Xperi (XPER) Q1 2026 Earnings Transcript

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Date

Wednesday, May 6, 2026 at 5 p.m. ET

Call participants

• Chief Executive Officer — Jon E. Kirchner
• Chief Financial Officer — Robert J. Andersen
• Head of Investor Relations — Samuel Levenson

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Takeaways

• Total Revenue -- $114 million, effectively unchanged year over year, as expected.
• Media Platform Revenue -- $12 million, up 45% year over year, driven by accelerated advertising monetization and direct sales programs.
• TiVo One Monthly Active Users -- 5.5 million, more than doubling from the prior year, with management reiterating a year-end target of over 7 million users.
• TiVo One ARPU -- $7.10, a sequential decrease attributed to user growth outpacing monetization, with expectations for ARPU to finish the year above $10.
• AutoStage Global Footprint -- Over 16 million vehicles across 13 automotive brands, expanding more than 45% year over year.
• Connected Car Revenue -- $38 million, a 14% increase due mainly to a multiyear minimum guarantee agreement.
• Pay TV/ATV Revenue -- $46 million, down 8%, reflecting declines in core Pay TV, partially offset by growth in the IPTV solution.
• IPTV Subscribers -- 3.28 million at quarter-end, up 19% year over year, with new service agreements signed for dynamic ad insertion and DRM.
• Consumer Electronics Revenue -- $18 million, declining 19%, due to nonrecurring minimum guarantee fees and audit settlements in the prior-year period, plus memory-related end-product challenges.
• Adjusted Operating Expense (Non-GAAP) -- Decreased 14% year over year, attributable to workforce reductions focused on growth areas.
• Adjusted EBITDA -- $25 million, equal to 22% of revenue, representing an improvement of nearly eight percentage points year over year.
• GAAP Loss Per Share -- $0.17, with non-GAAP earnings per share at $0.23.
• Free Cash Flow Usage -- $23 million, a $4 million improvement from the prior year, primarily due to accrued compensation and workforce reduction payments.
• Cash and Cash Equivalents -- $70 million at quarter-end; received additional $12 million related to the sale of Perceive to Amazon in April.
• 2026 Revenue Guidance -- Reaffirmed at $440 million to $470 million, with management now expecting a relatively even split between the first and second halves, citing earlier-than-planned contract signings.
• Media Platform Milestone -- A multiyear partnership with Samba TV, signed after quarter-end, will provide advanced measurement and targeting capabilities for TiVo One connected TV inventory.
• AutoStage Data Licensing -- Management anticipates first data license agreements in the broadcaster space in the second quarter and upcoming ad trials in the U.S. and Europe.
• Cost Base Outlook -- CFO Robert J. Andersen said, "Q1 is a good representation of the run rate for the remainder of the year."
• Geographic Mix of TiVo One Devices -- CEO Jon E. Kirchner indicated roughly "60% Europe, 40% U.S." for device base, with Europe expected to grow faster than the U.S.
• Capital Allocation Policy -- Management reiterated a "small amount of debt" approach, prioritizing funding growth initiatives while considering share buybacks and debt paydown as opportunities arise.

Summary

Xperi (NYSE:XPER) highlighted significant expansion in its TiVo One and AutoStage user bases, supporting its platform monetization strategy and annual growth targets. Management noted customers are engaging and signing contracts earlier in the year than anticipated, prompting an updated outlook for a more balanced revenue distribution across 2026. The company referenced the successful integration of enhanced advertising and measurement capabilities through partnerships, positioning TiVo One for increasing advertiser and agency demand.

• Management reported that operational cost reductions from prior workforce actions have largely materialized, with Q1 setting the expected expense run rate for the year.
• The company disclosed plans for new revenue streams via AutoStage data licensing agreements and advertiser trials, aiming to capture emerging value from its connected car footprint.

Industry glossary

• ARPU (Average Revenue Per User): A key platform metric representing the average revenue generated per monthly active user, referenced specifically for TiVo One.
• IPTV: Internet Protocol television; a digital television service delivered via broadband networks, relevant to Xperi's Pay TV segment.
• DRM (Digital Rights Management): A technology enabling secure content delivery and management of usage rights in media platforms, noted as a new native service offering.
• AutoStage: Xperi's connected car platform integrating advanced audio and data services into vehicles, referenced for footprint and monetization expansion.
• Samba TV: An audience analytics provider, partnering with Xperi to enhance targeting and measurement on TiVo One's connected TV advertising inventory.
• Minimum Guarantee Arrangement: A contractual revenue floor, cited as significant in both the Connected Car and Consumer Electronics segments this quarter.

Full Conference Call Transcript

Samuel Levenson: Thank you, Abby. Good afternoon, and thank you for joining us as Xperi Inc. reports first quarter 2026 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, 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 are 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 12/31/2025, and our Form 10-Q for the quarter ended 03/31/2026 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 will 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. Lastly, 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 Inc.’s CEO, Jon E. Kirchner.

