Xperi Holding Corporation (NASDAQ:XPER) Q3 2023 Earnings Call Transcript

Steven Frankel: And does it take a material incremental investment on either your part or this strategic investor that you may be looking for to get to where this customer wants to go? Or is that incremental investor — investment about running faster and may be catching something else?

Jon Kirchner: I think — I mean, I can speak to our role in that, which is the core work that was necessary to, I think, get this particular design win, has been largely completed on our part. There’s work we need to support the implementation with this customer. And obviously this is a component to more than this customer is working to build. So — but as far as where we sit, I would say the vast majority of the work is behind us, rather than ahead of us.

Steven Frankel: Okay. Great. Thank you. I’ll jump back in the queue.

Jon Kirchner: Thanks, Steve.

Operator: Your next question comes from the line of Nick Zangler from Stephens. Please go ahead.

Nicholas Zangler: Hey, guys. Thanks a lot and congrats on all the great progress this quarter. When you look at that — the revenue guide, a $14 million spread just between the high and low end of the guide for the year, which is obviously just the fourth quarter now. Curious if you could just talk about the variability there, maybe which segments in particular are driving or maybe more volatile or driving that variability, and that the degree of that spread then?

Robert Andersen: Yeah. Sure, Nick. It’s a fair question. I’d say when you look at our fourth quarter, we have a fair degree of — it’s really one of our busiest quarters in terms of closing out key agreements, particularly within Pay TV and Consumer Electronics. So we’re mindful that we will have variability there depending on whether or not we can reach terms that are acceptable to us. And if not, then we would shift the timing out. We also have variability in our per unit shipments for both CE and Connected Car, also subscriber growth within IPTV, and I guess you could also say advertising within the Media Platform. So given the variability within all of those pieces, we want to make sure that we are putting within our range an appropriate number to account for these various factors.

Nicholas Zangler: Understood. No, that’s helpful. And then on the Connected Car side, again, another great win here. It sounds like BMW is significantly expanding the incorporation of the AutoStage plus TiVo offering. So obviously, congrats there. But just can you talk about how this update, in particular, contributes to any sort of potential ramp in Connected Car revenues as we look forward?

Jon Kirchner: Yeah. I think they’re all components of continuing to build that Connected Car story, over the next few years. Certainly, the expansion of models is welcome news because in automotive, typical production time lines, this has been a fairly fast project, and I think speaks to the great work that BMW has done as a partner, but also I think the interest in video as a platform in car and also our ability to respond to their needs, I think, in a very effective way. So we’re not yet naturally guiding on 2024. We’ll have more to say about automotive, as we get into February, along with other things. But I think the fact that you have a major widely recognized partner, who is known for being highly selective about technology and building great experiences, not only engaging with the platform, but deciding to go more broadly fairly early, I think it will help us certainly in getting others into the mix and I think prove that this can be done in relatively short order, which over the next couple of years, I think, speaks positively towards the overall ramp in Connected Car-related revenue, as…