Q2 2025 Xperi Inc Earnings Call

Parties will be in a listen only mode. Following the presentation the call will be opened for questions.

I would now like to turn the call over to Sam live in Sun from Arbor Advisory grip Chan. Please go ahead.

Good afternoon, and thank you for joining us that's extremely reports second quarter 2025 financial results.

With me on today's call are John Kirshner, Chief Executive Officer, and Robert Andersen, Chief Financial Officer.

In addition to today's earnings release, there is an earnings presentation on our Investor Relations website at Investor that exterior dot com.

We encourage you to download the presentation and follow along with today's commentary.

Before we begin I would like to provide a few reminders first I would like to note that unless otherwise stated all comparisons are to the same period in the prior year.

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.

You are based on management's current expectations and beliefs, and therefore subject to risks uncertainties and changes in circumstances.

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 MD&A sections in our SEC filings, including our most recent Form 10-K for the year ended December 31, 2024 and.

And our Form 10-Q for the quarter ended June 32025 to be filed with the SEC.

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.

Third we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to the most directly comparable GAAP measures, which can be found in the investor Relations section of our website.

Last 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 <unk> CEO Don Kirshner.

Thank you Sam and thank you everyone for joining us on our second quarter 2025 earnings call.

Over this past quarter, we've been operating in an increasingly difficult environment.

Which has had an impact on our business. Nevertheless, we are excited about the significant progress we continued to make on our strategic initiatives that are critical to meeting our longer term growth plans as exemplified by growth in our Tivo one monthly active users connected car auto states footprint.

TV subscriber households.

Cover all of this and a little bit more detail in a moment let.

Let me first address the financial outlook update we made early last week.

A combination of macro uncertainty tariffs and a weakening consumer environment began to meaningfully impact our customers' decisions production outlook and purchasing patterns in the latter part of the second quarter the.

The impact of these conditions is being felt broadly across our business. As we look ahead to the remainder of 2025 and touches areas like slower than expected IP TV subscriber growth softer second half automotive production volumes weaker consumer electronics production and end market demand and a more challenging advertising market.

Robert will provide additional color later on this call.

I will now provide a summary of our results for the quarter.

For the quarter, we posted revenue of $106 million.

Despite lower year over year revenue, our adjusted EBITDA rose, 4% to $15 million or 14% of revenue due primarily to continued business transformation efforts and cost management.

We continue to work on lowering our cost profile in support of long term margin expansion.

Our non-GAAP earnings per share was <unk> 11.

We posted a $10 million of into operating cash flow in the quarter and recorded $5 million of positive free cash flow.

Now as we turn to the bigger picture, we continue to make significant progress on our strategic growth initiatives. As a reminder, we generally discuss our business in terms of growth solutions, where we see strong potential for new revenue growth and core solutions, which encompass our more mature longstanding product lines are.

Growth solutions encompass three main areas.

Connected TV and streaming devices that support the Tivo, one AD platform, where we monetize AD supported viewing viewership data and homepage engagement across smart Tvs powered by Tivo and Tivo video over broadband devices.

In cabin Entertainment, where Dts auto stage combines radio rich meta data and video streaming services to enhance the automotive experience.

We expect this solution to enable long term revenue through a mix of license fees Upselling features advertising and listen our data.

And third IP, TV, where we offer video over broadband on our industry, leading content for streaming platform for our customers' IP TV linear video households, as well as broadband only households, where revenue is primarily generated by monthly subscriptions.

Our progress in each of these growth areas is best measured against specific goals that we've set out for the year and we believe we are on track to meet or exceed these goals in 2025.

Let me first provide more detail on our growth initiatives.

First is.

As the Tivo, one AD platform, which we believe is the most significant potential to drive our overall long term revenue growth trajectory.

Over the past few years, we built the Tivo one AD platform across screen advertising platform that connects smart Tvs and IP TV set top boxes powered by Tivo into our cross screen AD platform for maximizing engagement and monetization on streaming devices.

The Tivo one AD platform connects our unique audience of monthly active users through industry, leading supply side platforms directly to AD buyers and demand side platforms.

