Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 25, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | ADEIA INC. | |
Trading Symbol | ADEA | |
Entity Central Index Key | 0001803696 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 106,335,738 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-39304 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-4734590 | |
Entity Address, Address Line One | 3025 Orchard Parkway | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95134 | |
City Area Code | 408 | |
Local Phone Number | 473-2500 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Security12b Title | Common Stock (par value $0.001 per share) | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 117,307 | $ 138,532 |
Operating expenses: | ||
Research and development | 13,011 | 9,650 |
Selling, general and administrative | 22,862 | 33,824 |
Amortization expense | 23,689 | 24,526 |
Litigation expense | 2,622 | 1,078 |
Total operating expenses | 62,184 | 69,078 |
Operating income from continuing operations | 55,123 | 69,454 |
Interest expense | (15,938) | (8,429) |
Other income and expense, net | 1,620 | 337 |
Income from continuing operations before income taxes | 40,805 | 61,362 |
Provision for income taxes | 11,784 | 5,517 |
Net income from continuing operations | 29,021 | 55,845 |
Net loss from discontinued operations, net of tax | (31,870) | |
Net income | 29,021 | 23,975 |
Less: Net loss attributable to noncontrolling interest in discontinued operations | (968) | |
Net income attributable to the Company | $ 29,021 | $ 24,943 |
Basic | ||
Continuing operations | $ 0.27 | $ 0.54 |
Discontinued operations | (0.30) | |
Net income | 0.27 | 0.24 |
Diluted | ||
Continuing operations | 0.26 | 0.53 |
Discontinued operations | (0.29) | |
Net income | $ 0.26 | $ 0.24 |
Weighted average number of shares used in per share calculations-basic | 105,585 | 103,679 |
Weighted average number of shares used in per share calculations-diluted | 113,447 | 105,332 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 29,021 | $ 23,975 |
Other comprehensive income (loss), net of tax: | ||
Change in foreign currency translation adjustment | 9 | (892) |
Net unrealized losses on available-for-sale debt securities | (5) | (122) |
Other comprehensive income (loss), net of tax | 4 | (1,014) |
Comprehensive income | 29,025 | 22,961 |
Less: Comprehensive loss attributable to noncontrolling interest | (968) | |
Comprehensive income attributable to the Company | $ 29,025 | $ 23,929 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 82,429 | $ 114,555 |
Accounts receivable, net of allowance for credit losses of $1,463 and $713, respectively | 36,933 | 58,480 |
Unbilled contracts receivable, net | 77,948 | 73,754 |
Other current assets | 11,493 | 11,924 |
Total current assets | 208,803 | 258,713 |
Long-term unbilled contracts receivable | 64,124 | 40,705 |
Property and equipment, net | 4,556 | 4,550 |
Operating lease right-of-use assets | 5,524 | 5,993 |
Intangible assets, net | 408,787 | 432,476 |
Goodwill | 313,660 | 313,660 |
Long-term income tax receivable | 110,513 | 113,679 |
Other long-term assets | 37,851 | 40,750 |
Total assets | 1,153,818 | 1,210,526 |
Current liabilities: | ||
Accounts payable | 4,079 | 8,546 |
Accrued liabilities | 29,427 | 31,277 |
Current portion of long-term debt | 36,344 | 109,813 |
Deferred revenue | 28,708 | 17,076 |
Total current liabilities | 98,558 | 166,712 |
Deferred revenue, less current portion | 9,884 | 10,683 |
Long-term debt, net | 610,594 | 619,580 |
Noncurrent operating lease liabilities | 4,229 | 4,794 |
Long-term income tax payable | 87,917 | 87,302 |
Other long-term liabilities | 20,022 | 20,043 |
Total liabilities | 831,204 | 909,114 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred stock: $0.001 par value; (2023: authorized 15,000 shares; 2022: authorized 15,000 shares and no shares issued and outstanding) | ||
Common stock: $0.001 par value; (2023: authorized 350,000 shares, issued 118,568 shares, outstanding 106,285 shares; 2022: authorized 350,000 shares, issued 117,392 shares, outstanding 105,167 shares) | 119 | 117 |
Additional paid-in capital | 635,001 | 636,266 |
Treasury stock at cost (2023: 12,283 shares; 2022: 12,225 shares) | (217,783) | (211,223) |
Accumulated other comprehensive loss | (47) | (51) |
Accumulated deficit | (94,676) | (123,697) |
Total stockholders' equity | 322,614 | 301,412 |
Total liabilities and equity | $ 1,153,818 | $ 1,210,526 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for credit losses | $ 1,463 | $ 713 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 15,000 | 0 |
Preferred stock, shares outstanding (in shares) | 15,000 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (in shares) | 119,174,000 | 117,392,000 |
Common stock, shares outstanding (in shares) | 106,285,000 | 105,167,000 |
Treasury stock, shares (in shares) | 12,889,000 | 12,225,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 29,021 | $ 23,975 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation of property and equipment | 384 | 5,866 |
Amortization of intangible assets | 23,689 | 39,319 |
Stock-based compensation expense | 3,640 | 16,804 |
Deferred income taxes | 2,373 | (911) |
Amortization of debt issuance costs | 1,170 | 1,123 |
Other | 600 | 861 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 20,951 | 43,698 |
Unbilled contracts receivable | (27,612) | (82,995) |
Other assets | 4,592 | (8,806) |
Accounts payable | (4,468) | 4,024 |
Accrued and other liabilities | (1,821) | (7,483) |
Deferred revenue | 10,833 | 10,798 |
Net cash from operating activities | 63,352 | 46,273 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (390) | (4,289) |
Purchases of intangible assets | 0 | (180) |
Purchases of short-term investments | 0 | (4,490) |
Proceeds from sales of investments | 0 | 2,000 |
Proceeds from maturities of investments | 0 | 10,023 |
Net cash from investing activities | (390) | 3,064 |
Cash flows from financing activities: | ||
Dividends paid | (5,314) | (5,218) |
Repayment of debt | (83,625) | (10,125) |
Proceeds from employee stock purchase program and exercise of stock options | 411 | 8,000 |
Repurchases of common stock | 0 | (17,260) |
Repurchases of common stock for tax withholdings on equity awards | (6,560) | (11,068) |
Net cash from financing activities | (95,088) | (35,671) |
Effect of exchange rate changes on cash and cash equivalents | 0 | (692) |
Net increase (decrease) in cash and cash equivalents | (32,126) | 12,974 |
Cash and cash equivalents at beginning of period | 114,555 | 201,121 |
Cash and cash equivalents at end of period | 82,429 | 214,095 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 14,691 | 7,188 |
Income taxes paid, net of refunds | $ 847 | $ 3,334 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) $ in Millions | Mar. 31, 2022 USD ($) |
Statement of Cash Flows [Abstract] | |
Cash and cash equivalents, current assets of discontinued operations | $ 135 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest |
Beginning balance at Dec. 31, 2021 | $ 1,340,428 | $ 113 | $ 1,340,480 | $ (178,022) | $ (752) | $ 187,814 | $ (9,205) |
Beginning balance (in shares) at Dec. 31, 2021 | 103,260 | 10,200 | |||||
Issuance of subsidiary shares to noncontrolling interest | (4) | 4 | |||||
Net income (loss) | 23,975 | 24,943 | (968) | ||||
Other comprehensive income (loss) | (1,014) | (1,014) | |||||
Cash dividends paid on common stock | (5,218) | (5,218) | |||||
Issuance of common stock in connection with exercise of stock options | 4 | 4 | |||||
Issuance of common stock in connection with exercise of stock options (in shares) | 1 | ||||||
Issuance of common stock in connection with employee stock purchase plan | 7,994 | $ 1 | 7,993 | ||||
Issuance of common stock in connection with employee stock purchase plan (in shares) | 739 | ||||||
Issuance of restricted stock, net of shares canceled | 2 | $ 2 | |||||
Issuance of restricted stock, net of shares canceled (in shares) | 1,609 | ||||||
Repurchases of common stock, shares exchanged | (11,068) | $ (11,068) | |||||
Repurchases of common stock, shares exchanged (in shares) | (659) | 497 | |||||
Withholding taxes related to net share settlement of restricted awards | $ (11,100) | ||||||
Withholding taxes related to net share settlement of restricted awards (in shares) | 700 | ||||||
Repurchases of common stock | $ (17,260) | $ (17,260) | |||||
Repurchases of common stock, (in shares) | (1,029) | 1,029 | |||||
Stock-based compensation expense | 16,804 | 16,804 | |||||
Ending balance at Mar. 31, 2022 | 1,354,647 | $ 116 | 1,365,277 | $ (206,350) | (1,766) | 207,539 | $ (10,169) |
Ending balance (in shares) at Mar. 31, 2022 | 103,921 | 11,726 | |||||
Beginning balance at Dec. 31, 2022 | 301,412 | $ 117 | 636,266 | $ (211,223) | (51) | (123,697) | |
Beginning balance (in shares) at Dec. 31, 2022 | 105,167 | 12,225 | |||||
Net income (loss) | 29,021 | 29,021 | |||||
Other comprehensive income (loss) | 4 | 4 | |||||
Cash dividends paid on common stock | (5,314) | (5,314) | |||||
Issuance of common stock in connection with exercise of stock options | 409 | 409 | |||||
Issuance of common stock in connection with exercise of stock options (in shares) | 38 | ||||||
Issuance of restricted stock, net of shares canceled | 2 | $ 2 | |||||
Issuance of restricted stock, net of shares canceled (in shares) | 1,744 | ||||||
Withholding taxes related to net share settlement of restricted awards | $ (6,560) | $ (6,560) | |||||
Withholding taxes related to net share settlement of restricted awards (in shares) | 700 | (664) | 664 | ||||
Stock-based compensation expense | $ 3,640 | 3,640 | |||||
Ending balance at Mar. 31, 2023 | $ 322,614 | $ 119 | $ 635,001 | $ (217,783) | $ (47) | $ (94,676) | |
Ending balance (in shares) at Mar. 31, 2023 | 106,285 | 12,889 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends paid on common stock, price per share | $ 0.05 | $ 0.05 |
The Company and Basis of Presen
The Company and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION Adeia Inc. (the “Company”), a Delaware corporation, is one of the industry’s largest intellectual property (“IP”) licensing platforms, with a diverse portfolio of media and semiconductor IP and more than 9,950 patents and patent applications worldwide. On October 1, 2022, the Company completed the previously announced separation (“the Separation”) of its product business into a separate, independent, publicly-traded company, Xperi Inc. (“Xperi Inc.”). The Separation was structured as a spin-off, which was achieved through the Company’s distribution of 100 percent of the outstanding shares of Xperi Inc.’s common stock to holders of the Company’s common stock as of the close of business on the record date of September 21, 2022 (the “Record Date”). Each Company stockholder of record received four shares of Xperi Inc. common stock for every ten shares of Company common stock that it held on the Record Date. Following the Separation, the Company retains no ownership in Xperi Inc., which is now listed under the ticker symbol “XPER” on the New York Stock Exchange. Effective at the open of business on October 3, 2022, the Company’s shares of common stock, par value $ 0.001 per share, began trading on the Nasdaq Global Select Market under the new ticker symbol “ADEA”. The accounting requirements for reporting the separation of Xperi Inc. as a discontinued operation were met when the Separation was completed. Accordingly, the historical financial results of Xperi Inc. for periods prior to the Separation are presented as net loss from discontinued operations, net of tax on the Condensed Consolidated Statements of Operations. For further information on discontinued operations, see “Note 7 – Discontinued Operations” . Unless noted otherwise, discussion in the Notes to the Condensed Consolidated Financial Statements pertains to continuing operations. Additionally, as a result of the Separation, the Company changed its operational structure in the fourth quarter of 2022, resulting in one reportable segment: IP Licensing. The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The amounts as of December 31, 2022 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, 2022, filed on March 1, 2023 (the “Form 10-K”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary (consisting of normal recurring adjustments) 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 Condensed Consolidated Financial Statements should be read in conjunction with the annual audited Consolidated Financial Statements and notes thereto included in the Form 10-K as of and for the year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023 or any future period and the Company makes no representations related thereto. Reclassification Certain reclassifications have been made to prior period balances in order to conform to the current period’s presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no significant changes in the Company’s significant accounting policies during the three months ended March 31, 2023, as compared to the significant accounting policies described in the Form 10-K. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging and subjective judgment include identifying the performance obligations in the contract, estimating variable consideration, estimating quarterly royalties prior to receiving the royalty reports from the licensees, determining standalone selling prices, allocating consideration in a contract with multiple performance obligations, the assessment of the recoverability of goodwill, 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 purchase accounting resulting from business combinations, among others. Actual results experienced by the Company may differ from management’s estimates. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which provides further clarification on the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modifications made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which deferred the application dates of Topic 848 to December 31, 2024. The Company currently has debt agreements that reference LIBOR and will apply the amendments prospectively through December 31, 2024 as these contracts are modified to reference other rates. The Company does not anticipate the adoption will have a material impact to the Company’s Condensed Consolidated Financial Statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | NOTE 3 – REVENUE Revenue Recognition General Revenue is recognized when control of the intellectual property (“IP”) rights is transferred to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for the licensing of the Company’s IP, which may include various combinations of IP rights and services which are generally capable of being distinct and accounted for as separate performance obligations. In situations where foreign withholding taxes are withheld by the Company’s licensee, revenue is recognized gross of withholding taxes that are remitted directly by the licensee to a local tax authority. 