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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to promote understanding of the results of operations and financial condition and should be read in conjunction with our consolidated financial statements and notes thereto. This discussion may contain forward-looking statements that reflect the plans, estimates and beliefs of Xperi. The words “expects,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “could,” “would,” “may,” “will,” “intends,” “potentially,” “projects,” “targets,” or other words of similar meaning and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were made. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth under Item 1A, “Risk Factors” and elsewhere in this report. We disclaim and do not undertake any obligation to update or revise any forward-looking statement, except as required by applicable law.

This section of Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025, which is available free of charge on the SEC’s website at www.sec.gov and our Investor Relations website at investor.xperi.com.

Business Overview

We are a leading media and entertainment technology company. Our technologies are integrated into consumer devices, connected cars, and a variety of media platforms worldwide, enabling our unique audiences to connect with entertainment content in a more intelligent, immersive, and personal way. As our audiences engage with content on our platform, we operate a global, cross-screen advertising solution that enables brands to reach millions of engaged consumers across our rapidly expanding digital entertainment ecosystem, driving increased value for our partners, customers, and consumers. We operate in one reportable business segment and group our revenue into four categories: Pay-TV, Consumer Electronics, Connected Car and Media Platform. Headquartered in Silicon Valley with operations around the world, we have approximately 1,460 employees and more than 35 years of operating experience.

Divestitures

In December 2023, we entered into a definitive agreement with Tobii AB, an eye tracking and attention computing company, pursuant to which we agreed to sell our AutoSense in-cabin safety business and related imaging solutions (the “AutoSense Divestiture”). The AutoSense Divestiture was completed in January 2024 and has streamlined our business and further enhanced our focus on entertainment markets.

In August 2024, we entered into an Asset Purchase Agreement with Amazon.com Services LLC to sell substantially all of the assets and certain liabilities of Perceive Corporation (“Perceive”, later known as Xperi Pylon Corporation and subsequently dissolved in December 2024), a subsidiary focused on edge inference hardware and software technologies, for a gross amount of $80.0 million in cash, including a holdback of $12.0 million to be held for 18 months after the closing of the transaction (the “Perceive Transaction”) to secure our and Perceive’s indemnification obligations. The Perceive Transaction was completed in October 2024, allowing us to be fully focused on entertainment-based solutions to grow our independent media platform and licensing businesses.

Macroeconomic Conditions

Macroeconomic conditions—including rising inflation and interest rates, recessionary concerns, financial and credit market volatility, shifts in economic policy, reduced discretionary spending by consumers and businesses, tariffs, and global supply chain disruptions—have adversely affected, and may continue to affect, our business and that of our customers. While we remain committed to closely monitoring these macroeconomic developments and intend to adapt our business strategies as needed, the ultimate impact on our business, operating results, and financial condition remains uncertain.

Restructuring Activities

In November 2025, we approved a restructuring plan designed to improve cost efficiency and better align our operating structure with our long-term strategies and prevailing market conditions. The plan involved a reduction of approximately 250 employees across all business and functional areas and became effective immediately. In connection with this plan, we incurred restructuring and related charges of $13.9 million in 2025, substantially all of which consisted of employee severance and related costs. These charges are reflected within cost of revenue (excluding depreciation and amortization of intangible assets),

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research and development, and selling, general and administrative expenses in our Consolidated Statements of Operations. We expect to substantially complete the restructuring activities by the end of the first half of 2026. Upon completion, we estimate that the reductions will generate annualized savings in the range of approximately $30 million to $35 million. For further information, refer to Note 15—Restructuring Activities of the Notes to Consolidated Financial Statements.

Results of Operations

The following table presents our historical operating results for the periods indicated as a percentage of revenue:

Year Ended December 31,

Operating expenses:

Research and development 30 39

Selling, general and administrative 41 44

Depreciation expense 3 3

Amortization expense 8 9

Impairment of long-lived assets — —

Total operating expenses 110 118

Operating loss (10 ) (18 )

Interest and other income, net 2 1

Interest expense - debt (1 ) (1 )

Gain on divestitures — 20

(Loss) income before taxes (9 ) 2

Provision for income taxes 4 2

Net loss (13 )% — %

Comparison of Fiscal Years Ended December 31, 2025 and 2024

Revenue

We derive the majority of our revenue from licensing our technologies and solutions to customers. For our revenue recognition policy including descriptions of revenue-generating activities, refer to Note 3—Revenue of the Notes to Consolidated Financial Statements.

The following table sets forth our revenue by year:

Year Ended December 31,

(dollars in thousands)

Revenue decreased by $45.6 million, or 9%, for the year ended December 31, 2025 compared to the prior year, primarily due to a $54.0 million decline in Pay‐TV revenue and the impact of the AutoSense and Perceive divestitures. The decrease in Pay‐TV revenue was driven by lower revenue from core guide products, principally due to higher minimum guarantee (“MG”) revenue recognized in the prior year, as well as lower consumer hardware and related subscription revenue as certain products reached end of life in 2025. These decreases were partially offset by continued growth in IPTV solutions.

The overall decline was partially mitigated by a $13.2 million increase in Connected Car revenue, primarily reflecting higher MG and licensing revenue related to HD Radio. This increase was offset in part by a reduction in Audio Solutions revenue due to the absence of certain MG revenue recognized in the prior year.

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Operating Expenses

Year Ended December 31,

(dollars in thousands)

Impairment of long-lived assets — 1,535 (1,535 ) (100 )%

Cost of Revenue, Excluding Depreciation and Amortization of Intangible Assets

Cost of revenue, excluding depreciation and amortization of intangible assets, consists primarily of employee-related costs, royalties paid to third parties, hardware product-related costs, content and data costs, hosting fees, maintenance costs and an allocation of facilities costs, as well as service center and other expenses related to providing our offerings, and non-recurring engineering (“NRE”) services.

Cost of revenue, excluding depreciation and amortization of intangible assets, for the year ended December 31, 2025 was $126.6 million, as compared to $113.8 million for the year ended December 31, 2024, an increase of $12.8 million, or 11%. The increase was primarily driven by higher costs associated with advertising revenue and increased personnel-related expenses.

Research and Development

Research and development (“R&D”) costs consist primarily of employee-related costs, stock-based compensation (“SBC”) expense, engineering consulting expenses associated with new product and technology development, product commercialization, quality assurance and testing costs, as well as other costs related to patent applications and examinations, materials, supplies, and an allocation of facilities costs. Other than certain software development costs that are capitalized, all research and development costs are expensed as incurred.

R&D expense for the year ended December 31, 2025 was $135.1 million as compared to $191.4 million for the year ended December 31, 2024, a decrease of $56.3 million, or 29%. The decrease was primarily attributable to a reduction in R&D headcount, reduced expenses associated with the Perceive Transaction, lower SBC and outside services costs, and lower R&D spending in the AutoSense in-cabin safety business and related imaging solutions following the AutoSense Divestiture.

Selling, General and Administrative

Selling expenses consist primarily of compensation and related costs (including SBC expense) for sales and marketing personnel engaged in sales and licensee support, marketing programs, public relations, promotional materials, travel, and trade shows. General and administrative expenses consist primarily of compensation and related costs (including SBC expense) for management, information technology, finance and legal personnel, legal fees and related expenses, facilities costs, and professional services. Our general and administrative expenses, other than facilities-related expenses and fringe benefits, are not allocated to other expense line items.

Selling, general and administrative expenses for the year ended December 31, 2025 were $181.9 million as compared to $218.1 million for the year ended December 31, 2024, a decrease of $36.2 million, or 17%. This decrease was primarily driven by reduced employee headcount, lower SBC and outside services expenses, and a reduction in certain one-time transaction costs.

Depreciation Expense

We recognized depreciation expense for certain equipment, capitalized internal-use software, leasehold improvements, and buildings and improvements. Depreciation expense was $13.4 million for the year ended December 31, 2025, as compared to $12.6 million for the year ended December 31, 2024, an increase of $0.8 million, or 6%. The increase was primarily driven by increased capitalized internal-use software costs over the past 12 months.

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Amortization Expense

We recognized amortization expense for certain intangible assets we acquired in business combinations that are recognized separately from goodwill. Amortization expense for the year ended December 31, 2025 was $34.8 million, as compared to $43.4 million for the year ended December 31, 2024, a decrease of $8.6 million, or 20%. The decrease was primarily due to certain intangible assets becoming fully amortized over the past 12 months.

As a result of intangible assets we acquired in previous mergers and acquisitions, we anticipate that amortization expenses will continue to be a significant expense over the next several years. See Note 8—Intangible Assets, Net of the Notes to Consolidated Financial Statements for additional detail.

Stock-based Compensation Expense

The following table sets forth our SBC expense for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Total stock-based compensation expense $ 40,683 $ 60,541

We recognized SBC expense from restricted stock units (“RSUs”) and purchases made under our employee stock purchase plan (“ESPP”). The decrease in SBC expense for the year ended December 31, 2025, when compared to the prior year, was primarily driven by reduced employee headcount, lower expense for performance-based awards and RSUs granted over time at lower valuations.

Impairment of Long-Lived Assets

Year Ended December 31,

(dollars in thousands)

Impairment of long-lived assets $ — $ 1,535 $ (1,535 ) (100 )%

As disclosed in Note 10—Leases of the Notes to the Consolidated Financial Statements, we recognized an impairment charge of $1.5 million in 2024 related to certain operating lease right-of-use (“ROU”) assets. The impairment resulted from changes in the utilization of certain office facilities, a significant decline in the expected market value of those leased facilities, and anticipated delays in our ability to sublease vacated office space.

There was no impairment of long-lived assets during the year ended December 31, 2025.

Interest and Other Income, Net

Year Ended December 31,

(dollars in thousands)

Interest and other income, net, was higher in 2025 compared to the prior year, primarily due to the absence of a one-time, non-cash loss of $4.8 million related to the deconsolidation of the Perceive subsidiary in 2024, as well as foreign currency transaction gains recognized in 2025.

