Xperi Inc.

Thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Xperia first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. Thank you. I would now like to turn to Mike Iberg, Head of Investor Relations. Mike, you may begin your conference.

Thanks, Krista. Good afternoon, and thank you for joining us as Xperia reports its first quarter 2024 financial results. With me on today's call are John Kirchner, Chief Executive Officer, and Robert Anderson, Chief Financial Officer. In addition to today's earnings release, there is an earnings presentation which you can access along with this webcast on our investor relations website at investor.expery.com. Before we begin, I'd like to provide a few reminders. First, I would like to note that unless otherwise stated, all quarterly comparisons are to the same quarter in the prior year. Second, today's discussions 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 and MD&A section of our SEC filings, including our most recent Form 10-K and 10-Q. 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. Third, we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations through the most directly comparable gap measures, which can be found in the investor relations section of our website. Lastly, a replay of this conference call will be available on our website shortly at the conclusion of this call. I will now turn the call over to Xperia CEO, John Kirchner.

Thank you, Mike, and thank you, everyone, for joining us on our first quarter 2024 earnings call. We continue to advance our transformation in the first quarter. delivering solid financial results across our key growth areas and continuing to make progress on several strategic initiatives. I'll let Robert walk you through the details in just a moment, but let me first touch on a few financial highlights. During the quarter, we saw strong progress across our key growth areas. Growth in media platform, connected car, and video over broadband helped offset expected declines in our core consumer electronics and pay TV markets. resulting in Q1 revenue of $119 million. Revenue was down 6% from the prior year without adjusting for the recent auto sense and imaging divestiture, or 3% on an adjusted basis. Non-GAAP adjusted operating expenses declined 8% in the quarter, mainly due to the divestiture and our ongoing cost optimization efforts. Looking forward, we expect further expense reductions in 2024 as we continue to optimize the organization. Adjusted EBITDA was over $5 million for the quarter, or 5% of revenue. We remain focused on three key growth opportunities where we see strong potential and differentiation. These are connected TV advertising, where we offer our TiVo operating system to power smart TVs and monetize ad-supported viewing. In-cabin entertainment, where DTS AutoStage combines broadcast radio, internet metadata, and video to enhance the automotive experience and drive long-term monetization, and TiVo Video over Broadband, where we offer an industry-leading content-first streaming platform for broadband-only and IPTV linear households. Each of these markets is expected to roughly double over the next five to seven years. We continue to strengthen our position in each market and believe we are increasingly well-positioned to grow our revenue as these markets expand. As mentioned last quarter, our goal is to have 20 million monetizable endpoints by the end of 2025, with at least 10 million households and 10 million cars in which Xperia provides the core entertainment platform. In doing so, relative to 2023, we expect these three growth initiatives to generate nearly $200 million of incremental revenue in 2026. Let me walk you through some of our recent achievements that reflect our progress. Within Media Platform, we're pleased to share that later this month, we are hosting an industry launch event in London, showcasing the TiVo operating system along with a number of our key partners, including OEMs, retailers, content providers, and advertisers. We're pleased to announce that an additional Japanese global brand is expected to launch smart TVs powered by TiVo in retail stores across Europe and the UK prior to the UEFA Euro 2024. which begins June 14th. Separately, Argos, a major UK retailer, has TVs powered by TiVo online and in stores today under their Bush House brand. The Argos TVs are one of the first smart TVs to incorporate freely the new UK streaming service backed by Britain's public service broadcasters delivering live TV over broadband. Vestel continues to expand distribution and is now shipping smart TVs powered by TiVo into most major European countries under a dozen different brands. In summary, we're focused on growing our TiVo OS footprint and our European partners are working closely with us to rapidly expand into additional countries. Our ability to move quickly into adjacent markets is facilitated by our cloud native TiVo services platform, through which we've been able to rapidly scale across many countries while meeting the specific regional requirements for live TV, localized content, language, popular subscription services, and regulations. Overall, the initial launch across various countries has been very encouraging. Within Connected Car, we saw continued positive momentum during the quarter. DTS Auto Stage is addressing consumer demands for a better entertainment experience driven by the extended amount of time people spend in their cars. Traditional broadcast radio is still the most prominent form of in-vehicle entertainment, and AutoStage, with its dynamic user interface and access to secondary and tertiary radio stations, has created additional demand and interest in HD radio. As more and more