Q4 2024 Xperi Inc Earnings Call
Speaker Change: Good day everyone. Thank you for standing by and welcome to the Xperi fourth quarter and full year 2024 earnings conference call.
During today's presentation, all parties will be in listen-only mode.
Speaker Change: Following the presentation, the call will be open for the questions.
Speaker Change: I would now like to turn the call over to Catherine Moiari from Experis Marketing and External Communications Department.
Catherine, please go ahead.
Speaker Change: Good afternoon and thank you for joining us as Xperia reports its fourth quarter and full year 2024 financial results.
Speaker Change: I'm filling in today for Mike Iburg, Xperia's Head of Investor Relations, who is unable to be with us today. With me on today's call are Jon Kirchner, Chief Executive Officer, and Robert Andersen, Chief Financial Officer.
Speaker Change: In addition to today's earnings release, there is an earnings presentation which you can access, along with this webcast, on our investor relations website at investor.xferi.com.
Speaker Change: Before we begin, I would like to provide a few reminders.
Speaker Change: First, I would like to note that unless otherwise stated, all comparisons are to the same period in the prior year.
Speaker Change: 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.
Speaker Change: which are based on management's current expectations and beliefs and therefore subject to risks, uncertainties, and changes in circumstances.
Speaker Change: For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discussed today, please refer to the risk factors and mDNA sections in our SEC filings.
Speaker Change: including our most recent Form 10-K and 10-Q and our Form 10-K for the year ended December 31, 2024 to be filed with the SEC.
Speaker Change: 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.
Speaker Change: Third, we 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.
Speaker Change: 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 Xperia's CEO, Jon Kirchner.
Jon Kirchner: Thank you, Catherine, and thank you everyone for joining us on our fourth quarter and full year 2024 earnings call.
Jon Kirchner: We close the 24 fiscal year on a strong operational note, making significant strides in our independent media platform strategy across the media platform, pay TV, and connected car markets.
Jon Kirchner: From a financial standpoint, we're pleased with the progress of our business transformation and its impact on profitability as we navigate a challenging market environment across our core business.
Jon Kirchner: Robert will walk you through the details in just a moment, but let me first touch on a few financial highlights.
Jon Kirchner: Revenue in the quarter was $122 million, up 2% from the prior year after adjusting for the divestitures of AutoSense and Perceive.
Jon Kirchner: This growth continues to demonstrate the progress of our business transformation efforts, which for the full year yielded an adjusted EBITDA margin of 15%, more than doubling year-over-year.
Jon Kirchner: From a balance sheet perspective, we finish the year with $131 million of cash and equivalents, which we believe provides solid operating liquidity as we look ahead.
Jon Kirchner: Also, we recently completed the refinancing of our $50 million of outstanding debt due this July through a new three-year facility.
Jon Kirchner: Looking forward, we remain focused on our three growth solutions where we see strong potential and differentiation.
Jon Kirchner: These are Connected TV Advertising, where we offer our TiVo One monetization platform that monetizes ad-supported viewing, viewership data, and homepage engagement across smart TVs powered by TiVo and TiVo video over broadband devices.
Jon Kirchner: In-cabin entertainment, where DTS Autostage combines radio, internet metadata, and video to enhance the automotive experience while enabling long-term monetization through licensing fees, upselling features, advertising, and data.
Jon Kirchner: and Tevo Video Over Broadband where we offer an industry-leading content-first streaming platform for our customers IPTV linear video households as well as broadband only households where revenue is primarily generated by monthly subscriptions.
Jon Kirchner: We expect each of these markets to continue to grow rapidly over the next several years.
Jon Kirchner: As evidenced by our progress during this past year, we believe we are increasingly well positioned to grow our revenue as our footprint in these markets expands over time.
Jon Kirchner: We have now updated this slide to reflect progress through 2024.
Jon Kirchner: Breaking this down in terms of monetization, in homes across Europe and North America, our goal is a monetizable footprint of at least 7 million active devices, generating $170 million or more of revenue.
Jon Kirchner: Additionally, we increased our goal to over 3.2 million IPTV households contributing over a hundred and twenty million dollars of revenue.
Jon Kirchner: Lastly, we've increased our footprint goal on DTS Auto Stage to over 15 million cars, producing over $20 million in revenue.