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Interest Expense—Debt

Year Ended December 31,

(dollars in thousands)

Interest expense - debt $ (2,979 ) $ (3,008 ) $ 29 (1 )%

Interest expense on our debt remained consistent for the year ended December 31, 2025, compared to the prior year.

Gain on Divestiture

Year Ended December 31,

(dollars in thousands)

NM - not meaningful

As disclosed in Note 7—Divestitures of the Notes to the Consolidated Financial Statements, we completed the AutoSense Divestiture in January 2024 and recognized a pre-tax gain of $22.9 million. In October 2024, we closed the Perceive Transaction through the sale of substantially all of Perceive’s assets and certain liabilities, resulting in the recognition of a pre-tax gain of $77.9 million in the year ended December 31, 2024.

There were no divestitures during the year ended December 31, 2025.

Provision for Income Taxes

Year Ended December 31,

(dollars in thousands)

For the year ended December 31, 2025, we recorded an income tax expense of $15.7 million on a pretax loss of $40.6 million which resulted in an effective tax rate of (38.7)%. The income tax expense for the year ended December 31, 2025 was primarily related to foreign withholding taxes of $8.7 million and foreign income taxes of $7.5 million, partially offset by $0.7 million of federal tax benefit.

For the year ended December 31, 2024, we recorded an income tax expense of $12.4 million on a pretax income of $11.6 million, which resulted in an effective tax rate of 107.5%. The income tax expense of $12.4 million was primarily related to foreign withholding taxes of $10.9 million and U.S. federal income taxes of $3.7 million, partially offset by a tax benefit of $1.3 million from the release of valuation allowance of a foreign subsidiary.

At December 31, 2025, our 2021 through 2025 tax years are generally open to examination. In the United States, any net operating losses or credits that were generated in prior years but not yet fully utilized in a year that is closed under the statute of limitations may also be subject to examination.

The need for a valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more-likely-than-not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. In making such assessment, significant weight is given to evidence that can be objectively verified. After considering both positive and negative evidence to assess the recoverability of our net deferred tax assets, we determined that it was unlikely that we would realize a portion of our federal, certain state and certain foreign deferred tax assets. We intend to continue maintaining a valuation allowance on our federal deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of the valuation allowance would result in the recognition of certain federal deferred tax assets and a decrease to income tax expense for the period the release is recorded. The exact timing and amount of the valuation allowance release depends on the level of profitability that we are able to achieve.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S. The OBBBA did not have a material impact on our effective tax rate or cash flows for the year ended December 31, 2025.

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Liquidity and Capital Resources

The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents as of December 31, 2025 and 2024 and for the years ended December 31, 2025 and 2024:

December 31,

(dollars in thousands)

(1)

The current ratio is a liquidity ratio that measures our ability to pay short-term obligations or those due within one year. The ratio is calculated by dividing current assets by current liabilities.

Year Ended December 31,

(in thousands)

Net cash (used in) operating activities $ (515 ) $ (55,340 )

Net cash (used in) provided by investing activities $ (20,984 ) $ 50,820

Net cash (used in) financing activities $ (12,241 ) $ (19,350 )

Our primary liquidity and capital resources are our cash and cash equivalents and borrowings available under an accounts receivable securitization program (the “AR Facility”) with PNC Bank, National Association (“PNC”). Cash and cash equivalents were $96.8 million at December 31, 2025, a decrease of $33.8 million from $130.6 million at December 31, 2024. This decrease resulted primarily from cash used in operations of $0.5 million, $50.0 million in repayment of the Vewd Software Holdings Limited (“Vewd”) senior unsecured promissory note, $21.0 million of capital expenditures, including capitalized internal-use software costs, and $7.0 million in payments of withholding taxes on net share settlement of equity awards, partially offset by $6.0 million in proceeds from the issuance of common stock under our ESPP, and $40.0 million of net loan proceeds borrowed under the AR Facility with PNC. For detailed information regarding the repayment of the Vewd debt and the AR Facility, refer to “Long-Term Debt Financing” below.

Our material cash requirements include the following contractual and other obligations.

Leases

We have lease arrangements for office and research facilities, data centers and office equipment. As of December 31, 2025, fixed lease payment obligations amounted to $35.4 million, with $10.7 million payable within 12 months. See Note 10—Leases of the Notes to Consolidated Financial Statements for additional information on lease obligations and maturities.

Purchase Obligations

Our purchase obligations primarily consist of noncancelable obligations related to advertising, engineering services and internet and telecommunications services. As of December 31, 2025, we had purchase obligations of $121.0 million, with $58.2 million payable within 12 months. These purchase obligations represent commitments under enforceable and legally binding agreements, and do not represent the entire anticipated purchases in the future. See Note 11—Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information on our purchase obligations.

Restructuring Payments

As discussed above, in November 2025, we approved a restructuring plan to reduce our global workforce by approximately 250 employees. In connection with this plan, we recognized $13.9 million of restructuring and related charges, substantially all of which consisted of employee severance and related costs. As of December 31, 2025, $8.7 million of restructuring charges remained accrued and are expected to be settled in the first half of 2026.

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Stock Repurchase Program

In April 2024, our Board of Directors (the “Board”) authorized the repurchase of up to $100.0 million of our common stock (the “Program”). Under the Program, we may make repurchases, from time to time, through open market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions, or other means. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases under the Program. As of December 31, 2025, we have repurchased a total of approximately 2.2 million shares of common stock, since inception of the Program, at an average price of $9.23 per share for a total cost of approximately $20.0 million. We did not repurchase any common stock during the year ended December 31, 2025. As of December 31, 2025, the total remaining amount available for repurchase was $80.0 million. We may continue to execute authorized repurchases from time to time under the Program. There is no guarantee that such repurchases under the Program will enhance the value of our common stock.

Cash Flows

Cash Flows from Operating Activities

Net cash used in operating activities was $0.5 million for the year ended December 31, 2025, primarily due to our net loss of $56.3 million being further adjusted by $36.4 million of changes in operating assets and liabilities driven primarily by an increase of $18.0 million in unbilled contracts receivable, partially offset by non-cash items such as SBC expense of $40.7 million, amortization of intangible assets of $34.8 million, depreciation expense of $13.4 million, and changes in deferred income taxes of $2.3 million.

Net cash used in operations was $55.3 million for the year ended December 31, 2024, primarily due to our net loss of $0.9 million being further adjusted by $71.8 million of changes in operating assets and liabilities driven principally by an increase of $46.3 million in unbilled contracts receivable, and $100.8 million of a non-cash gain recognized from the AutoSense Divestiture and the Perceive Transaction. These changes were partially offset by material non-cash items such as stock-based compensation expense of $60.5 million, amortization of intangible assets of $43.4 million, and depreciation expense of $12.6 million.

Cash Flows from Investing Activities

Net cash used in investing activities was $21.0 million for the year ended December 31, 2025, primarily related to capital expenditures, including capitalized internal-use software.

Net cash provided by investing activities was $50.8 million for the year ended December 31, 2024, primarily due to net proceeds from divestitures of $67.8 million, partially offset by capital expenditures of $16.8 million, including capitalized internal-use software.

Capital Expenditures

Our capital expenditures for property and equipment consist primarily of capitalized internal-use software, purchases of computer hardware and software, information systems, and production and test equipment. We expect capital expenditures in 2026 to be approximately $20.0 million. These expenditures are expected to be paid with existing cash and cash equivalents. There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.

Cash Flows from Financing Activities

Net cash used in financing activities was $12.2 million for the year ended December 31, 2025, primarily due to the $50.0 million voluntary repayment of the Vewd senior unsecured promissory note, and $7.0 million in payment of withholding taxes related to net share settlement of equity awards, partially offset by $40.0 million of net loan proceeds borrowed under the AR Facility with PNC and $6.0 million in proceeds from the issuance of common stock under our ESPP.

Net cash used in financing activities was $19.4 million for the year ended December 31, 2024, due to $20.0 million in repurchases of common stock under the Program and $7.2 million in payment of withholding taxes related to net share settlement of equity awards, partially offset by $7.9 million in proceeds from the issuance of common stock under the ESPP.

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Long-Term Debt Financing

In connection with the acquisition of Vewd in July 2022, we issued a senior unsecured promissory note (the “Promissory Note”) to the sellers of Vewd in the principal amount of $50.0 million, all of which was outstanding at December 31, 2024. Indebtedness outstanding under the Promissory Note bore an interest rate of 6.00% per annum, subject to certain potential adjustments. The Promissory Note was scheduled to mature on July 1, 2025. We were permitted, at any time and on any one or more occasions, to prepay all or any portion of the outstanding principal amount, plus accrued and unpaid interest, if any, under the Promissory Note without premium or penalty. On February 21, 2025, we voluntarily made a full principal payment of $50.0 million plus accrued interest by using a combination of cash on hand and a new long-term financing facility through the securitization of our accounts receivable as described below.

On February 21, 2025, we and Xperi SPV LLC (“Xperi SPV”), a special purpose subsidiary, entered into a Receivables Financing Agreement (the “RFA”) with PNC, and PNC Capital Markets LLC, and a Sale and Contribution Agreement (together with the RFA, the “RF Agreements”) among us, Xperi SPV and certain of our other wholly-owned subsidiaries to establish the AR Facility. Interest is payable on a monthly basis. The AR Facility is scheduled to terminate on February 21, 2028, unless terminated earlier pursuant to its terms. For a detailed description of the AR Facility, refer to Note 9—Debt and Receivables Securitization of the Notes to the Consolidated Financial Statements.

Upon entering into the RF Agreements on February 21, 2025, we borrowed $40.0 million under the AR Facility and selected the monthly Term SOFR Rate (as defined in the RFA). The RF Agreements contain various covenants that we believe are usual and customary. The interest payments on the AR Facility debt, exclusive of the debt issuance costs and related amortization, are expected to be approximately $2.4 million for the next 12 months and may vary with changes in interest rates. In December 2025, we repaid $1.1 million of the outstanding principal as the aggregate outstanding principal at the time temporarily exceeded the eligibility limit of the receivables and subsequently drew down the same amount. As of December 31, 2025, we were in compliance with the covenants under the RF Agreements.

