Xperi (XPER) Q2 2026 Earnings Call Transcript

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DATE

Wednesday, Aug. 5, 2026 at 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - Jon E. Kirchner
• Chief Financial Officer - Robert J. Andersen

TAKEAWAYS

• Total Revenue -- $114.5 million, an 8% increase driven by growth in media platform and connected car segments.
• Non-GAAP EPS -- $0.28, more than doubling the $0.11 reported in the second quarter of 2025.
• Non-GAAP Adjusted EBITDA -- $24.5 million, representing a 61% increase from $15.2 million last year.
• Non-GAAP Adjusted EBITDA Margin -- 21.4%, reflecting an improvement of 7 percentage points.
• GAAP Net Loss -- $1.5 million, improving from a $14.8 million net loss in the prior-year period.
• Operating Cash Flow -- $14.6 million, an improvement of $4.5 million from the second quarter of 2025.
• Free Cash Flow -- $7.6 million, compared to $5.3 million in the same quarter last year.
• Cash and Cash Equivalents -- $90.6 million at quarter end, which includes the final $12 million payment related to the sale of Perceive to Amazon.
• TiVo One Monthly Active Users -- 6.3 million at quarter end, representing 70% growth year over year.
• Advertising and Related Revenue -- $15.0 million, representing 54% growth driven by homepage video campaigns and expanded partner integrations.
• Media Platform Revenue -- $18 million, an increase of 44% primarily due to the scaling of advertising and related capabilities.
• TiVo One ARPU -- $6.70 on a trailing 12-month basis, as footprint growth currently exceeds the revenue growth rate.
• Connected Car Revenue -- $40 million, an increase of 60% driven by two significant minimum guarantee deals related to the HD Radio platform.
• DTS AutoStage Footprint -- 17 million cumulative vehicles shipped, representing 42% growth across 13 automotive brands.
• Pay TV Revenue -- $45 million, a decrease of 11% resulting from core pay TV service declines and the exit from the consumer hardware business.
• IPTV Revenue -- $26 million, growing 10% year over year.
• IPTV Subscriber Households -- 3.4 million globally, representing 13% growth from the prior-year period.
• Consumer Electronics Revenue -- $12 million, down 35% due to minimum guarantee arrangements for codec and audio solutions recorded in the prior year.
• Full-Year 2026 Revenue Guidance -- $440 million to $470 million, consistent with previous expectations.
• Full-Year 2026 Adjusted EBITDA Margin Guidance -- 17% to 19%.
• Capital Expenditures Guidance -- approximately $25 million, increased from the previous range of $15 million to $20 million to address memory market cost constraints.
• Stock-Based Compensation Guidance -- approximately $29 million, lowered from the prior $31 million estimate due to workforce reductions.
• TiVo One Year-End Goal -- 7 million monthly active users, with an expected average revenue per user exceeding $10.

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RISKS

• Andersen stated, "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," noting these factors increased the cost of necessary capital equipment.
• Andersen noted the advertising and related revenue category carries an "8% negative gross margin" due to a fixed cost base that will be amortized over time.
• Management reported a 35% decline in consumer electronics revenue and an 11% decline in core pay TV revenue, with Andersen attributing the latter to "us exiting the hardware business and the attendant subscriptions."

SUMMARY

Management reported a strategic shift toward monetization of connected TV and automotive audiences, with advertising and related revenue now exceeding 10% of total company revenue. The company stated it is transitioning from a period of foundational investment into a phase of accelerated platform scaling. While maintaining annual revenue and adjusted EBITDA margin targets, the company increased capital expenditure forecasts to address persistent supply constraints and cost increases in the memory market. Management indicated that the expansion of the TiVo One and DTS AutoStage footprints remains the primary driver for long-term growth and margin accretion.

• CEO Kirchner characterized the fiscal year as a "decisive pivot from years of investment in building our foundation toward accelerated monetization of our connected TV and automotive audiences."
• The company signed BYD, the world's largest electric vehicle manufacturer, as its 14th automotive brand to deploy DTS AutoStage audio and video solutions across export models.
• Management reported its first licensed customer for the DTS AutoStage broadcaster portal, signing Cumulus to an agreement for advanced listener analytics and data.
• CEO Kirchner noted that the Fox acquisition of Roke validates the "strategic value of the tvOS, the home screen, having first-party CTV data, and direct-to-consumer access."
• CFO Andersen projected that the IPTV growth and legacy pay TV decline will reach a "balancing equation" between mid-2027 and mid-2028.
• Management stated that engineering investments are being redirected to optimize TiVo OS for lower memory usage, which is expected to help the platform take market share by reducing bill-of-materials costs for OEM partners.
• The company executed a partnership for programmatic dynamic ad insertion with the NCTC, adding three new member operators to the TiVo platform.