Jon Kirchner: In summary, we expect that achieving these monetizable endpoint goals, along with building out our monetization platform, would enable Xperia to generate significant growth in 2026 and beyond from these categories relative to 2024.
Jon Kirchner: Now let me walk you through some of our recent achievements that reflect our progress, as well as outlining what steps we expect to take in 2025.
Jon Kirchner: For Teva OS, we've now exceeded our goal of over 2 million activated devices across Europe, with deployments in each of the five major countries of UK, France, Italy, Germany, and Spain.
Jon Kirchner: Importantly, our partner Sharp Home Electronics Company of America started shipping TiVo powered TVs into the U.S. market at the end of 2024.
Jon Kirchner: and these TVs are now available at certain US retailers. As an example, Sharp's QLED 4K 55 inch TV powered by TiVo can be found at certain retailers priced as low as $299.
Jon Kirchner: We also finished the year with 8 TV partners, with Thompson now named as our latest partner, exceeding the year's goal of at least 6. Notably, several of our partners are top 10 global TV manufacturers.
Jon Kirchner: We began to deploy our TiVo One ad platform during the quarter, which is our cross-screen ad platform for maximizing engagement and monetization on TiVo's independent media platforms, whether in the home or in the car.
Jon Kirchner: TiVo One is relevant not only on smart TVs powered by TiVo, but also on TiVo IPTV based video over broadband boxes which are connected to and power the user interface of smart TVs.
Jon Kirchner: The two platforms are built on a common TiVo best-in-class experience and further offer the benefit to advertisers of being reachable through a common ad platform.
Jon Kirchner: This advances our goals of providing an extraordinary end-user experience on smart TVs, along with a highly scalable platform for our advertising and monetization partners as they look to engage with unique audience segments across our footprint.
drive viewership, expand reach, and seek flexible advertising solutions.
Jon Kirchner: Taken together, the combination of our footprint growth and harmonization of our smart TV and video over broadband footprint through the TiVo 1 ad platform is expected to set the foundation for monetization growth as we move through 2025.
Jon Kirchner: One important ad unit that delivers unique reach and brings a valuable presence is the homepage across connected TVs.
Jon Kirchner: Advertising clients recognize that the homepage is a key, common, and frequent touchpoint in the consumer entertainment journey as they seek to find, watch, and enjoy the content they love.
Jon Kirchner: Overall, it was a positive quarter of execution for our independent media platform strategy and we look forward to beginning to turn the corner on monetization growth as we progress through the year.
Jon Kirchner: Our connected car business saw continued footprint momentum during the quarter. For DTS Autostage, we now have a footprint of over 10 million vehicles, which exceeds our original goal of 7 million.
Jon Kirchner: Additionally, by adding a Japanese automotive brand in the quarter, we met our goal of three incremental DTS Autostage design wins, including one that included video service powered by TiVo.
Jon Kirchner: Several new models of Autostage launched in the quarter from six brands including BMW, Hyundai, Mercedes, and Nissan.
Jon Kirchner: In our HD radio business, our technology is now implemented in more than 110 million vehicles, with penetration approaching 60% of new vehicles in North America.
Jon Kirchner: In the quarter, more than 15 automotive brands launched new model lineups with HD Radio, including Mercedes-Benz, Aston Martin, Hyundai, Toyota, Honda, Audi, and Tesla.
Jon Kirchner: Additionally, during the quarter, we signed several DTS Audio multi-year minimum guarantee agreements ensuring the use of our technology over the next several years.
Jon Kirchner: Within the pay TV business, our video over broadband, or IPTV solution, continues to make steady progress, ending 2024 with 2.6 million IPTV subscriber households.
exceeding our year-end goal of 2.4 million.
Jon Kirchner: We signed seven new TiVo broadband customers in the fourth quarter of 2024.
Jon Kirchner: exceeding our goal for the year and bringing the total number of operators committed to our broadband only solution to 20.
Jon Kirchner: This growth in IPTV subscribers and its related revenue helped to offset the secular decline from our core pay TV solutions.
Jon Kirchner: Turning to consumer electronics, we closed several long-term DTS renewals with our customers, including Harman and Yamaha.
Jon Kirchner: These illustrate the durability of our core audio technologies, even in an environment where there is meaningful macro uncertainty.
Jon Kirchner: Additionally, at CES 2025, DTS Clear Dialogue won three technology and innovation awards from industry-leading publications.
