Good day, everyone. Thank you for standing by and welcome to the Xperi First Quarter 2025 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. I would like to now turn the call over to Sam Levenson from Arbor Advisory Group. Sam, please go ahead.

Thank you, Amy. Good afternoon and thank you for joining us as Xperi reports its first quarter 2025 financial results. With me in today's call are Jon Kirchner, Chief Executive Officer; and Robert Andersen, Chief Financial Officer. In addition to today's earnings release, there's an earnings presentation on our Investor Relations website at investor.xperi.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 which 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 discuss 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. Please note, 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 their 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 Xperi’s CEO, Jon Kirchner.

Thank you, Sam and thank you everyone for joining us on our first quarter 2025 earnings call. Q1 execution was strong as we made measurable progress on our full year growth goals and TiVo OS and related TiVo One platform rollout, video-over-broadband IPTV household subscribers and the proliferation of DTS AutoStage footprint. These efforts put us in a good position to drive meaningful revenue growth through our media platform strategy over the next several years and realize significant increases in profitability and cash flow. Notably, this execution continues despite broad macroeconomic uncertainties that our team continues to navigate well. From a financial standpoint, our results were in line with our expectations for the quarter and represent a good start to the year. Robert will take you through the details in just a moment, but let me first touch on a few highlights. Revenue in the quarter was $114 million, a decrease from last year, primarily due to business divestitures completed during 2024. We continued to reduce our operating expenses due primarily to our focus on cost transformation. As a result, we achieved adjusted EBITDA of $16 million for the quarter, or 14% of revenue, up over 200% when compared to $5 million in the prior year quarter. Looking forward, we remain focused on our three growth solutions where we can see strong potential and differentiation. These are first, connected TV advertising where we offer our TiVo One platform that monetizes ad supported viewing, viewership data and homepage engagement across smart TVs powered by TiVo and TiVo video-over-broadband devices. Second in-cabin entertainment where DTS AutoStage combines radio, Internet, metadata and video to enhance the automotive experience and is designed to enable long-term monetization through licensing fees, upselling features, advertising and data. And third, TiVo video-over-broadband where we offer an industry-leading content…

Thanks Jon. As usual, I’ll be covering two main areas during this call. I’ll first go through the financial results and provide commentary for the quarter and second, I’ll discuss our financial outlook. Let me begin with the quarter’s results. Total revenue for the first quarter was $114 million, a decrease of 4% from last year’s $119 million and lower by 2% when adjusting for the perceived divestiture. Pay TV, our largest revenue category, posted $50 million in the quarter, a decrease of 12% as strong growth in IPTV, which was up 25%, was more than offset by a decrease in our core Pay TV business, partly due to certain minimum guarantee revenue that occurred last year. Consumer Electronics was $23 million, a decrease of 5% when excluding the divestiture of Perceive. The reduction was primarily due to lower revenue on softer production volume of certain Consumer Electronics products. Connected Car rose 37% to finish at $33 million. The significant growth was primarily due to minimum guarantee licensing arrangements for HD Radio that occurred during the quarter, partially offset by lower automotive volumes due to utilizing HD radio and audio-based solutions. Media platform at $8 million was lower than last year by 30% due primarily to lower middleware revenue associated with a license agreement and audit settlement that occurred last year along with a time shift of certain advertising commitments year-over-year. We expect these commitments to be fulfilled later this year. Moving to the income statement, our non-GAAP adjusted operating expense for the quarter was $76 million, an improvement of $15 million or 17% from the prior year. Approximately 80% of this expense improvement is savings from business optimization efforts and the remaining 20% is from business divestitures. Our adjusted EBITDA was $16 million, resulting in an adjusted EBITDA margin…

Thank you. [Operator Instructions] Our first question comes from the line of Hamed Khorsand with BWS. Your line is now open.

Hi. So starting off with the IPTV and the user base, it's now 2.75 million, but you sound like you also added a lot more service providers. So assuming that you get to 3 million soon, what's the time frame as far as monetizing that and getting to a higher baseline revenue? What will it take?

Well, I think there's kind of a continued quarter-over-quarter effort to assist with deployments and more wins that ultimately will drive subscribership revenue. So, I'm not sure what specifically, Hamed, you're seeking to answer other than, I think you'll see those improvements play out through the year and obviously consequent revenue increases. I think simultaneously some of the video-over-broadband wins at the end of the day are less about subscription revenue as they are about the longer tail of monetization that can happen on the platform. And as we talked about, this is an area where we're starting and have begun to roll out various code updates that will enable us to bring a more robust kind of ad platform on to those set-top boxes and that will in turn begin to yield monetization revenue that comes in parallel with what we're doing on Smart TVs.

I guess what I'm trying to get to is do you have the manpower and capacity to handle that 50% increase in the number of IPTV customers quarter-on-quarter?

Well, it's not necessarily up 50%. I'm not sure where you got that number.

Last quarter you guys said it was 20 customers. Now you're saying it's 30 customers.

Oh, it’s in the sheer [ph] number of customers.

Oh, that's the sheer numbers. Oh, sorry. Not all those deployments will happen immediately and simultaneously. They all have separate schedules under which they'll roll out. But in short, yes, we're staging and working with those customers to make sure not only we can handle it, but ultimately they come online over time.

