XPER

Good day, everyone. Thank you for standing by. Welcome to the Xperi First Quarter 2026 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. I would now like to turn the call over to Sam Levenson from Arbor Advisory Group. Sam, please go ahead.

Yeah. Thank you, Abby. Good afternoon. Thank you for joining us as Xperi reports its first quarter 2026 financial results. With me in today's call are Jon Kirchner, Chief Executive Officer, and Robert Andersen, Chief Financial Officer. In addition to today's earnings release, there's an earnings presentation on our investor relations website at investor.xperi.com. We encourage you to download the presentation and follow along with today's commentary. Before we begin, I would like to provide a few reminders. First, I'd like to note that unless otherwise stated, all comparisons are to the same period in the prior year. Second, today's discussion contains forward-looking statements about our anticipated business and financial performance that are predictions, projections, or other statements about future events, which are based on management's current expectations and beliefs, and therefore subject to risks, uncertainties, and changes in circumstances.

For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discuss today, please refer to the Risk Factors and the MD&A sections in our SEC filings, including our Form 10-K for the year ended December 31, 2025, and our Form 10-Q for the quarter ended March 31, 2026, to be filed with the SEC. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. Third, we refer to certain Non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to their most directly comparable GAAP measures, which can be found in the Investor Relations section of our website. Last, a replay of this conference call will be available on our website shortly after the conclusion of this call.

I'll now turn the call over to Xperi's CEO, Jon Kirchner.

Thank you, Sam, and thank you everyone for joining us on our first quarter 2026 earnings call. Overall, the first quarter results are evidence of the success we're achieving in delivering on our financial objectives and the notable progress we've made in delivering on our monetization strategy that we outlined for the year. Let me first provide an overview of the progress we made during the quarter against our key goals and priorities, progress that gives us confidence in our ability to monetize our growing platform. During the quarter, our TiVo One footprint grew to exceed 5.5 million monthly active users, and our AutoStage footprint grew to over 16 million vehicles globally. In addition to footprint growth, both our product feature set and ecosystem expanded, and we continued to add advertising partners and sellers to the TiVo One platform.

Taken together, this progress combined to help us accelerate advertising monetization, resulting in Media Platform revenue growth of 45% year-over-year. We've also started to reap benefits from the strategic investments made over the past few years, as evidenced by our results. Turning to our financial results for the quarter, I'm very pleased with the strong start to the year, which reflects both solid execution against our strategic plan and earlier than planned contract signings within CE and Connected Car. As I said, I'm particularly pleased with the progress we're making on driving monetization across our business. Given these results, we reaffirm the guidance we gave for the full year. Let me now go through each of our four business areas, starting with Media Platform.

We recorded $12 million of revenue for Media Platform in the quarter, reflecting year-over-year growth of 45%, primarily driven by growth in advertising monetization. We experienced progress through our direct sales programs as we continued to execute campaigns across our owned and operated inventory and also began to benefit from our new partnerships. As noted earlier, our footprint also continued to grow as TiVo One monthly active users more than doubled year-over-year to 5.5 million. Just after the end of the quarter, we signed a multi-year partnership with Samba TV, a television technology company that offers real-time insights and audience analytics. Through this partnership, we're adding intelligence and measurement capabilities to TiVo One connected TV inventory. This collaboration bolsters our TiVo Ads business by enriching our connected TV advertising platform with Samba's industry-leading data and analytics, thereby improving ad targeting and campaign performance measurement.

The relationship expands TiVo's ad sales and measurement capabilities, and we believe positions the TiVo One ad platform as an even more valuable cross-screen advertising solution for advertisers and agencies seeking better CTV audience targeting and comprehensive campaign insights. Average revenue per user for TiVo One was $7.10, a slight decrease from the fourth quarter, as over the trailing 12 months, the number of average monthly users grew faster than monetization revenue. As advertising monetization revenue accelerates, we expect ARPU to advance toward double-digit dollars in the second half of 2026. Moving to Connected Car, AutoStage footprint expanded over 45% year-over-year, reaching over 16 million vehicles across 13 automotive brands. Just after quarter end, we launched AutoStage Broadcaster Portal, a subscription service that we believe delivers unprecedented visibility and insights into audience behavior and listening metrics across 300 U.S. radio markets.

In addition, we signed multi-year HD Radio renewal agreements and launched HD Radio and new models, including from Audi, Honda, Mercedes, and Toyota. We also continue to advance our Connected Car roadmap, including advanced sound features and expanding services that are expected to support broadcaster and OEM partner advertising monetization. Moving to our pay-TV business. As noted earlier, our IPTV subscriber base continued to grow, increasing 19% year over year to reach 3.28 million subscriber households at quarter end. During the quarter, we signed the first agreements for new service offerings, such as programmatic dynamic ad insertion and our native digital rights management. In addition, we delivered an innovative 4K sports experience with multi-view capability to IPTV households for the Winter Olympics and Super Bowl. We also expanded our set-top box partnership with Kaon and executed a multi-year discovery agreement with DirecTV.

