Xperi inc. announces fourth quarter and full year 2022 results
San jose, calif.--(business wire)--xperi inc. (nyse: xper) (the “company” or “xperi”), an entertainment technology company that invents, develops, and delivers technologies that enable extraordinary experiences, today announced fourth quarter and full year 2022 financial results for the period ended december 31, 2022. “our first quarter as an independent company was underscored by substantial market progress, notable design wins, and strong financial performance,” said jon kirchner, chief executive officer of xperi. “consumers are demanding higher quality digital experiences and our customers and partners are increasingly selecting our independent media platforms to meet that demand. we are intensely focused on expanding our platform adoption and our recent design wins in smart tv and connected car are a testament to the ongoing success of our growth strategy.” financial highlights revenue of $136m during the fourth quarter was up 9% from the year-ago period, while full year 2022 revenue of $502m was up 3% from the prior year. fourth quarter gaap net loss was ($297m), or ($7.06) per share, and non-gaap net income1 was $4m, or $0.08 per share. adjusted ebitda1 was $4m for the fourth quarter, resulting in an adjusted ebitda margin of 3%. the company booked a non-cash charge of $258m in the fourth quarter for goodwill impairment and real estate restructuring in connection with its year-end review. full year results include the xperi product business on a carve-out basis for the first 9 months, during which time it was part of xperi holding corporation, now known as adeia inc. (nasdaq: adea). 1 see discussion of “non-gaap financial measures” and gaap to non-gaap reconciliation below. recent key operating achievements media platform tivo’s partner vestel, the first smart tv oem to incorporate the tivo operating system (tivo os), announced the brand lineup for their smart tvs powered by tivo will be vestel, hitachi, jvc, daewoo, regal, and telefunken. these tvs will feature chipsets from market-leader mediatek. tivo os will be integrated onto amlogic’s 4k and 2k chipsets designed for smart tvs, significantly reducing cost and time-to-market for tv oems looking to roll-out tivo’s independent media platform. connected car xperi was awarded its first design win for tivo’s video platform in connected car with a major european automobile manufacturer, with vehicles expected to ship in late 2023. dts autostage is now in production with five car brands and being deployed in more than 100 models across 140 countries, demonstrating the global value of our solution. the company was awarded a new design win for dts autosense, xperi’s driver monitoring system (dms) and occupant monitoring system (oms), with a major asian automotive oem, which will significantly expand xperi’s dms and oms footprint beginning in 2024. xperi ended 2022 with committed business in connected car, consisting of hd radio, dts autostage, and dts autosense, totaling more than $300m. pay tv tivo iptv continued its double-digit subscriber growth in the quarter and finished fy22 with subscribers up 80% and revenue more than doubling compared to fy21. tivo’s iptv platform won the fierce innovation award for customer engagement. consumer electronics dts:x, xperi’s immersive audio technology, will be integrated in lg’s new line of oled and premium lcd tvs, expected to be in the market in the first half of 2023. the company announced that sony pictures entertainment, imax corp., and dts have extended their agreement to distribute multiple new titles in the imax enhanced format, featuring dts’ premium audio technology. xperi announced dts:x is expected to launch on disney+ in 2023. financial outlook the company is providing the following guidance for fiscal year 2023. category ($ in millions) gaap outlook non-gaap outlook revenue 510 to 540 510 to 540 adjusted ebitda margin1,2 n/a 6% to 10% 1 see discussion of “non-gaap financial measures” below. 2 with respect to adjusted ebitda margin, the company has determined that it is unable to provide a quantitative reconciliation of this forward-looking non-gaap measure to the most directly comparable forward-looking gaap measure with a reasonable degree of confidence in its accuracy without unreasonable effort, as items including restructuring and impacts from discrete tax adjustments and tax law changes are inherently uncertain and depend on various factors, many of which are beyond the company's control. conference call information the company will hold its fourth quarter and full year 2022 earnings conference call at 2:00 pm pacific time (5:00 pm eastern time) on tuesday, february 21, 2023. to access the call toll-free, please dial 1-888-660-6513, otherwise dial +1 929-203-0876. the conference id is 5483252. all participants should dial in 15 minutes prior to the start of the conference call and can use the conference id to access the call. the company also suggests using the webcast link to access the call at q4 earnings call webcast. safe harbor statement this press release 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 information available to the company as of the date hereof, as well as the company’s current expectations, assumptions, estimates and projections that involve risks and uncertainties. in some cases, you can identify forward-looking statements by the words “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “expect,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. these statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. these