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What changed in Xperi Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Xperi Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+404 added−443 removedSource: 10-K (2025-02-27) vs 10-K (2024-03-01)

Top changes in Xperi Inc.'s 2024 10-K

404 paragraphs added · 443 removed · 284 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

74 edited+9 added−13 removed76 unchanged
Biggest changeThe Board of Directors believes that board diversity is important to serving the long-term interests of stockholders and takes diversity into consideration when identifying potential director candidates. We measure employee experience by collecting insight and understanding of engagement and satisfaction. We use an employee engagement survey, executive roundtables, and employee focus groups to solicit input.
Biggest changeWe measure employee experience by collecting insight and understanding of engagement and satisfaction. We use an employee engagement survey, executive roundtables, and employee focus groups to solicit input. Task forces are regularly created to identify and address gaps, resulting in changes to policies and practices and benefits offerings.
UX Business Operations and Technical Support Our UX Business has technical support and certification operations to support our products: • we provide training, technical support and integration services to Pay-TV service providers who license our products; • we operate the internet-based services required for our service offerings including data delivery, search, recommendation, advertising, device management and media recognition; • we provide broadcast delivery of television programming data and advertising to UXs on TVs and set-top-boxes in major European markets, in Japan, and in North America; we also deliver similar programming and advertising data via the internet; • we support our customers with porting and engineering services to ensure our interactive program guides and DVRs operate properly; and • we provide customer care for UX and DVR customers to resolve data, advertising, and consumer functional issues.
UX Business Operations and Technical Support Our UX Business has technical support and certification operations to support our products: • we provide training, technical support and integration services to Pay-TV service providers who license our products; • we operate the internet-based services required for our service offerings including data delivery, search, recommendation, advertising, device management and media recognition; • we provide broadcast delivery of television programming data and advertising to UX customers on TVs and set-top-boxes in major European markets, in Japan, and in North America; we also deliver similar programming and advertising data via the internet; • we support our customers with porting and engineering services to ensure our interactive program guides and DVRs operate properly; and • we provide customer care for UX and DVR customers to resolve data, advertising, and consumer functional issues.
Our TV as a Service IPTV solution includes a full cable programming lineup with local channels, DVR, recommendations, Dynamic Ad Insertion and more, all with the same ease as signing up for and using top streaming services. Video Metadata Our metadata products are a critical component of delivering an interactive entertainment experience.
Our TV-as-a-Service IPTV solution includes a full cable programming lineup with local channels, DVR, recommendations, Dynamic Ad Insertion and more, all with the same ease as signing up for and using top streaming services. 9 Video Metadata Our metadata products are a critical component of delivering an interactive entertainment experience.
This creates a unique opportunity for an independent media platform that allows Smart TV OEMs to brand the experience to maintain the customer relationship, provide the necessary scale to secure top content streaming providers, and participate in the long-term monetization throughout the typical 5-year lifecycle of TV ownership. • Increasing Consumption of Video Content : Average U.S. weekly video viewing of 42 hours remains relatively consistent from COVID-era highs, up from an average of 38 hours per week in 2015, driven by a number of factors, including increased availability of content catering to various consumer tastes and preferences, new platforms for consumption such as personal devices (e.g., mobiles and tablets), and disruption from the COVID-19 pandemic.
This creates a unique opportunity for an independent media platform that allows Smart TV OEMs to brand the experience to maintain the customer relationship, provide the necessary scale to secure top content streaming providers, and participate in the long-term monetization throughout the typical 5-year lifecycle of TV ownership. • Increasing Consumption of Video Content : Average U.S. weekly video viewing of 43 hours remains relatively consistent from COVID-era highs, up from an average of 38 hours per week in 2015 , driven by a number of factors, including increased availability of content catering to various consumer tastes and preferences, new platforms for consumption such as personal devices (e.g., mobiles and tablets), and disruption from the COVID-19 pandemic.
Pursuant to a consumer electronics device certification and licensing program operated by IMAX Corporation and DTS, Inc., since 2017, we have been offering consumers worldwide the ability to experience an IMAX Enhanced immersive movie experience with IMAX Enhanced content from leading studios such as Disney and Sony Pictures.
Pursuant to a consumer electronics device certification and licensing program operated by IMAX Corporation and DTS, Inc., since 2017, we have been offering consumers worldwide the ability to experience an IMAX Enhanced immersive movie 10 experience with IMAX Enhanced content from leading studios such as Disney and Sony Pictures.
To enable our talent to actively contribute to – and have a positive impact on – the overall business and culture, we have developed a set of programs and initiatives that include competitive compensation and benefits offerings, skills and management development, diversity and inclusion initiatives, goal and performance management, and succession planning.
To enable our talent to actively contribute to – and have a positive impact on – the overall business and culture, we have developed a set of programs and initiatives that include competitive compensation and benefits offerings, skills and management development, inclusion initiatives, goal and performance management, and succession planning.
Our SEC reports can be accessed through the investor relations section of our website. The information found on our website and in our ESG report is not incorporated into this or any other report we file with or furnish to the SEC. 14
Our SEC reports can be accessed through the investor relations section of our website. Any information found on our website and in our ESG report is not incorporated into this or any other report we file with or furnish to the SEC.
Over time, we believe consumers will place significant importance on the quality of media delivery and will expect the quality of delivery in the car to be comparable to that of their living room including access to OTT video and interactive gaming solutions. • Increasing Use of “Smart” Devices : Consumers have long relied on smartphones enabled with virtual assistants, talk-to-text, and other intelligent features, and increasingly want other home devices (as well as their automobiles) to be enabled with similar smart capabilities.
Over time, we believe consumers will place significant importance on the quality of media delivery and will expect the media quality in the car to be comparable to that of their living room including access to streaming video and interactive gaming solutions. • Increasing Use of “Smart” Devices : Consumers have long relied on smartphones enabled with virtual assistants, talk-to-text, and other intelligent features, and increasingly want other home devices (as well as their automobiles) to be enabled with similar smart capabilities.
Thus, we believe there is a significant market opportunity for an independent media platform that enables participants to monetize their products through recurring revenue streams across the lifecycle of the device rather than just a one-time monetization opportunity at the point-of-sale. 4 • Marked Need for An Independent Media Platform : Nearly half of all Smart TVs each year are shipped into Western Europe and North America by leading electronics manufacturers who lack the scale required to support the technology, content, and monetization capabilities of a Smart TV OS and streaming media platform.
Thus, we believe there is a significant market opportunity for an independent media platform that enables participants to monetize their products through recurring revenue streams across the lifecycle of the device rather than just a one-time monetization opportunity at the point-of-sale. • Marked Need for An Independent Media Platform : Just over half of all Smart TVs each year are shipped into Western Europe and North America by leading electronics manufacturers who lack the scale required to support the technology, content, and monetization capabilities of a Smart TV OS and streaming media platform.
At the same time, there is a new set of industry participants that are looking for ways to monetize the ad-based ecosystem, including consumer electronics manufacturers, Smart TV OEMs, automotive manufacturers, and video-over-broadband (“IPTV”) operators that have historically not participated in the OTT value chain.
At the same time, there is a new set of industry participants that are looking for ways to monetize the ad-based ecosystem, including consumer electronics manufacturers, Smart TV OEMs, automotive manufacturers, and video-over-broadband (“IPTV”) operators that have historically not participated in the streaming value chain.
Legacy TiVo DVR Subscriptions We offer direct-to-consumer retail TiVo DVR subscriptions in North America. The TiVo Service Platform includes a modular front-end that allows the basic platform to be used by hardware manufacturers to build set-top-boxes that support digital and analog broadcast, cable, internet TV, OTT and VOD services.
Legacy TiVo DVR Subscriptions We offer direct-to-consumer retail TiVo DVR subscriptions in North America. The TiVo Service Platform includes a modular front-end that allows the basic platform to be used by hardware manufacturers to build set-top-boxes that support digital and analog broadcast, cable, internet TV, streaming and VOD services.
Consumers are increasingly looking for solutions that allow them to navigate across the fragmented and complex entertainment landscape of OTT content. • OTT Advertising Monetization : The shift to OTT has not only impacted user needs for entertainment devices, but also disrupted the ad-based programming model that was centered on linear TV programming.
Consumers are increasingly looking for solutions that allow them to navigate across the fragmented and complex entertainment landscape of streaming content. • Advertising Monetization : The shift to streaming has not only impacted user needs for entertainment devices but also disrupted the ad-based programming model that was centered on linear TV programming.
Daimler launched the first series of automobiles featuring the DTS AutoStage platform in September 2020, followed by numerous vehicle brands thereafter. In 2023, Xperi and BMW Group announced the deployment of the DTS AutoStage video service Powered by TiVo, across various models in the United States, Great Britain, Germany, France, Italy, Spain, and South Korea.
Daimler launched the first series of automobiles featuring the DTS AutoStage platform in September 2020, followed by numerous vehicle brands thereafter. In 2023, BMW Group launched the deployment of the DTS AutoStage Video Service Powered by TiVo, across various models in the United States, Great Britain, Germany, France, Italy, Spain, and South Korea.
We offer employees benefits that vary by country and are designed to meet or exceed local laws and are competitive in the marketplace. We invest in the career growth of our employees by providing a wide range of development opportunities, including face-to-face, virtual, social, and self-directed learning, mentoring, coaching, and external development.
We offer employees benefits that vary by country and are designed to meet or exceed local laws and are competitive in the marketplace. We invest in the career growth and skill development of our employees by providing a wide range of learning opportunities, including face-to-face, virtual, social, and self-directed learning, coaching, and external development.
Consumer Electronics Our audio licensing products face competition from other third-party providers of similar solutions as well as internal engineering and design groups among industry IC providers and consumer electronics manufacturers. 10 Our primary competitor is Dolby Laboratories, which develops and markets, among other things, high-definition audio products and services.
Consumer Electronics Our audio licensing products face competition from other third-party providers of similar solutions as well as internal engineering and design groups among industry IC providers and consumer electronics manufacturers. 13 Our primary competitor is Dolby Laboratories, which develops and markets, among other things, high-definition audio products and services.
Dolby’s long-standing market position, brand, business relationships, resources and inclusion in various industry standards provide it with a strong competitive position. In addition to Dolby, we compete in specific product markets with companies such as Fraunhofer IIS and various other consumer electronics product manufacturers.
Dolby’s long-standing market position, brand, business relationships, resources and inclusion in various industry standards provide it with a strong competitive position. In addition to Dolby, we compete in specific product markets with companies such as Fraunhofer IIS and various other consumer electronics licensors.
The Children’s Online Privacy Protection Act restricts the ability of service providers to collect information from minors and the Protection of Children from Sexual 12 Predators Act of 1998 requires service providers to report evidence of violations of federal child pornography laws under certain circumstances.
The Children’s Online Privacy Protection Act 15 restricts the ability of service providers to collect information from minors and the Protection of Children from Sexual Predators Act of 1998 requires service providers to report evidence of violations of federal child pornography laws under certain circumstances.
We have world-class talent and strong research and development capabilities in various locations throughout the world. Starting with core research, machine learning and advanced algorithm development, we continue to focus on next generation technology 11 solutions.
We have world-class talent and strong research and development capabilities in various locations throughout the world. Starting with core research, machine learning and advanced algorithm development, we continue to focus on next generation technology 14 solutions.
Connected Car Our HD Radio and DTS AutoStage solutions face competition from streaming and subscription-based digital service providers such as Sirius/XM, Pandora, Gracenote, and other digital audio, video and data service providers. Media Platform TiVo OS . We compete for Smart TV platform adoption with companies such as Roku, Alphabet, Inc’s Google TV and Amazon FireTV.
Connected Car Our HD Radio and DTS AutoStage solutions face competition from streaming and subscription-based digital service providers such as Sirius/XM, Pandora, Gracenote, Amazon and other digital audio, video and data service providers. Media Platform TiVo OS . We compete for Smart TV platform adoption with companies such as Roku, Alphabet’s Google TV and Amazon FireTV.
Our UX Solutions may include advertising and we typically share a portion of the advertising revenue with the service provider. Advertising revenue tied to our UX Solutions is included in the Media Platform category described below.
Our UX Solutions may include advertising and we typically share a portion of the advertising revenue with the service provider. Advertising revenue tied to our UX Solutions is included in our Media Platform category.
TiVo OS brings services from long-time partners such as Disney, Hulu, and YouTube TV, among others, and seamlessly integrates local TV, free ad-supported TV (“FAST”), and the most popular services for Ad-supported Video on Demand (“AVOD”), Subscription Video on Demand (“SVOD”), and virtual Multichannel Video Programming Distributor (“vMVPD”) services.
TiVo OS brings services from long-time partners such as Disney, Prime, Netflix, YouTube, among others, and seamlessly integrates local TV, free ad-supported TV (“FAST”), and the most popular services for Ad-supported Video on Demand (“AVOD”), Subscription Video on Demand (“SVOD”), and virtual Multichannel Video Programming Distributor (“vMVPD”) services.
We continue to develop and evolve our DTS audio technologies, leveraging our content insight and AI capabilities, to deliver immersive audio with enhanced device playback solutions that solve end user issues such as ease of wireless set up, loudness and dialog clarity. • Connected Car : We seek to transform the automotive experience with a content-oriented multimedia experience, driven by personalization to the connected car.
We continue to develop and evolve our DTS audio technologies, leveraging our content insight and artificial intelligence (“AI”) capabilities, to deliver immersive audio with enhanced device playback solutions that solve end user issues such as ease of wireless set up, loudness and dialog clarity. • Connected Car : We seek to transform the automotive experience with a content-oriented multimedia experience, driven by personalization to the connected car.
Our IPTV solution supports multiple services and applications, such as TV programming, broadband OTT video content, digital music, photos and other media experiences.
Our IPTV solution supports multiple services and applications, such as TV programming, broadband streaming video content, digital music, photos and other media experiences.
This video service brings an award-winning, content-first experience to the connected car, delivering free premium content across live TV, news, sports, movies and more. BMW launched the first series of automobiles featuring AutoStage video service in fall of 2023, and plans to integrate this service into additional makes and models in 2024.
This video service brings an award-winning, content-first experience to the connected car, delivering premium content across live TV, news, sports, movies and more. BMW launched the first series of automobiles featuring AutoStage video service in fall of 2023 and integrated this service into additional makes and models in 2024.
With the successful launch of DTS AutoStage with Video in BMW cars, we have won an additional design with another European automotive OEM and are actively pursuing additional opportunities.
With the successful launch of DTS AutoStage with Video in BMW cars, we have won an additional design with another European automotive OEM, an additional design with a Japanese automotive OEM, and are actively pursuing several opportunities.
We operate in one reportable business segment and group our business into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Headquartered in Silicon Valley with operations around the world, we have approximately 2,100 employees and more than 35 years of operating experience.
We operate in one reportable business segment and group our revenue into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Headquartered in Silicon Valley with operations around the world, we have approximately 1,680 employees and more than 35 years of operating experience.
Since the majority of video advertising dollars are weighted toward linear TV, we believe the OTT advertising market is positioned for significant growth in the next 3 to 5 years as advertisers continue to follow the viewing audience as it shifts viewing habits from traditional television to streaming.
Since the majority of video advertising dollars are currently allocated toward linear TV, we believe the streaming advertising market is 7 positioned for significant growth in the next 3 to 5 years as advertisers continue to follow the viewing audience as it shifts viewing habits from traditional linear television to streaming.
We believe we create extraordinary experiences at home and on the go for millions of consumers around the world, enabling audiences to connect with content in a way that is more intelligent, immersive, and personal.
We believe we create extraordinary experiences at home and on the go for millions of consumers around the world, enabling our unique audiences to connect with content in a more intelligent, immersive, and personal way.
In particular, we are competing for technical talent and we need to offer not only robust and attractive compensation packages but also provide broad opportunities for our employees to make an impact, grow, and develop. As of December 31, 2023, we had a global talent base consisting of approximately 2,100 full-time employees.
In particular, we are competing for technical talent and we need to offer not only robust and attractive compensation packages but also provide broad opportunities for our employees to make an impact, grow, and develop. As of December 31, 2024, we had a global talent base consisting of approximately 1,680 full-time employees.