Moving to our consumer electronics business. During the quarter, we renewed DTS decoder and post-processing contracts with leading TV brands including Vizio, Xiaomi, TCL, and a major U.S. retailer. We also entered into a multi-year partnership with Tencent Music, China's leading music platform for DTS:X encoding of its music catalog, offering immersive audio as a premium feature to Tencent QQ Music subscribers. Overall, these renewals and partnerships support our focus on expanding the adoption of our consumer audio technologies. As we put our 2026 goals in context, we made strong progress toward our objectives in the first quarter. Our monthly active users on the TiVo One platform continued to grow, reaching 5.5 million at quarter end, more than doubling from the same period last year. We remain confident in reaching our target of over 7 million monthly active users by year-end.

On the monetization front, Media Platforms 45% year-over-year revenue growth was driven primarily by growth in advertising monetization. As our ecosystem and advertiser engagement expands, we believe we have a clear plan to reach our goal of doubling revenue to over $80 million. Also, as monetization revenue from advertising and data sales continues to grow in line with our expectations, we expect the TiVo One annual revenue per user or ARPU to finish the year above $10. Lastly, we've seen some very exciting progress on AutoStage, our Connected Car platform. While footprint continued to expand well past all of our original goals, we are now seeing clear demand among broadcasters and advertisers for the data coming off our platform.

The first data license agreements are expected in the 2Q with more to follow, and we plan to commence advertising trials with partners in the U.S. and Europe later this year. Overall, we remain very pleased with our start to 2026. Let me now turn the call over to Robert to discuss our financial results in more detail. Robert?

Thanks, Jon. Let me start by reviewing the revenue results for the quarter. Overall revenue finished at $114 million, essentially flat year-over-year. Pay-TV revenue decreased 8% as expected to finish at $46 million, driven by a decrease in core Pay-TV from classic guides and end of life of legacy consumer products that was partially offset by growth from our IPTV solution. Consumer electronics recorded $18 million of revenue, a decrease of 19% primarily due to non-recurring revenue from minimum guarantee arrangements and audit settlements in the same period last year as well as memory-related challenges in certain end products categories. Our Connected Car business grew 14% to $38 million, due primarily to a multi-year minimum guarantee arrangement signed during the quarter.

Lastly, Media Platform grew 45% to $12 million, driven primarily by growth in advertising monetization from a host of sources including direct sold revenue, new partner revenue, and a linear TV campaign spend. Looking at overall financial results. Our Non-GAAP adjusted operating expense decreased 14% year-over-year, due primarily to workforce reductions that have occurred over the past year as we have focused the business on our growth areas. We posted $25 million of adjusted EBITDA or 22% of revenue, an improvement of almost 8 percentage points over the prior year. GAAP loss per share was $0.17 and Non-GAAP earnings per share was $0.23. Turning to the balance sheet and statement of cash flow. We finished the first quarter of 2026 with $70 million of cash and cash equivalents.

It is worth noting that in early April we received the final $12 million payment related to the sale of Perceive to Amazon. As expected during our seasonally low first quarter, operating cash flow usage in the quarter was $18 million, an improvement of $4 million from the first quarter of 2025. Cash usage in the quarter was primarily due to the payment of accrued compensation, which occurs in the first quarter of each year, along with $8 million of payments related to employee departures from the workforce reduction announced in November. We had $23 million of free cash flow usage in the quarter, an improvement of $4 million from the same quarter last year. In terms of financial outlook for the year, we are reaffirming our annual guidance that was provided in February.

As noted previously, our revenue range of $440 million-$470 million take into account our view of broader market risks across our business. In terms of revenue timing during the year, for Q1, we executed certain agreements earlier than we had planned. We may expect to see a similar trend in Q2. We now expect revenue for the first half and second half of the year to be relatively even, as opposed to being slightly more back-half weighted as previously projected. Let me turn the call back over to Jon.

Thanks, Robert. To sum things up, we're very pleased with the results of the first quarter. Customers are engaging with us earlier in the year than anticipated, highlighting our relevance and growing momentum, which positions us for an even stronger start. Our results clearly demonstrate the progress we're making against our monetization strategy. That concludes our prepared remarks. Let's now open the call for questions. Operator?

Thank you. We'll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you're called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions. Again, it is star one to join the queue. Our first question comes from the line of Jason Kreyer with Craig-Hallum Capital Group. Your line is open.

Hey, guys. This is Thomas on for Jason. Thanks for taking my question. Jon, you called out in the PR that you guys are beginning to see an inflection point in monetization strategy. Can you sort of talk about what the drivers are that are catalyzing this inflection?

