engagement across our home and connected car platforms as consumers watch video and listen to radio content.
We have the opportunity to connect advertisers with our unique audiences, providing enhanced targeting and data solutions. We believe that being the only independent omnimedia platform with scale that can deliver high-value TV home screen ad units, along with the opportunity to reach unique engaged audiences in the connected car is a combination that differentiates our media platform from others in the marketplace. This strategic positioning combined with our established presence in both programmatic and direct sold advertising markets with anticipated growing demand for premium ad inventory gives us confidence in our expectation of successfully selling our owned and operated ad inventory to drive meaningful monetization revenue growth.
We expect that during 2026, we'll see media platform revenue double and that growth will continue to build in 2027 as our footprint continues to scale, and we have more sellers working with our platform. We also expect that as footprint scales and ad sales ramp up, ARPU will normalize as a result, as we exit 2026, we expect ARPU to exceed $10 growing over time towards $20-plus driven by increased engagement and ad optimization. As we turn to 2026, let me provide a few business metrics we'll be using to gauge our progress this year. First, our goal is to grow our MAU footprint beyond $7 million. This, in turn, is expected to expand the opportunity for monetization downstream over the typical 5- to 7-year life of TV ownership.
Second, as we expand our selling efforts -- our goal is to double media platform revenue and exit the year with ARPU above $10, which will provide further evidence that we're selling ever more data and advertising across our media platforms. Third, with an installed base of over 14 million vehicles with DTS AutoStage, we expect to generate ads and data monetization revenue on the AutoStage footprint. Taken together, Achievement of these goals will provide further visibility to the growth potential and strategic value of our media platform business.
Let me now turn the call back to Robert to discuss our outlook for 2026.
Thanks, John. Before I provide our outlook for the year, I think it will be helpful to understand how the parts of our business are trending. As Jon discussed earlier, we expect Media Platform revenue to double relative to 2025 and reflecting our belief that we have reached the inflection point for advertising monetization. We believe this growth in addition to continued growth in our connected car business, will substantially offset anticipated decreases in our Pay TV and consumer electronics businesses in 2026.
Notably, we believe certain legacy Pay TV product lines are nearing the end of significant decreases and the business is expected to level out behind IPTV subscription growth over the next several years. Also, we expect our consumer electronics business to face challenging comparisons in 2026 due to a number of multiyear deals recorded in prior periods that will impact revenue in 2026 and but are expected to be recontracted in 2027.
Now to our outlook for 2026, we expect full year revenue to be in the range of $440 million to $470 million. This range reflects our expectation of doubling media platform revenue and takes into account our current view of broader market risks across our business, including memory and supply chain challenges, and other macro uncertainties. Consistent with the normal pattern of our business, we expect the year's revenue to be slightly weighted to the back half of the year. For adjusted EBITDA margin outlook, we expect a range of 17% to 19%, which reflects the benefit of expense reductions from 2025 and with the range corresponding to the width of our revenue guidance range.
Operating cash flow is expected to be between $15 million to $25 million. and capital expenditures to be between $15 million and $20 million, yielding positive free cash flow at the midpoint of these ranges. On other items, we expect non-GAAP tax expense to be approximately $20 million and our diluted share count to be between 48 million and 49 million shares. Also, from a GAAP-based perspective, we expect stock-based compensation expense for 2026 to be approximately $31 million, lower by 25% from the $41 million incurred in 2025.
Let me turn the call back over to Jon for final comments.
Thanks, Robert. As you can gather from our narrative on this call, we're pleased with the significant progress we've made on our key strategic objectives. We believe we are now at an inflection point for the growth of advertising revenue on our media platforms business. It's good to finally have some wind at our backs rather than facing consistent headwinds in our efforts to transform and reposition our business. That concludes our prepared remarks. Let's now open the call for questions. Operator?
[Operator Instructions] And our first question comes from the line of Jason Kreyer with Craig-Hallum.
2. Question Answer
Great. Appreciate it. So -- just a quick question on the Smart TV side. Curious what the mix of that is between European markets and domestic markets and how that's trending or how you expect that to trend over the course of this year?
Yes. Jason, Currently, the TiVo One installed base is basically roughly 60% in Europe, 40% in the U.S. And keep in mind that, that not only reflects TVs, but reflects IPTV boxes that are running the TiVo One Ad platform, which are predominantly in the U.S. I think over time, you'll see that mix start to change as we see a second TV OEM show up in the marketplace and here in the U.S.
But there's no question in the near term, it's going to be more European weighted.
And then you had a release earlier this year, you're launching home screen as on TiVo, that's been a pretty big driver for capturing incremental spend for a lot of platforms out there. Just curious if you can frame your expectations for contribution there.
