Good day, everyone. Thank you for standing by. Welcome to Xperi Fourth Quarter and Full Year 2022 Earnings Conference Call. During today’s presentation, all participants 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 Mike Iburg, Xperi's Head of Investor Relations. Mike, please go ahead.

Good afternoon. And thank you for joining us as Xperi reports its fourth quarter and full year 2022 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 is an earnings presentation, which can be accessed along with this webcast on our Investor Relations website at investor.xperi.com. Before we begin, I would like to provide a few reminders. First, I would like to note that our full year 2022 financial results include results presented on a carve-out basis for the periods prior to Xperi's separation from Xperi Holding Corporation on October 1, 2022. Xperi Holding Corporation is now known as Adeia. Second, today's discussion contains forward-looking statements that are predictions, projections, and 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 discussed today, please refer to the risk factors and MD&A sections of our SEC filings, including our registration statement on Form 10. Please note that the company does not intend to update or alter these forward-looking statements to reflect the 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. Lastly, a replay of this conference call will be available on our website shortly after the conclusion of this call. I will now turn the call over to Xperi CEO, Jon Kirchner.

Thank you, Mike. And thank you everyone for joining us on our fourth quarter and full year 2022 earnings call. We're excited to announce strong financial results for our first quarter as an independent company. Revenue in the quarter was $136 million, an increase of 9% from the prior year. For the full year of 2022, total revenue was $502 million, representing a 3% increase from the prior year. Robert will provide a more detailed review of our financial performance in just a moment. We're making material progress in our key growth areas with incremental traction in media platform, IPTV, and connected car. Recent announcements, such as Amlogic integrating our TV OS and related technologies into their Smart TV chipsets and our latest design win for DTS AutoStage, which has been expanded to include TiVo’s video platform in the connected car infotainment experience, are prime examples of our increased momentum. As discussed at last fall’s Investor Day, we offer a wide range of solutions designed to create extraordinary entertainment experiences for end users as well as to improve safety, comfort, and convenience in the car. Four of our solutions are in markets that are expected to expand rapidly over the next several years, while other solutions are in markets that are more mature and relatively stable over the longer-term horizon. We refer to these areas as growth and core respectively. Our strategy is focused on driving revenue growth in four key areas: connected TV advertising, IPTV, in-vehicle infotainment, and in-cabin monitoring. With decades of experience, we have brought to market independent media platforms that are differentiated, unbiased, and tailored to provide a personalized consumer experience. We believe these attributes will allow us to capture share and drive revenue growth through a combination of license fees and monetization. The connected TV advertising market is expected to more than double over the next five years as advertisers shift their marketing investments toward the growing trend in video streaming. The IPTV market is also expected to more than double over the next five years as broadband into the home continues to increase. More than 80% of household broadband consumption is for video, a trend that is expected to continue. With over 70% of new vehicles projected to be capable of broadband connectivity by 2025, the in-vehicle infotainment market is expected to rapidly expand as more vehicles connect to the Internet and a wider variety of content is consumed. Lastly, the in-vehicle driver and occupant monitoring markets are expanding quickly as the industry and regulators aim to make the vehicle a safer place. Diving a little deeper into each of these markets. Our strategy in connected TV advertising is to work with Smart TV OEMs to bring TVs to market incorporating our TiVo OS. With our platform as the conduit for consuming content, we will be able to capture a portion of the ad revenue generated by consumers as they view ad-supported content over the life of the TV. As you may have heard, we made a strong impression at CES with live demos of the first Vestel TVs powered by TiVo. It was exciting to see these Smart TVs, which are expected to begin shipping later this year, running the TiVo platform in a production environment at full scale. The TV OS has several key advantages for TV OEMs. We offer a truly independent media platform with unbiased search and discovery that is not influenced by a particular content provider or advertiser. Our unique business model enables Smart TV OEMs to brand the experience, retain customer ownership, and participate in usage-based economics over the life of the product. These aren’t TiVo TVs; they are OEM branded TVs powered by TiVo. As smart TVs with TV OS began to ship, the path to monetization is relatively straightforward. By sharing a portion of the ad revenue with the TV manufacturers, we believe we can build stronger OEM relationships to drive higher volumes over time. We expect to have a footprint of at least 7 million TVs powered by TiVo within three years, which would yield