Well, I think a couple of things. First, we have worked, you know, for the last two years to begin to build a broad enough footprint to have the scale necessary to begin to attract advertisers and partners to our platform, you know, to reach, you know, unique audiences. I think, those efforts, as we're now at 5.5 million MAUs, is certainly a key part. The second is that we have also worked in tandem to continue to build out and connect our TiVo One ad platform, you know, to the broader advertising ecosystem. As, you know, that gets continually worked to, if you will, make sure all the plumbing, you know, is continually being optimized, I think that also enables more programmatic ad volume to flow.

Thirdly, as we are now making a bigger presence known and the uniqueness of some of what our platform offers in terms of audience engagement, that is, you know, driving advertiser interest. Through partnerships, we have more sellers, you know, out there beyond just our direct sales force. I think all of which is kind of combining to really begin to drive this business, I think, quite positively, and it's why we expect this year to see Media Platform revenue double, you know, year-over-year. I think, you know, while there's still plenty of work, I'm very, very pleased with how this seems to be taking shape.

That's great. Thanks. Maybe one follow-up. When we look at your operating expenses in Q1, does that sort of represent all the cost-cutting initiatives you put in place? Just kinda trying to determine if this is the right cost base to build off of, for the remainder of the year as we sort of move forward.

Yeah, most of our work on the cost-cutting is complete at this point, and I would warrant that Q1 is a good representation of the run rate for the remainder of the year.

That's great. Thank you, guys.

You're welcome.

Our next question comes from the line of Matthew Galinko with Maxim Group. Your line is open.

Hey, good afternoon. Thanks for taking my questions. Maybe firstly, can you touch on how unit availability is today in the U.S. market and how kind of that user growth is shaping up between U.S. and Europe? Then I'll ask a follow-up.

Sure. Matthew, similar to what was the case last quarter, you know, the majority of our TiVo One connected devices are in Europe. I think on a relative basis, you know, you're gonna continue to see that, you know, grow faster than the U.S. U.S. being a more competitive market, et cetera. We do expect, however, there to be more TV volume in the U.S. later this year. You know, we have both smart TVs and connected set-top boxes through our operators that are, you know, the distinction is not important because they're all connected to our TiVo One ad platform.

You know, this is all about managing the home screen and where content is being aggregated and ultimately being selected and the ability to advertise and stream in on homepage, et cetera, across these platforms. You know, I would say, you're probably looking at a balance, roughly 60% Europe, 40% U.S.

Thank you. Just any thoughts on, I guess the capital structure, particularly given the kind of the shift in, you know, pickup in the Media Platform business and the collection of the Perceive payment, does that change anything about, you know, your position towards debt on the balance sheet or, you know, how do you feel today?

Well, I think, you know, we continue like everyone, right, to be operating in a uncertain environment. I think nothing has fundamentally changed with our capital allocation policy, which is, you know, we carry, you know, a small amount of debt on the balance sheet. You know, obviously we want to fund, you know, importantly, our growth initiatives as our first priority and then look to, you know, opportunistically return capital through buybacks, you know, as appropriate as you balance both, you know, the need for cash internally along with, you know, with debt pay down and ultimately, you know, that return of capital.

You know, as we still sit here today on, you know, $80 some million in cash, I don't think our perspective broadly changes. You know, as we start to see more material growth as we go forward, obviously it's a conversation that we and the board have regularly and to the extent that we, you know, want to dial up any element of that, slightly more than another, certainly a matter of constant conversation.

As a reminder, it is star one if you would like to ask a question. Our next question comes from the line of Hamed Khorsand with BWS Financial. Your line is open.

Hi. Could you just talk about, you know, you're making good advancement here on how many people are using your AutoStage, but why wouldn't that, you know, translate into higher Media Platform revenue for you right now?

Hi, Hamed. Certainly, it ultimately will lead to more data and advertising-based monetization. One of the things we have talked about, is that in the course of this year, as, you know, we kind of exceeded, you know, the 10 to let's call it 12 billion units, kind of mark that there'd be enough scale to attract both advertisers and people interested in that data, you know, more meaningfully. So it's just simply a matter of timing. It's just where we are. You will in fact see, I think a very, very valuable and interesting platform to both broadcasters and advertisers, you know, take shape where there's, we think a meaningful amount of opportunity.

And you'll kind of see it as we lean ahead with our first data licenses happening in the broadcaster space, likely this quarter.

Okay. Thank you.

We have no further questions at this time. I will now turn the conference back over to Mr. Jon Kirchner for closing remarks.

Thanks, operator. With a great start to the year, we can see momentum building in our business, and I'd like to personally thank our customers and partners. In addition, I appreciate the commitment of the entire Xperi team as we continue to deliver on our plans and strategies. We look forward to sharing further updates on our next quarterly conference call, and thank you everyone for joining today.

Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

Good day, everyone. Thank you for standing by. Welcome to the Xperi Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Sam Levenson from Arbor Advisory Group. Sam, please go ahead.