Okay. And then my final question was going to be about cash flow. Is there a specific quarter we would see – would the company have positive cash flow that you're guiding to? Is it all happening in Q4?

No, it doesn't – it's not all completely back end weighted. Q1 is seasonally our weakest quarter because we paid deferred liabilities related to last year. So you'll see that pretty much any year for us. Given that we've guided to be positive for the year, I think you can expect the balance of the year to be in the positive category, certainly in the second half.

Okay. Thank you.

Thank you, Hamed.

Thank you. [Operator Instructions] The next question comes from Matt Galinko with Maxim Group. Your line is now open.

Can you just I'm not sure if I missed it in the prepared remarks, but did you or can you speak to any additional OEMs in the pipeline for TV companies?

We didn't necessarily call it out specifically in the script, but broadly speaking, we expect to add at least one to two TV partners in the course of this year beyond the eight we already have.

Got it. And any changes to kind of the number of active users that you're targeting by end of year? Or any just changes to that schedule? And maybe can you – maybe share a little bit more color around whether tariffs have any influence or potential to influence the targets you set for number of active users?

Sure. So we had talked about looking to exit the year with 5 million monthly active users. I think we are very much on track and I think stepping back as we talked about by the time we exit next year, we expect to be at least that 7 million number or better. I think that very much is on track based on all the planning and production activity and the partners that we have. To what extent tariffs will ultimately impact things. Obviously, they create a pretty fluid environment where there's a bit lower visibility and how that ultimately flows through. There's obviously some portion of the TV volume is manufactured in Asia might be subject to tariffs, but depending on how the tariffs come down and where final assembly and other things happen in various markets we may or may not be meaningfully impacted by that. So at this point, I think we are not hearing anything that would indicate that there's anything about that plan that is diverted meaningfully from what we've expected. And we'll continue to stay close to it, obviously, should anything change.

Great, thank you.

Thanks, Matt.

It looks like our next question comes from Jason Kreyer with Craig-Hallum. Your line is now open.

Great, thank you. This is Cal on for Jason, and apologies if any of this has been addressed, but, I cut the last end there talking about the tariffs, but can you just kind of talk about what kind of macro factors you're contemplating in the guide?

Well, I think we're, at this point, we're maintaining the guide that we previously provided, in part because, while there are, various uncertainties we see out there, it's not yet clear that is going to impact how we think about the range we provided for this year. And so I think, as always, as we said, as we set plans and our guidance ranges, we often and very intentionally, ensure there's a lot of different ways to get within the range. So as we sit here at this point, I think we are comfortable where we are. We'll obviously watch it, very closely as we go ahead, but, we're busy executing even in a world that, has a certain amount of fluidity. And, as I said, I think we've had some very, very strong execution as it relates to Q1.

Great. And then maybe just kind of pivoting over to the TiVo OS, you talked a little bit about, the new TiVo One, that the homepage unit that you're rolling out here. So just curious, the opportunity that you see there to potentially accelerate your ARPU growth with these more flagship units.

Well, I think there's a couple of things going on. First of all, that homepage ad unit is a very, very valuable piece of real estate, said simply, and it's one that obviously advertisers have a strong interest in. So our ability to roll out that ad unit across our platform of not only smart TVs, but ultimately, as we begin to roll it out across our broader IPTV video-overbroadband footprint, where we know there is a lot of very active viewership, obviously puts us in a position to begin to turn that monetization wheel the better. And I think we've done a lot of work to make sure these updates can successfully roll out and land, on devices, and then as we said, we're doing, we're doing various, pilots to ensure that, all is going well. So I think it will have a positive impact, on what we're doing. I think we've long planned for this to be part of the mix. So it's not something that came out of the blue that we're just adding, but this is part of our strategy of ultimately, trying to over that longer arc, accelerate more and better monetization and offer, more compelling ad products to our advertiser partners.

Great. And then if I could just, follow-up with one more. Just curious if you have, any sort of incremental updates on the U.S. TiVo OS devices as these rollouts continue to progress?

Obviously still early days, as the Sharp volumes are naturally small. We expect more TVs with an additional partner to hit the market as we go through the balance of this year. And then coupled with that, we have active update programs going on with respect to these settop-box video-overbroadband devices. And so as we think about U.S. footprint, it really is going to be the combination of these two things as we move into the back half and begin to see that scale reach the point where it's of more interest to advertisers and we can begin to drive monetization in an ever kind of increasing fashion.

Great. Thank you.

Thank you so much. There are no further questions at this time. So I'd like to turn the call back over to CEO, Jon Kirchnerfor closing remarks.

Thank you, Amy. And thanks everyone for joining today's call. We're pleased with the milestones we continue to achieve to support the long-term revenue growth we expect to generate through media platform, video-overbroadband and Connected Car. I'd like to thank our customers and broad ecosystem of partners for their continued support. I'd also like to thank our employees for their hard work toward realizing our strategic and financial goals. We look forward to reviewing our Q2 results with you in August. And operator this concludes today's call.

Thank you so much. This concludes today's conference call. You may now disconnect.