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 a contract with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative standalone selling price basis. The determination of standalone selling price considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. When observable prices are not available, standalone selling price for separate performance obligations is based on the adjusted market assessment approach to estimate the price that a customer in the relevant market would be willing to pay for licensing the Company’s IP rights. The allocation of transaction price among performance obligations in a contract may impact the amount and timing of revenue recognized in the Condensed Consolidated Statements of Operations during a given period. When a contract with a customer includes variable consideration, an estimate of the consideration which the Company expects to be entitled to for transferring the promised IP rights or services is made at contract inception and in each subsequent reporting period until the uncertainty associated with the variable consideration is resolved. The amount of variable consideration is estimated by considering all available information (historical, current, and forecast) and is updated as additional information becomes available. The estimate of variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Subsequent changes in the transaction price resulting from changes in the estimate of variable consideration are allocated to the performance obligations in the contract on the same basis as at contract inception. When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of IP, 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 IP License Arrangements The Company licenses (i) its media patent portfolios (“Media IP licensing”) to multichannel video programming distributors, over-the-top video service providers, consumer electronics manufacturers, social media and other new media companies and (ii) its semiconductor technologies and associated patent portfolios (“Semiconductor IP licensing”) to memory, logic, sensors, radio frequency component and foundry companies. The Company generally licenses its IP portfolios under three models: (i) fixed-fee Media IP licensing, (ii) fixed-fee or minimum guarantee Semiconductor IP licensing, and (iii) per-unit or per-subscriber Media IP or Semiconductor IP royalty licensing. Fixed-fee Media IP Licensing The Company’s long-term, fixed-fee Media IP licensing contracts provide its customers with rights to future patented technologies over the term of the contract that are highly interdependent or highly interrelated to the patented technologies provided at the inception of the contract. The Company treats these rights as a single performance obligation with revenue recognized on a straight-line basis over the term of the fixed-fee license contract. Fixed-fee or Minimum Guarantee Semiconductor IP Licensing The Company has entered into Semiconductor IP licenses that have a fixed fee or a minimum guarantee, whereby licensees pay a fixed fee for the right to incorporate the Company’s IP technologies in the licensee’s products over the license term. In contracts 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 IP and begins to benefit from the license, 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 contracts where the customer exceeds the minimum, the Company recognizes revenue relating to any additional per-unit fees in the periods it believes the customer has exceeded the minimum and adjusts the revenue based on actual usage once that is reported by the customer. Per-unit or Per-subscriber Media IP or Semiconductor IP Royalty Licensing The Company recognizes revenue from per-unit or per-subscriber IP royalty licenses in the period in which the licensee’s sales or production are estimated to have occurred, which results in an adjustment to revenue when actual sales or production are subsequently reported by the licensee, which is generally in the month or quarter following usage or shipment. Estimating customers’ monthly or 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. IP License Contracts with Multiple Performance Obligations At times, the Company enters into long-term license contracts with more than one performance obligation, which may include releases from past patent infringement claims or one or more prospective licenses. In these arrangements, the Company allocates the transaction price between releases for past patent infringement claims and prospective licenses based on their relative standalone selling prices, which requires significant management judgment. In determining the standalone selling price of each performance obligation, the Company considers such factors as the number of past and projected future subscribers, units shipped and units manufactured, as well as the per-subscriber or per-unit licensing rates the Company generally receives from licensees of comparable sizes in comparable markets and geographies. As a release from past patent infringement claims is generally satisfied at execution of the contract, the transaction price allocated to the release from past patent infringement claims is generally recognized in the period the contract is executed. Transaction price allocated to prospective Media IP licenses is recognized ratably over the license term, and transaction price allocated to prospective Semiconductor IP licenses is recognized upon execution of the contract. Practical Expedients and Exemptions The Company applies a practical expedient to not perform an evaluation of whether a contract includes a significant financing component when the timing of revenue recognition differs from the timing of cash collection by one year or less. The Company applies a practical expedient to expense costs to obtain a contract with a customer as incurred as a component of selling, general and administrative expenses when the amortization period would have been one year or less. The Company applies a practical expedient when disclosing revenue expected to be recognized from unsatisfied performance obligations to exclude contracts with customers with an original duration of less than one year ; amounts attributable to variable consideration arising from (i) a sales-based or usage-based royalty of an IP license or (ii) when variable consideration is allocated entirely to a wholly unsatisfied performance obligation; or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. Revenue Details Contract Balances Contracts Assets Contract assets primarily consist of unbilled contracts receivable that are expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed. The amount of unbilled contracts receivable may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Contract assets also include the incremental costs of obtaining a contract with a customer, principally sales commissions when the renewal commission is not commensurate with the initial commission. Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands): March 31, 2023 December 31, 2022 Unbilled contracts receivable $ 77,948 $ 73,754 Other current assets 534 512 Long-term unbilled contracts receivable (1) 64,124 40,705 Other long-term assets 1,101 1,144 Total contract assets $ 143,707 $ 116,115 (1) The long-term unbilled contracts receivable increase relates primarily to the recognition of revenue from two long-term semiconductor patent portfolio license agreements entered into during the three months ended March 31, 2023. Contract Liabilities Contract liabilities are comprised of deferred revenue related to multi-period licensing arrangements for which the Company is paid in advance, while the underlying performance obligation is satisfied at a future date or over time. Allowance for Credit Losses The allowance for credit losses represents the Company’s best estimate of lifetime expected credit losses inherent in accounts receivable and unbilled contracts receivable. The Company’s long-term unbilled contracts receivable is derived from fixed-fee or minimum-guarantee Semiconductor IP licensing and is primarily comprised of contracts with large, well-capitalized companies. It is generally considered to be of high credit quality due to past collection history and the nature of the customers. The Company allowance for credit losses at March 31, 2023 and December 31, 2022 was $ 1.5 million and $ 0.7 million, respectively and it is presented as part of accounts receivable, net in the Condensed Consolidated Balance Sheets. Additional Disclosures The following table presents additional revenue and contract disclosures (in thousands): Three Months Ended 2023 2022 Revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 4,782 $ 1,353 Performance obligations satisfied in previous periods (1) $ 753 $ 117 (1) Performance obligations satisfied in previous periods consist of settlements of litigation for past royalties owed pursuant to expired or terminated IP license agreements and revenue from releases for past patent infringement claims. Remaining revenue under contracts with performance obligations represents the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) under certain of the Company’s fixed fee arrangements (in thousands). As of Revenue from contracts with performance obligations expected to be satisfied in: 2023 (remaining 9 months) $ 119,211 2024 147,551 2025 142,925 2026 46,161 2027 35,801 Thereafter 76,526 Total $ 568,175 |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | NOTE 4 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS Other current assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid income taxes $ 6,757 $ 7,252 Prepaid insurance 1,383 2,103 Prepaid expenses 2,027 1,924 Other 1,326 645 $ 11,493 $ 11,924 Property and equipment, net, consisted of the following (in thousands): March 31, 2023 December 31, 2022 Equipment, furniture and other $ 14,478 $ 14,148 Leasehold improvements 5,117 5,057 19,595 19,205 Less: accumulated depreciation and amortization ( 15,039 ) ( 14,655 ) $ 4,556 $ 4,550 Other long-term assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Long-term deferred tax assets $ 32,905 $ 35,278 Other assets 4,946 5,472 $ 37,851 $ 40,750 Accrued liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Employee compensation and benefits $ 2,981 $ 6,978 Accrued legal fees 7,113 4,942 Accrued income taxes 174 358 Accrued expenses 13,637 12,745 Current portion of guarantee (1) 1,592 2,431 Current portion of operating lease liabilities 2,177 2,108 Other 1,753 1,715 $ 29,427 $ 31,277 (1) Refer to “Note 15 – Commitments and Contingencies” for further detail on the nature of the guarantee. Other long-term liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Long-term portion of guarantee (1) $ 18,064 $ 18,064 Other 1,958 1,979 $ 20,022 $ 20,043 (1) Refer to “Note 15 – Commitments and Contingencies” for further detail on the nature of the guarantee. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Financial Instruments | NOTE 5 – FINANCIAL INSTRUMENTS The Company has investments in debt securities which include corporate bonds and notes, treasury and agency notes and bills, commercial paper, certificates of deposit, and in equity securities consisting of money market funds. The Company classifies its debt securities as available-for-sale (“AFS”), which are accounted for at fair value with credit related losses recognized as a provision for credit losses in its Condensed Consolidated Statements of Operations and all non-credit related unrealized gains and losses recognized in accumulated other comprehensive income or loss on the Condensed Consolidated Balance Sheets. Under ASU 2016-01 (Topic 321), equity securities are measured at fair value with unrealized gains and losses recognized in other income and expense, net, in the Condensed Consolidated Statements of Operations. The following is a summary of marketable securities at March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 Cost Gross Gross Allowance for Credit Losses Estimated Marketable securities Commercial paper $ 29,574 $ 1 $ ( 9 ) $ — $ 29,566 Total debt securities 29,574 1 ( 9 ) $ — 29,566 Money market funds 3,923 — — — 3,923 Total equity securities 3,923 — — — 3,923 Total marketable securities $ 33,497 $ 1 $ ( 9 ) $ — $ 33,489 Reported in: Cash and cash equivalents $ 33,489 December 31, 2022 Cost Gross Gross Allowance for Credit losses Estimated Marketable securities Commercial paper $ 29,018 $ 3 $ ( 6 ) $ — $ 29,015 Total debt securities 29,018 3 ( 6 ) — 29,015 Money market funds 4,107 — — — 4,107 Total equity securities 4,107 — — — 4,107 Total marketable securities $ 33,125 $ 3 $ ( 6 ) $ — $ 33,122 Reported in: Cash and cash equivalents $ 33,122 At March 31, 2023 and December 31, 2022, the Company had $ 82.4 million and $ 114.6 million, respectively, in cash and cash equivalents. A significant portion of these amounts was held in marketable securities, as shown above. The remaining balances of $ 48.9 million and $ 81.5 million at March 31, 2023 and December 31, 2022, respectively, consisted of cash held in operating accounts not included in the tables above. Debt Securities The gross realized gains and losses on sales of marketable debt securities were immaterial during the three months ended March 31, 2023 and 2022. Unrealized losses on AFS debt securities were immaterial as of March 31, 2023 and December 31, 2022. The Company evaluated whether the decline in fair value has resulted from credit losses or other factors and concluded these amounts were related to temporary fluctuations in value of AFS securities and were due primarily to changes in interest rates and market conditions of the underlying securities. In addition, the contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. The Company does not intend to sell the debt securities and it is more-likely-than-not that it will not be required to sell the investments before recovery of their amortized cost bases. The Company did not recognize a provision for credit losses related to its AFS debt securities for the three months ended March 31, 2023 and 2022, respectively. No impairment charges were recorded on the AFS debt securities for the three months ended March 31, 2023. The following table summarizes the fair value and gross unrealized losses related to individual AFS debt securities at March 31, 2023 and December 31, 2022, which have been in a continuous unrealized loss position, aggregated by investment category and length of time (in thousands): Less Than 12 Months 12 Months or More Total Fair Value March 31, 2023 Fair Value Gross Fair Value Gross Fair Value Gross Cash and Cash Equivalents AFS Debt Securities Commercial Paper $ 29,566 $ ( 9 ) $ — $ — $ 29,566 $ ( 9 ) $ 29,566 $ — Less Than 12 Months 12 Months or More Total Fair Value December 31, 2022 Fair Value Gross Fair Value Gross Fair Value Gross Cash and Cash Equivalents AFS Debt Securities Commercial paper $ 29,015 $ ( 6 ) $ — $ — $ 29,015 $ ( 6 ) $ 29,015 $ — The estimated fair value of marketable debt securities by contractual maturity at March 31, 2023 is shown below (in thousands). Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties. Estimated Due in one year or less $ 29,566 |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | NOTE 6 – FAIR VALUE The Company follows the authoritative guidance for fair value measurement and the fair value option for financial assets and financial liabilities. The Company carries its financial instruments at fair value with the exception of its long-term debt. