Xperi Inc. · NYSE:XPER
Xperi — Investor Presentation (November 2022)
45 slides from Xperi's investor presentation, November 2022
Slide 1: Investor Deck November 2022
XPERI. Investor Deck November 2022
Slide 2: Safe Harbor
Safe Harbor This presentation contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on in
Slide 3: Xperi company facts
Independent Publicly Listed on Traded Company the NYSE: Headquartered in ~2,100 Oct 1, 2022 XPER San Jose Employees worldwide 3 © 2022 Xperi. All rights reserved.
Slide 4: Mission, Vision, Solutions, Brands
MISSION VISION SOLUTIONS BRANDS WHAT WHY WHERE WHO Xperi invents, Smarter technology Pay TV DTS® develops and delivers Extraordinary experiences Consumer Electronics HD Radio™ technologies that create Connected Car IMAX® Enhanced extraordinary experiences Media Platform TiVo® 4 © 2022 Xperi. All rig
Slide 5: Market Categories
Market Categories Pay-TV Video Over Broadband (IPTV) Classic Guides Discovery Consumer Hardware Subs Consumer Electronics DTS:X ® Audio IMAX Enhanced Imaging Connected Car DTS AutoSense TM HD Radio DTS AutoStage TM Music Metadata Media Platform TiVo OS / Vewd Monetization – Advertising Tech Note: Bo
Slide 6: PayTV
PayTV Video Over Broadband (IPTV) Classic Guides Discovery Consumer Hardware Subs 6 © 2022 Xperi. All rights reserved.
Slide 7: PayTV
PayTV • Mature, High Margin Core Revenue Video Over Broadband (IPTV) • Strong and trusted brand Core Guides 48% • High Growth Independent Streaming Discovery (PCD & Video Metadata) Platform (IPTV) offsets decline Consumer Hardware & Subs • Infrastructure supports media platform Q3 2022 growth Revenu
Slide 8: Video Over Broadband | IPTV Opportunity
Video Over Broadband | IPTV Opportunity Video Services Drive Global Demand for Broadband Growth Global Market for IPTV $140 ▪ Video represent 82% of US broadband $120 bandwidth usage 1H ‘22 17.8% $115B $100 CAGR $80 Billions ▪ TiVo IPTV household on average $60 engage with 8.9 streaming services and
Slide 9: Pay-TV Solutions
Pay-TV Solutions IPTV Solution TV as a Service IPTV Program Our most advanced platform, A Managed IPTV Service that is a offering a fully-integrated cloud- customizable, cloud-enabled, end- based solution that powers the to-end streaming video solution that TiVo client software which enables operato
Slide 10: Consumer Electronics
Consumer Electronics Audio IMAX EnhancedTM Imaging 10 © 2022 Xperi. All rights reserved.
Slide 11: Consumer Electronics
Consumer Electronics • DTS audio business is large and highly profitable with 80%+ penetration in 28% home audio product categories DTS:X & IMAX Enhanced • Customers are very strategic to our key Audio growth initiatives Imaging • Technology components contribute to Q3 2022 Revenue Contribution inde
Slide 12: Consumer Electronics Solutions
Consumer Electronics Solutions Perceive Perceive’s Ergo chip and associated DTS Electronic software delivers datacenter class Image Stabilization accuracy and performance at ultra- Eliminates effect of hand low power, performing tasks such as jitter and flight navigation face recognition, audio and
Slide 13: Connected Car
Connected Car DTS AutoSense TM DTS AutoStage TM HD Radio Music Metadata 13 © 2022 Xperi. All rights reserved.
Slide 14: Connected Car
Connected Car 17% • HD Radio is standard for digital AM/FM in DTS AutoStageTM the US DTS AutoSenseTM • Deep relationships with every auto brand HD Radio worldwide Music Metadata • Global service infrastructure for Q3 2022 infotainment and safety platforms Revenue Contribution 90M+ 2.4K+ 30+ Autos wo
Slide 15: In Vehicle Infotainment Market
In Vehicle Infotainment Market Radio Remains Primary Source for In-Vehicle Audio Entertainment Infotainment Market from ‘21 – ‘27 $40 ▪ 90% of all new vehicles are projected to $35 $38B 10.4% be connected by 2025 $30 CAGR $25 ▪ HD Radio has shipped on 90M+ vehicles, Billions $20 standard on 24 car b
Slide 16: DTS AutoStage Evolution
DTS AutoStageTM Evolution Traditional Radio to Connected Radio to Audio Aggregation to Full Media Integration Radio HD Radio Audio Platform Media Platform 2002 PRIOR - 2022 2024 2022 16 © 2022 Xperi. All rights reserved.
