10-Q 1 xper-20230930.htm 10-Q 10-Q
0001788999Q3false--12-31311111http://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#AccruedLiabilitiesCurrentP3Y0001788999us-gaap:TradeAccountsReceivableMember2022-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CN2022-07-012022-09-300001788999xper:VewdSoftwareHoldingsLimitedMember2022-07-012022-07-010001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-07-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CN2023-01-012023-09-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-09-300001788999us-gaap:EmployeeStockMember2023-09-300001788999xper:SeniorUnsecuredPromissoryNoteMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001788999country:JPus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001788999srt:MaximumMemberxper:ExistingTechnologyContentDatabaseMember2022-12-310001788999us-gaap:LandMember2023-09-300001788999xper:PromissoryNoteMember2023-07-012023-09-300001788999us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001788999xper:TwoThousandTwentyTwoEquityIncentivePlanMember2023-01-012023-09-300001788999us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeContractMember2023-09-300001788999us-gaap:EmployeeStockMember2023-05-312023-05-310001788999xper:TIVOMergerMemberxper:NonMarketableEquitySecuritiesMember2023-07-012023-09-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001788999srt:MaximumMember2023-09-300001788999xper:EquipmentFurnitureAndOtherMember2022-12-310001788999xper:ExistingTechnologyContentDatabaseMember2023-09-300001788999us-gaap:AdditionalPaidInCapitalMember2023-09-300001788999xper:UnrecognizedTaxBenefitsMember2022-12-310001788999srt:MaximumMemberxper:CustomerContractsAndRelatedRelationshipsMember2022-12-310001788999country:JP2023-07-012023-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001788999us-gaap:TrademarksAndTradeNamesMember2022-12-310001788999xper:NetParentCompanyInvestmentMember2022-01-012022-09-3000017889992025-01-012023-09-300001788999xper:XperiMemberus-gaap:SpinoffMember2022-10-012022-10-010001788999us-gaap:TradeAccountsReceivableMember2022-07-012022-09-300001788999us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001788999us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2022-06-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembersrt:LatinAmericaMember2023-01-012023-09-300001788999us-gaap:AdditionalPaidInCapitalMember2022-12-310001788999us-gaap:NondesignatedMember2023-01-012023-09-300001788999us-gaap:TransferredAtPointInTimeMember2022-01-012022-09-300001788999xper:RestrictedStockAwardsAndUnitsMember2023-01-012023-09-300001788999xper:TimeBasedRestrictedStockUnitsMember2023-09-300001788999us-gaap:CommonStockMember2023-01-012023-09-300001788999country:JPus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001788999us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001788999us-gaap:TradeAccountsReceivableMember2022-12-310001788999us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-3000017889992023-09-300001788999us-gaap:NoncontrollingInterestMember2023-09-300001788999us-gaap:TradeAccountsReceivableMember2023-01-012023-09-300001788999xper:ConsumerElectronicsMember2023-07-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CN2023-07-012023-09-300001788999us-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-09-300001788999us-gaap:CommonStockMember2022-01-012022-09-300001788999xper:PerformanceBasedRestrictedStockUnitsMember2023-09-300001788999xper:CostOfRevenueExcludingDepreciationAndAmortizationOfIntangibleAssetsMember2022-01-012022-09-300001788999us-gaap:RetainedEarningsMember2023-06-300001788999srt:MinimumMemberxper:PerformanceStockUnitsMember2023-01-012023-09-300001788999xper:TwoThousandTwentyTwoEquityIncentivePlanMembersrt:MinimumMemberxper:TimeBasedAwardsMember2023-01-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberxper:EuropeAndMiddleEastMember2022-01-012022-09-300001788999us-gaap:SalesRevenueNetMemberus-gaap:CreditConcentrationRiskMember2023-09-300001788999us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-09-300001788999us-gaap:RestrictedStockUnitsRSUMember2022-12-310001788999us-gaap:RetainedEarningsMember2022-01-012022-09-300001788999xper:PerceiveCorporationMember2023-09-3000017889992022-01-012022-12-310001788999srt:LatinAmericaMember2023-01-012023