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets. Level 2 Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. When applying fair value principles in the valuation of assets, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of its Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments, where available, or based on other observable inputs. There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2022 and March 31, 2023. The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of March 31, 2023 (in thousands): Fair Value Quoted Significant Significant Assets Marketable securities Money market funds - equity securities (1) $ 3,923 $ 3,923 $ — $ — Commercial paper - debt securities (2) 29,566 — 29,566 — Total Assets $ 33,489 $ 3,923 $ 29,566 $ — (1) Reported as cash and cash equivalents in the Condensed Consolidated Balance Sheet. (2) Reported as cash and cash equivalents as these were purchased with original maturities of three months or less at the date of purchase. The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of December 31, 2022 (in thousands): Fair Value Quoted Significant Significant Assets Marketable securities Money market funds - equity securities (1) $ 4,107 $ 4,107 $ — $ — Commercial paper - debt securities (2) 29,015 — 29,015 — Total Assets $ 33,122 $ 4,107 $ 29,015 $ — (1) Reported as cash and cash equivalents in the Condensed Consolidated Balance Sheet. (2) Reported as cash and cash equivalents as these were purchased with original maturities of three months or less at the date of purchase. Financial Instruments Not Recorded at Fair Value The Company’s long-term debt is carried at amortized cost and is measured at fair value on a quarterly basis for disclosure purposes. The carrying amounts and estimated fair values are as follows (in thousands): March 31, 2023 December 31, 2022 Carrying Estimated Carrying Estimated Refinanced Term B Loans (1) 646,938 640,468 729,393 700,217 Total long-term debt, net $ 646,938 $ 640,468 $ 729,393 $ 700,217 (1) Carrying amounts of long-term debt are net of unamortized debt discount and issuance costs of $ 18.7 million and $ 19.9 million as of March 31, 2023 and December 31, 2022, respectively. See “Note 9 – Debt ” for additional information. If reported at fair value in the Condensed Consolidated Balance Sheets, the Company’s debt would be classified within Level 2 of the fair value hierarchy. The fair value of the debt was estimated based on the quoted market prices for the same or similar issues. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 7 – DISCONTINUED OPERATIONS On October 1, 2022, the Company completed the Separation of its product business into a separate, independent, publicly-traded company, Xperi Inc. The accounting requirements for reporting the Separation of Xperi Inc. as a discontinued operation were met when the Separation was completed. Accordingly, the historical financial results of Xperi Inc. prior to the Separation are presented as discontinued operations and, as such, are excluded from continuing operations and results of operations from all periods presented. For further information on the Separation, see “Note 1 – The Company and Basis of Presentation ”. The Company’s presentation of discontinued operations excludes general corporate overhead costs, which were historically allocated to Xperi Inc., that do not meet the requirements to be presented in discontinued operations, although such costs are not reflective of the on-going operations of the Company. Such allocations included labor and non-labor costs related to the Company’s corporate support functions (e.g., administration, human resources, finance, accounting, tax, information technology, corporate development, legal, among others) that historically provided support to Xperi Inc. prior to the Separation. In addition, discontinued operations excludes the historical intercompany balances and transactions between the Company and Xperi Inc. that were eliminated in consolidation. In connection with the Separation, the Company incurred separation costs of $ 43.3 million from January 1, 2020 to March 31, 2023. Separation costs primarily consist of third-party advisory, consulting, legal and professional services, IT and employee bonus costs directly related to the Separation, as well as other items that are incremental and one-time in nature. Out of these costs, $ 28.6 million were incurred prior to the Separation and are included in net loss from discontinued operations, net of tax. The remaining separation costs of $ 14.7 million were incurred after the Separation and are reflected in continuing operations within operating expenses in the Company's Condensed Consolidated Statement of Operations. During the three months ended March 31, 2022, the Company incurred $ 2.8 million in separation costs, which are included in net loss from discontinued operations, net of tax. During the three months ended March 31, 2023, the Company incurred $ 1.0 million in separation costs, which are included in continuing operations as part of selling, general and administrative expenses. The Company and Xperi Inc. entered into various agreements to effect the Separation and provide a framework for their on-going relationship, including a separation and distribution agreement, transition services agreement, employee matters agreement, tax matters agreement, cross business license agreement and data sharing agreement. The transition services agreement consists of services that Xperi Inc. and its subsidiaries will provide to the Company and its subsidiaries for a transitional period, as defined in the agreement. The services to be provided include back office functions and assistance with regard to administrative tasks relating to day-to-day activities as needed, including finance, accounting and tax activities, IT services, customer support, facilities services, human resources, and general corporate support, as well as pass-through services provided by certain vendors. The impact of these transition services on the Company’s Condensed Consolidated Financial Statements for the three months ended March 31, 2023 was not material. Net Loss from Discontinued Operations The financial results of Xperi Inc. for the three months ended March 31, 2022 are presented as net loss from discontinued operations, net of tax, on the Condensed Consolidated Statements of Operations. The following table presents financial results of Xperi Inc. (in thousands): Three Months Ended Revenue $ 118,888 Operating expenses: Cost of revenue 27,407 Research and development 50,239 Selling, general and administrative 36,696 Depreciation expense 5,563 Amortization expense 14,793 Litigation expense 675 Total operating expenses 135,373 Operating loss ( 16,485 ) Other income and expense, net 631 Loss before taxes ( 15,854 ) Provision for income taxes 16,016 Net loss from discontinued operations, net of tax $ ( 31,870 ) Less: net loss attributable to noncontrolling interest ( 968 ) Net loss attributable to discontinued operations $ ( 30,902 ) Net Cash Flows of Discontinued Operations The following table presents selected financial information related to cash flows from discontinued operations (in thousands): Three Months Ended Net cash from operating activities $ ( 18,709 ) Net cash from investing activities $ ( 4,452 ) |
Goodwill and Identified Intangi
Goodwill and Identified Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Identified Intangible Assets | NOTE 8 – GOODWILL AND IDENTIFIED INTANGIBLE ASSETS Goodwill The carrying value of goodwill at March 31, 2023 and December 31, 2022 was $ 313.7 million. There were no changes to the carrying value of goodwill from January 1, through March 31, 2023. Goodwill at its reporting unit is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable. The process of evaluating goodwill for potential impairment is subjective and requires significant estimates, assumptions and judgments particularly related to the identification of reporting units, the assignment of assets and liabilities to reporting units and estimating the fair value of each reporting unit. No impairment charges were recognized for the three months ended March 31, 2023 and 2022. Identified Intangible Assets Identified intangible assets consisted of the following (in thousands): Average March 31, 2023 December 31, 2022 Life Gross Accumulated Net Gross Accumulated Net Finite-lived intangible assets Acquired patents / core technology 3 - 10 $ 645,928 $ ( 283,505 ) $ 362,423 $ 645,928 $ ( 270,275 ) $ 375,653 Existing technology / content database 5 - 10 38,681 ( 37,389 ) 1,292 38,681 ( 36,614 ) 2,067 Customer contracts and related relationships 3 - 9 155,900 ( 110,896 ) 45,004 155,900 ( 101,252 ) 54,648 Trademarks/trade name 4 - 10 1,300 ( 1,232 ) 68 1,300 ( 1,192 ) 108 Total intangible assets $ 841,809 $ ( 433,022 ) $ 408,787 $ 841,809 $ ( 409,333 ) $ 432,476 As of March 31, 2023, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands): Amounts 2023 (remaining 9 months) $ 69,851 2024 68,809 2025 52,731 2026 52,597 2027 52,246 Thereafter 112,553 $ 408,787 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9 – DEBT The outstanding amounts of debt were as follows (in thousands): March 31, 2023 December 31, 2022 Refinanced Term B Loans $ 665,625 $ 749,250 Unamortized debt discount and issuance costs ( 18,687 ) ( 19,857 ) 646,938 729,393 Less: current portion, net of debt discount and issuance costs ( 36,344 ) ( 109,813 ) Total long-term debt, net of current portion $ 610,594 $ 619,580 Refinanced Term B Loans On June 8, 2021, the Company amended that certain Credit Agreement dated June 1, 2020 by and among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “2020 Credit Agreement”). The 2020 Credit Agreement initially provided for a five-year senior secured term B loan facility in an aggregate principal amount of $ 1,050 million (the “2020 Term B Loan Facility”). In connection with the amendment (the “Amendment”), the Company made a voluntary prepayment of $ 50.6 million of the term loan outstanding under the 2020 Credit Agreement using cash on hand. The Amendment provided for, among other things, (i) a new tranche of term loans (the “Refinanced Term B Loans”) in an aggregate principal amount of $ 810.0 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of base rate loans, 2.50 % per annum and (y) in the case of Eurodollar loans, LIBOR plus a margin of 3.50 % per annum, (iii) a prepayment premium of 1.00 % in connection with any repricing transaction with respect to the Refinanced Term B Loans within six months of the closing date of the Amendment, (iv) an extension of the maturity to June 8, 2028 , and (v) certain additional amendments, including amendments to provide the Company with additional flexibility under the covenant governing restricted payments. The Company commenced repaying quarterly installments under the Refinanced Term B Loans in the third quarter of 2021. The obligations under the 2020 Credit Agreement, inclusive of any changes by the Amendment, continue to be guaranteed by the Company’s wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all of the assets of the Company and the Guarantors. The 2020 Credit Agreement, as amended, contains customary events of default, upon the occurrence of which, after any applicable cure period, the lenders will have the ability to accelerate all outstanding loans thereunder. The 2020 Credit Agreement, as amended, also contains customary representations and warranties and affirmative and negative covenants that, among other things and subject to certain exceptions, restrict the ability of the Company and its subsidiaries to create or incur certain liens, incur or guarantee additional indebtedness, merge or consolidate with other companies, transfer or sell assets and make restricted payments. The Separation did not require the Company to obtain any waivers under the 2020 Credit Agreement, and the Company completed the Separation in compliance with all of the covenants contained in the 2020 Credit Agreement. The 2020 Credit Agreement, as amended, requires the Company to maintain a total net leverage ratio of no greater than 3.00x in order access an annual basket from which to make restricted payments (such as dividend payments and share repurchases). The Company was in compliance with all requirements as of March 31, 2023. The 2020 Credit Agreement, as amended, also requires the Company to make additional cash payments on an annual basis beginning in April 2023 based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year. The additional cash payments are applied to the remaining principal balance due at final maturity. Accordingly, the Company made additional cash payments of $ 73.5 million during the three months ended March 31, 2023 under the excess cash flow provisions. The payments were made earlier than required under the 2020 Credit Agreement. After the Separation, the Company remains the obligor under the Refinanced B Term Loans. Interest Expense and Expected Principal Payments At March 31, 2023, $ 665.6 million in total debt was outstanding. There were also $ 18.7 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt. The interest rate on the Refinanced Term B Loans as of March 31, 2023, including the amortization of debt discount and issuance costs, was 9.43 % and interest is payable monthly. Interest expense was $ 15.9 million and $ 8.4 million for the three months ended March 31, 2023 and 2022, respectively. Amortized debt discount and issuance costs, which were included in interest expense, amounted to $ 1.2 million and $ 1.1 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, future minimum principal payments for long-term debt, excluding any additional principal payment required by the excess cash flow provision, are summarized as follows (in thousands): Amounts 2023 (remaining 9 months) $ 30,375 2024 40,500 2025 40,500 2026 40,500 2027 40,500 Thereafter 473,250 Total $ 665,625 |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NOTE 10 – NET INCOME PER SHARE The following table sets forth the computation of basic and diluted shares (in thousands): Three Months Ended 2023 2022 Numerator: Net income from continuing operations $ 29,021 $ 55,845 Net loss attributable to discontinued operations — ( 30,902 ) Net income attributable to the Company $ 29,021 $ 24,943 Denominator: Weighted average shares of common stock outstanding 105,585 103,679 Add: Effect of dilutive securities associated with options 1 3 Add: Effect of dilutive securities associated with restricted stock awards and units 7,861 1,650 Weighted average common shares - dilutive 113,447 105,332 Basic net income (loss) per share Net income from continuing operations $ 0.27 $ 0.54 Net loss attributable to discontinued operations — ( 0.30 ) Net income attributable to the Company $ 0.27 $ 0.24 Diluted net income (loss) per share Net income from continuing operations $ 0.26 $ 0.53 Net loss attributable to discontinued operations — ( 0.29 ) Net income attributable to the Company $ 0.26 $ 0.24 Anti-dilutive employee stock-based awards, excluded 440 3,600 Basic net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period, excluding any unvested restricted stock units that are subject to repurchase. Diluted net income (loss) per share is computed using the treasury stock method to calculate the weighted average number of shares of common stock and, if dilutive, potential common shares outstanding during the period. Potentially dilutive common shares include unvested restricted stock units and incremental common shares issuable upon the exercise of stock options, less shares repurchased from assumed proceeds. The assumed proceeds calculation includes actual proceeds to be received from the employee upon exercise and the average unrecognized stock compensation cost during the period. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stockholders' Equity | NOTE 11 – STOCKHOLDERS’ EQUITY Equity Incentive Plans The 2020 Equity Incentive Plan On June 1, 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 EIP”). Under the 2020 EIP, the Company may grant equity-based awards to employees, non-employee directors, and consultants for services rendered to the Company (or any parent or subsidiary) in the form of stock options, stock awards, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and performance awards (or any combination thereof). A total of 16.8 million shares have been reserved for issuance under the 2020 EIP provided that each share issued pursuant to “full value” awards (i.e., stock awards, restricted stock awards, restricted stock units, performance awards and dividend equivalents) are counted against shares available for issuance under the 2020 EIP on a 1.5 to 1 ratio. At the 2022 Annual Stockholders Meeting o n April 29, 2022, th e Company's shareholders approved an amendment to the 2020 EIP and increased by 8.8 million the number of shares reserved for issuance. The 2020 EIP provides for option grants designed as either incentive stock options or nonstatutory options. Options generally are granted with an exercise price not less than the value of the common stock on the grant date and have a term of ten years from the date of grant and vest over a four-year period. The vesting criteria for restricted stock awards and restricted stock units is generally the passage of time or meeting certain performance-based objectives, and continued employment through the vesting period, which is generally four years for time-based awards. Assumed Plans On June 1, 2020, the Company assumed all then-outstanding stock options, awards, and shares available and reserved for issuance under all legacy Equity Incentive Plans of TiVo (collectively, the “Assumed Plans”). Stock options assumed from the Assumed Plans generally have vesting periods of four years and a contractual term of seven years . Awards of restricted stock and restricted stock units assumed from the Assumed Plans are generally subject to a four year vesting period. The number of shares subject to stock options and restricted stock units outstanding under these plans are included in the tables below. Shares reserved under the Assumed Plans will be available for future grants. As of March 31, 2023, there were 3.2 million shares reserved for future grants under both the 2020 EIP and the Assumed Plans. A summary of the stock option activity is presented below (in thousands, except per share amounts): Options Outstanding Number of Weighted Balance at December 31, 2022 364 $ 13.06 Options granted — $ — Options exercised ( 38 ) $ 10.67 Options canceled / forfeited / expired ( 26 ) $ 10.99 Balance at March 31, 2023 300 $ 13.54 Restricted Stock Units Information with respect to outstanding restricted stock units (including both time-based vesting and performance-based vesting) as of March 31, 2023 is as follows (in thousands, except per share amounts) : Restricted Stock and Restricted Stock Units Number of Number of Total Weighted Balance at December 31, 2022 9,048 1,525 10,573 $ 10.48 Awards and units granted 1,407 638 2,045 $ 10.41 Awards and units vested / earned ( 1,744 ) — ( 1,744 ) $ 10.48 Awards and units canceled / forfeited ( 192 ) — ( 192 ) $ 9.74 Balance at March 31, 2023 8,519 2,163 10,682 $ 10.48 Performance Awards and Units Performance awards may be granted to employees or consultants based upon, among other things, the contributions, responsibilities and other compensation of the particular employee or consultant. The value and the vesting of such performance awards are generally linked to one or more performance goals or certain market conditions determined by the Company, in each case on a specified date or dates or over any period or periods determined by the Company, and may range from zero to 200 percent of the grant. For performance awards subject to a market vesting condition (“market-based PSUs”), the fair value per award is fixed at the grant date and the amount of compensation expense is not adjusted during the performance period regardless of changes in the level of achievement of the market condition. Employee Stock Purchase Plans On June 1, 2020, the Company adopted the 2020 Employee Stock Purchase Plan (the “2020 ESPP”). The 2020 ESPP is implemented through consecutive overlapping 24 -month offering periods, each of which is comprised of four six-month purchase periods. The first offering period commenced on September 1, 2020 and ended on August 31, 2022. Due to the Separation, the next offering period under the 2020 ESPP plan commenced on December 1, 2022 and will end on November 30, 2024. Each subsequent offering period under the 2020 ESPP will be twenty-four (24) months long and will commence on each December 1 with four six-month purchase periods. Participants may contribute up to 100 % of their base earnings and commissions through payroll deductions, and the accumulated deductions will be applied to the purchase of shares on each semi-annual purchase date. The purchase price per share will equal 85 % of the fair market value per share on the start date of the offering period or, if lower, 85 % of the fair market value per share on the semi-annual purchase date. An eligible employee’s right to buy the Company’s common stock under the 2020 ESPP may not accrue at a rate in excess of $ 25,000 of the fair market value of such shares per calendar year for each calendar year of an offering period. If the fair market value per share of the Company’s common stock on any purchase date during an offering period is less than the fair market value per share on the start date of the 24 -month offering period, then that offering period will automatically terminate and a new 24 -month offering period will begin on the next business day. All participants in the terminated offering will be transferred to the new offering period. At the 2022 Annual Stockholders Meeting on April 29, 2022, the Company's shareholders approved an amendment to the 2020 ESPP and increased by 6.0 million the number of shares reserved for issuance. As of March 31, 2023, there were 5.5 million shares reserved for grant under the Company’s 2020 ESPP. Modification of Equity Awards In connection with the Separation and under the provisions of the existing plans described above, the Company’s outstanding stock options and equity awards were converted to units denominated in the equity of the Company, Xperi Inc., or both. The number of units and exercise prices of outstanding stock options and equity awards were converted based on the conversion ratios established in the Employee Matters Agreement that the Company entered into in connection with the Separation. The intent of the conversion ratios was to preserve the value of the awards immediately before and after the Separation. Upon the Separation, employees holding stock options and equity awards denominated in the Company’s pre-Separation stock received a number of otherwise-similar stock options and awards in post-Separation Company’s stock and/or Xperi Inc.’s stock based on the conversion ratios outlined for each group of employees. For purposes of the vesting of these equity awards, continued employment or service with the Company or with Xperi Inc. is treated as continued employment for purposes of both the Company’s and Xperi Inc.’s equity awards and the vesting terms of each converted grant remained unchanged. There were no changes to the plan terms described above with the exception that the price on the grant date, or October 1, 2022 was adjusted to exclude the value of Xperi Inc. based on the conversion ratios applied to other equity awards. Dividends Stockholders of the Company’s common stock are entitled to receive dividends when declared by the Company’s board of directors (the “Board”). During the three months ended March 31, 2023 and 2022, dividends declared were $ 0.05 per common share. The capacity to pay dividends in the future depends on many factors, including the Company’s financial condition, results of operations, capital requirements, capital structure, industry practice and other business conditions that the Board considers relevant. Stock Repurchase Programs On June 12, 2020 the Board authorized a stock repurchase program providing for the repurchase of up to $ 150.0 million of the Company's Common Stock dependent on market conditions, share prices and other factors. On April 22, 2021, the Board authorized an additional $ 100.0 million of purchases under the existing stock repurchase plan. As of March 31, 2023, the Company had repurchased a total of approximately 10.0 million shares of common stock, since inception of the plan, at an average price of $ 17.24 per share for a total cost of $ 172.2 million. The shares repurchased are recorded as treasury stock and are accounted for under the cost method. No expiration date has been specified for this plan. As of March 31, 2023, the total remaining amount available for repurchase under this plan w as $ 77.8 million. The Company may execute authorized repurchases from time to time under the plan. In connection with the stock repurchase program, all shares repurchased by the Company as of June 1, 2020 and recorded as treasury stock were canceled and retired. The Company accounts for stock repurchases using the cost method and records retirement of treasury stock as a reduction of the cumulative treasury stock paid-in capital balance. Once the cumulative balance is reduced to zero, any remaining difference resulting from the retirement of treasury stock is recorded as a reduction of retained earnings. The Company issues restricted stock awards as part of the equity incentive plans described above. For the majority of restricted awards, shares are withheld to satisfy required withholding taxes at the vesting date. Shares withheld to satisfy required withholding taxes in connection with the vesting of restricted awards are treated as common stock repurchases in the Condensed Consolidated Financial Statements because they reduce the number of shares that would have been issued on vesting. However, these withheld shares are not included in common stock repurchases under the Company’s authorized share repurchase plan. During the three months ended March 31, 2023 and 2022, the Company withheld 0.7 million and 0.7 million shares of common stock to satisfy $ 6.6 million and $ 11.1 million of required withholding taxes, respectively. |
Stock-Based Compensation Expens
Stock-Based Compensation Expense | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense | NOTE 12 – STOCK-BASED COMPENSATION EXPENSE The effect of recording stock-based compensation (“SBC”) expense for the three months ended March 31, 2023 and 2022 is as follows (in thousands): Three Months Ended 2023 2022 Research and development $ 594 $ 375 Selling, general and administrative 3,046 7,771 Total stock-based compensation expense $ 3,640 $ 8,146 In connection with termination of employment with a former executive on March 1, 2022, the Company entered into a Separation Agreement and Release with the executive, dated February 18, 2022 (the “Separation Agreement”). Pursuant to the Separation Agreement, the Company approved, among other severance benefits, accelerated vesting of 372,244 of outstanding performance and time-based restricted stock units. As a result of this modification, the Company recorded incremental SBC of approximately $ 2.2 million during the three months ended March 31, 2022. There were no options granted in the three months ended March 31, 2023 and 2022. The following assumptions were used to value the restricted stock units subject to market conditions granted during the three months ended March 31, 2023: March 2023 Expected life (years) 3.0 Risk-free interest rate 4.5 % Dividend yield 1.9 % Expected volatility 68.5 % There were no market-based restricted stock units granted in the three months ended March 31, 2022. Prior to the Separation, ESPP grants occurred in March and September. Due to the Separation, the offering period under the 2020 ESPP plan commenced on December 1, 2022 as discussed in “Note 11 – Stockholders' Equity. ” Accordingly, there were no ESPP grants during the three months ended March 31, 2023. The following assumptions were used to value the ESPP shares granted during the three months ended March 31, 2022: March 2022 Expected life (years) 2.0 Risk-free interest rate 1.3 % Dividend yield 1.1 % Expected volatility 48.5 % |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 13 – INCOME TAXES For the three months ended March 31, 2023, the Company recorded an income tax expense of $ 11.8 million on pretax income of $ 40.8 million, which resulted in an effective tax rate of 28.9 % for the three months ended March 31, 2023. The income tax expense for the three months ended March 31, 2023 was primarily related to foreign withholding taxes, U.S. federal and state income taxes, and unrealized foreign exchange loss from the prior year South Korea refund claims, offset by U.S. foreign tax credits. The Company’s effective tax rate was based on a projected 2023 U.S. GAAP pretax income and varies from the 21 % U.S. federal tax rate. The Company's effective tax rate varies period over period because the most significant components of tax expense, foreign withholding taxes and foreign exchange gains or losses on the South Korea withholding tax refund claims, are not directly affected by changes in pre-tax income. For the three months ended March 31, 2022, the Company recorded an income tax expense of $ 5.5 million on pretax income of $ 61.4 million, which resulted in an effective tax rate of 9.0 %. The income tax expense for the three months ended March 31, 2022 was primarily related to foreign withholding taxes, state income taxes and unrealized foreign exchange loss from the prior year South Korea refund claims. The recorded effective tax rate was lower than the applicable statutory tax rate due to income earned in jurisdictions for which a full valuation allowance was recorded. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | NOTE 14 – LEASES The Company leases office and research facilities and office equipment under operating leases which expire through 2027. The Company’s leases have remaining lease terms of two to four years , some of which may include options to extend the leases for five years or longer, and some of which may include options to terminate the leases within the next five years or less. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets; expense for these leases is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred and are not included within the lease liability and right-of-use assets calculation. As a practical expedient, the Company elected, for all office and facility leases, not to separate nonlease components (e.g., common-area maintenance costs) from lease components (e.g., fixed payments including rent) and instead to account for each separate lease component and its associated non-lease components as a single lease component. As most of the leases do not provide an implicit rate, the Company generally, for purposes of discounting lease payments, uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The components of operating lease costs were as follows (in thousands): Three Months Ended 2023 2022 Fixed lease cost $ 571 $ 504 Variable lease cost 151 219 Total operating lease cost $ 722 $ 723 Other information related to leases was as follows (in thousands, except lease term and discount rate): Three Months Ended 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 588 $ 550 ROU assets obtained in exchange for new lease liabilities: Operating leases $ — $ 1,153 March 31, 2023 December 31, 2022 Weighted-average remaining lease term (years): Operating leases 2.95 3.19 Weighted-average discount rate: Operating leases 5.4 % 5.4 % Future minimum lease payments and related lease liabilities as of March 31, 2023 were as follows (in thousands): Operating Lease Payments (1) 2023 (remaining 9 months) $ 1,841 2024 2,525 2025 1,975 2026 291 2027 299 Thereafter — Total lease payments 6,931 Less: imputed interest ( 525 ) Present value of lease liabilities: $ 6,406 Less: current obligations under leases (accrued liabilities) 2,177 Noncurrent operating lease liabilities $ 4,229 (1) Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15 – COMMITMENTS AND CONTINGENCIES Purchase and Other Contractual Obligations In the ordinary course of business, the Company enters into contractual agreements with third parties that include non-cancelable payment obligations, for which it is liable in future periods. These arrangements primarily include unconditional purchase obligations to service providers. As of March 31, 2023, the Company’s total future unconditional purchase obligations were approximatel y $ 3.5 million, including $ 1.3 million due in the remainder of 2023, $ 1.3 million due in 2024 and the remaining $ 0.9 million due in 2025. Guarantee Prior to the Separation, Adeia Media LLC, a subsidiary of the Company (“Adeia Media”), and a subsidiary of Xperi Inc. (“Xperi Sub”) entered into an agreement (the “Specified Agreement”) with a third party pursuant to which Adeia Media guarantees the performance of Xperi Sub under the Specified Agreement, including its payment obligations to such third party. In connection with the Separation, Adeia Media and Xperi Sub entered into a separate cross business agreement (the “Cross Business Agreement”) effective as of October 1, 2022, under which Adeia Media agreed to make guarantee payments to Xperi Sub in amounts based on certain of its operating expenses and other minimum performance obligations under the Specified Agreement through 2031. Consequently, on October 1, 2022, the Company recognized a guarantee liability pursuant to ASC 460 “Guarantees” of $ 19.7 million, which represents the fair value of Adeia Media’s projected payments of such operating expenses during the term of the Cross Business Agreement. Subsequent changes to the carrying value of the guarantee are recognized as part of the Company’s results of operations. The maximum potential amount of future payments subject to the guarantee is approximately $ 7.5 million per annum between 2023 and 2031 . As of March 31, 2023 and December 31, 2022, the balance of the guarantee liability was $ 19.7 million and $ 20.5 million, respectively. During the three months ended March 31, 2023, the Company made guarantee payments of $ 0.5 million and recognized other income of $ 0.3 million in the Condensed Consolidated Statement of Operations as a result of a change in the carrying value of the guarantee liability. Indemnifications In the normal course of business, the Company provides indemnifications of varying scopes and amounts to certain of its licensees, customers, and business partners against claims made by third parties arising from the use of the Company’s intellectual property, services or technologies. The Company cannot reasonably estimate the possible range of losses that may be incurred pursuant to its indemnification obligations, if any. Variables affecting any such assessment include, but are not limited to: the nature of the claim asserted; the relative merits of the claim; the financial ability of the party suing the indemnified party to engage in protracted litigation; the number of parties seeking indemnification; the nature and amount of damages claimed by the party suing the indemnified party; and the willingness of such party to engage in settlement negotiations. To date, no such claims have been filed against the Company and no liability has been recorded in the Company’s financial statements. As permitted under Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company believes, given the absence of any such payments in the Company’s history, and the estimated low probability of such payments in the future, that the estimated fair value of these indemnification agreements is immaterial. In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable the Company to recover any payments under the indemnification agreements, should they occur. Contingencies At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of losses is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. Litigation related On June 23, 2017, Adeia Guides Inc. (formerly known as Rovi Guides, Inc.) and Adeia Media Solutions Inc. (formerly known as TiVo Solutions Inc.) (together, “Adeia Media”) filed a patent infringement complaint against Videotron Ltd. and Videotron G.P. (together, “Videotron”) in Toronto, Canada, alleging infringement of six patents (“Videotron 1”). On June 10, 2022, the Federal Court of Canada issued its decision in the case finding in favor of Videotron and its legacy illico platform. Specifically, the Court found invalid each of the asserted claims related to the four remaining patents involved in the case. In Canada, the prevailing party in patent litigation is entitled to reimbursement of certain of its costs and expenses. Accordingly, the Company accrued and paid $ 2.5 million for expense reimbursement during the year ended December 31, 2022. On September 12, 2022, Adeia Media filed a notice of appeal with the Federal Court of Appeal of Canada appealing the decision of the Federal Court of Canada. On January 30, 2023, Adeia Media filed its opening memorandum of fact and law. Videotron's memorandum of fact and law was filed on April 17, 2023. On January 19, 2018, Adeia Media filed a patent infringement complaint against Bell Canada (and four of its affiliates) (collectively, "Bell") in Toronto, Canada, alleging infringement of six patents (“Bell 1”). On February 2, 2018, Adeia Media filed a patent infringement complaint against Telus Corporation (and two of its affiliates) (collectively, "Telus") in Toronto, Canada, alleging infringement of the same six patents (“Telus 1”). Bell 1and Telus 1 were heard together for purposes of pre-trial and trial proceedings. On October 7, 2022, the Federal Court of Canada issued its decision in the two cases finding in favor of Bell and Telus and their respective IPTV services, Bell Fibe TV and Telus Optik TV. Specifically, the Court found invalid each of the asserted claims of the four remaining patents involved in the case. In Canada, the prevailing party in patent litigation is entitled to reimbursement of certain of its costs and expenses. Accordingly, the Company accrued $ 2.6 million for expense reimbursement in the third quarter of 2022. On November 7, 2022, Adeia Media filed a notice of appeal with the Federal Court of Appeal of Canada appealing the decision of the Federal Court of Canada. The Company is unable to predict the final outcome of other lawsuits, including other patent infringement lawsuits in Canada, to which it is a party and therefore cannot determine the likelihood of loss nor estimate a range of possible losses. An adverse decision in any of these proceedings could significantly harm the Company's business and consolidated financial position, results of operations or cash flows. The Company and its subsidiaries are involved in litigation matters and claims in the normal course of business. In the past, the Company and its subsidiaries have litigated to enforce their respective patents, to enforce the terms of license agreements, to determine the validity and scope of the proprietary rights of others and to defend itself or its customers against claims of infringement or invalidity. The Company expects it or its subsidiaries will be involved in similar legal proceedings in the future, including proceedings regarding infringement of its patents, and proceedings to ensure proper and full payment of royalties by licensees under the terms of its license agreements. |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 16 – SEGMENT AND GEOGRAPHIC INFORMATION The Company changed its operational structure in the fourth quarter of 2022, resulting in one reportable segment: Intellectual Property ("IP") Licensing. Reportable segments are identified based on the Company's organizational structure and information reviewed by the Company’s chief operating decision maker (“CODM”) to evaluate performance and allocate resources. The Company’s Chief Executive Officer is also the CODM as defined by the authoritative guidance on segment reporting. A portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., and it is expected that this revenue will continue to account for a portion of total revenue in future periods. The table below lists the geographic revenue for the periods indicated (in thousands): Three Months Ended 2023 2022 U.S. and Canada $ 86,085 73 % $ 130,940 95 % Asia 28,620 25 5,729 4 Europe and Middle East 2,188 2 1,352 1 Other 414 — 511 — $ 117,307 100 % $ 138,532 100 % For the three months ended March 31, 2023 and 2022, two customers each accounted for 10% or more of total revenue. At March 31, 2023, the Company had two customers representing 43 % and 16 % of aggregate accounts receivable, respectively. At December 31, 2022, the Company had two customers representing 36 % and 29 % of aggregate accounts receivable, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 17 – SUBSEQUENT EVENTS Declaration of Cash Dividends On May 4, 2023 , the Board declared a cash dividend of $ 0.05 per share of common stock, payable on June 20, 2023 , for the stockholders of record at the close of business on May 30, 2023 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared by the Company in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The amounts as of December 31, 2022 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, 2022, filed on March 1, 2023 (the “Form 10-K”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary (consisting of normal recurring adjustments) 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 Condensed Consolidated Financial Statements should be read in conjunction with the annual audited Consolidated Financial Statements and notes thereto included in the Form 10-K as of and for the year ended December 31, 2022. |
Reclassification | Reclassification Certain reclassifications have been made to prior period balances in order to conform to the current period’s presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging and subjective judgment include identifying the performance obligations in the contract, estimating variable consideration, estimating quarterly royalties prior to receiving the royalty reports from the licensees, determining standalone selling prices, allocating consideration in a contract with multiple performance obligations, the assessment of the recoverability of goodwill, 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 purchase accounting resulting from business combinations, among others. Actual results experienced by the Company may differ from management’s estimates. These estimates may change, as new events occur and additional information is obtained, and are recognized in the consolidated financial statements as soon as they become known. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which provides further clarification on the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modifications made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which deferred the application dates of Topic 848 to December 31, 2024. The Company currently has debt agreements that reference LIBOR and will apply the amendments prospectively through December 31, 2024 as these contracts are modified to reference other rates. The Company does not anticipate the adoption will have a material impact to the Company’s Condensed Consolidated Financial Statements. |
Revenue Recognition | Revenue Recognition General Revenue is recognized when control of the intellectual property (“IP”) rights is transferred to a customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for the licensing of the Company’s IP, which may include various combinations of IP rights and services which are generally capable of being distinct and accounted for as separate performance obligations. In situations where foreign withholding taxes are withheld by the Company’s licensee, revenue is recognized gross of withholding taxes that are remitted directly by the licensee to a local tax authority. 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 a contract with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative standalone selling price basis. The determination of standalone selling price considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. When observable prices are not available, standalone selling price for separate performance obligations is based on the adjusted market assessment approach to estimate the price that a customer in the relevant market would be willing to pay for licensing the Company’s IP rights. The allocation of transaction price among performance obligations in a contract may impact the amount and timing of revenue recognized in the Condensed Consolidated Statements of Operations during a given period. When a contract with a customer includes variable consideration, an estimate of the consideration which the Company expects to be entitled to for transferring the promised IP rights or services is made at contract inception and in each subsequent reporting period until the uncertainty associated with the variable consideration is resolved. The amount of variable consideration is estimated by considering all available information (historical, current, and forecast) and is updated as additional information becomes available. The estimate of variable consideration is included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Subsequent changes in the transaction price resulting from changes in the estimate of variable consideration are allocated to the performance obligations in the contract on the same basis as at contract inception. When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of IP, 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 IP License Arrangements The Company licenses (i) its media patent portfolios (“Media IP licensing”) to multichannel video programming distributors, over-the-top video service providers, consumer electronics manufacturers, social media and other new media companies and (ii) its semiconductor technologies and associated patent portfolios (“Semiconductor IP licensing”) to memory, logic, sensors, radio frequency component and foundry companies. The Company generally licenses its IP portfolios under three models: (i) fixed-fee Media IP licensing, (ii) fixed-fee or minimum guarantee Semiconductor IP licensing, and (iii) per-unit or per-subscriber Media IP or Semiconductor IP royalty licensing. Fixed-fee Media IP Licensing The Company’s long-term, fixed-fee Media IP licensing contracts provide its customers with rights to future patented technologies over the term of the contract that are highly interdependent or highly interrelated to the patented technologies provided at the inception of the contract. The Company treats these rights as a single performance obligation with revenue recognized on a straight-line basis over the term of the fixed-fee license contract. Fixed-fee or Minimum Guarantee Semiconductor IP Licensing The Company has entered into Semiconductor IP licenses that have a fixed fee or a minimum guarantee, whereby licensees pay a fixed fee for the right to incorporate the Company’s IP technologies in the licensee’s products over the license term. In contracts 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 IP and begins to benefit from the license, 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 contracts where the customer exceeds the