The parent of HD Radio cites the technology’s growing penetration in new cars as the catalyst for an increase in its revenue in the fourth quarter of 2017.
Xperi Corp. this week reported fourth quarter revenue of $126.6 million compared to $70.1 million for the same period a year ago. For the entire year, the audio solutions provider closed 2017 with revenue of $373.7 million.
Xperi acquired iBiquity Digital and its HD Radio platform for $172 million in 2015, and currently has about a half-billion dollars in debt. CEO Jon Kirchner reported growth in its automotive division for the full year at 19%, pushed by higher numbers of HD Radio in new cars sold in North America. Kirchner says at the end of 2017, “approximately 50% of new cars include HD Radio.” In the United States, Canada and Mexico, HD Radio was included in the launch of more than 15 new models in 2017, according to the company’s data. Xperi, which also includes technology brands DTS, FotoNation and Tessera, continues to “support the automotive rollout with the launch of more HD Radio stations” in North America, Kirchner said on Tuesday.
Kitchner says Xperi is optimistic and aiming for “a 65% penetration in five years by deploying HD Radio on lower-end North American models.”
Gains in its automotive division, which was up 13% in Q4 compared to the same period a year earlier, were partly offset by market declines in sales of Blu-ray and DVD drives in the car, according to Xperi.
“In 2017, the automotive market delivered just over $80 million in billings. Our long-term target for this business is to deliver between $150 million and $160 million in billings by 2022. We intend to generate this growth from several initiatives. First, continuing to deliver HD Radio designs wins within the North American market,” Kirchner says.
“Hybrid” radio looks to be of growing importance at the company. Xperi hopes to establish DTS Connected Radio as a must-have radio solution for global OEMs, he said. The DTS Connected Radio platform is a hybrid radio system that combines over-the-air analog/digital AM/FM radio with IP-delivered content. Xperi has been talking at industry events about the development of this platform over the past year or so.
CFO Robert Andersen provided additional insight on the balance sheet, saying the company finished the year with $200.7 million in cash, cash equivalents and investments. The company paid down $100 million of debt in January through a successful repricing of some loans, bringing its debt balance to $494 million.
Xperi, based in San Jose, Calif., describes itself as “a product and technology licensing company.” Their technologies and intellectual property are deployed in areas such as premium audio, computational imaging, computer vision, mobile computing and communications, memory, data storage, 3D semiconductor interconnect and packaging, according to the company.