Xperi Inc. Announcement of Fourth Quarter and Full-year 2022 Results by Xperi Inc.

As an independent company, strong financial performance in the first quarter

Awarded first design win for TiVo’s video platform in Connected Car

SAN JOSE, Calif. – February 21, 2023–(BUSINESS WIRE)–Xperi Inc. (NYSE: XPER) (the “Company” or “Xperi”), an entertainment technology company that invents, develops, and delivers technologies that enable extraordinary experiences, today announced fourth quarter and full year 2022 financial results for the period ended December 31, 2022.

Jon Kirchner (chief executive officer of Xperi) stated, “Our first quarter was highlighted by substantial market progression, notable design victories and strong financial performances.” “Consumers demand higher quality digital experiences, and our customers are increasingly choosing our independent media platforms to fulfill that demand,” said Jon Kirchner, chief executive officer of Xperi. Our ongoing growth strategy is proving to be a success, as we are focused on increasing platform adoption. We have recently won design awards in Smart TV and Connected car.

Financial Highlights

  • Revenues of $136M for the fourth quarter were up 9 percent over the previous year. Full-year revenue of $502M, however, was up 33%.

  • Fourth quarter GAAP Net Loss of ($297M) or ($7.06 per share and non-GAAP Total Income was ($297M).1 The price was $4M or $0.08 a share

  • Adjusted EBITDA1 The fourth quarter’s adjusted EBITDA margin was 3%, at $4M

  • In connection with its year end review, the Company took a $258M non-cash charge for goodwill impairments and real estate restructuring.

  • The Xperi product business was included in the full year results on a carve out basis for the first nine months. It was previously part of Xperi Holding Corporation (Nasdaq : ADEA).

1 Please see the discussion below on “Non GAAP financial Measures” (GAAP to non GAAP reconciliation).

Recent Key Operating Achievements

Media Platform

  • TiVo’s partner Vestel, the first Smart TV OEM to incorporate the TiVo Operating System (TiVo OS), announced the brand lineup for their Smart TVs Powered by TiVo will be Vestel, Hitachi, JVC, Daewoo, Regal, and Telefunken. These TVs will include chipsets from MediaTek, the market leader.

  • TiVo OS will be integrated onto Amlogic’s 4K and 2K chipsets designed for Smart TVs, significantly reducing cost and time-to-market for TV OEMs looking to roll-out TiVo’s independent media platform.

Connected Car

  • Xperi was awarded its first design win for TiVo’s video platform in Connected Car with a major European automobile manufacturer, with vehicles expected to ship in late 2023.

  • DTS AutoStage is currently in production with five automotive brands. It’s being deployed in more 100 models across 140 countries, which demonstrates its global value.

  • The Company was awarded a new design win for DTS AutoSense, Xperi’s Driver Monitoring System (DMS) and Occupant Monitoring System (OMS), with a major Asian automotive OEM, which will significantly expand Xperi’s DMS and OMS footprint beginning in 2024.

  • Xperi finished 2022 with connected car business, which included HD Radio and DTS AutoStage. Totaling over $300M, this totals more than 300M.

Pay TV

  • TiVo IPTV’s double-digit subscriber growth continued in the quarter. FY22 saw subscribers increase by 80% and revenue more that doubling than FY21.

  • TiVo’s IPTV platform won the Fierce Innovation Award for Customer Engagement.

Consumer Electronics

  • DTS:X, Xperi’s immersive audio technology, will be integrated in LG’s new line of OLED and premium LCD TVs, expected to be in the market in the first half of 2023.

  • The Company announced that Sony Pictures Entertainment, IMAX Corp., and DTS have extended their agreement to distribute multiple new titles in the IMAX Enhanced format, featuring DTS’ premium audio technology.

  • Xperi has announced that DTS:X will launch on Disney+ in 2023.

Financial Outlook

The following guidance is provided by the Company for fiscal year 2023.

Category ($ In millions

GAAP Outlook

Outlook Non-GAAP

Revenue

510 to 540

510 to 540

Adjusted EBITDA Margin1,2

n/a

6% to 10%

1 Below is a discussion on “Non GAAP Financial Measures”.

2 The Company determined that Adjusted EBITDA Margin is not able to provide a quantitative reconciliation between this forward-looking non GAAP measure and the most directly comparable forward looking GAAP measure. This is because items such as restructuring and the impacts of discrete tax adjustments or tax law changes are inherently uncertain. These factors are many and varied.

