Xperi Inc. (XPER) stock intrinsic value fair value estimate & owner earnings analysis

Xperi licenses audio, video and media technologies. Its products include DTS audio, TiVo pay-TV software and HD Radio and DTS AutoStage for connected cars. It earns royalties and licence fees from consumer electronics makers, pay-TV providers and automakers. Revenue was $448 million in 2025, down from $494 million in 2024 and $521 million in 2023. About 46% of 2025 revenue came from the United States, with Japan and the rest of Asia Pacific and Europe, the Middle East and Africa making up the rest. No customer was 10% or more of revenue. What we measure. We start from cash generated by operations, remove the swings caused by timing of customer billing and payments, and then deduct stock-based compensation and the capital spending needed just to keep the business running (equipment plus capitalized internal-use software, with only a proportional share treated as growth spending in years when revenue grew). On that basis the company has been negative every year we can measure: about $(1.04) per share in 2020, $(1.23) in 2021, $(2.12) in 2022, $(1.94) in 2023, $(1.35) in 2024 and $(0.56) in 2025. The 2020 and 2021 figures come from the period before the company was separated from its former parent, and we measure the current business from the 2022 separation onward. Over 2022 to 2025 the middle of the range is roughly $(1.65) per share. What drives the result. Operating cash flow was $(0.5) million in 2025 and $(55.3) million in 2024. A large part of the gap versus accounting profit is that much licence revenue is recognized before it is billed. Unbilled contracts receivable rose $18.0 million in 2025 and $46.3 million in 2024, and stood at about $146 million at year-end 2025. We remove that timing effect, as it is billing timing rather than earning power, but even after doing so the business does not cover its own costs. Stock-based compensation is the largest single item at $40.7 million in 2025 ($60.5 million in 2024, $69.5 million in 2023), and we treat it as a real cost. Capitalized software spending has risen from $5.9 million in 2023 to $15.6 million in 2025. Intangible amortization of $34.8 million is a non-cash charge already excluded from cash flow, and we treat it as sunk acquisition cost. Trend. The most recent full year improved: owner earnings per share moved from $(1.35) in 2024 to $(0.56) in 2025, helped by stock compensation falling about $20 million. Our base case starts at or below that trailing level, and we do not extrapolate the improvement because the company's own contracted revenue does not yet support it: contracted revenue not yet recognized was $123.5 million at year-end 2025, of which $63.3 million falls in 2026 and only $27.0 million in 2027, against annual revenue of about $448 million. Most future revenue is therefore not contracted, and revenue has fallen for two straight years. The three cases. Bear: revenue keeps declining as it did in 2024 and 2025 and cost cuts do not continue. Value is $0 per share. We do not put a negative number on it because at December 31, 2025 total assets of $615.8 million exceeded total liabilities of $201.8 million (including $40.0 million of long-term debt) and cash was $96.8 million, so this is not a case where the company owes more than it is worth. Base: the median path is that owner earnings stay negative but narrow, as stock compensation trends down from its 2023 peak. No named driver in the filings takes owner earnings above zero, so we assign no value to earning power. Value is $0 per share. Bull: stock compensation continues down at the pace of the last two years (about $15 million a year) and other items hold at 2025 levels. Applied to 2025 owner earnings of $(25.8) million, a further $15 million reduction would still leave owner earnings negative, so this does not produce positive value from named, evidenced drivers. Value is $0 per share. What we left out. We gave no credit for a return to growth in TiVo, DTS or automotive licensing, for new product launches, for margin expansion or for management cost-cutting targets, since none is secured by contract or supported by a multi-year record. Unbilled receivables of about $146 million are real cash that will be collected, but they are offset by new unbilled amounts building each year, so we treat billing timing as neutral rather than as value. What would make this wrong. If the company holds stock compensation and capital spending at 2025 levels or lower while revenue stabilizes, owner earnings would approach break-even and the shares would have value that we are not crediting. Several consecutive years of positive owner earnings after stock compensation would change our view. Because we cannot identify any earning power today that we can evidence, the margin-of-safety price is $0 per share. Sources: 10-K filings for fiscal years 2022, 2024 and 2025. Amounts are as reported; the 2022 accrued liabilities figure uses the later restated presentation. Capitalized software for 2020 through 2022 was not separately reported in the filings we used, so capital spending in those years is property and equipment only.