INDUSTRY GLOSSARY

• ARPU: Average Revenue Per User, a metric calculated by dividing total revenue by the average number of users over a specific period.
• DTS AutoStage: A hybrid radio and entertainment platform for connected vehicles that combines broadcast radio with internet-delivered content and analytics.
• HD Radio: A digital radio technology that allows broadcasters to transmit digital signals over traditional AM and FM frequencies.
• IPTV: Internet Protocol Television, the delivery of television content over internet protocol networks rather than traditional satellite or cable.
• MAU: Monthly Active User, a unique device or account that has connected to a service at least once within a 30-day period.
• PDAI: Programmatic Dynamic Ad Insertion, a technology that allows for the automated, real-time placement of targeted advertisements into video content.
• TiVo One: A cross-device advertising platform that integrates with the operating system of smart TVs and video-over-broadband devices.

Full Conference Call Transcript

Operator: Good day, everyone, and thank you for standing by. Welcome to the Xperi Second Quarter 26 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. I would now like to turn the call over to Samuel Levenson from Arbor Advisory Group. Samuel? Please go ahead.

Samuel Levenson: Good afternoon, and thank you for joining us as Xperi reports its second quarter 26 financial results. With me on today's call are Jon E. Kirchner, Chief Executive Officer and Robert J. 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 discussed today, please refer to the risk factors and MD and A sections in our SEC filings including our Form 10-K for the year ended 12/31/2025 and our Form 10 Q for the quarter ended 06/30/2026 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 are 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 will now turn the call over to Xperi's CEO, Jon E. Kirchner.

Jon E. Kirchner: Thank you, Samuel, and thank you everyone for joining us on our second quarter 26 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 continued 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 1 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 1 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 1 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 the year with an ARPU above $10. From an advertising perspective, we successfully executed home page video campaigns in The US and Europe. With global advertising brands ranging from the entertainment insurance, automotive, and technology industries.

We also saw advanced integration of the TiVo 1 ad platform with key partners, including Kargo, to enable seamless transactions for our unique home page hero video inventory. Recent industry events continue to highlight the strategic value of the TV homepage as 1 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 TVOS platforms like TiVo 1, 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 in the UK market expanding the capabilities we can offer to advertisers and partners. Importantly and separately, in the US, 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, 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.

As previously mentioned in media platform, we had an important win for our DTS auto stage broadcaster portal. Cumulus is 1 of the largest US broadcasters and operators of AMFM 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, 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 have 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 Dialog 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 Mobile. 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 2020 growth goals we outlined earlier this year, we remain encouraged by the trajectory of the business.

TiVo 1 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, auto stage 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 are 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 our goals for the year. Let me now turn the call over to Robert to discuss our financial results in more detail. Robert?

Robert J. Andersen: Thanks, John. 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 and expect a decrease of 35% year over year due to minimum guarantee arrangements for codec 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 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 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 26 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 26, an improvement of $5 million from the second quarter of 25. 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 of 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 are also seeing significant memory related cost increases in the purchase of NEST 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 reduced the forecasted stock based compensation expense below our original expectation.

Jon E. Kirchner: Let me now turn the call back over to John for a few closing remarks before we go to Q and A.

Robert J. Andersen: Thanks, Jon.

Jon E. Kirchner: Overall, we are very pleased with the continued strong execution against our strategic growth plan. In 2026, we are 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 1 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 operation and financial progress that we are achieving and they demonstrate the continued progress we have made thus far in 2026. I would 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: Thank you. And we will now begin Q&A session. If you have dialed in If you would like to withdraw your question, simply press 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions. Again, it is 1 to join the queue. And our first question comes from the line of Jason Kreyer with Craig-Hallum. Your line is open.

Jason Kreyer: All right. Thanks, guys. So John, I wanted to get your thoughts on the recent acquisition of Roke. It seems like with the takeout of Roke and then Visio getting taken up before that, there is 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, you know, more OEMs that want to partner or perhaps just shifting a greater mix of their inventory in to TiVo. So wondering if your outlook for the opportunity changes at all.

Jon E. Kirchner: I think yes to all of the above is the is the short answer. Jason, I think, you know, that act the Fox's acquisition of Roke could really validate the strategic value of the tvOS, the home screen, having first party CTV data, and direct to consumer access at the start of the entertainment journey. And I think you know, we are uniquely positioned as an independent who has a business model you know, that aligns well with in terms of incentives across OEMs and advertisers, content providers, etcetera.

