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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 June 30, 2025

☐ 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 July 28, 2025 was 46,260,160.

XPERI INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

TABLE OF CONTENTS


		Page
	Note About Forward-Looking Statements	3

	PART I
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024	5
	Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	6
	Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2025 and 2024	7
	Condensed Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2025 and 2024	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41

	PART II
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	45

Signatures		46

Note About Forward-Looking Statements

This quarterly report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements, which are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “could,” “would,” “may,” “will,” “intends,” “potentially,” “targets” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Quarterly Report. The identification of certain statements as “forward-looking” is not intended to mean that other statements not specifically identified are not forward-looking. All statements other than statements about historical facts are statements that could be deemed forward-looking statements, including, but not limited to, statements that relate to our future revenue, product development, demand, acceptance and market share, growth rate, competitiveness, gross margins, costs of research, development and other related costs, expenditures, tax expenses, cash flows, our management’s plans and objectives for our current and future operations, the levels of customer spending or research and development activities, disaggregation of revenue, general economic conditions, risks related to new, increased, reciprocal or retaliatory tariffs, interest rate risks, the impact of any acquisitions or divestitures on our financial condition and results of operations, our repurchase program, promissory note and notes receivable, the expected net proceeds, and use thereof, from our Perceive asset sale transaction, impacts of tax reform, capital expenditure plans, and the sufficiency of financial resources to support future operations and capital expenditures.

Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks, uncertainties, and changes in condition, significance, value and effect, including those discussed under the heading “Risk Factors” in our Form 10-K (as defined below) and other documents we file from time to time with the U.S. Securities and Exchange Commission (“SEC”), such as our quarterly reports on Form 10-Q and our current reports on Form 8-K. Such risks, uncertainties and changes in condition, significance, value and effect could cause our actual results to differ materially from those expressed herein and in ways not readily foreseeable. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report and are based on information currently and reasonably known to us. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report, other than as required by law. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

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 June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue	$	105,933		$	119,591		$	219,966		$	238,435
Operating expenses:
Cost of revenue, excluding depreciation and amortization of intangible assets		33,549			28,953			63,148			58,709
Research and development		29,783			45,123			69,332			95,562
Selling, general and administrative		41,142			53,102			89,840			109,455
Depreciation expense		3,448			3,278			6,353			6,862
Amortization expense		9,144			11,042			18,866			22,081
Total operating expenses		117,066			141,498			247,539			292,669
Operating loss		(11,133	)		(21,907	)		(27,573	)		(54,234	)
Interest and other income, net		1,747			1,290			4,042			2,332
Interest expense - debt		(759	)		(748	)		(1,491	)		(1,496	)
Gain on divestiture		—			—			—			22,934
Loss before taxes		(10,145	)		(21,365	)		(25,022	)		(30,464	)
Provision for income taxes		4,636			9,266			8,125			13,538
Net loss		(14,781	)		(30,631	)		(33,147	)		(44,002	)
Less: net loss attributable to noncontrolling interest		—			(332	)		—			(583	)
Net loss attributable to the Company	$	(14,781	)	$	(30,299	)	$	(33,147	)	$	(43,419	)
Net loss per share attributable to the Company - basic and diluted	$	(0.32	)	$	(0.67	)	$	(0.73	)	$	(0.97	)
Weighted-average number of shares used in computing net loss per share attributable to the Company - basic and diluted		45,846			45,331			45,313			44,926

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

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Net loss	$	(14,781	)	$	(30,631	)	$	(33,147	)	$	(44,002	)
Other comprehensive income (losses):
Reclassification of foreign currency translation adjustments into net loss upon liquidation of foreign subsidiaries		11			—			45			—
Foreign currency translation adjustment		—			59			—			(325	)
Unrealized gain (loss) on cash flow hedges		2,295			(396	)		4,453			(1,187	)
Comprehensive loss		(12,475	)		(30,968	)		(28,649	)		(45,514	)
Less: comprehensive loss attributable to noncontrolling interest		—			(332	)		—			(583	)
Comprehensive loss attributable to the Company	$	(12,475	)	$	(30,636	)	$	(28,649	)	$	(44,931	)

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

XPERI INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)