Our tivo, one AD platform strategy Leverages, the large and growing market for streaming content and advertising.

To support this media platform monetization strategy, we launched Tivo OS for Smart Tvs in December of 2023, and today, we have signed nine partners shipping over 80 television brands across 40 countries and through more than 30 major retailers.

Consumer reviews of the Tvs have been very strong and we continue to take market share and build the scale necessary in key markets to attract more advertisers add volume and ultimately drive more aggressive monetization growth.

We are increasingly winning in this competitive market by differentiating in a number of different ways first delivering a best in class TV operating system and a set top box user interface and discovery experience second we are an independent OS provider that does not compete with our television partners by making our own Tvs.

Third we share advertising revenue and data with our partners.

Fourth we focus on our partners branding throughout the experience, allowing our partners to retain brand visibility by shipping a co branded experience that is powered by Tivo and.

And fifth our technology enables a lower cost hardware solution, which we believe in many cases is meaningfully lower than key competitors, while still being highly performance and able to scale on a global basis.

Our goal for the Tivo one AD platform in 2025 has been to build an initial connected television and video over broadband device footprint.

5 million monthly active users as Q2 came to a close we saw substantial progress towards building scale for the Tivo. One AD platform. We now have $3 7 million monthly active users, putting us well on our way to achieving our 2025 goal.

We also announced a total of nine Tivo OTA partners to date with just one more needed to hit our 2025 goal of 10 partners, which we expect will yield significant increases in footprint over time.

As our monthly active user footprint grows we are beginning to recognize advertise revenue from our Tivo one ad platform.

With our year end exit goal of reaching $10 of annual revenue per user is still within our sights.

We've recently expanded the selling of homepage AD units to leading streaming services in Europe and interest from potential advertising partners in our footprint and viewership data is growing.

To further advertiser interest in our platform. We have recently signed key partnerships with world cargo and freewheel that we expect will bring additional scale and benefits to advertisers and brands interested in targeting our growing and largely unexposed installed base.

Within the connected car category, we've made significant progress expanding penetration of our Dts autosave solution by signing two new OEM programs and by launching in several new car models, including the BMW five series here, even nine and the Honda Ionic five anionic nine.

We broadened the ecosystem for auto stage by expanding the number of global broadcasters that support the platform and are now aggregating content from broadcasters in over 60 countries.

Broadcasters are key partners in the longer term auto stage platform monetization strategy as they provide both meta data to enrich the user experience and AD placements slots that we expect will drive auto based digital AD monetization over the long term.

On HD radio, we signed a multiyear agreement with an integrated chip provider and our footprint continued to grow with several new vehicle models launch from partners, including BMW, Honda Hyundai and Volkswagen.

Turning to pay TV, operator market continues to evolve and as such we offer our customers. Several solutions as follows first our IP television solutions. These solutions provide a full content lineup for operators, who customer whose customers are paying subscriptions for like one of your content.

With our content forward user interface the solution showcases bringing all video entertainment content together, including not only live linear but subscription video on demand transactional video on demand and free AD supported TV from leading streaming partners.

Second broadband TV broadband TV is a subscription based.

Product like IP TV with the fundamental difference of being lower cost and offering a more limited lineup of channels.

Lastly, tivo broadband Tivo broadband is effectively the same solution is broadband TV, except there are no subscription channels or fees.

We believe all of these household solutions enable a device footprint that has advertising and monetization opportunities for our monthly active users.

Against this backdrop, our IP television solutions in North America, and Latin America continued strong growth of over 30% on a year over year basis, reaching an installed base of over 3 million subscriber households, approximately half the installed bases in North America and the other half in Latin America when.

Speaker #1: And, and offering a more limited lineup of channels. Lastly, TiVo broadband. TiVo broadband is effectively the same solution as broadband TV, except there are no subscription channels or fees.

When accounting for both geographic and ASP mix within the markets and solutions IP TV revenue growth was 24%.

Additionally, we extended our relationships with key customers by signing significant multiyear renewals with Liberty Latin America and cable one and lastly, we executed international metadata agreements with Korea Telecom and Proxima approximate in Europe.