risks, uncertainties and other factors are described under the captions “risk factors,” and “management's discussion and analysis of financial condition and results of operations” and elsewhere in the documents we file with the securities and exchange commission from time to time. the company does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. about xperi inc. xperi invents, develops, and delivers technologies that enable extraordinary experiences. xperi technologies, delivered via its brands and partnerships (dts®, hd radio™, tivo®), and by its startup, perceive, and imax enhanced, an imax and dts partnership, are integrated into billions of consumer devices and media platforms worldwide, powering smart devices, connected cars and entertainment experiences. xperi has created a unified ecosystem that reaches highly engaged consumers driving increased value for partners, customers and consumers. xperi, dts, hd radio, perceive, tivo, and their respective logos are trademarks or registered trademarks of affiliated companies and partners of xperi inc. in the united states and other countries. all other company, brand and product names may be trademarks or registered trademarks of their respective companies. non-gaap financial measures in addition to disclosing financial results calculated in accordance with u.s. generally accepted accounting principles (gaap), the company’s earnings release contains non-gaap financial measures adjusted for either one-time or ongoing non-cash acquired intangibles amortization charges; amortization of capitalized cloud computing costs; costs related to actual or planned acquisitions, financing, and divestitures including transaction fees, integration costs, severance, facility closures, and retention bonuses; separation costs; all forms of stock-based compensation; impairment of assets and goodwill; other items not indicative of our ongoing operating performance, and related tax effects for each adjustment. management believes that the non-gaap measures used in this release provide investors with important perspectives into the company’s ongoing business and financial performance and provide a better understanding of our core operating results reflecting our normal business operations. the non-gaap financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with gaap. our use of non-gaap financial measures has certain limitations in that the non-gaap financial measures we use may not be directly comparable to those reported by other companies. for example, the terms used in this press release, such as adjusted ebitda, do not have a standardized meaning. other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. we seek to compensate for the limitation of our non-gaap presentation by providing a detailed reconciliation of the non-gaap financial measures to the most directly comparable gaap measures in the tables attached hereto. investors are encouraged to review the related gaap financial measures and the reconciliation of these non-gaap financial measures to their most directly comparable gaap financial measures. all financial data is presented on a gaap basis except where the company indicates its presentation is on a non-gaap basis. set forth below are reconciliations of the company’s reported gaap to non-gaap financial metrics. source: xperi inc. xper-e xperi inc. condensed consolidated statements of operations (in thousands, except per share amounts) (unaudited) three months ended twelve months ended december 31, 2022 december 31, 2021 december 31, 2022 december 31, 2021 revenue $ 135,531 $ 124,745 $ 502,260 $ 486,483 operating expenses: cost of revenue, excluding depreciation and amortization of intangible assets 37,258 37,643 122,946 125,626 research and development 57,713 50,498 216,355 194,869 selling, general and administrative 60,506 51,834 217,402 199,921 depreciation expense 4,804 5,526 20,501 22,584 amortization expense 16,044 22,045 62,209 105,311 impairment of long-lived assets 7,724 - 7,724 - goodwill impairment 250,555 - 604,555 - total operating expenses 434,604 167,546 1,251,692 648,311 operating loss (299,073 ) (42,801 ) (749,432 ) (161,828 ) other income, net 2,117 1,078 1,815 1,590 loss before taxes (296,956 ) (41,723 ) (747,617 ) (160,238 ) provision for income taxes 1,090 10,679 13,589 18,840 net loss (298,046 ) (52,402 ) (761,206 ) (179,078 ) less: net loss attributable to noncontrolling interest (1,016 ) (630 ) (3,722 ) (3,456 ) net loss attributable to the company $ (297,030 ) $ (51,772 ) $ (757,484 ) $ (175,622 ) loss per share attributable to the company: basic and diluted loss per share $ (7.06 ) $ (1.23 ) $ (18.02 ) $ (4.18 ) number of basic and diluted shares outstanding 42,043 42,024 42,029 42,024 xperi inc. condensed consolidated balance sheets (in thousands) (unaudited) december 31, december 31, 2022 2021 assets current assets: cash and cash equivalents $ 160,127 $ 120,695 accounts receivable, net 64,712 79,494 unbilled contracts receivable, net 65,251 50,962 other current assets 42,174 25,985 total current assets 332,264 277,136 long-term unbilled contracts receivable 4,289 3,825 property and equipment, net 47,827 57,477 operating lease right-of-use assets 52,901 61,758 intangible assets, net 264,376 270,934 long-term deferred tax assets 2,096 1,847 goodwill - 536,512 other long-term assets 33,158 19,223 total assets $ 736,911 $ 1,228,712 liabilities and equity current liabilities: accounts payable $ 14,864 $ 7,362 accrued liabilities 110,014 84,404 deferred revenue 25,363 28,211 total current liabilities 150,241 119,977 deferred revenue, less