Xperi Holding Corporation Announces Third Quarter 2021 Results
Xperi Holding Corporation (Nasdaq: XPER) reported third-quarter 2021 financial results, showcasing revenue of $219.4 million, an 8.2% increase year-over-year. Despite supply chain challenges, the company achieved cash flow from operations of $82.9 million and repurchased $24.8 million in stock. Notable business developments included the IP licensing segment's revenue of $101.6 million and the TiVo Stream platform expansion. The full-year revenue forecast was narrowed to $870M to $890M, with improved operating cash flow guidance.
- Revenue increased by 8.2% year-over-year to $219.4 million.
- Cash flow from operations reached $82.9 million.
- IP licensing revenue remained strong at $101.6 million.
- The company repurchased $24.8 million of common stock.
- Narrowed full-year revenue outlook to $870M to $890M.
- GAAP loss per share of $(0.43).
- Continued impact from supply chain constraints.
“We finished the third quarter with better-than-expected revenue, cash flow, and earnings, and we remain on track to deliver strong financial results for the year, despite seeing an increased impact from general supply chain constraints,” said
Third Quarter 2021 Financial Highlights:
-
Revenue of
$219.4 million 8.2% year-over-year. -
GAAP loss per share of
$(0.43) $0.53 -
Cash Flow from Operations of
$82.9 million -
Adjusted Free Cash Flow1 of
$87.7 million -
Repurchased
$24.8 million
Third Quarter 2021 Business and Recent Operating Highlights:
IP Licensing Business (Revenue:
- Continued to demonstrate the long-term stability and significant profitability of the media IP business.
-
Signed a license with
Yangtze Memory Technologies Co., Ltd. (YMTC), the first company to ship commercial 3D NAND product that incorporates hybrid bonding.
Product Business (Revenue:
Consumer Experience business highlights:
-
Revenue of
$46.1 million -
Announced that The Walt Disney Company, IMAX, and DTS will launch IMAX Enhanced on Disney+ on
November 12, 2021 , beginning with the Marvel Cinematic Universe. - Expanded ad-supported TiVo+ with new content partners including QVC, Hallmark Movies & More, Magnolia Pictures and Kevin Hart’s Laugh Out Loud; expanded Pluto TV offering with 33 new channels; and added AcornTV to the TiVo Stream 4K.
- Successfully launched new Connected TV advertising product with unique audience targeting based on TiVo’s viewership data.
Pay-TV business highlights:
-
Revenue of
$54.2 million -
Saw accelerated IPTV deployments and supported Cable One,
Service Electric Cablevision ,Blue Ridge , and Armstrong in launching IPTV services.
Connected Car business highlights:
-
Revenue of
$17.4 million -
Delivered HD Radio on 24 new 2021 car models in the
U.S. andMexico . -
Mercedes launched the Mercedes C-Class with DTS AutoStage in
Europe , following the successful launch of the S-Class. -
BMW launched BMW iX vehicles with DTS AutoSense in
Europe .
Capital Allocation
During the quarter, the Company repurchased
On
On
Full Year 2021 Business Outlook
The Company made adjustments to its full year outlook, narrowing the revenue range, lowering the expense range, and raising the operating cash flow range.
Category |
New GAAP Outlook |
Prior GAAP Outlook |
Revenue |
|
|
COGS |
|
|
Operating Expense excluding COGS* |
|
|
Interest Expense |
~ |
~ |
Other Income |
~ |
~ |
Cash Tax (net of refunds) |
|
|
Basic Shares Outstanding |
105M |
105M |
Diluted Shares Outstanding |
107M |
107M |
Operating Cash Flow |
|
|
| Category | New Non-GAAP Outlook |
Prior Non-GAAP Outlook |
Revenue |
|
|
COGS |
|
|
Operating Expense excluding COGS* |
|
|
Interest Expense |
~ |
~ |
Other Income |
~ |
~ |
Cash Tax (net of refunds) |
|
|
Basic Shares Outstanding |
105M |
105M |
Diluted Shares Outstanding |
112M |
112M |
Operating Cash Flow |
|
|
Adjusted Free Cash Flow1* |
|
|
1 Adjusted Free Cash Flow is defined as Operating Cash Flow, less purchases of property and equipment, plus merger and integration, separation, and severance and retention costs.