Jon Kirchner: We are well underway with commercialization efforts with OEMs while building the IC ecosystem to support the rollout of the product.
Jon Kirchner: We've accomplished a lot over the past year in terms of building critical footprint across our growth segments, either meeting or exceeding all key platform growth milestones communicated at the beginning of the year. We believe these milestones are validation of our independent media platform's value proposition to our customers, and further demonstrate how Xperia is working to enhance the way people discover, watch, and enjoy their favorite content in the home and on
Jon Kirchner: As we turn to 25, let me provide a few business metrics we'll be using to gauge our progress this year.
Jon Kirchner: Thus far our focus has been on gaining critical mass in terms of initial footprint and hence we've provided the number of activated devices defined as new users initiating first use of the platform.
Jon Kirchner: Going forward, our focus will turn to monetizing this footprint, so we will soon start reporting active users connected to our TVO1 advertising solution, defined as users that have been active by engaging at least once with our platform over the trailing 30-day period.
Jon Kirchner: With this background, we aim to achieve the following goals as we exit 2025.
Jon Kirchner: In Media Platform, we have three primary goals. Drive more than 5 million active TiVo devices across Europe and North America.
Jon Kirchner: Exit the year with an average ARPU above $10, and sign at least two additional Smart TV partners, bringing our total to 10.
Jon Kirchner: In PAY-TV, our goals are to activate TiVo 1 across the North America video over broadband footprint.
Jon Kirchner: and exit the year with at least 3 million IPTV subscriber households.
In Connected Car
Jon Kirchner: We target to exit the year with a DTS Autostage footprint of over 13 million vehicles and to initiate monetization on certain Autostage vehicle platforms in North America.
Jon Kirchner: By delivering on these goals, we expect to generate meaningful revenue growth for media platforms, connected car, and IPTV in 2025.
Jon Kirchner: For this year, we anticipate this growth will be offset by declines in our core business. However, due to continued business transformation efforts, we expect improved profitability and cash flow.
Jon Kirchner: As we turn the corner on our expected larger monetization footprint exiting 2025, we anticipate media platform growth to outpace core business declines, resulting in meaningful top-line revenue growth, continued margin expansion, and increased cash flow.
Robert Andersen: With that, I'll turn the call over to Robert to discuss our financials. Robert?
Robert Andersen: Thanks, Jon. I'll be covering two main areas during this call. First, I'll go through the financial results for the quarter and the year, including commentary on the results.
Second, I'll provide financial outlook and commentary for fiscal 2025.
Robert Andersen: Beginning with the quarter's results, total revenue for the fourth quarter was $122 million.
Robert Andersen: Down 11% from last year's 137 million, but up 2% when adjusting for the auto sense and perceived divestitures.
PTV, our largest revenue category.
Robert Andersen: was down 8% as strong growth in IPTV, which was up 35%, was more than offset by a decline in our core pay TV business, partly due to the timing of certain revenue in the prior year's fourth quarter.
Robert Andersen: Consumer electronics was up 2% when excluding the perceived and auto-sense divestitures.
Robert Andersen: This growth was due, in part, to year-over-year strength in unit volumes for game consoles.
Robert Andersen: Connected Car was up 9% as reported and up 42% when excluding the divested AutoSense business from the numbers.
Robert Andersen: This significant underlying growth was due to certain minimum guarantee deals for the legacy audio technologies that were closed in the quarter, for which the company recognizes most of the revenue up front.
Robert Andersen: Media platform was down 15% due to a year-over-year decline in a large linear ad campaign buy from a repeat customer whose budgets changed due to market conditions.
Robert Andersen: as well as certain minimum guarantee deals associated with our middleware products in the prior year period.
Robert Andersen: For the full year 2024, revenue was down 5% as reported, but essentially flat year-over-year when excluding the Auto Sense divestiture.
Robert Andersen: Looking at the year-over-year trends in pay TV we saw overall growth of 6% due to continued expansion in IPTV as expected coupled with better than expected revenue and core pay TV from several multi-year agreements signed during the year for which revenue was recognized up front.
Robert Andersen: Some of these agreements relate to certain segments of our historical guides business.
Robert Andersen: where the opportunity existed to lock in meaningful value and certainty.
Connected car was up 29%.
Robert Andersen: excluding auto sets due to several multi-year DTS audio agreements during the year along with growth in the HD radio business.