an annualized revenue run rate of approximately $140 million while delivering meaningful margin expansion over time. Our IPTV offering sits within our Pay TV business and has seen rapid success. We offer a best-in-class cloud-based entertainment platform for video and broadband service providers. Our content-agnostic approach, where we bring all entertainment together to find, watch, and enjoy, provides consumers with a personalized engagement experience that is superior to alternative offerings. We continue to expand our IPTV subscriber base through new service providers across the Americas and ended the year with 1.2 million subscriber households. IPTV growth was strong in the fourth quarter, offsetting modest declines in the larger, more mature Pay TV markets, resulting in total Pay TV revenue being modestly higher year-over-year. Over the next three years, we expect IPTV revenue to grow from approximately $40 million to over $100 million. Within our connected car business, we have two significant growth opportunities, namely in-vehicle infotainment and in-cabin monitoring. We address these opportunities with our DTS AutoStage infotainment and DTS AutoSense solutions. The automotive industry is making extensive investments in connected car as Internet connectivity is turning the cabin into a personal entertainment space. We have longstanding relationships with automotive manufacturers who have adopted our HD Radio solution deployed in over 95 million vehicles. Now we are leveraging our media platform solutions incorporating metadata, our legendary search and discovery, and TiVo’s video capabilities to provide a vastly improved in-cabin entertainment experience. As anyone familiar with the automotive market understands, these contracts take a long time to win and are long-term in nature. As we look at our committed business and connected car at year-end, we have over $300 million of revenue to be recognized over the next several years. To put that in perspective, that's more than $300 million for a business that posted $84 million in revenue last year. Importantly, our pipeline of new automotive opportunities continues to grow. During the quarter, we were awarded our first design win incorporating video into our AutoStage in-car infotainment platform. This offering, which goes into production later this year, will bring TiVo’s video platform into the center console. Also in connected car, we continue to receive design wins for AutoSense, our in-car driver and occupant monitoring systems, most recently winning a significant program with a large Asian automotive OEM. Together, these wins continue to set the stage for meaningful long-term connected car revenue growth. We expect these four key growth areas to represent over 40% of our total revenue in three years, a significant increase from approximately 20% today. Our existing monetization business, which includes licensing our viewership data, advertising on our program guides, and licensing the recently acquired Vewd technologies, generates about $40 million of revenue annually. By launching smart TVs powered by TiVo and participating in the monetization of ad-supported content, we expect this business to quadruple to over $190 million annually in three years. Next, having exceeded 1.2 million paid subscriber households, our TiVo IPTV platform currently generates approximately $40 million of revenue annually, primarily from recurring subscriber fees. Over the next three years, we expect annual revenue to more than double to over $100 million due to subscriber growth and increased revenue per household. Our AutoStage and AutoSense platforms continue to win new contracts for future model years, and we expect accelerating revenue growth as these contracts go into production. Additionally, we plan to incorporate ad monetization into the AutoStage platform, which will create another opportunity for revenue growth downstream. As previously discussed, this is a long-term play where we expect revenue to grow from $4 million to approximately $40 million annually in three years, with more substantial revenue coming in the five to seven-year range. Altogether, we expect our key growth areas of connected car, monetization, and IPTV to grow from approximately $84 million to over $330 million in three years, contributing $246 million of high-margin net new revenue. Lastly, turning to Perceive, we expect first revenue to occur in 2023. Though there is some uncertainty around timing and amount, there is no perceived revenue included in our annual guidance. We continue to believe Perceive represents a significant option for value creation as machine learning use cases move to the Edge. For example, there's increasing awareness in the industry of the power of large machine learning models, such as large language models that are delivering impressive results. We continue to provide tools and software applications for prospective customers as they evaluate and scope features based on the implementation of large networks on their Edge devices. Notably, at CES, we demonstrated a large language model running on our platform, sparking significant customer interest. We believe that our approach is distinctive and represents a clear value proposition of running large data center-class networks at the Edge at lower power than anyone in the industry. Thus, we intend to continue to invest prudently as we evaluate how best to generate the highest return on our investment and navigate what we believe will be a significant move to the Edge over the longer run. With that, I'll turn the call over to Robert to discuss our financials.