*See tables for reconciliation of GAAP to non-GAAP differences.
Conference Call Information
The Company will hold its third quarter 2021 earnings conference call at
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 the Company’s current expectations, estimates and projections about the Company’s financial results, forecasts, and business outlook, and growth drivers in the Company’s business segments. In this context, forward-looking statements often address expected future business, financial performance and financial condition, and often contain words such as “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. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control, and are not guarantees of future results, such as statements about the anticipated benefits of the transaction. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenue, cost savings, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business strategies, and expansion and growth of the Company’s businesses; the Company’s ability to implement its business strategy; pricing trends, including the Company’s ability to achieve economies of scale; the ability of the Company to retain and hire key personnel; uncertainty as to the long-term value of the Company’s common stock; legislative, regulatory and economic developments affecting the Company’s business; general economic and market developments and conditions; failure to remediate the material weaknesses in our internal control over financial reporting; the evolving legal, regulatory and tax regimes under which the Company operates; unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, and natural disasters; the extent to which the COVID-19 pandemic continues to have an adverse impact on our business, results of operations, and financial condition will depend on future developments, including measures taken in response to the pandemic, which are highly uncertain and cannot be predicted; the impact of semiconductor supply chain constraints on our customers; and any plans regarding a potential separation of the combined business. These risks, as well as other risks associated with the business, are more fully discussed in the Company’s filings with the
About
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with
Set forth below are reconciliations of the Company’s reported and forecasted GAAP to non-GAAP financial metrics.
– Tables Follow –
SOURCE:
XPER-E
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
| Revenue: | ||||||||||||||||
| Licensing, services and software | $ |
214,558 |
|
$ |
195,319 |
|
$ |
651,075 |
|
$ |
448,802 |
|
||||
| Hardware |
|
4,821 |
|
|
7,478 |
|
|
12,172 |
|
|
9,291 |
|
||||
| Total revenue |
|
219,379 |
|
|
202,797 |
|
|
663,247 |
|
|
458,093 |
|
||||
| Operating expenses: | ||||||||||||||||
| Cost of licensing, services and software revenue, excluding depreciation and amortization of intangible assets |
|
26,043 |
|
|
21,854 |
|
|
69,875 |
|
|
31,646 |
|
||||
| Cost of hardware revenue, excluding depreciation and amortization of intangible assets |
|
6,506 |
|
|
12,216 |
|
|
17,689 |
|
|
13,688 |
|
||||
| Research, development and other related costs |
|
58,766 |
|
|
57,731 |
|
|
168,369 |
|
|
124,565 |
|
||||
| Selling, general and administrative |
|
62,627 |
|
|
63,785 |
|
|
197,754 |
|
|
168,586 |
|
||||
| Depreciation expense |
|
6,796 |
|
|
6,753 |
|
|
17,994 |
|
|
11,815 |
|
||||
| Amortization expense |
|
52,388 |
|
|
50,894 |
|
|
156,825 |
|
|
105,447 |
|
||||
| Litigation expense |
|
2,327 |
|
|
8,527 |
|
|
7,162 |
|
|
14,501 |
|
||||
| Total operating expenses |
|
215,453 |