Liquidity

We believe our current cash and cash equivalents, together with borrowings or availability under our AR Facility, will be sufficient to meet our needs for at least the next 12 months from the issuance date of the Consolidated Financial Statements included in this Annual Report. As we assess growth strategies, we may need to supplement our cash and cash equivalents with additional outside sources. As part of our liquidity strategy, we will continue to monitor our earnings and cash flow as well as our ability to access the capital markets as needed.

Poor financial results, unanticipated expenses, unanticipated acquisitions of technologies or businesses or unanticipated strategic investments could give rise to additional financing requirements sooner than we expect. Equity or additional debt financing may not be available when needed or, if available, equity or debt financing may not be on terms satisfactory to us. Additionally, disruption and volatility in the global capital markets and economic uncertainties, including those driven by tariffs, have impacted corporate and consumer confidence and could continue to impact our capital resources and liquidity in the future.

We may supplement our short-term liquidity needs with access to capital markets, if necessary, and further strategic cost savings initiatives. Our access to capital markets may be constrained and our cost of borrowing may increase under certain business and market conditions, and our liquidity is subject to various risks including the risks identified in “Risk Factors” included in Part I, Item 1A of this Form 10-K.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements have been prepared in conformity with GAAP in the United States which requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty. We evaluate our estimates based on our historical experience and various other assumptions that are believed to be reasonable under the circumstances. These estimates relate to revenue recognition, recognition and measurement of deferred income tax assets and liabilities, and the assessment of unrecognized tax benefits. Actual results could differ from those estimates, and material effects on our operating results and financial position may result.

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We believe the following accounting estimates are most critical to understanding our consolidated financial statements. See Note 2—Summary of Significant Accounting Policies and Note 3—Revenue of the Notes to Consolidated Financial Statements for a full description of our accounting policies.

Revenue recognition

We derive the majority of our revenue from the licensing of our technologies to customers. Generally, revenue is recognized upon transfer of control of promised products, services, or licensing of our technologies to customers in an amount that reflects the consideration that we expect to receive in exchange for those products, services and licensing of the technologies. The primary judgments include estimating licensees’ quarterly royalties prior to receiving the royalty reports, estimating variable consideration, identifying the performance obligations in the contract, determining stand-alone selling price and the transaction price, and allocating consideration in an arrangement with multiple performance obligations.

We generally recognize royalty revenue from per-unit or per-subscriber licenses based on units shipped or manufactured, or number of subscribers. Revenue is recognized in the period in which the customer’s sales, production or usage are estimated to have occurred. This may result in an adjustment to revenue when actual sales, production or usage are subsequently reported by the customer, generally in the month or quarter following sales, production or usage. Estimating customers’ quarterly royalties and license fees prior to receiving the customer reports requires us to make significant assumptions and judgments related to forecasted trends and growth rates used to estimate quantities shipped or manufactured by customers or the number of subscribers, which could have a material impact on the amount of revenue we report on a quarterly basis.

Accounting for income taxes

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments are used in the calculation of tax credits, tax benefits and deductions, and in the calculation of tax assets and liabilities. Significant changes to these estimates may result in an increase or decrease to our tax provision in a subsequent period.

We must assess the likelihood that we will be able to recover our deferred tax assets. If recovery is not more-likely-than-not, we must increase our provision for income taxes by recording a valuation allowance against our deferred tax assets. Should there be a change in our ability to recover our deferred tax assets, our provision for income taxes would fluctuate in the period of the change.

We account for uncertain tax positions in accordance with authoritative guidance related to income taxes. The calculation of our unrecognized tax benefits involves dealing with uncertainties in the application of complex tax regulations. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. We record unrecognized tax benefits for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional tax liabilities are more-likely-than-not assuming the tax authorities have full knowledge of all relevant information. If we ultimately determine that the tax liabilities are unnecessary, we reverse the liabilities and recognize a tax benefit during the period in which it occurs. This may occur for a variety of reasons, such as the expiration of the statute of limitations on a particular tax return or the completion of an examination by the relevant tax authority. We record an additional charge in our provision for taxes in the period in which we determine that the recorded unrecognized tax benefits are less than the expected ultimate settlement.

Our policy is to classify accrued interest and penalties related to the accrued liability for unrecognized tax benefits in the provision for income taxes. For the years ended December 31, 2025 and 2024, we recognized interest and penalties related to unrecognized tax benefits of $0.1 million and an immaterial amount, respectively. See Note 14—Income Taxes of the Notes to Consolidated Financial Statements for additional detail.

Recent Accounting Pronouncements

See Note 2—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the respective expected dates of adoption.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The primary objectives of our investment activities are to preserve principal and maintain liquidity while at the same time capturing a market rate of return. To achieve these objectives, we maintain our portfolio of cash and cash equivalents with high quality financial institutions in the countries in which we do business. Our cash and cash equivalents and future investments are subject to risks including:

Bank Liquidity Risk

As of December 31, 2025, we had a total of $96.8 million of deposits in operating accounts that were held with both domestic and international financial institutions. These deposits could be lost or become inaccessible if the underlying financial institutions fail or if they are unable to meet the liquidity requirements of their depositors and they are not supported by the government of the jurisdiction where such cash is held. We have not incurred any losses and have had full access to our operating accounts to date. We believe any failures of domestic and international financial institutions could impact our ability to fund our operations in the short term.

Interest Rate Risk

We are exposed to changes in interest rates related to our RFA. As of December 31, 2025, we had outstanding indebtedness in the amount of $40.0 million under the AR Facility that was subject to variable interest rates, based on the secured overnight financing rate (“SOFR”). Changes in economic conditions outside of our control could result in higher interest rates, thereby increasing our interest expense and reducing the funds available for capital investment, operations or other purposes. Assuming no change in our outstanding indebtedness, we estimate that a 1% increase in the applicable SOFR interest rate would result in an annual increase in our interest expense of approximately $0.4 million. Any significant increase in our interest expense could negatively impact our results of operations and cash flows. If the U.S. Federal Reserve raises its benchmark interest rate, any increases would likely impact the borrowing rate on our outstanding indebtedness, and increase our interest expense, comparably.

Exchange Rate Risk

Our international business is subject to risks, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility when compared to the U.S. dollar. Accordingly, our future results could be materially impacted by changes in these or other factors.

Due to our operations outside the United States, we are subject to the risks of fluctuations in foreign currency exchange rates, particularly related to the Polish zloty, Indian rupee, British pound, Euro, Japanese Yen, Chinese Yuan and New Taiwan Dollar. As a substantial majority of our non-U.S. revenue and expense transactions are denominated in U.S. dollars, fluctuations in foreign currency exchange rates could cause our products and services to become relatively more expensive to customers in a particular country, leading to a reduction in sales or profitability in that country. Some of our subsidiaries operate in their local currency, which mitigates a portion of the exposure related to fluctuations in foreign currency exchange rates.

We have established risk management strategies designed to reduce the impact of volatility of future cash flows caused by changes in the exchange rate for these currencies. These strategies reduce, but do not entirely eliminate, the impact of currency exchange rate movements. We minimize the impact of certain currency exchange rate fluctuations by hedging our exposure to certain foreign currencies with various financial institutions. If a financial counterparty to any of our hedging arrangements experiences financial difficulties or is otherwise unable to honor the terms of the foreign currency hedge, we may experience financial losses.

For derivative instruments that are designated and qualify as cash flow hedges under ASC 815, Derivatives and Hedging, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income or loss and reclassified into earnings in the same financial statement line as the item being hedged, and in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized each period under Interest and Other Income in the consolidated statements of operations. For derivative instruments that are not designated as hedging instruments, gains and losses are recognized each period under Interest and Other Income in the consolidated statements of operations.

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As of December 31, 2025, we had outstanding foreign currency derivative contracts with a total notional amount of $74.7 million to buy and sell U.S. dollars in exchange for other currencies. Assuming a hypothetical 10% favorable or adverse movement in foreign currency exchange rates against the U.S. dollar, our outstanding foreign currency derivative contracts would experience a gain of approximately $6.3 million or a loss of approximately $5.2 million.

Item 8. Financial Statements and Supplementary Data

Our consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of operations, equity, comprehensive loss and cash flows for each of the years in the three-year period ended December 31, 2025 are set forth in this Annual Report at Item 15(a)(1).

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

The information required by this Item 9 was previously reported in our Current Report on Form 8-K that was filed with the SEC on April 8, 2024.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, including our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the evaluation date). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the evaluation date that our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, using the criteria described in Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.

This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm due to an exemption established by the rules of the SEC for emerging growth companies.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, during the quarterly period ended December 31, 2025 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information

(a)

Not applicable.

(b)

During the three months ended December 31, 2025, no director or “officer” (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

62

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Code of Business Conduct and Ethics

We have adopted a written Code of Business Conduct and Ethics Policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons serving similar functions. The Code of Business Conduct and Ethics is posted on our website at investor.xperi.com. If we make any substantive amendments to, or grant any waivers from, the Code of Business Conduct and Ethics Policy for any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K within four business days of such amendment or waiver.

BIOGRAPHICAL INFORMATION OF OUR DIRECTORS

Certain information concerning our current Board of Directors as of February 26, 2026 follows.