current portion 19,129 23,663 long-term deferred tax liabilities 20,559 14,428 long-term debt 50,000 - noncurrent operating lease liabilities 42,666 49,017 other long-term liabilities 5,330 5,670 total liabilities 287,925 212,755 commitments and contingencies company stockholders’ equity: net investment by former parent - 1,025,838 preferred stock - - common stock 42 - additional paid-in capital 1,136,330 - accumulated other comprehensive loss (4,119 ) (676 ) accumulated deficit (668,835 ) - total company stockholders’ equity 463,418 1,025,162 noncontrolling interest (14,432 ) (9,205 ) total equity 448,986 1,015,957 total liabilities and equity $ 736,911 $ 1,228,712 xperi inc. condensed consolidated statements of cash flows (in thousands) (unaudited) twelve months ended december 31, 2022 december 31, 2021 cash flows from operating activities: net loss $ (761,206 ) $ (179,078 ) adjustments to reconcile net loss to net cash from operating activities: depreciation of property and equipment 20,501 22,584 amortization of intangible assets 62,209 105,311 stock-based compensation expense 45,303 33,509 goodwill impairment 604,555 - impairment of long-lived assets 7,724 - deferred income taxes (1,602 ) 6,913 other 24 (1,754 ) changes in operating assets and liabilities: accounts receivable 17,505 (2,416 ) unbilled contracts receivable (12,473 ) 15,475 other assets (20,439 ) 15,296 accounts payable 6,633 (4,018 ) accrued and other liabilities 11,123 (37,249 ) deferred revenue (8,302 ) 1,974 net cash from operating activities (28,445 ) (23,453 ) cash flows from investing activities: purchases of property and equipment (14,207 ) (8,893 ) purchases of intangible assets (166 ) (186 ) net cash paid for acquisitions (50,473 ) (12,401 ) net cash from investing activities (64,846 ) (21,480 ) cash flows from financing activities: net proceeds from capital contributions by former parent 83,235 - net transfers from former parent 52,802 83,330 withholding taxes related to net share settlement of restrict awards (286 ) - net cash from financing activities 135,751 83,330 effect of exchange rate changes on cash and cash equivalents (3,028 ) (3,326 ) net increase in cash and cash equivalents 39,432 35,071 cash and cash equivalents at beginning of period 120,695 85,624 cash and cash equivalents at end of period $ 160,127 $ 120,695 supplemental disclosure of cash flow information: debt incurred in connection with acquisition $ 50,000 $ - interest paid $ 756 $ - income taxes paid, net of refunds $ 13,416 $ 11,801 xperi inc. gaap to non-gaap reconciliations (in thousands, except per share amounts) (unaudited) net income attributable to the company: three months ended december 31, 2022 gaap net loss attributable to the company $ (297,030 ) adjustments to gaap net loss attributable to the company: stock-based compensation expense: cost of revenue 729 research, development and other 5,266 selling, general and administrative 9,547 amortization of intangible assets 16,044 impairment of long-lived assets 7,724 goodwill impairment 250,555 acquisition and separation-related costs: transaction and other related costs recorded in selling, general and administrative 2,234 severance and retention recorded in research, development and other 2,009 severance and retention recorded in selling, general and administrative 291 separation-related bonus adjustment recorded in cost of revenue, excluding depreciation and amortization of intangible assets (24 ) separation-related bonus adjustment recorded in research and development (67 ) separation-related bonus adjustment recorded in selling, general and administrative 91 non-gaap tax adjustment (1) 6,340 non-gaap net income attributable to the company $ 3,709 diluted earnings per share attributable to the company: three months ended december 31, 2022 gaap loss per share attributable to the company $ (7.06 ) adjustments to gaap loss per share attributable to the company: stock-based compensation expense 0.37 amortization expense 0.38 impairment of long-lived assets 0.18 goodwill impairment 5.96 acquisition and separation-related costs 0.11 non-gaap tax adjustment 0.15 difference in shares used in the calculation (0.01 ) non-gaap diluted earnings per share attributable to the company $ 0.08 gaap weighted average number of shares-basic/diluted 42,043 non-gaap weighted average number of shares-diluted 46,470 (1) the provision for income taxes is adjusted to reflect the net direct and indirect income tax effects of the various non-gaap pretax adjustments. xperi inc. gaap to non-gaap reconciliations (in thousands) (unaudited) three months ended december 31, 2022 gaap loss before taxes $ (296,956 ) interest expense 839 depreciation expense 4,804 amortization of intangible assets 16,044 amortization of capitalized cloud computing costs 527 impairment of long-lived assets 7,724 goodwill impairment 250,555 acquisition and integration-related costs: transaction and other related costs recorded in selling, general and administrative 2,234 severance and retention recorded in research and development 2,009 severance and retention recorded in selling, general and administrative 291 separation-related bonus adjustment recorded in cost of revenue, excluding depreciation and amortization of intangible assets (24 ) separation-related bonus adjustment recorded in research and development (67 ) separation-related bonus adjustment recorded in selling, general and administrative 91 stock-based compensation expense: cost of revenue 729 research and development 5,266 selling, general and administrative 9,547 non-gaap adjusted ebitda $ 3,613