Where I think we you know, we are gonna see you know, we are gonna see as the market narrows in some places, you know, to create more strategic opportunity for us. So, know, not dissimilar from some of the other industry changes we have seen over the past, you know, 2 years. I think in many ways, it only bolsters you know, the case that we are not only making but continuing to advance in the marketplace. And perhaps that goes a step further with Robert's recent comment about know, memory and kind of the low memory requirements of the TiVo platform.

Jason Kreyer: Correct?

Jon E. Kirchner: Correct. And I and I think, you know, historically, we have been 1 of the most efficient you know, tvOS implementations. We have got a lot of technical expertise as to, you know, how to do this. That being said, you know, the memory crunch and the cost element of that you know, has people looking at everything saying, you know, we need to figure out how to know, have this delivered for even lower. You know? BOM costs, lower memory usage, etcetera. So you know, given that we have both demand saying, hey. Look. If you can help us figure this out, there is more business potentially gonna come your direction.

You know, we have we have jumped all over that in order to support our partner, you know, and customer base as best we can. And I and I think that, these efforts, these investments in the near term you know, will really, prove to be very beneficial as we get into 2027 and beyond. Okay. And then as a follow-up, I wanted to pivot to automotive. So we have seen a bunch of volatility in the automotive over the last year or 2. 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 do not think there is 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, you know, implementing AutoStage beyond just the audio but into video. I think, you know, evidence is that is a point of 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, you know, you know, some of the supply chain slash, you know, memory type issues.

You know, I think the reality that the in cabin experience is a key differentiator in the purchase journey Yeah. It remains, you know, 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, you know, 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 and terms of CTV, but inside the cabin. And that dataset is increasingly of interest to advertisers.

Certainly has gotten you know, I think, a ton of interest within the radio world as people look for better know, targeting, as well as measurement and better understanding what is happening actually inside the car in a world that is large been you know, somewhat limited in terms of its data access. So I think all of you know, all of what is happening in CAR plus kind of the continued advancement of what is happening in the living room you know, bodes well for the business strategy that we laid out. How we are gonna differentiate ourselves in what is a highly competitive, highly valuable market.

Jason Kreyer: that is a great point you made. Thanks, John.

Operator: And our next question comes from the line of Matthew Galinko with Maxim Group.

Matthew Galinko: Hey, thanks for taking my questions. Maybe my first is around 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 you know, signing additional partners in that area.

Jon E. Kirchner: Maybe going in reverse. I Matthew, I think absolutely. Do I expect there to be more? I think we have a very robust pipeline of interest. it is something we have been working on for some time. Partially as we have developed the broadcaster portal product in, you know, in conjunction with working with our customers and, you know, our broadcast partners identifying what their real needs were and where the gaps were in terms of the information. You know, coming you know, coming off, you know, radio in general and out of the car.

So, you know, it is it is been a product that was designed you know, you know, very you know, let's call it interactively with a number of our key customers Cumulus has been part of that. We are 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 US that are relevant, priced on that basis.

So I think, you know, the deals will you know, 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 you know, your real time data people are getting off our vehicles as we now approach know, 17 million worldwide and you know, well more than half that active in The US. it is just people are seeing data they have never seen before. And I think that is, that is a tremendous position for us to be in. Thank you.

Matthew Galinko: 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, you know, 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 are 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 how is there anything anomalous in 2Q?

Robert J. Andersen: This is Robert. I am 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 you know, that is that also has been impacted to some extent by us exiting the hardware business and the attendant subscriptions that would ultimately go with it. So that is continued to decrease year over year. And I think we have 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 you know, I think as we have looked out over the next year or 2, we do see a balancing equation whereby we expect the Alexa 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 do not think anything specific to your original question around this quarter to it can vary a little bit. Yeah.

Jon E. Kirchner: I would I would just add to that, you know, you have got you know, you have got active cord cutting in certain parts of the market You also have us exiting largely the consumer facing. that is the hardware and subscription piece. And as those tails kinda roll off, you know, depending on the exact timing of how these things are hitting, you know, on a year over year basis, that is what you are seeing.

But the big the big place we have been working towards, you know, achieving is know, when does that bottom out become stable and then ultimately, know, you see the benefit of all the work you have done over the past few years in growing your IPTV you know, business, which is strong, and that continues to grow, you know, in some of our partners. So as that happens here in the in the not too distant future, I think I think the discussion of, you know, declines begins to you know, to know, fade into, you know, just what does, you know, neutral to growth look like?

Operator: And our next question comes from the line of Dave Storms with Stonegate. Your line is open.