	June 30, 2025			December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	95,148		$	130,564
Accounts receivable, net		59,787			58,745
Unbilled contracts receivable, net		81,325			83,075
Prepaid expenses and other current assets		35,756			32,488
Deferred consideration from divestiture		11,645			—
Total current assets		283,661			304,872
Note receivable, noncurrent		30,857			29,702
Deferred consideration from divestiture, noncurrent		7,384			18,217
Unbilled contracts receivable, noncurrent		51,568			45,396
Property and equipment, net		46,927			44,473
Operating lease right-of-use assets		32,190			30,082
Intangible assets, net		144,855			163,714
Deferred tax assets		7,734			7,228
Other noncurrent assets		24,044			24,076
Total assets	$	629,220		$	667,760
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	14,952		$	16,979
Accrued liabilities		78,158			94,420
Deferred revenue		20,315			23,950
Short-term debt		—			50,000
Total current liabilities		113,425			185,349
Long-term debt		40,000			—
Deferred revenue, noncurrent		17,783			20,932
Operating lease liabilities, noncurrent		24,256			19,932
Deferred tax liabilities		1,491			1,491
Other noncurrent liabilities		12,438			10,979
Total liabilities		209,393			238,683
Commitments and contingencies (Note 13)
Equity:
Preferred stock: $0.001 par value; 6,000 shares authorized as of June 30, 2025 and December 31, 2024; no shares issued and outstanding as of June 30, 2025 and December 31, 2024		—			—
Common stock: $0.001 par value; 140,000 shares authorized as of June 30, 2025 and December 31, 2024; 46,221 and 44,328 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively		46			44
Additional paid-in capital		1,293,958			1,274,561
Accumulated other comprehensive loss		(1,586	)		(6,084	)
Accumulated deficit		(872,591	)		(839,444	)
Total equity		419,827			429,077
Total liabilities and equity	$	629,220		$	667,760

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

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(33,147	)	$	(44,002	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		22,429			30,060
Amortization of intangible assets		18,866			22,081
Depreciation of property and equipment		6,353			6,862
Accrued interest income from note receivable		(1,155	)		(895	)
Accretion of discount from deferred consideration from divestitures		(812	)		(414	)
Gain from divestiture		—			(22,934	)
Deferred income taxes		(506	)		163
Other		1,955			(692	)
Changes in operating assets and liabilities:
Accounts receivable		(1,449	)		(2,903	)
Unbilled contracts receivable		(4,422	)		(22,027	)
Prepaid expenses and other assets		461			4,909
Accounts payable		(1,997	)		(5,360	)
Accrued and other liabilities		(11,943	)		(19,404	)
Deferred revenue		(6,784	)		2,635
Net cash used in operating activities		(12,151	)		(51,921	)
Cash flows from investing activities:
Purchases of property and equipment		(1,627	)		(2,307	)
Capitalized internal-use software		(7,352	)		(5,825	)
Purchases of intangible assets		(7	)		(84	)
Net cash used in divestiture		—			(227	)
Net cash used in investing activities		(8,986	)		(8,443	)
Cash flows from financing activities:
Repayment of short-term debt		(50,000	)		—
Withholding taxes related to net share settlement of equity awards		(6,345	)		(5,929	)
Payment of debt issuance costs		(1,249	)		—
Proceeds from long-term debt		40,000			—
Proceeds from issuance of common stock under employee stock purchase plan		3,315			4,328
Net cash used in financing activities		(14,279	)		(1,601	)
Effect of exchange rate changes on cash and cash equivalents		—			12
Net decrease in cash and cash equivalents		(35,416	)		(61,953	)
Cash and cash equivalents at beginning of period (1)		130,564			154,434
Cash and cash equivalents at end of period	$	95,148		$	92,481
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$	4,225		$	9,204
Interest paid	$	1,131		$	1,504

(1)

Included $12.3 million of cash and cash equivalents classified as held for sale at December 31, 2023.