I think it's an important part of how we think about the monetization opportunities on our platform in part because the home screen is -- represents maybe the most valuable piece of real estate as people begin to engage with content and jump from 1 piece of content to another. We've got a robust offering there from a home screen capability in terms of what the ad unit can do. And I think along with obviously in video ads, along with data monetization, all 3 of which kind of combine to form the basis of our expected revenue growth this year and really represents the revenue in the added monetization business.
For us, I think we feel like we're pretty well positioned. The reactions we've gotten to our home screen ad unit from partners is very strong.
And our next question comes from the line of Amit Khorsand with BWS Financial.
I'm just trying to get clarification on the ARPU for TVO 1, you said there was an acceleration in usage, but you only went up by 500,000 subscribers sequentially. In the prior quarter, you went up by $1.1 million, and you were able to achieve the ARPU -- a higher ARPU. So I'm just trying to understand why ARPU declined this time even though the growth was lower.
So Amit, you've got a couple of things that are going on in the revenue calculation, which I think we actually publish a definition of how you get there. There is -- remember, it's a lagging indicator over trailing quarters. So depending on how that average moves relative to how dollars are starting to appear on the platform, there's also some dollars that are covered in certain campaigns that get amortized across your footprint in that calculation. So depending on the relationship between the growth of footprint to the growth of revenue. That's why the ARPU metric will certainly move around at the beginning.
Over time, as you end up with a more normalized situation where there's more, let's call it, consistent growth on the platform, and there's obviously ever more the numerator of that calculation, continues to grow. I think our expectation that you'd see it more consistently be up and to the right, Robert.
And let me add in. I think for the denominator here for the average monthly active users. That number has -- the number has continued to increase pretty substantially. If you just look at MAU growth from Q3 to Q4, a sequential growth, so $4.8 million to $5.3 million. And over the course of the last year, it's grown from $1.5 million at the end of 2024 to $5.3 million at the end of 2025. So 50% growth. What we're finding is that our user base is growing faster than the attendant advertising associated with that base. It takes a little while for the new TVs to start to generate revenue.
So that might explain a little bit why you saw -- well, that does explain why you saw a slight decline in the ARPU down to $7.80 a at the end of the year, that's going to fluctuate a little bit just depending on the growth rates of the 2 pieces, the numerator and the denominator. Does that help, Amit.
That's helpful. And then the other question is, are you done with the cash expense side of the cost savings initiatives, the head count reduction that you were undertaking?
No. We'll have some costs in Q1 as well. We incurred some of the cash expense in Q3 and -- excuse me, Q4, but we'll have some in Q1 as well.
Okay. My last question was you were talking about monetizing the AutoStage platform, I'm assuming this year. Is it -- have you already started doing so? Or is there a time line as to when you expect to do so?
I think it will play out as you get more towards midyear, some of the beginnings of it. We are well engaged on a number of things. And I think the first part that we'll begin to see, Amit, is data-related monetization, more so than ad monetization because we're generating a lot of data from the platform that is of tremendous interest to advertisers and broadcasters and as I said, we're well into a number of conversations. And on the back of that is where you'll see the ads piece of that start to show up. There's continuing work there as well.
So in short, we've got a very, very unique platform that is quite large. And from a from a perspective of thinking about the radio industry with lack of real targetability, et cetera, et cetera, and even measurement still being, let's call it, data in its methodology we have a real-time system that gives a tremendous amount of information to people about what consumers are engaged with what content, et cetera, how trending is happening.
And all of that, I think, puts us in a pretty interesting position. And 1 other adjunct to that, of course, is more effective advertising is almost -- it's completely dependent on having ever better data. And 1 thing that's not lost on us as being 1 of the largest providers of contextual data around media assets, both music and video. It's part of the reason we think as you put all this together, we have a really unique opportunity to to provide unique solutions that are value-added across not only in 1 environment like the car, but across environments as you think about the home and the car.
[Operator Instructions] And our next question comes from the line of Matthew Galinko with Maxim Group.
Will there be a geographic bias to the connected car monetization as that starts coming in, I guess, midyear in '27.
I think, certainly, you'll see -- I would expect you to see it more North America-based initially. But some of the work we're doing is with folks outside the United States already as well. So I think you'll see a European element of that. and possibly further geographic expansion. It's broadly of interest to the industry at large across the globe.
Got it. And as we think about that $20 ARPU number, can you maybe talk about what you're seeing today that gives you confidence that we get there over time? And kind of what time frame are you thinking about getting to that number?
