First quarter revenue declined 6% to $118.8 million at Xperi, the entertainment tech company behind HD Radio and DTS AutoStage. Revenue was down 3% when adjusting for the $42.7 million divestiture of its AutoSense in-cabin safety business and related imaging solutions. Xperi’s Connected Car segment, home to the two radio platforms, “saw continued positive momentum during the quarter” and helped offset declines in other parts of the business, CEO John Kirchner told analysts late Wednesday. Connected Car, along with Xperi’s Media Platform, and Video-Over-Broadband, are the company’s “most attractive opportunities,” Kirchner said.
“DTS AutoStage addresses consumer demands for a better entertainment experience, driven by the extended amount of time people spend in their cars,” Kirchner explained. “Traditional broadcast radio is still the most prominent form of in-vehicle entertainment, and AutoStage with its dynamic user interface and access to secondary and tertiary radio stations, has created additional demand and interest in HD Radio.” As more automakers include the hybrid radio software in their vehicle fleets, Kirchner said HD Radio is “steadily increasing” its penetration within the North American market.
After years of snail-pace growth, HD Radio is now a standard feature in 58% of all vehicles built for the North American market as of 2023, up from 52% in 2021. The platform continues to increase its penetration with Hyundai and Genesis recently making HD Radio a standard feature across their North American models. Xperi continues to work with all U.S. auto brands and says it expects to further increase HD Radio penetration.
Meanwhile, Xperi’s newer, sexier radio platform – DTS AutoStage – is now deployed in more than six million vehicles worldwide, including about 4 million in the U.S. That’s a 50% increase globally over the last nine months. A dozen automakers are now shipping AutoStage-equipped vehicles, including Ford, Nissan, BMW, Mercedes Benz, Hyundai and Kia, and six more have signed up. Kirchner says the company plans to “deliver three additional AutoStage wins” by the end of 2024, with at least one including the AutoStage video service powered by TiVo now deployed in hundreds of thousands of cars across seven countries, and end the year with an installed base of 7 million vehicles. “Conversations with automotive OEMs are progressing and the pipeline continues to build,” Kirchner said.
Xperi narrowed its overall loss in the quarter to $13.4 million (or 29 cents per share), compared to a loss of $32.9 million (or 76 cents per share) in the year ago period. Earnings fell 21% to $5.4 million from $6.8 million in Q1 2023. The company reaffirmed its outlook for total 2024 revenue in the $500-$530 million neighborhood.
“As we focus on executing our independent media platform strategy to drive profitable growth, we are taking steps to further reduce expenses as part of our ongoing business transformation," Kirchner said. “We believe we are on track to achieve the multi-year targets we announced in Sept. 2022, as these growth drivers and the continued execution of our strategy set the stage for significant long-term revenue growth and margin expansion."
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