Xperi Inc. (XPER)·Q2 2024 Earnings Summary

Executive Summary

• Q2 revenue was $119.6M, down 5.7% YoY (Q2’23: $126.9M) but up slightly QoQ (Q1’24: $118.8M); non-GAAP EPS turned positive to $0.12 (vs. $(0.09) in Q2’23) and adjusted EBITDA improved to $14.6M with a 12% margin, driven by Connected Car strength and cost actions .
• Management maintained FY2024 guidance of $500–$530M revenue and 12%–14% adjusted EBITDA margin; non-GAAP tax expense still expected at ~$20M for the year .
• Segment mix was uneven: Connected Car +41% YoY (upfront rev. recognition), Pay TV +5% YoY aided by IPTV (+45%), while Media Platform (-25%) and Consumer Electronics (-40%) weighed on growth .
• Strategic catalysts advanced: seventh TiVo OS TV partner (a top-5 U.S. supplier) signed for U.S. launch in spring 2025; TiVo OS footprint now spans 15 European countries and 17 brands; AutoStage exceeded 7M cars; IPTV households surpassed 2.25M .
• Wall Street consensus from S&P Global was unavailable at the time of request; therefore, beats/misses vs. estimates cannot be quantified here (see Estimates Context) [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

• Profitability inflected: non-GAAP EPS turned positive ($0.12) and adjusted EBITDA nearly tripled vs. prior year; CEO: “We delivered solid financial results with improved profitability while continuing to execute on our strategic growth initiatives.” .
• Growth engines executing: Connected Car revenue +41% YoY (upfront recognition on a multi‑year Asia Tier-1 codec program); IPTV +45% YoY supported Pay TV growth .
• Platform scale building: Seventh TiVo OS partner (top-5 U.S. supplier) signed; TVs “Powered by TiVo” live across 15 European countries/17 brands; on track to reach 2M active connected devices by year-end .

What Went Wrong

• Advertising softness: Media Platform -25% YoY due to a unique initial ad buy last year, legacy Classic Guides footprint declines, and advertisers shifting spend later in the year .
• Consumer Electronics -40% YoY on fewer multiyear renewals and end-market softness; management expects growth to resume in 2025, but near-term pressure persists .
• GAAP loss persists: GAAP net loss of $(30.3)M and GAAP EPS of $(0.67); operating cash flow in the quarter was a $2M use (working capital and one-time items) .

Financial Results

Consolidated performance vs. prior periods

Notes: Non-GAAP gross margin and adjusted EBITDA margin are management metrics discussed on calls; Q2’24 EBITDA margin 12% and Q1’24 5% were provided verbally .

Segment dynamics (Q2 2024 vs. Q2 2023)

KPIs and operating milestones

Guidance Changes

Color: Management continues to expect stronger 2H24 EBITDA as TVOS monetization begins and transformation costs fade; Q2 commentary reiterated this outlook and left ranges unchanged .

Earnings Call Themes & Trends

Management Commentary

• “We delivered solid financial results with improved profitability while continuing to execute on our strategic growth initiatives. Our growing TiVo OS and Video‑over‑Broadband footprint is setting the stage for future monetization…” — Jon Kirchner, CEO .
• “Strong performance in Connected Car and IPTV were the highlights in the quarter… Adjusted EBITDA was $15 million or 12% of revenue, nearly tripling both sequentially and from the prior year quarter.” — Jon Kirchner .
• “Media Platform was down 25% year‑over‑year, primarily due to a decline in advertising revenue from a unique initial ad‑buy last year… [and] advertisers shifting spend to… later in the year.” — Robert Andersen, CFO .

Q&A Highlights

• AutoStage pipeline/timing: Management expects to hit 2024 AutoStage objectives; pipeline “robust” with both audio and video; no unexpected pushouts cited . Codec win use case is “primarily video” .
• TiVo OS early learnings: Focus on satisfaction/engagement to drive monetization; activations accelerating; confident in hitting 2M active devices by YE .
• Consumer Electronics outlook: 2024 down on multiyear deal lumpiness and market softness; over a longer window CE expected to grow low single digits, but year-to-year will be lumpy .
• U.S. TiVo OS: Building a U.S. OEM pipeline; some U.S. launches late ’24 with additional in spring ’25; more partners being engaged .
• Auto video adoption curve: Broad OEM engagement with tests underway; mix of OTA updates and roadmap integrations; expect at least one more video customer by YE .

Estimates Context

• S&P Global consensus for Q2 2024 (EPS, revenue, EBITDA) was not retrievable due to an API rate limit at the time of this analysis; as a result, we cannot quantify beats/misses vs. Wall Street estimates here (we attempted to fetch “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and “EBITDA Consensus Mean” for Q2 2024) [GetEstimates error].

Key Takeaways for Investors

• Improved quality of earnings: non-GAAP EPS positive and EBITDA margin stepped up to 12%, with OpEx falling 15% YoY; margin expansion is tracking the 2H‑weighted plan .
• Growth vectors are working: Connected Car strength (AutoStage >7M cars; new DTS codec program) and IPTV scaling (+45% YoY) are offsetting legacy declines, stabilizing topline .
• TVOS flywheel forming: 7th TV partner (top‑5 U.S.) and broad EU presence (15 countries/17 brands) support a 2M device YE target; monetization should become more visible starting in 2H24 and into 2025 .
• Ads narrative: Near-term Media Platform weakness tied to one-time comp and timing of spend; as TVOS/Video‑over‑Broadband activations grow, management expects ad monetization to offset legacy ad declines by Q4 .
• 2024 outlook intact: Revenue $500–$530M and 12%–14% adjusted EBITDA margin maintained; non-GAAP tax ~$20M; sets a baseline for 2025 operating leverage as platforms scale .
• Watch list catalysts: U.S. TiVo OS launches (late ’24/early ’25), additional AutoStage wins (≥1 video), IPTV surpassing 2.4M by YE, and Perceive strategic outcome .
• Risk checks: Advertising/timing variability (Media Platform), CE end-market softness and renewal lumpiness, and execution on TVOS monetization pacing remain key sensitivities .

Sources

• Q2’24 8‑K and press release, financial statements, and non‑GAAP reconciliations .
• Q2’24 earnings call transcript (prepared remarks and Q&A) .
• Q1’24 8‑K and call for sequential comparisons and prior guidance context .
• Q4’23 8‑K for trend context .