Speaker #1: We believe all of these household solutions enable a device footprint that has advertising and monetization opportunities for our monthly active users. Against this backdrop, our PTV solutions in North America and Latin America continued strong growth of over 30% on a year-over-year basis.

In the consumer electronics market, we advanced our Dts sound based technology solutions by signing key minimum guarantee contract renewal agreements during the quarter with TPB Philips Tcl on Sony We also entered into a separate renewal agreement with Sony for the inclusion of IMAX at excuse me IMAX enhanced.

Speaker #1: Reaching an installed base of over 3 million subscriber households. Approximately half the installed base is in North America, and the other half in Latin America.

Speaker #1: When accounting for both geographic and ASP mix within the markets and solutions, IPTV revenue growth was 24%. Additionally, we extended our relationships with key customers by signing significant multi-year renewals with Liberty Latin America, and Cable One.

And Sony's Tvs sound bars receivers and projectors, which continues to bring best in class entertainment to consumers in the home.

We signed our first customer TV contract for our clear dialogue enhancement technology with a major TV OEM are.

Speaker #1: And lastly, we executed international metadata agreements with Korea Telecom and Proxima Proxima in Europe. In the umer electronics market, we advanced our DTS sound-based technology solutions by signing key minimum guarantee contract renewal agreements during the quarter.

Our clear dialogue solution Leverages AI to give users control over improving the intelligibility of dialogue across all sources, a key pain point for consumers around the world who struggled to make out what people are saying when watching TV.

Speaker #1: With TPV Philips, TCL, and Sony. We also entered into a separate renewal agreement with Sony for the inclusion of IMAX at, excuse me, IMAX Enhanced Technology and Sony's TVs soundbars receivers and projectors which continues to bring best-in-class entertainment to consumers in the home.

Clear dialogue has won multiple industry awards and we've spent the last 18 months porting the solution onto integrated chips, where we expect market a bill availability in the first half of 2026.

Let me now summarize where we stand with respect to our 2025 exit goals and media platform. We made substantial progress growing monthly active users utilizing the tivo one AD platform to $3 7 million and we've signed an additional smart TV partner, bringing the total to nine and pay TV. We've now exceeded our annual footprint goal of <unk>.

Speaker #1: We signed our first customer TV contract for our clear dialogue enhancement technology with a major TV OEM. Our clear dialogue solution leverages AI to give users control over improving the intelligibility of dialogue across all sources.

3 million IP TV subscriber households, while also beginning to deploy the tivo one AD platform to certain operators in North America.

Speaker #1: A key pain point for consumers around the world who struggle to make out what people are saying when watching TV. Clear dialogue is won multiple industry awards, and we've spent the last 18 months porting the solution onto integrated chips where we expect market availability in the first half of 2026.

Connected car, we've increased the number of vehicles with our Dts auto stage solution to over $12 million overall, we're encouraged by our progress towards meeting or exceeding these strategic goals by year end 2025, we expect this strategic progress will in turn position us to generate more revenue and profitability growth over the long.

Speaker #1: Let me now summarize where we stand with respect to our 2025 exit goals. In media platform, we made substantial progress growing monthly active users utilizing the TiVo One ad platform to 3.7 million, and we've signed an additional smart TV partner bringing the total to 9.

Term with that I'll turn the call over to Robert to discuss our financials Robert.

Thanks, Sean as in past quarters, I'll be covering two main areas during this call.

Speaker #1: In pay TV, we've now exceeded our annual footprint goal of 3 million IPTV subscriber households. While also beginning to deploy the TiVo One ad platform to certain operators in North America.

First go through the financial results and provide commentary for the quarter.

And second I will discuss our financial outlook.

Speaker #1: In connected car, 've increased the number of vehicles with our DTS auto stage solution to over 12 million. Overall, we're encouraged by our progress toward meeting or exceeding these strategic goals by year-end 2025.

Let me begin with the quarter's revenue results.

Total revenue for the second quarter with $106 million, a decrease of 11% from last year's $120 million.