	Six Months Ended June 30,
	2025		2024
Supplemental disclosure of noncash investing and financing activities:
Costs capitalized for internal-use software included in accrued liabilities	$	438	$	743
Property and equipment included in accounts payable	$	486	$	171
Note receivable in exchange for consideration from divestiture	$	—	$	27,676
Deferred consideration from divestiture	$	—	$	5,854

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

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

(unaudited)


Three Months Ended June 30, 2025	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total
	Shares		Amount		Capital			Loss			Deficit			Equity
Balances at April 1, 2025		45,519	$	45	$	1,280,559		$	(3,892	)	$	(857,810	)	$	418,902
Vesting of restricted stock units, net of tax withholding		201		—		(242	)		—			—			(242	)
Issuance of common stock under employee stock purchase plan		501		1		3,314			—			—			3,315
Stock-based compensation		—		—		10,327			—			—			10,327
Reclassification of foreign currency translation adjustments into net loss upon liquidation of foreign subsidiaries		—		—		—			11			—			11
Unrealized gain on cash flow hedges		—		—		—			2,295			—			2,295
Net loss		—		—		—			—			(14,781	)		(14,781	)
Balances at June 30, 2025		46,221	$	46	$	1,293,958		$	(1,586	)	$	(872,591	)	$	419,827


Six Months Ended June 30, 2025	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total
	Shares		Amount		Capital			Loss			Deficit			Equity
Balances at January 1, 2025		44,328	$	44	$	1,274,561		$	(6,084	)	$	(839,444	)	$	429,077
Vesting of restricted stock units, net of tax withholding		1,392		1		(6,346	)		—			—			(6,345	)
Issuance of common stock under employee stock purchase plan		501		1		3,314			—			—			3,315
Stock-based compensation		—		—		22,429			—			—			22,429
Reclassification of foreign currency translation adjustments into net loss upon liquidation of foreign subsidiaries		—		—		—			45			—			45
Unrealized gain on cash flow hedges		—		—		—			4,453			—			4,453
Net loss		—		—		—			—			(33,147	)		(33,147	)
Balances at June 30, 2025		46,221	$	46	$	1,293,958		$	(1,586	)	$	(872,591	)	$	419,827

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

XPERI INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

(unaudited)


Three Months Ended June 30, 2024	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Noncontrolling			Total
	Shares		Amount		Capital			Loss			Deficit			Interest			Equity
Balances at April 1, 2024		45,031	$	45	$	1,221,709		$	(4,040	)	$	(818,568	)	$	(17,389	)	$	381,757
Change in ownership interest of the Company		—		—		932			—			—			(932	)		—
Vesting of restricted stock units, net of tax withholding		137		—		(340	)		—			—			—			(340	)
Issuance of common stock under employee stock purchase plan		578		1		4,327			—			—			—			4,328
Stock-based compensation		—		—		15,303			—			—			—			15,303
Foreign currency translation adjustment		—		—		—			59			—			—			59
Unrealized loss on cash flow hedges		—		—		—			(396	)		—			—			(396	)
Net loss		—		—		—			—			(30,299	)		(332	)		(30,631	)
Balances at June 30, 2024		45,746	$	46	$	1,241,931		$	(4,377	)	$	(848,867	)	$	(18,653	)	$	370,080


Six Months Ended June 30, 2024	Common Stock				Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Noncontrolling			Total
	Shares		Amount		Capital			Loss			Deficit			Interest			Equity
Balances at January 1, 2024		44,211	$	44	$	1,212,501		$	(2,865	)	$	(805,448	)	$	(17,097	)	$	387,135
Change in ownership interest of the Company		—		—		973			—			—			(973	)		—
Vesting of restricted stock units, net of tax withholding		957		1		(5,930	)		—			—			—			(5,929	)
Issuance of common stock under employee stock purchase plan		578		1		4,327			—			—			—			4,328
Stock-based compensation		—		—		30,060			—			—			—			30,060
Foreign currency translation adjustment		—		—		—			(325	)		—			—			(325	)
Unrealized loss on cash flow hedges		—		—		—			(1,187	)		—			—			(1,187	)
Net loss		—		—		—			—			(43,419	)		(583	)		(44,002	)
Balances at June 30, 2024		45,746	$	46	$	1,241,931		$	(4,377	)	$	(848,867	)	$	(18,653	)	$	370,080

