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

Nicholas Zangler: Got it.

Jon Kirchner: Second, folks that just have already signed up.

Nicholas Zangler: Right. No, 100% agree. Awesome. Thank you very much, guys, and congrats on all this great progress.

Robert Andersen: Thank you, Nick.

Operator: Our next question comes from the line of Hamed Khorsand from BWS Financial. Please go ahead.

Hamed Khorsand: Hi. First question I had was something you have not brought up at all on this call. Was there any progress on AutoSense at all? You left that out.

Jon Kirchner: There has been. We continue to work on supporting business that we have as well as advancing discussions with pipeline customers. So I would say business as usual, but you don’t always have customer wins in any given quarter to speak to. So lots of intense work on advancing the program and obviously more news to follow.

Hamed Khorsand: Okay. And then you now have four TV OEMs, but you’ve only named two. Why haven’t the other two been named yet? And will they expand geographically beyond just Europe?

Jon Kirchner: I think here again, Hamed, we’ll have more to say in February on just kind of what the shape of rollout will look like. You got to keep in mind that not every TV partner has the same strategy about how they’re managing everything from marketing to announcements, to the retail channels, etc. So we are not at liberty to front run what our customer needs are, but rather really respond to their strategies. So what I can say is that in due course, obviously, you’ll know who they are and certainly as we get closer to the roll out of those TVs and as our partners permit us and we both engage on helping promote what they’re doing. And I think as we said in the past, we expect there to be distribution in the U.S. next year amongst the four we’ve signed and from more than one of the customers we’ve signed.

So I think again, more shape to follow. And I think the pipeline remains very, very active and robust. So as we said in the script, we expect to have more news just on broader progress in TV OS, as we get into February.

Hamed Khorsand: Okay. And one last question, if I may. Robert, given the guidance for Q4, it depicts a lot of operating leverage. Is that kind of operating leverage good enough? Or will it be better in 2024? Can we use that kind of operating leverage as a highlight for the business?

Robert Andersen: As you asked the question about operating leverage, are you indicating that we — can you grow top line and kind of hold expense? I just want to make sure I’m answering your question properly.

Hamed Khorsand: Yeah. Given the guidance you’re providing, it kind of shows quite a bit of EBITDA growth sequentially. And then your previous commentary by Jon, I think it was, said about single-digit — mid-single-digit growth as well. So I’m just trying to put two in two together for 2024.

Robert Andersen: Yeah. I think the short answer for this is yes. We as a business are focusing on two primary things. One, growing that top line through these initiatives. And the other is being very thoughtful about our spend. But there’s no question that the business itself has a — it can leverage very well for operating margin. And by that measure, expanding EBITDA as we get into next year.

Hamed Khorsand: All right. Thank you.

Robert Andersen: You’re welcome.

Operator: [Operator Instructions] Your next question comes from the line of Matthew Galinko from Maxim Group. Please go ahead.

Matthew Galinko: Hey. Thanks for taking my questions. Can you, I guess, offer any comments on how some of the dynamics in automotive industry are impacting your outlook for volumes in that business for you between the strikes and some pricing dynamics? I’m just curious how you’re thinking about it.