minimum, the Company recognizes revenue relating to any additional per-unit fees in the periods it believes the customer has exceeded the minimum and adjusts the revenue based on actual usage once that is reported by the customer. Per-unit or Per-subscriber Media IP or Semiconductor IP Royalty Licensing The Company recognizes revenue from per-unit or per-subscriber IP royalty licenses in the period in which the licensee’s sales or production are estimated to have occurred, which results in an adjustment to revenue when actual sales or production are subsequently reported by the licensee, which is generally in the month or quarter following usage or shipment. Estimating customers’ monthly or 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. IP License Contracts with Multiple Performance Obligations At times, the Company enters into long-term license contracts with more than one performance obligation, which may include releases from past patent infringement claims or one or more prospective licenses. In these arrangements, the Company allocates the transaction price between releases for past patent infringement claims and prospective licenses based on their relative standalone selling prices, which requires significant management judgment. In determining the standalone selling price of each performance obligation, the Company considers such factors as the number of past and projected future subscribers, units shipped and units manufactured, as well as the per-subscriber or per-unit licensing rates the Company generally receives from licensees of comparable sizes in comparable markets and geographies. As a release from past patent infringement claims is generally satisfied at execution of the contract, the transaction price allocated to the release from past patent infringement claims is generally recognized in the period the contract is executed. Transaction price allocated to prospective Media IP licenses is recognized ratably over the license term, and transaction price allocated to prospective Semiconductor IP licenses is recognized upon execution of the contract. Practical Expedients and Exemptions The Company applies a practical expedient to not perform an evaluation of whether a contract includes a significant financing component when the timing of revenue recognition differs from the timing of cash collection by one year or less. The Company applies a practical expedient to expense costs to obtain a contract with a customer as incurred as a component of selling, general and administrative expenses when the amortization period would have been one year or less. The Company applies a practical expedient when disclosing revenue expected to be recognized from unsatisfied performance obligations to exclude contracts with customers with an original duration of less than one year ; amounts attributable to variable consideration arising from (i) a sales-based or usage-based royalty of an IP license or (ii) when variable consideration is allocated entirely to a wholly unsatisfied performance obligation; or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets | Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands): March 31, 2023 December 31, 2022 Unbilled contracts receivable $ 77,948 $ 73,754 Other current assets 534 512 Long-term unbilled contracts receivable (1) 64,124 40,705 Other long-term assets 1,101 1,144 Total contract assets $ 143,707 $ 116,115 (1) The long-term unbilled contracts receivable increase relates primarily to the recognition of revenue from two long-term semiconductor patent portfolio license agreements entered into during the three months ended March 31, 2023. |
Schedule of Revenue Recognized in Period | The following table presents additional revenue and contract disclosures (in thousands): Three Months Ended 2023 2022 Revenue recognized in the period from: Amounts included in deferred revenue at the beginning of the period $ 4,782 $ 1,353 Performance obligations satisfied in previous periods (1) $ 753 $ 117 (1) Performance obligations satisfied in previous periods consist of settlements of litigation for past royalties owed pursuant to expired or terminated IP license agreements and revenue from releases for past patent infringement claims. |
Schedule of Remaining Performance Obligations | Remaining revenue under contracts with performance obligations represents the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) under certain of the Company’s fixed fee arrangements (in thousands). As of Revenue from contracts with performance obligations expected to be satisfied in: 2023 (remaining 9 months) $ 119,211 2024 147,551 2025 142,925 2026 46,161 2027 35,801 Thereafter 76,526 Total $ 568,175 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Prepaid income taxes $ 6,757 $ 7,252 Prepaid insurance 1,383 2,103 Prepaid expenses 2,027 1,924 Other 1,326 645 $ 11,493 $ 11,924 |
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following (in thousands): March 31, 2023 December 31, 2022 Equipment, furniture and other $ 14,478 $ 14,148 Leasehold improvements 5,117 5,057 19,595 19,205 Less: accumulated depreciation and amortization ( 15,039 ) ( 14,655 ) $ 4,556 $ 4,550 |
Schedule of Other Long Term Assets | Other long-term assets consisted of the following (in thousands): March 31, 2023 December 31, 2022 Long-term deferred tax assets $ 32,905 $ 35,278 Other assets 4,946 5,472 $ 37,851 $ 40,750 |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Employee compensation and benefits $ 2,981 $ 6,978 Accrued legal fees 7,113 4,942 Accrued income taxes 174 358 Accrued expenses 13,637 12,745 Current portion of guarantee (1) 1,592 2,431 Current portion of operating lease liabilities 2,177 2,108 Other 1,753 1,715 $ 29,427 $ 31,277 (1) Refer to “Note 15 – Commitments and Contingencies” for further detail on the nature of the guarantee. |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): March 31, 2023 December 31, 2022 Long-term portion of guarantee (1) $ 18,064 $ 18,064 Other 1,958 1,979 $ 20,022 $ 20,043 (1) Refer to “Note 15 – Commitments and Contingencies” for further detail on the nature of the guarantee. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Marketable Securities | The following is a summary of marketable securities at March 31, 2023 and December 31, 2022 (in thousands): March 31, 2023 Cost Gross Gross Allowance for Credit Losses Estimated Marketable securities Commercial paper $ 29,574 $ 1 $ ( 9 ) $ — $ 29,566 Total debt securities 29,574 1 ( 9 ) $ — 29,566 Money market funds 3,923 — — — 3,923 Total equity securities 3,923 — — — 3,923 Total marketable securities $ 33,497 $ 1 $ ( 9 ) $ — $ 33,489 Reported in: Cash and cash equivalents $ 33,489 December 31, 2022 Cost Gross Gross Allowance for Credit losses Estimated Marketable securities Commercial paper $ 29,018 $ 3 $ ( 6 ) $ — $ 29,015 Total debt securities 29,018 3 ( 6 ) — 29,015 Money market funds 4,107 — — — 4,107 Total equity securities 4,107 — — — 4,107 Total marketable securities $ 33,125 $ 3 $ ( 6 ) $ — $ 33,122 Reported in: Cash and cash equivalents $ 33,122 |
Fair Value and Gross Unrealized Losses Related to Individual Available-for-Sale Debt Securities | The following table summarizes the fair value and gross unrealized losses related to individual AFS debt securities at March 31, 2023 and December 31, 2022, which have been in a continuous unrealized loss position, aggregated by investment category and length of time (in thousands): Less Than 12 Months 12 Months or More Total Fair Value March 31, 2023 Fair Value Gross Fair Value Gross Fair Value Gross Cash and Cash Equivalents AFS Debt Securities Commercial Paper $ 29,566 $ ( 9 ) $ — $ — $ 29,566 $ ( 9 ) $ 29,566 $ — Less Than 12 Months 12 Months or More Total Fair Value December 31, 2022 Fair Value Gross Fair Value Gross Fair Value Gross Cash and Cash Equivalents AFS Debt Securities Commercial paper $ 29,015 $ ( 6 ) $ — $ — $ 29,015 $ ( 6 ) $ 29,015 $ — |
Estimated Fair Value of Marketable Debt Securities by Contractual Maturity | The estimated fair value of marketable debt securities by contractual maturity at March 31, 2023 is shown below (in thousands). Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties. Estimated Due in one year or less $ 29,566 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets Measured on Recurring Basis | Fair Value Quoted Significant Significant Assets Marketable securities Money market funds - equity securities (1) $ 3,923 $ 3,923 $ — $ — Commercial paper - debt securities (2) 29,566 — 29,566 — Total Assets $ 33,489 $ 3,923 $ 29,566 $ — (1) Reported as cash and cash equivalents in the Condensed Consolidated Balance Sheet. (2) Reported as cash and cash equivalents as these were purchased with original maturities of three months or less at the date of purchase. The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of December 31, 2022 (in thousands): Fair Value Quoted Significant Significant Assets Marketable securities Money market funds - equity securities (1) $ 4,107 $ 4,107 $ — $ — Commercial paper - debt securities (2) 29,015 — 29,015 — Total Assets $ 33,122 $ 4,107 $ 29,015 $ — (1) Reported as cash and cash equivalents in the Condensed Consolidated Balance Sheet. (2) Reported as cash and cash equivalents as these were purchased with original maturities of three months or less at the date of purchase. |
Schedule of Carrying Amounts and Estimated Fair Values | The carrying amounts and estimated fair values are as follows (in thousands): March 31, 2023 December 31, 2022 Carrying Estimated Carrying Estimated Refinanced Term B Loans (1) 646,938 640,468 729,393 700,217 Total long-term debt, net $ 646,938 $ 640,468 $ 729,393 $ 700,217 (1) Carrying amounts of long-term debt are net of unamortized debt discount and issuance costs of $ 18.7 million and $ 19.9 million as of March 31, 2023 and December 31, 2022, respectively. See “Note 9 – Debt ” for additional information. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Consolidated Statement of Operations, Balance Sheet and Cash flows of Discontinued Operation | The financial results of Xperi Inc. for the three months ended March 31, 2022 are presented as net loss from discontinued operations, net of tax, on the Condensed Consolidated Statements of Operations. The following table presents financial results of Xperi Inc. (in thousands): Three Months Ended Revenue $ 118,888 Operating expenses: Cost of revenue 27,407 Research and development 50,239 Selling, general and administrative 36,696 Depreciation expense 5,563 Amortization expense 14,793 Litigation expense 675 Total operating expenses 135,373 Operating loss ( 16,485 ) Other income and expense, net 631 Loss before taxes ( 15,854 ) Provision for income taxes 16,016 Net loss from discontinued operations, net of tax $ ( 31,870 ) Less: net loss attributable to noncontrolling interest ( 968 ) Net loss attributable to discontinued operations $ ( 30,902 ) The following table presents selected financial information related to cash flows from discontinued operations (in thousands): Three Months Ended Net cash from operating activities $ ( 18,709 ) Net cash from investing activities $ ( 4,452 ) |
Goodwill and Identified Intan_2
Goodwill and Identified Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Identified Intangible Assets | Identified intangible assets consisted of the following (in thousands): Average March 31, 2023 December 31, 2022 Life Gross Accumulated Net Gross Accumulated Net Finite-lived intangible assets Acquired patents / core technology 3 - 10 $ 645,928 $ ( 283,505 ) $ 362,423 $ 645,928 $ ( 270,275 ) $ 375,653 Existing technology / content database 5 - 10 38,681 ( 37,389 ) 1,292 38,681 ( 36,614 ) 2,067 Customer contracts and related relationships 3 - 9 155,900 ( 110,896 ) 45,004 155,900 ( 101,252 ) 54,648 Trademarks/trade name 4 - 10 1,300 ( 1,232 ) 68 1,300 ( 1,192 ) 108 Total intangible assets $ 841,809 $ ( 433,022 ) $ 408,787 $ 841,809 $ ( 409,333 ) $ 432,476 |
Estimated Future Amortization Expense | As of March 31, 2023, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands): Amounts 2023 (remaining 9 months) $ 69,851 2024 68,809 2025 52,731 2026 52,597 2027 52,246 Thereafter 112,553 $ 408,787 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Amounts of Debt | The outstanding amounts of debt were as follows (in thousands): March 31, 2023 December 31, 2022 Refinanced Term B Loans $ 665,625 $ 749,250 Unamortized debt discount and issuance costs ( 18,687 ) ( 19,857 ) 646,938 729,393 Less: current portion, net of debt discount and issuance costs ( 36,344 ) ( 109,813 ) Total long-term debt, net of current portion $ 610,594 $ 619,580 |
Summary of Future Minimum Principal Payments for Long-term Debt, Excluding Any Additional Payment Required by the Excess Cash Flow Provision | As of March 31, 2023, future minimum principal payments for long-term debt, excluding any additional principal payment required by the excess cash flow provision, are summarized as follows (in thousands): Amounts 2023 (remaining 9 months) $ 30,375 2024 40,500 2025 40,500 2026 40,500 2027 40,500 Thereafter 473,250 Total $ 665,625 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted shares (in thousands): Three Months Ended 2023 2022 Numerator: Net income from continuing operations $ 29,021 $ 55,845 Net loss attributable to discontinued operations — ( 30,902 ) Net income attributable to the Company $ 29,021 $ 24,943 Denominator: Weighted average shares of common stock outstanding 105,585 103,679 Add: Effect of dilutive securities associated with options 1 3 Add: Effect of dilutive securities associated with restricted stock awards and units 7,861 1,650 Weighted average common shares - dilutive 113,447 105,332 Basic net income (loss) per share Net income from continuing operations $ 0.27 $ 0.54 Net loss attributable to discontinued operations — ( 0.30 ) Net income attributable to the Company $ 0.27 $ 0.24 Diluted net income (loss) per share Net income from continuing operations $ 0.26 $ 0.53 Net loss attributable to discontinued operations — ( 0.29 ) Net income attributable to the Company $ 0.26 $ 0.24 Anti-dilutive employee stock-based awards, excluded 440 3,600 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | Options Outstanding Number of Weighted Balance at December 31, 2022 364 $ 13.06 Options granted — $ — Options exercised ( 38 ) $ 10.67 Options canceled / forfeited / expired ( 26 ) $ 10.99 Balance at March 31, 2023 300 $ 13.54 |
Summary of Restricted Stock Units | : Restricted Stock and Restricted Stock Units Number of Number of Total Weighted Balance at December 31, 2022 9,048 1,525 10,573 $ 10.48 Awards and units granted 1,407 638 2,045 $ 10.41 Awards and units vested / earned ( 1,744 ) — ( 1,744 ) $ 10.48 Awards and units canceled / forfeited ( 192 ) — ( 192 ) $ 9.74 Balance at March 31, 2023 8,519 2,163 10,682 $ 10.48 |
Stock-Based Compensation Expe_2
Stock-Based Compensation Expense (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Effect of Recording Stock-Based Compensation Expense | The effect of recording stock-based compensation (“SBC”) expense for the three months ended March 31, 2023 and 2022 is as follows (in thousands): Three Months Ended 2023 2022 Research and development $ 594 $ 375 Selling, general and administrative 3,046 7,771 Total stock-based compensation expense $ 3,640 $ 8,146 |
Employee Stock Purchase Plan | |
Schedule of Assumptions Used to Value Awards Granted | The following assumptions were used to value the ESPP shares granted during the three months ended March 31, 2022: March 2022 Expected life (years) 2.0 Risk-free interest rate 1.3 % Dividend yield 1.1 % Expected volatility 48.5 % |