Robert Andersen: media platform was down 17% year-over-year primarily due to a decline in linear TV advertising revenue from a unique initial ad buy-in as well as middleware revenue from minimum guarantee agreements both of which occurred in 2023
Robert Andersen: Further, Media Platform received little benefit from monetization revenue during the year due to partner delays that impacted our footprint in 2024.
Robert Andersen: Late in the year these issues were eventually addressed and we now have achieved our goal of 2 million activated devices.
Robert Andersen: Before proceeding to the income statement, I'd like to take a moment and provide a revenue view of 2024 that accounts for the divestiture perceived, which occurred at the very beginning of the fourth quarter.
Robert Andersen: In the accompanying presentation, the top table shows our revenue by market as reported. The bottom table shows numbers that remove the perceived revenue of approximately $5 million that was recorded within the consumer electronics category.
Robert Andersen: These adjustments create a baseline for 2024 revenue of $488 million, which we will use for relative comparison purposes as we post revenue numbers during 2025.
Robert Andersen: Turning now to the income statement, our non-GAAP-adjusted operating expense for the quarter, excluding cost of revenue, was $78 million, down $20 million, or 20%, from the prior year, primarily due to personnel savings from business optimization efforts, and also from cost reductions from the divestitures.
Robert Andersen: Our adjusted EBITDA was $23 million, resulting in an adjusted EBITDA margin of 19%.
Robert Andersen: After accounting for tax and interest expense, our non-GAAP earnings per share was $0.39.
Robert Andersen: Non-gap tax in the quarter was a million dollars which was lower than planned due to evaluation allowance reversal during the quarter at one of our European subsidiaries.
Robert Andersen: For the full year, adjusted EBITDA was $74 million, or 15% of revenue, more than doubling last year's adjusted EBITDA margin.
Robert Andersen: Turning to the balance sheet, the company ended the year with $131 million of cash and cash equivalent.
Robert Andersen: With the $58 million cash increase in the quarter being driven by $68 million of proceeds from the sale of Perceive in October, balanced by $10 million of common stock repurchases that were executed in the quarter.
Robert Andersen: For the full year, the company repurchased $20 million worth of common stock, or 2.2 million shares, at an average price of $9.23.
Robert Andersen: As Jon noted earlier, we recently completed a financing arrangement with PNC Bank for a $55 million line of credit backed by our accounts receivable assets.
Robert Andersen: This line has a three-year term, with our borrowing rate is currently one month SOFR plus 190 basis points.
Robert Andersen: Assuming all borrowings accrue interest at the current SOFR rate, along with the amortization of upfront costs related to setting up the arrangement, we currently expect our all-in borrowing rate of approximately 7.5%.
Robert Andersen: With the completion of the financing, we paid down our existing $50 million of debt with $10 million of cash and $40 million from the new receivables-backed line.
Robert Andersen: Looking at operating cash flow for the year we had a usage of 55 million dollars consistent with our updated guide for the year.
Robert Andersen: Moving now to our Outlook for 2025, we are providing the following information and commentary.
Robert Andersen: We expect full year revenue to be in the range of $480 to $500 million.
Robert Andersen: At the midpoint, this represents level to possibly modest growth over a normalized 2024.
Robert Andersen: Revenue is expected to have a slightly heavier weighting toward the back half of the year relative to 2024 with Q1 being the lowest quarter of the year.
Robert Andersen: Within the markets we serve, we expect significant growth in media platform from an increase in advertising revenue from the expanding TiVo OS and connected TV footprints.
Robert Andersen: We expect consumer electronics and connected car to be relatively consistent with 2024 due to broader macroeconomic uncertainty.
Robert Andersen: Lastly, we expect a year-over-year decline in pay TV revenue as growth in IPTV is expected to be more than offset by core pay TV revenue decline due to industry declines in the impact of multi-year classic guide to minimum guarantee arrangements that occurred in 2024.
Robert Andersen: For the year, we expect operating cash flow to be slightly positive.
Robert Andersen: On other items, we expect non-GAAP tax expense to be approximately $20 million and capital investments of approximately $20 million.
Robert Andersen: Also, from a GAAP perspective, we expect stock-based compensation expense for the year to be approximately $50 million, down meaningfully from 2024.
Robert Andersen: Basic and diluted share count is expected to be approximately 46 million.