As the footprint of devices using TiVo OS grows, we expect to monetize the devices through the following vehicles: • Ad Supported Content : The sale of ad inventory on services, including our own TiVo+ and certain third-party AVOD services. • SVOD and MVPD Services : Revenue shared by SVOD and virtual MVPD services on new user subscriptions activated or re-activated through our OS platform. • Home Screen Ad Placements : Ad placements on the TiVo OS platform’s home screen by streaming services, studios, and other consumer brands. • Data Licensing: Revenue from advertisers, advertising agencies, and networks to license data generated from TiVo platforms to inform their ad buying decisions. • Off-Platform Ads : Household identifications taken from the TiVo OS platform and used to target other media sources. 9 Monetization – TV Viewership Data We offer TV viewership data with program airing data for millions of households.
As the footprint of devices using TiVo OS grows, we expect to monetize the devices through the following vehicles: • Ad Supported Content : The sale of ad inventory on services, including our own TiVo+ and certain third-party AVOD services. • SVOD and MVPD Services : Revenue shared by SVOD and virtual MVPD services on new user subscriptions activated or re-activated through our OS platform. • Home Screen Ad Placements : Ad placements on the TiVo OS platform’s home screen by streaming services, studios, and other consumer brands. • Data Licensing: Revenue from advertisers, advertising agencies, and networks to license data generated from TiVo platforms to inform their ad buying decisions. • Off-Platform Ads : Household identifications taken from the TiVo OS platform and used to target other media sources.
While delivering ad-based programming to OTT audiences has presented new challenges, it has also created opportunities for advertisers to deliver customized, highly relevant, and targeted ad content to a rapidly growing audience.
While delivering ad-based programming to streaming audiences has presented new challenges, it has also created opportunities for advertisers to deliver personalized, highly relevant, and targeted ad content to a rapidly growing audience.
Our solutions immerse drivers and passengers in more of their favorite audio and video content, and also enable high quality, subscription-free digital radio. With vehicle safety systems improving, consumer expectations around consuming content become more demanding.
Our solutions immerse drivers and passengers in more of their favorite audio and video content, and also enable high quality, subscription-free digital radio. With vehicle safety systems improving and consumer content choice growing in the home, expectations around consuming content become more 8 demanding.
These growth drivers include: the delivery and monetization of the TiVo OS into Smart TVs, infotainment (AutoStage) solutions into the connected car market, increased adoption of our IPTV solutions in the Pay-TV market, and unit growth in consumer electronics from DTS audio solutions.
These growth drivers include: the delivery and monetization of the TiVo OS into Smart TVs, infotainment (AutoStage) solutions into the connected car market, increased adoption and monetization of our IPTV solutions in the Pay-TV market, continued proliferation of our HD Radio solution, and unit growth in consumer electronics from DTS audio solutions.
Autonomous and semi-autonomous driving technologies have made significant progress over the last several years and passenger cars are increasingly being fitted with autonomous driving features. If autonomous driving technologies become mainstream, the automobile will become a more common place for media consumption.
Autonomous and semi-autonomous driving technologies have made significant progress over the last several years and passenger cars are increasingly being fitted with autonomous driving features. As these driving technologies become mainstream, the expectation is that automobile will become a more common place for media consumption.
Item 1. B usiness Corporate Information The principal executive offices of Xperi Inc. (“we”, “our”, the “Company” or “Xperi”) are located at 2190 Gold Street, San Jose, California 95002 USA. Our telephone number is +1 (408) 519-9100. We maintain a corporate website at xperi.com.
Item 1. B usiness Corporate Information The principal executive offices of Xperi Inc. (“we,” “our,” the “Company,” or “Xperi”) are located at 2190 Gold Street, San Jose, California 95002 USA. Our telephone number is +1 (408) 519-9100. We maintain a corporate website at xperi.com.
Xperi, the Xperi logo, TiVo, the TiVo logo, DTS, the DTS logo, Ergo, DTS HD, DTS Audio Processing, DTS:X Ultra, DTS Virtual:X, DTS Headphone:X, DTS Play-Fi, DTS:X, DTS AutoStage, and HD Radio are trademarks or registered trademarks of Xperi or its affiliated companies in the United States and other countries.
Xperi, the Xperi logo, TiVo, the TiVo logo, DTS, the DTS logo, DTS HD, DTS Audio Processing, DTS:X Ultra, DTS Virtual:X, DTS Headphone:X, DTS Play-Fi, DTS:X, HD Radio, DTS AutoStage, DTS AutoStage Video Service Powered by TiVo, TiVo OS and TiVo+ are trademarks or registered trademarks of Xperi or its affiliated companies in the United States and other countries.
Media Platform Media Platform provides the services and technology required to enable consumers to find, watch, and enjoy their favorite media entertainment on connected devices, while at the same time, providing us the ability to monetize this engagement with certain content.
Media Platform Media Platform provides the services and technology required to enable consumers to find, watch, and enjoy their favorite media entertainment on connected devices, while at the same time, providing us the opportunity to monetize this consumer engagement.
We license proprietary technology and services in an independent media platform that connects advertisers and entertainment producers to audiences they cannot as easily reach on other platforms.
We license proprietary technology and services through our independent media platform that connects advertisers and entertainment producers to unique audiences they cannot as easily reach on other platforms.
Our footprint includes millions of traditional linear TV households, where we deterministically capture viewership data throughout the home, as well as anyone streaming from our ad-supported content network. By creating an environment where users search less and watch more, we enable content producers to grow their audiences and consumer brands to increase exposure to their marketing campaigns over time.
Our footprint includes millions of traditional linear TV households, where we deterministically capture viewership and ad exposure data in the home. By creating an environment where users search less and watch more, we enable content producers to grow their audiences and consumer brands to increase exposure to their marketing campaigns over time.
As the TiVo OS footprint increases, the inventory of FAST and AVOD services, such as our own TiVo+ network, also increases to provide a robust opportunity to monetize this unique, connected TV advertisement inventory.
As the TiVo OS footprint increases, the inventory of FAST and AVOD services, such as our own TiVo+ network, also increases, which provides a robust opportunity to scale the monetization of this unique, connected TV advertisement inventory.
Omdia S.A. estimates revenues from the shipment of these platforms and devices in North America alone (including TVs, Smartphones, Tablets and PCs, Streaming Media Players, connected Blu-Rays players, and Video Game consoles) will surpass $190 billion in 2023 and continue to grow by 3% year-over-year to 2025. • Growing Connectivity in Cars and the Future of Semi-Autonomous and Autonomous Vehicles : As the automobile dashboard interface becomes more integral to the in-car experience, purchasing a car for its infotainment capabilities starts to move up the list of purchase considerations for car buyers.
TechInsights estimates revenue from the shipment of these platforms and devices in North America alone (including TVs, Smartphones, Tablets and PCs, Streaming Media Players, connected Blu-Rays players, and Video Game consoles) to surpass $250 billion in 2024 and continue to grow by 2.5% year-over-year to 2028. • Growing Connectivity in Cars and the Future of Semi-Autonomous and Autonomous Vehicles : As the automobile dashboard interface becomes more integral to the in-car experience, purchasing a car for its infotainment capabilities starts to move up the list of purchase considerations for car buyers.
TiVo OS provides industry-leading content recommendations based on AI-defined insights encouraging consumers to continually discover their next new favorite program or show.
TiVo OS provides content recommendations based on AI-defined insights, encouraging consumers to continually discover their next new favorite TV show or movie.
Our platform creates high viewer engagement with an unbiased, content-first user experience where traditional linear TV and streaming services integrate into a personalized experience that makes it easy to find, watch and enjoy content 5 across fragmented ecosystems. Our solutions allow advertisers and entertainment producers to connect with audiences they cannot as easily reach on other platforms.
Our platform strives to creates high viewer engagement through an unbiased, personalized, content-first user experience, combining both traditional linear TV and streaming services that makes it easy to find, watch and enjoy content across fragmented ecosystems. Our solutions allow advertisers and entertainment producers to connect with highly engaged audiences they cannot as easily reach on other platforms.
We are innovating to create the dashboard of the future, striving to accommodate more types of entertainment, from audio, video, gaming and more to create a compelling entertainment experience in the car. • Media Platform : We are strongly positioned as an independent media platform that allows Smart TV OEMs to brand the experience to maintain the customer relationship, provide the necessary scale to secure top content streaming providers, and generate recurring revenues by participating in monetization throughout the lifecycle of TV ownership.
We are innovating to create the dashboard of the future, striving to accommodate more types of entertainment, from audio, video, gaming and more to create a compelling entertainment experience in the car. • Media Platform : We are strongly positioned as an independent media platform that enables Smart TV OEMs to brand the TV user experience and maintain the customer relationship; provides the necessary scale to secure top content streaming providers; and generates recurring revenue by participating in the platform monetization throughout the device’s lifespan.
TiVo OS for TVs is licensed as a software-as-a-service to Smart TV OEMs and will include the right to monetize all or part of the end-user content engagement over the life of the device.
TiVo OS for TVs is licensed as a software-as-a-service to Smart TV companies and includes the ability to monetize all or part of the end-user content engagement over the life of the device.
We protect our innovations and inventions through a variety of means, including, but not limited to, applying for patent, copyright, and trademark protection domestically and internationally, and protecting our trade secrets. As of December 31, 2023, we held approximately 749 United States issued patents and 156 patent applications, as well as approximately 1,024 foreign issued patents and 210 patent applications.
We protect our innovations and inventions through a variety of means, including, but not limited to, applying for patent, copyright, and trademark protection domestically and internationally, and protecting our trade secrets. As of December 31, 2024, we held approximately 492 United States issued patents and 45 patent applications, as well as approximately 678 foreign issued patents and 100 patent applications.
Broadcasters, MVPDs, content producers, advertising agencies and advertisers use our TV viewership data, alone or in combination with third-party data sources utilizing industry-leading data safe havens, to target promotions and advertising directly, or through third-party viewer segments, to monetize their subscriber customer base.
Broadcasters, MVPDs, content producers, advertising agencies and advertisers use our TV viewership data, alone or in combination with third-party data sources utilizing industry-leading data safe havens, to target promotions and advertising directly, or through third-party viewer segments, to monetize their subscriber customer base. 12 Monetization – Advertising Solutions We provide advertisers with nationwide or regionally-targeted advertising on our various owned or operated devices.
OTT media now accounts for more than 50% of US weekly video viewing for adults ages 18 and older. The proliferation of OTT has created the need for a new generation of entertainment products that are centered on the OTT viewing experience.
Streaming media now accounts for roughly 54% of U.S. weekly video viewing for adults ages 18 and older. The proliferation of streaming content has created the need for a new generation of entertainment products that are centered on the streaming viewing experience.
We believe the overall OTT streaming market growth, our independent position, our differentiated end-user solution, and our more inclusive business model of sharing economics with Smart TV OEMs represents an opportunity where we can establish a strong position.
We believe the overall streaming market growth, our independent position, our differentiated end-user solution, and our more inclusive business model of sharing economics with Smart TV OEMs represents an opportunity where we can establish a strong market position. We work closely with content owners, advertisers, and ad agencies to monetize the viewing of ad-supported content across our TiVo OS platform.
We offer customized leadership and management development programs for our management teams. We leverage our manager ecosystem, coupled with industry-standard performance management tools, to align corporate goals with employee objectives. Employees are encouraged to create and align individual, functional, and team-based goals, track performance against goals, write self-evaluations, and solicit feedback.
We also provide technical training through an online platform, offering more than 25,000 technical learning programs. We leverage our manager ecosystem, coupled with industry-standard performance management tools, to align corporate goals with employee objectives. Employees are encouraged to create and align individual, functional, and team-based goals, track performance against goals, write self-evaluations, and solicit feedback.
In December 2023, we entered into a definitive agreement with Tobii AB (the “Purchaser”), an eye tracking and attention computing company, pursuant to which we agreed to sell to the Purchaser our AutoSense in-cabin safety business and related imaging solutions (the “Divestiture”).
In December 2023, we entered into a definitive agreement with Tobii AB (“Tobii”), an eye tracking and attention computing company, pursuant to which we agreed to sell our AutoSense in-cabin safety business and related imaging solutions (the “AutoSense Divestiture”). The AutoSense Divestiture was completed in January 2024, and has streamlined our business and further enhanced our focus on entertainment markets.
We invest in a global online learning platform where more than 250 courses and programs are offered in a wide range of skill areas, providing development opportunities for employees to become more knowledgeable and effective in their roles. We also provide technical training through an online platform, offering more than 10,000 technical learning programs.
We produce bespoke learning materials and toolkits which are accessible via our intranet. We also invest in a global online learning platform where more than 150 courses and programs are offered in a wide range of skill areas, providing development opportunities for employees to become more knowledgeable and effective in their roles.
Our first design win was announced in 2022 with BMW and went into production in the fall of 2023, providing a living room-like experience through the display screen in the dashboard of the vehicle.
This solution is an optional feature available through our DTS AutoStage offering, known as DTS AutoStage Video Service Powered by TiVo. Our first design win was announced in 2022 with BMW and went into production in the fall of 2023, providing a living room-like experience through the display screen in the dashboard of the vehicle.
For Tier 2 and Tier 3 Smart TV OEMs, TiVo OS provides an opportunity to participate in the fast-growing connected TV monetization value chain with scale and cross-platform end-user insight not available to OEMs on a standalone basis.
For Tier 2 and Tier 3 Smart TV OEMs, TiVo OS provides an opportunity to participate in the fast-growing connected TV monetization value chain with scale and cross-platform end-user insight. Devices – TiVo OS for Car TiVo OS for Car is a modified version of the Linux-based TiVo Smart TV operating system designed specifically for the automotive space.
Media Platform includes our Vewd middleware solutions, TiVo OS, TiVo Stream 4K, connected TVs and connected cars that leverage the TiVo OS, and the associated monetization of these endpoints. 8 Platform – TiVo OS TiVo OS drives industry-leading consumer engagement by delivering rich metadata, personalization, natural language understanding and voice control, and content integration services.
Media Platform includes TiVo Operating System (“OS”) and the Smart TVs and connected cars that leverage TiVo OS, the associated monetization services across our platforms, our middleware solutions, and sales of TiVo Stream 4K. 11 Platform – TiVo OS TiVo OS drives industry-leading consumer engagement by delivering rich metadata, personalized recommendations, natural language understanding and voice control, and a content-first user experience across streaming services and linear television.
Our immersive audio solutions, such as DTS-HD and DTS:X, empower content creators to deliver more compelling content and are supported by major Hollywood studios, many cinema operators in the United States and Asia, and leading streaming service providers in the United States, Europe and Asia.
Our immersive audio solution DTS:X empowers content creators to deliver more compelling content and are supported by major Hollywood studios, many cinema operators in the United States and Asia, and leading streaming service providers in the United States, Europe and Asia. We have licensed our audio technologies and related trademarks to substantially all the major consumer electronics product manufacturers worldwide.
We have licensed our audio technologies and related trademarks to 7 substantially all the major consumer electronics product manufacturers worldwide. These customers include Denso, Harman, Hisense, HP, LG, Logitech, Microsoft, Panasonic, Samsung, Sony, TCL and others. Typically, our audio technologies are delivered as software code on integrated circuit (“IC”) chips.
These customers include Denso, Harman, Hisense, HP, LG, Logitech, Microsoft, Panasonic, Samsung, Sony, TCL and others. Typically, our audio technologies are delivered as software code on an integrated circuit (“IC”) chip.
We have demonstrated support and commitment to developing a culture of non-discrimination and embracing diversity, equity, and inclusion throughout our workforce. We have numerous employee resource groups (“ERGs”), employee-led, voluntary communities for groups that share similar backgrounds or identities.
We have demonstrated support and commitment to developing a culture of non-discrimination and embracing inclusion throughout our workforce. We have numerous employee resource groups (“ERGs”), which are employee-led, voluntary 16 communities for groups that share similar backgrounds. ERGs develop programming throughout the year supporting culture and belonging, and empower employees to achieve their personal and career goals.
Customers typically pay us a monthly or quarterly licensing fee for the rights to use our metadata, receive regular updates, and integrate metadata into their own service. 6 Personalized Content Discovery, Natural Language Voice and Insights Personalized Content Discovery with conversation services provides our customers with a way to enable their customers (the device user) to quickly find, discover and access content across linear television, VOD, DVR, and OTT sources.
Personalized Content Discovery, Natural Language Voice and Insights Personalized Content Discovery with conversation services provides our customers with a way to enable their customers (the device user) to quickly find, discover and access content across linear television, VOD, DVR, and streaming sources.
The TiVo OS platform for Smart TVs launched in 2023 with our first Smart TV OEM partner Vestel. Since announcing Vestel as our initial TiVo OS partner, we have announced additional design wins with Sharp, Konka, and Skyworth, and have a total of five Smart TV OEMs under contract.