Thanks, Jon. As Jon mentioned earlier, our fourth quarter earnings represent our first quarter as a fully independent company. And before I walk through the financials, I'd like to mention that all comparisons are against the same quarter in the prior year. Total revenue for the fourth quarter was $136 million, an increase of 9%. This increase was primarily driven by our media platform and consumer electronics businesses. Media platform, although only 14% of total revenue, was up 57%, driven primarily by monetization and the Vewd acquisition, which occurred last summer. Consumer electronics, at 20% of total revenue, was up 11%, driven by growth in mobile as we extend our audio and video enhancement technologies into more mobile and PC devices, as well as from incremental license fees from a large mobile customer. Similar to prior quarters, Pay TV represented approximately half of our total revenue and was essentially flat as strong growth in IPTV offset modest declines in our core Pay TV product lines, such as classic guides and consumer DVR hardware. Connected car represented 17% of total revenue and was up 4% due primarily to the progress we've made in AutoStage and AutoSense in addition to automotive head unit production that includes our audio solutions. For the full year of 2022, consumer electronics increased 29%, primarily driven by incremental license fees from a large mobile customer and by stronger mobile and PC penetration. Media platform increased 13% due to the Vewd acquisition and growth in monetization. Pay TV declined 5% as declines in the more mature classic guides business were mostly offset by strong growth in IPTV. Connected car declined 5%, primarily due to lower automobile production volumes that impacted HD Radio revenue. Our non-GAAP gross margin for the quarter was $99 million or 73%. Non-GAAP operating expenses for the quarter were $104 million and adjusted EBITDA was $3.6 million. Non-GAAP earnings per share was $0.08, favorably impacted by strong expense management and by a year-end tax trip that created an income tax benefit in the quarter. Moving to the balance sheet, the company ended the quarter with $160 million of cash and cash equivalents. As part of our year-end review of goodwill and fixed assets, we booked a non-cash charge of $251 million for goodwill impairment and an additional $8 million related to closing a redundant office building as we seek to optimize our facilities footprint. Looking forward, we expect to incur additional real estate-related charges as part of our business optimization goals. Our cash flow from operations in the quarter was a negative $17 million due to $5 million of one-time expenses associated with the business separation and changes in working capital mostly driven by an increase in unbilled receivables of approximately $11 million. In terms of our 2023 financial outlook, we are providing the following ranges and commentary. We expect full-year revenue to be in the range of $510 million to $540 million, in line with the gross estimate we provided at our Investor Day in September. We expect this growth to come primarily from our media platform and connected car businesses. In terms of quarterly cadence, we expect fiscal '23 revenue to follow a similar seasonal pattern to fiscal '22 with each quarter showing a comparable percentage increase from the prior year quarter. Full-year adjusted EBITDA margin is expected to be in the range of 6% to 10%. This range accounts for incremental investments in AutoStage, AutoSense, and TV OS due to accelerated business momentum and recent design wins that in the midpoint is slightly lower than the estimate we provided in September. We estimate cash taxes and non-GAAP tax for the year to be in the range of $20 million to $25 million. Note that our tax expense is affected by two recently implemented US tax law changes. First, we are required to capitalize certain R&D costs over five or more years, which has the impact of increasing our US taxable income. It is unclear whether this requirement will be repealed during the course of 2023. Second, we can no longer deduct withholding taxes incurred in various countries with which the US does not have a tax treaty. At the middle of our revenue and adjusted EBITDA guidance ranges, we expect operating cash flow to be approximately breakeven for the year. Basic share count is expected to average 43 million for the year, and fully diluted share count is expected to average approximately 49 million for the year. That concludes our prepared remarks. Let's now open the call to your questions.

Your first question comes from the line of Nick Zangler with Stephens.

Congrats on all the great news this quarter. I guess I'll start with this connected car win. Can you frame up what the TiVo OS looks like on a connected car? Does it look similar to the TiVo OS that's on a TV, just kind of reformatted to the car, or are there significant differences there? Also, does the OEM get to keep the branding like you do on the TV side? If you could share the software economics there, just like you do with the TVs? And then maybe just any early thoughts on the ARPU potential that you see there?

I think it's early stages. So Nick, I think what I'm going to be able to respond to here is to give you the bigger picture. We do expect the business opportunity to create near-term license fees on a subscribership basis as well as monetization over the longer run. From a design perspective, obviously, the automaker has a great deal of input on how they would like the video services to appear in the vehicle. It will not be identical to what you see in our living room. However, at the core, what's behind it, TiVo’s legendary search and recommendation, metadata usage, etc., all those elements are there. I think uniquely deployed, given that the car is not the living room, you’re going to see an increasing amount of content consumed in vehicles, particularly as people look at electric vehicles where longer stays while cars are being charged make front seat entertainment more relevant. We're super excited about the win. I think it shows the power of the platform in not only the living room, but in-car and on mobile, bringing together that entertainment experience that we've been working toward for a number of years. We'll have more to say about the economics of this long-term as we begin to do more business in the space.