Darcy Antonellis

Ms. Antonellis, age 63, has served as a director at Xperi Inc. since its spin-off from Adeia Inc. (the “Former Parent”) in October 2022 (the “Separation”). Previously she served as a director at the Former Parent beginning in June 2020. Prior to that, she served as a director at Xperi Corporation beginning in December 2018. Ms. Antonellis has been the Operating Advisor of the technology, media and telecom sectors of ABS Capital Partners, a private equity firm, since June 2023. Prior to that, she served as Executive Advisor, Amdocs Ltd., a software and services company for communications, media, financial and digital enterprises from August 2021 to June 2023. Prior to joining Amdocs Ltd., from 2018 to August 2021, Ms. Antonellis served as Division President, Amdocs Inc., and Chief Executive Officer of Vubiquity Inc. (acquired by Amdocs in 2018), a global media and entertainment distribution technology and services provider. Prior to joining Vubiquity in 2014, Ms. Antonellis held numerous positions at Warner Bros., including President, Technical Operations and Chief Technology Officer. Ms. Antonellis also currently serves on the boards of directors of Cinemark Holdings Inc., Bango plc, and Vionlabs AB. She is a SMPTE Fellow and holds patents in the areas of digital distribution and audio/visual processing technologies. Ms. Antonellis brings extensive expertise in executive management, operations, and engineering, and her in-depth understanding of media technology and content services, media, and the entertainment industry to her role as a member of the Board.

Laura J. Durr

Ms. Durr, age 65, has served as a director at Xperi Inc. since September 2022, prior to its spin-off from its Former Parent. She previously served as a director at the Former Parent since June 2020. Prior to that, she served as a member of the Board of Directors of TiVo Corporation beginning in April 2019. Ms. Durr served as the Executive Vice President and Chief Financial Officer of Polycom, Inc. from May 2014 until its acquisition by Plantronics Inc. in July 2018. Prior to becoming Chief Financial Officer, Ms. Durr held various finance leadership roles at Polycom between 2004 and 2014, including Senior Vice President-Worldwide Finance, Chief Accounting Officer and Worldwide Controller. Prior to joining Polycom, Ms. Durr held executive positions in finance and administration at Quicksilver Technology, C Speed Corporation, Lucent Technologies and International Network Services and also spent six years at Price Waterhouse LLP. Ms. Durr currently serves on the board of directors of NETGEAR, Inc., a global networking company that delivers innovative products and services to consumers, businesses and service providers. She also serves on the board of directors of Owlet, Inc. Ms. Durr brings valuable leadership, operational and strategic experience and insight, given her background in finance and strategy for leading Silicon Valley technology companies, to her role as a member of the Board.

Jeremi T. Gorman

Ms. Gorman, age 48, has served as a director at Xperi Inc. since June 2024. Since August 2025, she has served as chief revenue officer of Fanatics Advertising, a division of Fanatics Holdings, Inc. (“Fanatics”), a global digital sports platform, and prior to that served as a senior advisor of the advertising division of Fanatics starting in January 2025. Ms. Gorman has previously served as a member of executive team, and the first President of Worldwide Advertising for Netflix Inc. until October 2023. Prior to joining Netflix, Ms. Gorman was chief business officer at Snap Inc. from November 2018 to September 2022 and held various positions at Amazon.com Inc. from 2012 to 2018, including as global head of enterprise advertising sales. Earlier in her career, Ms. Gorman held advertising and marketing roles at Yahoo!, Variety and Monster.com. Ms. Gorman brings valuable

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operational and strategic experience and insight, given her background in media, entertainment and technology, to her role as a member of the Board.

David C. Habiger

Mr. Habiger, age 57, has served as chairman of the board at Xperi Inc. since its spin-off from its Former Parent in October 2022. He previously served as chairman of the board at the Former Parent beginning in June 2020. Prior to that, he served as a director at Xperi Corporation beginning in December 2016. Prior to that, he served on the DTS, Inc. board beginning in March 2014, including as Chair of the Compensation Committee and a member of the Audit Committee. Mr. Habiger was president and CEO of J.D. Power from 2018 to May 2025, and prior to that, the CEO of Textura Corporation from 2012 to 2016, prior to its sale to Oracle. He also held the CEO position at NDS Group Ltd. from 2011 to 2012, prior to its sale to Cisco Systems, and was president and CEO at Sonic Solutions from 1992 to 2011, prior to its sale to Rovi. He demonstrated his skill in leading companies through all stages of development by guiding Sonic through an IPO and to its position as a leading cloud-based provider of premium movies and TV shows. Mr. Habiger is Chair of the Board of Directors of Reddit, Inc. and a director on the Board of Directors of Boston Scientific Corporation, Enersys, and the Federal Reserve Bank of Chicago. He serves on the Systems Activities, Bank Operations, and Risk Committee (SABOR) and the Governance & Human Resources Committee for the Federal Reserve. He is also a member of the board of trustees at Rush University Medical Center. Mr. Habiger has served on a variety of other public boards, currently serves on a variety of private boards and is a member of the Society of Motion Picture and Television Engineers. Mr. Habiger brings extensive experience and leadership skills in the digital media and entertainment industries, in-depth knowledge and understanding of the consumer electronics industry, and expertise in executive management to his role as Chair of the Board.

Jon E. Kirchner

Mr. Kirchner, age 58, has served as CEO and director at Xperi Inc. since its spin-off from its Former Parent in October 2022. Prior to that, he served as CEO and director at the Former Parent beginning in June 2020. Previously he was CEO of Xperi Corporation beginning in June 2017. Prior to that, Mr. Kirchner was President of Xperi Corporation following the completion of the acquisition of DTS, Inc. in December 2016. At DTS, he was appointed Chairman of the Board of Directors in 2010, served on the board of directors beginning in 2002, and served as the company's Chief Executive Officer beginning 2001. Prior to his tenure of Chief Executive Officer, Mr. Kirchner served in a number of senior leadership roles at DTS from 1993 to 2001, including director, President, Chief Operating Officer and Chief Financial Officer. Mr. Kirchner led DTS through a period of significant success, growing it from a small startup to a global industry leader generating over $190 million in licensing revenue. Prior to joining DTS, Mr. Kirchner worked for the consulting and audit groups at Price Waterhouse LLP (now PricewaterhouseCoopers LLP). From 2012 to 2023, Mr. Kirchner served on the board of directors of Free Stream Media Corporation (Samba TV), a leader in developing cross platform TV experiences for consumers and advertisers. Mr. Kirchner brings experience in the senior management of public companies (including service as chairman, president, Chief Executive Officer, Chief Operating Officer and Chief Financial Officer), extensive experience in the digital media and entertainment industries, and knowledge of the Company as its Chief Executive Officer, to his role as a member of the Board.

Roderick K. Randall

Mr. Randall, age 67, has served as a director at Xperi Inc. since June 2024. He has over 25 years of experience in the wireless, telecommunications, computer-networking and electric vehicle industries. Mr. Randall has served as an Executive Partner at Siris Capital Group, LLC, a private equity investment firm focused on building value at complex telecom and technology companies operating at scale, since 2010. Prior to his role at Siris Capital, Mr. Randall was a founding partner at S1 Capital Partners, Vesbridge Partners and a General Partner at St. Paul Venture Capital, where he led the mobile investment practice. Previously, Mr. Randall served as the Chief Marketing Officer at Lucent Technologies, and was a Vice President of Marketing at Ascend Communications. Prior to that, Mr. Randall was the Vice President of Strategic Market Development at Madge Networking, following its acquisition of Teleos Communications. Mr. Randall co-founded Teleos Communications in 1987 and served in a variety of roles at the company, including Chief Technology Officer, Vice President of Marketing and Business Development. Mr. Randall began his career at AT&T Bell Laboratories and holds several U.S. patents. Mr. Randall also previously served on the board of directors at Fisker Inc. from 2018 to 2024. Mr. Randall brings extensive experience in the senior management of public and private companies (including extensive experience in the telecommunications, wireless, computer-networking and electric vehicle industries), to his role as a member of the Board.

Christopher Seams

Mr. Seams, age 63, has served as director at Xperi Inc. since its spin-off from its Former Parent in October 2022. Previously he served as a director at the Former Parent beginning in June 2020, when Xperi Corporation merged with TiVo Corporation.

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Prior to that, he served as a director at Xperi Corporation beginning in December 2016, when Tessera Technologies, Inc. acquired DTS, Inc. Prior to that, he served as a director at Tessera Technologies, Inc. beginning in March 2013. From 2013 to 2016, Mr. Seams was the Chief Executive Officer of Deca Technologies, a subsidiary of Cypress Semiconductor Corporation. Prior to Deca Technologies, Mr. Seams served as Executive Vice President of Sales & Marketing at Cypress. He also previously served as an Executive Vice President of Worldwide Manufacturing & Research and Development of Cypress. Mr. Seams joined Cypress in 1990 and held various technical and operational management positions in manufacturing, development, and operations. Prior to joining Cypress in 1990, he worked in process development for Advanced Micro Devices and Philips Research Laboratories. Mr. Seams also currently serves as Chair of the Board of Directors of ONTO Innovation Inc. (formerly Nanometrics). Mr. Seams brings extensive technology, leadership, and business experience to his role as a member of the Board.

BIOGRAPHICAL INFORMATION OF OUR EXECUTIVE OFFICERS

Certain information concerning our current executive officers as of February 26, 2026 follows. There are no family relationships between any of our executive officers.

Jon E. Kirchner – Please refer to the Biographical Information of our Directors for Mr. Kirchner’s biographical information.

Robert Andersen

Mr. Andersen, age 62, is Chief Financial Officer of Xperi Inc. Prior to its spin-off from its Former Parent in October 2022, he was the CFO of Xperi Holding Corporation. Prior to Xperi Corporation's merger with TiVo Corporation, he served as Executive Vice President and CFO of Xperi Corporation. Mr. Andersen joined Xperi Corporation in 2014 as CFO of Tessera Technologies, Inc., the predecessor to Xperi Corporation before the acquisition of DTS, Inc. in 2016. Mr. Andersen has many years of leadership experience in Silicon Valley at both private and public technology companies, including Phoenix Technologies, Wind River Systems and Hewlett Packard. Mr. Andersen served on the board of directors of Quantum Corporation through March 2017 and on the board of directors for the Alameda County Community Food Bank through December 2025. Mr. Andersen holds a B.A. in economics from the University of California, Davis, and an M.B.A. from the University of California, Los Angeles.

