Stonegate Capital Partners Initiates Coverage on Xperi Inc. (XPER)

Stonegate Capital Partners Initiates Coverage on Xperi Inc. (NYSE: XPER). Xperi's 1Q26 results increased confidence that its earnings inflection is underway. Topline benefited from earlier contract signings in Consumer Electronics and Connected Car, but the more meaningful change was the cost base as adjusted operating expense fell 14%, lifting adjusted EBITDA margin to 22.1% from 14.4%. Management said first-quarter expenses are a fair run rate, giving the Company room to translate Media Platform growth into earnings without relying on further large cost actions. TiVo One's expanding audience is beginning to support advertising revenue, reinforcing the shift toward post-deployment monetization. We are keeping our eye on TiVo One ARPU, the second-half advertising ramp, and the first AutoStage data licenses as markers of continued progress.

The cost reset materially improves earnings visibility: A 14% reduction in adjusted operating expense establishes a lower run-rate cost base and supports sustained operating leverage toward the 17%-19% EBITDA margin target. Media Platform is emerging as the core growth and mix driver: TiVo One audience growth, expanding advertising demand, and broader programmatic capabilities support a higher-quality, recurring monetization model. Execution milestones should drive the next leg of the story: TiVo One ARPU expansion, the second-half advertising ramp, and initial AutoStage data licensing are the key catalysts for earnings upside and multiple expansion.