Since announcing Vestel as our initial TiVo OS partner, we have announced additional design wins with major TV companies such as Sharp, Panasonic, Skyworth, and Konka, and have a total of eight Smart TV companies under contract, including three TV OEMs for the US market, including Sharp Home Electronics Company of America.
Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant operational costs and may limit our ability to develop, deploy or use AI technologies. There is no assurance that we will be able to appropriately respond to this evolving landscape, which may result in legal liability, regulatory action, or brand and reputational harm.
There is no assurance that we will be able to appropriately respond to this evolving landscape, which may result in legal liability, regulatory action, or brand and reputational harm.
The Divestiture, which was completed in January 2024, is expected to further streamline our business and focus our investments on entertainment markets. Market Opportunity Consumer preferences and behavior around media consumption are undergoing a significant transformation, driven by new platforms for content delivery, greater availability of diverse content, and an increase in time spent consuming video content.
The Perceive Transaction was completed on October 2, 2024, and we are now fully focused on entertainment-based solutions to grow our independent media platform and licensing businesses. Market Opportunity Consumer behaviors around media consumption are undergoing a significant transformation, driven by new platforms for content delivery, greater availability of diverse content, and an increase in time spent consuming video content.
Our DTS codec is designed to enable recording, delivery and playback of immersive high-definition audio and is incorporated by customers around the world into an array of consumer electronics devices.
Our DTS codec is designed to enable recording, delivery and playback of immersive high-definition audio and is incorporated by customers around the world into an array of consumer electronics devices. We provide products and services to entertainment ecosystem partners such as motion picture studios and other content creators to facilitate the inclusion of compelling, realistic DTS-encoded audio within their content.
TVs with integrated streaming capabilities from manufacturers such as Samsung, Vizio and LG also represent competition to the TiVo Stream 4K. TV Audience Data.
For example, many CE manufacturers have television or internet-enabled streaming devices for accessing video over the internet such as Apple TV, Amazon Fire TV, Google Chromecast and Roku. TVs with integrated streaming capabilities from manufacturers such as Samsung, Vizio and LG also represent competition to the TiVo Stream 4K. TV Audience Data.
TiVo Stream 4K is sold via online and traditional retail channels as well as through broadband partners seeking to provide a vMVPD service and streaming media player bundled offerings to their customers. Devices – TiVo OS for TV TiVo OS for TV is a Linux-based Smart TV operating system that leverages TiVo OS technologies, features, and capabilities.
TiVo Stream 4K is sold via online and traditional retail channels as well as through broadband partners seeking to provide a vMVPD service and streaming media player bundled offerings to their customers. Growth Factors There are several facets of our product growth strategy.
Video content delivery is rapidly shifting from linear broadcast to over-the-top (“OTT”) platforms, impacting not just how users consume content, but also the ad-supported programming ecosystem. Our technologies sit at the forefront of this transformation, enhancing consumer experiences where consumers spend the most time – in their homes and in their cars.
Video content delivery is rapidly shifting from linear broadcast to over-the-top streaming platforms, impacting not just how users consume content, but also the ad-supported programming ecosystem.
Monetization – Advertising Solutions We provide advertisers with nationwide or regionally-targeted advertising on our various owned or operated devices. Advertisers place ads in a variety of display formats in both traditional linear television and digital advertising for internet delivered content, seamlessly incorporated into the user interface.
Advertisers place ads in a variety of display formats in both traditional linear television and digital advertising for internet delivered content, seamlessly incorporated into the user interface. Using our Personalized Content Discovery platform, we also target content promotions as “paid search” by directly including the sponsored content in the user interface’s recommended content carousel.
We work closely with content owners, advertisers, and ad agencies, where we monetize the viewing of ad-supported content across our TiVo OS platform. In doing so, we are competing with the same platforms and TV OEMs that operate their own TV operating systems such as Samsung, Vizio and LG. TiVo Stream 4K.
In doing so, we are competing with the same platforms and TV OEMs that operate their own TV operating systems such as Samsung, Vizio (a subsidiary of Walmart), and LG. TiVo Stream 4K. We compete against products with on-demand streaming capabilities offered by internet CE manufacturers.
We provide products and services to entertainment ecosystem partners such as motion picture studios, game developers and other content creators to facilitate the inclusion of compelling, realistic DTS-encoded audio within their content. The incorporation of our solutions into consumer end devices allows consumers to experience immersive and compelling audio wherever they choose to enjoy it.
The incorporation of our solutions into consumer end devices allows consumers to experience immersive and compelling audio wherever they choose to enjoy it.
The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity, and privacy and data protection. There is uncertainty around the validity and enforceability of intellectual property rights related to the use, development, and deployment of AI technologies.
The legal and regulatory landscape surrounding AI, machine learning, and automated decision-making processes and similar technologies, including proprietary AI and machine learning algorithms and models (collectively, “AI Technologies”) is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity, and privacy and data protection.
A McKinsey survey reported that 37% of consumers state they are eager to switch to cars with increased connectivity and nearly half of the high-end auto consumers express an interest in exploring the digital capabilities of their new cars.
A McKinsey survey in 2024 reported that over a third of consumers across multiple automotive segments report they are eager to switch to cars with increased connectivity. In the EV segment, this interest increases to over half of consumers.
Our solutions not only enhance the user experience, but also enable partners across the entire ecosystem to participate in the continuously evolving content delivery value chain. • Shift to OTT and Streaming : OTT has rapidly become a mainstream content delivery mechanism through a wide variety of providers such as Netflix, Disney+ and YouTube.
Our technologies sit at the forefront of this transformation, enhancing experiences where consumers spend the most time – in their homes and in their cars. • Shift to Streaming : Streaming has rapidly become a mainstream content delivery mechanism through a wide variety of providers such as Netflix, Disney+ and YouTube.
Using our Personalized Content Discovery platform, we also target content promotions as “paid search” by directly including the sponsored content in user interface’s recommended content carousel. We work with service providers bundling their non-TiVo advertising inventory with our native inventory, thereby giving us a more significant national footprint. Growth Factors There are several facets of our product growth strategy.
We work with service providers bundling their non-TiVo advertising inventory with our native inventory, thereby giving us a more significant national footprint.
Using insights from the development of our inaugural materiality assessment, we created our ESG program around three key focus areas: Culture and Belonging, Resilience, and Community Impact. As part of our Resilience pillar, we aim to be positive stewards of the environment.
Environmental, Social & Governance We created our Environmental, Social and Governance (“ESG”) program around three key focus areas: Culture and Belonging, Resilience, and Community Impact. Xperi plans to publish its ESG report annually. Our report will be available on the Xperi website.
Removed
Perceive In the machine learning area, our Perceive subsidiary delivers silicon and software solutions for edge inference.
Added
In August 2024, we entered into an Asset Purchase Agreement with Amazon.com Services LLC to sell substantially all of the assets and certain liabilities of Perceive Corporation (later known as Xperi Pylon Corporation and subsequently dissolved in December 2024), a subsidiary focused on edge inference hardware and software technologies, for a gross amount of $80.0 million in cash, including a holdback of $12.0 million to be held for 18 months after the closing of the transaction (the “Perceive Transaction”) to secure our and Perceive Corporation’s indemnification obligations.
Removed
Perceive’s Ergo family of chips, IP and associated software deliver breakthrough innovation – the ability to run advanced AI models at the edge, delivering accuracy and high performance at ultra-low power, enabling a wide range of applications such as object detection, audio/video event detection and media processing.
Added
Customers typically pay us a monthly or quarterly licensing fee for the rights to use our metadata, receive regular updates, and integrate metadata into their own service.
Removed
These solutions enable efficient AI inference at the edge, reducing or eliminating the need to send data to the cloud, and thus reducing latency, operating costs, power, and heat, as well as complying with increasing privacy and safety concerns of regulators. Perceive is currently extending its technology to enable inference using Large Language Models (LLMs) in edge devices.
Added
Devices – TiVo OS for TV TiVo OS for TV is a Linux-based Smart TV operating system that leverages TiVo OS technologies, features, and capabilities. The TiVo OS platform for Smart TVs launched in 2023 with our first Smart TV OEM partner Vestel.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur Former Parent is separately responsible for any taxes that arise from the failure of the Distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning of section 355 of the Code or the failure of certain related transactions to qualify for tax-free treatment, to the extent such failure to qualify is attributable to actions, events or transactions relating to our Former Parent’s or its affiliates’ stock, assets or business, or any breach of its representations, covenants or obligations under the Tax Matters Agreement (or any other agreement entered into in connection with the Separation and Distribution), the materials submitted to the IRS in connection with the IRS Ruling or the representations made in the representation letter provided to counsel in connection with the Tax Opinion. 40 If the Distribution fails to qualify for non-recognition treatment for U.S. federal income tax purposes for certain reasons relating to the overall structure of the Mergers and the Distribution, then under the Tax Matters Agreement, we and our Former Parent could share the tax liability resulting from such failure in accordance with our relative market capitalizations as of the Distribution Date (determined based on the average trading prices of each company’s stock during the ten trading days beginning on the Distribution Date).
Biggest changeOur Former Parent is separately responsible for any taxes that arise from the failure of the Distribution to qualify as tax-free for U.S. federal income tax purposes within the meaning of section 355 of the Code or the failure of certain related transactions to qualify for tax-free treatment, to the extent such failure to qualify is attributable to actions, events or transactions relating to our Former Parent’s or its affiliates’ stock, assets or business, or any breach of its representations, covenants or obligations under the Tax Matters Agreement (or any other agreement entered into in connection with the Separation and Distribution), the materials submitted to the IRS in connection with the IRS Ruling or the representations made in the representation letter provided to counsel in connection with the Tax Opinion.
The services that provide content from the internet are not generally governed by international or national standards and are thus free to choose any media format(s) to deliver their products and services.
The services that provide content from the internet generally are not governed by international or national standards and thus are free to choose any media format(s) to deliver their products and services.
Commercial success depends on many factors including demand for innovative technology, availability of materials and equipment, selling price the market is willing to bear, competition and effective licensing or product sales. We may not achieve significant revenue from new product and service investments for a number of years, if at all.
Commercial success depends on many factors including demand for innovative technology, availability of materials and equipment, the selling price the market is willing to bear, competition and effective licensing or product sales. We may not achieve significant revenue from new product and service investments for a number of years, if at all.
Federal Trade Commission (“FTC”), state attorneys general, the European Commission, European and UK data protection authorities), have increasingly scrutinized privacy issues with respect to devices that identify or are identifiable to a person (or household or device) and personal information collected through the internet, and we expect such scrutiny to continue to increase.
Federal Trade Commission (“FTC”), state attorneys general, the European Commission, and European and UK data protection authorities), have increasingly scrutinized privacy issues with respect to devices that identify or are identifiable to a person (or household or device) and Personal Information collected through the internet, and we expect such scrutiny to continue to increase.
Under our agreements with many of our customers and partners, we are required to provide indemnification in the event our technology is alleged to infringe upon the intellectual property rights of third parties. In certain of our agreements, we have agreed to indemnify our customers and partners under certain circumstances.
Under our agreements with many of our customers and partners, we are required to provide indemnification in the event our technology is alleged to infringe upon the intellectual property rights of third parties. In many of our agreements, we have agreed to indemnify our customers and partners under certain circumstances.
If the remediation of any identified material weakness is not completed in a timely fashion, or at all, or if the plan is inadequate, there will be an increased risk that we may be unable to timely file future periodic reports with the SEC and that future financial statements could contain errors that will be undetected.
If the remediation of any identified material weakness is not completed in a timely fashion, or at all, or if the remediation plan is inadequate, there will be an increased risk that we may be unable to timely file future periodic reports with the SEC and that future financial statements could contain errors that will be undetected.
Furthermore, an adverse outcome of a dispute may require us to: pay damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s intellectual property; cease making, licensing, or using technologies that are alleged to infringe or misappropriate the intellectual property of others; expend additional development 31 resources to redesign our products; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content, or materials; and indemnify our partners and other third parties.
Furthermore, an adverse outcome of a dispute may require us to: pay damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s intellectual property; cease making, licensing, or using technologies that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to redesign our products; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content, or materials; and indemnify our partners and other third parties.
Our future success will depend, in part, upon the ability of our management team to manage such changes effectively, requiring our management to: • recruit, hire, and train additional personnel, or effectively manage the transition of exiting personnel; • transition and improve our operational and financial systems, procedures, and controls; • maintain our cost structure at an appropriate level based on the royalties, revenue and cash we forecast and generate; • manage multiple concurrent development projects; and • manage operations in multiple time zones with different cultures and languages.
Our future success will depend, in part, upon the ability of our management team to manage such changes effectively, requiring our management to: • recruit, hire, and train additional personnel, or effectively manage the transition of exiting personnel; • transition and improve our operational and financial systems, procedures, and controls; 23 • maintain our cost structure at an appropriate level based on the royalties, revenue and cash we forecast and generate; • manage multiple concurrent development projects; and • manage operations in multiple time zones with different cultures and languages.
Laws, regulations, or court rulings that adversely affect the popularity or growth in use of the internet, including decisions that undermine open and neutrally administered internet access, or that disincentivize internet access network operators’ willingness to invest in upgrades and maintenance of their equipment, could decrease customer demand for our service offerings, may 36 impose additional burdens on us, or could cause us to incur additional expenses or alter our business model.
Laws, regulations, or court rulings that adversely affect the popularity or growth in use of the internet, including decisions that undermine open and neutrally administered internet access, or that disincentivize internet access network operators’ willingness to invest in upgrades and maintenance of their equipment, could decrease customer demand for our service offerings, may impose additional burdens on us, or could cause us to incur additional expenses or alter our business model.
Among other things, continuing and increased consumer acceptance of HD Radio technology will depend upon: • the number of radio stations broadcasting digitally using HD Radio technology; • the willingness of automobile manufacturers to include HD Radio receivers in their vehicles; • the willingness of Tier 1 suppliers to incorporate HD Radio technology into their products; • the cost and availability of HD Radio enabled products; and • the marketing and pricing strategies that we employ and that are employed by our customers and retailers.
Among other things, continuing and increased consumer acceptance of HD Radio technology will depend upon: • the number of radio stations broadcasting digitally using HD Radio technology; • the willingness of automobile manufacturers to include HD Radio receivers in their vehicles; • the willingness of Tier 1 suppliers to incorporate HD Radio technology into their products; 24 • the cost and availability of HD Radio enabled products; and • the marketing and pricing strategies that we employ and that are employed by our customers and retailers.
For example, the EU General Data Protection Regulation (“GDPR”) imposes detailed requirements related to the collection, storage, and use of personal information related to people located in the EU (or which is processed in the context of EU operations) and places data protection obligations and restrictions on organizations, and may require us to make further changes to our policies and procedures in the future beyond what we have already done.
For example, the EU General Data Protection Regulation (“GDPR”) imposes detailed requirements related to the collection, storage, and use of Personal Information related to people located in the EU (or which is processed in the context of EU operations) and places data protection obligations and restrictions on organizations, and may require us to make further changes 31 to our policies and procedures in the future beyond what we have already done.
We face competitive risks across all our businesses, including: • our Media Platform and Pay-TV solutions face significant competition from companies that produce and market TV operating systems, program guides and television schedule information in a variety of formats, including passive and interactive on-screen electronic guide services, online listings, over the top applications and against customers and potential customers who choose to build their own TV operating systems or interactive program guide; • our advanced video solutions compete with other CE products and home entertainment services (such as Roku, AppleTV, Amazon FireTV and Chromecast) as well as products and service offerings built by other service providers or their suppliers for consumer spending; • our Smart TV solutions compete with other operating systems for Smart TVs, including TV manufacturers with their own in-house solutions (e.g., Samsung with Tizen) or TV manufacturers that use competing third-party solutions (e.g., Google TV). • our Consumer Electronics and audio technologies compete with other providers of audio products and services such as Dolby and Sonos, with Dolby being the primary competitor in high-definition audio processing and enjoying advantages in selling its digital multi-channel audio technology, having introduced such technology before we did and having achieved mandatory standard status in product categories that we have not, including terrestrial digital TV broadcasts in the United States; • our Connected Car technologies compete with internal design groups of automotive manufacturers and other automobile technology suppliers that provide similar technologies by employing different approaches; and • our competitive position is affected by the rate of adoption and incorporation of our technologies by semiconductor manufacturers, assemblers, foundries, manufacturers of consumer and communication electronics, and the automotive and surveillance industry.