-09-300001788999us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001788999country:CN2023-01-012023-09-300001788999us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2022-12-310001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:US2022-01-012022-09-300001788999us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300001788999xper:TimeBasedRestrictedStockUnitsMember2022-12-310001788999us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001788999us-gaap:AdditionalPaidInCapitalMember2022-09-300001788999us-gaap:SalesRevenueNetMemberus-gaap:CreditConcentrationRiskMember2022-09-300001788999xper:CostOfRevenueExcludingDepreciationAndAmortizationOfIntangibleAssetsMember2022-07-012022-09-300001788999xper:XperiMember2023-09-300001788999us-gaap:EmployeeStockMember2023-01-012023-09-300001788999us-gaap:TrademarksAndTradeNamesMembersrt:MaximumMember2023-09-300001788999xper:TiVoTradenameTrademarksMember2022-12-310001788999us-gaap:RetainedEarningsMember2022-12-310001788999us-gaap:EmployeeStockMember2023-09-272023-09-270001788999srt:MaximumMemberxper:CustomerContractsAndRelatedRelationshipsMember2023-09-300001788999xper:MediaPlatformMember2023-07-012023-09-300001788999us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001788999us-gaap:NoncontrollingInterestMember2023-07-012023-09-300001788999country:US2022-01-012022-09-300001788999us-gaap:EmployeeStockMember2023-07-012023-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001788999srt:MaximumMemberxper:AcquiredPatentsCoreTechnologyMember2023-09-300001788999country:JP2022-01-012022-09-300001788999us-gaap:ForeignExchangeContractMember2023-09-300001788999us-gaap:TradeAccountsReceivableMember2023-07-012023-09-300001788999us-gaap:TradeAccountsReceivableMember2023-09-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-09-300001788999us-gaap:TransferredOverTimeMember2022-01-012022-09-300001788999country:US2023-01-012023-09-300001788999xper:UnbilledContractsReceivableMember2023-07-012023-09-300001788999us-gaap:NoncompeteAgreementsMemberxper:VewdSoftwareHoldingsLimitedMember2022-07-010001788999us-gaap:InventoriesMember2023-09-300001788999xper:TwoThousandTwentyTwoEquityIncentivePlanMember2023-09-300001788999xper:ConnectedCarMember2022-07-012022-09-300001788999us-gaap:GeographicConcentrationRiskMemberxper:OtherAsiaMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001788999us-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-12-310001788999us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001788999xper:NetInvestmentByFormerParentMember2022-07-012022-09-300001788999srt:MaximumMemberxper:ExistingTechnologyContentDatabaseMember2023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembersrt:LatinAmericaMember2022-01-012022-09-300001788999srt:MaximumMemberxper:AcquiredPatentsCoreTechnologyMember2022-12-3100017889992023-04-012023-06-300001788999xper:ConnectedCarMember2023-07-012023-09-300001788999xper:CustomerOneMemberus-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-01-012022-12-310001788999us-gaap:EmployeeStockMember2023-09-270001788999xper:FormerParentsPerformanceStockUnitsMember2023-01-012023-09-300001788999xper:PayTVMember2022-01-012022-09-300001788999us-gaap:GeographicConcentrationRiskMemberxper:OtherAsiaMemberus-gaap:SalesRevenueNetMember2023-07-012023-09-300001788999us-gaap:NoncompeteAgreementsMember2022-12-3100017889992026-01-012023-09-3000017889992023-11-030001788999xper:ConsumerElectronicsMember2023-01-012023-09-300001788999xper:PerformanceStockUnitsMember2023-07-012023-09-3000017889992022-07-012022-09-300001788999us-gaap:BuildingAndBuildingImprovementsMember2023-09-300001788999xper:UnbilledContractsReceivableMember2022-12-310001788999xper:PromissoryNoteMember2023-01-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberxper:OtherAsiaMemberus-gaap:SalesRevenueNetMember2023-01-012023-09-300001788999country:US2022-07-012022-09-300001788999xper:EuropeAndMiddleEastMember2022-07-012022-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-09-300001788999xper:UnbilledContractsReceivableMember2023-06-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberxper:EuropeAndMiddleEastMember2022-07-012022-09-300001788999xper:RestrictedStockAwardsAndUnitsMember2023-07-012023-09-300001788999us-gaap:LandMember2022-12-3100017889992027-01-012