Yahoo Finance Xperi Inc (XPER) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges and ...
Total Revenue: $119 million, down 6% year-over-year.
Adjusted EBITDA: $5 million, representing 5% of revenue.
Non-GAAP Adjusted Operating Expenses: Decreased by 8% due to divestiture and cost optimization.
Non-GAAP Gross Margin: $90 million or 76%, down approximately 270 basis points.
Non-GAAP Loss Per Share: $0.05.
Cash and Cash Equivalents: Ended the quarter with $95 million.
Operating Cash Flow: $50 million use of cash, aligned with seasonal expectations.
2024 Revenue Guidance: Expected to be between $500 million to $530 million.
2024 Adjusted EBITDA Margin Guidance: Anticipated to be between 12% to 14%.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Xperi Inc (NYSE:XPER) reported solid financial results across key growth areas, demonstrating progress in strategic initiatives.
The company saw growth in media platform connected car and video over broadband, which helped offset declines in core consumer electronics and pay-TV markets.
Xperi Inc (NYSE:XPER) is focused on three key growth opportunities: connected TV advertising, in-cabin entertainment, and TV video over broadband, with markets expected to double in the next five to seven years.
The company successfully hosted an industry launch event in London, showcasing the Xevo operating system and announcing the launch of smart TVs powered by TiVo across Europe.
Xperi Inc (NYSE:XPER) continues to strengthen its position in the connected car market, with DTS Auto Stage deployed in over 6 million vehicles worldwide, a 50% increase over the last nine months.
Negative Points
Revenue for Q1 2024 was down 6% from the previous year, with a 3% decline on an adjusted basis considering the recent auto sensing, imaging divestiture.
Non-GAAP adjusted operating expenses declined by 8% mainly due to the divestiture and ongoing cost optimization efforts, indicating potential challenges in operational scaling.
The consumer electronics segment saw a significant decline of 21%, primarily due to fewer multiyear license renewals compared to the previous year.
Despite growth in video over broadband IPTV solutions, there was a notable decline in core pay TV solutions, continuing a trend of challenges in this market segment.
The company's adjusted EBITDA was only $5 million for the quarter, or 5% of revenue, reflecting relatively low profitability.
Q & A Highlights
Q: Given the timing of landing your sixth TV brand, how does that look as far as active TVs? Would that count actually go up as your goal is concerned and where do you sit as far as getting a seventh one maybe this year? A: Jon Kirchner, CEO of Xperi Inc, responded that they have an active pipeline and continue to work with potential partners to join their ecosystem. He expressed confidence in hitting their target of 2 million devices for the year, with the sixth brand contributing to this target soon.
Q: Could you comment on the pay TV revenues declining faster than expected? Why the degradation there as much as you've seen, and are you not making up on the IPTV side? A: Robert Andersen, CFO of Xperi Inc, explained that the decline in pay TV is on track with their expectations, similar to the previous year's trend. He noted that video over broadband is expected to largely help offset declines within the core Pay TV business.
Q: Regarding the expected US launch this year for TV or for a brand in the US, how important would it be to get in earlier in the year, and how would seasonality affect the ramp-up there? A: Jon Kirchner mentioned that their objective is to have TVs in retail for the strong holiday buying season. He noted that monetization begins after the TVs are sold and installed, with revenue expected primarily from European installations earlier in the cycle.
Q: Can you expand on how HD radio and auto stage are influencing North American auto penetration? Is it possible to drive penetration into the mid-60% range over the next couple of years? A: Jon Kirchner stated that they see mid-60s as a reasonable long-term target for HD radio penetration. He highlighted that their in-cabin entertainment platform, which combines HD radio and auto stage, offers a differentiated experience that could influence vehicle purchase decisions.
Q: What are the implications of the recent financial performance on your strategic initiatives? A: Jon Kirchner discussed the company's focus on three key growth opportunities: connected TV advertising, in-cabin entertainment, and TV video over broadband. He highlighted recent achievements and partnerships, emphasizing the company's strategic positioning to capitalize on market expansions.
Q: How are the recent divestitures and cost optimization efforts impacting your financial health? A: Robert Andersen noted that the divestitures and ongoing cost optimization efforts have led to a reduction in non-GAAP adjusted operating expenses, contributing to improved financial health and positioning the company for future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