Rebecca K. Marquez

Ms. Marquez, age 54, has been Chief Legal Officer and Corporate Secretary of Xperi Inc. since December 2022. Prior to joining the Company, she was General Counsel at Ring LLC, which was acquired by Amazon in 2018. Before Ring, Ms. Marquez was Assistant General Counsel and Assistant Secretary at Tribune Publishing Company from 2014 to 2017, and Assistant General Counsel and Assistant Secretary at United Online, Inc. from 2003 to 2014. Prior to that, Ms. Marquez was an associate at Latham & Watkins from 1998 to 2003. Ms. Marquez currently serves on the board of directors of IPG Inc., a joint venture between Xperi's subsidiary, Rovi Product Corporation, and Dentsu Group Inc. Ms. Marquez is one of Xperi's representatives on IPG's board. She received a B.A. in communication studies and her J.D. from the University of California, Los Angeles.

Matt Milne

Mr. Milne, age 58, has been Chief Revenue Officer of Xperi Inc. since October 2022 and President of TiVo Ads since October 2025. Prior to its spin-off from its Former Parent in October 2022, he was Chief Revenue Officer of Xperi Holding Corporation. Prior to the merger between Xperi Corporation and TiVo Corporation, he served as TiVo’s Chief Revenue Officer beginning in January 2017. Mr. Milne joined TiVo (then Rovi) in February 2011 and served as Senior Vice President, CE Sales from 2011 to 2012. During his employment at TiVo, he also served as Executive Vice President, Worldwide Sales and Marketing from January 2012 to May 2014 and as Senior Vice President responsible for Tier 1 Intellectual Property Licensing and Sales from May 2014 to April 2016. He was promoted to Chief Revenue Officer in January 2017 after serving as SVP and GM of Intellectual Property and Licensing from April 2016. Prior to joining TiVo, Mr. Milne held various sales, marketing and product leadership positions at DivX, MediaFLO USA (a wholly owned subsidiary of Qualcomm Incorporated), Viewsonic, Gateway, Inc., Cameo Technologies and Western Digital. Mr. Milne currently serves on the board of directors of IPG Inc., a joint venture between Xperi's subsidiary Rovi Product Corporation and Dentsu Group Inc. Mr. Milne is one of Xperi's representatives on IPG's board. Mr. Milne holds a B.A. in business from California State University, Fullerton and an M.B.A. from California State Polytechnic University, Pomona.

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Geir Skaaden

Mr. Skaaden, age 59, is Chief Products and Services Officer of Xperi Inc. Prior to its spin-off from its Former Parent in October 2022, he was Chief Products and Services Officer of Xperi Holding Corporation. Prior to the merger between Xperi Corporation and TiVo Corporation, Mr. Skaaden was Chief Products and Services Officer of Xperi Corporation. He served as DTS, Inc.’s Executive Vice President, Products, Platforms and Solutions from October 2015 until its acquisition by Xperi Corporation in December 2016, having previously served as DTS’s Senior Vice President, Corporate Business Development, Digital Content and Media Solutions. Earlier, he held a number of leadership roles where he oversaw product management, business development, global licensing and marketing. Before joining DTS in 2008, Mr. Skaaden served as the Chief Executive Officer at Neural Audio Corporation. Mr. Skaaden holds a B.A. in Finance from the University of Oregon, a business degree from the Norwegian School of Management, and an M.B.A. from the University of Washington.

Other Information

The remaining information required by this Item 10 is hereby incorporated by reference from the information under the captions “Insider Trading Policy and Procedures” that will be contained in the Proxy Statement for our 2026 Annual Meeting of Stockholders (the “Proxy Statement”).

Item 11. Executive Compensation

The information required by this Item 11 is incorporated by reference from the information under the captions “Election of Directors,” “Executive Officers” and “Executive Compensation and Related Information” that will be contained in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item 12 is incorporated by reference from the information under the captions “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” that will be contained in the Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated by reference from the information under the captions “Certain Relationships and Related Transactions” and “Election of Directors” that will be contained in the Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information required by this Item 14 is incorporated by reference from the information under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm” that will be contained in the Proxy Statement.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Documents filed as part of this report:

PageNumber

(1) Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID: 34) F-1

Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) F-2

Consolidated Statements of Operations F-3

Consolidated Statements of Comprehensive loss F-4

Consolidated Balance Sheets F-5

Consolidated Statements of Cash Flows F-6

Consolidated Statements of Equity F-8

Notes to Consolidated Financial Statements F-9

(2) Exhibits

67

Report of Independent Registered Public Accounting Firm

To the stockholders and the Board of Directors of Xperi Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Xperi Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

San Jose, California

February 26, 2026

We have served as the Company's auditor since 2024.

F-1

Report of Independent Registered Public Accounting Firm

To theBoard of Directors and Stockholders of Xperi Inc.

Opinion on the Financial Statements

We have audited the consolidated statement of operations, of comprehensive loss, of equity and of cash flows of Xperi Inc. and its subsidiaries (the “Company”) for the year ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

San Jose, California

March 1, 2024, except for the change in the manner in which the Company accounts for segments discussed in Note 2 to the consolidated financial statements, as to which the date is February 27, 2025.

We served as the Company’s auditor from 2020 to 2024.

F-2

XPERI INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Year Ended December 31,

Operating expenses:

Impairment of long-lived assets — 1,535 1,710

Gain on divestitures — 100,833 —

The accompanying notes are an integral part of these consolidated financial statements.

F-3

XPERI INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Year Ended December 31,

Other comprehensive income (loss):

Unrealized gain (loss) on cash flow hedges 1,601 (2,892 ) 1,128

Change in foreign currency translation adjustment — (327 ) 126

The accompanying notes are an integral part of these consolidated financial statements.

F-4

XPERI INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except for par value)

December 31,

ASSETS

Current assets:

Prepaid expenses and other current assets 23,631 32,488

Deferred consideration from divestiture 11,880 —

Deferred consideration from divestiture, noncurrent 8,015 18,217

Unbilled contracts receivable, noncurrent 67,417 45,396

LIABILITIES AND EQUITY

Current liabilities:

Operating lease liabilities, noncurrent 21,487 19,932

Commitments and contingencies (Note 11)

Equity:

Accumulated other comprehensive loss (4,438 ) (6,084 )

The accompanying notes are an integral part of these consolidated financial statements.

F-5

XPERI INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended December 31,

Cash flows from operating activities:

Gain from divestitures — (100,833 ) —

Accrued interest income from note receivable (2,226 ) (2,026 ) —

Loss from deconsolidation of Perceive subsidiary — 4,839 —

Impairment of long-lived assets — 1,535 1,710

Changes in operating assets and liabilities:

Net cash (used in) provided by operating activities (515 ) (55,340 ) 62

Cash flows from investing activities:

Purchases of property and equipment (5,384 ) (5,043 ) (6,815 )

Purchases of intangible assets (7 ) (195 ) (185 )

Net proceeds from divestitures — 67,773 —

Net cash (used in) provided by investing activities (20,984 ) 50,820 (12,933 )

Cash flows from financing activities:

Repayment of short-term debt (50,000 ) — —

Payment of debt issuance costs (1,249 ) — —

Repayment of long-term debt (1,100 ) — —

Repurchases of common stock — (19,990 ) —

Proceeds from long-term debt 41,100 — —

Net cash (used in) provided by financing activities (12,241 ) (19,350 ) 7,052

Effect of exchange rate changes on cash and cash equivalents — — 126

F-6

Year Ended December 31,

Supplemental disclosure of cash flow information:

Supplemental disclosure of noncash investing and financing activities:

Note receivable in exchange for consideration from divestitures $ — $ 27,676 $ —

Deferred consideration from divestiture $ — $ 17,156 $ —

Property and equipment included in accounts payable $ 862 $ 516 $ 1,343

(2) Refer to Note 14—Income Taxes for the disaggregation of income taxes paid by jurisdiction, net of refunds received, upon the adoption of Accounting Standards Update (“ASU”) 2023-09 for the year ended December 31, 2025.

The accompanying notes are an integral part of these consolidated financial statements.

F-7

XPERI INC.

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

Shares Amount Capital Income (Loss) Deficit Interest Total Equity

Change in ownership interest of the Company — — (410 ) — — 410 —

Foreign currency translation adjustment — — — 126 — — 126

Unrealized gain on cash flow hedges — — — 1,128 — — 1,128

Change in ownership interest of the Company — — 881 — — (881 ) —

Loss from deconsolidation of Perceive subsidiary — — — — — 4,839 4,839

Foreign currency translation adjustment — — — (327 ) — — (327 )

Unrealized loss on cash flow hedges — — — (2,892 ) — — (2,892 )

Unrealized gain on cash flow hedges — — — 1,601 — — 1,601

The accompanying notes are an integral part of these consolidated financial statements.

F-8

XPERI INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – THE COMPANY AND DESCRIPTION OF BUSINESS

Xperi Inc. (“Xperi or the “Company”) is a leading media and entertainment technology company headquartered in Silicon Valley with operations around the world. The Company’s technologies are integrated into consumer devices, connected cars, and a variety of media platforms worldwide, enabling its unique audiences to connect with entertainment content in a more intelligent, immersive, and personal way. As the Company’s audiences engage with content on its platform, the Company operates a global, cross-screen advertising solution that enables brands to reach millions of engaged consumers across its rapidly expanding digital entertainment ecosystem, driving increased value for its partners, customers, and consumers. The Company operates in one reportable business segment and groups its revenue into four categories: Pay-TV, Consumer Electronics, Connected Car, and Media Platform.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company’s financial statements were prepared on a consolidated basis and include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on December 31. The Company employs a calendar month-end reporting period for its quarterly reporting.

