Slide 1: Xperi Q2 2020 Investor Presentation
XPERI Q2 2020 INVESTOR PRESENTATION August 10, 2020
Slide 2: Safe Harbor
Safe Harbor This document contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Xperi
Slide 3: One Company, Two Businesses
One Company, Two Businesses Product IP Licensing Product business that delivers end-to-end Leading IP Licensing business with improved entertainment in the home and on-the-go visibility, customer diversification and scale Seamless end-to- end entertainment experience from 11,000+ patents and applica
Slide 4: The New Xperi
The New Xperi Delivering Innovative Technologies in Sight, Sound, and Beyond Headquartered in 2000+ employees 11,000+ patents and Listed on Nasdaq San Jose, CA worldwide applications XPER 4
Slide 5: Transformative Initiatives to Drive Shareholder Value
Transformative Initiatives to Drive Shareholder Value Integration Separation Revenue Synergies Separate Business Operations • Roadmap for TiVo Stream embedded • Spin off Product business from IP in TVs and integrated product solutions business in ~12 months Focus • Roadmap for connected car media Ar
Slide 6: Product Markets
Consumer Experience Product Markets Connected Car Pay-TV 6
Slide 7: Products Markets
Products Markets Consumer Experience Find/Watch Enjoy Monetize Understand • TiVo Stream • DTS Audio Solutions • Audience Viewership Data • Intelligence on • TiVo DVR • Imaging • Advertising the Edge • IMAX Enhanced • AVOD, vMVPD, SVOD, TiVo+ • Content ID, Search & Discovery Connected Car Pay-TV Find
Slide 8: Products Path to Drive Long-Term Growth
Products Path to Drive Long-Term Growth Consumer Experience Connected Car Pay-TV • Drive Stream footprint • Deliver fully immersive • New UX design wins • Monetization of media Connected Media Platform • IPTV conversions consumption & engagement • Deliver Occupancy and • IMAX Enhanced growth Driver
Slide 9: Consumer Experience Find, Watch, Enjoy
Consumer Experience Find, Watch, Enjoy Disruptive Platform for Monetization Transform home entertainment discovery and presentation Monetize TiVo Stream through integrated, intelligent user experience, audio, imaging, media consumption & and wireless solutions providing expanded channel, and larger
Slide 10: TiVo Stream Roadmap to Revenue Synergies
TiVo Stream Roadmap to Revenue Synergies 2020 2021 - 2022 2023 Footprint Conversion Engagement Footprint + Engagement Monetization $ $ $$ Phase 1 Phase 2 Phase 3 May 2020 Stream as an Stream as a Stream 4K Launch embedded application comprehensive Smart for Smart TVs TV platform 10
Slide 11: Connected Car Platform for Entertainment & Safety
Connected Car Platform for Entertainment & Safety Revolutionizing the in-cabin automotive experience through highly personalized, connected infotainment (information, safety, entertainment) solutions for the global automotive market Building an ecosystem that delivers an in-car entertainment experie
Slide 12: Connected Car Roadmap to Revenue Synergies
Connected Car Roadmap to Revenue Synergies Near-term Mid-term Long-term Expand Connected Radio Add preference engine Add video and additional services Platform to include metadata capabilities and advertising in in expanded connected MEDIA connected AUDIO platform, platform, expand platform reach Co
Slide 13: Pay-TV Platform for Service Providers
Pay-TV Platform for Service Providers Support the long tail of Pay-TV and reduce churn by developing solutions that help attract, retain and engage subscribers Delivering joy with easy access to live TV, Next-Gen Platform video on demand and streaming in one amazing experience Personalized Content D
Slide 14: IP Licensing
IP Licensing Media Semiconductor 14
Slide 15: Media and Semiconductor IP Licensing Platform
Media and Semiconductor IP Licensing Platform Long History of Developing Relevant IP, Meeting the Evolving Needs of Customers and End Markets Media Digital Video Recorder Video on Demand Over the Top Early Tech Digital Cable Multi-Screen Cloud/Apps 2000 2005 2010 2015 2020 Chip Scale Package (CSP) W
Slide 16: IP Extend Large and Profitable Platform
IP Extend Large and Profitable Platform IP Licensing Long-term Cash Flow Generation Focus Media Semiconductor Areas • License remaining North • Push beyond Moore’s Law Growth America Pay-TV operators with 3D integration technology Opportunities • Increase penetration in new in Image Sensors, RF, NAN
Slide 17: Consistent Baseline of Significant Media Revenue
Consistent Baseline of Significant Media Revenue Delivering ~$300M* Media Revenue Annually $350 $300 $318 $302 $317 $250 $302 $293 $285 $275 $281 $275 $200 $150 $100 $50 $0 in millions 2011 2012 2013 2014 2015 2016 2017 2018 2019 Multiple agreements with New or renewed Agreements with leading some o
Slide 18: IP Platform + Growth Opportunities
IP Platform + Growth Opportunities 25m+ 200% 11b Expanding Unlicensed NA Pay-TV Increase in weekly hours Annual unlicensed Patent Platform subscribers currently spent watching content memory units* the subject of ongoing outside of traditional TV litigation* over last 5 years* North America Pay-TV N