car manufacturers adopt AutoStage, HD radio is steadily increasing its penetration within the North American market. In 2021, HD radio was a standard feature in 52% of all cars produced for North America. By the end of 2023, that number had increased to 58%. We continue to work with all of the domestic automotive brands and believe we can increase our HD radio penetration further. A good example of our recent progress is that Hyundai and Genesis will now include HD radio as standard in cars built for the North American market. Today, AutoStage is deployed in more than 6 million vehicles worldwide, a 50% increase over the last nine months. And AutoStage video service, powered by TiVo, is now deployed in hundreds of thousands of cars across seven countries. Within Pay TV, video over broadband, our IPTV solution, continues to make steady progress, surpassing 2 million subscriber households in the quarter and continuing its trend of double-digit growth. This is helping to offset the secular decline in some of our core pay TV solutions. We've mentioned TiVo Broadband several times now, and I thought it might be helpful to provide a quick overview of this new offering. TiVo Broadband utilizes our content first user interface to deliver popular streaming content from a variety of partners, including premium subscription video on demand, TiVo Plus, our free ad supported content network, and customer-specific linear channels to an operator's broadband-only customer base. This gives operators access to a low-cost video content package they can offer to their broadband-only subscribers. Given that much of the content is ad-supported, we have the ability to monetize the viewing of that content in partnership with our operator customers, who recognize that video services remain a key offering to support higher per-subscriber ARPU and lower customer churn. During the quarter, we signed three new TiVo broadband operators, Midco, Blue Peak, and Buckeye Broadband, bringing our total number of broadband providers to seven and representing a serviceable, available footprint of more than 1 million U.S. households for potential monetization. Turning to consumer electronics, Disney+, in collaboration with IMAX and DTS, announced the global streaming premiere of Queen Rock Montreal, the most successful IMAX concert film ever. featuring immersive sound from DTS. This film, along with 18 fan-favorite Marvel titles, will soon be available for streaming on Disney Plus in the IMAX Enhanced format with DTSX immersive sound. There are now more than 350 movies available on IMAX Enhanced with DTSX. The expanded portfolio of IMAX Enhanced titles supports the integration of our DTS decoder into our partners' AV and TV portfolios. Further to that point, we recently signed several important multi-year DTS-X license renewals with major consumer electronics manufacturers, including TCL, Hisense, and Xiaomi. We continue to look for opportunities to expand the DTS footprint, and in the most recent quarter, we executed new DTS-X decoder license agreements with two global PC manufacturers, ASUS and MSI, to integrate our decoder onto their motherboards. With respect to Perceive, as we previously announced, Centerview Partners was engaged as an independent financial advisor to assist the board with its strategic review of our Perceive business back in February. That process is progressing and is expected to be completed by the end of summer. While that process is ongoing, Perceive continues to generate revenue, has significantly reduced its cash burn, and remains on track to deliver technology to a big tech partner for product commercialization. Perceive is also advancing its efforts on large language model compression. Last quarter, we provided a list of business metrics we intend to use to measure our performance in 2024. I'd like to provide an update on the steady progress we've made through the first quarter. Within Media Platform, we want to see TVs powered by TiVo in all five major European countries and in the U.S. market by year-end. Our partners are currently shipping into most of the largest European countries and continue to expand. In addition, our plans to launch in the U.S. market remain on track for later this year. We have a goal to exit 2024 with at least six TV partners and an active TVOS footprint of 2 million devices. I'm pleased to share that we've added a Japanese global brand as our sixth TVOS partner. Negotiations with additional TV partners are progressing. and our TiVo OS footprint is expected to accelerate as we move through the year. I look forward to updating you on our progress on our next call. Our goal with InPay TV is to deliver more than 10 additional TiVo broadband wins and exit 2024 with 2.4 million video over broadband subscribers. As I mentioned earlier, we surpassed 2 million subscriber households and added three new TiVo broadband partners during the first quarter, which keeps us on track to achieve these targets. For Connected Car, our goal is to deliver three additional AutoStage wins, with at least one including video, and exit 2024 with an installed base of 7 million vehicles. Today, we announced that AutoStage is now deployed in over 6 million vehicles. Conversations with automotive OEMs are progressing, and the pipeline continues to build. With consistent progress against these key growth initiatives, coupled with our ongoing business transformation efforts, We expect to deliver the improved profitability and cash flow outlined in our 2024 outlook, and we remain well positioned to accelerate revenue growth and operating leverage in 2025 and beyond. With that, I'll turn the call over to Robert to discuss our financials. Robert.