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Why Xperi Stock Skyrocketed Today

By Evan Niu, CFA - Feb 19, 2020 at 1:27PM

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Xperi and TiVo, which are preparing to merge, both reported fourth-quarter earnings results.

What happened

Shares of Xperi (XPER) have skyrocketed today, up by 21% as of 12:40 p.m. EST, after the company reported fourth-quarter earnings results. TiVo (TIVO), which Xperi is preparing to merge with, also reported earnings.

So what

Q4 billings came in at $126.7 million, while operating expenses were $95.4 million. Operating cash flow was $65 million, and Xperi finished the quarter with $121.5 million in cash, cash equivalents, and short-term investments. Xperi paid down $50 million in debt during the period, reducing debt by $150 million throughout 2019.

Green stock chart going up

Image source: Getty Images.

"Xperi finished 2019 on a strong note, delivering better than expected results for the fourth quarter and generating record operating cash flow for the full year as we remained focused on execution across our business," CEO Jon Kirchner said in a statement. "We recently reached a significant milestone in the development of a new machine learning hardware and software platform, which is now being sampled by prospective customers."

Now what

TiVo shares also popped 21% on strong fourth-quarter results. In December, the two tech companies announced a $3 billion merger, which is structured as an all-stock transaction with a fixed exchange ratio of 0.455 Xperi shares per TiVo share that will see Xperi investors own 46.5% of the combined company, while TiVo shareholders will own the remaining 53.5%. Both stocks should move relatively in sync due to the structure of the transaction, which is expected to close in the second quarter.

Xperi expects billings in the first quarter to be in the range of $100 million to $104 million, with full-year 2020 billings of $400 million to $420 million.

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