We face competitive risks across all our businesses, including: • our Media Platform and Pay-TV solutions face significant competition from companies that produce and market TV operating systems, program guides and television schedule information in a variety of formats, including passive and interactive on-screen electronic guide services, online listings, over the top applications, and customers and potential customers who choose to build their own TV operating systems or interactive program guides; • our advanced video solutions compete with other consumer electronic products and home entertainment services (such as Roku, AppleTV, Amazon FireTV and Chromecast) as well as products and service offerings built by other service providers or their suppliers for consumer spending; • our Smart TV solutions compete with other operating systems for Smart TVs, including TV manufacturers with their own in-house solutions (e.g., Samsung with Tizen) or TV manufacturers that use competing third-party solutions (e.g., Google TV); • our Consumer Electronics and audio technologies compete with other providers of audio products and services such as Dolby and Sonos, with Dolby being the primary competitor in high-definition audio processing and enjoying advantages in selling its digital multi-channel audio technology, having introduced such technology before we did and having achieved mandatory standard status in product categories that we have not, including terrestrial digital TV broadcasts in the United States; • our Connected Car technologies compete with internal design groups of automotive manufacturers and other automobile technology suppliers that provide similar technologies by employing different approaches; and • our competitive position is affected by the rate of adoption and incorporation of our technologies by semiconductor manufacturers, assemblers, foundries, manufacturers of consumer and communication electronics, and the TV, automotive and consumer electronics industry.
Despite our efforts, we: • may not receive significant revenue from our current research and development efforts for several years, if at all; • cannot ensure that the level of funding and significant resources we are committing for investments in new products, services and technologies will be sufficient or result in successful new products, services or technologies; • cannot ensure that any new products or services that we develop will achieve market acceptance; • cannot ensure that these new products, services or technologies will be as profitable as expected, if at all, even if we achieve market acceptance; • cannot ensure that our newly developed products, services or technologies can be successfully protected as proprietary intellectual property rights or will not infringe the intellectual property rights of others; • cannot prevent our products, services and technologies from becoming obsolete due to rapid advancements in technology and changes in consumer preferences; • cannot ensure that revenue from new products, services or technologies will offset any decline in revenue from our products, services and technologies which may become obsolete; • cannot ensure that our competitors and/or potential customers will not develop products, services or technologies similar to those developed by us, resulting in a reduction in the potential demand for our newly developed products, services or technologies; and • may not correctly identify new or changing market trends at an early enough stage to capitalize on market opportunities.
Despite our efforts, we: • may not receive significant revenue from our research and development efforts for several years, if at all; • cannot ensure that the level of funding and significant resources we are committing for investments in new products, services and technologies will be sufficient or result in successful new products, services or technologies; • cannot ensure that any new products or services that we develop will achieve market acceptance; • cannot ensure that these new products, services or technologies will be as profitable as expected, if at all, even if we achieve market acceptance; • cannot ensure that our newly developed products, services or technologies can be successfully protected as proprietary intellectual property rights or will not infringe the intellectual property rights of others; • cannot prevent our products, services and technologies from becoming obsolete due to rapid advancements in technology and changes in consumer preferences; • cannot ensure that revenue from new products, services or technologies will offset any decline in revenue from our products, services and technologies which may become obsolete; • cannot ensure that our competitors and/or potential customers will not develop products, services or technologies similar or superior to those developed by us, resulting in a reduction in the potential demand for our newly developed products, services or technologies; and • may not correctly identify new or changing market trends at an early enough stage to capitalize on market opportunities.
Following the Mergers, and in anticipation of the Distribution, our Former Parent sought and received the IRS Ruling, which included a ruling from the IRS regarding the proper manner and methodology for measuring the common ownership in the stock of our Former Parent, Pre-Merger Xperi and Pre-Merger TiVo for purposes of determining whether there has been a 50 percent or greater change of ownership under section 355(e) of the Code.
Following the Mergers, and in anticipation of the Distribution, our Former Parent sought and received the IRS Ruling, which included a ruling from the IRS regarding the proper manner and methodology for measuring the common ownership in the stock of our Former Parent, Pre-Merger Xperi and 41 Pre-Merger TiVo for purposes of determining whether there has been a 50 percent or greater change of ownership under section 355(e) of the Code.
We may take advantage of the longer phase-in periods for the adoption of new or revised financial accounting standards permitted under the JOBS Act until we are no longer an emerging growth company. If we were to subsequently elect instead to comply with these public company effective dates, such election would be irrevocable pursuant to the JOBS Act.
We may take advantage of the longer phase-in periods for the adoption of new or revised financial accounting standards permitted under the JOBS Act until we are no longer an emerging growth company. If we were to 44 subsequently elect instead to comply with these public company effective dates, such election would be irrevocable pursuant to the JOBS Act.
Currently, a limited number of devices are designed to support certain of our technologies. If we are unsuccessful in causing component manufacturers, device manufacturers and software providers to integrate certain of our technologies into their product offerings, those technologies may become less accessible to consumers, which would adversely affect our business, financial condition, and results of operations.
Currently, a limited number of devices are designed to support certain of our technologies. If we are unsuccessful in causing component manufacturers, device manufacturers and software providers to integrate certain of our 25 technologies into their product offerings, those technologies may become less accessible to consumers, which would adversely affect our business, financial condition, and results of operations.
If we fail to maintain and strengthen these relationships, these industry participants may not purchase and use our technologies or facilitate the adoption of our technologies, which will harm our business, financial condition, results of operations and prospects and may make it more difficult for us to enter into new markets.
If we fail to maintain and strengthen these relationships, these industry participants may not purchase and use our technologies or facilitate the integration or adoption of our technologies, which will harm our business, financial condition, results of operations and prospects and may make it more difficult for us to enter into new markets.
Therefore, we face exposure to risks of operating in many foreign countries, including: 26 • difficulties and costs associated with complying with a wide variety of complex laws, treaties, regulations and compliance requirements; • fluctuations in foreign currency exchange rates; • restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the United States; • earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs; • political and economic instability, trade conflict and international hostilities; • unexpected changes in political or regulatory environments; • differing employment practices, labor compliance and costs associated with a global workforce; • exchange controls or other restrictions; • import and export restrictions and other trade barriers; • difficulties in maintaining overseas subsidiaries and international operations; and • difficulties in obtaining approval for significant transactions.
Therefore, we face exposure to risks of operating in many foreign countries, including: • difficulties and costs associated with complying with a wide variety of complex laws, treaties, regulations and compliance requirements; • fluctuations in foreign currency exchange rates; • restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the United States; • earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs; • political and economic instability, trade conflict and international hostilities; 28 • unexpected changes in political or regulatory environments; • differing employment practices, labor compliance and costs associated with a global workforce; • exchange controls or other restrictions; • import and export restrictions and other trade barriers; • difficulties in maintaining overseas subsidiaries and international operations; and • difficulties in obtaining approval for significant transactions.
We often take steps to disclose source code for which disclosure is required under an open source license, but it is possible that we have or will make mistakes in doing so, which 32 could negatively impact our brand or our adoption in the community, or could expose us to additional liability.
We often take steps to disclose source code for which disclosure is required under an open source license, but it is possible that we have or will make mistakes in doing so, which could negatively impact our brand or our adoption in the community, or could expose us to additional liability.
If network operators were to engage in restricting, blocking, degrading, or charging for access, it could impede our growth, result in a decline in our quality of service, cause us to incur additional expense, or otherwise impair our ability to attract and retain users, any of which could harm our business.
If network operators were to engage in restricting, blocking, degrading, or charging for access, it could impede our growth, result in a decline in our quality of service, cause us to incur additional expense, or otherwise impair our ability to attract and 38 retain users, any of which could harm our business.
Our ability to continue to transfer personal information outside of the EU may become significantly more costly and may subject us to increased scrutiny and liability under the GDPR or other legal frameworks, and we may experience operating disruptions if we are unable to conduct these transfers in the future.
Our ability to continue to transfer personal information outside of the EU and UK may become significantly more costly and may subject us to increased scrutiny and liability under the GDPR or other legal frameworks, and we may experience operating disruptions if we are unable to conduct these transfers in the future.
If a partner were to be accused of infringement or lose a lawsuit and in turn seek indemnification from us, we could be subject to significant expense responding to the indemnification claim and/or monetary liabilities relating to a judgment or settlement. Liability under our indemnification commitments may not be contractually limited.
If a partner were to be accused of infringement, settle or lose a lawsuit and in turn seek indemnification from us, we could be subject to significant expense responding to the indemnification claim and/or monetary liabilities relating to a judgment or settlement. Liability under our indemnification commitments may not be contractually limited.
Factors that may be considered a change in circumstances indicating that the carrying value of our amortizable or other intangible assets may not be recoverable 34 include a decline in future cash flows, fluctuations in market capitalization, slower growth rates in our industry or slower than anticipated adoption of our products by our customers.
Factors that may be considered a change in circumstances indicating that the carrying value of our amortizable or other intangible assets may not be recoverable include a decline in future cash flows, fluctuations in market capitalization, slower growth rates in our industry or slower than anticipated adoption of our products by our customers.
A successful assertion by one or more jurisdictions that we were required to withhold or pay income taxes or collect indirect 38 taxes where we did not could result in substantial tax liabilities, fees, and expenses, including substantial interest and penalty charges, which could harm our business.
A successful assertion by one or more jurisdictions that we were required to withhold or pay income taxes or collect indirect taxes where we did not could result in substantial tax liabilities, fees, and expenses, including substantial interest and penalty charges, which could harm our business.
In the event that portions of our proprietary technology are determined to be subject to an open source license, or are intentionally released under an open source license, we could be required to publicly release the relevant portions of our source code, which could reduce or eliminate our ability to commercialize our products and technologies.
In the event that portions of our proprietary technology are determined to be subject to an open source license, or are intentionally released under an open source license, we could be required to publicly release the relevant 34 portions of our source code, which could reduce or eliminate our ability to commercialize our products and technologies.
Accordingly, our revenue could decline if these providers elect not to incorporate DTS audio into their content or if they sell less content that incorporates DTS audio. 22 In addition, we may not be successful in maintaining existing relationships or developing new relationships with partners or content providers.
Accordingly, our revenue could decline if these providers elect not to incorporate DTS audio into their content or if they sell less content that incorporates DTS audio. In addition, we may not be successful in maintaining existing relationships or developing new relationships with partners or content providers.
Further, if we fail to effectively manage the integration of our software and services with our hardware partners’ devices, we or our manufacturing partners could suffer from product recalls, poorly performing products and higher than anticipated warranty costs.
Further, if we fail to effectively 27 manage the integration of our software and services with our hardware partners’ devices, we or our manufacturing partners could suffer from product recalls, poorly performing products and higher than anticipated warranty costs.
Among other things, such restrictions are likely to increase the number of users to whom we cannot serve targeted advertising and are likely to restrict our ability to collect and process certain types of information deemed sensitive under these new laws.
Among other things, such restrictions are likely to increase the number of users to whom we cannot serve targeted advertising and are likely to restrict our ability to collect and process certain types of Personal Information deemed sensitive under these new laws.
We will continue to review our business practices and may find it necessary or desirable to make changes to our personal information processing to cause our transfer and receipt of EEA residents’ personal information to conform to applicable 30 European law.
We will continue to review our business practices and may find it necessary or desirable to make changes to our personal information processing to cause our transfer and receipt of EEA residents’ personal information to conform to applicable European law.
Any additional laws, rules and regulations imposed on digital audio broadcasting may adversely impact the attractiveness of HD Radio technology and negatively impact our business, financial condition and results of operations.
Any additional laws, rules and regulations imposed on digital audio broadcasting may adversely impact the attractiveness of HD Radio technology and negatively impact 39 our business, financial condition and results of operations.
The existence of any material weakness in our internal control over financial reporting could also affect our ability to obtain financing or could increase the cost of any such financing.
The existence of any material 45 weakness in our internal control over financial reporting could also affect our ability to obtain financing or could increase the cost of any such financing.
Our ability to collect and use such data could be restricted by a number of factors, including users having the ability to refuse consent to or opt out from our, our service providers’, or our advertising partners’ collection and use of this data, restrictions imposed by advertisers, content partners, licensors, and service providers, changes in technology, and developments in laws, regulations, and industry standards.
Our ability to collect and use such data could be restricted by a number of factors, including users having the ability to refuse consent to or opt out from our, our service providers’, or our advertising partners’ collection and use of this Personal Information, restrictions imposed by advertisers, content partners, licensors, and service providers, changes in technology, and developments in laws, regulations, and industry standards.
For so long as we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. We cannot predict whether investors will find our common stock less attractive because we will rely on these 46 exemptions.
For so long as we rely on any of the exemptions available to emerging growth companies, investors will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. We cannot predict whether investors will find our common stock less attractive because we will rely on these exemptions.
Further, the laws and enforcement regimes of certain countries may not protect our technology and intellectual property to the same extent as do the laws and enforcement regimes of the United States.
Further, the laws and enforcement regimes of certain countries may not protect our technology and intellectual property to the same extent as the laws and enforcement regimes of the United States.
If one or several of our third-party supply chain partners were to discontinue service to us, our ability to fulfill sales orders through the TiVo website and distribute inventory timely, cost effectively, or at all, may be delayed or prevented, which could harm our business, financial condition, and results of operation.
If one or several of our third-party supply chain partners were to discontinue service to us, our ability to fulfill sales orders through the TiVo website and distribute inventory timely, cost effectively, or at all, may be delayed or prevented, which could harm our business, financial condition, and results of operations.
During past economic slowdowns and recessions, many consumers reduced their discretionary spending and advertisers reduced their advertising expenditures. Any such conditions, including entertainment promotional spending by media and content providers, could significantly impact our ability to generate revenue, and thus impact our business, financial condition and results of operations.
During past economic slowdowns and recessions, many consumers reduced their discretionary spending and advertisers reduced their advertising expenditures. Any such conditions, including reduction in entertainment promotional spending by media and content providers, could significantly impact our ability to generate revenue, and thus impact our business, financial condition and results of operations.
The effects of such actions may adversely impact our business, financial condition and results of operations. Our business depends, in part, on royalty-based and advertising-based revenue models, which are inherently risky. Our business is dependent, in part, on future royalties and/or advertising revenues paid to us by customers and partners.
The effects of such actions may adversely impact our business, financial condition and results of operations. 20 Our business depends, in part, on royalty-based and advertising-based revenue models, which are inherently risky. Our business is dependent, in part, on future royalties and/or advertising revenue paid to us by customers and partners.
We may not realize the anticipated benefits of acquisitions or divestitures we may complete in the future, and we may not be able to successfully incorporate or separate the applicable services, products, or technologies, or integrate or separate personnel from the applicable businesses, in which case our business, financial condition and results of operations could be harmed.
We may not realize the anticipated benefits of acquisitions or divestitures we have completed or may complete in the future, and we may not be able to successfully incorporate or separate the applicable services, products, or technologies, or integrate or separate personnel from the applicable businesses, in which case, our business, financial condition and results of operations could be harmed.
We face risks inherent in royalty-based and/or advertising-based business models, many of which are outside of our control, such as the following: • the number of subscribers our Pay-TV customers have or the number of set top boxes our Pay-TV customers provide to their end-user subscribers; • the number of end users and time spent viewing content and advertising available within devices that incorporate our licensed technology; 19 • the rate of adoption and incorporation of our technology by semiconductor manufacturers, assemblers, foundries, manufacturers of consumer and communication electronics, and the TV, automotive, consumer electronics, and surveillance industries; • the willingness and ability of advertisers to use our advertising placements that are available via our licensed technology; • the allocation by advertisers of their budgets to traditional advertising, such as traditional television, radio and print, and to advertising through social media and other digital platforms; • the willingness and ability of content owners and content aggregators to make their content available via our licensed technology; • the willingness and ability of advertising technology partners to license their products and services to us for use in our licensed technology; • the willingness and ability of suppliers to produce materials and equipment that support our licensed technology in a quantity sufficient to enable volume manufacturing; • ability of our customers to purchase such materials and equipment on a cost-effective and timely basis; • the length of the design cycle and our customers’ ability to successfully integrate certain of our technologies into integrated circuits; • the demand for products that incorporate our licensed technology; • the cyclicality of supply and demand for products using our licensed technology; • the seasonal nature of advertising consumption and the associated variance to revenue based on those changes; • the impact of economic downturns and labor disruptions such as strikes; and • the impact of poor financial performance of our customers.