|
|
221,760 |
|
|
635,668 |
|
|
470,248 |
|
||||
| Operating income (loss) |
|
3,926 |
|
|
(18,963 |
) |
|
27,579 |
|
|
(12,155 |
) |
||||
| Interest expense |
|
(8,532 |
) |
|
(13,393 |
) |
|
(30,400 |
) |
|
(24,602 |
) |
||||
| Other income and expense, net |
|
927 |
|
|
2,305 |
|
|
2,916 |
|
|
3,448 |
|
||||
| Loss on debt extinguishment |
|
— |
|
|
— |
|
|
(8,012 |
) |
|
(8,300 |
) |
||||
| Loss before taxes |
|
(3,679 |
) |
|
(30,051 |
) |
|
(7,917 |
) |
|
(41,609 |
) |
||||
| Provision for (benefit from) income taxes |
|
42,698 |
|
|
482 |
|
|
35,807 |
|
|
(6,761 |
) |
||||
| Net loss | $ |
(46,377 |
) |
$ |
(30,533 |
) |
$ |
(43,724 |
) |
$ |
(34,848 |
) |
||||
| Less: net loss attributable to noncontrolling interest |
|
(1,310 |
) |
|
(781 |
) |
|
(2,826 |
) |
|
(1,819 |
) |
||||
| Net loss attributable to the Company | $ |
(45,067 |
) |
$ |
(29,752 |
) |
$ |
(40,898 |
) |
$ |
(33,029 |
) |
||||
| Loss per share attributable to the Company: | ||||||||||||||||
| Basic | $ |
(0.43 |
) |
$ |
(0.28 |
) |
$ |
(0.39 |
) |
$ |
(0.44 |
) |
||||
| Diluted | $ |
(0.43 |
) |
$ |
(0.28 |
) |
$ |
(0.39 |
) |
$ |
(0.44 |
) |
||||
| Weighted average number of shares used in per share calculations-basic |
|
104,849 |
|
|
107,499 |
|
|
104,898 |
|
|
75,441 |
|
||||
| Weighted average number of shares used in per share calculations-diluted |
|
104,849 |
|
|
107,499 |
|
|
104,898 |
|
|
75,441 |
|
||||
|
||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
|
|
|
||||||
|
2021 |
|
|
|
2020 |
|
||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
165,438 |
|
$ |
170,188 |
|
||
| Available-for-sale debt securities |
|
71,863 |
|
|
86,947 |
|
||
| Accounts receivable, net |
|
130,291 |
|
|
115,975 |
|
||
| Unbilled contracts receivable, net |
|
103,277 |
|
|
132,431 |
|
||
| Other current assets |
|
47,838 |
|
|
40,763 |
|
||
| Total current assets |
|
518,707 |
|
|
546,304 |
|
||
| Long-term unbilled contracts receivable |
|
4,653 |
|
|
6,761 |
|
||
| Property and equipment, net |
|
61,265 |
|
|
63,207 |
|
||
| Operating lease right-of-use assets |
|
70,858 |
|
|
80,226 |
|
||
| Intangible assets, net |
|
864,485 |
|
|
1,004,379 |
|
||
|
851,088 |
|
|
847,029 |
|
|||
| Other long-term assets |
|
153,486 |
|
|
153,270 |
|
||
| Total assets | $ |
2,524,542 |
|
$ |
2,701,176 |
|
||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ |
16,081 |
|
$ |
13,045 |
|
||
| Accrued legal fees |
|
3,582 |
|
|
5,783 |
|
||
| Accrued liabilities |
|
108,934 |
|
|
129,035 |
|
||
| Current portion of long-term debt, net |
|
36,037 |
|
|
43,689 |
|
||
| Deferred revenue |
|
43,989 |
|
|
33,119 |
|
||
| Total current liabilities |
|
208,623 |
|
|
224,671 |
|
||
| Deferred revenue, less current portion |
|
28,601 |
|
|
39,775 |
|
||
| Long-term deferred tax liabilities |
|
19,181 |
|
|
24,754 |
|
||
| Long-term debt, net |
|
738,438 |
|
|
795,661 |
|
||
| Noncurrent operating lease liabilities |
|
57,124 |
|
|
66,243 |
|
||
| Other long-term liabilities |
|
101,421 |
|
|
98,953 |
|
||
| Total liabilities |
|
1,153,388 |
|
|
1,250,057 |
|
||
| Commitments and contingencies | ||||||||
| Company stockholders’ equity: | ||||||||
| Preferred stock |
|
— |
|
|
— |
|
||
| Common stock |
|
113 |
|
|
110 |
|
||
| Additional paid-in capital |
|
1,324,763 |
|
|
1,268,471 |
|
||
|
(152,453 |
) |
|
(77,218 |
) |
|||
| Accumulated other comprehensive income (loss) |
|
(297 |
) |
|
1,264 |
|
||
| Retained earnings |
|
207,600 |
|
|
264,250 |
|
||
|
1,379,726 |
|
|
1,456,877 |
|
|||
| Noncontrolling interest |
|
(8,572 |
) |
|
(5,758 |
) |
||
| Total equity |
|
1,371,154 |
|
|
1,451,119 |