Well, I think what gives us confidence is there are robust markets and tremendous interest in better targeting solutions and premium CTV inventory. And I think being an independent provider plus having heavy using IPTV households that represents some unique audience is not typically part of the mix for many advertisers. We have the opportunity to, I think, optimize engagement on the platforms, which in turn, as the footprint continues to grow, those 2 things will drive higher ARPU where there's established markets for what we're trying to do. So -- and we're working as we talked about on this call, in particular, with a number of partners who have tons of experience, and in many ways, are making the market happen today with selling these ad products and connecting them with brands and advertisers who have an interest in reaching consumers.
So I think everything about it gives us confidence that provided. We continue to execute well and plug into the various ad markets, whether they be programmatic or with direct sellers, whether they be employed by us or employed by resellers that if we have the ad units and we have the audiences that continue to grow as we continue to optimize engagement that you will ratably continue to see ARPU grow -- the exact timing of getting from where we are today to north of $20, I think we're very interested in seeing how with more and more sellers coming online in the course of '26 and how all that plays out. that will give us a better sense of how and when we think we'll achieve that. But we know there's plenty of precedent for those kinds of numbers, we're a little bit different because our mix is Europe and the U.S., not just U.S. alone.
But the 1 thing I would tell you about Europe that may be notable is that there's even larger dislocation between where the ad dollars are in Europe, meaning far more ad dollars, roughly 75% of all your ad dollars in Europe are still connected to linear. Even though streaming viewing obviously, is a as an ever-growing percentage of total audience engagement. And so what does that mean? It means over the next few years, there's plenty of expectation that you're going to see more ad dollars aggressively move out of linear into streaming. And as that happened, the real estate -- as that happens, the real estate around home screen and streaming engaged audiences becomes more valuable, which in turn, will drive up the ARPU associated with that in Europe as well.
Got it. If I could just sneak 1 last question in. On consumer electronics business, I guess, how does the supply chain issue factor into 2026 outlook there? I think you mentioned a lower mix of minimum guarantees also impacting '26. But what is your expectation for supply chain and memory shortages?
Well, I think we know is impacting how people think about their product planning in terms of what manufacturing planning looks like what pricing looks like and in turn, what consumer demand ultimately looks like in the face of potentially more challenging pricing or availability. So I think we -- based on our conversations with analysts and with our industry customers, I think we're taking a cautious view of what that looks like. And remember, a good portion of our business is still unit based. So depending on how that plays out, that will ultimately determine what the CE revenue in total looks like. So I think we're sitting here cautiously just kind of watching carefully. We've also got people that are still grappling with an ever-shifting tariff environment. And what does that mean for their own supply chains and where do they want to be and that kind of thing, which has the impact sometimes of impacting how think about how people think about production plans or even their partners if they're producing with partners.
So I think all of that leads to some slight uncertainties that are factoring into how we think about CE.
And that concludes our question-and-answer session. I will now turn the call back over to Jon Kirchner for closing remarks.
Thanks, operator. We're pleased with the meaningful progress we made last year, and I want to thank the entire Xperi team for their continued focus and execution as we work to deliver long-term value for our shareholders. We look forward to sharing further updates with you on our first quarter call. And that concludes today's call. Thanks for joining, everybody.
And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.
Xperi Corp — Q4 2025 Earnings Call
Xperi Corp — Q3 2025 Earnings Call
1. Management Discussion
Thank you for standing by. Welcome to the Xperi Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Sam Levenson from Arbor Advisory Group. Sam, please go ahead.
Good afternoon, and thank you for joining us as Xperi reports its third quarter 2025 financial results. With me on today's call are Jon Kirchner, our Chief Executive Officer; and Robert Andersen, Chief Financial Officer. In addition to today's earnings release, there is an earnings presentation on our Investor Relations website at investor.xperi.com. We encourage you to download the presentation and follow along with today's commentary.
Before we begin, I would like to provide a few reminders. First, I would like to note that unless otherwise stated, all comparisons are to the same period in the prior year. Second, today's discussion contains forward-looking statements about our anticipated business and financial performance that are predictions, projections or other statements about future events, which are based on management's current expectations and beliefs and therefore, subject to risks, uncertainties and changes in circumstances. For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discuss today, please refer to the Risk Factors and MD&A sections in our SEC filings, including our most recent Form 10-K for the year ended December 31, 2024, and our Form 10-Q for the quarter ended September 30, 2025, to be filed with the SEC.
Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. Third, we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to their most directly comparable GAAP measures, which can be found in the Investor Relations section of our website. And last, a replay of this conference call will be available on our website shortly after the conclusion of this call.
Now I'll turn the call over to Xperi's CEO, Jon Kirchner.