Jon E. Kirchner: Thank you, Samuel, 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 are achieving in delivering on our financial objectives, and the notable progress we have 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, 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 helped us accelerate advertising monetization, resulting in Media Platform revenue growth of 45% year over year. We have 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 am very pleased with a 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 am particularly pleased with the progress we are 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 audience analytics. Through this partnership, we are 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 twelve 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 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 insight 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 roadmap, including advanced sound features and expanding services that are expected to support broadcaster and OEM partner advertising monetization. Moving to our Pay TV business, 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 multiview 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 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 expand, 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 have seen exciting progress on AutoStage, our connected car platform. While footprint continued to expand well past 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?

Robert J. Andersen: Thanks, Jon. Let me start by reviewing the revenue results for the quarter. Overall revenue finished at $114 million, essentially flat year over year. ATV 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 eight 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 flows, we finished the quarter 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 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 takes into account our view of broader market risks across our business.

In terms of revenue timing during the year, in 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.

Jon E. Kirchner: Thanks, Robert. To sum things up, we are 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 are making against our monetization strategy. That concludes our prepared remarks. We will now open the call for questions. Operator?

Operator: We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. 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 star 1 to join the queue. Our first question comes from the line of Jason Michael Kreyer with Craig-Hallum Capital Group. Your line is open.

Jason Michael Kreyer: Hey, thank you. This is Thomas on for Jason. Thanks for taking my question. First, Jon, you called out in the press release that you are beginning to see an inflection point in the monetization strategy. Can you talk about what the drivers are that are catalyzing this inflection?

Jon E. Kirchner: I think a couple of things. First, we have worked for the last two years to build a broad enough footprint to have the scale necessary to attract advertisers and partners to our platform to reach unique audiences, and those efforts as we are now at 5.5 million MAUs are certainly a key part. Second, we have also worked in tandem to build out and connect our TiVo One ad platform to the broader advertising ecosystem, and as that gets continually worked to make sure all the plumbing is optimized, that enables more programmatic ad volume to flow.

Third, as we are now making a bigger presence known and the uniqueness of what our platform offers in terms of audience engagement, that is driving advertiser interest. Through partnerships, we have more sellers out there beyond just our direct sales force, and all of this is combining to really begin to drive this business quite positively, which is why we expect this year to see Media Platform revenue double year over year. While there is still plenty of work, I am very pleased with how this is taking shape.

Jason Michael Kreyer: That is great, thanks. And maybe one follow-up: when we look at your operating expenses in Q1, does that represent all the cost-cutting initiatives you put in place? I am trying to determine if this is the right cost base to build off for the remainder of the year as we move forward.

Robert J. Andersen: 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.

Jason Michael Kreyer: That is great. Thank you, guys.

Operator: As a reminder, it is star 1 if you would like to ask a question. Our next question comes from the line of Matthew Galinko with Maxim Group. Your line is open.

Matthew Galinko: Hey, good afternoon. Thanks for taking my questions. Firstly, can you touch on how unit availability is today in the U.S. market and how that user growth is shaping up between the U.S. and Europe? And then I will ask a follow-up.

Jon E. Kirchner: Sure. So Matt, similar to what was the case last quarter, the majority of our TiVo One connected devices are in Europe. On a relative basis, you are going to continue to see that grow faster than the U.S., the U.S. being a more competitive market. 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 through our operators. The distinction is not important because they are all connected to our TiVo One ad platform. This is about managing the home screen where content is aggregated and selected, and the ability to advertise in-stream and on the home page across these platforms.

I would say you are probably looking at roughly 60% Europe, 40% U.S.

Matthew Galinko: Thank you. And any thoughts on whether anything has changed about your position toward debt on the balance sheet, or how do you feel today?

Jon E. Kirchner: We continue, like everyone, to be operating in an uncertain environment. Nothing has fundamentally changed with our capital allocation policy, which is that we carry a small amount of debt on the balance sheet. Our first priority is to fund our growth initiatives, and then look to opportunistically return capital through buybacks as appropriate, as you balance the need for cash internally along with debt paydown and ultimately that return of capital. As we sit here today with eighty-some million dollars in cash, I do not think our perspective broadly changes.

As we start to see more material growth as we go forward, it is 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, it is certainly a matter of constant conversation.

Operator: Our next question comes from the line of Hamed Khorsand with BWS Financial. Your line is open.

Hamed Khorsand: Hi. Could you talk about the advancement in how many people are using AutoStage, and why that would not translate into higher Media Platform revenue for you right now?

Jon E. Kirchner: Hi, Hamed. It ultimately will lead to more data and advertising-based monetization. One of the things we have talked about is that in the course of this year, as we exceeded the 10 to 12 million units mark, there would be enough scale to attract both advertisers and those interested in the data more meaningfully. It is simply a matter of timing. You will see a very valuable and interesting platform to both broadcasters and advertisers take shape where there is a meaningful amount of opportunity, and you will see it as we move ahead with our first data licenses happening in the broadcaster space likely this quarter.

Hamed Khorsand: Okay. Thank you.

Operator: We have no further questions at this time. I will now turn the conference back over to Mr. Jon E. Kirchner for closing remarks.

Jon E. Kirchner: Thanks, operator. With a great start to the year, we can see momentum building in our business, and I would like to personally thank our customers and partners.

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