|
||
| Total liabilities and equity | $ |
2,524,542 |
|
$ |
2,701,176 |
|
||
|
||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Nine Months Ended | ||||||||
|
|
|||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ |
(43,724 |
) |
$ |
(34,848 |
) |
||
| Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
| Depreciation of property and equipment |
|
17,994 |
|
|
11,815 |
|
||
| Amortization of intangible assets |
|
156,825 |
|
|
105,447 |
|
||
| Stock-based compensation expense |
|
42,468 |
|
|
26,614 |
|
||
| Deferred income taxes |
|
(7,092 |
) |
|
(28,158 |
) |
||
| Loss on debt extinguishment |
|
8,012 |
|
|
8,300 |
|
||
| Patent assets received in lieu of cash |
|
(8,787 |
) |
|
— |
|
||
| Other |
|
8,474 |
|
|
8,635 |
|
||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable |
|
(14,327 |
) |
|
14,982 |
|
||
| Unbilled contracts receivable |
|
30,708 |
|
|
37,874 |
|
||
| Other assets |
|
(3,956 |
) |
|
(21,793 |
) |
||
| Accounts payable |
|
3,036 |
|
|
921 |
|
||
| Accrued and other liabilities |
|
(23,414 |
) |
|
(6,471 |
) |
||
| Deferred revenue |
|
(304 |
) |
|
6,115 |
|
||
| Net cash from operating activities |
|
165,913 |
|
|
129,433 |
|
||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment |
|
(8,298 |
) |
|
(2,975 |
) |
||
| Proceeds from sale of property and equipment |
|
19 |
|
|
— |
|
||
| Net cash received (paid) for mergers and acquisitions |
|
(17,400 |
) |
|
117,424 |
|
||
| Purchases of intangible assets |
|
(119 |
) |
|
(692 |
) |
||
| Purchases of short-term investments |
|
(65,446 |
) |
|
(68,093 |
) |
||
| Proceeds from sales of investments |
|
46,248 |
|
|
7,189 |
|
||
| Proceeds from maturities of investments |
|
33,436 |
|
|
19,683 |
|
||
| Net cash from investing activities |
|
(11,560 |
) |
|
72,536 |
|
||
| Cash flows from financing activities: | ||||||||
| Dividends paid |
|
(15,752 |
) |
|
(25,579 |
) |
||
| Repayment of debt |
|
(73,923 |
) |
|
(357,125 |
) |
||
| Debt refinancing costs |
|
(6,843 |
) |
|
— |
|
||
| Proceeds from debt, net of debt discount and issuance costs |
|
— |
|
|
1,010,286 |
|
||
| Repayment of assumed debt from merger transaction |
|
— |
|
|
(734,609 |
) |
||
| Proceeds from employee stock purchase program and exercise of stock options |
|
13,839 |
|
|
4,765 |
|
||
| Repurchases of common stock |
|
(75,235 |
) |
|
(59,291 |
) |
||
| Net cash from financing activities |
|
(157,914 |
) |
|
(161,553 |
) |
||
| Effect of exchange rate changes on cash and cash equivalents |
|
(1,189 |
) |
|
758 |
|
||
| Net increase (decrease) in cash and cash equivalents |
|
(4,750 |
) |
|
41,174 |
|
||
| Cash and cash equivalents at beginning of period |
|
170,188 |
|
|
74,551 |
|
||
| Cash and cash equivalents at end of period | $ |
165,438 |
|
$ |
115,725 |
|
||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ |
25,030 |
|
$ |
20,372 |
|
||
| Income taxes paid, net of refunds | $ |
22,151 |
|
$ |
30,647 |
|
||
| Stock issued in merger transaction | $ |
— |
|
$ |
828,334 |
|
||
|
||||||||
|
||||
| GAAP TO NON-GAAP RECONCILIATIONS | ||||
| (in thousands, except per share amounts) | ||||
| (unaudited) | ||||
| Net income attributable to the Company: | ||||
| Three Months Ended | ||||
| GAAP net loss attributable to the Company | $ |
(45,067 |
) |
|
| Adjustments to GAAP net loss attributable to the Company: | ||||
| Stock-based compensation expense: | ||||
| Cost of revenue |
|
525 |
|
|
| Research, development and other |
|
5,110 |
|
|
| Selling, general and administrative |
|
8,779 |
|
|
| Amortization expense |
|
52,388 |
|
|
| Merger and integration-related costs: | ||||