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

XPERI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Xperi Inc. (“Xperi” or the “Company”) is a leading consumer and entertainment technology company. The Company creates extraordinary experiences at home and on the go for millions of consumers around the world, enabling audiences to connect with content in a way that is more intelligent, immersive, and personal. Powering smart devices, connected cars, entertainment experiences and more, the Company brings together ecosystems designed to reach highly-engaged consumers, allowing it and its ecosystem partners to uncover significant new business opportunities, now and in the future. The Company’s technologies are integrated into consumer devices and a variety of media platforms worldwide, driving increased value for its partners, customers, and consumers. The Company operates in one reportable business segment and groups its revenue into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The Company’s financial statements were prepared on a consolidated basis and include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

For reporting periods in fiscal year 2024 and prior, the Company owned a controlling financial interest of its former subsidiary, Perceive Corporation (“Perceive”, later known as Xperi Pylon Corporation). In December 2024, Perceive was dissolved after all of its remaining assets and liabilities were distributed to the Company.

Unaudited Interim Financial Statements

The accompanying unaudited interim condensed consolidated financial statements are presented in accordance with the applicable rules and regulations of the SEC for interim financial information. The amounts as of December 31, 2024 have been derived from the Company’s annual audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 27, 2025 (the “Form 10-K”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, which consist of normal recurring adjustments, necessary to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Form 10-K.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025 or any future period and the Company makes no representations related thereto.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging, and subjective judgment include the estimation of licensees’ quarterly royalties prior to receiving the royalty reports, the determination of stand-alone selling price and the transaction price in an arrangement with multiple performance obligations, the fair value of note receivable and deferred consideration in connection with the AutoSense Divestiture, the assessment of useful lives and recoverability of other intangible assets and long-lived assets, recognition and measurement of current and deferred income tax assets and liabilities, the assessment of unrecognized tax benefits, and valuation of performance-based awards with a market condition. Actual results experienced by the Company may differ from management’s estimates.

Concentration of Credit and Other Risks

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, unbilled contracts receivable, a note receivable and deferred consideration from

divestiture. The Company maintains cash and cash equivalents with large financial institutions, and at times, the deposits may exceed the federally insured limits. As part of its risk management processes, the Company performs periodic evaluations of the relative credit standing of these financial institutions. The Company has not sustained material credit losses from instruments held at these financial institutions. In addition, the Company has cash and cash equivalents held in international bank accounts that are denominated in various foreign currencies and has established risk management strategies designed to minimize the impact of certain currency exchange rate fluctuations.

The Company believes that any concentration of credit risk in its accounts receivable and unbilled contracts receivable are substantially mitigated by its evaluation processes and the high level of credit worthiness of its customers. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral.

For the three and six months ended June 30, 2025 and 2024, no customer accounted for 10% or more of total revenue. As of June 30, 2025, no customer represented 10% or more of the Company’s net balance of accounts receivable. Additionally, one customer exceeded 10% of the Company’s net balance of current and noncurrent unbilled contracts receivable. As of December 31, 2024, no customer represented 10% or more of the Company’s net balance of accounts receivable. Additionally, one customer exceeded 10% of the Company’s net balance of current and noncurrent unbilled contracts receivable.

As part of the consideration for divesting its AutoSense in-cabin safety business and related imaging solutions (the “AutoSense Divestiture”), the Company received a note receivable and deferred consideration from Tobii AB (“Tobii”). Both of these instruments are exposed to credit risk arising from default on repayment from Tobii. The credit risk associated with the note receivable is mitigated by establishing a floating lien and security interest in certain of Tobii’s assets, rights, and properties, whereas the deferred consideration is not secured by any collateral. The Company utilizes valuation methodologies such as internally generated cash flow projections on the principal and interest of each instrument, along with the review of certain other data points, to determine the likelihood that the note receivable or deferred consideration will be repaid. Further, the Company assesses each instrument for credit losses and provides a reserve when full payment on the instruments may not occur as expected, in which case the reserve reflects the excess of the amortized cost basis over the results of the cash flow projections. The Company currently expects Tobii to make full payment on both instruments in accordance with the underlying agreement. Accordingly, no allowance for credit losses was recorded as of June 30, 2025.

Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. This guidance is effective on a prospective or retrospective basis for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this guidance on the disclosures within its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. The standard will become effective for the Company’s 2027 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date or retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures within its consolidated financial statements.

NOTE 2 – REVENUE

Revenue Recognition

General

Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, which may include various combinations of goods and services which are generally capable of being distinct and accounted for as separate performance

obligations. Revenue is recognized net of sales taxes collected from customers which are subsequently remitted to governmental authorities.

Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the individual performance obligations are separately accounted for if they are distinct. In an arrangement with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative standalone selling price (“SSP”) basis. The determination of SSP considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. When observable prices are not available, SSP for separate performance obligations is generally based on the cost-plus-margin approach, considering overall pricing objectives.

When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of technology or when a license of technology is the predominant item to which the variable consideration relates, revenue is recognized at the later of when the subsequent sale or usage occurs or the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied or partially satisfied.

Description of Revenue-Generating Activities

The Company derives the majority of its revenue from licensing its technologies and solutions to customers within the Pay-TV, Consumer Electronics, Connected Car and Media Platform product categories. Refer to Part I, Item 1 of the Form 10-K for detailed information regarding these product categories.

Pay-TV

Customers within the Pay-TV category are primarily multi-channel video service providers, consumer electronics (“CE”) manufacturers, and end consumers. Revenue in this category is primarily derived from licensing the Company’s Pay-TV solutions, including Electronic Program Guides, TiVo video-over-broadband (“IPTV”) Solutions, Personalized Content Discovery and enriched Metadata.

For these solutions, the Company provides on-going media or data delivery, either via on-premise licensed software, hosting or access to its platform. The Company generally receives fees on a per-subscriber per-month basis or as a monthly fee, and revenue is recognized during the month in which the solutions are provided to the customer. For most of the on-premise licensed software arrangements, substantially all functionality is obtained through the Company’s frequent updating of the technology, data and content. In these instances, the Company typically has a single performance obligation related to these ongoing activities in the underlying arrangement, and revenue is generally recognized over the period the solution is provided. In the case of certain fixed fee on-premise licensed software arrangements, revenue is recognized immediately upon the delivery of the licensed technology. Hosted solutions and access to our platform is considered a single performance obligation with revenue being recognized over the period the solution is provided.

Consumer Electronics

The Company licenses its audio technologies to CE manufacturers or their supply chain partners.

The Company generally recognizes royalty revenue from licenses based on units shipped or manufactured. Revenue is recognized in the period in which the customer’s sales or production are estimated to have occurred. This may result in an adjustment to revenue when actual sales or production are subsequently reported by the customer, generally in the month or quarter following sales or production. Estimating customers’ quarterly royalties prior to receiving the royalty reports requires the Company to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities shipped or manufactured by customers, which could have a material impact on the amount of revenue it reports on a quarterly basis.

Certain customers enter into fixed fee or minimum guarantee agreements, whereby customers pay a fixed fee for the right to incorporate the Company’s technology in the customer’s products over the license term. In arrangements with a minimum guarantee, the fixed fee component corresponds to a minimum number of units or dollars that the customer must produce or pay, with additional per-unit fees for any units or dollars exceeding the minimum. The Company generally recognizes the full fixed fee as revenue at the beginning of the license term when the customer has the right to use the technology and begins to benefit from the license. If applicable, revenue is recognized net of the effect of any significant financing components calculated using customer-specific, risk-adjusted lending rates, with the related interest income being recognized over time on an effective rate basis. For minimum guarantee agreements where the customer exceeds the minimum, the Company recognizes

revenue relating to any additional per-unit fees in the periods it estimates the customer will exceed the minimum and adjusts the revenue based on actual usage once that is reported by the customer.

Connected Car

The Company licenses its digital radio solutions, automotive infotainment and related offerings to automotive manufacturers or their supply chain partners.

The Company generally recognizes royalty revenue from these licenses based on units shipped or manufactured, similar to the revenue recognition described above in “Consumer Electronics”. Certain customers may enter into fixed fee or minimum guarantee agreements, also similar to the revenue recognition described above in “Consumer Electronics.” Automotive infotainment and related revenue is generally recognized over time as the customer obtains access to the solutions and underlying data.