Analyst: Maybe wanted to start with, TiVo monthly active users had a nice growth. Sequentially there. It looks like your well on track to hit the 7 million stated goal. Just about maybe the cadence of that, should we expect that to maybe be smooth and linear, or is this going to be more dependent on any partnerships that are in the pipeline that might make that a little more lumpy. Just any commentary there would be great.

Jon E. Kirchner: Yeah. I think as you have as you have seen it, it is not it does not tend to be linear. It kind of depends in part based on what territories activations are happening in, partner launches, retail timing, you know, what sell through looks like, etcetera. So there is there is a bunch of factors. We obviously we knew kind of coming into this year that we might see it lighter early in the year, and then we would see a meaningful pickup. And I think at this point, we would look ahead to year end feel like the 7 million goal that we set a couple of years ago, will be achieved.

But I think this is this is an area where we continue to invest a lot of time because we believe that we can continue to grow that footprint. You know, 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, you know, with a useful life of, you know, 5+ years for a lot of these TVs, there is a lot of revenue downstream that can come from that. So, it is a good question, but it is not linear. It will bounce around. that is great commentary. I appreciate that. Similar question. On the auto stage vehicles.

Great to see they added BYD. It looks like you have been growing roughly a million or so vehicles per quarter for the last couple quarters. How quickly could the integration from BYD accelerate that growth? Or will that maybe take some time from a logistics standpoint? I think it will contribute meaningfully given the size of, you know, their current installed base and where they are going, there are some vehicles that are likely to be included in some over the area the over the air updates as well as new models. So while I do not have the and I am not really at liberty to speak to the specific plans there.

You know, BYD is the world's largest electric vehicle manufacturer. And they have got quite the presence, of course, outside the United States. So 2 things are important about that. 1 is that volume obviously positively accrues to continued growth in auto stage. Secondly, the fact that they have a very strong presence in Europe and we believe the auto stage listening and analytics and data play has a lot of potential upside in Europe as well is a huge positive.

And I would say, you know, 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 you know, across the board. I think, sends a pretty strong message of industry progress and support.

Analyst: that is great. Thank you for taking my questions, and good luck on the next quarter. Thank you. Thank you, Dave.

Operator: And our final question comes from Amit Khorsand with BWS Financial. Your line is open.

Hamed Khorsand: Hi. 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?

Robert J. Andersen: Sure. This is Robert. We obviously had a very strong quarter from 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, you know, they have been historically in the low to mid single digits. I think for this year, it is going to be a little bit weighted toward yeah.

So I think that kind of gives you a sense. it is it is probably mid twenties. Mid 20s. Sorry. Single digits. Mid twenties for this year. Okay. Alright. Percentage of revenue.

Hamed Khorsand: And then the other question I had was just given how you have grown, TiVo 1 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?

Jon E. Kirchner: Yeah. I think I think 1 of the things to understand, we talk about ARPU. You know, there is 2 components of course, revenue growth and footprint growth. And in periods where the footprint is growing faster than the revenue, you know, it tends to drive down your ARPU. You know, until you are at a more normalized base state and you are just more in the optimization mode with what you have got where the relative gains are let's call it smaller. On a percentage. So that is kind of what you saw in this past quarter. You know, with a slight dip in ARPU was a function of the user base MAUs growing faster than the revenue.

However, you know, as we think about it, for example, for 2026, we expect, you know, to end the year at around 7 million And based on that and our expectation that we are 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, you know, I think you are going to continue to see us as we take regular steps to you know, to tweak and optimize kind of the platform improving things like fill rates and as well as providing, you know, 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 will see continued gains that, you know, are not dissimilar from what you have seen on other platforms that, you know, if you will, cut their teeth and launched years ago, and then, you know, they saw a similar ramp. I think we are kind of on that journey.

Ourselves, but the hardest thing to do, Amit, is get footprint. it is a hypercompetitive market in part because that real estate is incredibly valuable. And I think we continue to do so very successfully You know, as an independent platform, I think we continue to have a lot of interest and I think based on that, we are going to be able to increasingly monetize that over time.

Hamed Khorsand: Okay. Great. Thank you. Thank you, Amit.

Operator: And that concludes our Q&A session. I will now turn the conference back over to Mr. Jon Kirchner for closing remarks.

Jon E. Kirchner: Thanks, operator. As we move back into the back half of the year and continue to expect to see momentum in our business. We are grateful for the continued support of our customers, partners, and shareholders. Our multiyear pivot is taking shape in 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, that concludes our remarks. And ladies and gentlemen, this concludes today's call, and we thank you for your participation.

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