Conference Call Information

The Company will host its fourth quarter earnings conference call at 2:20 PM Pacific Time (5:00 pm Eastern Time) Tuesday, February 21st 2023. You can access the call by dialing 1-888-660-65313 or +1 929-203-0876. The conference ID number is 5483252. Participants should dial in at least 15 minutes before the start of conference call. They can then use the conference ID for access to the call. You can also access the conference call via the webcast link at Q4 Earnings Call Webcast.

Safe Harbor Statement

This press release contains “forward looking statements” as defined by the federal securities laws. These forward-looking statements are based on information available to the Company as of the date hereof, as well as the Company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. Forward-looking statements can be identified by words such as “expect”, “anticipate,”” “intend,”,” plan,” believe,”,” could,” and “seek,” which are based on information available to the Company at the date hereof. These statements also include expressions similar to these words, or any other similar terminology that may convey uncertainty about future events or outcomes. These statements are subject to risks, uncertainties, and other factors that could cause actual results, levels or performance, or achievements, to differ materially from what is expressed or implied in these forward-looking statement. These risks, uncertainties and factors are listed under “Risk Factors”, “Management’s Discussion and Analy of Financial Condition and Results Of Operations” and elsewhere on the documents we file with Securities and Exchange Commission. The Company assumes no obligation to publically revise or update forward-looking statements due to new information, future developments, or other factors, except as required under securities and other applicable law.

About Xperi Inc.

Xperi creates, develops and delivers technology that allows for extraordinary experiences. Xperi technologies, delivered via its brands and partnerships (DTS®, HD Radio™, TiVo®), and by its startup, Perceive, and IMAX Enhanced, an IMAX and DTS partnership, are integrated into billions of consumer devices and media platforms worldwide, powering smart devices, connected cars and entertainment experiences. Xperi has built a unified ecosystem to reach highly engaged customers, thereby increasing the value of partners, customers, and consumers.

Xperi, DTS HD Radio, Perceive and TiVo are trademarks or registered trademarks owned by affiliated companies and partners of Xperi Inc., the United States, and other countries. All other brand, company and product names could be trademarks/registered trademarks of the respective companies.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company’s earnings release contains non-GAAP financial measures adjusted for either one-time or ongoing non-cash acquired intangibles amortization charges; amortization of capitalized cloud computing costs; costs related to actual or planned acquisitions, financing, and divestitures including transaction fees, integration costs, severance, facility closures, and retention bonuses; separation costs; all forms of stock-based compensation; impairment of assets and goodwill; other items not indicative of our ongoing operating performance, and related tax effects for each adjustment. Management believes that the non-GAAP measures used in this release provide investors with important perspectives into the Company’s ongoing business and financial performance and provide a better understanding of our core operating results reflecting our normal business operations. The Company’s non-GAAP financial information should not be considered to be an alternative or superior financial measure. Non-GAAP financial measurements are not comparable to other companies’. This press release does not give a uniform meaning to terms such as Adjusted EBITDA. Others may use similar or identical measures but may exclude other items. Investors may not be able to get a comparable view of our performance relative to other companies. To compensate for this limitation in our non-GAAP presentation, we provide a detailed reconciliation between the non-GAAP financial measurements and the most directly comparable GAAP measure in the attached tables. Investors are invited to examine the GAAP financial measurements and the reconciliation between these non-GAAP financial measure to the most directly comparable GAAP financial measure. All financial data are presented using GAAP, except when the Company specifies otherwise.

Set forth below are reconciliations of the Company’s reported GAAP to non-GAAP financial metrics.

SOURCE: XPERI INC.

XPER-E

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS of OPERATIONS

(in thousand, except per share amounts).