Media Platform

The Company generates revenue from advertising, TV viewership data, metadata for ad measurement and programming analytics, and licensing of the core middleware solutions.

Advertising revenue is generally recognized when the related advertisement is provided. TV viewership data revenue is generally recognized over time as the customer obtains the underlying data. Metadata for ad measurement and programming analytics is generally recognized over time as the customer obtains the scheduled data. License revenue for the core middleware solutions is generally recognized either on a per-unit royalty or a minimum guarantee or fixed fee basis, similar to “Consumer Electronics” described in the section above.

Hardware Products, Services and Settlements/Recoveries

The Company sells hardware products, primarily to end consumers, within the Pay-TV and Consumer Electronics product categories. Hardware product revenue is generally recognized when the promised product is delivered.

The Company also generates non-recurring engineering (“NRE”) revenue within all of its product categories. The Company recognizes NRE revenue as progress is made toward completion, generally using an input method based on the ratio of costs incurred to date to total estimated costs of the project.

Revenue from each of advertising, NRE services, and hardware products was less than 10% of total revenue for all periods presented.

The Company actively monitors and enforces its technology licenses, including seeking appropriate compensation from customers that have under-reported royalties owed under a license agreement and from third parties that utilize the Company’s technologies without a license. As a result of these activities, the Company may, from time to time, recognize revenue from periodic compliance audits of licensees for underreporting royalties incurred in prior periods, or from settlements of license disputes. These settlements and recoveries may cause revenue to be higher than expected during a particular reporting period and such settlements and recoveries may not occur in subsequent periods. The Company recognizes revenue from settlements and recoveries when a binding agreement has been executed or a revised royalty report has been received and the Company concludes collection is probable.

Disaggregation of Revenue

The Company’s revenue that is recognized over time consists primarily of per unit royalties, per-subscriber per-month or monthly license fees, single performance obligations satisfied over time, and NRE services. Revenue that is recognized at a point in time consists primarily of fixed fee or minimum guarantee licensing contracts, hardware products, advertising and settlements/recoveries.

The following table summarizes revenue by timing of recognition (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Recognized over time	$	80,971	$	87,173	$	160,037	$	183,855
Recognized at a point in time		24,962		32,418		59,929		54,580
Total revenue	$	105,933	$	119,591	$	219,966	$	238,435

The following table summarizes revenue by product category (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Pay-TV	$	49,937	$	60,752	$	99,801	$	117,558
Consumer Electronics		18,763		17,164		41,561		43,292
Connected Car		25,105		31,423		58,391		55,771
Media Platform		12,128		10,252		20,213		21,814
Total revenue	$	105,933	$	119,591	$	219,966	$	238,435

The following table summarizes revenue by geographic location (in thousands):


	Three Months Ended June 30,
	2025					2024
	Amount		Percentage of Revenue			Amount		Percentage of Revenue
U.S. and Canada (1)	$	60,389		57	%	$	60,116		50	%
Asia Pacific		31,660		30			36,663		31
Europe, Middle East and Africa		8,119		8			9,467		8
Other		5,765		5			13,345		11
Total revenue	$	105,933		100	%	$	119,591		100	%


	Six Months Ended June 30,
	2025					2024
	Amount		Percentage of Revenue			Amount		Percentage of Revenue
U.S. and Canada (1)	$	110,100		50	%	$	125,227		52	%
Asia Pacific		78,604		36			69,791		29
Europe, Middle East and Africa		18,198		8			22,942		10
Other		13,064		6			20,475		9
Total revenue	$	219,966		100	%	$	238,435		100	%

(1) For the three months ended June 30, 2025 and 2024, the Company recognized $55.8 million of revenue from the U.S., which represented 53% and 47% of total revenue for the respective periods. For the six months ended June 30, 2025 and 2024, revenue from the U.S. was $101.2 million and $115.6 million, or 46% and 48% of total revenue, for the respective periods.