| Transaction and other related costs recorded in selling, general and administrative |
|
130 |
|
|
| Severance and retention recorded in cost of licensing, services and software revenue, excluding depreciation and amortization of intangible assets |
|
100 |
|
|
| Severance and retention recorded in research, development and other |
|
129 |
|
|
| Severance and retention recorded in selling, general and administrative |
|
115 |
|
|
| Separation costs recorded in selling, general and administrative |
|
2,241 |
|
|
| Tax provision recorded in excess of cash taxes paid |
|
35,456 |
|
|
| Non-GAAP net income attributable to the Company | $ |
59,906 |
|
|
| Diluted earnings per share attributable to the Company: | ||||
| Three Months Ended | ||||
| GAAP diluted loss per share attributable to the Company | $ |
(0.43 |
) |
|
| Adjustments to GAAP diluted earnings per share attributable to the Company: | ||||
| Stock-based compensation expense |
|
0.13 |
|
|
| Amortization expense |
|
0.46 |
|
|
| Merger and integration-related costs |
|
0.01 |
|
|
| Separation costs |
|
0.02 |
|
|
| Difference in shares used in the calculation |
|
0.03 |
|
|
| Tax provision recorded in excess of cash taxes paid |
|
0.31 |
|
|
| Non-GAAP diluted earnings per share attributable to the Company | $ |
0.53 |
|
|
| Weighted average number of shares used in per share calculations excluding the effects of stock-based compensation - diluted |
|
113,107 |
|
|
| RECONCILIATION FROM OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW | ||||
| (in thousands) | ||||
| (unaudited) | ||||
| Three Months Ended | ||||
| Cash flow from operations | $ |
82,934 |
|
|
| Adjustments to cash flow from operations: | ||||
| Purchases of property & equipment |
|
(3,440 |
) |
|
| Merger and integration costs |
|
130 |
|
|
| Separation-related costs |
|
2,241 |
|
|
| Severance costs |
|
55 |
|
|
| Retention payments |
|
5,823 |
|
|
| Adjusted free cash flow | $ |
87,743 |
|
|
| RECONCILIATION FOR GUIDANCE ON | ||||||||
| GAAP TO NON-GAAP OPERATING EXPENSE EXCLUDING COGS | ||||||||
| (in millions) | ||||||||
| (unaudited) | ||||||||
| Twelve Months Ended | ||||||||
| Low | High | |||||||
| GAAP operating expense excluding COGS | $ |
735.0 |
|
$ |
745.0 |
|
||
| Stock-based compensation -- R&D |
|
(22.0 |
) |
|
(22.0 |
) |
||
| Stock-based compensation -- SG&A |
|
(36.0 |
) |
|
(36.0 |
) |
||
| Merger, integration and separation-related expense -- R&D |
|
(3.0 |
) |
|
(3.0 |
) |
||
| Merger, integration and separation-related expense -- SG&A |
|
(14.0 |
) |
|
(14.0 |
) |
||
| Amortization expense |
|
(205.0 |
) |
|
(205.0 |
) |
||
| Total of non-GAAP adjustments |
|
(280.0 |
) |
|
(280.0 |
) |
||
| Non-GAAP operating expense excluding COGS | $ |
455.0 |
|
$ |
465.0 |
|
||
| RECONCILIATION FOR GUIDANCE ON | ||||||||
| OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW | ||||||||
| (in millions) | ||||||||
| (unaudited) | ||||||||
| Twelve Months Ended | ||||||||
| Low | High | |||||||
| Cash flow from operations | $ |
205.0 |
|
$ |
225.0 |
|
||
| Adjustments to cash flow from operations: | ||||||||
| Purchases of property & equipment |
|
(15.0 |
) |
|
(15.0 |
) |
||
| Merger, integration and separation costs (1) |
|
20.0 |
|
|
20.0 |
|
||
| Adjusted free cash flow | $ |
210.0 |
|
$ |
230.0 |
|
||
| (1) Includes severance costs and retention payments. | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20211108006048/en/
Xperi Investor Contact:
+1 818-436-1231
geri.weinfeld@xperi.com
Xperi Media Contact:
+1 310-227-9801
lauren.ward@xperi.com
Source:
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