Xperi Corp. announced during its Q3 earnings call on Wednesday that it is nearing 1 million smart TVs powered by its TiVo operating system in the global market, particularly in Europe. Xperi reported revenues of $132.9 million, marking a 2% increase year-over-year.
The pay-TV segment generated $81.67 million in revenue for the quarter, a 35% increase, driven by growth in its core pay-TV business and newer IPTV initiatives. As of Q3, Xperi reported 2.4 million households utilizing TiVo platforms and secured partnerships with twelve pay-TV operators for its TiVo Broadband service.
The company recently finalized the $80 million sale of its AI tech unit, Perceive, to Amazon, receiving around $60 million from the transaction. Xperi has revised its revenue outlook for the full year 2024, now estimating total revenues between $490 million and $505 million, down from the previous forecast of $500 million to $530 million, citing softness in its core licensing business and delays in smart TV platform revenues that have been pushed to 2025.
Deployment Plans and Market Competition
CEO Jon Kirchner expressed confidence in reaching the 2 million milestone by year-end. He noted that two original equipment manufacturer (OEM) partners have experienced slower deployment of “powered by TiVo” TVs in the U.S., with shipments initially planned for summer now scheduled for late 2024.
Xperi is set to launch its first smart TVs powered by the TiVo operating system in the U.S. market, with production expected to begin in late November and retail availability around the end of the year. While specific details regarding TV models, pricing, and retail partners have yet to be revealed, the competition in the U.S. market is intense, featuring established brands like Samsung, LG Electronics, and Vizio.
Kirchner affirmed the long-term goal of achieving 7 million TiVo-powered smart TVs globally by the end of 2025, which is critical for monetizing through data and advertising services, and believes this could be accomplished without adding to the existing seven OEM partners, although he anticipates additional partners will join soon.
The company also reported that smart TVs from brands such as Panasonic, Argos, Sharp, and various Vestel brands, are now widely available in Europe. Kirchner explained that monetization of the TiVo OS will only be possible once deployments reach a scale that allows for significant revenue generation.
Growth Strategies & Future Outlook
As part of its restructuring efforts, Xperi has been laying off staff, including approximately 100 employees in Q3, and divesting certain business units. The company focuses on three key growth areas: connected TV advertising through TiVo TVOS, automotive in-cabin entertainment, and its video-over-broadband IPTV service for pay-TV operators. Kirchner noted that each of these markets is expected to double in size over the next five to seven years.
Although current revenue from TiVo’s smart TVs is minimal due to their limited market presence, Kirchner believes the company is well-positioned to enhance its financial performance. He stated, “There’s nothing that suggests we won’t be able to monetize the engagement and viewership,” highlighting the significant hours of content being consumed on the new TiVo TVs.
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