Robert Andersen: That concludes our prepared remarks. Let's now open the call for questions.
Operator
Robert Andersen: Thank you. We will now begin the question and answer session.
Robert Andersen: If you have dialed in and would like to ask a question,
Robert Andersen: Please press star 1 on your telephone keypad to raise your hand and join the queue
Robert Andersen: And if you would like to withdraw your question, simply press the star 1 again. If you are called upon to ask a question and listening by a loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.
Again, please press star 1 to join the queue.
Speaker Change: Your first question comes from the line of Jason Crayer of Craig Howard. Your line is now open.
Speaker Change: Great, thank you. This is Cal on for Jason. Maybe to start, you know, good to see you guys hitting the some of the footprint goals that you had laid out. So I guess just looking ahead, how do you think about, you know, with T-Bone OS in particular, how do you think about balancing adding new OEM partners versus growing more volume and getting more activated devices with your existing partners?
Speaker Change: I think we certainly intend to do both. Cal, the first couple of quarters of experience with these partners is that they're getting good feedback on the units from a customer satisfaction and use perspective. And so, I think...
Speaker Change: you know, will continue to work to, you know, expand, let's call it share of production.
Speaker Change: with our partners, but at the same time, we still have a pipeline of others that we are working with that have an interest in potentially joining the platform, and I think that'll be just incrementally positive as we look to ramp, particularly over the next year or two, to an even bigger and broader footprint.
Speaker Change: Great. And then maybe to follow up, you know, just kind of looking at the TIVO1 platform that you guys are talking about in the rollout, just kind of wanted to get some high-level thoughts on how you're thinking about ARPU, how you're thinking about the trends that you're seeing early on in North America versus Europe, and, you know, getting to that greater than $10 an ARPU figure, you know, how much of that is dependent on scaling more North
European footprint that you already have a market.
Speaker Change: Fair question. I think naturally it will be a combination of both. I think we start out the year
Speaker Change: You know, at lower ARPU numbers, and I think it'll ramp through the year, as we said, looking to exit north of $10.
Speaker Change: I think one of the things to appreciate about the TIVO 1 ad platform is that
Speaker Change: You know, it's a common platform and as we have begun to roll out that backbone onto our video broadband devices, you know, you instantly have a
Speaker Change: U.S. footprint that is actually tied into the same network. So a way to think about the the universe of
Speaker Change: of TVs with TiVo OS, which at this point are heavily Europe-centric.
coupled with
Speaker Change: video over broadband-based boxes connected to TVs that are also powered by that TiVo1 interface. And one of the things we know about our...
Speaker Change: our various video over broadband customers is that they watch you know naturally a lot of TV so there's going to be you know there's going to be a fair amount of use I think it's the combination of those two things that actually
Speaker Change: You know, allow us to not only have confidence as the footprint grows, but to be able to benefit from, you know, let's call it the more robust ad market in the U.S., coupled with what is emerging and growing, of course, in Europe and different territories.
Great, thank you guys.
Thank you, Cal.
Speaker Change: Your next question comes from the line of Stephen Frankel of Rosenblatt. Your line is now open.
Good afternoon, Jon. Last quarter you spoke about
Stephen Frankel: some TiVo OS smart TVs that where the launches were delayed pushed into 2025 from the end of last year. Could you update us on your insights into the timing of those shipments now?
I think we're
Speaker Change: We've certainly made up some ground, Steve. Some of what we expected to happen, let's call it in late summer and early fall, you know, began to happen more robustly, right, you know, as we approach the end of the year. And so as we sit here today, I think we've got a fairly clear line of sight on a number of partners ramping up into the spring and, of course, starting here in the U.S. with Sharp.
Stephen Frankel: where they actually began some shipping to the U.S. in December but those units effectively became available here in the U.S. in February.
Okay and then I appreciate the year-end
growth or goals that set up
Speaker Change: some accelerated growth in 2026, but what's most important for us to watch as we go through the year? Is it that the ability for TiVo One to drive growth to the media platform business? Is that the critical variable of your success?
Speaker Change: Absolutely, I think, you know, over over the coming quarters, you know, and it will, there's no doubt it's back half waited, but you'll see it start to emerge as well as I think you can, you know,
Speaker Change: begin to look at active users on the platform, because it's the combination of how that number ultimately translates to viewership hours, which, you know, in turn, takes you.
towards the monetization path and
Speaker Change: and our ability over time to continue to work to optimize that. There is a fair amount of optimization that will occur.