We face risks inherent in royalty-based and/or advertising-based business models, many of which are outside of our control, such as the following: • the number of subscribers our Pay-TV customers have or the number of set top boxes our Pay-TV customers provide to their end-user subscribers; • the number of end users and time spent viewing content and advertising available within devices that incorporate our licensed technology; • the rate of adoption and incorporation of our technology by semiconductor manufacturers, assemblers, foundries, manufacturers of consumer and communication electronics, and the TV, automotive, and consumer electronics industries; • the willingness and ability of advertisers to use our advertising placements that are available via our licensed technology; • the allocation by advertisers of their budgets to traditional advertising, such as traditional television, radio and print, and to advertising through social media and other digital platforms; • the willingness and ability of content owners and content aggregators to make their content available via our licensed technology; • the willingness and ability of advertising technology partners to license their products and services to us for use in our licensed technology; • the willingness and ability of suppliers to produce materials and equipment that support our licensed technology in a quantity sufficient to enable volume manufacturing; • the ability of our customers to purchase such materials and equipment on a cost-effective and timely basis; • the length of the design cycle and our customers’ ability to successfully integrate certain of our technologies into integrated circuits; • the demand for products that incorporate our licensed technology; • the cyclicality of supply and demand for products using our licensed technology; • the seasonal nature of advertising consumption and the associated variance to revenue based on that seasonality; • the impact of economic downturns, labor disruptions such as strikes, and overall consumer sentiment; and • the impact of poor financial performance of our customers.
We continue to assess the available regulatory guidance, determinations, and enforcement actions from EU Data Protection Authorities and the U.S.
We continue to assess the available regulatory guidance, determinations, and enforcement actions from EU and UK Data Protection Authorities and the U.S.
For instance, we face increased competition from a growing number of broadband-enabled devices from providers such as Roku, Apple TV, Amazon FireTV and Chromecast that provide broadband-delivered digital content directly to a consumer’s television connected to such a device.
For instance, we face increased competition from a growing number of broadband-enabled televisions or connected devices from providers such as Roku, Apple TV, Amazon FireTV and Chromecast that provide broadband-delivered digital content directly to a consumer’s television or a device connected to a television.
In order for us to remain competitive in this market, we must continue to invest significant resources in innovation and product development in order to enhance our technologies and our existing products and services and introduce new high-quality technologies, products and services to meet the wide variety of such competitive pressures.
In order for us to remain competitive, we must continue to invest significant resources in innovation and product development to enhance our technologies and our existing products and services and introduce new high-quality technologies, products and services to meet the wide variety of market and competitive pressures.
A stockholder’s percentage of ownership in us may be diluted in the future. A stockholder’s percentage ownership in us may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including, without limitation, equity awards that we may grant to our directors, officers, and employees.
A stockholder’s percentage of ownership in us may be diluted in the future. A stockholder’s percentage ownership in us may be diluted because of equity issuances for acquisitions, capital markets transactions or otherwise, including, without limitation, equity awards that we may grant to our directors, officers, and employees.
Any compromise of our ability to store or transmit such information and data securely or reliably, and any costs associated with preventing or eliminating such problems, could harm our business, financial condition, and results of operations.
Any compromise of our ability to store or transmit such Confidential Information securely or reliably, and any costs associated with preventing or eliminating such problems, could harm our business, financial condition, and results of operations.
We will need to continue to expend considerable resources on research and development in the future in order to continue to design, deliver and enhance innovative media, entertainment, audio, and machine learning products, services and technologies.
We will need to continue to expend considerable resources on research and development in the future in order to continue to design, deliver and enhance innovative media, entertainment, and audio products, services and technologies.
For example, certain European Union (“EU”) laws and regulations prohibit access to or storage of information on a user’s device (such as cookies and similar technologies that we use for advertising) that is not “strictly necessary” to provide a user-requested service or used for the “sole purpose” of a transmission unless the user has provided consent, and users may choose not to provide this consent to collection of information which is used for advertising purposes.
For example, certain EU laws and regulations prohibit access to or storage of information on a user’s device (such as cookies and similar technologies that we use for advertising) that is not “strictly necessary” to provide a user-requested service or used for the “sole purpose” of a transmission unless the user has provided consent, and users may choose not to provide this consent to collection of information which is used for advertising purposes.
There can be no assurance that we will be successful in executing our monetization strategy, or in accurately forecasting potential revenues from our Media Platform solutions. 18 Our Media Platform business may not be successful in developing, maintaining, and expanding key relationships with TV OEMs and content publishers.
There can be no assurance that we will be successful in executing our monetization strategy, or in accurately forecasting potential revenue from our Media Platform solutions. Our Media Platform business may not be successful in developing, maintaining, and expanding key relationships with TV OEMs and content publishers.
Increased regulation of data collection, use, and security practices, including self-regulation and industry standards, changes in existing laws, enactment of new laws, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business, or otherwise harm our business.
Increased regulation of Personal Information collection, use, and security practices, including self-regulation and industry standards, changes in existing laws, enactment of new laws, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business, or otherwise harm our business.
Changes in our tax rates or exposure to additional tax assessments may adversely affect our effective tax rates and negatively affect our business and financial condition. We are subject to U.S. federal and state income taxes, as well as taxes in various international jurisdictions.
General Risk Factors Changes in our tax rates or exposure to additional tax assessments may adversely affect our effective tax rates and negatively affect our business and financial condition. We are subject to U.S. federal and state income taxes, as well as taxes in various international jurisdictions.
Risks Related to Financial Matters If our goodwill and other intangible assets become impaired, we may be required to record a significant charge to earnings. In addition to internal development, we have acquired and intend to continue to acquire additional businesses, technology and intellectual property through strategic relationships and transactions.
If our goodwill and other intangible assets become impaired, we may be required to record a significant charge to earnings. In addition to internal development, we have acquired and intend to continue to acquire additional businesses, technology and intellectual property through strategic relationships and transactions.
Our ability to deliver more relevant advertisements to users and to increase the value of our services to advertisers depends in part on the collection or use of user engagement data, which may be restricted or prevented due to a number of factors including users having the ability to opt out from our, our service providers’, or our advertising partners’ collection and use of this data, restrictions imposed by advertisers, content providers, or service providers, changes in technology, and developments in laws, regulations, and industry standards.
Our ability to deliver more relevant advertisements to users and to increase the value of our services to advertisers depends in part on the collection or use of user engagement data, which may be restricted or prevented due to a number of factors, including users having the ability to opt out from the collection and use of our data or 19 data collected by our service providers or our advertising partners, restrictions imposed by advertisers, content providers, or service providers, changes in technology, and developments in laws, regulations, and industry standards.
Litigation and regulatory proceedings are inherently uncertain, and the federal, state, and foreign laws and regulations governing issues such as data privacy and security, payment processing, taxation, net neutrality, liability of providers of online services, video, telecommunications, e-commerce tariffs, and consumer protection related to the internet continue to develop.
Litigation and regulatory proceedings are inherently uncertain, and the federal, state, and foreign laws and regulations governing issues such as data privacy and security, payment processing, taxation, net neutrality, liability of providers of online services, video, telecommunications, e-commerce tariffs, and consumer protection related to the internet continue to develop and may be subject to varying interpretations.
Any restrictions on our ability to collect or use data could harm our ability to grow our revenue, particularly our Media Platform revenue which depends on engaging the relevant recipients of advertising campaigns.
Any restrictions on our ability to collect or use Personal Information could harm our ability to grow our revenue, particularly our Media Platform revenue which depends on engaging the relevant recipients of advertising campaigns.
Geopolitical factors such as terrorist activities, wars, foreign invasion or armed conflict (such as the current Russia/Ukraine conflict and the Israel-Hamas war), tariffs, trade disputes, local or global recessions, diplomatic or economic tensions (such as the tension between China and Taiwan), long-term environmental risks, climate change, or global health conditions that adversely affect the global economy may adversely affect our business, financial condition and results of operations.
Geopolitical factors such as terrorist activities, wars, foreign invasion or armed conflict, tariffs, trade disputes, local or global recessions, diplomatic or economic tensions (such as the tension between China and Taiwan), long-term environmental risks, climate change, or global health conditions that adversely affect the global economy may adversely affect our business, financial condition and results of operations.
Compliance with these obligations could delay or impede the development of new products and may cause reputational harm. As part of our data protection compliance program, we have implemented data transfer mechanisms to provide for the transfer of personal information from the European Economic Area (the “EEA”) or the United Kingdom to the United States.
Compliance with these obligations could delay or impede the development of new products and may cause reputational harm. As part of our data protection compliance program, we have implemented data transfer mechanisms to provide for the transfer of Personal Information from the EEA or the United Kingdom to the United States.
Potential customers may also be hesitant in adopting new technologies and may instead turn to competitors who offer competing products in different deployment models. Our technologies may also require potential customers to adapt their existing software to fully realize their advantages.
Potential customers may also be hesitant to adopt new technologies and may instead turn to competitors who offer competing products in different deployment models. Our technologies may also require potential customers to adapt their existing software to fully realize the technological advantages.
Also, the recent strikes called by the Writers Guild of America and SAG-AFTRA reduced the demand for advertising and media and entertainment promotional spending campaigns, which could negatively impact our business and results of operations.
Also, the strikes called by the Writers Guild of America and SAG-AFTRA reduced the demand for advertising and media and entertainment promotional spending campaigns, which negatively impacted our business and results of operations.
While we generally must comply with Section 404 of the Sarbanes-Oxley Act for the year ending December 31, 2023, we are not required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until our first annual report subsequent to our ceasing to be an emerging growth company.
While we generally must comply with Section 404 of the Sarbanes-Oxley Act, we are not required to have our independent registered public accounting firm attest to the effectiveness of our internal controls until our first annual report subsequent to our ceasing to be an emerging growth company.
Delays, errors or omissions in this information could harm our business. If these third parties choose not to support integration efforts or delay the integration of our solutions, our business, financial condition and results of operations could be harmed. Relationships have historically played an important role in the entertainment industries that we serve.
If these third parties choose not to support integration efforts or delay the integration of our solutions, our business, financial condition and results of operations could be harmed. Relationships have historically played an important role in the entertainment industries that we serve.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit the ability of our stockholders to obtain a favorable judicial forum for disputes with us. 45 Pursuant to our amended and restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any of our current or former directors, officers, stockholders, employees or agents to us or our stockholders, (iii) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents arising out of or relating to any provision of the General Corporation Law of Delaware or our amended and restated certificate of incorporation or bylaws (each, as in effect from time to time), or (iv) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents governed by the internal affairs doctrine of the State of Delaware; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein.
Pursuant to our amended and restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any of our current or former directors, officers, stockholders, employees or agents to us or our stockholders, (iii) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents arising out of or relating to any provision of the General Corporation Law of Delaware or our amended and restated certificate of incorporation or bylaws (each, as in effect from time to time), or (iv) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents governed by the internal affairs doctrine of the State of Delaware; provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein.
Although we cannot predict whether or in what form these proposals will pass, several of the proposals under consideration, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense, and cash flows.
Although we cannot predict whether or in what form these proposals will pass, several of the proposals under consideration, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense, and cash flows. Item 1B. Unresolv ed Staff Comments None.
We have previously launched access in certain of our products and services to the entertainment offerings of Amazon Prime Video, Netflix, Hulu Plus, HBO Max, Disney+, VUDU, Paramount+, Peacock, and others for the distribution of digital content directly to broadband-connected TiVo devices. These entertainment offerings typically involve no significant long-term commitments.
Certain of our products and services provide consumers with access to the entertainment offerings of Amazon Prime Video, Netflix, Hulu Plus, HBO Max, Disney+, VUDU, Paramount+, Peacock, and others for the distribution of digital content directly to broadband-connected TiVo devices. These entertainment offerings typically involve no significant long-term commitments.
To be successful, we design certain of our solutions to interoperate effectively with a variety of consumer hardware devices, including PCs, tablets, smartphones, TVs, set-top boxes, video game consoles, MP3 devices, multi-media storage devices, portable media players, DVD players and recorders, and Blu-ray players. Certain of our TiVo products rely on multiple systems operator support of CableCARD.
To be successful, we design certain of our solutions to interoperate effectively with a variety of consumer hardware devices, including PCs, tablets, smartphones, TVs, set-top boxes, video game consoles, MP3 devices, multi-media storage devices, portable media players, DVD players and recorders, and Blu-ray players.
The market price of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including: • our quarterly or annual earnings, or those of other companies in our industry; • the failure of securities analysts to cover our common stock; • actual or anticipated fluctuations in our operating results; • changes in earnings estimates by securities analysts or our ability to meet those estimates or our earnings guidance; • the operating and stock price performance of other comparable companies; • overall market fluctuations and domestic and worldwide economic conditions; and • other factors described in these “Risk Factors” and elsewhere herein. 44 Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company.
The market price of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including: • our quarterly or annual earnings, or those of other companies in our industry; • the failure of securities analysts to cover our common stock; • actual or anticipated fluctuations in our operating results; • changes in earnings estimates by securities analysts or our ability to meet those estimates or our earnings guidance; • the operating and stock price performance of other comparable companies; • overall market fluctuations and domestic and worldwide economic conditions; and 42 • other factors described in these “Risk Factors” and elsewhere herein.
Furthermore, demand for and adoption of our HD Radio and DTS AutoStage technologies and services may not continue to increase and may face increased competition from existing suppliers or new entrants providing the same or similar services.
Furthermore, demand for and adoption of our HD Radio and DTS AutoStage technologies and services may not continue to increase and may face increased competition from existing suppliers or new entrants providing the same or similar services, in some cases, at lower prices or free of charge.
These broad market fluctuations may adversely affect the trading price of our common stock. We cannot guarantee the timing, amount or payment of dividends, if any, on our common stock in the future. There can be no assurance that we will have sufficient surplus under Delaware law to be able to pay any dividends in the future.
We cannot guarantee the timing, amount or payment of dividends, if any, on our common stock in the future. There can be no assurance that we will have sufficient surplus under Delaware law to be able to pay any dividends in the future.
In September 2020, the FCC eliminated rules requiring cable providers to support CableCARD. While the cable industry has continued to provide CableCARDs for third-party devices like ours, we cannot predict the ultimate impact of any new technical equipment regulations on our business and operations.
In September 2020, the FCC eliminated rules requiring cable providers to support CableCARD. While the cable industry has continued to provide CableCARDs for third-party devices like ours, certain large operators such as Comcast have started to discontinue their support of CableCARDs. We also cannot predict the ultimate impact of any new technical equipment regulations on our business and operations.
We may incur significant expenses responding to indemnification demands or defending these partners if they are accused of patent or other intellectual property infringement based on allegations related to our technology.
We have in the past and may in the future incur significant expenses responding to indemnification demands or defending these partners if they are accused of patent or other intellectual property infringement based on allegations related to our technology, products or services.
Occurrence of any catastrophic event, including an earthquake, flood, tsunami, or other weather event, power loss, internet failure, software or hardware malfunctions, cyber attack, war or foreign invasion (such as the Russian invasion of Ukraine and the Israel-Hamas war), terrorist attack and other geopolitical conflicts (such as Yemen’s Houthi attacks in the Red Sea), medical epidemic or pandemic (such as the COVID-19 pandemic), government shutdown orders, other man-made disasters, or other catastrophic events could disrupt our, our business partners’ and customers’ business operations or result in disruptions in the broader global economic environment.
Occurrence of any catastrophic event, including an earthquake, flood, tsunami, wildfire, hurricanes or other weather event, power loss, internet failure, software or hardware malfunctions, cyber attack, war or foreign invasion, terrorist attack and other geopolitical conflicts, medical epidemic or pandemic, government shutdown orders, other man-made disasters, or other catastrophic events could disrupt our, our business partners’ and customers’ business operations or result in disruptions in the broader global economic environment.
For example, our success depends, in part, on the level of discretionary consumer and corporate spending. Discretionary consumer and corporate spending is affected by many factors, including economic conditions affecting disposable consumer income and corporate spending, such as the rate of inflation, risk of recession, employment status, labor disputes, and interest and tax rates.
Discretionary consumer and corporate spending is affected by many factors, including economic conditions affecting disposable consumer income and corporate spending, such as the rate of inflation, risk of recession, employment status, labor disputes, and interest and tax rates.
We expect the shift away from optical disc-based media to streaming and downloadable content consumption to continue. If we fail to continue to further penetrate the streaming and downloadable content delivery market, our business could suffer.
We expect the shift away from optical disc-based media to streaming and downloadable content consumption to continue, and optical disc-based media eventually will become obsolete. If we fail to continue to further penetrate the streaming and downloadable content delivery market as the market for optical disc-based media continues to decline, our business could suffer.