Thank you, Sam, and thank you, everyone, for joining us on our third quarter 2025 earnings call. For those new to our story, we're still learning about our business, I'll start this call with a brief overview of the company and our long-term goals. Xperi is a global software and services company that delivers products through our well-known brands, including TiVo, DTS and HD Radio. Our established and profitable core businesses, which include HD Radio, the digital radio standard in the United States, Pay TV program guides and audio licensing solutions in home and automotive have enabled us to build a strategic, connected and synergistic platform for media monetization. We believe media monetization represents a large and attractive market opportunity. And after investment over the past several years, our growth strategies as an independent media platform are reaching an inflection point.
To put that in perspective, it's important to recognize the progress we've made against the ambitious strategic goals we outlined a few years ago. Today, we have either accomplished or are on a path to realize each of our strategic goals, which collectively represent a pivot for our business and creates a platform that has significant potential to grow and create long-term value.
Now let me provide an overview of the progress we made during the quarter against this year's goals, progress that continues to give us confidence that we are reaching a key inflection point as a business. For media platform footprint, our most critical growth area, we are extremely pleased with the ongoing partner rollout of our TiVo One CTV advertising platform into the U.S. and European markets. We achieved 30% sequential growth to finish with 4.8 million monthly active users at quarter end. The continued growth of our footprint is instrumental for us to reach larger scale in the U.S. and the larger European countries as we work to expand monetization of the installed base. We also continue to engage new industry partners to help monetize our growing TiVo One user base.
In the connected car market, our platform footprint also continued to grow, reaching over 13 million vehicles installed with AutoStage at quarter end. Importantly, as we have now built meaningful scale, we have initiated collaboration with leading audio media companies to monetize this unique and highly valuable footprint. In our Pay TV business, our video over broadband subscriber count grew 32% year-over-year to reach 3.2 million subscriber households. We signed important renewals with customers during the quarter that validate the market commitment to our video over broadband technologies and services.
Turning to our summary financial results for the quarter. We recorded consolidated revenue of $112 million. As expected, revenue was lower than the prior year period, which had included a large minimum guarantee arrangement with Panasonic in our Pay TV business. In the consumer electronics and connected car markets, we achieved year-over-year growth as planned. Our non-GAAP adjusted operating expenses decreased approximately 20% as compared to the prior year. The decrease was due primarily to our continued focus on cost transformation and from the divestiture of the Perceive business in October of last year.
Our focus on cost transformation, investment alignment and improving profitability and cash flow generation has been an ongoing effort at the company. Concurrently with today's earnings release, we announced a workforce reduction of 250 employees spanning the entire business. For the third quarter, we posted $0.28 of non-GAAP earnings per share, achieved positive operating cash flow of $8 million and recorded our second consecutive quarter of positive free cash flow at $2 million.
Turning now to the Media Platform business. I noted earlier that we have reached 4.8 million monthly active users on the TiVo One platform, a key indicator for our business performance and one that continued to increase over the first month of the fourth quarter. Notably, more than 75% of this footprint is located in the U.S. and the 5 largest countries in Europe. Consumer and retailer feedback on TVs with the TiVo OS operating system continues to be very positive, and TiVo's powered by TiVo are available at a range of sizes and price points. For example, a number of recent retailer promotions in the U.K. have highlighted aggressive low pricing for TVs that feature TiVo OS, which we expect will further expand our footprint in that market.
Also, in addition to Sharp, a second brand partner is in production and expected to deliver TVs powered by TiVo to certain U.S. retailers before year-end. We expect U.S. distribution of smart TVs powered by TiVo to scale next year and represent national coverage by the second half of 2026. We are also pleased to announce our 10th TiVo OS TV partnership with the signing of a European brand for a leading Asia-based original device manufacturer. This further validates the strong OEM interest in our cost-effective built-for TV independent platform across a range of partners. We believe large OEMs without their own operating system, leading retail house brands and ODM producers all see unique value in being able to brand the experience, retain their first-party engagement data and participate in long-term monetization.
Given the significant progress we've made in establishing footprint for our TiVo One advertising platform across many brands, we believe now would be an appropriate time to start reporting another key performance indicator, average revenue per user for TiVo One or ARPU. Our definition for ARPU is consistent with industry practice, and we calculate it by dividing the trailing 4 quarters of monetization revenue within the Media Platform business by the average number of TiVo One monthly active users during that same period. Our monetization revenue includes all advertising and data monetization revenue from the TiVo One platform and from other parts of our media platform business.