And lower by 10% when adjusting for the perceived divestiture.

Speaker #1: We expect this strategic progress will, in turn, position us to generate more revenue and profitability growth over the long term. With that, I'll turn the call over to Robert financials.

This year over year revenue decrease was primarily attributable to certain minimum guarantee arrangements recorded in the prior year period.

Speaker #1: Robert.

Speaker #2: Thanks, Jon. As in past quarters, I'll be covering two to discuss our this call. I'll go through the financial results and provide commentary for the quarter, and second, I'll uss our financial outlook.

Within pay TV <unk> and connected car.

As a reminder, in any given year approximately 20% to 25% of our revenue across the business is categorized as point in time.

Of which consists of minimum guarantee arrangements with our customers.

Speaker #2: Let me begin with the quarter's revenue results. Total revenue for the second quarter was $106 million, a decrease of 11% from last year's $120 million.

While the revenue from these agreements is recognized during the period in which of the signed many of these agreements regularly renew and a multiyear cycles and provide the benefit of long term predictability certainty and commitment to our technologies.

Speaker #2: And lower by 10% when adjusting for the perceived divestiture. This year-over-year revenue decrease was primarily attributable to certain minimum guarantee arrangements recorded in the prior year period, within pay TV and connected car.

When unit volumes under these agreements are exceeded we recognized an overage revenue on a per unit basis and reported periods.

Speaker #2: As a reminder, in any given year, approximately 20 to 25% of our revenue across the business is categorized as point-in-time, most of which consists of minimum guarantee arrangements with our customers.

Within the pay TV category, we recognized revenue of $50 million a decrease of 18% from last year. This decrease was largely due to certain minimum guarantee revenue recognized last year relating to our classic guide product line and was partially mitigated by 'twenty four.

Speaker #2: While the revenue from these agreements is recognized during the period in which it is signed, many of these agreements regularly renew in a multi-year cycle, and provide the benefit of long-term predictability, certainty, and commitment to our technologies.

<unk> revenue growth and our IP television solutions as we saw continued subscriber year over year ground.

Consumer electronics revenue was $19 million, an increase of 23% when excluding the divestiture.

Speaker #2: When unit volumes under these agreements are exceeded, we recognize the overage revenue on a per-unit basis in reported periods. Within the pay TV category, we recognized revenue of $50 million, a decrease of 18% from last year.

Excluding divestiture proceeds.

While this growth was attributable to the signing of minimum guarantee renewals for our codec and the audio solutions with certain large CD customers.

Speaker #2: This decrease was largely due to certain minimum guarantee revenue recognized last year relating to our classic guide product line, and was partially mitigated by 24% revenue growth in our IPTV solutions as we saw continued subscriber year-over-year growth.

Other agreement agreement is expected to be concluded we're not sign due to market uncertainty.

Connected car revenue decreased by $6 million due to a lower amount of minimum guarantee agreements recorded in the quarter when compared to last year.

Linear platform revenue was 12 million, 18% higher than last year due primarily to advertising revenue from the linear ad placement.

Speaker #2: Consumer electronics revenue was $19 million, an increase of 23% when excluding the divestiture of excluding the divestiture perceived. While this growth was attributable to the signing of minimum guarantee renewals for our Kodak and audio solutions with certain large CE customers, other agreements agreements expected to be concluded were not signed due to market uncertainty.

Delayed from last quarter.

Looking at our income statement for the quarter, our year over year cost of revenue increased by almost $5 million driven both by both revenue mix and from higher costs related to certain advertising revenue.

non-GAAP adjusted operating expense decreased by $19 million or 23%.

Speaker #2: Connected car revenue decreased by $6 million, due to a lower amount of minimum guarantee agreements recorded in the quarter when compared to last year.

Primarily due to ongoing business transformation and cost management efforts that John had mentioned earlier.

Speaker #2: Media platform revenue was $12 million, 18% higher than last year, the primarily to advertising revenue from a linear ad placement that was delayed from last quarter.