Our inability to renew existing arrangements on terms that are favorable to us, or enter into alternative arrangements that allow us to effectively provide and transmit our metadata to customers, could have a material adverse effect on our businesses that leverage metadata, including our interactive program guide business, and could damage the attractiveness of our metadata offerings to our customers or could increase the costs associated with providing our metadata offerings, and cause our revenue or margins to decline, which would adversely impact business, financial condition and results of operations. 25 We depend on a limited number of third parties to design, manufacture, distribute and supply hardware devices upon which our TiVo software and services operate.
Our inability to renew existing arrangements on terms that are favorable to us, or enter into alternative arrangements that allow us to effectively provide and transmit our metadata to customers, could have a material adverse effect on our businesses that leverage metadata, including our interactive program guide business, and could damage the attractiveness of our metadata offerings to our customers or could increase the costs associated with providing our metadata offerings, and cause our revenue or margins to decline, which would adversely impact business, financial condition and results of operations.
Furthermore, we need to develop new relationships with local content partners or enter into new arrangements with existing content publishers as we enter into new international markets or expand our services and features.
We need to identify, establish and maintain relationships with content publishers to provide users with popular streaming services, channels and content. Furthermore, we need to develop new relationships with local content partners or enter into new arrangements with existing content publishers as we enter into new international markets or expand our services and features.
In the ordinary course of our business, we collect, store, process, and transmit large amounts of sensitive corporate, personal, and other information, including intellectual property, proprietary business information, user payment card information, other user information, employee information, and other confidential information.
In the ordinary course of our business, we and certain of our third-party providers collect, 29 store, process, and transmit large amounts of corporate, personal, and other information, including intellectual property, proprietary business information, user information (including user payment card information), employee information, and other confidential information (collectively, “Confidential Information”).
In addition, large streaming platforms such as Netflix, Disney+ and Amazon Prime Video have launched ad-supported tiers in their streaming services, which may further increase competition for streaming advertising revenue.
In addition, large streaming platforms such as Netflix, Disney+ and Amazon Prime Video offer ad-supported tiers of their streaming services, which has further increased competition for streaming advertising revenue.
If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. Item 1B. Unresolv ed Staff Comments Not applicable.
If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
For example, in California, increasing intensity of drought and annual periods of wildfire danger increase the probability of planned power outages. Further, acts of terrorism could cause disruptions to the internet or the economy as a whole.
For example, in California, increasing intensity of drought and annual periods of wildfire danger increase the probability of planned power outages. In particular, our office in Calabasas, California has experienced planned power outages that have extended for multiple days. Further, acts of terrorism could cause disruptions to the internet or the economy as a whole.
The occurrence of any of the foregoing could harm our business. As a result of intellectual property infringement claims, or to avoid potential claims, we may choose or be required to seek licenses from third parties.
As a result of intellectual property infringement claims, or to avoid potential claims, we may choose or be required to seek licenses from third parties.
However, these provisions apply even if an acquisition proposal or offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in our and our stockholders’ best interests. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.
These provisions are not intended to make us immune from takeovers. However, these provisions apply even if an acquisition proposal or offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in our and our stockholders’ best interests.
We will continue to monitor the implementation and evolution of data protection regulations, but if we are not compliant with data protection laws or regulations if and when implemented, we may be subject to significant fines and penalties (such as restrictions on personal information processing) and our business may be harmed.
We are monitoring such developments and the impact this may have on our business. If we are not compliant with data protection laws or regulations if and when implemented, we may be subject to significant fines and penalties (such as restrictions on Personal Information processing) and our business may be harmed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSee “ Risk Factors — Our systems, networks and online business activities and those of third parties that we utilize in our operations are subject to cybersecurity and stability risks, information technology system failures, and security breaches .” The Company’s Board of Directors has oversight of our strategic and business risk management and has delegated cybersecurity risk management oversight to the Audit Committee of the Board.
Biggest changeSee “ Risk Factors — If we or our third-party providers experience significant disruptions of our IT Systems or data security incidents, this could result in harm to our reputation, subject us to liability, cause us to modify our business practices, and otherwise materially adversely affect our business, results of operations, and financial conditions.” The Company’s Board of Directors has oversight of our strategic and business risk management and has delegated cybersecurity risk management oversight to the Audit Committee of the Board.
Although the risks from cybersecurity threats have not materially affected our business strategy, results of operations, or financial condition to date, there can be no assurance that they will not be materially affected by such risks or a material incident in the future, or that we have not experienced an undetected cybersecurity incident.
Although the risks from cybersecurity threats have not materially affected our business strategy, results of operations, or financial condition to date, there can be no assurance that they will not be materially affected by such risks or a material 46 incident in the future, or that we have not experienced an undetected cybersecurity incident.
They engage outside legal counsel, experts, consultants, and other third parties to perform regular audits, assist with forensic investigations, or address cybersecurity threats and incidents. As appropriate, they obtain input on the security industry and threat trends from external experts and consultants. Significant incidents are reviewed by a cross-functional working group to determine whether further escalation is appropriate.
Additionally, they engage outside legal counsel, experts, consultants, and other third parties to conduct regular audits, assist with forensic investigations, and address cybersecurity threats and incidents. When necessary, they seek input from external experts and consultants on security industry and threat trends. Significant incidents are reviewed by a cross-functional working group to determine whether further escalation is appropriate.
Our corporate information security organization, led by our Chief Information Officer (“CIO”), is responsible for our cybersecurity risk management and mitigation, incident prevention, detection, and remediation. This team’s leadership includes professionals with deep cybersecurity expertise. This team collaborates with technical and business stakeholders across our businesses to analyze risk and form detection, mitigation and remediation strategies.
Our CIO oversees our cybersecurity strategy and the development of our cybersecurity capabilities, encompassing risk management and mitigation, incident prevention, detection, and remediation. Our CIO and corporate information security organization collaborate with technical and business stakeholders across our businesses to analyze risks and devise detection, mitigation, and remediation strategies.
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Our corporate information security organization is led by our Chief Information Officer (“CIO”) , who brings over 30 years of information technology experience across a wide range of industry sectors, including semiconductor and technology. Before joining Xperi, our CIO was the Chief Information Security Officer for a large technology company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease facilities in other locations, including Canada, China, India, Ireland, Japan, the Republic of Korea, Mexico, Norway, Poland, Romania, Singapore, Sweden, Taiwan, the United Kingdom and the United States. We believe that our existing space is adequate for our current operations.
Biggest changeWe also lease facilities in other locations, including China, India, Ireland, Japan, the Republic of Korea, Mexico, Norway, Poland, Romania, Singapore, Sweden, Taiwan, the United Kingdom and the United States. We believe that our existing space is adequate for our current operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe expect to continue to be involved in similar legal proceedings in the 47 future. Although considerable uncertainty exists, our management does not anticipate that the ultimate disposition of these matters will have a material adverse effect on our results of operations, consolidated financial position or liquidity.
Biggest changeWe expect to continue to be involved in similar legal proceedings in the future. Although considerable uncertainty exists, our management does not anticipate that the ultimate disposition of these matters will have a material adverse effect on our results of operations, consolidated financial position or liquidity.
However, the ultimate disposition, costs, or liabilities could be material to our results of operations in the period recognized. Item 4. Mine Saf ety Disclosures Not applicable. 48 PART II
However, the ultimate disposition, costs, or liabilities could be material to our results of operations in the period recognized. Item 4. Mine Saf ety Disclosures Not applicable. 47 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis graphic comparison is presented pursuant to the rules of the SEC. 10/3/2022 12/30/2022 3/31/2023 6/30/2023 9/29/2023 12/29/2023 Xperi Inc. $ 100.00 $ 57.52 $ 73.01 $ 87.84 $ 65.87 $ 73.61 Nasdaq Composite $ 100.00 $ 96.77 $ 113.00 $ 127.48 $ 122.23 $ 138.80 Russell 2000 Index $ 100.00 $ 103.07 $ 105.48 $ 110.53 $ 104.46 $ 118.62 S&P 500 $ 100.00 $ 104.38 $ 111.71 $ 120.99 $ 116.57 $ 129.67 This section is not “soliciting material,” is not deemed “filed” with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Biggest changeWe believe the indexes included in the graph below provide similar market capitalizations or technology characteristics to us as we do not use a published industry or line-of-business index and do not believe we can reasonably identify a peer group. 10/3/2022 12/30/2022 3/31/2023 6/30/2023 9/29/2023 12/29/2023 3/28/2024 6/28/2024 9/30/2024 12/31/2024 Xperi Inc. $ 100.00 $ 57.52 $ 73.01 $ 87.84 $ 65.87 $ 73.61 $ 80.56 $ 54.84 $ 61.72 $ 68.60 Nasdaq Composite $ 100.00 $ 96.77 $ 113.00 $ 127.48 $ 122.23 $ 138.80 $ 151.45 $ 163.96 $ 168.18 $ 178.55 Russell 2000 Index $ 100.00 $ 103.07 $ 105.48 $ 110.53 $ 104.46 $ 118.62 $ 124.32 $ 119.83 $ 130.49 $ 130.50 S&P 500 $ 100.00 $ 104.38 $ 111.71 $ 120.99 $ 116.57 $ 129.67 $ 142.84 $ 148.45 $ 156.66 $ 159.90 This section is not “soliciting material,” is not deemed “filed” with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
We have never declared or paid cash dividends on our common stock since the Separation.
Dividends We have never declared or paid cash dividends on our common stock since the Separation.
The following graph shows a comparison of total stockholder return for holders of our common stock, the Nasdaq Composite Index, the Russell 2000 Index and the S&P 500 for the period beginning October 3, 2022, the date of the Separation, through December 31, 2023.
The following graph shows a comparison of total stockholder return for holders of our common stock, the Nasdaq Composite Index, the Russell 2000 Index and the S&P 500 for the period beginning October 3, 2022, the date of the Separation, through December 31, 2024.
As of February 16, 2024, there were 44,271,263 outstanding shares of common stock held by 269 stockholders of record. In addition, a substantially greater number of stockholders may be “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
Holders As of February 10, 2025, there were 44,388,930 outstanding shares of common stock held by 230 stockholders of record. In addition, a substantially greater number of stockholders may be “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
The graph and table assume that $100 was invested on October 3, 2022 in each of our common stock, the Nasdaq Composite Index, the Russell 2000 Index and the S&P 500, and that all dividends were reinvested.
The graph and table assume that $100 was invested on October 3, 2022 in each of our common stock, the Nasdaq Composite Index, the Russell 2000 Index and the S&P 500, and that all dividends were reinvested. This graphic comparison is presented pursuant to the rules of the SEC.
Stock Repurchases As of December 31, 2023, we had no authorized share repurchase programs and there were no share repurchases during the year ended December 31, 2023. 49 Stock Performance Graph The common stock of Xperi Inc. commenced trading on October 3, 2022 following the completion of the Separation.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources .” 48 Stock Performance Graph The common stock of Xperi Inc. commenced trading on October 3, 2022 following the completion of the Separation.
Added
Purchases of Equity Securities by Issuer and Affiliated Purchasers Share repurchase activity during the three months ended December 31, 2024 was as follows (in thousands, except for per-share amounts): Total number of shares purchased Average price paid per share (a) Total number of shares purchased as part of our share repurchase program Approximate dollar value of shares that may yet be purchased under our share repurchase program (b) October 1 — October 31 — $ — — $ 90,000 November 1 — November 30 416 $ 9.10 416 $ 86,212 December 1 — December 31 628 $ 9.87 628 $ 80,009 Total 1,044 1,044 a) The average price paid per share includes broker commissions. b) On April 29, 2024, we announced that our Board of Directors authorized a stock repurchase program providing for the repurchase of up to $100.0 million of the Company's common stock at management’s discretion.
Added
The Program may be discontinued or amended at any time and has no specified expiration date. All repurchases in the three months ended December 31, 2024 were made under the Program. For additional information about the Program, see Item 7.
Added
The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. (Reserved) 50 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 61 Item 8. Financial Statements and Supplementary Data 62 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 62
Biggest changeItem 6. (Reserved) 49 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 50 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 60 Item 8. Financial Statements and Supplementary Data 60 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 61

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table presents our historical operating results for the periods indicated as a percentage of revenue: Year Ended December 31, 2023 2022 2021 Revenue 100 % 100 % 100 % Operating expenses: Cost of revenue, excluding depreciation and amortization of intangible assets 23 24 26 Research and development 43 43 40 Selling, general and administrative 45 43 41 Depreciation expense 3 4 4 Amortization expense 11 12 22 Goodwill impairment — 121 — Impairment of long-lived assets — 2 — Total operating expenses 125 249 133 Operating loss (25 ) (149 ) (33 ) Other (expense) income, net — — — Loss before taxes (25 ) (149 ) (33 ) Provision for income taxes 2 3 4 Net loss (27 )% (152 )% (37 )% 52 Comparison of Fiscal Years Ended December 31, 2023 and 2022 Revenue We derive the majority of our revenue from licensing our technology and solutions to customers.
Biggest changeThe Perceive Transaction was completed on October 2, 2024 and we are now fully focused on entertainment-based solutions to grow our independent media platform and licensing businesses. 50 Results of Operations The following table presents our historical operating results for the periods indicated as a percentage of revenue: Year Ended December 31, 2024 2023 Revenue 100 % 100 % Operating expenses: Cost of revenue, excluding depreciation and amortization of intangible assets 23 23 Research and development 39 43 Selling, general and administrative 44 45 Depreciation expense 3 3 Amortization expense 9 11 Goodwill impairment — — Impairment of long-lived assets — — Total operating expenses 118 125 Operating loss (18 ) (25 ) Interest and other income, net 1 1 Interest expense - debt (1 ) (1 ) Gain on divestitures 20 — Income (loss) before taxes 2 (25 ) Provision for income taxes 2 2 Net loss — (27 )% Comparison of Fiscal Years Ended December 31, 2024 and 2023 Revenue We derive the majority of our revenue from licensing our technology and solutions to customers.
General and administrative expenses consist primarily of compensation and related costs (including stock-based compensation expense) for management, information technology, finance and legal personnel, legal fees and expenses, facilities costs, and professional services. Our general and administrative expenses, other than facilities-related expenses and fringe benefits, are not allocated to other expense line items.
General and administrative expenses consist primarily of compensation and related costs (including stock-based compensation expense) for management, information technology, finance and legal personnel, legal fees and related expenses, facilities costs, and professional services. Our general and administrative expenses, other than facilities-related expenses and fringe benefits, are not allocated to other expense line items.
Actual results could differ from those estimates, and material effects on our operating results and financial position may result. We believe the following accounting estimates are most critical to understanding our consolidated financial statements.
Actual results could differ from those estimates, and material effects on our operating results and financial position may result. 57 We believe the following accounting estimates are most critical to understanding our consolidated financial statements.
Cash Flows Cash Flows From Operating Activities Net cash provided by operations was $0.1 million for the year ended December 31, 2023, primarily due to our net loss of $139.7 million and a decrease in deferred income taxes of $8.6 million, offset by non-cash items such as depreciation expense of $16.6 million, amortization of intangible assets of $57.8 million, stock-based compensation expense of $69.5 million, impairment of long-lived assets of $1.7 million, and $2.0 million of changes in operating assets and liabilities.
Net cash provided by operations was $0.1 million for the year ended December 31, 2023, primarily due to our net loss of $139.7 million and a decrease in deferred income taxes of $8.6 million, offset by non-cash items such as depreciation expense of $16.6 million, amortization of intangible assets of $57.8 million, stock-based compensation expense of $69.5 million, impairment of long-lived assets of $1.7 million, and $2.0 million of changes in operating assets and liabilities.
Our access to capital markets may be constrained and our cost of borrowing may increase under certain business and market conditions, and our liquidity is subject to various risks including the risks identified in “Risk Factors” included in Item 1A of this Form 10-K.
Our access to capital markets may be constrained and our cost of borrowing may increase under certain business and market conditions, and our liquidity is subject to various risks including the risks identified in “Risk Factors” included in Part I, Item 1A of this Form 10-K.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 6, 2023, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.xperi.com.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 1, 2024, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.xperi.com.
Selling, General and Administrative Selling expenses consist primarily of compensation and related costs (including stock-based compensation expense) for sales and marketing personnel engaged in sales and licensee support, marketing programs, public relations, promotional materials, travel, and trade show expenses.
Selling, General and Administrative Selling expenses consist primarily of compensation and related costs (including stock-based compensation expense) for sales and marketing personnel engaged in sales and licensee support, marketing programs, public relations, promotional materials, travel, and trade shows.