For reporting periods in fiscal year 2024 and prior, the Company owned a controlling financial interest of its former subsidiary, Perceive Corporation (“Perceive”, later known as Xperi Pylon Corporation). In December 2024, Perceive was dissolved after all of its remaining assets and liabilities were distributed to the Company. At the time of its dissolution, the Company recognized a loss of $4.8 million within interest and other income, net, on its consolidated statements of operations upon the derecognition of the remaining balance of the noncontrolling interests in Perceive. Refer to Note 7—Divestitures for details concerning an asset sale transaction related to Perceive.

Foreign Currency Remeasurement and Transactions

The functional currency of the Company’s foreign subsidiaries is the U.S. dollar. Accordingly, each foreign subsidiary remeasures monetary assets and liabilities at period-end exchange rates, while non-monetary items are remeasured at historical exchange rates. Revenue and expenses are remeasured at the exchange rates in effect on the day the transaction occurs, except for those expenses related to non-monetary assets and liabilities, which are remeasured at historical exchange rates. Remeasurement adjustments are recognized in interest and other income, net in the consolidated statements of operations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, challenging, and subjective judgment include the estimation of licensees’ quarterly royalties prior to receiving the royalty reports, the determination of stand-alone selling price and the transaction price in an arrangement with multiple performance obligations, the fair value of note receivable and deferred consideration in connection with the AutoSense in-cabin safety business and related imaging solutions (the “AutoSense Divestiture”), 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 valuation of performance-based awards with a market condition. Actual results experienced by the Company may differ from management’s estimates.

Net Loss Per Share Attributable to the Company

Net loss per share attributable to the Company is computed by dividing net loss attributable to the Company for the period by the weighted-average number of common shares outstanding during the period. Dilutive weighted-average common shares

F-9

outstanding do not include unvested restricted stock units and stock options for the periods presented because the effect of their inclusion would have been anti-dilutive.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, which may include various combinations of goods and services which are generally capable of being distinct and accounted for as separate performance obligations. See Note 3—Revenue for detailed discussion on revenue recognition and disaggregation of revenue.

Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is available and that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The CODM reviews financial information and manages the business on a consolidated basis for the purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it has one operating segment, which is also its reportable segment. For additional information, see Note 16—Geographic and Segment Related Information.

Cash and Cash Equivalents

Cash and cash equivalents primarily consist of deposits maintained in domestic and foreign financial institutions.

Non-Marketable Equity Investments

The Company holds an equity method investment in a privately-held entity over which it has the ability to exercise significant influence, but does not have a controlling interest. Under the equity method, the Company records its proportionate share of income or loss in interest and other income, net, in the consolidated statements of operations. The Company monitors its non-marketable securities portfolio for potential impairment.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount of cash equivalents, accounts receivable, accounts payable, accrued liabilities, and short-term debt approximates fair value due to the short-term nature of these instruments. Note receivable, deferred consideration from divestitures, and long-term debt are carried at amortized cost and measured at fair value on a quarterly basis for disclosure purposes.

Derivative Instruments

The Company uses derivative financial instruments to manage foreign currency exchange rate risk. The Company does not enter into derivative transactions for trading purposes. The Company’s derivative financial instruments are recorded on the consolidated balance sheets as assets or liabilities measured at fair value. For derivatives designated as a hedge, and effective as part of a hedge transaction, the effective portion of the gain or loss on the hedging derivative instrument is reported as a component of other comprehensive income (loss) and as a basis adjustment to the underlying hedged item and reclassified to earnings in the period in which the hedged item affects earnings. To the extent derivatives do not qualify or are not designated as hedges, or are ineffective, their changes in fair value are recorded in interest and other income, net immediately.

Concentration of Credit and Other Risks

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, unbilled contracts receivable, a note receivable and deferred consideration from divestitures. The Company maintains cash and cash equivalents with large financial institutions, and at times, the deposits may exceed the federally insured limits. As part of its risk management processes, the Company performs periodic evaluations of the relative credit standing of these financial institutions. The Company has not sustained material credit losses from instruments held at these financial institutions. In addition, the Company has cash and cash equivalents held in international bank accounts that are denominated in various foreign currencies and has established risk management strategies designed to minimize the impact of certain currency exchange rate fluctuations.

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The Company believes that any concentration of credit risk in its accounts receivable and unbilled contracts receivable is substantially mitigated by its evaluation process and the high level of creditworthiness of its customers. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral.

For the years ended December 31, 2025, 2024, and 2023, no customer accounted for 10% or more of total revenue. As of December 31, 2025, no customer represented 10% or more of the Company’s net balance of accounts receivable, and two customers exceeded 10% of the Company’s combined net balance of current and noncurrent unbilled contracts receivable. As of December 31, 2024, no customer represented 10% or more of the Company’s net balance of accounts receivable, and one customer exceeded 10% of the Company’s combined net balance of current and noncurrent unbilled contracts receivable.

As part of the consideration for the AutoSense Divestiture, the Company received a note receivable and deferred consideration from Tobii AB (“Tobii”). Both of these instruments are exposed to credit risk arising from default on repayment from Tobii. The credit risk associated with the note receivable is mitigated by establishing a floating lien and security interest in certain of Tobii’s assets, rights, and properties, whereas the deferred consideration is not secured by any collateral. The Company utilizes valuation methodologies such as internally generated cash flow projections on the principal and interest of each instrument, along with the review of certain other data points, to determine the likelihood that the note receivable or deferred consideration will be repaid. Further, the Company assesses each instrument for credit losses and provides a reserve if full payment on the instruments may not occur as expected, in which case the reserve reflects the excess of the amortized cost basis over the results of the cash flow projections. The Company expects Tobii to make full payment on both instruments in accordance with the underlying agreement. Accordingly, no allowance for credit losses was recorded as of December 31, 2025.

Accounts Receivable and Allowance for Credit Losses

The timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to cash collection.

Payment terms and conditions vary by contract type, location of customer and the products or services offered, although terms generally require payment from a customer within 30 to 60 days. When the timing of revenue recognition differs from the timing of cash collection, an evaluation is performed to determine whether the contract includes a significant financing component.

The allowance for credit losses, which includes the allowance for accounts receivable and unbilled contracts receivable, represents the Company’s best estimate of lifetime expected credit losses inherent in those financial assets. The Company’s lifetime expected credit losses are determined using relevant information about past events (including historical experience), current conditions, and reasonable and supportable forecasts that affect collectability. The Company monitors its credit exposure through ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. In addition, the Company performs routine credit management activities such as timely account reconciliations, dispute resolution, and payment confirmations. The Company may employ collection agencies and legal counsel to pursue recovery of defaulted receivables.

Inventory

Inventories consist primarily of finished DVRs, non-DVRs and accessories and are stated at the lower of cost or net realizable value on an aggregate basis. Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. Adjustments to reduce the carrying amount of inventory to the lower of cost or net realizable value are made, if required, for excess or obsolete goods, which includes a review of, among other factors, demand requirements and market conditions.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the related assets’ estimated useful lives:

Computer equipment and software 1 to 5 years

Capitalized internal-use software 3 years

Office equipment and furniture 1 to 5 years

Leasehold improvements Lesser of related lease term or 5 years

Building and improvements Up to 30 years

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Expenditures that materially increase asset life are capitalized, while ordinary maintenance and repairs are expensed as incurred.

Capitalized Internal-Use Software

The Company capitalizes certain costs incurred in connection with software development projects for internal use during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once the software development project is available for general release, capitalization ceases, and the Company estimates the useful life of the asset and begins amortization. Capitalized internal-use software costs are amortized on a straight-line basis over its estimated useful life.

Capitalization of Cloud Computing Costs

The Company capitalizes certain costs related to its enterprise cloud computing arrangements during the application development stage. During the post-implementation stage, these costs are amortized as hosting fees on a straight-line basis over the term of the hosting arrangements.

Identified Intangible Assets

Identified finite-lived intangible assets consist of acquired patents, existing technology, customer relationships, trademarks and trade names, and non-compete agreements resulting from acquisitions, and acquired patents under asset purchase agreements. The Company’s identified intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 1 to 10 years. Identified indefinite-lived intangible assets include legacy TiVo tradenames and trademarks resulting from acquisitions.

Impairment of Long-Lived Assets

Long-lived assets include property and equipment, operating lease right-of-use (“ROU”) assets, and intangible assets. The Company reviews its long-lived assets for possible impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Such events and changes may include: a significant decrease in market value, changes in asset use, negative industry or economic trends, and changes in the Company’s business strategy. The Company measures recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets or the asset group are expected to generate. If the carrying value of the assets is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets.

For identified indefinite-lived intangible assets resulting from acquisitions, the Company evaluates their carrying value on an annual basis, and an impairment charge would be recognized to the extent that the carrying amount of such assets exceeds their estimated fair value.

Accounts Receivable Securitization Facility

Under the accounts receivable securitization program (the “AR Facility”) described in Note 9—Debt and Receivables Securitization, certain of the Company’s wholly-owned subsidiaries (collectively, the “Originators”) agree to periodically transfer and sell their trade receivables such as accounts receivable and unbilled contracts receivable, along with all related rights to a special purpose subsidiary, which the Company controls and consolidates in its financial statements. Once sold, the Originators have no continuing involvement in the transferred receivables.

In turn, the trade receivables held by the special purpose subsidiary are pledged as collateral against the amounts drawn from the AR Facility with PNC Bank, National Association (“PNC”), which the Company accounts for as a secured borrowing. The outstanding loan amount is classified as long-term debt in the consolidated balance sheets.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are recognized as ROU assets, along with their corresponding current and noncurrent lease liabilities in the Company’s consolidated balance sheets. The ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, the

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Company generally 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 Company’s lease terms may include options to extend or terminate the lease, and these terms are factored into the valuation of ROU assets and liabilities when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company accounts for lease and non-lease components such as common area maintenance costs separately. Leases with an initial term of 12 months or less are not recorded on the 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 ROU assets calculation.

Research and Development

Research and development costs are comprised primarily of employee-related costs, stock-based compensation expense, engineering consulting expenses associated with new product and technology development, product commercialization, quality assurance and testing costs, as well as costs related to information technology, patent applications and examinations, materials, supplies, and an allocation of facilities costs. All research and development costs are expensed as incurred.