Thank you, operator. Good afternoon, and thank you for joining us as Xperi reports its fourth quarter and full year 2025 financial results. With me on today's call are Jon Kirchner, Chief Executive Officer; and Robert Andersen, Chief Financial Officer. In addition to today's earnings release, there's an earnings presentation on our Investor Relations website at investor.xperi.com. We encourage you to download the presentation and follow along with today's commentary. Before we begin, I would like to provide a few reminders. First, I would like to note that unless otherwise stated, all comparisons are to the same period in the prior year. Second, today's discussion contains forward-looking statements about our anticipated business and financial performance that are predictions, projections or other statements about future events, which are based on management's current expectations and beliefs and therefore, subject to risks, uncertainties and changes in circumstances. For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discuss today, please refer to the Risk Factors and MD&A sections in our SEC filings, including our Form 10-K for the year ended December 31, 2025, to be filed with the SEC. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. Third, we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to the most directly comparable GAAP measures, which can be found in the Investor Relations section of our website. Last, a replay of this conference call will be available on our website shortly after the conclusion of this call. I'll now turn the call over to Xperi's CEO, Jon Kirchner.

Thank you, Sam, and thank you, everyone, for joining us on our fourth quarter and full year 2025 earnings call. As we finish the year, it seems an appropriate time to look at the investments made over the past few years, appreciate our recent progress in hitting key metrics that set the stage for future growth and discuss the next phase of focus for the business, substantive revenue increases through advertising and data monetization. Let me first provide an overview of the progress we made during the quarter against this past year's goals. Progress that continues to give us confidence in our belief that we're reaching a key inflection point as a business. There are 3 key areas of progress over the past year. First, at the end of 2025, we reached 5.3 million monthly active users on our TiVo One ad platform, surpassing the year's goal of 5 million and registering an increase of over 250% over the course of the year. As I've noted in the past, footprint growth is critical for us to reach larger scale in the U.S. and the larger European countries, which in turn is expected to facilitate more effective monetization of our installed base. Next, in the Connected Car market, our DTS AutoStage footprint also continued to grow, reaching over 14 million vehicles, 40% growth when compared to the prior year. We believe AutoStage is a unique platform, both in terms of scale and reach, and we are already seeing signs of the platform's value as we progress advertising and data monetization trials with ecosystem partners. And finally, in our Pay TV business, our video over broadband subscriber count grew 25% year-over-year to reach 3.25 million subscriber households. Subscription-based revenue from IPTV continues to build, which we believe will provide a balance within our Pay TV business as revenue from our older Pay TV products is expected to continue to decrease. Thus, we expect the Pay TV business will level out over the next several years as our IPTV business continues to serve those customers that want a flexible IPTV streaming bundle in a modern, rich and compelling user interface. We also anticipate broadband households will provide additional streaming monetization opportunities. Turning to our summary financial results for the quarter. We recorded consolidated revenue of $117 million, a decrease of $6 million compared to last year as growth in Media Platform and Connected Car were more than offset by a combination of anticipated decrease in Consumer Electronics, driven by lower demand and memory cost and supply chain issues and Pay TV, which benefited from minimum guaranteed arrangements recorded in 2024 that didn't occur in 2025. During 2025, we proactively reduced non-GAAP adjusted operating expense, lowering it by 13% compared to 2024. This change was primarily due to workforce reductions that were implemented over the past year. We achieved adjusted EBITDA of $22 million for the quarter, bringing the year's adjusted EBITDA to $77 million or 17% of revenue, which was at the high end of our outlook range for the year. We also recorded operating cash flow of $4 million in the quarter, bringing operating cash flow close to neutral overall for the year. Let me now go through each of our 4 business areas, starting with Media Platform. As noted earlier, we reached a key milestone for our TiVo One ad platform by hitting 5.3 million monthly active users at year-end, a remarkable achievement for both growth on the platform and acceptance of our TiVo operating system into the market. We continue to add new capabilities for the TiVo operating system, including the deployment of Blacknut Cloud Gaming and demonstrations of the operating system directly on high-end mini LED smart TVs, set-top boxes and sound bars. We also deployed a video-based homepage ad unit to provide advertisers with more ways to reach our audiences. Within Media Platform, we achieved significant revenue growth in advertising when compared to a year ago, with average revenue per user for TiVo One finishing the year at $7.80, down slightly from the prior quarter due to our user base growing faster than related monetization revenue. We expect ARPU to take a bit of time to normalize as both revenue and footprint growth are expected to accelerate on the platform. Advertising partnerships continue to be an important foundation for our goal of accelerating revenue growth. And during the quarter, we entered into new agreements with Titan Ads, OpenGlass and Anoki, all well-known industry resellers of premium CTV inventory, such as home screen video ads in the European and U.S. markets. We also launched FreeWheel as a new supply-side demand partner and began generating revenue through the partnership. Our advertising business also saw progress through our direct sales efforts with homepage ad campaigns executed for clients, including Hallmark Media, Freeform, NBCUniversal and TNT. Moving to Connected Car. The momentum for DTS AutoStage continued with the signing of Mercedes Benz to launch DTS AutoStage video service powered by TiVo. This win adds another major OEM launching on our Connected Car video platform, which we believe cements our position as a leading supplier of Media Platforms to automotive OEMs. It's worth noting that Mercedes is the first car brand to offer all 4 of Xperi Connected Car solutions, HD Radio, DTS:X immersive sound, AutoStage audio and video powered by TiVo. As a leading brand that often sets direction for the automotive industry, we believe Mercedes support furthers momentum for our Media Platform and technology solutions. At year-end, AutoStage had a footprint of over 14 million vehicles from many automotive brands. Also during the quarter, we added a significant number of radio broadcasters across the U.S., Europe, Australia, Lat Am and Africa, further expanding the global services connected to the AutoStage platform. Our HD Radio solutions saw continued adoption with several new models from Toyota, Honda, Audi and others launching in the fourth quarter. We also signed a multiyear agreement with a large U.S.-based Tier 1 supplier that is expected to provide a cost-optimized HD Radio implementation over the next few years, which we believe will further propel the growth of HD Radio among major car brands. Finally, we also signed a multiyear DTS audio deal with a large Asian Tier 1 supplier, which is expected to secure our DTS decoder in a number of future car programs. Moving to our Pay TV business. As noted earlier, our IPTV subscriber base continued to grow, increasing by 25% year-over-year to hit 3.25 million subscriber households at year-end. For our managed IPTV service, we posted wins with [ Prism Fiber ] and MIDTEL in the U.S. and with Celerity and MOPC in Canada. We also continued to grow our broadband-only wins, including new deals with Blue Stream Fiber, Buckeye, [ Prism Fiber ], MIDTEL, Carnegie, Hickory and Velocity. During the quarter, we signed multiyear agreements with ClaroVTR for IPTV services in Latin America and with Frontier Communications in the U.S. for content discovery services. In addition, we signed a notable multiyear agreement for classic guides technology with Canadian-based telecom operator, Cogeco. Moving to our Consumer Electronics business. During the quarter, we continued to expand the IMAX Enhanced program with new product categories such as high-end earbuds. We also saw adoption of the program by Yamaha and the signing of a key renewal with Onkyo. Now all major audio-video receiver manufacturers are participating in the IMAX Enhanced program, which we believe reflects its position as the premium audio/video solution in the marketplace. We also signed a decoder and post-processing renewal with Sound United, which owns premium brands like Denon and Marantz. Lastly, we signed a multiyear agreement with a leader in the PC space, covering sound technologies for consumer products as well as extending audio technology penetration into its commercial products. In a few moments, I'll turn to a discussion of our pivot to audience monetization, advertising and growth. But let me first turn the call over to Robert to discuss our financial results in more detail. Robert?