023-09-300001788999xper:PerformanceStockUnitsMember2023-01-012023-09-300001788999xper:OtherAsiaMember2022-07-012022-09-300001788999xper:TIVOMergerMemberxper:NonMarketableEquitySecuritiesMember2023-09-300001788999srt:MaximumMemberxper:PerformanceStockUnitsMember2023-01-012023-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001788999srt:LatinAmericaMember2022-07-012022-09-300001788999xper:PromissoryNoteMemberxper:VewdSoftwareHoldingsLimitedMember2022-07-010001788999xper:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:US2023-07-012023-09-300001788999xper:MediaPlatformMember2022-01-012022-09-300001788999us-gaap:NoncontrollingInterestMember2022-01-012022-09-3000017889992022-12-310001788999xper:TimeBasedRestrictedStockUnitsMember2023-01-012023-09-300001788999xper:XperiMemberus-gaap:SpinoffMember2022-09-210001788999us-gaap:AccumulatedTranslationAdjustmentMember2022-07-012022-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:US2023-01-012023-09-300001788999xper:RestrictedStockAwardsAndUnitsMember2022-01-012022-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300001788999us-gaap:CommonStockMember2022-12-310001788999srt:MinimumMemberxper:CustomerContractsAndRelatedRelationshipsMember2022-12-310001788999xper:EuropeAndMiddleEastMember2023-01-012023-09-300001788999xper:PayTVMember2023-01-012023-09-300001788999srt:LatinAmericaMember2023-07-012023-09-300001788999us-gaap:GeographicConcentrationRiskMembercountry:JPus-gaap:SalesRevenueNetMember2023-07-012023-09-300001788999us-gaap:EmployeeStockMember2022-01-012022-09-300001788999xper:NetInvestmentByFormerParentMember2022-06-300001788999us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-09-300001788999us-gaap:RetainedEarningsMember2022-07-012022-09-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2023-07-012023-09-300001788999us-gaap:EmployeeStockMemberxper:AmendmentToTwoThousandAndTwentyTwoEmployeeStockPurchasePlanMember2023-09-272023-09-270001788999xper:VewdSoftwareHoldingsLimitedMember2022-07-010001788999us-gaap:TradeAccountsReceivableMember2023-06-300001788999xper:UnbilledContractsReceivableMember2022-09-300001788999us-gaap:RetainedEarningsMember2022-09-300001788999us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001788999xper:CustomerContractsAndRelatedRelationshipsMember2022-12-310001788999xper:CorporateAndSharedFunctionalEmployeesMember2022-07-012022-09-300001788999us-gaap:TransferredAtPointInTimeMember2023-07-012023-09-300001788999us-gaap:NoncompeteAgreementsMember2023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembersrt:LatinAmericaMember2022-07-012022-09-300001788999srt:MaximumMemberus-gaap:PerformanceSharesMember2023-01-012023-09-300001788999xper:XperiIncMemberus-gaap:SpinoffMember2022-10-010001788999us-gaap:CommonStockMember2023-06-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2023-06-300001788999xper:TIVOMergerMemberxper:NonMarketableEquitySecuritiesMember2023-01-012023-09-300001788999xper:UnbilledContractsReceivableMember2022-01-012022-09-300001788999xper:EquipmentFurnitureAndOtherMember2023-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001788999xper:VewdSoftwareHoldingsLimitedMemberus-gaap:DevelopedTechnologyRightsMember2022-07-010001788999srt:MinimumMemberus-gaap:NoncompeteAgreementsMember2023-09-300001788999xper:PromissoryNoteMemberxper:VewdSoftwareHoldingsLimitedMember2022-07-012022-07-010001788999us-gaap:SalesRevenueNetMemberxper:NreServicesMemberus-gaap:ProductConcentrationRiskMember2023-01-012023-09-300001788999xper:UnbilledContractsReceivableMember2022-07-012022-09-3000017889992028-01-012023-09-300001788999xper:PayTVMember2022-07-012022-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001788999xper:CustomerContractsAndRelatedRelationshipsMember2023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CN2022-01-012022-09-300001788999us-gaap:TransferredAtPointInTimeMember2022-07-012022-09-300001788999us-gaap:SalesRevenueNetMemberus-gaap:AdvertisingMemberus-gaap:ProductConcentrationRiskMember2023-01-012023-09-300001788999srt:MinimumMemberxper:ExistingTechnologyContentDatabaseMember2023-09-3000017889992022-06-300001788999xper:CustomerOneMemberus-gaap:CreditConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-09-300001788999xper:UnbilledContractsReceivableMember2023-09-300001788999xper:ConsumerElectronicsMember2022-07-012022-09-300001788999country:JP2022-07-012022-09-3000017889992022-09-300001788999us-gaap:TransferredOverTimeMember2022-07-012022-09-300001788999us-gaap:EmployeeStockMembersrt:MaximumMember2023-01-012023-09-300001788999xper:OtherAsiaMember2022-01-012022-09-300001788999country:US2023-07-012023-09-300001788999us-gaap:TrademarksAndTradeNamesMembersrt:MinimumMember2022-12-310001788999us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeContractMember2022-12-310001788999us-gaap:TrademarksAndTradeNamesMembersrt:MaximumMember2022-12-310001788999srt:MinimumMemberxper:ExistingTechnologyContentDatabaseMember2022-12-3100017889992022-10-012022-12-310001788999xper:ExistingTechnologyContentDatabaseMember2022-12-3100017889992024-01-012023-09-3000017889992023-10-012023-09-300001788999us-gaap:CommonStockMember2023-09-300001788999country:CN2022-07-012022-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001788999us-gaap:NoncontrollingInterestMember2022-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001788999xper:ConnectedCarMember2023-01-012023-09-300001788999us-gaap:TransferredAtPointInTimeMember2023-01-012023-09-300001788999us-gaap:EmployeeStockMember2023-01-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberxper:OtherAsiaMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001788999xper:UnbilledContractsReceivableMember2023-01-012023-09-300001788999us-gaap:AdditionalPaidInCapitalMember2023-06-300001788999us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-09-300001788999srt:LatinAmericaMember2022-01-012022-09-300001788999xper:TIVOMergerMemberxper:NonMarketableEquitySecuritiesMember2022-07-012022-09-300001788999xper:SeniorUnsecuredPromissoryNoteMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001788999us-gaap:LeaseholdImprovementsMember2022-12-310001788999xper:XperiMemberus-gaap:SpinoffMember2022-10-010001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001788999srt:ParentCompanyMember2022-07-012022-09-300001788999us-gaap:LeaseholdImprovementsMember2023-09-3000017889992022-04-012022-06-300001788999us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001788999xper:UnbilledContractsReceivableMember2022-06-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001788999us-gaap:TrademarksAndTradeNamesMember2023-09-300001788999us-gaap:GeographicConcentrationRiskMembercountry:JPus-gaap:SalesRevenueNetMember2022-01-012022-09-300001788999srt:ParentCompanyMember2022-01-012022-09-300001788999us-gaap:SalesRevenueNetMemberxper:HardwareProductsMemberus-gaap:ProductConcentrationRiskMember2023-01-012023-09-300001788999xper:ConsumerElectronicsMember2022-01-012022-09-300001788999us-gaap:NoncontrollingInterestMember2022-12-310001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:US2022-07-012022-09-300001788999xper:PerformanceBasedRestrictedStockUnitsMember2022-12-310001788999srt:MaximumMemberus-gaap:NoncompeteAgreementsMember2022-12-310001788999xper:TIVOMergerMemberxper:NonMarketableEquitySecuritiesMember2022-01-012022-09-300001788999us-gaap:RetainedEarningsMember2023-01-012023-09-300001788999xper:FormerParentsPerformanceStockUnitsMember2023-04-012023-06-3000017889992023-07-012023-09-300001788999us-gaap:RestrictedStockUnitsRSUMember2023-09-300001788999us-gaap:NoncontrollingInterestMember2021-12-3100017889992023-06-300001788999us-gaap:NoncontrollingInterestMember2023-01-012023-09-300001788999xper:VewdSoftwareHoldingsLimitedMember2023-01-012023-09-300001788999xper:UnbilledContractsReceivableMember2021-12-310001788999us-gaap:AccumulatedTranslationAdjustmentMember2023-09-300001788999us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300001788999us-gaap:ForeignExchangeContractMember2022-12-310001788999xper:VewdSoftwareHoldingsLimitedMemberus-gaap:TradeNamesMember2022-07-010001788999srt:MinimumMemberxper:AcquiredPatentsCoreTechnologyMember2023-09-300001788999srt:MinimumMemberxper:AcquiredPatentsCoreTechnologyMember2022-12-310001788999xper:CostOfRevenueExcludingDepreciationAndAmortizationOfIntangibleAssetsMember2023-07-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberxper:EuropeAndMiddleEastMember2023-07-012023-09-300001788999xper:TwoThousandTwentyOneConvertibleNotesMember2023-09-300001788999xper:MediaPlatformMember2023-01-012023-09-300001788999us-gaap:BuildingAndBuildingImprovementsMember2022-12-310001788999xper:TwoThousandTwentyTwoEquityIncentivePlanMemberus-gaap:PerformanceSharesMember2023-01-012023-09-300001788999us-gaap:TrademarksAndTradeNamesMembersrt:MinimumMember2023-09-3000017889992021-12-310001788999xper:TiVoTradenameTrademarksMember2023-09-300001788999us-gaap:CommonStockMember2023-07-012023-09-300001788999us-gaap:RetainedEarningsMember2023-07-012023-09-3000017889992022-01-012022-09-300001788999us-gaap:TransferredOverTimeMember2023-01-012023-09-300001788999xper:CustomerRelationshipsLargeMemberxper:VewdSoftwareHoldingsLimitedMember2022-07-010001788999us-gaap:TradeAccountsReceivableMember2021-12-310001788999country:CN2023-07-012023-09-300001788999xper:RestrictedStockAwardsAndUnitsMember2022-07-012022-09-300001788999us-gaap:EmployeeStockMembersrt:MinimumMember2023-01-012023-09-300001788999xper:ConnectedCarMember2022-01-012022-09-300001788999us-gaap:CommonStockMember2022-09-300001788999srt:MinimumMemberus-gaap:NoncompeteAgreementsMember2022-12-310001788999us-gaap:NondesignatedMember2023-07-012023-09-300001788999us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-07-012023-09-300001788999us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-06-300001788999us-gaap:TransferredOverTimeMember2023-07-012023-09-300001788999us-gaap:TradeAccountsReceivableMember2022-06-300001788999srt:MaximumMemberus-gaap:NoncompeteAgreementsMember2023-09-300001788999us-gaap:CommonStockMember2022-07-012022-09-300001788999xper:VewdSoftwareHoldingsLimitedMemberxper:CustomerRelationshipsSmallMember2022-07-010001788999us-gaap:NoncontrollingInterestMember2023-06-300001788999us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001788999us-gaap:EmployeeStockMemberxper:AmendmentToTwoThousandAndTwentyTwoEmployeeStockPurchasePlanMember2023-09-270001788999us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001788999xper:AcquiredPatentsCoreTechnologyMember2023-09-300001788999country:JP2023-01-012023-09-300001788999us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-310001788999srt:MinimumMemberus-gaap:PerformanceSharesMember2023-01-012023-09-300001788999xper:OtherAsiaMember2023-01-012023-09-300001788999xper:NetParentCompanyInvestmentMember2021-12-310001788999xper:MediaPlatformMember2022-07-012022-09-300001788999us-gaap:TradeAccountsReceivableMember2022-01-012022-09-300001788999xper:TIVOMergerMemberxper:NonMarketableEquitySecuritiesMember2022-12-310001788999us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001788999xper:MobiTVMember2022-01-012022-09-300001788999us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001788999xper:AcquiredPatentsCoreTechnologyMember2022-12-310001788999us-gaap:EmployeeStockMember2022-07-012022-09-300001788999xper:CorporateAndSharedFunctionalEmployeesMember2022-01-012022-09-300001788999xper:OtherContractualArrangementsMember2023-01-012023-09-300001788999us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-07-012023-09-300001788999xper:PayTVMember2023-07-012023-09-3000017889992023-01-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMemberxper:EuropeAndMiddleEastMember2023-01-012023-09-300001788999xper:CostOfRevenueExcludingDepreciationAndAmortizationOfIntangibleAssetsMember2023-01-012023-09-300001788999us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembersrt:LatinAmericaMember2023-07-012023-09-300001788999country:CN2022-01-012022-09-300001788999us-gaap:EmployeeStockMember2023-07-012023-09-300001788999xper:EuropeAndMiddleEastMember2023-07-012023-09-300001788999srt:MinimumMemberxper:CustomerContractsAndRelatedRelationshipsMember2023-09-300001788999xper:OtherContractualArrangementsMembersrt:MaximumMember2023-09-300001788999us-gaap:NoncontrollingInterestMember2022-06-300001788999xper:TwoThousandTwentyTwoEquityIncentivePlanMembersrt:MaximumMemberxper:TimeBasedAwardsMember2023-01-012023-09-300001788999xper:OtherAsiaMember2023-07-012023-09-300001788999xper:MobiTVMember2022-07-012022-09-300001788999xper:EuropeAndMiddleEastMember2022-01-012022-09-300001788999xper:XperiIncMemberus-gaap:SpinoffMember2022-10-012022-10-010001788999us-gaap:RetainedEarningsMember2023-09-300001788999us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-30xbrli:purexper:Businessxper:Daysxbrli:sharesxper:Customeriso4217:USDxbrli:sharesxper:Segmentiso4217:USD

