Xperi Inc.

Good day, everyone. Thank you for standing by. Welcome to Xperia's first quarter 2022 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. In order to ask a question, please press star 1 on your touchtone telephone. I would now like to turn the call over to Jill Koval from Xperia. Jill, please go ahead.

Good afternoon, everyone, and thank you for joining us as we report our first quarter 2022 financial results. With me on the call today are Jon Kirchner, Chief Executive Officer, and Robert Andersen, Chief Financial Officer. In addition to today's earnings, there is also an earnings presentation which you can access along with the webcast on our IR website. Before we begin, I would like to provide two reminders. First, today's discussion contains forward-looking statements 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 discussed today, please refer to the risk factors section in our SEC filings including our annual report on Form 10-K. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. Second, we refer to certain non-GAAP financial measures which exclude one-time or ongoing non-cash acquired intangibles amortization charges, costs related to actual or planned business combinations including transaction fees, integration costs, severance, facility closures and retention bonuses, separation costs, stock-based compensation, loss on debt extinguishment, expense debt refinancing costs, and related tax effects. We have provided reconciliations of these non-GAAP measures to the most directly comparable GAAP measures in the earnings release and on the investor relations section of our website. The recording of this conference call will be available on our investor relations website at www.xperi.com. I'll now turn the call over to Xperi CEO, Jon Kirchner.

Thank you, Jill, and thank you everyone for joining us. While we continue to operate in a volatile macro environment, the financial results of the first quarter demonstrate the continued progress that we're making against our strategic priorities, Thank you very much. compared to 59 cents in Q1 of 2021. Let me provide a quick update on our previously announced business separation. We remain on track to separate later this fall into two standalone publicly traded companies, Adia, our IP licensing business, and our Xperia product business. The strategy behind Adia is to continue to extend the adoption of our innovations and licensing of its intellectual property across the broader media, entertainment, and semiconductor industries. Audio will continue to grow its patent portfolios in size and relevance through ongoing investments that are principally focused on internal innovations, as well as through targeted acquisitions and strategic management of its patent portfolios. At the same time, Xperia will become a more nimble and focused product business. With a unique set of leading products and capabilities, Experi will be well positioned to execute on its strategy for creating extraordinary experiences at home and on the go for millions of consumers around the world, elevating content and how audiences connect with it in a way that is more intelligent, immersive, and personal. We are excited by the growth potential of this business, which we intend to accomplish in three primary ways. by meeting the demand for advanced infotainment and in-cabin safety in cars, by enabling faster IPTV growth in the United States and abroad, and by establishing our TV OS as a leading platform for the discovery, management, and monetization of TV-based entertainment for Tier 2 TV makers. We continue to believe separation of these businesses will reduce business complexity, and enable these two pure play platforms to be better positioned to grow and compete over the long term, thereby unlocking meaningful value for shareholders. Focusing on Adia, we're very excited about the positioning of our IP business. We've built a sophisticated and diverse IP platform that is planned to separate with nearly 10,000 patent assets, almost 85% of which are homegrown. In preparation for our separation, we've built a media-focused R&D function within Audia that, in addition to our longstanding semi-R&D team, will continue to innovate and support the long-term needs of the business. The quality and breadth of our portfolio, in addition to our continuous innovation funnel, has been a key contributor in our ability to renew and complete new license agreements with world-leading media, entertainment, consumer electronics, social media, and semiconductor companies. We have worked diligently to enhance the visibility and sustainability around Audia's future revenue streams and to strengthen its foundation in preparation for its journey as a successful standalone company. During the quarter, we renewed or entered into new license agreements with over 10 customers, including a long-term renewal with a top 10 virtual multi-channel video programming distributor, which emphasizes the longevity of Audia's intellectual property portfolios, and Adia's continued importance to pay TV as it further expands into OTT streaming services. Additionally, we continue to progress other significant licensing discussions that we expect to close in the second quarter. In our Canadian litigation, on Friday, the court indicated that it intends to issue its judgment in our initial case against Videotron on June 3, 2022. and that it will advise the parties of the anticipated date of the judgment in our initial cases against Bell and Telus promptly after it issues the Videotron judgment. We remain very confident in the relevance of our IP portfolio and our ability to ultimately achieve a market-based resolution in Canada, although predicting timing is always difficult. As a reminder, we also filed second rounds of litigation against Videotron and Bell Canada last year. Moving to our product business, Over the past two years, we've worked to transform and strategically position the business for profitable growth as it emerges as an independent company. We continue to advance strategic initiatives in our four product categories, pay TV, consumer electronics, connected car, and the media platform space. Our PayTV product category includes classic guides, IPTV solutions, content discovery, TiVo Linux platforms, consumer TV subscribers, and hardware. Our long-term focus in this market is driving adoption of our higher value IPTV solutions, which are positioned to offset subscriber declines in our traditional guides business. We're pleased with the progress we've made around IPTV, as we continue to add new operators with our expanded product offerings, including a new win with InfinityLink Communications. Total IPTV subscribers continued to grow at a double-digit rate quarter over quarter. Notably, our pay TV product category grew slightly on a year-over-year basis as growth from IPTV through our expanded offerings more than offset the decline from our traditional guides business. Our second product category is consumer electronics. which includes DTS audio and imaging solutions in home and mobile, IMAX enhanced licensing, and our perceived business. During the quarter, we signed key renewals with Skyworth and Best Buy for their soundbar and TV products, and we expanded our licensing relationship with TCL to include decoder post-processing and PlayFi support in soundbar and TV products. Looking forward, we expect the consumer electronics product category to grow this year as the supply chain for game consoles begins to normalize and through growth in our PlayFi wireless and mobile business. We expect additional growth to come from expansion of our IMAX enhanced ecosystem and from Perceive as we expect to see the first products utilizing our technology come to market in late 2022 for the first part of 2023. Our third product category is connected car, which includes HD radio, music metadata, DTS auto stage, and DTS auto sense. Connected car continues to be impacted by supply chain constraints, which we are closely monitoring. We're working with our partners to try to mitigate shortages that could impact key components that deliver with our technology and anticipate an improving situation in the back half of 2022 as the supply chain stabilizes. A few important highlights from the first quarter include BMW's expanded shipments of the DTS AutoSense-enabled iX model into more countries. We also advanced engagement for occupancy monitoring solutions with numerous European and Asian car companies. Likewise, Mercedes-Benz expanded shipments of DTS AutoStage-enabled models to more than 40 countries. And over the quarter, we further advanced pipeline development with OEM customers in the US, Europe, and Asia. and finally, our DTS AutoSense neuromorphic driver monitoring solution was chosen as a 2022 winner for the Artificial Intelligence Excellence Award presented by the Business Intelligence Group. Our fourth and final product category is Media Platform, which captures the TiVo Stream OS, the TiVo Stream 4K, monetization and TV viewership data. This is our fastest-growing category, and we expect double-digit growth in this category in 2022, mostly driven by expansion in our advertising-based monetization revenue. At the same time, we're focused on partnerships with TV OEMs, chipset partners, and content providers to bring the first TVs powered by TiVo StreamOS in late 2023 or early 2024. During the quarter, we announced the integration of YouTube TV into TiVo Stream 4K and TiVo Stream OS, strengthening the premium live TV viewing experience. Additionally, we launched TiVo Extend, an end-to-end advertising solution that enables incremental reach and frequency opportunities for connected TV advertisers. We also advanced the TiVo Stream ecosystem development across content partners, OEMs, and chipset providers. With that, I'll turn the call over to Robert to discuss our financials. Robert?