Thanks, Jon. Let me start by reviewing revenue results for the quarter. Overall, revenue finished at $117 million, lower by 5% when compared to last year. As Jon noted earlier, we had 15% revenue growth in Media Platform due to significant growth in advertising revenue, along with 5% growth in Connected Car revenue from higher minimum guarantee arrangements that were completed during the quarter. This growth was more than offset by a 21% decrease in Consumer Electronics revenue, driven by lower customer demand due to memory costs and supply chain issues, along with a 7% decrease in Pay TV revenue from minimum guarantee arrangements recorded in the prior year and due to lower revenue from our end-of-life consumer DVR business. Looking at overall financial results, our non-GAAP operating expense for the quarter improved by $10 million or 13% compared to the same quarter of 2024 due primarily to proactive personnel reductions implemented over the course of 2025. We posted $22 million of adjusted EBITDA or 19% of revenue, essentially in line with last year's numbers. Non-GAAP diluted earnings per share was $0.24, lower than the prior year by $0.15 due primarily to lower non-GAAP tax expense in the fourth quarter of 2024. Turning to the full year results. We finished 2025 with revenue of $448 million. This was a 9% decrease compared to the prior year due to 2 primary areas. First, we saw a 21% decrease in Pay TV revenue due to an expected reduction in core Pay TV revenue from overall industry trends, a challenging comparison with a significant multiyear minimum guarantee agreement that we recorded in 2024 and from the ongoing reduction in our consumer business as our DVR products have entered end of life. And second, our Consumer Electronics business decreased by 5% compared to 2024 due to disruptions in unit volumes from memory supply issues as well as the comparable of revenue from the divested Perceive business that was sold in late 2024. Our Connected Car business posted 12% year-over-year growth due to a higher volume of minimum guarantee arrangements where the revenue is required to be recorded upfront. Our Media Platform business was essentially flat year-over-year as growth in advertising revenue was offset by expected decreases in both middleware licensing and revenue from our Stream 4K device. Turning to overall financial results for the year. Our non-GAAP adjusted operating expense of $274 million improved by $60 million or 18% compared with the prior year due primarily to reductions in headcount implemented during the year, the divestiture of Perceive at the end of 2024 and the shifting of certain operating expenses to cost of revenue as newer products have begun generating revenue. We finished the year with adjusted EBITDA of $77 million or 17% of revenue, resulting in growth of 2 percentage points when compared to 2024. Turning now to the balance sheet and statement of cash flow. We finished the fourth quarter of 2025 with $97 million of cash and cash equivalents, which was level with our balance from the third quarter of 2025. We generated $4 million of operating cash flow in the quarter, which was $3 million higher than the same quarter in 2024. For the full year, operating cash flow was $0.5 million usage, right in the middle of our updated guidance range of neutral operating cash flow, plus or minus $10 million. Notably, achieving essentially neutral operating cash usage for 2025 demonstrates a significant improvement over prior year, where our operating cash usage was $55 million. We had $2 million of free cash flow usage in the quarter. Let me now turn the call back over to Jon to cover our key operating metrics and objectives going forward.