A significant portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., principally in Asia Pacific and Europe, Middle East and Africa. Included within Asia Pacific, Japan, China, and South Korea each contributed a significant amount of revenue, as shown in the following table (in thousands):


	Three Months Ended June 30,
	2025					2024
	Amount		Percentage of Revenue			Amount		Percentage of Revenue
Japan	$	12,773		12	%	$	13,873		11	%
China	$	11,167		11	%	$	3,545		3	%
South Korea	$	6,454		6	%	$	16,653		14	%


	Six Months Ended June 30,
	2025					2024
	Amount		Percentage of Revenue			Amount		Percentage of Revenue
Japan	$	30,562		14	%	$	25,910		11	%
China	$	26,001		12	%	$	16,332		7	%
South Korea	$	19,211		9	%	$	23,599		10	%

No individual country in Europe, Middle East and Africa and other regions accounted for 10% or more of total revenue in all periods presented.

The following table presents additional revenue disclosures (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue recognized in the period from:
Amounts included in deferred revenue at the beginning of the period	$	6,575	$	6,336	$	14,614	$	13,602
Performance obligations satisfied in previous periods (true ups, recoveries, and settlements) (1)	$	2,080	$	353	$	1,295	$	3,362

(1) True ups represent the differences between the Company’s quarterly estimates of per-unit royalty revenue and actual production/sales-based royalties reported by licensees in reports that are generally received in the following period and may include other changes in estimates. Recoveries represent corrections or revisions to previously reported per-unit royalties by licensees, generally resulting from the Company’s inquiries or compliance audits. Settlements represent resolutions of disputes or litigation during the period for past royalties owed.

Remaining Performance Obligations

Remaining performance obligations represent contracted revenue that has not yet been recognized. As of June 30, 2025, the Company’s remaining performance obligations and the period over which they are expected to be recognized were as follows (in thousands):


Year Ending December 31:	Amounts
2025 (remaining 6 months)	$	31,281
2026		36,144
2027		20,002
2028		9,632
2029		4,051
Thereafter		1,181
Total	$	102,291

Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses for the three and six months ended June 30, 2025 and 2024 (in thousands):


	Three Months Ended June 30,
	2025						2024
	Accounts Receivable			Unbilled Contracts Receivable			Accounts Receivable			Unbilled Contracts Receivable
Beginning balance	$	1,072		$	450		$	2,868		$	245
Provision for credit losses		27			22			(856	)		103
Recoveries/charge-off		(145	)		(4	)		(858	)		—
Ending balance	$	954		$	468		$	1,154		$	348

	Six Months Ended June 30,
	2025						2024
	Accounts Receivable			Unbilled Contracts Receivable			Accounts Receivable			Unbilled Contracts Receivable
Beginning balance	$	946		$	499		$	1,906		$	190
Provision for credit losses		229			(22	)		(58	)		161
Recoveries/charge-off		(221	)		(9	)		(694	)		(3	)
Ending balance	$	954		$	468		$	1,154		$	348

NOTE 3 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

Prepaid expenses and other current assets consisted of the following (in thousands):


	June 30, 2025		December 31, 2024
Prepaid expenses	$	21,594	$	21,027
Prepaid income taxes		8,270		8,295
Finished goods inventory		296		1,061
Other		5,596		2,105
Total	$	35,756	$	32,488

Property and equipment, net consisted of the following (in thousands):


	June 30, 2025			December 31, 2024
Computer equipment and software	$	56,793		$	54,737
Capitalized internal-use software		30,760			23,384
Office equipment and furniture		10,982			10,773
Building		17,876			17,876
Land		5,300			5,300
Leasehold improvements		10,859			10,778
Construction in progress		460			1,979
Total property and equipment		133,030			124,827
Less: accumulated depreciation and amortization(1)		(86,103	)		(80,354	)
Property and equipment, net	$	46,927		$	44,473

(1)

Includes $7.3 million and $4.1 million as of June 30, 2025 and December 31, 2024, respectively, of accumulated amortization associated with capitalized internal-use software.

The following table summarizes the capitalization and amortization of internal-use software for the three and six months ended June 30, 2025 and 2024 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Costs capitalized associated with internal-use software	$	4,081	$	3,303	$	7,525	$	6,582
Amortization of capitalized internal-use software	$	1,895	$	522	$	3,243	$	1,016

Accrued liabilities consisted of the following (in thousands):


	June 30, 2025		December 31, 2024
Employee compensation and benefits	$	21,476	$

Xperi Inc. 10-Q