From a profitability perspective, our adjusted EBITDA was $15 2 million up 4% from last year's $14 6 million or two two basis points of margin.

Speaker #2: Looking at our come statement for the quarter, our year-over-year cost of revenue increased by almost $5 million, driven both by both revenue mix and from higher costs related to certain advertising revenue.

As our revenue decrease was more than offset by the year over year expense reduction.

Our non-GAAP earnings per share was <unk> 11.

Compared to 12.

We posted in the second quarter of last year.

Speaker #2: Non-GAAP up adjusted operating expense decreased by $19 million, or 23%, primarily due to ongoing business transformation and cost management efforts that Jon mentioned earlier.

From a balance sheet perspective, we finished the quarter with 95 billion in cash up $7 million from last quarter.

This increase was principally due to the $10 million of operating cash flow generated in the quarter.

Speaker #2: From a profitability perspective, our adjusted EBITDA was $15.2 million, up 4% from last year's $14.6 million, or $2.2 basis points of margin, as our revenue decrease was more than offset by the year-over-year expense reduction.

Which was a $12 million improvement from the $2 million usage of operating cash flow that occurred last year.

With regard to our outlook, we expect a revenue range of $440 million to $460 million.

Speaker #2: Our non-GAAP earnings per share was $0.11, compared to $0.12 we posted in the second quarter of last year. From a balance sheet perspective, we finished the quarter with $95 million in cash, up $7 million from last quarter.

Despite the limited direct impact from tariffs that we experienced in the first quarter as the second quarter progressed, we noted significantly more uncertainty related to the macroeconomic environment.

Customer concerns around visibility drove a reluctance to enter into certain agreements and a weakening consumer environment was reflected in lower near term forecasts.

Speaker #2: This increase was principally due to the $10 million of operating cash flow generated in the quarter, which was a $12 million improvement from the $2 million usage of operating cash flow that occurred last year.

Expect these conditions to persist for the balance of the year as such we are forecasting slower than expected IP TV subscriber growth.

Speaker #2: With regard to our outlook, we expect a revenue range of $440,000 to $460,000, despite the limited direct impact from tariffs that we experienced in the first quarter.

Softer second half production volumes in automotive weaker consumer electronics production and end market demand in certain product categories.

And a more challenging advertising market.

Speaker #2: As the second quarter progressed, we noted significantly more uncertainty related to the macroeconomic environment. Customer concerns around visibility drove a reluctance to enter into certain agreements, and a weakening consumer environment was reflected in lower near-term forecasts.

While our revenue outlook for the year has been reduced we are encouraged by the progress of our business transformation efforts as we continue to focus on cost management profitability and cash flow generation.

We expect an adjusted EBITDA margin range of 15% to 17%.

Speaker #2: We expect these conditions to persist for the balance of the year, as such, we are forecasting slower than expected IPTV subscriber growth, softer second-half production volumes in automotive, weaker consumer electronics production, and end-market demand in certain product categories, and a more challenging advertising market.

Operating cash flow is now expected to be neutral plus or minus $10 million non.

non-GAAP tax expense is still expected to be approximately $20 million capital expenditures at approximately $20 million and basic and fully diluted shares are still expected to be approximately $46 million.

Speaker #2: While our revenue outlook for the year has been reduced, we are encouraged by the progress of our business transformation efforts as we continue to focus on cost management, profitability, and cash flow generation.

That concludes our prepared remarks, let's now open the call for <unk>.

Operator.

At this time I would like to remind everyone in order to ask a question sorry.

Speaker #2: We expect an adjusted EBITDA margin range of 15% to 17%. Operating cash flow is now expected to be neutral, plus or minus $10 million.

Alright, and then the number one and your telephone keypad lead you request for today's session that you. Please limit to one question and one follow up we will pause for just a moment to compile the Q&A roster.

Speaker #2: Non-GAAP tax expense is still expected to be approximately $20 million, capital expenditures at approximately $20 million, and basic and fully diluted shares are still expected to be approximately $46 million.

Your first question comes from the line of Jason <unk>.

Craig Hallum. Your line is now open. Please go ahead.