Slide 19: Financial Summary
19 Financial Summary XPERI.
Slide 20: Q2 Financial Highlights
Q2 Financial Highlights • Completed the merger of Xperi Corporation and TiVo Corporation on June 1, 2020, to form Xperi Holding Corporation • Billings for legacy Xperi of $93.4 million, above the high end of expectations • Reported GAAP quarterly revenue, including only one month of TiVo operations
Slide 21: 2H 2020 Outlook
2H 2020 Outlook Category GAAP Outlook Non-GAAP Outlook Revenue * $390M to $410M $390M to $410M COGS $72M to $75M $72M to $75M Operating Expenses ** $380M to $395M $230M to $245M Interest Expense $26M to $27M $26M to $27M Other Income ~ $2M ~ $2M Cash Tax (net of refunds) $20M to $22M $20M to $22M Ba
Slide 22: 2020 Guidance Bridge
2020 Guidance Bridge Billings + Revenue $1,050 - $1,110M Combined Adjusted Revenue ($70M) $901 - $921M Xperi Billings ($7M) Convert Xperi Purchase $400 - $420M Billings to Revenue ($72 - $112M) Accounting Impact COVID-19 Estimated Impact First Half $511M* + Second Half TiVo Revenue Guidance $650 - $
Slide 23: Strong Historical FCF Generation and Capital Return
Strong Historical FCF Generation and Capital Return Historical FCF Capital Allocation Capital Allocation Framework (in millions) (Cumulative 2017-2019) Phase 1: Balanced $166.2 $138.5 $131.8 42.8% 58.7 • Debt Paydown Xperi • Reinvest in Business 67.3% • Share Repurchases: $150M authorized repurchase
Slide 24: Appendix
Appendix XPERI.
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company’s earnings release contains non-GAAP financial measures adjusted for either one-time or ongoing non-cash acquired intangibles amorti
Slide 26: Revenue by Segment
Revenue by Segment XPERI HOLDING CORPORATION AND TIVO CORPORATION REVENUE BY SEGMENT (in thousands) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2020* 2019 2020* 2019 Xperi: Product segment $ 64,124 $ 61,431 $ 120,066 $ 105,999 IP Licensing segment 73,507 13,684 135,230 25,683 T
Slide 27: Adjusted Revenue Schedule
Adjusted Revenue Schedule XPERI HOLDING CORPORATION ADJUSTED REVENUE SCHEDULE (in thousands) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Xperi revenue (as reported) $ 137,631 * $ 75,115 $ 255,296 * $ 131,682 TiVo revenue 95,543 ** 176,172 255,405 ** 334,407
Slide 28: GAAP to Non-GAAP Reconciliation Table
GAAP to Non-GAAP Reconciliation Table XPERI HOLDING CORPORATION RECONCILIATION FOR GUIDANCE ON GAAP TO NON-GAAP OPERATING EXPENSE (in millions) (unaudited) Six Months Ended December 31, 2020 Low High GAAP operating expense $ 380.0 $ 395.0 Stock-based compensation -- R&D (12.0) (12.0) Stock-based com