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-41486

 

XPERI INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

83-4470363

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

 

2190 Gold Street, San Jose, California

 

95002

(Address of Principal Executive Offices)

 

(Zip Code)

(408) 519-9100

(Registrant’s Telephone Number, Including Area Code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock (par value $0.001 per share)

XPER

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

The number of shares outstanding of the registrant’s common stock as of November 3, 2023 was 43,465,834.

 

 


 

XPERI INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS

 

 

 

 

Page

 

PART I

 

 

Item 1.

Financial Statements (unaudited)

 

 

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022

 

3

 

Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022

 

4

 

Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022

 

5

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022

 

6

 

Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2023 and 2022

 

7

 

Notes to Condensed Consolidated Financial Statements

 

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

37

Item 4.

Controls and Procedures

 

37

 

 

 

 

 

PART II

 

 

Item 1.

Legal Proceedings

 

38

Item 1A.

Risk Factors

 

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

Item 3.

Defaults Upon Senior Securities

 

39

Item 4.

Mine Safety Disclosures

 

39

Item 5.

Other Information

 

39

Item 6.

Exhibits

 

40

 

 

 

 

Signatures

 

 

41

 

2


 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

130,390

 

 

$

121,637

 

 

$

384,101

 

 

$

366,728

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue, excluding depreciation and amortization of intangible assets

 

 

26,413

 

 

 

31,403

 

 

 

85,061

 

 

 

85,689

 

Research and development

 

 

56,436

 

 

 

57,070

 

 

 

166,993

 

 

 

158,641

 

Selling, general and administrative

 

 

59,620

 

 

 

56,702

 

 

 

173,893

 

 

 

156,894

 

Depreciation expense

 

 

4,248

 

 

 

4,990

 

 

 

12,543

 

 

 

15,697

 

Amortization expense

 

 

14,724

 

 

 

16,613

 

 

 

44,349

 

 

 

46,166

 

Goodwill impairment

 

 

 

 

 

354,000

 

 

 

 

 

 

354,000

 

Impairment of long-lived assets

 

 

 

 

 

 

 

 

1,096

 

 

 

 

Total operating expenses

 

 

161,441

 

 

 

520,778

 

 

 

483,935

 

 

 

817,087

 

Operating loss

 

 

(31,051

)

 

 

(399,141

)

 

 

(99,834

)

 

 

(450,359

)

Other expense, net

 

 

(1,336

)

 

 

(527

)

 

 

(60

)

 

 

(301

)

Loss before taxes

 

 

(32,387

)

 

 

(399,668

)

 

 

(99,894

)

 

 

(450,660

)

Provision for income taxes

 

 

9,685

 

 

 

2,024

 

 

 

14,481

 

 

 

12,500

 

Net loss

 

 

(42,072

)

 

 

(401,692

)

 

 

(114,375

)

 

 

(463,160

)

Less: net loss attributable to noncontrolling interest

 

 

(646

)

 

 

(890

)

 

 

(2,554

)

 

 

(2,706

)

Net loss attributable to the Company

 

$

(41,426

)

 

$

(400,802

)

 

$

(111,821

)

 

$

(460,454

)

Net loss per share attributable to the Company - basic and diluted

 

$

(0.96

)

 

$

(9.54

)

 

$

(2.61

)

 

$

(10.96

)

Weighted-average number of shares used in net loss per share calculations - basic and diluted

 

 

43,316

 

 

 

42,024

 

 

 

42,774

 

 

 

42,024

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


 

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net loss

 

$

(42,072

)

 

$

(401,692

)

 

$

(114,375

)

 

$

(463,160

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

(46

)

 

 

(914

)

 

 

46

 

 

 

(4,363

)

Unrealized loss on cash flow hedges

 