Research and Development Research, development and other related costs (“R&D expense”) are comprised primarily of employee-related costs, stock-based compensation expense, engineering consulting expenses associated with new product and technology development, product commercialization, quality assurance and testing costs, as well as costs related to patent applications and examinations, materials, supplies, and an allocation of facilities costs.
Research and Development Research, development and other related costs (“R&D expense”) consist primarily of employee-related costs, stock-based compensation expense, engineering consulting expenses associated with new product and technology development, product commercialization, quality assurance and testing costs, as well as other costs related to patent applications and examinations, materials, supplies, and an allocation of facilities costs.
We evaluate our estimates based on our historical experience and various other assumptions that are believed to be reasonable under the circumstances. These estimates relate to revenue recognition, the assessment of recoverability of goodwill and intangible assets, business combinations, recognition and measurement of deferred income tax 58 assets and liabilities, the assessment of unrecognized tax benefits, and others.
We evaluate our estimates based on our historical experience and various other assumptions that are believed to be reasonable under the circumstances. These estimates relate to revenue recognition, the assessment of recoverability of intangible assets, business combinations, recognition and measurement of deferred income tax assets and liabilities, and the assessment of unrecognized tax benefits.
Recent Accounting Pronouncements See Note 2— Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the respective expected dates of adoption. 60
Recent Accounting Pronouncements See Note 2— Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the respective expected dates of adoption. 59
Business Overview We are a leading consumer and entertainment technology company. We believe we create extraordinary experiences at home and on the go for millions of consumers around the world, enabling audiences to connect with content in a way that is more intelligent, immersive, and personal.
Business Overview We are a leading consumer and entertainment technology company. We believe we create extraordinary experiences at home and on the go for millions of consumers around the world, enabling our unique audiences to connect with content in a more intelligent, immersive, and personal way.
We operate in one reportable business segment and group our business into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Headquartered in Silicon Valley with operations around the world, we have approximately 2,100 employees and more than 35 years of operating experience.
We operate in one reportable business segment and group our revenue into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Headquartered in Silicon Valley with operations around the world, we have approximately 1,680 employees and more than 35 years of operating experience.
This section of Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
This section of Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Cash Flows from Financing Activities Net cash provided by financing activities was $7.1 million for the year ended December 31, 2023, primarily due to $11.9 million in proceeds from the issuance of common stock under the ESPP, offset by $4.9 million in payment of withholding taxes related to net share settlement of equity awards.
Cash Flows from Financing Activities Net cash used in financing activities was $19.4 million for the year ended December 31, 2024, due to $20.0 million in repurchases of common stock under the Program and $7.2 million in payment of withholding taxes related to net share settlement of equity awards, partially offset by $7.9 million in proceeds from the issuance of common stock under the ESPP. 56 Net cash provided by financing activities was $7.1 million for the year ended December 31, 2023, primarily due to $11.9 million in proceeds from the issuance of common stock under the ESPP, offset by $4.9 million in payment of withholding taxes related to net share settlement of equity awards.
For the year ended December 31, 2023, we recognized interest and penalties of $0.3 million related to unrecognized tax benefits, whereas interest and penalties were immaterial for the years ended December 31, 2022 and 2021. See Note 14— Income Taxes of the Notes to Consolidated Financial Statements for additional detail.
For the years ended December 31, 2024 and 2023, we recognized interest and penalties related to unrecognized tax benefits of an immaterial amount and $0.3 million, respectively. See Note 14— Income Taxes of the Notes to Consolidated Financial Statements for additional detail.
We determined that we may not be able to fully recover the carrying amount of the leased offices due to how the offices are being used, a significant decrease in the expected market price of the leased asset, and expected delays in subleasing the space based on the current real estate leasing market.
We determined that we may not be able to fully recover the carrying amount of the leased building and offices due to how they were being used, a significant decrease in the expected market price of the ROU assets and expected delays in subleasing the space based on the condition of the commercial real estate leasing market.
We account for uncertain tax positions in accordance with authoritative guidance related to income taxes. The calculation of our unrecognized tax benefits involves dealing with uncertainties in the application of complex tax regulations. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures.
The calculation of our unrecognized tax benefits involves dealing with uncertainties in the application of complex tax regulations. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures.
In addition, in the United States, any net operating losses or credits that were generated in prior years but not yet fully utilized in a year that is closed under the statute of limitations may also be subject to examination.
At December 31, 2024, our 2020 through 2024 tax years are generally open to examination. In the United States, any net operating losses or credits that were generated in prior years but not yet fully utilized in a year that is closed under the statute of limitations may also be subject to examination.
Stock-based Compensation Expense The following table sets forth our stock-based compensation (“SBC”) expense for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Cost of revenue, excluding depreciation and amortization of intangible assets $ 3,466 $ 2,906 Research and development 25,276 21,561 Selling, general and administrative 40,789 20,836 Total stock-based compensation $ 69,531 $ 45,303 Stock-based compensation include restricted stock units, employee stock options and purchases made under our employee stock purchase plan (“ESPP”).
Stock-based Compensation Expense The following table sets forth our stock-based compensation (“SBC”) expense for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Cost of revenue, excluding depreciation and amortization of intangible assets $ 3,216 $ 3,466 Research and development 20,634 25,276 Selling, general and administrative 36,691 40,789 Total stock-based compensation expense $ 60,541 $ 69,531 We recognized stock-based compensation expense from restricted stock units and purchases made under our employee stock purchase plan (“ESPP”).
Cash and cash equivalents were $154.4 million, including $12.3 million classified as held-for-sale in connection with the Divestiture, at December 31, 2023, a decrease of $5.7 million from $160.1 million at December 31, 2022.
Cash and cash equivalents were $130.6 million at December 31, 2024, a decrease of $23.8 million from $154.4 million, including $12.3 million classified as held for sale in connection with the AutoSense Divestiture, as of December 31, 2023.
The decrease was primarily due to certain intangible assets becoming fully amortized in 2023, which was partially offset by new amortization expense as a result of the Vewd Acquisition in July 2022. As a result of previous mergers and acquisitions, we anticipate that amortization expenses will continue to be a significant expense over the next several years.
The decrease was primarily due to certain intangible assets becoming fully amortized over the past 12 months. As a result of previous mergers and acquisitions, we anticipate that amortization expenses will continue to be a significant expense over the next several years.
For the year ended December 31, 2022, we recorded an income tax expense of $13.6 million on a pretax loss of $747.6 million, which resulted in an effective tax rate of (1.8)%.
For the year ended December 31, 2023, we recorded an income tax expense of $10.0 million on a pretax loss of $129.6 million, which resulted in an effective tax rate of (7.7)%.
We may, at any time and on any one or more occasions, prepay all or any portion of the outstanding principal amount, plus accrued and unpaid interest, if any, under the Promissory Note without premium or penalty. In addition, the Promissory Note has mandatory prepayment provisions upon certain change of control or asset sale events.
We may, at any time and on any one or more occasions, prepay all or any portion of the outstanding principal amount, plus accrued and unpaid interest, if any, under the Promissory Note without premium or penalty.
Release of the valuation allowance would result in the recognition of certain federal deferred tax assets and a decrease to income tax expense for the period the release is recorded. The exact timing and amount of the valuation allowance release depends on the level of profitability that we are able to achieve.
Release of the valuation allowance would result in the recognition of certain federal deferred tax assets and a decrease to income tax expense for the period the release is recorded.
If recovery is not likely on a more-likely-than-not basis, we must increase our provision for income taxes by recording a valuation allowance against our deferred tax assets. Should there be a change in our ability to recover our deferred tax assets, our provision for income taxes would fluctuate in the period of the change.
We must assess the likelihood that we will be able to recover our deferred tax assets. If recovery is not more-likely-than-not, we must increase our provision for income taxes by recording a valuation allowance against our deferred tax assets.
Divestiture In December 2023, we entered into a definitive agreement with Tobii AB, an eye tracking and attention computing company, pursuant to which we agreed to sell our AutoSense in-cabin safety business and related imaging solutions (the “Divestiture”). The Divestiture, which was completed in January 2024, is expected to further streamline our business and focus our investments on entertainment markets.
Divestitures In December 2023, we entered into a definitive agreement with Tobii AB (“Tobii”), an eye tracking and attention computing company, pursuant to which we agreed to sell our AutoSense in-cabin safety business and related imaging solutions (the “AutoSense Divestiture”).
Impairment of Long-Lived Assets As a result of optimizing our global real estate footprint and decisions to vacate and sublease an office building following the Spin-Off, we recorded non-cash impairment charges of $7.7 million to reduce the carrying amount of certain operating lease 54 right-of-use (“ROU”) assets and property and equipment, including leasehold improvements, during the year ended December 31, 2022.
Impairment of Long-Lived Assets As a result of optimizing our global real estate footprint and subleasing certain building and offices following the Spin-Off (as defined in Note 1— The Company and Description of Business ), we recorded non-cash impairment charges of $1.5 million and $1.7 million to reduce the carrying amount of certain operating lease right-of-use (“ROU”) assets and property and equipment, including related leasehold improvements, during 2024 and 2023, respectively.
All research, development and other related costs are expensed as incurred. 53 R&D expense for the year ended December 31, 2023 was $222.8 million as compared to $216.4 million for the year ended December 31, 2022, an increase of $6.4 million, or 3%.
Other than certain software development costs that are capitalized, all research and development costs are expensed as incurred. R&D expense for the year ended December 31, 2024 was $191.4 million as compared to $222.8 million for the year ended December 31, 2023, a decrease of $31.4 million, or 14%.
Cost of revenue, excluding depreciation and amortization of intangible assets, for the year ended December 31, 2023 was $118.6 million, as compared to $122.9 million for the year ended December 31, 2022, a decrease of $4.3 million, or 4%.
Cost of revenue, excluding depreciation and amortization of intangible assets, for the year ended December 31, 2024 was $113.8 million, as compared to $118.6 million for the year ended December 31, 2023, a decrease of $4.8 million, or 4%. This decrease was primarily attributable to lower costs incurred in connection with a decrease in advertising revenue.
We may supplement our short-term liquidity needs with access to capital markets, if necessary, and strategic cost savings initiatives.
Equity or debt financing may not be available when needed or, if available, equity or debt financing may not be on terms satisfactory to us. We may supplement our short-term liquidity needs with access to capital markets, if necessary, and strategic cost savings initiatives.
There can be no assurance that current expectations will be realized and plans are subject to change upon further review of our capital expenditure needs.
We expect capital expenditures in 2025 to be approximately $20.0 million. These expenditures are expected to be paid with existing cash and cash equivalents. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.
Provision for Income Taxes Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Provision for income taxes $ 10,042 $ 13,589 $ (3,547 ) (26 )% 55 For the year ended December 31, 2023, we recorded an income tax expense of $10.0 million on a pretax loss of $129.6 million, which resulted in an effective tax rate of (7.7)%.
Provision for Income Taxes Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Provision for income taxes $ 12,448 $ 10,042 $ 2,406 24 % For the year ended December 31, 2024, we recorded an income tax expense of $12.4 million on a pretax income of $11.6 million, which resulted in an effective tax rate of 107.5%.
Liquidity and Capital Resources The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents as of December 31, 2023 and 2022 and for the years ended December 31, 2023 and 2022: December 31, 2023 2022 (dollars in thousands) Cash and cash equivalents $ 142,085 (1) $ 160,127 Current ratio 1.9 2.2 (1) Excludes $12.3 million of cash and cash equivalents classified as held for sale at December 31, 2023.
The exact timing and amount of the valuation allowance release depends on the level of profitability that we are able to achieve. 54 Liquidity and Capital Resources The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023: December 31, 2024 2023 (dollars in thousands) Cash and cash equivalents $ 130,564 $ 154,434 (1) Current ratio (2) 1.6 1.9 (1) Included $12.3 million of cash and cash equivalents classified as held for sale at December 31, 2023.
At this time, we are unable to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time.
At this time, we are unable to reasonably estimate the timing of the long-term payments or the amount by which the liability will increase or decrease over time. Stock Repurchase Program In April 2024, our Board of Directors (the “Board”) authorized the repurchase of up to $100.0 million of our common stock (the “Program”).
Future interest payments associated with the debt total $4.5 million, with $3.0 million payable within 12 months. Purchase Obligations Our purchase obligations primarily consist of noncancelable obligations related to advertising, engineering services and internet and telecommunications services. As of December 31, 2023, we had purchase obligations of $143.2 million, with $44.2 million payable within 12 months.
Purchase Obligations Our purchase obligations primarily consist of noncancelable obligations related to advertising, engineering services and internet and telecommunications services. As of December 31, 2024, we had purchase obligations of $137.9 million, with $47.9 million payable within 12 months.
Depreciation Expense Depreciation expense was $16.6 million for the year ended December 31, 2023, as compared to $20.5 million for the year ended December 31, 2022, a decrease of $3.9 million, or 19%. The decrease was primarily due to certain fixed assets being fully depreciated during the fourth quarter of 2022 as well as during 2023.
Depreciation expense was $12.6 million for the year ended December 31, 2024, as compared to $16.6 million for the year ended December 31, 2023, a decrease of $4.0 million, or 24%. The decrease was primarily due to certain fixed assets becoming fully depreciated over the past 12 months.
Long-Term Debt As of December 31, 2023, we had outstanding long-term debt in an aggregate principal amount of $50.0 million, which is due on July 1, 2025. We may, at any time and on any one or more occasions, prepay all or any portion of the outstanding principal amount, plus accrued and unpaid interest, if any, without premium or penalty.
We may, at any time and on any one or more occasions, prepay all or any portion of the outstanding principal amount, plus accrued and unpaid interest, if any, without premium or penalty.
These purchase obligations represent commitments under enforceable and legally binding agreements, and do not represent the entire anticipated purchases in the future. See Note 11— Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information on our purchase obligations.
These purchase obligations represent commitments under enforceable and legally binding agreements, and do not represent the entire anticipated purchases in the future.
Year Ended December 31, 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 62 $ (28,445 ) Net cash used in investing activities $ (12,933 ) $ (64,846 ) Net cash provided by financing activities $ 7,052 $ 135,751 Our primary sources of liquidity and capital resources are our cash on hand including cash provided by the Former Parent prior to the Separation.
Year Ended December 31, 2024 2023 (in thousands) Net cash (used in) provided by operating activities $ (55,340 ) $ 62 Net cash provided by (used in) investing activities $ 50,820 $ (12,933 ) Net cash (used in) provided by financing activities $ (19,350 ) $ 7,052 Our primary liquidity and capital resources are our cash and cash equivalents on hand.
Leases We have lease arrangements for office and research facilities, data centers and office equipment. As of December 31, 2023, fixed lease payment obligations amounted to $49.9 million, with $16.8 million payable within 12 months. See Note 10— Leases of the Notes to Consolidated Financial Statements for additional information on lease obligations and maturities.
Our material cash requirements include the following contractual and other obligations. Leases We have lease arrangements for office and research facilities, data centers and office equipment. As of December 31, 2024, fixed lease payment obligations amounted to $38.5 million, with $16.9 million payable within 12 months.
Poor financial results, unanticipated expenses, unanticipated acquisitions of technologies or businesses or unanticipated strategic investments could give rise to additional financing requirements sooner than we expect.
As part of our liquidity strategy, we will continue to monitor our earnings and cash flow as well as our ability to access the capital markets as needed. Poor financial results, unanticipated expenses, unanticipated acquisitions of technologies or businesses or unanticipated strategic investments could give rise to additional financing requirements sooner than we expect.
Cash Flows from Investing Activities Net cash used in investing activities was $12.9 million for the year ended December 31, 2023, which was primarily related to capital expenditures.
Net cash used in investing activities was $12.9 million for the year ended December 31, 2023, which was primarily related to capital expenditures, including capitalized internal-use software. Capital Expenditures Our capital expenditures for property and equipment consist primarily of purchases of computer hardware and software, capitalized internal-use software, information systems, and production and test equipment.
These estimates and judgments are used in the calculation of tax credits, tax benefits and deductions, and in the calculation of tax assets and liabilities.
These estimates and judgments are used in the calculation of tax credits, tax benefits and deductions, and in the calculation of tax assets and liabilities. Significant changes to these estimates may result in an increase or decrease to our tax provision in a subsequent period.
Long-term Debt In connection with the Vewd acquisition on July 1, 2022, we issued a senior unsecured promissory note (the “Promissory Note”) to the sellers of Vewd in the principal amount of $50.0 million. Indebtedness outstanding under the Promissory Note bears an interest rate of 6.00% per annum, payable in cash on a quarterly basis.
