Xperi Inc ((XPER)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Xperi Inc. painted a mixed picture for investors. While there were significant advancements in the TiVo One and Connected Car platforms, and cost reductions led to improved profitability, the company faced challenges with a decline in overall revenue and announced a substantial workforce reduction. This combination of positive and negative developments created a nuanced sentiment during the call.
TiVo One Platform Growth
Xperi Inc. reported impressive growth in its TiVo One CTV advertising platform, achieving a 30% sequential increase. This growth brought the platform’s monthly active users to 4.8 million, highlighting the company’s strong position in the competitive CTV advertising market.
Connected Car Expansion
The company’s Connected Car platform, DTS AutoStage, saw its footprint expand to over 13 million vehicles by the end of the quarter. Xperi initiated significant collaborations aimed at monetizing this platform, showcasing its potential for future revenue streams.
IPTV Subscriber Growth
Xperi’s video over broadband service experienced a 32% year-over-year increase in subscriber households, reaching 3.2 million. This growth underscores the demand for IPTV services and Xperi’s ability to capture a larger share of the market.
Cost Reduction and Profitability
The company successfully reduced its non-GAAP adjusted operating expenses by approximately 20% compared to the previous year. This cost-cutting measure, along with a planned workforce reduction, is expected to save Xperi $30-35 million annually, bolstering its profitability.
Partnerships and Renewals
Xperi renewed agreements with key partners such as Vestel and NCTC, and expanded its IMAX Enhanced program with Sony Pictures. These partnerships are crucial for maintaining and expanding Xperi’s market presence.
Revenue Decline
Despite the positive developments, Xperi’s consolidated revenue fell to $112 million, a decrease from the previous year. This decline was attributed to the expiration of a large minimum guarantee arrangement with Panasonic in the Pay TV sector.
Workforce Reduction
In a move to improve profitability and cash flow, Xperi announced a reduction of 250 employees, representing 15% of its workforce. This decision reflects the company’s focus on streamlining operations amid revenue challenges.
Forward-Looking Guidance
Looking ahead, Xperi maintained its full-year revenue guidance of $440 million to $460 million and an adjusted EBITDA margin of 15% to 17%. The company introduced a new performance indicator, average revenue per user (ARPU) for TiVo One, calculated at $8.75, with a target to reach $10 by year-end and grow beyond $20 over time. These forecasts demonstrate Xperi’s strategic focus on growth and profitability.
In conclusion, Xperi Inc.’s earnings call revealed a complex landscape of growth and challenges. While the company made significant strides in its TiVo One and Connected Car platforms and achieved cost reductions, it also faced revenue declines and announced a workforce reduction. Investors will be keenly watching how Xperi navigates these dynamics in the coming quarters.