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Xperi (NASDAQ:ADEA) Inc. (NASDAQ:XPER) reported its first-quarter 2025 financial results on May 7, showing significant profitability improvements despite a slight revenue decline. The company’s stock rose 2.01% in aftermarket trading to $7.09, following the release of results that highlighted successful cost transformation initiatives and strong performance in its Connected Car segment.
Quarterly Performance Highlights
Xperi reported Q1 2025 revenue of $114 million, representing a 4% year-over-year decrease (or 2% when excluding the divested Perceive business). Despite the revenue dip, the company achieved substantial profitability improvements, with Non-GAAP Adjusted EBITDA of $16 million (14% of revenue), up more than 200% compared to Q1 2024.
"Our first quarter results demonstrate our continued focus on operational efficiency and strategic growth initiatives," said Jon Kirchner, CEO of Xperi. "While we faced some revenue headwinds, our cost transformation efforts and growth in key segments like Connected Car have positioned us well for the remainder of 2025."
The company reported a GAAP net loss of $18 million, or $0.41 per share, compared to a loss of $0.29 per share in the same period last year. However, on a non-GAAP basis, Xperi achieved earnings of $0.16 per share, a significant improvement from the $0.05 loss per share in Q1 2024.
As shown in the following comprehensive financial summary:
Segment Performance Analysis
Xperi’s revenue performance varied significantly across its four market segments, with Connected Car emerging as the clear growth driver while other segments faced challenges.
The Connected Car segment delivered impressive 37% year-over-year growth, reaching $33.3 million in revenue. This growth was fueled by continued momentum in HD Radio, which launched in 15 new models in North America and signed two multi-year agreements with Tier-1 manufacturers. Additionally, DTS AutoStage expanded its footprint to 11 million vehicles across more than 130 countries.
In contrast, the company’s other segments experienced revenue declines. Pay TV revenue fell 12% year-over-year to $49.9 million, Consumer Electronics decreased 13% to $22.8 million, and Media Platform declined 30% to $8.1 million. When excluding the divested Perceive business, the Consumer Electronics segment decline was a more modest 5%.
The detailed revenue breakdown by segment is illustrated in the following table:
Despite these mixed results, Xperi highlighted positive developments across all segments. In Pay TV, the company reached over 2.75 million video-over-broadband (IPTV) subscriber households, representing 36% year-over-year growth. The Media Platform segment achieved 2.5 million TiVo (NASDAQ:TIVO_old) One Monthly Active Users and launched over 80 additional streaming services onto the TiVo OS platform.
Strategic Growth Initiatives
Xperi continues to execute on its strategic growth initiatives, categorizing its offerings into Growth Solutions and Core Solutions across its four key markets. The company is particularly focused on expanding its TiVo One platform, enhancing its Connected Car offerings, and growing its IPTV footprint.
The following slide illustrates how Xperi has organized its business to focus on growth opportunities:
The company is making progress toward its 2025 exit growth goals across multiple platforms. For the Media Platform, Xperi aims to reach more than 5 million TiVo One Monthly Active Users across Europe and North America with an average ARPU above $10. In Pay TV, the company targets an IPTV footprint of at least 3 million subscriber households. For Connected Car, Xperi plans to expand the DTS AutoStage footprint to over 13 million vehicles and initiate monetization on certain AutoStage footprint in North America.
These strategic goals are outlined in the following slide:
"We’re making solid progress toward our 2025 exit goals," noted Robert Andersen, CFO of Xperi. "Our focus on expanding our user base and improving monetization across our growth platforms is beginning to yield results, as evidenced by the significant improvement in our profitability metrics."
Financial Position and Outlook
Xperi ended Q1 2025 with $88 million in cash and cash equivalents, after a $10 million paydown of current debt. The company refinanced its outstanding debt during the quarter, which included the $10 million paid down with cash and $40 million financed with a 3-year receivables-backed line of credit with PNC Bank at a current borrowing rate of 1-month SOFR plus 190 basis points.
Operating cash usage in the quarter was $22 million, which represents a $28 million improvement compared to Q1 2024. This improvement was primarily due to a $15 million paydown of accrued liabilities and a $7 million increase in unbilled receivables.
Looking ahead, Xperi maintained its full-year 2025 financial outlook, projecting revenue between $480 million and $500 million, with an Adjusted EBITDA margin of 16% to 18%. The company also expects slightly positive operating cash flow, with capital expenditures of approximately $20 million.
The detailed financial outlook is presented in the following slide:
Xperi’s Q1 2025 results show that while the company faces revenue challenges in some segments, its cost transformation initiatives and strategic focus on growth areas are yielding significant improvements in profitability. The Connected Car segment continues to be a bright spot, and the company remains confident in its ability to achieve its full-year financial targets and strategic growth goals.
As competition intensifies in the media platform and connected car markets, Xperi’s ability to execute on its growth initiatives and maintain its improved profitability will be crucial for long-term success. Investors will be watching closely to see if the company can translate its strategic vision into sustained revenue growth across all segments in the coming quarters.
Full presentation:
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