Alright, Thanks for taking my question guys.

Looking for just a little bit more clarity on the volatility or maybe kind of shortfall.

Speaker #2: That concludes our prepared remarks. Let's now open the call for. Operator.

Between Q2, and Q3, you gave some clarity on the consumer electronic side of things curious those those deals that didn't.

Speaker #3: At this time, I would like to remind everyone that in order to ask a question, press Star, then the number one on your telephone keypad.

Yes.

Did these deals get signed did they get signed for just shorter duration or or do you still expect these things to get signed and then ill.

Speaker #3: We do request for today's session that you please limit to one question and one follow-up. We will pause for just a moment. To confirm the Q&A roster.

Curious for any clarity outside of consumer electronics that you had mentioned the AD market and I'm, just curious kind of what youre seeing there. Thank you.

Speaker #3: Your first question comes from the line of Jason Carrier with Craig Hellum. Your line is now open. Please go ahead.

Sure I can take that one Jason.

So what we saw in Q2 was a.

Speaker #4: All right. Thanks for taking my question, guys. Looking for just a little bit more clarity on the volatility or maybe kind shortfall in between Q2 and Q3.

I think I think I would characterize it as some uncertainty in the near term outlook from our customers.

Which had them I think in the cases, we saw less likely to take longer term deals or two.

Speaker #4: You gave some clarity on the consumer electronics side of things. Curious, those deals that didn't, I guess, did the deals get signed? Did they get signed for just shorter duration, or do you still expect these things to get signed?

Kind of complete the deals with we put in front of them.

And so as to whether or not they actually get signed it's TBD, but it was really just a delay I think it's probably how I'd characterize it right now.

Speaker #4: And then, you know, curious for any clarity outside of consumer electronics. Like you had mentioned, the ad market and just curious kind of what ou're seeing there.

As we look at the advertising market I think we've seen that there has been a.

Speaker #4: Thank you.

Hum.

Speaker #2: Sure. I can take that one, Jason. So what we saw in Q2 was a, I think it was characterized as some uncertainty in the near-term outlook from our customers.

Similar degree of uncertainty as one looks forward so.

We kind of took that into consideration into our revised range that we provided.

Speaker #2: Which had them I think in the cases we saw less likely to take longer-term deals or to kind of complete the deals we would put in front of them.

That helps.

Yeah.

That helps.

Ill follow up just sticking on the AD market.

The long term monetization plan, you've got a direct sales element right. Now you also announced on the call you've got some new partnerships just curious the balance between direct sales and these partners that you announced.

Speaker #2: And so as to whether or not they actually get signed, it's TBD. But it was really just a delay. I think it's probably how I'd characterize it right now.

Speaker #2: As we look at the advertising market, I think we've seen that there has been a similar degree of uncertainty as one looks forward. So you know we kind took that into consideration into our revised range that we provided.

Hi.

Jason It's Sean I think it's obviously going to be a combination of both.

Been a lot of time working on building connectivity to programmatic infrastructure.

But I think.

Theres always going to be a certain amount of campaigns that are going to be sold direct in part based on the needs and the nature of things.

Speaker #2: Does that help?

Speaker #4: Okay. That helps. A follow-up, just sticking on the ad market. The long-term monetization plan, you know, you've got a direct sales element right now.

Homepage AD unit selling for example versus some of your other programmatic AD units, but.

I think it's our intent.

Speaker #4: You also announced on the call you've got some new partnerships. Just curious the balance between direct sales and these partners that you announced.

I think and maybe building on your last question.

Recognizing that at a time when advertisers are pulling back or maybe looking in some cases for for more efficient lower cost <unk>.

Speaker #2: Excuse me, Jason. It's Jon. I think it's obviously going to be a bination of both. We've spent a lot of time working on building connectivity to programmatic infrastructure.

Solutions in a troubled environment and.

And there is a move towards bigger ecosystems.

And we're still in the process of building scale.

Speaker #2: But I think you know there's always going to be a certain amount of campaigns that going to be sold direct, you know, in part, you know, based on the needs and the nature of things.

Working with partners.