Restricted Stock Units | |
Schedule of Assumptions Used to Value Awards Granted | The following assumptions were used to value the restricted stock units subject to market conditions granted during the three months ended March 31, 2023: March 2023 Expected life (years) 3.0 Risk-free interest rate 4.5 % Dividend yield 1.9 % Expected volatility 68.5 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Costs | The components of operating lease costs were as follows (in thousands): Three Months Ended 2023 2022 Fixed lease cost $ 571 $ 504 Variable lease cost 151 219 Total operating lease cost $ 722 $ 723 |
Schedule of Other Information Related to Leases | Other information related to leases was as follows (in thousands, except lease term and discount rate): Three Months Ended 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 588 $ 550 ROU assets obtained in exchange for new lease liabilities: Operating leases $ — $ 1,153 March 31, 2023 December 31, 2022 Weighted-average remaining lease term (years): Operating leases 2.95 3.19 Weighted-average discount rate: Operating leases 5.4 % 5.4 % |
Schedule of Future Minimum Lease Payments and Related Lease Liabilities | Future minimum lease payments and related lease liabilities as of March 31, 2023 were as follows (in thousands): Operating Lease Payments (1) 2023 (remaining 9 months) $ 1,841 2024 2,525 2025 1,975 2026 291 2027 299 Thereafter — Total lease payments 6,931 Less: imputed interest ( 525 ) Present value of lease liabilities: $ 6,406 Less: current obligations under leases (accrued liabilities) 2,177 Noncurrent operating lease liabilities $ 4,229 (1) Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes. |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Geographic Revenue Information | The table below lists the geographic revenue for the periods indicated (in thousands): Three Months Ended 2023 2022 U.S. and Canada $ 86,085 73 % $ 130,940 95 % Asia 28,620 25 5,729 4 Europe and Middle East 2,188 2 1,352 1 Other 414 — 511 — $ 117,307 100 % $ 138,532 100 % |
The Company and Basis of Pres_2
The Company and Basis of Presentation - Additional Information (Details) | 3 Months Ended | |||
Oct. 01, 2022 NumberOfShare | Mar. 31, 2023 Patent Segment $ / shares | Dec. 31, 2022 Segment $ / shares | Oct. 03, 2022 $ / shares | |
Organization Consolidation And Presentation [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Number of principal segment | Segment | 1 | 1 | ||
Distribution of outstanding shares, percentage | 100% | |||
Common stock, conversion ratio | 4 | |||
Number of each shares of common stock held on record date | NumberOfShare | 10 | |||
Xperi Inc | ||||
Organization Consolidation And Presentation [Line Items] | ||||
Ownership interest, percentage | 0% | |||
Minimum | ||||
Organization Consolidation And Presentation [Line Items] | ||||
Number of patents and applications | Patent | 9,950 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) RevenueModel | Dec. 31, 2022 USD ($) | |
Revenue Recognition [Line Items] | ||
Number of revenue models used for company licenses | RevenueModel | 3 | |
Accounts receivable allowance for credit losses | $ | $ 1,463 | $ 713 |
Maximum | ||
Revenue Recognition [Line Items] | ||
Practical expedient, timing of revenue recognition differs from the timing of cash collection, period | 1 year | |
Revenue recognition practical expedient amortization period | 1 year | |
Practical expedient revenue expected to be recognized from unsatisfied performance obligations, duration | 1 year |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Unbilled contracts receivable | $ 77,948 | $ 73,754 |
Other current assets | 534 | 512 |
Long-term unbilled contracts receivable | 64,124 | 40,705 |
Other long-term assets | 1,101 | 1,144 |
Total contract assets | $ 143,707 | $ 116,115 |
Revenue - Schedule of Revenue R
Revenue - Schedule of Revenue Recognized in Period (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Amounts included in deferred revenue at the beginning of the period | $ 4,782 | $ 1,353 |
Performance obligations satisfied in previous periods | $ 753 | $ 117 |
Revenue - Schedule of Remaining
Revenue - Schedule of Remaining Performance Obligations (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligations | $ 568,175 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligations | $ 119,211 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligations | $ 147,551 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligations | $ 142,925 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligations | $ 46,161 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2027-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligations | $ 35,801 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2028-04-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligations | $ 76,526 |
Performance obligations expected to be satisfied, expected timing |
Revenue - Schedule of Remaini_2
Revenue - Schedule of Remaining Performance Obligations (Details 1) $ in Thousands | Mar. 31, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 568,175 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid income taxes | $ 6,757 | $ 7,252 |
Prepaid insurance | 1,383 | 2,103 |
Prepaid expenses | 2,027 | 1,924 |
Other | 1,326 | 645 |
Other current assets, total | $ 11,493 | $ 11,924 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 19,595 | $ 19,205 |
Less: accumulated depreciation and amortization | (15,039) | (14,655) |
Property and equipment, net | 4,556 | 4,550 |
Equipment, furniture and other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 14,478 | 14,148 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,117 | $ 5,057 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Captions - Schedule of Other Long Term Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Long-term deferred tax assets | $ 32,905 | $ 35,278 |
Other assets | 4,946 | 5,472 |
Other long-term assets, total | $ 37,851 | $ 40,750 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Captions -Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Employee compensation and benefits | $ 2,981 | $ 6,978 |
Accrued legal fees | 7,113 | 4,942 |
Accrued income taxes | 174 | 358 |
Accrued expenses | 13,637 | 12,745 |
Current portion of guarantee | 1,592 | 2,431 |
Current portion of operating lease liabilities | $ 2,177 | $ 2,108 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued liabilities, total | Accrued liabilities, total |
Other | $ 1,753 | $ 1,715 |
Accrued liabilities, total | $ 29,427 | $ 31,277 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Captions - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Long-term portion of guarantee | $ 18,064 | $ 18,064 |
Other | 1,958 | 1,979 |
Other long-term liabilities, total | $ 20,022 | $ 20,043 |
Financial Instruments - Summary
Financial Instruments - Summary of Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Marketable Securities [Line Items] | ||
Debt securities, Cost | $ 29,574 | $ 29,018 |
Debt securities, Gross Unrealized Gains | 1 | 3 |
Debt securities, Gross Unrealized Losses | (9) | (6) |
Debt securities, Allowance for Credit Losses | 0 | 0 |
Debt securities, Estimated Fair Values | 29,566 | 29,015 |
Equity securities, Cost | 3,923 | 4,107 |
Equity securities, Gross Unrealized Gains | 0 | 0 |
Equity securities, Gross Unrealized Losses | 0 | 0 |
Equity securities, Allowance for Credit Losses | 0 | 0 |
Equity securities, Estimated Fair Values | 3,923 | 4,107 |
Marketable securities, Cost | 33,497 | 33,125 |
Marketable securities, Gross Unrealized Gains | 1 | 3 |
Marketable securities, Gross Unrealized Losses | (9) | (6) |
Marketable securities, Allowance for Credit Losses | 0 | 0 |
Marketable securities, Estimated Fair Values | 33,489 | 33,122 |
Commercial paper | ||
Marketable Securities [Line Items] | ||
Debt securities, Cost | 29,574 | 29,018 |
Debt securities, Gross Unrealized Gains | 1 | 3 |
Debt securities, Gross Unrealized Losses | (9) | (6) |
Debt securities, Allowance for Credit Losses | 0 | 0 |
Debt securities, Estimated Fair Values | 29,566 | 29,015 |
Money market funds | ||
Marketable Securities [Line Items] | ||
Equity securities, Cost | 3,923 | 4,107 |
Equity securities, Gross Unrealized Gains | 0 | 0 |
Equity securities, Gross Unrealized Losses | 0 | 0 |
Equity securities, Allowance for Credit Losses | 0 | 0 |
Equity securities, Estimated Fair Values | 3,923 | 4,107 |
Cash and cash equivalents | ||
Marketable Securities [Line Items] | ||
Marketable securities, Estimated Fair Values | $ 33,489 | $ 33,122 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Investments [Line Items] | ||
Cash, cash equivalents and short -term investments | $ 82,400,000 | $ 114,600,000 |
Impairment charges related to marketable debt securities | 0 | |
Operating Accounts | ||
Schedule Of Investments [Line Items] | ||
Cash, cash equivalents and short -term investments | $ 48,900,000 | $ 81,500,000 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value and Gross Unrealized Losses Related to Individual Available-for-Sale Debt Securities (Details) - Commercial paper - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | $ 29,566 | $ 29,015 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Losses | (9) | (6) |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or more, Fair Value | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or more, Gross Unrealized Losses | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 29,566 | 29,015 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Gross Unrealized Losses | (9) | (6) |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Cash and Cash Equivalents | 29,566 | 29,015 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, AFS Debt Securities | $ 0 | $ 0 |
Financial Instruments - Estimat
Financial Instruments - Estimated Fair Value of Marketable Debt Securities by Contractual Maturity (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Investments, Debt and Equity Securities [Abstract] | |
Due in one year or less | $ 29,566 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assets Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 33,489 | $ 33,122 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,923 | 4,107 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 29,566 | 29,015 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,923 | 4,107 |
Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 3,923 | 4,107 |
Money market funds | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Money market funds | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 29,566 | 29,015 |
Commercial paper | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Commercial paper | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 29,566 | 29,015 |
Commercial paper | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 0 | $ 0 |
Fair Value - Schedule of Carryi
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, net - Carrying Amount | $ 646,938 | $ 729,393 |
Recurring | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, net - Carrying Amount | 646,938 | 729,393 |
Total long-term debt, net - Estimated Fair Value | 640,468 | 700,217 |
Recurring | Refinanced Term B Loans | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, net - Carrying Amount | 646,938 | 729,393 |
Total long-term debt, net - Estimated Fair Value | $ 640,468 | $ 700,217 |
Fair Value - Schedule of Carr_2
Fair Value - Schedule of Carrying Amounts and Estimated Fair Values (Parenthetical) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Unamortized debt discount and issuance costs | $ 18,687 | $ 19,857 |
Term B Loan Facility | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Unamortized debt discount and issuance costs | $ 18,700 | $ 19,900 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 39 Months Ended | |||
Oct. 01, 2022 NumberOfShare | Mar. 31, 2023 USD ($) Segment | Dec. 31, 2022 Segment | Mar. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Distribution of outstanding shares, percentage | 100% | |||||
Stockholder of record received shares | 4 | |||||
Number of each shares of common stock held on record date | NumberOfShare | 10 | |||||
Number of principal businesses segment | Segment | 1 | 1 | ||||
Separation costs | $ 1 | $ 2.8 | $ 28.6 | $ 43.3 | ||
Operating Expenses | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Separation costs | $ 14.7 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Financial Results (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Operating expenses: | |
Net loss from discontinued operations, net of tax | $ (31,870) |
Net loss attributable to discontinued operations | (30,902) |
Xperi Inc. | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Revenue | 118,888 |
Operating expenses: | |
Cost of revenue | 27,407 |
Research and development | 50,239 |
Selling, general and administrative | 36,696 |
Depreciation expense | 5,563 |
Amortization expense | 14,793 |
Litigation expense | 675 |
Total operating expenses | 135,373 |
Operating loss | (16,485) |
Other income and expense, net | 631 |
Loss before taxes | (15,854) |
Provision for income taxes | 16,016 |
Net loss from discontinued operations, net of tax | (31,870) |
Less: net loss attributable to noncontrolling interest | (968) |
Net loss attributable to discontinued operations | $ (30,902) |
Discontinued Operations - Sum_2
Discontinued Operations - Summary Selected Financial Information Related to Cash Flows (Details) - Xperi Inc. $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Net cash from operating activities | $ (18,709) |
Net cash from investing activities | $ (4,452) |
Goodwill and Identified Intan_3
Goodwill and Identified Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Carrying value of goodwill | $ 313,660,000 | $ 313,660,000 | |
Changes in carrying value of goodwill | 0 | ||
Impairment charges | $ 0 | $ 0 |
Goodwill and Identified Intan_4
Goodwill and Identified Intangible Assets - Identified Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 841,809 | $ 841,809 |
Finite-lived intangible assets, Accumulated Amortization | (433,022) | (409,333) |
Finite-lived intangible assets, Net | 408,787 | 432,476 |
Acquired patents / core technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | 645,928 | 645,928 |
Finite-lived intangible assets, Accumulated Amortization | (283,505) | (270,275) |
Finite-lived intangible assets, Net | $ 362,423 | 375,653 |
Acquired patents / core technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | |
Acquired patents / core technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 10 years | |
Existing technology / content database | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 38,681 | 38,681 |
Finite-lived intangible assets, Accumulated Amortization | (37,389) | (36,614) |
Finite-lived intangible assets, Net | $ 1,292 | 2,067 |
Existing technology / content database | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 5 years | |
Existing technology / content database | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 10 years | |
Customer contracts and related relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 155,900 | 155,900 |
Finite-lived intangible assets, Accumulated Amortization | (110,896) | (101,252) |
Finite-lived intangible assets, Net | $ 45,004 | 54,648 |
Customer contracts and related relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | |
Customer contracts and related relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 9 years | |
Trademarks/trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Assets | $ 1,300 | 1,300 |
Finite-lived intangible assets, Accumulated Amortization | (1,232) | (1,192) |
