[Management View]
Xperi reported a strategic workforce reduction of 250 employees, aiming for annual savings of $30-$35 million by the end of 2026. The company emphasized its focus on expanding its media platform, particularly the TiVo One platform, and highlighted its progress in the connected car market with DTS AutoStage.

[Outlook]
Xperi maintained its full-year revenue guidance of $440-$460 million for fiscal 2025, with an adjusted EBITDA margin of 15%-17%. The company expects U.S. distribution of smart TVs powered by TiVo to scale next year and achieve national coverage by 2026.

[Financial Performance]
- Consolidated revenue: $112 million, down due to the non-repeat of a large minimum guarantee in Pay TV from the prior year.
- Adjusted EBITDA: $23 million, representing a 21% margin compared to $31 million in the prior year.
- Non-GAAP EPS: $0.28, lower than the $0.51 reported last year.
- Operating cash flow: $8 million, a year-over-year increase of over $12 million.
- Free cash flow: $2 million, marking the second consecutive quarter of positive free cash flow.
- Cash position: $97 million at quarter end, up $2 million from last quarter.

[Q&A Highlights]
Question 1: Can you touch on the pieces that drive the initially lower gross margin in the media platform business as it scales and how long you expect to operate at a lower margin before reaching a mature margin?
Answer: There are semi-fixed costs of operating a platform that will impact margins initially. As the business scales, marginal advertising dollars will come through at higher margins. Market incentives and content deals also affect costs. Over time, as revenue scales, margin acceleration is expected.

Question 2: As you begin to deliver targeted ads to automotive, do you expect a similar fixed cost basis before contributing at a higher margin level?
Answer: It is more part and parcel to the existing platform. The opportunity lies in unlocking measurement in radio broadcast, which has high interest. The platform development work is complete, and scale is sufficient to offer compelling solutions for data and advertising.

Question 3: What was the TiVo MAU progress last year in the third and fourth quarters?
Answer: The exact number is not available, but it was significantly smaller, in the low millions.

Question 4: What was the ARPU last quarter?
Answer: The exact number is not available, but it is expected to be similar to the current $8.75. The ARPU calculation involves both monetization revenue and the underlying footprint.

Question 5: What is the critical mass needed for meaningful ad revenue on TiVo One?
Answer: Material progress is expected in 2026 based on visibility into footprint growth. Scale is important to advertisers, and partnerships are being pursued to augment and accelerate revenue growth efforts.

Question 6: When will AutoStage revenue become material?
Answer: Revenue is expected in 2026, with more material impact in 2027.

Question 7: Why are minimum guarantees becoming more than 20% of 2025 revenue?
Answer: Partners seek clear windows for technology inclusion and supply chain management. Minimum guarantees provide predictability and lower service costs. They are recurring and offer strategic value.

Question 8: Was the Connected Car revenue jump due to minimum guarantees?
Answer: Yes, there was a higher level of minimum guarantees this quarter.

Question 9: When will media platform revenue stabilize?
Answer: Meaningful growth in 2026 will reduce volatility.

[Sentiment Analysis]
Analysts and management maintained a positive tone, focusing on strategic growth areas and cost-saving measures. There was confidence in achieving long-term goals and improving profitability.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 |
|-------------------------------|---------------|---------------|
| Consolidated Revenue | $112 million | - |
| Adjusted EBITDA | $23 million | $31 million |
| Non-GAAP EPS | $0.28 | $0.51 |
| Operating Cash Flow | $8 million | - |
| Free Cash Flow | $2 million | - |
| Cash Position | $97 million | - |

[Risks and Concerns]
- Workforce reduction of 250 employees, representing 15% of total staff, with a one-time restructuring charge of $16-$18 million through 2026.
- Decline in Pay TV revenue by $32 million, or 39%, related to the prior year's minimum guarantee with Panasonic.
- Adjusted EBITDA margin declined to 21% due to lower revenue.

[Final Takeaway]
Xperi is strategically reducing its workforce to drive cost savings while focusing on expanding its media platform and connected car market. Despite a decline in Pay TV revenue, the company is confident in its long-term growth prospects, maintaining its full-year revenue guidance and emphasizing its progress in key growth areas. The introduction of the TiVo One ARPU metric and new industry partnerships are expected to enhance future revenue streams.