Stock-based Compensation

Prior to the Separation, certain Company employees participated in the Former Parent’s equity programs. Stock-based compensation expense has been attributed to the Company based on the awards and terms previously granted to the Company’s direct employees, as well as an allocation of the Former Parent’s corporate and shared functional employee expenses.

Stock-based compensation is measured at the grant date based on the estimated fair value of the award and is recognized on a straight-line basis, net of estimated forfeitures, over the requisite service or performance period. Forfeiture rates are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could be significantly different from what was recorded in the current period.

The Company uses the closing trading price of its common stock on the date of grant as the fair value of awards of restricted stock units (“RSUs”), and performance-based restricted stock units (“PSUs”) that are based on company-designated performance targets. For PSUs that are based on market conditions, or market-based PSUs, fair value is estimated by using a Monte Carlo simulation on the date of grant. The Company estimates the grant-date fair value of stock to be issued under the employee stock purchase plan (“ESPP”) using the Black-Scholes pricing model.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of assets and liabilities and their respective tax bases and operating loss and tax carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable to the years in which those temporary differences are expected to reverse. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized.

From time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty. Significant judgment is required in assessing and estimating the tax consequences of these transactions. Accruals for unrecognized tax benefit liabilities, which represent the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized for financial reporting purposes, are recorded when the Company believes it is not more-likely-than-not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Adjustments to unrecognized tax benefits are recognized when facts and circumstances change, such as the closing of a tax audit, notice of an assessment by a taxing authority or the refinement of an estimate. Income tax benefit includes the effects of adjustments to unrecognized tax benefits, as well as any related interest and penalties.

Advertising Costs

Advertising costs are expensed as incurred and are presented within selling, general and administrative expense in the consolidated statements of operations. Advertising expenses for the years ended December 31, 2025, 2024 and 2023, were $10.6 million, $9.9 million, and $8.1 million, respectively.

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Contingencies

From time to time, the Company may be involved in legal and administrative proceedings and claims of various types. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. Management reviews these estimates in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable but the amount of loss cannot be reasonably estimated, the Company discloses the loss contingency and an estimate of possible loss or range of loss (unless such an estimate cannot be made). The Company does not recognize gain contingencies until they are realized. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Recent Accounting Pronouncements

The following are ASUs issued by the Financial Accounting Standards Board (“FASB”) that are relevant to the Company’s consolidated financial statements and related disclosures.

Accounting Standard Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold and further disaggregation of income taxes paid for individually significant jurisdictions. The Company adopted this guidance on a prospective basis within its December 31, 2025 consolidated financial statements. For further information, refer to Note 14—Income Taxes.

Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard requires that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. The standard will become effective for the Company’s 2027 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date or retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures within its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The update guidance aims to simplify how all entities currently estimate expected credit losses for their outstanding trade and other related receivables arising from revenue transactions and provides a practical expedient available for election by public entities. Once elected, all public entities are no longer required to consider forecasted information when estimating expected credit losses, but only the historical and current economic conditions relevant to the collectibility of the trade and other related receivables. The updated guidance will become effective on a prospective basis for the Company in the first quarter of 2026. The Company does not expect the impact upon adoption to be material to its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This updated guidance eliminates the consideration of software project development stages and introduces additional considerations for the existing probability threshold assessment on completing a software development project. Entities are required to assess whether significant uncertainty exists in the development activities of the software before capitalizing any software costs, and such uncertainty is considered to exist if the project involves any technological innovations with novel and unproven features or unidentified significant performance requirements. The updated guidance will become effective for the Company in the first quarter of 2028 and may be adopted on either a prospective basis, full retrospective basis, or modified prospective basis with a cumulative-effect adjustment through retained earnings. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

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NOTE 3 – REVENUE

Revenue Recognition

General

Revenue is recognized when control of the promised goods or services is transferred to a customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services, which may include various combinations of goods and services which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of sales taxes collected from customers which are subsequently remitted to governmental authorities.

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 an arrangement with multiple performance obligations, the transaction price is allocated among the separate performance obligations on a relative standalone selling price (“SSP”) basis. The determination of SSP considers market conditions, the size and scope of the contract, customer and geographic information, and other factors. When observable prices are not available, SSP for separate performance obligations is generally based on the cost-plus-margin approach, considering overall pricing objectives.

When variable consideration is in the form of a sales-based or usage-based royalty in exchange for a license of technology or when a license of technology is the predominant item to which the variable consideration relates, 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 satisfied or partially satisfied.

Description of Revenue-Generating Activities

The Company derives the majority of its revenue from licensing its technologies and solutions to customers within the Pay-TV, Consumer Electronics, Connected Car and Media Platform product categories. Refer to Part I, Item 1 of this Form 10-K for detailed information regarding these product categories.

Pay-TV

Customers within the Pay-TV category are primarily multi-channel video service providers, consumer electronics (“CE”) manufacturers, and end consumers. Revenue in this category is primarily derived from licensing the Company’s Pay-TV solutions, including Electronic Program Guides, TiVo video-over-broadband (“IPTV”) Solutions, Personalized Content Discovery and enriched Metadata.

For these solutions, the Company generally provides on-going media or data delivery, either via on-premise licensed software, hosting or access to its platform. The Company generally receives fees on a per-subscriber per-month basis or as a monthly fee, and revenue is recognized during the month in which the solutions are provided to the customer. For most of the on-premise licensed software arrangements, substantially all functionality is obtained through the Company’s frequent updating of the technology, data and content. In these instances, the Company typically has a single performance obligation related to these ongoing activities in the underlying arrangement, and revenue is generally recognized over the period the solution is provided. Hosted solutions and access to our platform is considered a single performance obligation with revenue being recognized over the period the solution is provided. In the case of certain minimum guarantee or fixed fee on-premise licensed software arrangements, revenue is recognized immediately upon the delivery of the licensed technology.

Consumer Electronics

The Company licenses its audio technologies to CE manufacturers or their supply chain partners.

The Company generally recognizes royalty revenue from licenses based on units shipped or manufactured. Revenue is recognized in the period in which the customer’s sales or production are estimated to have occurred. This may result in an adjustment to revenue when actual sales or production are subsequently reported by the customer, generally in the month or quarter following sales or production. Estimating customers’ 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.

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Certain customers enter into fixed fee or minimum guarantee agreements, whereby customers pay a fixed fee for the right to incorporate the Company’s technology in the customer’s products over the license term. In arrangements 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 technology and begins to benefit from the license. If applicable, revenue is recognized 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 agreements where the customer exceeds the minimum, the Company recognizes revenue relating to any additional per-unit fees in the periods it estimates the customer will exceed the minimum and adjusts the revenue based on actual usage once that is reported by the customer.

Connected Car

The Company licenses its digital radio solutions, automotive infotainment and related offerings to automotive manufacturers or their supply chain partners.

The Company generally recognizes royalty revenue from these licenses based on units shipped or manufactured, similar to the revenue recognition described above in “Consumer Electronics”. Certain customers may enter into fixed fee or minimum guarantee agreements, also similar to the revenue recognition described above in “Consumer Electronics”. Automotive infotainment and related revenue is generally recognized over time as the customer obtains access to the solutions and underlying data.

Media Platform

The Company generates revenue from advertising, TV viewership data, metadata for ad measurement and programming analytics, and licensing of the core middleware solutions.

Advertising revenue is generally recognized when the related advertisement is delivered. TV viewership data revenue is generally recognized over time as the customer obtains the underlying data. Metadata for ad measurement and programming analytics is generally recognized over time as the customer obtains the scheduled data. License revenue for the core middleware solutions is generally recognized either on a per-unit royalty or a minimum guarantee or fixed fee basis, similar to “Consumer Electronics” described in the section above.

Hardware Products, Services and Settlements/Recoveries

The Company sold hardware products, primarily to end consumers, within the Pay-TV and Consumer Electronics product categories. Hardware product revenue was generally recognized when the promised product was delivered.

The Company also generates non-recurring engineering (“NRE”) revenue within all of its product categories. The Company recognizes NRE revenue as progress is made toward completion, generally using an input method based on the ratio of costs incurred to date to total estimated costs of the project.

Revenue from each of advertising, NRE services, and hardware products was less than 10% of total revenue for all periods presented.

The Company actively monitors and enforces its technology licenses, including seeking appropriate compensation from customers that have under-reported royalties owed under a license agreement and from third parties that utilize the Company’s technologies without a license. As a result of these activities, the Company may, from time to time, recognize revenue from periodic compliance audits of licensees for underreporting royalties incurred in prior periods, or from settlement of license disputes. These settlements and recoveries may cause revenue to be higher than expected during a particular reporting period and such settlements and recoveries may not occur in subsequent periods. The Company recognizes revenue from settlements and recoveries when a binding agreement has been executed or a revised royalty report has been received and the Company concludes collection is probable.

Disaggregation of Revenue

The Company’s revenue that is recognized over time consists primarily of per unit royalties, per-subscriber per-month or monthly license fees, single performance obligations satisfied over time, and NRE services. Revenue that is recognized at a

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point in time consists primarily of fixed fee or minimum guarantee licensing contracts, advertising, hardware products, and settlements/recoveries.

The following table summarizes revenue by timing of recognition (in thousands):

Year Ended December 31,

The following table summarizes revenue by product category (in thousands):

Year Ended December 31,

The following table summarizes revenue by geographic location (in thousands):

Year Ended December 31,

(1)

For the year ended December 31, 2025, 2024, and 2023, the Company recognized $206.3 million, $237.8 million, and $268.0 million of revenue from the U.S., which represented 46%, 48%, and 51% of total revenue for the respective periods.

A significant portion of the Company’s revenue is derived from licensees headquartered outside of the U.S., principally in Asia Pacific and Europe, the Middle East and Africa. Japan, which is part of Asia Pacific, contributed a significant amount of revenue, as shown in the following table (in thousands):

Year Ended December 31,

No individual country in Europe, Middle East and Africa and other regions accounted for 10% or more of total revenue in all periods presented.