Our calculated ARPU for TiVo One at the end of the quarter was $8.75, which is approaching the $10 goal we are working toward as we exit 2025 and a metric that over time, we expect to continue to grow to north of $20. ARPU growth is not expected to be linear as it is impacted by not only monetization revenue, but changes in our underlying footprint and in what quarters more unit growth comes online. To help further our goal of growing ARPU for TiVo One in the periods ahead, we recently signed multiple monetization partnerships, including agreements with Titan ads, a CTV industry leader across key EU markets; Kargo, a leading CTV ad reseller in the United States; and comScore, a U.S.-based media measurement leader.
Moving to Connected Car. We continue to grow our footprint for DTS AutoStage and had more than 13 million vehicles using this unique platform at quarter end, the vast majority of which are in North America. While this initial footprint is focused primarily on audio and data solutions, we also secured 2 new video-based AutoStage OEM programs in the quarter, one in Europe and one in Asia. Over the past 2 weeks, we announced and launched an updated version of the DTS AutoStage broadcaster portal, the world's first global in-car radio audience measurement platform. This gives radio broadcasters insights into listening patterns, allows stations to fine-tune programming in near real time and delivers advertisers accurate measurement of the audience engagement across 250 designated market areas.
This level of measurement has traditionally only been available on digital streaming platforms and enables radio stations to deliver higher value to advertisers. The technology and scale of the platform has been years in development. We have now initiated commercial discussions around measurement and data licensing with leading broadcasters and media companies to very strong interest across the industry. Separately, as AutoStage has reached significant scale, we also initiated collaboration with leading audio media companies in the U.S. and U.K. to launch targeted advertising trials on the platform.
We expect these ultimate partnerships will form the basis of additional revenue streams for advertising and data. In terms of HD Radio expansion, several new radio stations went on the air with HD Radio digital broadcasting. New vehicle models were launched by companies such as Audi, Hyundai, Tesla, Mercedes-Benz and Lexus during the quarter. Notably, we also signed a significant multiyear HD Radio contract with a large Asia-based Tier 1 supplier, which is expected to help HD Radio continue to grow with Japanese car brands.
Moving to our Pay TV business. In the third quarter, IPTV subscribers increased 32% year-over-year, reaching 3.2 million households. Revenue was up 18% year-over-year from a mix of subscriber growth in the U.S. and Latin America. We renewed the agreement with NCTC, the National Content and Technology Cooperative, covering over 70 operators in the U.S. This agreement guarantees IPTV subscriber commitments for 4 more years and encourages operators to launch and scale broadband TV.
During the quarter, we continued to see strong interest from video over broadband operators to extend their video offerings with new, more cost-effective OTT video service bundles. As a result, by quarter end, over 40 operators had committed to our TiVo broadband product and over 100,000 households had activated. We secured a multiyear renewal with Mitchell Seaforth Cable TV, or MSC, a key partnership that impacts multiple operators in Canada and which is expected to drive our continued subscriber growth there.
Lastly, at the beginning of October, we exited the DVR hardware business under the TiVo brand, closing one innovative and industry-changing chapter in the company's history. The TiVo brand will continue to empower consumers to find, watch and enjoy the content they love on innovative video over broadband and smart TV solutions. Let me next cover highlights in our consumer electronics business. During the quarter, we renewed a multiyear contract with Vestel to deploy DTS audio solutions across its TV brands. Vestel is the largest television manufacturer in Europe and an important customer and partner to Xperi given their volumes across many brands.
In our IMAX Enhanced initiative, a partnership with IMAX that brings the signature IMAX experience into the living room, we expanded our contract with Sony Pictures to release hundreds of additional titles in the IMAX Enhanced format, coupled with DTS:X immersive audio. These titles will be available for direct distribution through free ad-supporting streaming television. We believe providing free access to the IMAX Enhanced experience offers unique value for consumers and will help our program licensing partners further differentiate their IMAX Enhanced products. We also expanded the IMAX Enhanced program in the home projector category through new agreements with Optoma and Epson.
To wrap up what we've discussed today, our strategic progress is evident against the growth goals we set for the year. Within Media platform, we expect to finish the year above 5 million monthly active users on our TiVo One platform. Further, we've achieved our goal of signing 2 additional partners to reach a total of 10 TiVo OS partners. The ARPU that we announced today of $8.75 brings us closer to our year-end goal of $10. And importantly, we've made progress in securing advertising partnerships that we expect will enable us to monetize our expanding and valuable footprint. For Pay TV, we've had considerable success in activating TiVo One through updates in North America on video over broadband devices. This effort helps us build scale in the U.S. market to further our monetization efforts.