Slide 17: In Vehicle Safety Market
In Vehicle Safety Market Global Safety Standards Drive Demand for Next Generation in Cabin Sensing Camera Based DMS ‘22-’27 $2,500 ▪ EU Safety Regulations require driver $2,213 $2,000 monitoring for new cars starting in 2024 $1,500 46% Millions CAGR ▪ 43% industry penetration of camera- based Driver
Slide 18: DTS AutoSense
DTS AutoSenseTM Single Camera Driver and Occupancy Monitoring Platform 2022 AI Excellence 2022 Gold Stevie® Award Award in the Technical Innovation of the Year 2020 Overall AutoTech Solution of Top safety pick the Year 2020 CLEPA Awards 2021 Most Innovative Application or Deployment of Computer Visi
Slide 19: Media Platform
Media Platform TiVo OS Monetization 19 © 2022 Xperi. All rights reserved.
Slide 20: Media Platform
Media Platform 8% • The TiVo OS platform delivers universal, unbiased discovery across live TV, hybrid broadcast and streaming, while TiVo OS presenting personalized content Monetization • A second media platform enables content to connected cars called DTS Q3 2022 AutoStage. Revenue Contribution 16
Slide 21: What Is TiVo OS?
What Is TiVo OS? Universal Discovery Personalized Experience Live TV + Streaming Together Consumer Choice and Control 21 © 2022 Xperi. All rights reserved.
Slide 22: Building an Independent Streaming Media Platform
Building an Independent Streaming Media Platform August 2019 CES 2020 January 2021 February 2022 July 2022 TiVo IPTV & TE4 TiVo Stream 4K Stream & Monetization TiVo Xtend Vewd Acquired Discovery launched Verticals Formed Monetization Platform Launched Launched Mercedes launched TV OS Tiger Team Mana
Slide 23: Xperi Independent Streaming Platform
Xperi Independent Streaming Platform Powered by TiVo – Not a TiVo TV ▪ Streaming and hybrid TV integrated in unbiased TV OEM content first user experience proven to drive industry leading engagement TV Customer@TVOEM ▪ TV OEMs brand the experience ▪ TV OEMs retain direct customer relationship BIG TE
Slide 24: CTV Streaming & Advertising Growth
CTV Streaming & Advertising Growth Significant Gap Exists between Viewership and Advertising Spend CTV Advertising Growth from ‘21 - ’26 $40 ▪ 50.2% of viewership hours in 1H of ‘22 19% $35 $32B occurred via streaming through an CAGR average of 8.9 services per household $30 $25 Billions ▪ But only
Slide 25: Highly Scalable Business Model
Highly Scalable Business Model Growth Model 1 OEM 4-5 OEMS <1M 7M $140M+ 3 Year 60M >5B < $5M <$10 $20-30 Today Growth Opportunity 25 © 2022 Xperi. All rights reserved.
Slide 26: Opportunity is More Than 40% of SmartTV Market in EU & NAM
Opportunity is More Than 40% of SmartTV Market in EU & NAM ~ 185M Yr. Smart TV Shipments World-Wide • More than 40% of OEMs lack the scale required to support the technology, content, and monetization requirements of a proprietary platform • Big Tech Walled Gardens commoditize Smart TV market [Price
Slide 27: Exponential Business Model | Independent Streaming Platform
Exponential Business Model | Independent Streaming Platform Connected TV Video over DTS AutoStage Monetization Broadband (IPTV) TODAY 3 YEARS TODAY 3 YEARS TODAY 3 YEARS Active Footprint <1M >7M <1M >2.4M <2M 5M+ 60M >5B 1.4B 5.4B - - Streaming Hours Hours Hours Hours Hours ARPU <$10 $20-$30 ~$30 $4
Slide 28: Our Competitive Advantage
Our Competitive Advantage Smart TV Market Needs a Neutral Platform Unlike existing platforms, TiVo allows users choice and control, enables subscriber acquisition and retention for content services, and provides recurring revenue for partners. Xperi Benefits From its Leading IPTV Platform TiVo revol
Slide 29: Financial Summary
Financial Summary 29 © 2022 Xperi. All rights reserved.