<unk> to help make sure that as our footprint comes online at our audiences.

Speaker #2: You know, homepage ad unit selling, for example, versus you know some of your other, you know, programmatic ad units. But I think it's our intent, you know, I think, and maybe building on your last question, you ow, recognizing that in a time when advertisers are pulling back, you know, or maybe looking in some cases for for more efficient or lower-cost, you ow, solutions in a troubled environment, you know, and there's a move towards bigger ecosystems, and we're still in the process of building scale, I think working with partners, you know, aggressively to help make sure that that as our footprint comes online and and our audiences, you know, can be targeted, that we, you know, we tap into partners as as we can.

Can be targeted that we tap into partners as much as we can I think that'll that'll help in the near term.

Deal with or mitigate some of the environmental conditions.

Her time, obviously, we will be we will be able to either make the choice to extend those agreements in bigger ways or.

As things normalize we will we will adjust accordingly.

Got it makes sense. Thank you gentlemen.

Thank you Jason.

Thank you and your next question comes from the line of handmade Cline Zhang with the B Ws financial Your line is now open. Please go ahead.

Hi.

Speaker #2: I think that'll that'll help in the near term, you know, kind of, you know, deal with or mitigate some of the environmental conditions. You know, and over time, obviously, we'll we'll be able to either make the choice to extend those agreements and in bigger ways, you know, or, as things normalize, you know, we will we will adjust accordingly.

First off could you just talk about the dynamics of your <unk>.

AD platform and how you're expecting to grow that this year given that.

You're you're expecting unit volumes declined.

So what does that actually have a negative impact on what you get on the platform.

Speaker #4: Got it. Makes sense. Thank you, Jonathan.

There may be some mixing mixing of different.

Speaker #2: Thank you, Jason.

Data data effects, there Amit we expect our.

Speaker #3: Thank you. And your next question comes from the line of Hamed Korzand with the BWS Financial. The line is now open. Please go ahead.

Monthly active user footprint to grow and as we said we think we're on track to hit.

<unk> 5 million or more monthly active users, which would be up from where we are at $3 7 million.

Speaker #5: Hi. So first off, could you just talk about the dynamics of your ad platform and how you're expecting to grow that this year, given that you're you're ecting unit volumes to cline?

And so we'll have we will have more viewers and more more active users through which to tap into advertising I think.

Part of what's happening behind the scenes is.

Speaker #5: So wouldn't that actually have a negative impact on what you get on the platform?

That user base are those meus are spread out over a wider geography. So we're also naturally working on underneath building more scale in key markets.

Speaker #2: There may be some mixing of different data facts there, Hamed. We expect our monthly active user footprint to grow, and as we said, we think we're on track to hit $5 million or more monthly active users, which would be up from where we are at 3.7 million.

Because it's the scale of those key markets that ultimately makes your platform.

More interesting and desirable to advertisers and the other thing we're going to be doing is working as we said just a second ago to Jason.

With partners to make the inventory more available.

Speaker #2: And so, you know, we'll have, you know, we'll have more viewers and more active users through which to tap into advertising. I think, you ow, part of what's happening behind the scenes is, you ow, that user base or those MAUs are spread out over a wider geography.

Through our partners.

To ultimately see revenue growth. So there is a there is a natural kind of buildup that that happens in general as youre looking to optimize a monetization platform and you're trying to optimize viewing and merchandising of SaaS content for.

Speaker #2: So we're naturally working on underneath building more scale in key markets. because it's that scale in those key markets that ultimately makes your platform, more interesting and desirable to advertisers.

For consumers through the interface you know Theres a lot of work that goes on for a long period of time, but I think the point is.

Without footprint growth.

As a fundamental starting point you can't.

Speaker #2: And, you know, the other thing we're going to doing is working, as we said, just a second ago to Jason, with partners, you know, to make the inventory, more available, you ow, through through our partners, to ultimately see revenue growth.

Very hard to grow meaningful amounts of revenue our footprint continues to be on a very strong trajectory.

And we have more partners.

Expanding what they're doing from a TV presence perspective in Europe and elsewhere.

