Xperi Inc. Q3 FY2025 earnings call

• Media Platform: TiVo One CTV advertising platform had 30% sequential growth to 4.8 million monthly active users; ARPU was $8.75. Continued partner rollout and engagement with new industry partners. - Connected Car: Over 13 million vehicles with AutoStage; initiated collaboration with leading audio media companies for monetization. - Pay TV: IPTV subscribers increased 32% YOY to 3.2 million; renewed agreements with customers. - HD Radio: New radio stations and vehicle models; signed multiyear contract with Asia-based Tier 1 supplier. - Workforce reduction: 250 employees reduced, with one-time restructuring charges and annual savings of $30M-$35M.

Consolidated revenue for the quarter was $112 million. In the Media Platform, TiVo One CTV advertising platform had 30% sequential growth to finish with 4.8 million monthly active users at quarter end, and ARPU was $8.75. Connected Car had over 13 million vehicles installed with AutoStage at quarter end. Pay TV video over broadband subscriber count grew 32% YOY to reach 3.2 million subscriber households. Consumer electronics and connected car markets achieved year-over-year growth. HD Radio saw new radio stations and vehicle models, plus a multiyear contract with an Asia-based Tier 1 supplier.

Reiterated 2025 revenue guidance of $440M-$460M and adjusted EBITDA margin of 15%-17%. Workforce reduction will incur one-time charges of $16M-$18M but expected annual savings of $30M-$35M. No 2026 guidance provided yet, but preliminary view consistent with consensus estimates.

Forward-looking statements subject to risks in SEC filings, including those from minimum guarantee arrangements and market uncertainties affecting revenue comparability and growth expectations.

Q: Can you maybe touch on the pieces that drive the initially lower gross margin in the media platform business that scales. And sort of how long do you expect to kind of operate at a lower margin before you reach kind of your terminal or a mature margin?

A: There's semi-fixed costs of operating the platform initially, but as scale builds, marginal advertising dollars come through at higher margin. Various deals and market incentives also play a role, with belief margin will accelerate over time.

Q: As you begin to deliver targeted ads to automotive, do you expect a similar kind of individual fixed cost basis that you need to clear before contributing at a higher margin level? Or is that kind of all amortized through the same fixed costs as you do kind of on the traditional side?

A: More of the latter; part of the existing platform. Finished platform development and seeing interest in measurement and targeting, turning corner into next chapter.

Q: Maybe tell us where TiVo MAUs were last year in the third and fourth quarters so we can gauge it going forward. Also, what was ARPU last quarter?

A: TiVo MAUs were very low millions last year; ARPU not at fingertips but expected to move northward as monetization increases, though not linear due to quarter-to-quarter factors.

Q: TiVo One is scaling up nicely. What is the critical mass you need to have meaningful ad revenue generated on that platform? Are we halfway there?

A: Expect material progress in 2026 based on '26 footprint growth. Scale is important per market, but pursuing partnerships to augment revenue growth.

Q: Could you just talk a little bit more about these minimum guarantees and how it's becoming -- you're saying it's going to be more than 20% of 2025 revenue. Is that because of the competitive necessity that you have to provide such deals?

A: Partners interested in technology inclusion windows, supply chain management, and certainty; benefits include locking in technology, lower service costs, and predictability. Accounting standards affect revenue recognition differently.

Q: Was minimum guarantee a reason why the Connected Car revenue jumped this quarter?

A: Yes, had higher level of minimum guarantees this quarter than last year.

Q: When would you see platform revenue stabilize? It seems like it's quite volatile quarter-over-quarter.

A: As meaningful growth in 2026 occurs, less volatility will be seen; revenue will stabilize as growth continues.