Slide 30: Growth Potential Enabled by a Strong Core Business
Growth Potential Enabled by a Strong Core Business Financial Highlights Disruptive Growth Potential Strong Base of Established Clear Path to Accelerating by Delivering Independent ‘Core’ Franchises Profitable Growth Media Platforms • Leading suite of software and • Huge TAM potential • Significant o
Slide 31: Core vs. Growth Summary
Core vs. Growth Summary 12-15% CAGR Monetization revenue growth from TiVo OS rollout Customer shift to IPTV ~ 50% ~ 50% CAGR Proliferation of automotive solutions AutoSense and AutoStage ~ -3% ~ -5% CAGR Core products and services provide business support and profit for growth investments 2021 2022
Slide 32: Robust Financial Model Across Product Categories
Robust Financial Model Across Product Categories LTM* Revenue | % of Total ($ Product Category Primary Revenue Model million) LTM Gross Margin Recurring fees on monthly basis PayTV per-subscriber $257 | 53% ~70% Consumer Electronics $113 | 23% ~90% Per unit license fees Connected Car $83 | 17% ~80%
Slide 33: Growth Drivers by Product Category – 3-5 Year Outlook
Growth Drivers by Product Category – 3-5 Year Outlook Significant Mix Shift Toward Growth Areas Key Drivers Core vs. Growth Product Category Revenue Growth Key Drivers Outlook over 3-5 Years Core Growth Media Platform ~50% ▪ Monetization of Connected TV from TiVo OS ▪ Expansion of higher ARPU IPTV s
Slide 34: Long-Term Adjusted EBITDA Margin Drivers
Long-Term Adjusted EBITDA Margin Drivers Operating leverage from growth in high- ~25-30% margin revenue Margin Reduced burn on high-growth Completion of initiatives cost transformation and separation related activities Approx. Breakeven FY2022E Target Adj EBITDA Margin 34 © 2022 Xperi. All rights re
Slide 35: Q3 2022 Earnings Results
Q3 2022 Earnings Results 35 © 2022 Xperi. All rights reserved.
Slide 36: Q3 2022 Revenue Breakdown
Q3 2022 Revenue Breakdown Market Q3 2022 Change YoY ($ in thousands) Pay-TV 58,378 (7,513) Consumer Electronics 33,561 12,327 Connected Car 20,224 (225) Media Platform 9,473 (684) TOTAL 121,637 3,905 36 © 2022 Xperi. All rights reserved.
Slide 37: Q3 2022 Financial Results
Q3 2022 Financial Results (in thousands, except per share amounts) Q3 2022 GAAP Q3 2022 Non-GAAP Revenue 121,637 121,637 Cost of Revenue1 31,403 30,268 Adjusted Operating Expense 2 489,375 97,311 Interest Expense 750 750 Other Income 223 223 Provision for Income Tax 2,024 3,843 Less: Net Loss Attrib
Slide 38: Financial Outlook for FY 2022
Financial Outlook for FY 2022 Category GAAP Outlook Non-GAAP Outlook ($ in millions) Revenue 490 to 510 490 to 510 Cost of Revenue1 115 to 125 115 to 125 Adjusted Operating Expense 2 879 to 889 395 to 405 Adjusted EBITDA n/a ~ breakeven 1 Excluding depreciation and amortization of intangible assets
Slide 39: Appendix
Appendix
Slide 40: Non-GAAP Financial Measures
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 amort
Slide 41: GAAP to Non-GAAP Net Income Reconciliation
GAAP to Non-GAAP Net Income Reconciliation XPERI INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share amounts) (unaudited) Net loss attributable to the Company: Three Months Ended September 30, 2022 GAAP net loss attributable to the Company $ (400,802) Adjustments to GAAP net loss a
Slide 42: GAAP to Non-GAAP EPS Reconciliation
GAAP to Non-GAAP EPS Reconciliation XPERI INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share amounts) (unaudited) Loss per share attributable to the Company: Three Months Ended September 30, 2022 GAAP loss per share attributable to the Company $ (9.54) Adjustments to GAAP loss per
Slide 43: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation XPERI INC. GAAP TO NON-GAAP RECONCILIATIONS (in thousands, except per share amounts) (unaudited) Three Months Ended September 30, 2022 GAAP Loss before taxes $ (399,668) Interest expense 750 Depreciation expense 4,990 Amortization expense 16,613 Goodwill impairment 354
Slide 44: GAAP to Non-GAAP Outlook Reconciliation
GAAP to Non-GAAP Outlook Reconciliation XPERI INC. RECONCILIATION FOR GUIDANCE ON GAAP TO NON-GAAP ADJUSTED OPERATING EXPENSES (in millions) (unaudited) Twelve Months Ended December 31, 2022 Low High GAAP adjusted operating expense $ 879.0 $ 889.0 Stock-based compensation -- R&D (25.0) (25.0) Stock-
Slide 45: Thank You
Thank You