We also achieved our goal of over 3 million subscriber households in our IPTV footprint. Within Connected Car, we've surpassed 13 million vehicles with AutoStage and expect this large and unique footprint to continue growing as new cars enter the market. Also, we've started collaborations with leading audio media companies in the U.S. and the U.K. to launch targeted advertising trials on the AutoStage platform.
In summary, we're confident this strategic progress sets us up for long-term growth, improved profitability and increased cash flow.
Let me now turn the call over to Robert to discuss our financial results. Robert?
Thanks, Jon. I will start by reviewing the revenue results for the quarter. When excluding the impact of the Perceive divestiture, overall revenue was lower by $20 million compared to last year as expected due to a large multiyear minimum guarantee agreement with Panasonic recorded in the prior year period. Looking at each of our primary markets, Pay TV was lower than last year by $32 million or 39% due primarily to last year's Panasonic agreement. Excluding all minimum guarantee agreements from the prior year period, Pay TV would have decreased on a percentage basis in the high single digits, consistent with the overall market.
For IPTV, revenue grew approximately $4 million or 18% as subscribers continue to grow at a brisk pace, particularly in Latin America. For the consumer electronics market, excluding the impact of the Perceive divestiture, revenue grew by $3 million or 20% due to a higher level of new agreements this year, along with higher revenue on a per unit basis from audio technologies and game consoles. In Connected Car, revenue was up by $9 million or 36% due to a higher level of long-term arrangements in this year's number, including the significant Asia-based program that Jon mentioned earlier. Revenue in media platform was approximately flat on a year-over-year basis.
Turning to the income statement. Our year-over-year revenue increased by approximately $2 million, driven by higher costs related to long-term arrangements recorded in the quarter. Non-GAAP adjusted operating expense decreased by $16 million or approximately 20% primarily due to reduced personnel expense as a result of our ongoing business transformation efforts and also from last year's divestiture of Perceive at the beginning of the fourth quarter.
Our adjusted EBITDA was $23 million, a 21% adjusted EBITDA margin, down from last year's $31 million as our expense decrease was more than offset by the lower revenue year-over-year. Our non-GAAP earnings per share was $0.28 compared to the $0.51 we posted in the third quarter last year. From a balance sheet perspective, we finished the quarter with $97 million of cash and cash equivalents, up $2 million from last quarter due to the positive free cash flow of $2 million generated in the quarter. Notably, operating cash flow was approximately $8 million in the quarter, an increase of over $12 million from the same quarter last year due primarily to the absence this year of transaction costs related to the Perceive divestiture and other restructuring costs that occurred last year.
Turning now to our financial outlook. I'd like to cover 2 topics that are related to our outlook. First, minimum guarantee arrangements with customers; and second, the workforce reduction that we announced today. Beginning with minimum guarantee arrangements, which, for simplicity, I'll refer to as MGs. We enter into MGs with our customers to lock in certainty of value, ensure usage of the technology over multiple years and product cycles and to lower the company's service costs. As discussed on previous calls, the accounting standard for MGs creates difficult revenue comparisons on a quarterly basis since revenue is required to be recognized when the agreement is signed.
The amount of revenue is generally recorded as an unbilled receivable on the balance sheet and cash is collected over the term of the agreement. Arrangements average 3 years in length and cash is received when customers are billed quarterly over the duration. We have entered into MGs over many years for our audio technologies within consumer electronics and have more recently seen customer interest in MGs in Pay TV and Connected Car as they offer customers benefits in product planning, supply chain management and pricing. As a percentage of revenue, MGs comprised just over 20% of total revenue in 2024 and are expected to be in the low 20% range for 2025.
Importantly, these MGs are term-based arrangements that are typically renewed when the contract expires. For example, over the past 2 years, approximately 90% of the annualized dollar value of expiring contracts has been a -- MG contracts has been renewed. As such, we consider MG contracts to be ordinary course of business and reoccurring revenue. While MGs may cause comparability issues from one quarter to the next, we believe the locking in of key customers, revenue and predictable cash flows, all with a high probability of renewal has significant strategic value for our business.
Over the next 2 years, as our business continues to move toward greater monetization and advertising revenue, we expect MGs to decrease as a percentage of overall revenue. On the second topic, we announced concurrently with today's release that we are reducing our workforce by approximately 250 people across the company. This action will impact all business and functional areas and represents approximately 15% of our workforce. We view this as an important step to improve profitability and cash flow generation while enabling continued investment in our primary growth areas. We expect to incur a onetime expense of between $16 million to $18 million of restructuring and related charges, primarily for employee severance and related costs and substantially all of which will be completed by the end of the first half of 2026. We expect that these reductions once completed, will generate savings of $30 million to $35 million on an annualized basis. These expense reductions are intended to help offset an expected revenue mix shift as our media platform expands in 2026, which we expect will initially have higher cost of sales than other parts of our business.