Thanks, Robert. Five years ago, when we began the journey to combine TiVo and Xperi, we recognized that the product business would need to go through a meaningful transformation, significantly changing cost structure and operating model as viewership shifted from traditional media to streaming. As we close out 2025, a few years into our journey as a stand-alone independent company, I'm pleased to report that many of our previously stated long-term goals have either been achieved or we have direct line of sight to accomplishment in the next 12 months. This includes our goal of growing our MAU platform from the more than 5.3 million users towards our goal of at least 7 million, something we expect to surpass during 2026. We also set an initial goal of 4 smart TV partners, which has now been exceeded for a total of 10, which we believe validates the market need for an independent TiVo OS platform. In addition, we sought to grow our IPTV subscriber base to at least 3 million subscriber households, a goal that has now been surpassed. In Connected Car, we had previously set a long-term goal of building the AutoStage platform footprint to at least 15 million vehicles. By year-end, we had surpassed 14 million, and we have line of sight to meeting and exceeding our goal of 15 million vehicles in 2026. With that scale, we expect to progress auto monetization trials with broadcast and OEM vehicle partners with the goal of enabling monetization-based revenue growth to accelerate in 2027 and beyond. So as we've made multiyear investments and seen tremendous progress in building the critical foundations for a long-term monetization business in both the home and the Connected Car, we feel confident in our belief that we've reached an inflection point in our business. With increasing amounts of audience engagement across our home and Connected Car platforms as consumers watch video and listen to radio content, we have the opportunity to connect advertisers with our unique audiences providing enhanced targeting and data solutions. We believe that being the only independent omnimedia platform with scale that can deliver high-value TV home screen ad units along with the opportunity to reach unique engaged audiences in the Connected Car is a combination that differentiates our Media Platform from others in the marketplace. This strategic positioning, combined with our established presence in both programmatic and direct sold advertising markets with anticipated growing demand for premium ad inventory gives us confidence in our expectation of successfully selling our owned and operated ad inventory to drive meaningful monetization revenue growth. We expect that during 2026, we'll see Media Platform revenue double, and that growth will continue to build in 2027 as our footprint continues to scale, and we have more sellers working with our platform. We also expect that as footprint scales and ad sales ramp up, ARPU will normalize as a result. As we exit 2026, we expect ARPU to exceed $10, growing over time towards $20-plus, driven by increased engagement and ad optimization. As we turn to 2026, let me provide a few business metrics we'll be using to gauge our progress this year. First, our goal is to grow our MAU footprint beyond 7 million. This, in turn, is expected to expand the opportunity for monetization downstream over the typical 5- to 7-year life of TV ownership. Second, as we expand our selling efforts, our goal is to double Media Platform revenue and exit the year with ARPU above $10, which will provide further evidence that we're selling ever more data and advertising across our media platforms. Third, with an installed base of over 14 million vehicles with DTS AutoStage, we expect to generate ads and data monetization revenue on the AutoStage footprint. Taken together, achievement of these goals will provide further visibility to the growth potential and strategic value of our Media Platform business. Let me now turn the call back to Robert to discuss our outlook for 2026.