Contract Balances

Contract Assets

A contract asset represents a right to consideration that is conditional upon factors other than the passage of time. Contract assets primarily consist of unbilled contracts receivable that are expected to be received from customers in future periods, where revenue is recognized upon the completion of performance obligations, but in advance of billings. The amount of

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unbilled contracts receivable may not exceed their net realizable value and is classified as noncurrent if the amounts are expected to be invoiced more than one year from the reporting date.

Contract Liabilities

Contract liabilities are mainly comprised of deferred revenue, which arises when cash payments are received in advance of performance obligations being satisfied. Deferred revenue generally consists of prepaid licenses or other fees for which the Company is paid in advance while the promised good or service is transferred to the customer at a future date or over time.

The following table presents additional revenue disclosures (in thousands):

Year Ended December 31,

Revenue recognized in the period from:

(1)

True ups represent the differences between the Company’s quarterly estimates of per-unit royalty revenue and actual production/sales-based royalties reported by licensees that are generally received in the following period, and may include other changes in estimates. Recoveries represent corrections or revisions to previously reported per-unit royalties by licensees, generally resulting from the Company’s inquiries or compliance audits. Settlements represent resolutions of disputes or litigation during the period for past royalties owed.

Remaining Performance Obligations

Remaining performance obligations represent contracted revenue that has not yet been recognized. As of December 31, 2025, the Company’s remaining performance obligations and the period over which they are expected to be recognized were as follows (in thousands):

Year Ending December 31: Amounts

Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses for the years ended December 31, 2025, 2024, and 2023 (in thousands):

Year Ended December 31,

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NOTE 4 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

Prepaid expenses and other current assets consisted of the following (in thousands):

December 31,

Finished goods inventory — 1,061

Property and equipment, net consisted of the following (in thousands):

December 31,

Less: accumulated depreciation and amortization(1) (87,394 ) (80,354 )

(1)

Includes $11.3 million and $4.1 million as of December 31, 2025 and 2024, respectively, of accumulated amortization associated with capitalized internal-use software.

Due to the global downsizing of its real estate footprint, the Company vacated a number of its leased office facilities, resulting in the impairment of the leasehold improvements completed at those facilities. There was no impairment of leasehold improvements for the year ended December 31, 2025. For the years ended December 31, 2024 and 2023, the Company recorded impairment charges of $0.6 million and $0.4 million, respectively. See Note 10—Leases for more detail.

The following table summarizes the capitalization and amortization of internal-use software for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

Amortization of capitalized internal-use software 7,241 2,547 1,503

Accrued liabilities consisted of the following (in thousands):

December 31,

Employee compensation and benefits $ 38,125 $ 33,360

Current portion of operating lease liabilities 8,858 15,353

Accrued rebates and other payments to customers 3,914 4,289

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NOTE 5 – FINANCIAL INSTRUMENTS

Non-marketable Equity Securities

As of December 31, 2025 and 2024, other noncurrent assets included equity securities accounted for under the equity method with a carrying amount of $4.7 million. No impairments to the carrying amount of the Company’s non-marketable equity securities were recognized in the years ended December 31, 2025, 2024, and 2023.

Derivatives Instruments

The Company uses a foreign exchange hedging strategy to hedge local currency expenses and reduce variability associated with anticipated cash flows. The Company’s derivative financial instruments consist of foreign currency forward contracts. The maturities of these instruments are generally less than twelve months. Fair values for derivative financial instruments are based on prices computed using third-party valuation models. All the significant inputs to the third-party valuation models are observable in active markets. Inputs include current market-based parameters such as forward rates, yield curves, and credit default swap pricing.

Cash Flow Hedges

The Company designates certain foreign currency forward contracts as hedging instruments pursuant to ASC 815, Derivatives and Hedging. The effective portion of the gain or loss on the derivatives are reported as a component of accumulated other comprehensive loss (“AOCL”) in stockholders’ equity and reclassified into earnings in the consolidated statements of operations in the period upon which the hedged transactions are settled.

The notional and fair values of all derivative instruments were as follows (in thousands):

December 31,

Derivative instruments designated as cash flow hedges:

All of the Company’s derivative financial instruments are eligible for netting arrangements that allow the Company and its counterparty to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled under these arrangements have been presented in the Company’s consolidated balance sheets on a net basis.

The gross amounts of the Company’s foreign currency forward contracts and the net amounts recorded in the Company’s consolidated balance sheets were as follows (in thousands):

December 31,

Gross amount of recognized assets $ 1,009 $ 173

Gross amount of recognized liabilities (1,266 ) (2,031 )

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The changes in AOCL related to the cash flow hedges consisted of the following (in thousands):

Year Ended December 31,

Other comprehensive gain (loss) before reclassification 2,175 (2,107 ) 1,190

Net current period other comprehensive gain (loss) 1,601 (2,892 ) 1,128

The following table summarizes the gains recognized upon settlement of the hedged transactions in the consolidated statement of operations for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

Selling, general and administrative 67 74 192

Undesignated Derivatives

For derivatives that were not designated as hedge instruments, they were measured and reported at fair value as a derivative asset or liability in the consolidated balance sheets with their corresponding changes in the fair value recognized as gains or losses in interest and other income, net in the consolidated statements of operations. These instruments were all re-designated as foreign currency cash flow hedges in July 2023.

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 note receivable, deferred consideration from divestitures, short-term debt, and 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 and liabilities, 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.

The Company’s derivative financial instruments (as described in Note 5—Financial Instruments), consisting of foreign currency forward contracts, are reported at fair value on a recurring basis and classified as Level 2.

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Financial Instruments Not Recorded at Fair Value

The following table presents the fair value hierarchy for the Company’s assets and liabilities recorded at their carrying amount, bur for which the fair value is disclosed (in thousands):

December 31,

CarryingAmount Estimated FairValue CarryingAmount Estimated FairValue

Assets:

Liabilities:

Senior Unsecured Promissory Note $ — $ — $ 50,000 $ 50,000

(1) Includes $11.9 million as of December 31, 2025 of the net carrying amount of the holdback consideration from the Perceive Transaction (as described in Note 7—Divestitures), which approximates its associated fair value and is classified as current in the consolidated balance sheets.

The fair value of the note receivable, including accrued interest, and the deferred consideration resulting from the AutoSense Divestiture and the Perceive Transaction were estimated based on an income and market approach with valuation inputs such as the U.S. Treasury constant maturity yields, comparable bond yields, and credit spreads over the term of the same or similarly issued instruments. They are classified within Level 2 of the fair value hierarchy.

Debt is classified within Level 2 of the fair value hierarchy. As of December 31, 2025, long-term debt included the AR Facility (as defined in Note 9—Debt and Receivables Securitization) with a floating interest rate based on market conditions. As of December 31, 2024, short-term debt included the senior unsecured promissory note. The carrying amounts of these two debt instruments approximated their respective fair values. Refer to Note 9—Debt and Receivables Securitization for additional information on these two debt instruments.

NOTE 7 – DIVESTITURES

AutoSense In-cabin Safety Business and Related Imaging Solutions

In December 2023, the Company entered into a definitive agreement with Tobii in connection with the AutoSense Divestiture. The AutoSense Divestiture represented a 100% equity sale transaction of two of the Company’s wholly-owned subsidiaries and was expected to streamline the Company’s business to further focus its business on entertainment-related products and services.

In January 2024, the AutoSense Divestiture was completed for total consideration of $44.3 million, comprised of $10.8 million of cash, a note receivable from Tobii (the “Tobii Note”) of $27.7 million, and deferred consideration (as described under Deferred Consideration below) totaling $15.0 million, which was estimated to have a fair value of $5.8 million based on a present value factor as of January 31, 2024. The $10.8 million of cash included in the total consideration represents the cash balance that was transferred to Tobii upon completion of the AutoSense Divestiture to support operations during the transition and was subsequently returned to the Company, and as such, this amount is included in the assets sold as of January 31, 2024 and in the total consideration received. In addition, there may be potential earnout payments (as described under Contingent Consideration below) payable in 2031, contingent upon the future success of the divested AutoSense in-cabin safety business.

In connection with the AutoSense Divestiture, the Company also recorded a liability of $7.1 million for potential indemnification of certain pre-closing date matters.

F-22

As of January 31, 2024, the Company derecognized the carrying amounts of the following assets and liabilities (in thousands):

Current Noncurrent Total

Assets:

Prepaid expenses and other current assets 812 — 812

Property and equipment, net — 2,291 2,291

Operating lease right-of-use assets — 3,272 3,272

Liabilities:

Accounts payable $ 248 $ — $ 248

Operating lease liabilities, noncurrent — 2,708 2,708

Other noncurrent liabilities — 7,064 7,064

(1)

Total assets held for sale also included certain fully amortized finite-lived intangible assets with an original cost of $35.2 million.

Upon the completion of the AutoSense Divestiture, the Company recognized a pre-tax gain of $22.9 million.

The AutoSense Divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore, its results of operations were not reported as discontinued operations.

Note Receivable from Tobii AB

The Tobii Note, with a fixed interest rate of 8% per annum, matures on April 1, 2029 and is payable in three annual installments. Tobii may, at any time and on any one or more occasions, prepay all or any portion of the outstanding principal amount, along with accrued interest, without any penalty. In the event of default, an additional interest of 2% per annum may be applied to the outstanding balance of the Tobii Note, and the Company has the right to demand full or partial payment on the outstanding balance with unpaid interest.

The Tobii Note is secured by a floating lien and security interest in certain of Tobii’s assets, rights, and properties, and contains customary affirmative and negative covenants including the restrictions on incurring certain indebtedness, and certain change of control and asset sale events, but does not include any financial covenants.

The Tobii Note has the following scheduled principal repayments (in thousands):

Date of Principal Payment: Amount

Total principal payments $ 27,676

F-23