Turning now to our outlook for 2025. We are reiterating our annual revenue guidance range of $440 million to $460 million and our adjusted EBITDA margin of 15% to 17%. While we expect to incur certain cash charges associated with the restructuring of our workforce, we also expect some cash savings in the quarter as employees depart. As such, we are not changing our outlook for operating cash flow, which is still expected to be neutral, plus or minus $10 million.
Looking ahead, while we are not providing 2026 guidance at this point, our preliminary view is broadly consistent with consensus estimates for next year. We plan to share a more formal outlook for 2026 when we report our fourth quarter results.
That concludes our prepared remarks. Let's now open up the call for questions. Operator?
[Operator Instructions] Your first question comes from the line of Matthew Galinko with Maxim Group.
2. Question Answer
Can you maybe touch on the pieces that drive the initially lower gross margin in the media platform business that scales. And sort of how long do you expect to kind of operate at a lower margin before you reach kind of your terminal or a mature margin?
Well, I think there's a couple of things going on. There is a semi-fixed cost of operating a platform as you start to grow that business. And so that will hit things harder initially. But as you build scale, your marginal advertising dollars will obviously come through at higher margin. There are also various deals that we have done pretty customarily that help us ensure there's plenty of content on the platform and whatnot and other market, what I'll call market incentives that as revenue starts to emerge within that business, some of those costs will be recognized.
So I think it's elements like that, but we have a very strong belief that over time, as you certainly build significantly more revenue scale that you should -- you will see margin acceleration in that business.
Got it. And I guess as a follow-up, as you begin to deliver targeted ads to automotive, do you expect a similar kind of individual fixed cost basis that you need to clear before contributing at a higher margin level? Or is that kind of all amortized through the same fixed costs as you do kind of on the traditional side?
I mean some of -- I would say it's more of the latter. It's kind of part and parcel to the platform we've been working on for some time. And I think the way to think about the opportunity there is that we are unlocking a level of measurement that currently does not exist in radio broadcast. And the interest around being able to run targeting and measurement in that space is very high. It's obviously a sizable business and has been for a long time. But what we've been able to do now is we've finished some of the platform development work, and we've also seen the scale get to the point where we can offer, I think, a very compelling solution to various partners, whether it be for data or for advertising, I think we are -- and this was part of the -- I think we're turning the corner into a really interesting next chapter as we look ahead over the next 12 to 24 months. And this is something that we've been working towards for some time, part of the broader vision, but it is great to see it coming together.
And the next question comes from the line of Steve Frankel with Rosenblatt.
Jon, congratulations on the progress and starting to scale the business. And maybe help me with a couple of numbers for starters, I appreciate the TiVo MAU progress, but maybe tell us where that was last year in the third and fourth quarters so we can gauge it going forward.
That's a good question. I don't have that exact number off the top of my head. Is your question from a geographic standpoint, Steve, or total MAUs.
Total MAUs.
Much, much smaller. It has grown significantly. So in the low millions.
Very low millions.
And what was -- you know what ARPU was last quarter. So the $875 million compares to what was the most recent data point that you gave out on that.
It's not one we have at our fingertips here, but I think it's fair to say that it would be probably pretty similar number. It just -- this happens when you do a 12-month look back when you're calculating the average revenue per user and your denominator actually ends up being pretty small. So we're looking at all of our monetization revenue as a business from both TiVo One and from other parts of our business.
And I think the expectation, Steve, is that as you start to see more monetization happening, particularly as you look into '26 and beyond, you'll start to see that number move northward. Although, as we said, it won't necessarily be linear because there's 2 things going on in that calculation, the speed or the speed at which stuff is coming online in any given quarter relative to various monetization-related deals you may be doing in any particular given quarter.
Okay. Let me take a different tack then. TiVo One is scaling up nicely. What is the critical mass you need to have meaningful ad revenue generated on that platform? Are we halfway there?
Let me kind of answer, I think, the bigger question, and then I'll maybe come back to another one. The answer is we expect to see material progress on the platform we have and based on the visibility that we have into '26 footprint growth, we expect that to occur in '26. So we feel very good about that. The question of how much do you need to have, generally speaking, scale is important to advertisers and the scale number is kind of different based on markets. So it's different for the U.K. than it is for Germany or the U.S. for that matter.