 

(2,273

)

 

 

 

 

 

(1,420

)

 

 

 

Comprehensive loss

 

 

(44,391

)

 

 

(402,606

)

 

 

(115,749

)

 

 

(467,523

)

Less: comprehensive loss attributable to noncontrolling interest

 

 

(646

)

 

 

(890

)

 

 

(2,554

)

 

 

(2,706

)

Comprehensive loss attributable to the Company

 

$

(43,745

)

 

$

(401,716

)

 

$

(113,195

)

 

$

(464,817

)

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


 

XPERI INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)

 

 

 

September 30,
2023

 

 

December 31, 2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

131,530

 

 

$

160,127

 

Accounts receivable, net

 

 

64,171

 

 

 

64,712

 

Unbilled contracts receivable, net

 

 

61,148

 

 

 

65,251

 

Prepaid expenses and other current assets

 

 

38,946

 

 

 

42,174

 

Total current assets

 

 

295,795

 

 

 

332,264

 

Unbilled contracts receivable, noncurrent

 

 

21,926

 

 

 

4,289

 

Property and equipment, net

 

 

44,600

 

 

 

47,827

 

Operating lease right-of-use assets

 

 

43,969

 

 

 

52,901

 

Intangible assets, net

 

 

220,356

 

 

 

264,376

 

Deferred tax assets

 

 

2,465

 

 

 

2,096

 

Other noncurrent assets

 

 

35,122

 

 

 

33,158

 

Total assets

 

$

664,233

 

 

$

736,911

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

15,575

 

 

$

14,864

 

Accrued liabilities

 

 

109,924

 

 

 

110,014

 

Deferred revenue

 

 

25,979

 

 

 

25,363

 

Total current liabilities

 

 

151,478

 

 

 

150,241

 

Long-term debt

 

 

50,000

 

 

 

50,000

 

Deferred revenue, noncurrent

 

 

19,050

 

 

 

19,129

 

Operating lease liabilities, noncurrent

 

 

34,497

 

 

 

42,666

 

Deferred tax liabilities

 

 

12,246

 

 

 

12,899

 

Other noncurrent liabilities

 

 

10,507

 

 

 

12,990

 

Total liabilities

 

 

277,778

 

 

 

287,925

 

Commitments and contingencies (Note 14)

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Preferred stock: $0.001 par value; 6,000 shares authorized as of September 30, 2023 and December 31, 2022; no shares issued and outstanding as of September 30, 2023 and December 31, 2022

 

 

 

 

 

 

Common stock: $0.001 par value; 140,000 shares authorized as of September 30, 2023 and December 31, 2022; 43,387 and 42,066 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

43

 

 

 

42

 

Additional paid-in capital

 

 

1,189,289

 

 

 

1,136,330

 

Accumulated other comprehensive loss

 

 

(5,493

)

 

 

(4,119

)

Accumulated deficit

 

 

(780,656

)

 

 

(668,835

)

Total Company stockholders’ equity

 

 

403,183

 

 

 

463,418

 

Noncontrolling interest

 

 

(16,728

)

 

 

(14,432

)

Total equity

 

 

386,455

 

 

 

448,986

 

Total liabilities and equity

 

$

664,233

 

 

$

736,911

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


 

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(114,375

)

 

$

(463,160

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation of property and equipment

 

 

12,543

 

 

 

15,697

 

Amortization of intangible assets

 

 

44,349

 

 

 

46,166

 

Stock-based compensation expense

 

 

51,681

 

 

 

29,761

 

Goodwill impairment

 

 

 

 

 

354,000

 

Impairment of long-lived assets

 

 

1,096

 

 

 

 

Deferred income taxes

 

 

(1,022

)

 

 

(451

)

Other

 

 

(162

)

 

 

(146

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

188

 

 

 

18,990

 

Unbilled contracts receivable

 

 

(13,556

)

 

 

623

 

Prepaid expenses and other assets

 

 

1,264

 

 

 

(14,884

)

Accounts payable

 

 

87

 

 

 

10,504

 

Accrued and other liabilities

 

 

(3,229

)

 

 

(824

)

Deferred revenue

 

 

537

 

 

 

(7,609

)

Net cash used in operating activities

 

 

(20,599

)

 

 

(11,333

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(9,432

)

 

 

(10,514

)

Purchases of intangible assets

 