Short-Term Debt In connection with the acquisition of Vewd Software Holdings Limited (“Vewd”) on July 1, 2022, we issued a senior unsecured promissory note (the “Promissory Note”) to the sellers of Vewd in the principal amount of $50.0 million, all of which was outstanding at December 31, 2024.
Income Tax Payable As of December 31, 2023, we had accrued $9.6 million of unrecognized tax benefits in long-term income taxes payable related to uncertain tax positions, which included $0.4 million of accrued interest and penalties.
See Note 11— Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information on our purchase obligations. 55 Income Tax Payable As of December 31, 2024, we had accrued $1.3 million of unrecognized tax benefits in long-term income taxes payable related to uncertain tax positions, which included $0.1 million of accrued interest and penalties.
This decrease resulted primarily from $12.7 million of capital expenditures, and $4.9 million in payment of withholding taxes on net share settlement of equity awards, partially offset by $11.9 million in proceeds received from the issuance of common stock under the ESPP. 56 Our material cash requirements include the following contractual and other obligations.
This decrease resulted primarily from cash used in operations of $55.3 million, $20.0 million in repurchases of common stock, $7.2 million in payments of withholding taxes on net share settlement of equity awards and $16.8 million of capital expenditures, including capitalized internal-use software costs, partially offset by $67.8 million in net proceeds received from divestitures, and $7.9 million in proceeds from the issuance of common stock under the ESPP.
The income tax expense of $13.6 million was primarily related to foreign withholding taxes of $10.2 million, state income taxes of $1.6 million, and foreign income tax expense of $7.2 million, partially offset by a tax benefit due to an impairment of goodwill of $5.0 million.
The income tax expense of $12.4 million was primarily related to foreign withholding taxes of $10.9 million and U.S. federal income taxes of $3.7 million, partially offset by a tax benefit of $1.3 million from the release of valuation allowance of a foreign subsidiary.
Amortization Expense Amortization expense for the year ended December 31, 2023 was $57.8 million, as compared to $62.2 million for the year ended December 31, 2022, a decrease of $4.4 million, or 7%.
Amortization Expense We recognized amortization expense for certain intangible assets we acquired in business combinations that are recognized separately from goodwill. Amortization expense for the year ended December 31, 2024 was $43.4 million, as compared to $57.8 million for the year ended December 31, 2023, a decrease of $14.4 million, or 25%.
Selling, general and administrative expenses for the year ended December 31, 2023 were $233.4 million as compared to $217.4 million for the year ended December 31, 2022, an increase of $16.0 million, or 7%. The increase was primarily due to increases in stock-based compensation expense and cloud computing expense.
Selling, general and administrative expenses for the year ended December 31, 2024 were $218.1 million as compared to $233.4 million for the year ended December 31, 2023, a decrease of $15.3 million, or 7%.
Operating Expenses Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Cost of revenue, excluding depreciation and amortization of intangible assets $ 118,628 $ 122,946 $ (4,318 ) (4 )% Research and development 222,833 216,355 6,478 3 % Selling, general and administrative 233,403 217,402 16,001 7 % Depreciation expense 16,645 20,501 (3,856 ) (19 )% Amortization expense 57,752 62,209 (4,457 ) (7 )% Goodwill impairment — 604,555 (604,555 ) (100 )% Impairment of long-lived assets 1,710 7,724 (6,014 ) (78 )% Total operating expenses $ 650,971 $ 1,251,692 $ (600,721 ) (48 )% Cost of Revenue, Excluding Depreciation and Amortization of Intangible Assets Cost of revenue, excluding depreciation and amortization of intangible assets, consists primarily of employee-related costs, royalties paid to third parties, hardware product-related costs, maintenance costs and an allocation of facilities costs, as well as service center and other expenses related to providing our offerings and non-recurring engineering (“NRE”) services.
Additionally, there was an increase of $15.0 million in Pay-TV revenue driven largely by higher MG revenue in core guide products and continued growth in IPTV Solutions revenue. 51 Operating Expenses Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Cost of revenue, excluding depreciation and amortization of intangible assets $ 113,756 $ 118,628 $ (4,872 ) (4 )% Research and development 191,352 222,833 (31,481 ) (14 )% Selling, general and administrative 218,106 233,403 (15,297 ) (7 )% Depreciation expense 12,638 16,645 (4,007 ) (24 )% Amortization expense 43,376 57,752 (14,376 ) (25 )% Impairment of long-lived assets 1,535 1,710 (175 ) (10 )% Total operating expenses $ 580,763 $ 650,971 $ (70,208 ) (11 )% Cost of Revenue, Excluding Depreciation and Amortization of Intangible Assets Cost of revenue, excluding depreciation and amortization of intangible assets, consists primarily of employee-related costs, royalties paid to third parties, hardware product-related costs, content and data costs, hosting fees, maintenance costs and an allocation of facilities costs, as well as service center and other expenses related to providing our offerings, and non-recurring engineering (“NRE”) services.
Net cash used in investing activities was $64.8 million for the year ended December 31, 2022, primarily related to net cash paid of $50.5 million for the Vewd Acquisition, and capital expenditures of $14.2 million.
Cash Flows from Investing Activities Net cash provided by investing activities was $50.8 million for the year ended December 31, 2024, primarily due to net proceeds from divestitures of $67.8 million, partially offset by capital expenditures of $16.8 million, including capitalized internal-use software.
Net cash used by operations was $28.4 million for the year ended December 31, 2022, primarily due to our net loss of $761.2 million and $6.0 million in changes in operating assets and liabilities being adjusted for non-cash items of depreciation of $20.5 million, amortization of intangible assets of $62.2 million, stock-based compensation of $45.3 million, goodwill impairment of $604.6 million and impairment of long-lived assets of $7.7 million.
Cash Flows Cash Flows from Operating Activities Net cash used in operations was $55.3 million for the year ended December 31, 2024, primarily due to our net loss of $0.9 million being further adjusted by $71.8 million of changes in operating assets and liabilities driven principally by an increase of $46.3 million in unbilled contracts receivable, and $100.8 million of a non-cash gain recognized from the AutoSense Divestiture and the Perceive Transaction.
Our current cash and cash equivalents balance is expected to be sufficient to support our operations, capital expenditures and income tax payments, in addition to any investments and other capital allocation needs, for at least the next 12 months from the issuance date of these financial statements.
Liquidity We believe our current cash and cash equivalents will be sufficient to meet our needs for at least the next 12 months from the issuance date of the Consolidated Financial Statements included in this Form 10-K. As we assess growth strategies, we may need to supplement our cash and cash equivalents with outside sources.
The following table sets forth our revenue by year: Year Ended December 31, 2023 2022 $ Change % Change (dollars in thousands) Revenue $ 521,334 $ 502,260 $ 19,074 4 % The $19.1 million or 4% increase in revenue for the year ended December 31, 2023, compared to the prior year, was primarily attributable to an increase of $10.7 million in Connected Car revenue as the result of growth from the DTS AutoSense and DTS AutoStage solutions and HD Radio, an increase of $9.2 million in Media Platform revenue driven principally by contribution from Vewd, which was acquired in July 2022, as well as an increase of $4.0 million in Consumer Electronics revenue due largely to growth in royalty and minimum guarantee contracts revenue in Home and Audio.
The following table sets forth our revenue by year: Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Revenue $ 493,688 $ 521,334 $ (27,646 ) (5 )% The $27.6 million or 5% decrease in revenue for the year ended December 31, 2024, compared to the prior year, was primarily attributable to a decline of $50.4 million in Consumer Electronics due to the AutoSense Divestiture, revenue related to minimum guarantee (“MG”) contracts from prior year where revenue is taken at the time of contract execution, and market-based softness of certain end products.
Removed
The estimated impact of the Divestiture on 2024 revenue is approximately $30.0 million. Spin-Off Transaction In June 2020, Xperi Holding Corporation (“Xperi Holding,” “Adeia,” or the “Former Parent”) announced plans to separate into two independent publicly traded companies (the “Separation”), one comprising its intellectual property (“IP”) licensing business and one comprising its product business (“Xperi Product”).
Added
The AutoSense Divestiture was completed in January 2024 and has streamlined our business and further enhanced our focus on entertainment markets.
Removed
On October 1, 2022 (the “Separation Date”), the Former Parent completed the Separation (the “Spin-Off”) through a pro-rata distribution (the “Distribution”) of all of the outstanding common stock of its product-related business (“Xperi,” “we,” “our,” or the “Company”) to the stockholders of record of Xperi Holding Corporation as of the close of business on September 21, 2022, the record date (the “Record Date”) for the Distribution.
Added
In August 2024, we entered into an Asset Purchase Agreement with Amazon.com Services LLC to sell substantially all of the assets and certain liabilities of Perceive Corporation (later known as Xperi Pylon Corporation and subsequently dissolved in December 2024), a subsidiary focused on edge inference hardware and software technologies, for a gross amount of $80.0 million in cash, including a holdback of $12.0 million to be held for 18 months after the closing of the transaction (the “Perceive Transaction”) to secure our and Perceive Corporation’s indemnification obligations.
Removed
Each Xperi Holding stockholder of record received four shares of Xperi common stock, $0.001 par value, for every ten shares of Xperi Holding common stock, $0.001 par value, held by such stockholder as of the close of business on the Record Date.
Added
Additionally, we had a decrease of $8.6 million in Media Platform revenue driven principally by lower advertising revenue associated with third-party connected TV inventory as well as revenue related to MG contracts from prior year from our middleware solutions platform where revenue is taken at the time of contract execution.
Removed
As a result of the Distribution, Xperi became an independent, publicly traded company and its common stock is listed under the symbol “XPER” on the New York Stock Exchange (“NYSE”).
Added
These decreases were partially offset by an increase of $16.3 million in Connected Car revenue as a result of higher revenue in Audio Solutions, HD Radio and AutoStage partially offset by the impact of the AutoSense Divestiture.
Removed
Basis of Presentation Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). 51 During the three months ended September 30, 2022, all of the assets and liabilities of the Xperi Product business had been transferred to a legal entity (the “Transfer”) under the common control of Xperi Inc.
Added
The decrease was primarily driven by lower research and development spend in the AutoSense in-cabin safety business and related imaging solutions following the AutoSense Divestiture, a reduction in expenses related to the Perceive business which was sold via the Perceive Transaction in the fourth quarter of 2024 and decreases in stock-based compensation and bonus expenses.
Removed
(“Xperi”). Subsequent to this Transfer and through December 31, 2022, our financial statements and accompanying notes are prepared on a consolidated basis and include the financial statements of Xperi and its subsidiaries in which Xperi has a controlling financial interest. All intercompany balances and transactions are eliminated in consolidation.
Added
These decreases were partially offset by certain one-time compensation and retention expenses associated with the Perceive Transaction and severance charges incurred in 2024.
Removed
Prior to the Transfer, the financial statements and accompanying notes of the Xperi Product business were prepared on a combined basis and were derived from the consolidated financial statements and accounting records of the Former Parent as we were not historically held by a single legal entity.
Added
The decrease was primarily attributable to reduced employee headcount as well as decreases in stock-based compensation and bonus expenses, partially offset by an increase in certain one-time transaction costs primarily related to the AutoSense Divestiture and the Perceive Transaction in 2024. 52 Depreciation Expense We recognized depreciation expense for certain equipment, capitalized internal-use software, leasehold improvements, and buildings and improvements.
Removed
For a detailed discussion of the basis of presentation, refer to Note 2— Summary of Significant Accounting Policies of Notes to the Consolidated Financial Statements. Key Metrics In evaluating our financial condition and operating performance, we focus on revenue and cash flow from operations.
Added
The decrease in SBC expense for the year ended December 31, 2024, when compared to the prior year, was primarily driven by lower expense for performance-based restricted stock units and reduced employee headcount in 2024.
Removed
For the year ended December 31, 2023 as compared to the year ended December 31, 2022: • Revenue increased by $19.1 million, representing a 4% increase for the year ended December 31, 2023, compared to the prior year.
Added
Interest and Other Income, Net Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Interest and other income, net $ 829 $ 2,991 $ (2,162 ) (72 )% Interest and other income, net, was lower in 2024 as compared to the prior year principally due to a one-time, non-cash loss of $4.8 million resulting from deconsolidation of the Perceive subsidiary in 2024, partially offset by an increase in accrued and accreted interest income of approximately $3.0 million on the Tobii Note and Deferred Consideration (as defined in Note 7— Acquisitions And Divestitures ) from the AutoSense Divestiture. 53 Interest Expense—Debt Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Interest expense - debt $ (3,008 ) $ (3,000 ) $ (8 ) 0 % The interest expense on debt incurred in connection with the Vewd Acquisition (discussed below in Liquidity and Capital Resources) remained constant in 2024 when compared to 2023.
Removed
The increase was primarily attributable to an increase of $10.7 million in Connected Car revenue as the result of growth from the DTS AutoSense and DTS AutoStage solutions and HD Radio, an increase of $9.2 million in Media Platform revenue driven principally by contribution from Vewd, which was acquired in July 2022, as well as an increase of $4.0 million in Consumer Electronics revenue due largely to growth in royalty and minimum guarantee contracts revenue in Home and Audio.
Added
Gain on Divestiture Year Ended December 31, 2024 2023 $ Change % Change (dollars in thousands) Gain on divestiture $ 100,833 $ — $ 100,833 NM NM - not meaningful As disclosed in Note 7— Acquisitions and Divestitures, we completed the AutoSense Divestiture on January 31, 2024 and streamlined our business, further enhancing our focus on entertainment markets.
Removed
These increases were partially offset by a decrease of $4.8 million in Pay-TV revenue, driven by declines in core guide products and consumer hardware and subscription revenue which were partially offset by increases in IPTV solutions. • Net cash from operating activities increased by $28.5 million benefiting primarily from higher cash collections, strong working capital management and a decrease in Separation-related transaction costs and severance and retention payments in 2023.
Added
Upon the completion of the AutoSense Divestiture, we recognized a pre-tax gain of $22.9 million in 2024. On October 2, 2024, we closed the Perceive Transaction by selling substantially all the assets and certain liabilities of Perceive. As a result of completing the Perceive Transaction, we recorded a pre-tax gain of $77.9 million in 2024.
Removed
These increases were partially offset by a decrease of $4.8 million in Pay-TV revenue, driven by declines in core guide products and consumer hardware and subscription revenue which were partially offset by increases in IPTV solutions.
Added
We did not recognize any gain on divestiture in the year ended December 31, 2023.
Removed
This decrease was primarily attributable to lower hardware product-related costs and lower revenue share accrued and paid, partially offset by higher costs incurred in connection with advertising revenue and NRE services in 2023.
Added
(2) The current ratio is a liquidity ratio that measures our ability to pay short-term obligations or those due within one year. The ratio is calculated by dividing current assets by current liabilities.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−2 removed12 unchanged
Biggest changeBank Liquidity Risk As of December 31, 2023, we had a total of $154.4 million of deposits, including $12.3 million classified as held-for-sale in connection with the Divestiture, in operating accounts that were held with both domestic and international financial institutions.
Biggest changeOur cash and cash equivalents and future investments are subject to risks including: Bank Liquidity Risk As of December 31, 2024, we had a total of $130.6 million of deposits in operating accounts that were held with both domestic and international financial institutions.
Assuming a hypothetical 10% favorable or adverse movement in foreign currency exchange rates against the U.S. dollar, our outstanding foreign currency derivative contracts would experience a gain of approximately $5.0 million or a loss of approximately $4.0 million. 61
Assuming a hypothetical 10% favorable or adverse movement in foreign currency exchange rates against the U.S. dollar, our outstanding foreign currency derivative contracts would experience a gain of approximately $5.5 million or a loss of approximately $4.5 million.
As of December 31, 2023, we had outstanding foreign currency derivative contracts with a total notional amount of $46.2 million to buy and sell U.S. dollars in exchange for other currencies.
As of December 31, 2024, we had outstanding foreign currency derivative contracts with a total notional amount of $62.4 million to buy and sell U.S. dollars in exchange for other currencies.
Removed
Our cash and cash equivalents and future investments are subject to risks including: Investment Risk We are not currently exposed to market risk because we hold no investments, however we may hold such investments in the future.
Removed
We will be exposed to market risk as it relates to changes in the market value of our investments in addition to the liquidity and creditworthiness of the underlying issuers of our investments. Investments are subject to fluctuations in fair value due to the volatility of the credit markets and prevailing interest rates for such securities.

Other XPER 10-K year-over-year comparisons