Thanks, Jon. Before I provide our outlook for the year, I think it would be helpful to understand how the parts of our business are trending. As Jon discussed earlier, we expect Media Platform revenue to double relative to 2025, reflecting our belief that we have reached the inflection point for advertising monetization. We believe this growth, in addition to continued growth in our Connected Car business will substantially offset anticipated decreases in our Pay TV and Consumer Electronics businesses in 2026. Notably, we believe certain legacy Pay TV product lines are nearing the end of significant decreases and the business is expected to level out behind IPTV subscription growth over the next several years. Also, we expect our Consumer Electronics business to face challenging comparisons in 2026 due to a number of multiyear deals recorded in prior periods that will impact revenue in 2026, but are expected to be recontracted in 2027. Now to our outlook for 2026. We expect full year revenue to be in the range of $440 million to $470 million. This range reflects our expectation of doubling Media Platform revenue and takes into account our current view of broader market risks across our business, including memory and supply chain challenges and other macro uncertainties. Consistent with the normal pattern of our business, we expect the year's revenue to be slightly weighted to the back half of the year. For adjusted EBITDA margin outlook, we expect a range of 17% to 19%, which reflects the benefit of expense reductions from 2025 with the range corresponding to the width of our revenue guidance range. Operating cash flow is expected to be between $15 million to $25 million and capital expenditures to be between $15 million and $20 million, yielding positive free cash flow at the midpoint of these ranges. On other items, we expect non-GAAP tax expense to be approximately $20 million and our diluted share count to be between 48 million and 49 million shares. Also, from a GAAP-based perspective, we expect stock-based compensation expense for 2026 to be approximately $31 million, lower by 25% from the $41 million incurred in 2025. Let me turn the call back over to Jon for final comments.

Thanks, Robert. As you can gather from our narrative on this call, we're pleased with the significant progress we've made on our key strategic objectives. We believe we are now at an inflection point for the growth of advertising revenue on our Media Platforms business. It's good to finally have some wind at our backs rather than facing consistent headwinds in our efforts to transform and reposition our business. That concludes our prepared remarks. Let's now open the call for questions. Operator?

[Operator Instructions] And our first question comes from the line of Jason Kreyer with Craig-Hallum.

So just a quick question on the Smart TV side. Curious what the mix of that is between European markets and domestic markets and how that's trending or how you expect that to trend over the course of this year?

Yes. Jason, Currently, the TiVo One installed base is basically roughly 60% in Europe, 40% in the U.S. And keep in mind that, that not only reflects TVs, but reflects IPTV boxes that are running the TiVo One ad platform, which are predominantly in the U.S. I think over time, you'll see that mix start to change as we see a second TV OEM show up in the marketplace here in the U.S. But there's no question in the near term, it's going to be more European weighted.

And then you had a release earlier this year, you're launching home screen ads on TiVo. That's been a pretty big driver for capturing incremental spend for a lot of platforms out there. Just curious if you can frame your expectations for contribution there.

I think it's an important part of how we think about the monetization opportunities on our platform, in part because the home screen represents maybe the most valuable piece of real estate as people begin to engage with content and jump from one piece of content to another. We've got a robust offering there from a home screen capability in terms of what the ad unit can do. And I think along with, obviously, in video ads, along with data monetization, all 3 of which kind of combine to form the basis of our expected revenue growth this year and really that represents the revenue in the ad monetization business for us, I think we feel like we're pretty well positioned. The reactions we've gotten to our home screen ad unit from partners is very strong.

And our next question comes from the line of Hamed Khorsand with BWS Financial.

I'm just trying to get clarification on the ARPU for TiVo One. You said there was an acceleration in usage, but you only went up by 500,000 subscribers sequentially. In the prior quarter, you went up by 1.1 million, and you were able to achieve the ARPU -- a higher ARPU. So I'm just trying to understand why ARPU declined this time even though the growth was slower.

So Hamed, you've got a couple of things that are going on in the revenue calculation, which I think we actually published a definition of how you get there. There is remember, it's a lagging indicator over 4 trailing quarters. So depending on how that average moves relative to how dollars are starting to appear on the platform, there's also some dollars that are covered in certain campaigns that get amortized across your footprint in that calculation. So depending on the relationship between the growth of footprint to the growth of revenue, that's why the ARPU metric will certainly move around at the beginning. Over time, as you end up with a more normalized situation where there's more, let's call it, consistent growth on the platform, and there's obviously ever more the numerator to that calculation continues to grow, I think our expectation that you'd see it more consistently be up and to the right. Robert?

And let me add in. I think for the denominator here for the average monthly active users, that the number has continued to increase pretty substantially. If you just look at MAU growth from Q3 to Q4, 10% sequential growth, so $4.8 million to $5.3 million. And over the course of the last year, it's grown from 1.5 million at the end of 2024 to $5.3 million at the end of 2025. So 250% growth. What we're finding is that our user base is growing faster than the attendant advertising associated with that base. It takes a little while for the new TV to start to generate revenue. So that might explain a little bit why you saw -- well, that does explain why you saw a slight decline in the ARPU, down to $7.80 at the end of the year. That's going to fluctuate a little bit just depending on the growth rates of the 2 pieces, the numerator and the denominator. Does that help, Hamed?

That's helpful. And then the other question is, are you done with the cash expense side of the cost savings initiatives, the headcount reduction that you were undertaking?

No, we'll have some costs in Q1 as well. We incurred some of the cash expense in Q3 -- excuse me, Q4, but we'll have some in Q1 as well.

Okay. My last question was you were talking about monetizing the AutoStage platform, I'm assuming this year. Is it -- have you already started doing so? Or is there a time line as to when you expect to do so?