Speaker Change: you know, even on an existing platform of 2 million over time as you're...
Speaker Change: As you're working, you know, working things out to drive the most and best possible experience balanced with monetization. But I think those two things are, you know, continued footprint slash active user.
Speaker Change: growth as well as beginning to see you know that monetization emerge I think are the key things because I think it'll demonstrate that
Stephen Frankel: that can begin to turn the crank on monetization and, you know, it will begin to show here as we work our way through the year. Yeah, Steve, maybe to put an additional point on that, we expect, you know, with active users as Jon described,
Steve: and the ARPU numbers that we've laid out. We expect each of those metrics to go sequentially quarter over quarter.
Stephen Frankel: and our goal is to exit 2025 with more than 5 million active users.
Steve: And as we mentioned on the call, an average ARPU of over $10.
Great.
The IPTV base today, is this...
Speaker Change: Only being monetized in the traditional way with things like local ad breaks, or are some of your customers using maybe other ad networks or other vendors to monetize these eyeballs today?
Speaker Change: I would say only in more of a traditional context, Steve, and I think we've been able to, you know, and part of what we have designed with our video over broadband solutions is
Speaker Change: The notion that it would ultimately connect into a common ad platform that would give us more flexibility around streaming and homepage-based advertising. And so I think as we're updating...
Speaker Change: You know operators and units in the field that that installation base in the u.s. Is coming online And that allows us to begin to you know to leverage the benefit of the tivo one ad platform
Speaker Change: And is the rev share there between you and the operator similar to what you're doing with the TV manufacturer or do you have a different set of economics in this market?
Speaker Change: I would say there I mean certainly there are some some differences Steve but I think big picture
Speaker Change: You know, they're not material as one thinks about, you know, our ability to generate meaningful amounts of U.S.-based ARPU, you know, off these respective, or with these respective partners, while obviously making it worth their while as well.
Thank you so much. I'll jump back into the queue.
Speaker Change: Your next question comes from the line of Hamid Korsad of BWS Financial. Your line is now open.
Speaker Change: Not so great clarity. You don't have that commentary today. How much has the market changed for you? How much clarity do you have now that your commentary is a lot much different?
Speaker Change: Well, I think some of the uncertainty that existed before still existed. Let's just say it's more evenly distributed, you know, in terms of awareness, you know, things like tariffs.
Speaker Change: You know, some of the geopolitical macro stuff and how it impacts, I think there's still some question.
That being said, I think we've moderated our expectations.
Speaker Change: as we've set, you know, guidance range as we think about 25, so, you know, no need to continue to hammer on that, recognizing it all exists. But you know, I think as always, right, we learn a little more as we get
Speaker Change: through Q4 you know and and we you know talk to our partners about plans for for 25 and as we've gotten
Speaker Change: You know not only more of that information, but I think we've made more progress I think we've we've landed at least in a world of You know handicapping the risks as well as coming up with a guidance range, and what we think is achievable obviously
Speaker Change: You know, we will see how things go in that uncertainty, whether the environment further improves in ways that, you know, that benefit our customers primarily, because that's, you know, where the revenue is flowing from.
Speaker Change: You know, we'll take it one step at a time, but obviously we're all trying to both understand and navigate it as best we possibly can.
Speaker Change: Okay, and then looking out the 25, the goal of adding two more TV OEMs or partners, how far along are you on those? Is that a possibility of becoming a source of new revenue or is that purely just the timing of adding new partners?
Speaker Change: I think we are I think it's fair to say we've got a pipeline in various stages some of which is pretty well advanced and for the stuff that's more advanced if it if it gets worked out it's certainly conceivable that it would have some footprint impact in the course of
You know, the back half of 25.
Speaker Change: But again, the pipeline is more than just stuff that let's call it is towards the end of that funnel. We've got other discussions that are earlier stage. So and stuff tends to move around as people see our progress. I think one of the things I can say quite definitively is we have
Speaker Change: We have both made and demonstrated significant progress now across a wide base of partners.
Speaker Change: and that, you know, gets, helps others have not only more confidence but ultimately potentially look to us as a, you know, a very viable and attractive alternative in the marketplace as they look to continue to build better business models and ultimately bring the best possible solution to their customers.
