Xperi said its TiVo unit has nearly completed the integration of MobiTV, the video software and distribution company acquired at auction in May, and is seeing solid adoption of its IPTV platform even as overall pay-TV revenues slipped in Q3 2021.

Pay-TV revenues dropped 2%, to $54.2 million, year-over-year in Q3, the first full quarter for Xperi/TiVo with the MobiTV assets.

Figure 1: Xperi said unit sales of the TiVo Stream 4K were solid in Q3, but did not reveal sales numbers. The company plans to integrate TiVo Stream OS to connected TVs in the 2023-2024 timeframe.
(Image source: Xperi/TiVo)

Despite the drop in pay-TV revenues, money coming in for the company's IPTV products is mostly offsetting declines in its traditional interactive program guides, Xperi CEO Jon Kirchner said on Monday's earnings call.

He called out Cable One, Service Electric Cablevision, Blue Ridge and Armstrong among customers that have launched and are starting to scale up IPTV services powered by TiVo's technology.

He said the TiVo unit is on track to complete the integration of MobiTV in the fourth quarter of 2021. "With the MobiTV integration completed we will be able to further scale our overall IPTV offerings and accelerate subscriber growth," Kirchner said.

TiVo, he said, was able to re-sign about 100 MobiTV customers within 30 to 45 days after the assets were acquired. "This is very much a game of scale, and I think that we will be looking to see that scale meaningfully change in 2022," Kirchner added.

Kirchner said some new IPTV business was backlogged last year due to the pandemic, which resulted in fewer truck rolls and opportunities to deploy new services. He said Xperi and its customers have been working on remedies, including self-install options.

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Xperi is still pushing ahead with a plan to bring the TiVo Stream operating system to connected TVs, but didn't have much new color to share. Kirchner said the company is in "advanced discussions" on that strategy.

The company previously announced plans to evolve TiVo Stream into a smart TV platform in the 2023-2024 timeframe.

That market remains heated among TV makers with their own platforms (Samsung, LG Electronics and Vizio among them) along with Roku, Google and Amazon. It's become even more competitive with the recent entry of Comcast and its new family of XClass TVs.

Financial snapshot

Total Q3 revenues at Xperi were up 8.2%, to $219.4 million. That included a 27% year-over-year bump in revenues from Xperi's intellectual property/licensing business that was no doubt aided by a new deal with Comcast struck nearly a year ago. Xperi is currently navigating IP-related lawsuits with two Canadian operators – Videotron and Bell Canada.

Product revenues dropped 4%, to $117.7 million, driven in part by supply chain constraints that affected customer shipment volumes.

Doing the splits

Kirchner said Xperi still intends to split out its product and licensing/IP businesses, targeting that for mid-2022. He said Xperi will have a better view on that timing in February.

Looking ahead, Xperi has lowered full-year revenue guidance from a range of $870 million to $890 million from a prior range of $860 million to $900 million due to the aforementioned impact of supply chain constraints on the company's product business.

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— Jeff Baumgartner, Senior Editor, Light Reading