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Xperi NYSE: XPER reported second-quarter 2026 revenue growth of 8% year over year to $114 million, supported by gains in its media platform and connected-car businesses. The company said advertising and related revenue increased more than 50%, while cost reductions contributed to improved profitability.

Chief Executive Officer Jon Kirchner said the quarter reflected execution on the company’s strategy to scale its connected-TV and automotive platforms and increase monetization of their audiences. Xperi reported $24 million of adjusted EBITDA, equal to 21% of revenue and up seven percentage points from a year earlier. Non-GAAP earnings per share were $0.28, more than double the prior-year result, while operating cash flow totaled $15 million.

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Media Platform Growth Led by Advertising Media Platform revenue rose 44% year over year to $18 million, driven primarily by advertising and related revenue. TiVo ONE monthly active users reached 6.3 million at the end of the quarter, representing approximately 70% year-over-year footprint growth.

The trailing 12-month average revenue per user for TiVo ONE was $6.70, slightly below the first-quarter level because user growth outpaced revenue growth, Kirchner said. However, the company continues to expect to exit 2026 with ARPU above $10, anticipating faster advertising and related revenue growth during the second half of the year.

Xperi said it ran homepage video campaigns in the United States and Europe for brands in entertainment, insurance, automotive and technology. It also expanded integrations with advertising partners Teads and Kargo for its homepage hero video inventory.

During the quarter, the company launched TiVo Channels, which adds free ad-supported local content in more than 20 countries. It also introduced a TiVo viewership and audience-insights data offering in the United Kingdom.

Because advertising and related revenue exceeded 10% of total revenue in the quarter, Xperi said it will begin separately reporting that revenue category and its associated cost of revenue on its income statement. Chief Financial Officer Robert Andersen said the category currently has an 8% negative gross margin because of a fixed-cost base, but management expects margins to turn positive in 2027 and eventually approach media-platform margins in the 60% range.

Connected-Car Revenue Benefits From Minimum Guarantees Connected Car revenue increased 60% year over year to $40 million, primarily due to two significant minimum-guarantee deals signed during the quarter for Xperi’s HD Radio platform. Andersen said the company expects additional minimum guarantees during the second half and expects automotive revenue to increase for the full year.

DTS AutoStage’s cumulative vehicle shipments exceeded 17 million across 13 automotive brands at quarter-end, up 42% from a year earlier. BYD became the 14th automotive brand to join the AutoStage program, committing to deploy Xperi’s audio and video solution across its export-model portfolio.

Xperi also expanded DTS AutoStage video powered by TiVo to 100 countries across major original equipment manufacturers, including BMW, Mercedes-Benz and Audi. Kirchner said the company sees infotainment as an ongoing differentiator for automakers despite volatility in broader vehicle demand.

The company began monetizing automotive data through its DTS AutoStage Broadcaster Portal. Cumulus, a U.S. radio broadcaster and operator of AM/FM stations, became the first licensed customer for the product, which provides listener-behavior insights based on aggregated in-car listening data. Kirchner said the portal is sold through subscription licenses that vary based on station count and geographic coverage, and that Xperi has a pipeline of additional broadcaster interest.

Pay-TV Decline Offset Partly by IPTV Expansion Pay-TV revenue declined 11% to $45 million, reflecting a decrease in core pay-TV revenue that was partly offset by IPTV growth. IPTV revenue rose 10% to $26 million, while global IPTV subscriber households reached 3.4 million, up 13% year over year.

Xperi said it signed three new operators for TiVo managed-service IPTV and completed several renewals for IPTV and discovery offerings. It also partnered with NCTC on programmatic dynamic ad insertion, with Summit Broadband, EPB and Buckeye adopting TiVo as their platform.

Andersen said the legacy pay-TV business continues to decline, including from Xperi’s exit from consumer-facing hardware and associated subscriptions. Management expects IPTV growth to balance declines in the legacy business sometime between mid-2027 and mid-2028.

Consumer electronics revenue was $12 million, down 35% year over year. Andersen attributed the decline to minimum-guarantee arrangements for Kodak and audio solutions that had been recorded in the prior year. Xperi said it renewed multiyear DTS agreements with brands including Sony, Yamaha, Pioneer, Insignia, MSI and Realtek.

Outlook Maintained With Capital-Spending Revision Xperi maintained its annual financial outlook but raised its capital-expenditure forecast to approximately $25 million from a prior range of $15 million to $20 million. Andersen said the increase reflects persistent memory-market issues that have led customers to request software modifications to reduce memory requirements, as well as higher memory-related costs for capital equipment.

The company lowered its stock-based compensation forecast to approximately $29 million from about $31 million, citing workforce reductions over the past year. Non-GAAP operating expenses declined 6% year over year, while GAAP operating expenses excluding cost of revenue declined 10%.

Xperi ended the quarter with $91 million in cash and cash equivalents, up $20 million from the prior quarter. Free cash flow was $8 million, compared with a $3 million improvement from the prior-year quarter. The company also received the final $12 million payment tied to its sale of Perceive to Amazon.

About Xperi (NYSE:XPER)Xperi Inc NYSE: XPER is a global technology company that develops and licenses audio, imaging and semiconductor packaging solutions. The company was formed in 2016 through the spin-off of Tessera Technologies' product divisions and expanded its product portfolio in 2019 with the acquisition of TiVo Corporation. Headquartered in San Jose, California, Xperi's technologies underpin a range of consumer electronics, automotive, mobile and broadcast products around the world.

In its technology licensing segment, Xperi offers a broad portfolio of semiconductor packaging and interconnect solutions designed to improve performance and energy efficiency in chips and devices.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Xperi (XPER - Free Report) came out with quarterly earnings of $0.28 per share, beating the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.11 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +33.33%. A quarter ago, it was expected that this media software company would post earnings of $0.2 per share when it actually produced earnings of $0.23, delivering a surprise of +15%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Xperi, which belongs to the Zacks Technology Services industry, posted revenues of $114.49 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.89%. This compares to year-ago revenues of $105.93 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Xperi shares have added about 35.7% since the beginning of the year versus the S&P 500's gain of 13%.

What's Next for Xperi?While Xperi has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Xperi was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.21 on $114.47 million in revenues for the coming quarter and $0.85 on $458.7 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Red Cat Holdings, Inc. (RCAT - Free Report) , is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6.

This company is expected to post quarterly loss of $0.21 per share in its upcoming report, which represents a year-over-year change of -50%. The consensus EPS estimate for the quarter has been revised 4.4% lower over the last 30 days to the current level.

Red Cat Holdings, Inc.'s revenues are expected to be $22.31 million, up 592.7% from the year-ago quarter.