Speaker Change: Okay, and then, Robert, is 2025 going to be a free cash flow positive year, and are you willing to provide any metrics around that?
What we guided specifically on the call is...
Speaker Change: slightly positive operating cash flow. I think if we finish at maybe the top end of our expectation or have a good year from a cash flow perspective, that could turn free cash flow positive, but I wasn't at the comfort level to guide that specifically.
OK, thank you.
You're welcome. Thanks.
Speaker Change: Your next question comes from the line of Matthew Galinko of Maxim Group. Your line is now open.
Thank you.
Hi, good afternoon. Thanks for taking my questions.
is there.
Speaker Change: you know, significant, you know, negotiation that has to happen with the existing OEMs or is there execution on pushing, you know, new software to the existing TVs? Just, you know, maybe talk operationally about what it, what that entails.
Speaker Change: Well, I would say first first that, you know, it's something we have been working on now for quite a while.
Speaker Change: with a vision of how to, if you will, connect together various endpoint devices across home and car. So, you know, the advent of the vision around the platform and how it could be used to address unique audiences for advertisers, I think, is...
Speaker Change: has been quite thoughtful. I think that, of course, will continue to evolve like all software as we look to make it more robust and valuable.
Speaker Change: You know, we are in the process in different ways of deploying it and, you know, depending on where.
Speaker Change: Let's say smart TVs were in their original release point. You may have some TVs that went out before some of the updates were available for this. And so they're being updated as we speak. And I think we have a lot of experience with working with our partners to get those updates done.
Speaker Change: and similarly in some of the IPTV video over broadband areas there are updates happening there as well to ensure that we can tie into the various aspects of the things we think that'll be most valuable for consumers as well as what we're trying to do monetization wise so
I would say it's
Speaker Change: a pretty well defined process that's technically really robust on how to get it done across the different, you know, the different categories of products over time.
Got it. Thank you.
Speaker Change: Can you, do you have any maybe just updated thoughts on what the competitive environment is in media platform as you're looking to onboard new OEMs, you know, what are you seeing?
Speaker Change: Well, I think, you know, the environment remains quite competitive, in part because the size of the prize is extremely valuable. And so, you know, I don't think we're seeing, you know, any less competition, I think.
Speaker Change: You know that there are significant barriers of barriers of entry to to new entrance I think we have crossed those barriers. I think quite clearly at this point with
Speaker Change: a number of not only partners but demonstrating the quality of the UX platform search and discovery all of the things that we've brought to the game because of decades of experience in the business.
Speaker Change: So, you know, I think the competitive landscape will continue to play out, but I think the combination of our
Speaker Change: product with our business model, which is about, you know, highlighting our customers, TV brands, allowing them to participate in the long tail of revenue, having a direct customer relationship.
Speaker Change: being content first and neutral from an independent media platform perspective. All those things will continue to resonate. So, you know, does that mean?
Speaker Change: It's easy? No. Of course, it's very difficult. We're dealing with very large, you know, competitors. But I think the strategy that we laid out a few years ago...
Speaker Change: as well as our confidence that we ultimately could, you know, run this, you know, broader play.
Speaker Change: is in fact working, you know, well, and I think the most exciting part of it for us is
Speaker Change: that, you know, you can't begin to see monetization revenue until you start to have footprint in the rest, and we accomplished a lot in 24, and we'll begin to see that.
Speaker Change: You know, that wheel turn in 25 and as the concentration, if you will, or the size of the installed active user base grows, I think it only creates more opportunity through that, you know, scaling and network effect.
Speaker Change: you know, more to, you know, obviously more to, more to, to, to...
Speaker Change: follow and observe about how the competitive landscape may evolve but I think you know at the current time I don't think we see a lot of difference in it.
Thank you.
Speaker Change: That concludes our Q&A session. I will now turn the conference back over to Jon Kirchner for closing remarks.
Thanks, Operator, and thanks, everyone, for joining today's call.
Jon Kirchner: We're excited about the growth potential for our independent media platform business across home and car over the longer term and are pleased with the improving profitability performance of our business as we navigate the current environment.
Jon Kirchner: I'd like to thank our employees for their continued commitment to our business transformation and hard work toward realizing our strategic goals. We look forward to reviewing our Q1 results with you in May. And operator, this concludes today's call.
Jon Kirchner: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
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