Speaker #2: So, you know, there is a there is a natural kind of build-up that that happens in general as you're looking to optimize a a monetization platform and you're trying to optimize viewing and merchandising of fast content.

And as that footprint grows and we increasingly can kind of expose what our unique audience.

Potentially offers to the advertising community.

Speaker #2: You know, for consumers through the interface, you know, there's a lot of work that that, you know, goes on for, you know, a long period of time.

We ultimately will be able to not only better sell that but ultimately drive more.

Speaker #2: But I think the the point is, without footprint growth, as as a fundamental starting point, you can't, you know, it's very hard to grow meaningful amounts of revenue.

Monetization value.

Okay.

My other question was.

Sure.

I'm here any commentary about.

Stock buyback at what point would you implement that.

Speaker #2: Our footprint continues to be on a very strong trajectory. and we have more partners, you know, expanding what they're doing from a TV presence perspective, you know, in Europe and and elsewhere.

Strategy.

Well, we have authorization to do stock buybacks from our board and that's naturally a discussion we're having with the board, particularly given where the stock is at present.

Speaker #2: and, you ow, as that footprint grows and we, you ow, increasingly can kind expose what, you ow, our unique audience, you know, potentially offers to the advertising community, you know, we ultimately will be able to not only better sell that, but ultimately drive more, monetization value.

I think you can see us taking a very close look at that as part of our capital allocation strategy.

Okay. Thank you.

Tommy.

We have reached end of our call today I'd like now to turn the call over to CEO John <unk>.

Speaker #5: Okay. and my other question was, I didn't, hear any commentary about, stock buyback. At what point would you implement that, strategy?

I think it's fair to say that no doubt we are operating in an environment with a certain degree of uncertainty, which affects our industry and our customers and our competitors as well as ourselves.

Speaker #2: Well, we we have authorization to do stock buybacks from our board. And that's naturally a discussion we're having with the board, particularly given where the stock is at present.

That said I think we have a very clear strategy for growth and we continue to make excellent progress toward achieving our 2025 goals some of which we've already surpassed six months ahead of schedule.

Speaker #2: So I think you can, see us taking a very close look at that as part of our capital allocation strategy.

And in addition, as the results of our second quarter I think demonstrate we are successfully mitigated revenue pressure I think was significant reductions.

Speaker #5: Okay. Thank ou.

Speaker #2: Thanks, Hamed.

And that our cost base and strong cost management.

Speaker #3: We have reached the end of our call today. I'd like now to turn the call over to CEO Jon Kirchner.

Our view of the opportunity ahead of US is really unchanged over the back half of 2025, we remain confident in our ability to further build the strategic foundation for rising revenue and profitability as we get into 'twenty, six and I'd like to thank clearly our entire experience team for their focus and strong execution on our strategic objectives is.

Speaker #6: Thank you, operator.

Speaker #2: I think it's fair to say that no doubt we are operating in an environment with a certain degree of uncertainty, which affects our industry and our customers and our competitors as well as ourselves.

We collectively strive to create shareholder value. Thank.

Thank you for joining us today, and we look forward to keeping you apprised of our progress operator. This ends today's call.

Speaker #2: You know, that said, I think we have a very clear strategy for growth, and we continue to make excellent progress toward achieving our 2025 goals, some of which we've ready surpassed six months ahead of schedule.

That concludes today's call. Thank you all for joining you may now disconnect everyone have a great day.

Speaker #2: And in addition, you know, as the results of our second quarter, I think, onstrate, we've successfully mitigated revenue pressure, I think, with significant reductions and our cost base and strong cost management.

Speaker #2: So our view of the opportunity ahead of us is really unchanged. And over the back half of 2025, we remain confident in our ability to further build the strategic foundation for rising revenue and profitability as we get into '26.

Speaker #2: And I'd like to thank clearly our entire Xperi team for their focus and strong execution on our strategic objectives as we collectively strive to create shareholder value.

Speaker #2: Thank you for joining us today, and we look forward to keeping you apprised of our progress, operator, this ends today's call.