But that -- but one of the things that we are doing very proactively to address the fact that in places where scale may not fully exist immediately or even in the near term where people, let's call it, some advertisers might ideally want it, that is pursuing partnerships where people can bring other footprint in conjunction with our inventory and successfully sell it. And I think, as we've said, we've announced a number of partnerships that I think do 2 things. It helps provide some of that scale, obviously, helps get our inventory into various selling pipelines without having to take lots of extra time to build out those pipelines as well from an ad sales perspective. But I think more than anything, it speaks to the fact that there is real interest in the industry in our inventory and footprint. And as these partners who obviously deal in this space and have for some time are keen to engage with us to enter those partnerships and take it forward in conjunction with us.
So we're not outsourcing everything we're doing on the platform. It's we're finding strategic partners in different ways and places so that we can augment and accelerate the revenue growth efforts.
Okay. And then it seems very exciting that you're making progress with AutoStage and early discussions around monetizing that. Do you think that revenue becomes material kind of exiting 2026? Or we ought to think about 2027 when that platform is a monetization machine.
I think the trial, Steve, will play out through '26, and I certainly expect to see revenue off the platform in '26, but I think it's going to be more material in '27.
And the next question comes from the line of Hamed Khorsand with BWS Financial.
Could you just talk a little bit more about these minimum guarantees and how it's becoming -- you're saying it's going to be more than 20% of 2025 revenue. Is that because of the competitive necessity that you have to provide such deals?
I think there's multiple things going on, Hamed, and I think Robert touched on some of them in the script. You've got partners, in many cases, interested in trying to have very clear kind of windows on how they think about what their -- what technology they're including in their platforms. They obviously manage their supply chains also, in some cases, looking for greater certainty and not having to deal with potential renegotiations. And on the flip side, we are in a similar place where we look out, and there's certainly some uncertainty in the market in these spaces.
And to the extent that we can lock in our technology into various platforms for longer periods of time, lowers our service cost, gives us greater predictability. And I think the key point about them is that they're not one and done. They're just -- it's kind of -- it's a slightly different, more committed structure to our technology and our solutions -- the only thing that's different about it is the accounting standards require you to recognize the revenue a little bit differently than you would on a pure as-you-go type licensing reporting basis. So I think there's clear benefits on both sides and obviously, visibility on both sides being one of the key ones.
Was minimum guarantee a reason why the Connected Car revenue jumped this quarter?
Yes. We had a higher level of minimum guarantees this quarter than we had last year.
Okay. And my last question is, when would you see platform revenue stabilize? It seems like it's quite volatile quarter-over-quarter.
Can you define what you mean by platform?
Well, the media platform, sorry. The media revenue, yes.
Yes, I think as you start to see meaningful growth in '26, you'll see less volatility, which has to do with some of the existing, what I'll call, underlying parts of that number. So it will take on more stability over time as the number grows.
I think if I can add on there, given that we recognize our advertising and as we synonymously call it, monetization in media platform for the TiVo One growth that -- we expect that to be a grower next year and going forward.
And we have no further questions at this time. I would like to turn it back to Jon Kirchner for closing remarks.
Thanks, operator. We're pleased with the meaningful progress we've made in achieving nearly all of our 2025 strategic goals ahead of schedule. I want to thank the entire Xperi team for their continued focus and execution as we work to deliver long-term value for our shareholders. We look forward to sharing further updates on our year-end call. Thanks, everyone, for joining us today.
Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.
Xperi Corp — Q3 2025 Earnings Call
Financial data from Xperi Corp
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 457 457 |
4%
4%
100%
|
|
| - Direct Costs | 130 130 |
10%
10%
29%
|
|
| Gross Profit | 326 326 |
9%
9%
71%
|
|
| - Selling and Administrative Expenses | 175 175 |
12%
12%
38%
|
|
| - Research and Development Expense | 115 115 |
31%
31%
25%
|
|
| EBITDA | 37 37 |
654%
654%
8%
|
|
| - Depreciation and Amortization | 47 47 |
9%
9%
10%
|
|
| EBIT (Operating Income) EBIT | -11 -11 |
81%
81%
-2%
|
|
| Net Profit | -33 -33 |
770%
770%
-7%
|
|
In millions USD.
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Xperi Corp Stock News
Company Profile
Xperi Corp. engages in creating, developing and licensing audio, imaging, semiconductor packaging and interconnect technologies. It operates through the following two segments: Product Licensing and Semiconductor & IP Licensing. The Product Licensing segment comprises of audio and imaging businesses, which licenses through the DTS, FotoNation, HD Radio, and IMAX Enhanced brands. The Semiconductor & IP Licensing segment licenses semiconductor packaging and interconnects technologies and associated intellectual property. The company was founded in 1990 and is headquartered in San Jose, CA.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Kirchner |
| Employees | 1,380 |
| Founded | 2019 |
| Website | xperi.com |