Finite-lived intangible assets, Net | $ 68 | $ 108 |
Trademarks/trade name | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 4 years | |
Trademarks/trade name | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 10 years |
Goodwill and Identified Intan_5
Goodwill and Identified Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining 9 months) | $ 69,851 | |
2024 | 68,809 | |
2025 | 52,731 | |
2026 | 52,597 | |
2027 | 52,246 | |
Thereafter | 112,553 | |
Finite-lived intangible assets, Net | $ 408,787 | $ 432,476 |
Debt - Schedule of Outstanding
Debt - Schedule of Outstanding Amounts of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Line Of Credit Facility [Line Items] | ||
Long-term debt, Gross | $ 665,625 | |
Unamortized debt discount and issuance costs | (18,687) | $ (19,857) |
Long-term debt | 646,938 | 729,393 |
Less: current portion, net of debt discount and issuance costs | (36,344) | (109,813) |
Long-term debt, net | 610,594 | 619,580 |
Refinanced Term B Loans | ||
Line Of Credit Facility [Line Items] | ||
Long-term debt, Gross | $ 665,625 | $ 749,250 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) | 3 Months Ended | ||||
Jun. 08, 2021 | Jun. 01, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Line Of Credit Facility [Line Items] | |||||
Voluntary prepayment against the term loan | $ 83,625,000 | $ 10,125,000 | |||
Unamortized debt discount and issuance costs | 18,687,000 | $ 19,857,000 | |||
Additional cash payment under excess cash flow provision | 73,500,000 | ||||
Borrowings | 646,938,000 | $ 729,393,000 | |||
Interest expense | 15,938,000 | 8,429,000 | |||
Amortized costs | 1,170,000 | 1,123,000 | |||
2020 Term B Loan Facility | |||||
Line Of Credit Facility [Line Items] | |||||
Loan facility, term | 5 years | ||||
Borrowing capacity | $ 1,050,000,000 | ||||
Refinanced Term B Loans | |||||
Line Of Credit Facility [Line Items] | |||||
Borrowing capacity | $ 810,000,000 | ||||
Voluntary prepayment against the term loan | $ 50,600,000 | ||||
Debt instrument, prepayment premium | 1% | ||||
Debt instrument, maturity date | Jun. 08, 2028 | ||||
Interest rate | 9.43% | ||||
Interest expense | $ 15,900,000 | 8,400,000 | |||
Amortized costs | $ 1,200,000 | $ 1,100,000 | |||
Refinanced Term B Loans | Base Rate | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 2.50% | ||||
Refinanced Term B Loans | Eurodollar, London Interbank Offered Rate (LIBOR) | |||||
Line Of Credit Facility [Line Items] | |||||
Debt instrument, basis spread on variable rate | 3.50% | ||||
2021 Convertible Notes | |||||
Line Of Credit Facility [Line Items] | |||||
Unamortized debt discount and issuance costs | $ 18,700,000 | ||||
Borrowings | $ 665,600,000 |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Principal Payments for Long-term Debt, Excluding Any Additional Payment Required by the Excess Cash Flow Provision (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 (remaining 9 months) | $ 30,375 |
2024 | 40,500 |
2025 | 40,500 |
2026 | 40,500 |
2027 | 40,500 |
Thereafter | 473,250 |
Total | $ 665,625 |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income from continuing operations | $ 29,021 | $ 55,845 |
Net loss attributable to discontinued operations | (30,902) | |
Net income attributable to the Company | $ 29,021 | $ 24,943 |
Denominator: | ||
Weighted average shares of common stock outstanding | 105,585 | 103,679 |
Add: Effect of dilutive securities associated with options | 1 | 3 |
Add: Effect od dilutive securities associated with restricted stock awards and units | 7,861 | 1,650 |
Weighted average common shares - dilutive | 113,447 | 105,332 |
Basic net income (loss) per share | ||
Net income from continuing operations | $ 0.27 | $ 0.54 |
Net loss attributable to discontinued operations | (0.30) | |
Net income | 0.27 | 0.24 |
Diluted net income (loss) per share | ||
Net income from continuing operations | 0.26 | 0.53 |
Net loss attributable to discontinued operations | (0.29) | |
Net income | $ 0.26 | $ 0.24 |
Anti-dilutive employee stock-based awards, excluded | 440 | 3,600 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | 3 Months Ended | 34 Months Ended | ||||
Apr. 29, 2022 shares | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | Apr. 22, 2021 USD ($) | Jun. 12, 2020 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Dividends declared, per share | $ / shares | $ 0.05 | $ 0.05 | ||||
Stock repurchase program, authorized amount | $ | $ 100,000,000 | $ 150,000,000 | ||||
Treasury stock, total repurchase during period (in shares) | 10,000,000 | |||||
Treasury stock, average price of share repurchased (in dollars per share) | $ / shares | $ 17.24 | |||||
Treasury stock, total cost of repurchased stock | $ | $ 17,260,000 | $ 172,200,000 | ||||
Stock repurchase program, remaining amount available for repurchase | $ | $ 77,800,000 | $ 77,800,000 | ||||
Withholding taxes related to net share settlement of restricted awards | 700,000 | 700,000 | ||||
Tax withholding on restricted stock awards | $ | $ 6,560,000 | $ 11,100,000 | ||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Additional shares reserved for issuance | 6,000,000 | |||||
Expiration period | 24 months | |||||
Shares reserved for grant (in shares) | 5,500,000 | 5,500,000 | ||||
Rolling expiration period | 24 months | |||||
Maximum employee subscription rate | 100% | 100% | ||||
Purchase price of common stock, percent | 85% | |||||
Maximum employee subscription amount | $ | $ 25,000 | $ 25,000 | ||||
Performance Shares | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance awards, percentage of grant available to vest | 0% | |||||
Performance Shares | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance awards, percentage of grant available to vest | 200% | |||||
2020 EIP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation full value awards counted against shares available for issuance ratio | 1.5 | |||||
Number of shares reserved for issuance | 16,800,000 | 16,800,000 | ||||
Additional shares reserved for issuance | 8,800,000 | |||||
Expiration period | 10 years | |||||
Vesting period | 4 years | |||||
2020 EIP | Time-based Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Assumed Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expiration period | 7 years | |||||
Vesting period | 4 years | |||||
Assumed Plans | Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
2020 EIP and Assumed Plans | Employee Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares reserved for grant (in shares) | 3,200,000 | 3,200,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Shares Subject to Options | |
Number of Shares, Beginning balance (shares) | shares | 364 |
Number of Shares, Options exercised (shares) | shares | (38) |
Number of Shares, Options canceled / forfeited / expired (shares) | shares | (26) |
Number of Shares, Ending balance (shares) | shares | 300 |
Weighted Average Exercise Price Per Share | |
Weighted Average Exercise Price Per Share, Beginning balance (USD per share) | $ / shares | $ 13.06 |
Weighted Average Exercise Price Per Share, Options exercised (USD per share) | $ / shares | 10.67 |
Weighted Average Exercise Price Per Share, Options canceled / forfeited / expired (USD per share) | $ / shares | 10.99 |
Weighted Average Exercise Price Per Share, Ending balance (USD per share) | $ / shares | $ 13.54 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Restricted Stock Units (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Time-Based Restricted Stock and Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock awards and units, beginning balance (shares) | 9,048 |
Restricted stock awards and units, granted (shares) | 1,407 |
Restricted stock awards and units, vested / earned (shares) | (1,744) |
Restricted stock awards and units, canceled / forfeited (shares) | (192) |
Restricted stock awards and units, ending balance (shares) | 8,519 |
Performance-Based Restricted Stock Awards and Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock awards and units, beginning balance (shares) | 1,525 |
Restricted stock awards and units, granted (shares) | 638 |
Restricted stock awards and units, ending balance (shares) | 2,163 |
Restricted Stock Awards and Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Restricted stock awards and units, beginning balance (shares) | 10,573 |
Restricted stock awards and units, granted (shares) | 2,045 |
Restricted stock awards and units, vested / earned (shares) | (1,744) |
Restricted stock awards and units, canceled / forfeited (shares) | (192) |
Restricted stock awards and units, ending balance (shares) | 10,682 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average grant date fair value per share of restricted stock and units, beginning balance (USD per share) | $ / shares | $ 10.48 |
Weighted average grant date fair value per share of restricted stock and units, granted (USD per share) | $ / shares | 10.41 |
Weighted average grant date fair value per share of restricted stock and units, vested / earned (USD per share) | $ / shares | 10.48 |
Weighted average grant date fair value of restricted stock and units, canceled / forfeited (USD per share) | $ / shares | 9.74 |
Weighted average grant date fair value per share of restricted stock and units, ending balance (USD per share) | $ / shares | $ 10.48 |
Stock-Based Compensation Expe_3
Stock-Based Compensation Expense - Effect of Recording Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 3,640 | $ 8,146 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 594 | 375 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 3,046 | $ 7,771 |
Stock-Based Compensation Expe_4
Stock-Based Compensation Expense - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 01, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares, options granted | 0 | 0 | |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares, options granted | 0 | ||
Separation Agreement | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, accelerated vesting | 372,244 | ||
Incremental stock-based compensation | $ 2.2 | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares, options granted | 0 |
Stock-Based Compensation Expe_5
Stock-Based Compensation Expense - Schedule of Assumptions Used to Value Awards Granted (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected life (in years) | 2 years | |
Risk-free interest rate | 1.30% | |
Dividend yield | 1.10% | |
Expected volatility | 48.50% | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected life (in years) | 3 years | |
Risk-free interest rate | 4.50% | |
Dividend yield | 1.90% | |
Expected volatility | 68.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Provision for (benefit from) income taxes | $ 11,784 | $ 5,517 |
Effective tax rate (percent) | 28.90% | 9% |
Income (loss) before taxes | $ 40,805 | $ 61,362 |
U.S. federal tax rate | 21% |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Lessee Lease Description [Line Items] | |
Operating lease existence of option to extend | true |
Operating lease description | The Company’s leases have remaining lease terms of two to four years, some of which may include options to extend the leases for five years or longer, and some of which may include options to terminate the leases within the next five years or less. Leases with an initial term of 12 months or less are not recorded on the Condensed Consolidated Balance Sheets; |
Minimum | |
Lessee Lease Description [Line Items] | |
Remaining lease term | 2 years |
Lessee term of period to extend | 5 years |
Maximum | |
Lessee Lease Description [Line Items] | |
Remaining lease term | 4 years |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Fixed lease cost | $ 571 | $ 504 |
Variable lease cost | 151 | 219 |
Total operating lease cost | $ 722 | $ 723 |
Leases - Schedule of Other Info
Leases - Schedule of Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 588 | $ 550 | |
Operating lease, ROU assets obtained in exchange for new lease liabilities | $ 1,153 | ||
Operating leases, weighted average remaining lease term (years) | 2 years 11 months 12 days | 3 years 2 months 8 days | |
Operating leases, weighted average discount rate | 5.40% | 5.40% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments and Related Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Lease Payments | ||
2023 (remaining 9 months) | $ 1,841 | |
2024 | 2,525 | |
2025 | 1,975 | |
2026 | 291 | |
2027 | 299 | |
Total lease payments | 6,931 | |
Less: imputed interest | (525) | |
Present value of lease liabilities: | 6,406 | |
Current portion of operating lease liabilities | 2,177 | $ 2,108 |
Noncurrent operating lease liabilities | $ 4,229 | $ 4,794 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Sep. 30, 2022 | |
Commitments And Contingencies Disclosure [Line Items] | ||||
Total purchase commitments | $ 3.5 | |||
Purchase commitments remainder of 2023 | 1.3 | |||
Purchase commitments due in 2024 | 1.3 | |||
Purchase commitments due in 2025 | 0.9 | |||
Guarantee liability | 19.7 | $ 20.5 | ||
Maximum potential amount of future payments subject to guarantee | $ 7.5 | |||
Guarantor obligations potential amount of future payments start year | 2023 | |||
Guarantor obligations potential amount of future payments end year | 2031 | |||
Guarantee Payments | $ 0.5 | |||
Other income | $ 0.3 | |||
Accrued estimated expense reimbursement | $ 2.5 | $ 2.6 | ||
Cross Business Agreement | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Guarantee liability | $ 19.7 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 Customer Segment | Dec. 31, 2022 Segment | Mar. 31, 2022 Customer | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||||
Number of principal businesses segment | Segment | 1 | 1 | ||
Number of customers more than 10% of revenue | Customer | 2 | 2 | ||
Customer One | Accounts Receivable | Credit Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage (or more) | 43% | 36% | ||
Customer Two | Accounts Receivable | Credit Concentration Risk | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk, percentage (or more) | 16% | 29% |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Geographic Revenue Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Foreign revenues | $ 117,307 | $ 138,532 |
Total Revenue | Geographic Concentration Risk | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage (or more) | 100% | 100% |
U.S. and Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Foreign revenues | $ 86,085 | $ 130,940 |
U.S. and Canada | Total Revenue | Geographic Concentration Risk | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage (or more) | 73% | 95% |
Asia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Foreign revenues | $ 28,620 | $ 5,729 |
Asia | Total Revenue | Geographic Concentration Risk | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage (or more) | 25% | 4% |
Europe and Middle East | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Foreign revenues | $ 2,188 | $ 1,352 |
Europe and Middle East | Total Revenue | Geographic Concentration Risk | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage (or more) | 2% | 1% |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Foreign revenues | $ 414 | $ 511 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | 3 Months Ended | ||
May 04, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Subsequent Event [Line Items] | |||
Dividends payable per share | $ 0.05 | $ 0.05 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declaration date | May 04, 2023 | ||
Dividends payable per share | $ 0.05 | ||
Dividends payable date | Jun. 20, 2023 | ||
Dividends record date | May 30, 2023 |