Xperi Lifts Profit Outlook as Ad Revenue Jumps 280%

Xperi grew revenue 2% to $114 million in the third quarter of 2026 and raised its full-year forecasts for adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margin and operating cash flow. The driver was blunt: advertising and related revenue across the company rose more than 280% to $15 million. Growth, as ever, is a matter of what one sells more of.

The company posted a GAAP net loss of $5.2 million, or $0.11 per share. Non-GAAP adjusted EBITDA came in at $23 million, or 20% of revenue, non-GAAP earnings at $0.24 per share, and operating cash flow at $4 million. Xperi ended the quarter with $87 million in cash and cash equivalents after using approximately $3 million in free cash flow.

What did the advertising engine actually deliver?

Media platform revenue more than doubled year over year to $17 million. CFO Robert Andersen said the bulk of the growth in that line came from TiVo One, the company's entertainment platform, though it still includes some legacy advertising business.

The audience metrics moved in the right direction. TiVo One monthly active users reached 6.8 million at quarter-end, up 40% from a year earlier. Xperi now expects more than 7.5 million users by year-end, ahead of its previous goal of 7 million. TiVo One average revenue per user (ARPU) was $7.65, up 14% sequentially; the company guides to a year-end ARPU of $8 to $10, citing the timing of additional users coming online and continued development of the advertising pipeline. CEO Jon Kirchner said the midpoint is about 90% of the existing goal.

Margins remain a work in progress. Advertising and related gross margin, excluding depreciation and amortization, was 31% in the quarter, bringing the year-to-date margin to a positive 5%. Andersen said further growth could improve margins as Xperi spreads fixed platform costs over more revenue. Scale, in short, is the strategy.

For the full year, Xperi expects media platform revenue growth of approximately 60%, including more than 100% growth in advertising and related revenue, partly offset by lower middleware licensing revenue. Andersen was candid that advertising growth ran somewhat slower than previously expected, and that lower middleware revenue was the primary factor behind the revised media platform outlook.

On the customer front, European electronics retailer MediaMarktSaturn selected TiVo OS for its PEAQ private-label brand, bringing Xperi to 11 original equipment manufacturer design wins. Kirchner added that engineering work to reduce the operating system's memory requirements could lower costs for TV manufacturers and contribute to additional market share.

How did the older businesses perform?

Connected car revenue fell 14% to $30 million, primarily because of HD Radio minimum guarantee agreements signed in the prior-year quarter. The installed base keeps widening regardless: AutoStage, Xperi's in-vehicle platform, had shipped in more than 18 million vehicles across 13 automotive brands, and its broadcaster portal expanded to 550 U.S. metro areas from 300. Xperi signed data monetization agreements with eight additional broadcasters during the quarter.

Kirchner said HD Radio has about 60% penetration in new cars in North America, and described the growing AutoStage footprint as an opportunity to generate additional revenue from data and advertising.

Pay TV revenue rose 7% to $53 million, helped by classic guides, minimum guarantee arrangements and IPTV licensing growth. IPTV revenue increased 7% to $26 million, with the global IPTV subscriber base reaching 3.42 million households. Consumer electronics revenue fell 28% to $14 million, reflecting a higher level of minimum guarantee revenue in the prior-year period. Kirchner said IPTV growth is increasingly offsetting declines in older pay TV products, and he expects those legacy declines to stop weighing on total pay TV results within the next 12 to 18 months, as the company moves into 2028.

What changed in the outlook?

Xperi narrowed its 2026 revenue outlook to $450 million to $462 million, from $440 million to $470 million. It raised its adjusted EBITDA margin forecast to 19% to 21% and its operating cash flow forecast to $20 million to $30 million. Full-year free cash flow is expected to range from negative $5 million to positive $5 million.

Andersen attributed the improved profitability outlook to lower expected spending and said the company was managing receivables and expenses carefully. Management and the board are evaluating potential stock purchases under an existing repurchase authorization, he said.

The quarter also carried a succession note. Xperi announced that Andersen plans to retire in 2027, with timing dependent on identifying and onboarding a successor. He said he will work with Kirchner, the board and his successor on the transition and remain available to the company afterward as needed.

Xperi Inc. (NYSE: XPER) develops entertainment and consumer technology software and services for connected televisions, cars and other consumer electronics, anchored by the TiVo entertainment platform. A company built on guiding viewers to content is now guiding itself toward profitability. The third quarter suggests the route exists.