(unaudited)

Three Months End

Twelve Months Finished

December 31,
2022

December 31,
2021

December 31,
2022

December 31,
2021

Revenue

$

135,531

$

124,745

$

502,260

$

486,483

Operating expenses

Cost of revenue, exempting depreciation or amortization of intangible asset

37,258

37,643

122,946

125,626

Research and development

57,713

50,498

216,355

194,869

Selling, general and administration

60,506

51,834

217,402

199,921

Depreciation expense

4,804

5,526

20,501

22,584

Amortization expense

16,044

22,045

62,209

105,311

Endangering long-lived assets

7,724

7,724

Goodwill Impairment

250,555

604,555

Total operating expenses

434,604

167,546

1,251,692

648,311

Operating loss

(299,073

)

(42,801

)

(749,432

)

(161,828

)

Other income, net

2,117

1,078

1,815

1,590

Loss before taxes

(296,956

)

(41,723

)

(747,617

)

(160,238

)

Provisions for income taxes

1,090

10,679

13,589

18,840

Net Loss

(298,046

)

(52,402

)

(761,206

)

(179,078

)

Noncontrolling interest is responsible for less net loss

(1,016

)

(630

)

(3,722

)

(3,456

)

Net loss attributable by the Company

$

(297,030

)

$

(51,772

)

$

(757,484

)

$

(175,622

)

Loss per Share attributable To the Company

Share loss, both basic and diluted

$

(7.06

)

$

(1.23

)

$

(18.02

)

$

(4.18

)

Number of shares in Basic and Diluted outstanding

42,043

42,024

42,029

42,024

XPERI INC.

CONDENSED CONSOLIDATED BALANCE SHAFTS

(in thousands)

(unaudited)

December 31,

December 31,

2022

2021

ASSETS

Current assets

Cash and cash equivalents

$

160,127

$

120,695

Net receivables, accounts

64,712

79,494

Receivables not billed, net

65,251

50,962

Other current assets

42,174

25,985

Total current assets

332,264

277,136

Receivables for long-term, unbilled contracts

4,289

3,825

Equipment and property net

47,827

57,477

Lease rights-of-use assets

52,901

61,758

Intangible assets and net

264,376

270,934

Deferred long-term tax assets

2,096

1,847

Goodwill

536,512

Other long-term investments

33,158

19,223

Total assets

$

736,911

$

1,228,712

LIABILITIES and EQUITY

Current liabilities:

Accounts payable

$

14,864

$

7,362

Accrued liabilities

110,014

84,404

Deferred revenue

25,363

28,211

Total current liabilities

150,241

119,977

Deferred revenue, less current portion

19,129

23,663

Long-term deferred taxes liabilities

20,559

14,428

Long-term debt

50,000

Non-current operating lease liabilities

42,666

49,017

Other long-term liabilities

5,330

5,670

Total liabilities

287,925

212,755

Contingencies and commitments

Company stockholders’ equity:

Net investment by the Former Parent

1,025,838

Stock preferred

Common stock

42

Additional paid-in capital

1,136,330

Accumulated loss other than comprehensive

(4,119

)

(676

)

Accumulated deficit

(668,835

)

Total Company stockholders’ equity

463,418

1,025,162

Noncontrolling Interest

(14,432

)

(9,205

)

Total equity

448,986

1,015,957

Total liabilities and equity

$

736,911

$

1,228,712

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS ABOUT CASH FLOWS

(in thousands)

(unaudited)

Twelve Months Finished

December 31, 2022

December 31, 2021

Cash flows from operating activities

Net loss

$

(761,206

)

$

(179,078

)

Adjustments to reconcile net losses to net cash earned from operating activities

Property and equipment depreciation

20,501

22,584

Amortization for intangible assets

62,209

105,311

Stock-based compensation expense

45,303

33,509

Goodwill impairment

604,555

Endangering long-lived assets

7,724

Deferred income taxes

(1,602

)

6,913

Other

24

(1,754

)

Changes in operating liabilities and assets:

Receivables

17,505

(2,416

)

Receivables for unbilled contracts

(12,473

)

15,475

Other assets

(20,439

)

15,296

Accounts payable

6,633

(4,018

)

Other liabilities, accrued

11,123

(37,249

)

Deferred revenue

(8,302

)

1,974

Net cash generated by operating activities

(28,445

)

(23,453

)

Cash flows from investing activities

Property and equipment purchases

(14,207

)