I think it will play out as you get more towards midyear, some of the beginnings of it. We are well engaged on a number of things. And I think the first part that we'll begin to see, Hamed, is data-related monetization, more so than ad monetization because we're generating a lot of data from the platform that is of tremendous interest to advertisers and broadcasters. And as I said, we're well into a number of conversations. And on the back of that is where you'll see the ads piece of that start to show up. There's continuing work there as well. So in short, we've got a very, very unique platform that is quite large. And from a from a perspective of thinking about the radio industry with lack of real targetability, et cetera, et cetera, and even measurement still being, let's call it, dated in its methodology, we have a real-time system that gives a tremendous amount of information to people about what consumers are engaged with, what content, et cetera, how trending is happening. And all of that, I think, puts us in a pretty interesting position. And one other adjunct to that, of course, is more effective advertising is almost -- is completely dependent on having ever better data. And one thing that's not lost on us is being one of the largest providers of contextual data around media assets, both music and video. It's part of the reason we think as you put all this together, we have a really unique opportunity to provide unique solutions that are value-added across not only in one environment like the car, but across environments as you think about the home and the car.

[Operator Instructions] And our next question comes from the line of Matthew Galinko with Maxim Group.

Would there be a geographic bias to the Connected Car monetization as that starts coming in, I guess, midyear in '27?

I think certainly, you'll see -- I would expect you to see it more North America-based initially. But some of the work we're doing is with folks outside the United States already as well. So I think you'll see a European element of that and possibly further geographic expansion. It's broadly of interest to the industry at large across the globe.

Got it. And as we think about that $20 ARPU number, can you maybe talk about what you're seeing today that gives you confidence that we get there over time? And kind of what time frame are you thinking about getting to that number?

Well, I think what gives us confidence is there are robust markets and tremendous interest in better targeting solutions and premium CTV inventory. And I think being an independent provider plus having heavy using IPTV households that represent some unique audiences not typically part of the mix for many advertisers. We have the opportunity to, I think, optimize engagement on the platforms, which in turn, as the footprint continues to grow, those 2 things will drive higher ARPU where there's established markets for what we're trying to do. So -- and we're working, as we talked about on this call, in particular, with a number of partners who have tons of experience and in many ways, are making the market happen today with selling these ad products and connecting them with brands and advertisers who have an interest in reaching consumers. So I think everything about it gives us confidence that provided we continue to execute well and plug into the various ad markets, whether they be programmatic or with direct sellers, whether they be employed by us or employed by resellers, that if we have the ad units and we have the audiences that continue to grow as we continue to optimize engagement that you will ratably continue to see ARPU grow. The exact timing of getting from where we are today to north of $20, I think we're very interested in seeing how with more and more sellers coming online in the course of '26 and how all that plays out, that will give us a better sense of how and when we think we'll achieve that. But we know there's plenty of precedent for those kinds of numbers. We're a little bit different because our mix is Europe and the U.S., not just U.S. alone. But the one thing I would tell you about Europe that may be notable is that there's even larger dislocation between where the ad dollars are in Europe meaning far more ad dollars, roughly 75% of all your ad dollars in Europe are still connected to linear, even though streaming viewing obviously is an ever-growing percentage of total audience engagement. And so what does that mean? It means over the next few years, there's plenty of expectation that you're going to see more ad dollars aggressively move out of linear into streaming. And as that happen, the real estate -- as that happens, the real estate around home screen and streaming engaged audiences becomes more valuable, which in turn will drive up the ARPU associated with that in Europe as well.

Got it. And if I could just sneak 1 last question in. On the Consumer Electronics business, I guess how does the supply chain issue factor into 2026 outlook there? I think you mentioned a lower mix of minimum guarantees also impacting '26. But what is your expectation for supply chain and memory shortages?

Well, I think we know it's impacting how people think about their product planning in terms of what manufacturing planning looks like, what pricing looks like and in turn, what consumer demand ultimately looks like in the face of potentially more challenging pricing or availability. So I think we -- based on our conversations with analysts and with our industry customers, I think we're taking a cautious view of what that looks like. And remember, a good portion of our business is still unit-based. So depending on how that plays out, that will ultimately determine what the CE revenue in total looks like. So I think we're sitting here cautiously, just kind of watching carefully. We've also got people that are still grappling with an ever-shifting tariff environment and what does that mean for their own supply chains and where do they want to be and that kind of thing, which has the impact sometimes of impacting how think about -- how people think about production plans or even their partners as they -- if they're producing with partners. So I think all of that leads to some slight uncertainties that are factoring into how we think about CE.

And that concludes our question-and-answer session. I will now turn the call back over to Jon Kirchner for closing remarks.

Thanks, operator. We're pleased with the meaningful progress we made last year, and I want to thank the entire Xperi team for their continued focus and execution as we work to deliver long-term value for our shareholders. We look forward to sharing further updates with you on our first quarter call, and that concludes today's call. Thanks for joining, everybody.

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.