 

(149

)

 

 

(110

)

Net cash paid for acquisition

 

 

 

 

 

(50,473

)

Net cash used in investing activities

 

 

(9,581

)

 

 

(61,097

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from issuance of common stock under employee stock purchase plan

 

 

5,850

 

 

 

 

Withholding taxes related to net share settlement of equity awards

 

 

(4,313

)

 

 

 

Net proceeds from Former Parent capital contributions

 

 

 

 

 

83,235

 

Net transfers from Former Parent

 

 

 

 

 

52,802

 

Net cash provided by financing activities

 

 

1,537

 

 

 

136,037

 

Effect of exchange rate changes on cash and cash equivalents

 

 

46

 

 

 

(4,184

)

Net (decrease) increase in cash and cash equivalents

 

 

(28,597

)

 

 

59,423

 

Cash and cash equivalents at beginning of period

 

 

160,127

 

 

 

120,695

 

Cash and cash equivalents at end of period

 

$

131,530

 

 

$

180,118

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Interest paid

 

$

2,244

 

 

$

 

Income taxes paid, net of refunds

 

$

15,504

 

 

$

9,460

 

Debt issued in connection with acquisition

 

$

 

 

$

50,000

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6


 

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

(unaudited)

Three Months Ended September 30, 2023

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Noncontrolling

 

 

Total

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Interest

 

 

Equity

 

Balances at July 1, 2023

 

 

43,213

 

 

$

43

 

 

$

1,173,100

 

 

$

(3,174

)

 

$

(739,230

)

 

$

(16,329

)

 

$

414,410

 

Change in ownership interest of the Company

 

 

 

 

 

 

 

 

(247

)

 

 

 

 

 

 

 

 

247

 

 

 

 

Vesting of restricted stock units, net of tax withholding

 

 

174

 

 

 

 

 

 

(1,186

)

 

 

 

 

 

 

 

 

 

 

 

(1,186

)

Stock-based compensation

 

 

 

 

 

 

 

 

17,622

 

 

 

 

 

 

 

 

 

 

 

 

17,622

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(46

)

 

 

 

 

 

 

 

 

(46

)

Unrealized loss on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

(2,273

)

 

 

 

 

 

 

 

 

(2,273

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(41,426

)

 

 

(646

)

 

 

(42,072

)

Balances at September 30, 2023

 

 

43,387

 

 

$

43

 

 

$

1,189,289

 

 

$

(5,493

)

 

$

(780,656

)

 

$

(16,728

)

 

$

386,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2023

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Noncontrolling

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Interest

 

 

Total Equity

 

Balances at January 1, 2023

 

 

42,066

 

 

$

42

 

 

$

1,136,330

 

 

$

(4,119

)

 

$

(668,835

)

 

$

(14,432

)

 

$

448,986

 

Change in ownership interest of the Company

 

 

 

 

 

 

 

 

(258

)

 

 

 

 

 

 

 

 

258

 

 

 

 

Vesting of restricted stock units, net of tax withholding

 

 

677

 

 

 

 

 

 

(4,313

)

 

 

 

 

 

 

 

 

 

 

 

(4,313

)

Issuance of common stock under employee stock purchase plan

 

 

644

 

 

 

1

 

 

 

5,849

 

 

 

 

 

 

 

 

 

 

 

 

5,850

 

Stock-based compensation

 

 

 

 

 

 

 

 

51,681

 

 

 

 

 

 

 

 

 

 

 

 

51,681

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

46

 

 

 

 

 

 

 

 

 

46

 

Unrealized gain on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

(1,420

)

 

 

 

 

 

 

 

 

(1,420

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(111,821

)

 

 

(2,554

)

 

 

(114,375

)

Balances at September 30, 2023

 

 

43,387

 

 

$

43

 

 

$

1,189,289

 

 

$

(5,493

)

 

$

(780,656

)

 

$

(16,728

)

 

$

386,455

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

7


 

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

(unaudited)

Three Months Ended September 30, 2022

 

Common Stock

 

 

Additional
Paid-In

 

 

Net Investment
by Former

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Noncontrolling

 

 

Total

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Parent

 

 

Loss

 

 

Deficit

 

 

Interest

 

 

Equity

 

Balances at July 1, 2022

 

 

 

 

$

 

 

$

 

 

$

1,029,487

 

 

$

(4,125

)

 

$