(8,893

)

Purchases of intangible assets

(166

)

(186

)

Acquisitions paid in net cash

(50,473

)

(12,401

)

Net cash generated by investing activities

(64,846

)

(21,480

)

Cash flows from financing activities

Net proceeds from capital contributions of Former Parent

83,235

Net transfers to Former Parent

52,802

83,330

Withholding taxes in relation to net share settlement of restrict award

(286

)

Financing activities generate net cash

135,751

83,330

Cash and cash equivalents: Effect of changes in exchange rates

(3,028

)

(3,326

)

Increase in cash and cash equivalents net

39,432

35,071

Cash and cash equivalents in the beginning of the period

120,695

85,624

End of the period cash and cash equivalents

$

160,127

$

120,695

Additional disclosure of cash flow data:

Acquisition debt

$

50,000

$

Interest paid

$

756

$

Net of refunds, income taxes paid

$

13,416

$

11,801

XPERI INC.

GAAP TO NONGAAP RECONCILIATIONS

(in thousands, not per share amounts)

(unaudited)

Net income attributable the Company:

Three Months End

December 31, 2022

GAAP net loss attributable by the Company

$

(297,030

)

Adjustments to GAAP net loss attributable the Company

Stock-based compensation expense

Revenue costs

729

Research, development and other

5,266

Selling, general and administration

9,547

Amortization for intangible assets

16,044

Long-lasting assets are at risk

7,724

Goodwill impairment

250,555

Costs associated with acquisition and separation

Transactions and related costs recorded in general, administrative, and selling

2,234

In research, development and any other activities, there has been a record of separation and retention

2,009

In selling, general, and administrative cases, there is a record of separation and retention

291

Separation-related Bonus Adjustment recorded in cost of Revenue, excluding amortization and depreciation of intangible assets

(24

)

Research and development: Separation-related Bonus Adjustment

(67

)

Separation-related bonus adjustment in sales, general, and administrative

91

Non-GAAP tax adjustment (1)

6,340

Non-GAAP net income attributable the Company

$

3,709

The Company’s diluted earnings per share:

Three Months End

December 31, 2022

GAAP loss per share attributable the Company

$

(7.06

)

Adjustments to GAAP Loss per Share attributable To the Company

Stock-based compensation expense

0.37

Amortization expense

0.38

Long-lived assets are at risk

0.18

Goodwill impairment

5.96

Separation-related and acquisition costs

0.11

Adjustment of non-GAAP taxes

0.15

Different shares used in calculation

(0.01

)

Non-GAAP diluted earnings/share attributable to Company

$

0.08

GAAP weighted average shares-basic/diluted

42,043

Non-GAAP weighted Average Number of Shares-Dilutive

46,470

(1)

The provision for income taxes has been adjusted to reflect the net income tax effects of non-GAAP pretax adjustments.

XPERI INC.

GAAP TO NONGAAP RECONCILIATIONS

(in thousands)

(unaudited)

Three Months End

December 31, 2022

GAAP loss before taxes

$

(296,956

)

Interest expense

839

Depreciation expense

4,804

Amortization for intangible assets

16,044

Amortization of cloud computing capital costs

527

Endangering long-lived assets

7,724

Goodwill impairment

250,555

Acquisition and integration costs

Transactions and related costs recorded in general, administrative, and selling

2,234

Research and development: Severance and retention

2,009

Retention and seperation recorded in general, administrative and selling

291

Separation-related Bonus Adjustment recorded in cost of Revenue, excluding amortization and depreciation of intangible assets

(24

)

Research and development: Separation-related Bonus Adjustment

(67

)

Separation-related bonus adjustment in sales, general, and administrative

91

Stock-based compensation expense

Cost of revenue

729

Research and development

5,266

Selling, general and administration

9,547

Non-GAAP Adjusted EBITDA

$

3,613

Businesswire.com – View the source version https://www.businesswire.com/news/home/20230221005738/en/

Contacts

Contact the Xperi Investor
Mike Iburg
VP, Investor Relations
+1 408-321-3827
[email protected]

Media Contact
Amy Brennan
Corporate Communications Senior Director
+1 949-518-6846
[email protected]

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