Also on the Roku call the other day, TiVo got a shout out. Just given all the dynamics that are happening within the TV OEM industry, Roku now is building out their own branded TV, which effectively competes with their TV OEM partners. Curious what impact this has had on your engagement with potential TV OEM partners and their interest in utilizing the TiVo powered by TiVo option, which seems to be a bit more friendly to TV OEMs?

First and foremost, that announcement underscores the need for an independent media platform. We've had robust engagement prior to that announcement, but it has created further interest as people look to engage around independent platforms. Our model, our business model, sharing revenue with TV partners long-term, as well as our best-in-class interface and search really helps drive interest in what we're doing. We already power more than 30 million households today with video-based services, positioning us uniquely as a credible partner by TV OEMs. People are recognizing the independence of our model and see how it benefits them, allowing them to own the brand and customer while we share data and participate in the longtail of the economics.

Final question for me on the fundamentals this quarter. It was broad-based beat on the expense side, driving significant adjusted EBITDA upside relative to your prior expectations. What type of expense mitigation efforts took place in the quarter? Is there any push-out into next year potentially, or just thoughts on the spread and where we expected expenses to roll in and where they actually did?

Generally speaking, our expense management in the quarter is very good. We are making good progress toward optimizing the cost structure of the company, and I would expect that to continue into 2023. Our numbers supported that, which is actually a positive adjusted EBITDA result, reflecting our expense management and optimization efforts.

Your next question comes from Hamed Khorsand with BWS Financial.

Could you expand on the mobile customer that you generate revenue from? Is this related to the imaging revenue you talked about a couple of quarters ago? Is this recurring in nature? What’s the possibility of adding more mobile customers?

The mobile customer referred to on the call is related to settling a dispute with that customer and entering into a longer-term arrangement with them. We still see considerable opportunity for us in mobile through our CE products. So there’s a good growth outlook there.

Regarding the ad monetization, how are you building inventory availability? What kind of response are you getting from advertisers for your platform?

People are very interested in the insights we have into the audiences we currently serve across our various TV products. They’re interested in what we will bring to the table in conjunction with that regarding connected TV. We already have an established monetization platform and teams working on it today that could work directly with advertisers. In short, we’re ready to continue to scale that as we get more footprint in the connected TV space.

Related to connected car, you've been talking about many more models lately for AutoStage. Where do you stand on generating revenue from those models that you talked about in your press release? Is this a 2023 event or 2024?

You're going to see some vehicles come online in '23, more in '24, and even more again in '25. These deals involve engineering that has a front-end timeframe, but they begin to roll on some models and expand into a larger base over time. Our highlighted pipeline over the next couple of years exceeds $300 million, indicating our confidence in winning significant business.

What percentage of those models displace HD Radio and what percentage is brand new as an opportunity?

We do business with all the automotive brands sold in the United States. We’re not really displacing those opportunities. Rather, AutoStage acts as an add-on to HD Radio in the US, or it becomes new business altogether for those manufacturers shipping units into other geographies where HD Radio is not the standard. It’s a mix of adding value in the US and capturing new revenue in international markets.

Your next question is from the line of Matthew Galinko with The Maxim Group.

On Perceive, it sounds like there's still some volatility on how much and exactly when it starts in 2023. Is that just the result of work that has to happen internally or is that your customers’ own internal work leading to the uncertainty?

It's a little bit of both. The interest in larger models has caused some to reassess their capabilities and expand their ambitions, which starts to create a cycle of re-evaluation. Also, concerns over costs in the broader CE space have led people to rethink their strategies, resulting in some uncertainty. We remain highly confident in the technical differentiation of our platform and the ongoing strong interest.

With the increased engagement that's been discussed, does the pipeline of opportunities fall into the general consumer electronics market that you've previously been involved with or is there a different direction that might emerge as a stronger thrust of Perceive’s adoption?

Yes, certainly CE is where a lot of this is showing up. But we’re exploring various use cases in industrial, automotive, and more, which could lead to productive outcomes. The timing and specific paths forward will depend on how some overlapping factors play out in the coming quarters.

There are no further questions at this time. I will turn the call back over to the company for closing remarks.

Thanks, operator, and thanks everyone for joining today's call. We're excited about our growth prospects and the continuing momentum we see in our business. I’d like to thank our employees, customers, and partners for helping us achieve these strong results. We look forward to reviewing our Q1 results with you in early May, and I'm sure we'll see a few of you in between now and then. Thanks so much. Have a good day.

Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect.