Xperi Holding Corporation
Q4 2020 Earnings Call Transcript

Published: 23 Feb 2021

[Operator:]

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Xperi Fourth Quarter Fiscal Year 2020 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. This call is recorded today Tuesday, February 23, 2021. I would now like to turn the call over to Geri Weinfeld, Vice President of Investor Relations for Xperi. Geri, please go ahead.

[Geri Weinfeld:]

Good afternoon, everyone. With me on the call today are Jon Kirchner, CEO; and Robert Andersen, CFO. Also on the call is Samir Armaly, President of IP Licensing, who will be available along with Jon and Robert to answer questions during the Q&A portion of the call.

[Jon Kirchner:]

Thanks, Geri, and thanks, everyone, for joining us. It would be difficult to begin a discussion around last year's performance without reference to the COVID-19 pandemic. It was a year like no other and our employees came together seamlessly to deliver on our mission to provide extraordinary experiences in the home, on-the-go, and in the car and while we're impacted by the pandemic in some areas of our business, we exited the year with strong results and key accomplishments. 2020 was a transformative year. We closed our merger with TiVo, made significant progress on integration and were able to achieve 90% of the $50 million in run rate synergies from the combination. Importantly, by the time we finished the first quarter we will have reached the $50 million run rate synergy target we set for the transaction nine months ahead of schedule.

[Robert Andersen:]

Thanks, Jon. Let me begin with financial results for the 2020 fourth quarter and full-year. As Jon noted earlier in order to provide more meaningful comparisons, I'll be describing revenue and cash flow based numbers on a fully combined basis as that Xperi and TiVo were combined for all periods. Combined numbers can be found in the interactive analyst’s center on our Investor Relations website. Total revenue for the fourth quarter was $433.9 million, up from $265.7 million in the fourth quarter of 2019. The increase was mainly driven by the Comcast settlement and growth in the consumer experience and Connected Car categories offset by lower revenue from semiconductor IP. As Jon mentioned, the full-year revenue on a combined basis for 2020 was $1.15 billion, up 21% from $948.2 million in 2019. Fourth quarter GAAP operating expense including COGS is $244.1 million. CapEx spend is significantly higher than the fourth quarter of last year due to our merger with TiVo. GAAP operating expense for the full year including COGS was $714.4 million. On a non-GAAP basis, Q4 total operating expense including COGS was $173.6 million. Q4 interest expense was $13.3 million. And other income was $1 million. Cash taxes paid in the quarter were $12.4 million. So using cash tax and non-GAAP fully diluted shares of $112.3 million. Non-GAAP earnings per share for Q4 was $2.10. We ended the quarter with 105.5 million basic shares outstanding. And we bought back just over 1 million shares of common stock during the quarter at an average price of $19.82 for a total of $20 million. As of the end of the fourth quarter, we had $80 million of share repurchase authorization remaining. Moving to the balance sheet, we finished the quarter with $257.1 million in cash and investments, up by $54 million from the third quarter. We paid down $163 million of our debt during the quarter to bring our year end debt balance down to $873.8 million. We also purchased a substantial number of patent assets during the quarter for a total of $50 million. These assets provide valuable coverage in key existing IP markets and are equally important in some of the areas we're focused on for future growth. Operating cash flow for the quarter was $298.2 million up from $136.8 million a year ago due primarily to the Comcast settlement and balanced by lower cash on semi-IP customers and delay cash payment for operating spend at the end of 2019. Our adjusted free cash flow for the quarter was $296.8 million. Adjusted free cash flow reflects operating cash flow adjusted for $4.4 million of property plant equipment and $3 million of merger and separation related costs. For the second half of the year excluding prior period payments from Comcast we returned approximately 50% of free cash flow through dividends and share buybacks which is in line with our target objectives. During the quarter Xperi paid a cash dividend of $0.05 per share of common stock. In terms of guidance we believe an annual view provides the best measure of the business and there are always certain deals in our annual forecasts for which it is difficult to determine timing by quarter. I will however provide some guidelines on what we expect on seasonality for revenue and expenses. For the full year of 2021 we expect revenue to be between $860 million and $900 million. The comparison purposes to last year is worth noting that was approximately $300 million of non-recurring revenue in 2020 relating to the media and semiconductor IP licenses. For revenue we would expect the first and fourth quarters of the year to be slightly higher than the second and third. We expect cogs for the year to be between $115 million and $125 million. The operating expense for the year is expected to be between $760 million and $790 million and non-GAAP operating expenses expected to be between $475 million and $505 million. Please refer to our earnings release for reconciliation between GAAP and non-GAAP expenses. We expect depreciation costs to be approximately $25 million. Overall we expect non-GAAP expense to decline by approximately $35 million year-over-year primarily due to realize merger synergies and other cost reductions. Well, we expect litigation then to be lower in 2021. The savings is balanced by investments in systems infrastructure and business growth initiatives. The expenses as we would expect the first half spending is slightly lower in the second half. We expect interest expense to be approximately $43 million significantly less year-over-year on a combined basis due to debt pay down and more favorable borrowing terms. Other income will be approximately $4 million and cash taxes will be between $35 million and $38 million. Also we expect our basic number of shares to be $105 million and fully diluted shares on a non-GAAP basis to be $112 million. Using the midpoint of the guidance range as we would expect non-GAAP earnings per share for the full year 2021 to be approximately $1.74. Additionally we expect to generate between $180 million and $220 million of operating cash flow and Well between $185 million and $225 million of adjusted free cash flow in fiscal 2021. That concludes our prepared remarks. Let's now open the call to your questions. Operator?

[Operator:]

Thank you. We'll take our first question from Matthew Galinko with Sidoti and Company. Please go ahead.

[Matthew Galinko:]

Thanks for taking my question. Maybe just I guess investments and product and I think expanding some -- maybe just some field support for that. Can you elaborate a little bit more on what does it mean to product . What you have so far, what are the milestones we should be looking for and is that based on feedback from your initial partners and bringing that to market and I mean -- and I guess just to cap off that multi-part question, do you expect an acceleration in identifying and ramping up with partners as you maybe automated a little bit more? Thanks.

[Jon Kirchner:]

Sure. Hi, Matt. So, the hardware side of the chip is done. It's a very innovative hardware design but it is closely coupled with software that basically makes the platform work where you get incredible power savings yet performance and accuracy And so the investments we're making are very much around the software toolset because it basically is a different way of doing neural networks and if you will translating standard networks that people are typically using today in the cloud on to this chip platform, which of course is very, very small and low power is not a trivial task. And one of the things we've learned and continue to work on and we've known this going in, but continue to work on, is how do we make it really easy for people to run algorithms that they may otherwise be running in the cloud and basically port them on to this device. So that process and those tools coupled with field applications engineering support to help people particularly first time go through the process of working on what is fundamentally a new and pretty revolutionary platform is a focus. As we get through the completion of the tools, which should occur more or less as we approach late spring into the middle of this year at least in the first instantiations, we do believe that customers can be able to more rapidly evaluate not only the platform, but then ultimately proceed with confidence around incorporating the chip and design. So we see the pipeline expanding as we get towards the latter part of the year. And certainly, we expect to see business acceleration in 2022 and beyond as a result of those investments and the continued efforts by the team.

[Matthew Galinko:]

Got it. If I could just sneak one follow-up on that. We've talked in prior quarters about other potential use of Perceive beyond the kind of the security cameras or smart camera market. So I know you called out that opportunity today, but is there anything else once you get that product position done and we move into the back-half of the year and that you expect to be pulled into or that you're starting to see interest from that you think is relevant?

[Jon Kirchner:]

Very much so. Security cameras are just literally the initial target application based on some -- lot of internal we have, expertise we have in terms of world-class imaging, but when you really think about the platform I would think about it this way which is any device where you'd like to bring intelligence, much greater intelligence into the fold and the way to think about that is there are billions upon billions -- tens of billions of sensors in the world of all kinds and they're delivering information and intelligence around everything from imaging to audio to thermal to other sorts of sensing and the idea behind Perceive what is so powerful is it that anywhere you have today which is a sensor that just basically feeds raw data into some other SOC or some other process to try to figure out or send it to the cloud what it means. The Perceive chip right there locally in a private way and in an incredibly powerful way can turn that raw data into better information and really apply intelligence to then figure out what happens downstream. So applications are wearables, consumer white goods, AR related things, VR related things, mobile phones, automotive, other consumer electronics, enterprise, industrial, I mean the list goes on and on and on. It's a vast, vast potential market really because these are all the places if you look around where people are beginning to apply artificial intelligence in different ways and the ability to move some of that computation out of the cloud directly on into the local environment saves money on data traffic up and down to the cloud. It improves accuracy. It improves privacy. There's a whole series of benefits that come in and around and you can really develop something that is genuinely powerful and low power in its operation and put it at the edge. And so that's the vision and the opportunity behind Perceive. We are in fact engaged with customers in a number of these areas that I mentioned. And the feedback continues to be outstanding.

[Matthew Galinko:]

Perfect. Thank you.

[Operator:]

We'll take our next question from Eric Wold with B. Riley Securities. Please go ahead.

[Eric Wold:]

Thank you and good afternoon guys. A couple of questions kind of diving on the outlook a little bit. I guess one you're thinking back to last year as we were kind of maybe starting to come out of the pandemic a little bit, you spread some cautiousness around the potential pace of the recovery of the product segment this year as the economy came back to life. Can you update us on where your thoughts are there given what’s kind of transpired the past few months and kind of what you've seen to start the year where you're seeing maybe signals have appeared strength in that segment for the year and where you might be seeing some signals of weakness.

[Robert Andersen:]

Hey Eric. This is Robert. I can start out and John if he wants to make over the top comments. So at this point in the year and given where we are amidst the pandemic, we expect the product business to be roughly flat year-over-year. And the upside range would be probably in the neighborhood of a few percentage points. We have seen some recovery in automotive, which we noted in Q4. But I think we are taking I believe a rather cautious outlook for 2021 at this stage.

[Eric Wold:]

Got it. Where do you see

[Jon Kirchner:]

Well, I think we…

[Robert Andersen:]

Go ahead, Jon if you want to take it. I was going to say we see some risks on the per unit basis in 2021, which would be in the consumer segment. And there is also upside there too. There is also some chip shortages we’ve noticed in auto. So I think we’re taking a bit more of a conservative view there.

[Jon Kirchner:]

Yeah. I would add…

[Eric Wold:]

Got it.

[Jon Kirchner:]

I would Eric, that I think obviously cord cutting continues. I think the -- I think the pace of IPTV deployments, which is an area that is an offset for us in that space, we see I improving. That’s good news. The extent of which would improve, and this system strip deployed during the course of the year was loss of determine kind of what the -- if you will what the net impact of that is on other areas of the business that are expected to recover. And that is certainly aspects of the home to gain control certainly. Some of that we’re seeing, graphic we’re seeing around connected TV related things including Stream 4K growth and this is where we touched on, on that.

[Eric Wold:]

Got it. And then last question in the guidance the $860 million and $900 million of revenue guidance for the year maybe you could just dive into that a little bit in kind of just maybe what the drivers are there in terms of baseline growth which you're assuming any major renewal during the year assuming any major licensing litigation. If you kind of get a sense or kind of baseline which I think this is mostly based on everything else kind of becomes potential upside to that?

[Robert Andersen:]

Sure. This is Robert. I think as we look at the range we recognize, generally speaking we'll call our midpoint almost likely working to that midpoint I'd say we have a pipeline of smaller IP opportunities which we have good visibility as well as a range of product and unit shipment scenarios as we work our way through the shape of the pandemic recovery that get us to the midpoint. Getting to the higher end, we would need certain new deals especially on IP and higher per unit reports from our customers. It's all within the range of possibilities of course. That give you a feel for their.

[Jon Kirchner:]

And if I may Eric, just one other thing I think to be crystal clear what's not in the guide is IP deals for which we don't have direct line of sight or guidance history I think our experience tells us you're better off not including large things that may occur until they occur. And so there's opportunities on the media side. There's opportunities obviously on the semi side that would take you not only to the top, but well above the top of the range but at this point of the year as Bob had said we're not inclined to guide that way until we get better visibility into where these things set.

[Eric Wold:]

Perfect. Thank you.

[Operator:]

We'll take our next question from Hamed Khorsand with BWS Financial. Please go ahead.

[Hamed Khorsand:]

Hi. So first off I just want to ask you is where do you stand with embedding TiVo Stream 4K into TVs for this year or if it's being pushed down to next year?

[Jon Kirchner:]

We continue to work on the process of obviously both working on the technical end of that as well as the business partnership to that end. I don't think you may be surprised, but I would not expect to necessarily see TV models. I think TiVo largely talked in terms of 2022 being the first time we'll see kind of that transition. So, we'll continue to focus in part on sales of Stream 4K and continue to build out some footprint, but obviously working aggressively behind the scenes to set up for the real endgame which is getting our technology and our technology stack embedded on TVs as we get into 2022 and beyond.

[Hamed Khorsand:]

And within the TiVo Stream 4K you're seeing this greater increase in viewership, especially on the ads. Does that helped you in anyway as far as the ad rates go or -- and how has that been perceived with your different ad customers?

[Jon Kirchner:]

I think there's clear interest in what we're doing from a search and recommendation and a user engagement perspective that has benefits from an advertiser perspective, certainly distribution platform perspective and I think it also is of interest as we think about presenting our technology stack and our platform opportunity to connecting TV folks who are obviously excited to participate in downstream economics they’re interested in how much user engagement will be on the platform. So, I think it’s still for us as we move into that space, it’s still earlier days, but I think we have the benefit of a history of building world-class UX interfaces for Pay-TV for a lot of years and I think we’re taking the expertise and then obviously a couple of that with building out the infrastructure necessary to support clear monetization because over the next three to five years we see that tremendous amount of expected growth in robot in particular and the current around OTT are very strong and there’s room for us to deploy and I think as we do deploy would be meaningful and quite attractive.

[Hamed Khorsand:]

And just one last question is on the international front are you able to -- be able to more aggressive with COVID restrictions going away as far as capturing new IPTV customers?

[Jon Kirchner:]

I think we’re very -- we continue to be very active in certain markets like Latin America and whatnot and we continue to engage with potential customers around the globe so I don’t know that I have a better atrophy other than I think short of some of the COVID related impact that we're really seeing any barriers to further opportunities for growth. There's the natural just inherent decisions that operators need to make about around those investments and from a system perspective et cetera. But in general I think we've got -- we booked quite a bit of business IPTV related. And now we're actively working with partners to get these units deployed and as they get deployed we'll see the revenue benefits that flow through.

[Hamed Khorsand:]

Okay. Thank you.

[Operator:]

We'll take our next question from Mitch Steves with RBC Capital Markets.

[Mitch Steves:]

Hi guys. Thanks for taking my question. I had a big picture one I think that’s Canada had a lot of investors when we talk about the product of the licensing revenue of the combined entity what's kind of a real long term growth we should expect to realize guidance for this year which where you think that automate a little bit weaker than originally thought due to supply constraints. How do we think about the long term growth of the combined now and if you could break that into the divisions you have there been extremely helpful.

[Jon Kirchner:]

I think you've got different pieces as we look at the more traditional kind of CE business acts perhaps growth around new media related growth monetization and ads and whatnot user engagement related revenue. That business is a kind of a single, mid single digit grower over time. If you look at the various pieces of it historically kind of has been up and down somewhat automotive with the number of things we're working on in infotainment and safety. We believe that the opportunity is there could represent multi-year growth rates in the high single to low double-digits just bigger picture. There is clearly quite a bit of potential explosive growth that exists in those Ergo’s Perceive subsidiaries opportunities, which is huge because obviously to the extent that it takes off to itself with regard to what will be explosive growth. And we haven't yet quantified what that potentially looks like although it's pretty close whether it's large. And similarly as you think about media in Canada, we bought with an embedded TV stack and start to monetize the growth there could be very, very significant and significantly greater than what you might see out of a traditional CE or hardware business. So overall, I think you've got a different portfolio that are -- there’s going to be moving at different rates. I think we're heavily focused on how do we put ourselves in the best position to realize some of that outsized growth in a couple of key areas while we continue to work on improving business efficiency and whatnot and profitability to really ensure that whether we're growing over time in the single-digits or in the double-digits on a blended basis that we can do so very profitable and ultimately continue to improve our strategic position in the marketplace.

[Mitch Steves:]

Okay. So just to be crystal clear here I think the next year you would expect to be growing mid-single digits by that point for the total in 2022?

[Jon Kirchner:]

I'm sorry could you ask the question again?

[Mitch Steves:]

So by 2022, so this year is a kind of digestion year, it would be safe to assume to grow the midpoint of the total company at this point?

[Jon Kirchner:]

I don't think we're guiding to 2022 at this point. I don't think we're in a position to do that. Do we believe that as you look over the next couple of years that we should grow meaningfully? The answer is yes. To what degree that slides into 2022 or 2023, 2024, I think obviously as we get further to 2021 we'll have more to say.

[Mitch Steves:]

Okay. Understand. Thank you.

[Operator:]

We'll take our next question from Richard Shannon with Craig-Hallum. Please go ahead.

[Richard Shannon:]

Maybe just a technical question on your guidance what's implied there for sales in 2021 here. It gives the baseline for IP and I think Jon you mentioned you kind of expect product to be flat and I think you implied automotive is growing. Does that mean the other two segments are going to be down year-on-year? Can you provide more color to that?

[Robert Andersen:]

I can take this, Richard. This is Robert. So I think -- yeah, we did mentioned that we expect product to be roughly flat year-over-year. There are instances where it can be growing. It sort of depends on how the year progresses in terms of unit shipments and new deals. I think we are expecting some smaller IP opportunities for which we have really good visibility at this stage. So that gets you into the middle of our range and as I mentioned earlier, we do have largest strategic opportunities that’s part. And we do have other deals that would get us kind of to the higher end of the range. The range itself does not include large strategic deals from an IP perspective.

[Jon Kirchner:]

Yeah. So let me…

[Richard Shannon:]

Okay.

[Jon Kirchner:]

…just further elaborate. So if you think about it, you've got car we expect to grow, markets up roughly 10% -- 9%/10% if you look at some of the IHS data. You can perhaps apply a bit of caution to that just because of some of the supply issues. And I think we expect our consumer experience business to grow as well. But that'll be offset by continued Pay-TV base decline. So that's the cocktail of how to think about the three pieces. And then Robert I think addressed the bigger question about where do we fit in terms of the guidance range.

[Richard Shannon:]

That is helpful. Thanks for that. My next question is you talked about the impending split of your IP and Product businesses to be delayed until 2022. I think I may have missed your language here, Jon but is that entirely due to COVID dynamics or is there other things built into that? And then kind of following on that topic is when should we hear more about you from that plan about timing about how this -- how the business really splits up I guess?

[Jon Kirchner:]

I think you've got a couple of things that we touched on in the script. We've clearly got impact from the shape of the COVID recovery and trying to deal with the uncertainty of that. We believe that shareholders are best served by basically effecting the separation at a time when both businesses are really ready to stand on their own two feet and ultimately have attractive growth stories with reasonable visibility for investors. It's one thing, if we think that you've got to be able to be in a position to demonstrate in fairly short order post separation how this is that you're tracking. So you've got the pandemic shape with a recovery issue impacting how we think about 2021. I think hopefully by the time we went through 2021 and we're looking at 2022 we're in a very different place and have much better visibility. Secondarily there's some fairly complex systems work that's going on that we think is critical to get it right not only for the benefit of course enabling the two businesses to operate independently and the public and meet all the requirements related thereto but equally important so that we can ensure by modernizing our systems that we can if you will develop some best-in-class infrastructure for both businesses that will lower the cost of operation and be far more efficient for each of these businesses as we go forward because obviously we want to affect the most attractive business -- businesses we can and that includes not only the growth story and the growth trajectory and the performance but equally kind of on the cost side of the equation we want to make sure that, that we can deliver them as profitable as possible. So when you put those things together I think you look at the first half of 2022 more realistically than what we've concluded was originally I thought around 2021. And the last thing to just be aware of is, as we think about this is that we will go and of course of this year this year internally began operating on an independent basis because we think it's important that the business teams have their sea legs underneath them, so that as we complete the balance of the work and get into 2022. We're clicking on all cylinders as we affect the legal separation and then move on.

[Richard Shannon:]

Okay. Fair enough, Jon. I appreciate those details. Last question for me is related to auto business kind of a two part are actually here and connecting the radio which I think you're calling auto stage. The other stage I think you talked about is kind of a key initial customer there. Maybe you can give us a sense of what we should expect in terms of customer announcements this year top 10 OEMs how many can we see et cetera and then again kind of similar with AutoSense you just announced four OEMs what could we see for this year in terms of customer engagement .

[Jon Kirchner:]

I think the challenge with this one is that our customers naturally don't like us running their - what they're dealing with their vehicle models. So I think one is going to have to stay tuned. I can tell you that we do expect obviously more models within the customers that we have. So in this case with a auto stage I can also tell you that the pipeline remains extremely active and in the back half of this year you will see the first AutoSense customer ship with a major European partner. We're super proud of that and as we said we've already got nearly 20 design wins with respect to that product. So hopefully in due course we can share more information with you. But I'm not at liberty to really discuss who it is and when it may happen.

[Operator:]

We'll take our next question from Brett Hendrickson with Nokomis Capital. Please go ahead.

[Brett Hendrickson:]

Hey, thanks for taking the question. Jon, I hear you talking about Perceive and all the exciting things going on and I do appreciate that you guys are both tactically, but considerately if that's the word looking at the separation of the licensing in the Product business and I just wonder with hearing that discussion in the optimal timing of it does it make sense to at least either now or maybe 18 months from now, consider -- I think Perceive has plan to go with the Products business, but might Perceive be better off as its own division at some point? I see the valuations that these stocks are paying for businesses and to put it nicely some of the semiconductor, public semiconductor companies now have an extremely low cost of capital and they just -- I know even within the last 48 hours, we had a public company sell-off one of its divisions in part through its back and keep shares in the news back. Would that be a way to highlight the value and create even more shareholder value? Is that worth -- at least worth considering? I know it's still early in the game for Perceive, but want to hear your thoughts on it.

[Jon Kirchner:]

Yeah. I think in general I think we and the board are routinely talking about all the ways that we might go about generating value and balancing of course the risk of these things and ultimately taking advantage of market circumstances. So, I would say we're certainly aware of what's going on in the marketplace. I think a key point though is we should think about the cycle of value creation value creation, we’re probably I think from my perspective still slightly early and being able to much more publicly and emphatically demonstrate to the potential of a platform, we've gotten -- of course we've gotten plenty of feedback, we’ve got some very interesting customers, etcetera, etcetera. But if you think about it we're not that far away exactly to your point where we can perhaps be more public about all the reasons, we're so excited and as that happens, I think obviously we'll continue to assess what the options are but we think there is a lot of value there and we're obviously constantly and consciously thinking about how do we best maximize long-term value associated with that endeavor.

[Brett Hendrickson:]

Yeah. Good to hear and I know -- I don’t know you can't comment on it, but I mean we've seen some of these businesses come public with less design wins and less meat on the bone than you've already put on the bone and perceive and have billion dollar plus valuations. And so I guess without commenting on that, I guess the question would be when you and the boards sit around and talk about the different parts of value creation over the next three to four years and the long-term investors. So do you hope you're thinking in that kind of timeframe or do you at least if you thought about the rest of the products business and license and proceed separately, it's fair to say that of the total enterprise value that you see in the future years perceive as a material part of it even as a standalone. I mean it's a material part of what could be a multi-billion dollar valuation for all the similar products?

[Jon Kirchner:]

Yes, we believe it can be very material and then so to your point do you play it in an integrated way or do you play it over time as the platform picks up more inertia might very well be able to stand behind on its own and deliver a lot of value again, my thoughts that aren't lost on us, we believe today everything is a function of where you are in the cycle and the innovation you're trying to bring. Right now its best being where it is, but over time for the reasons you describe and particularly if it's more broadly adopted as we expect it will become. It will impact the -- a significant component of value and as we have better line of sight to that, we’ll obviously figure out how best to manage that situation.

[Brett Hendrickson:]

I appreciate that. And last quick question, sort of related. You’ve attracted value investments like that, so obviously attractive to the free cash flow and free cash flow yield and so we obviously appreciate the stock buyback, but starting to go in there. When I think about the free cash flow and sorry if I missed it, should how much investment in this year that come and get investments from the free cash flow guidance you gave is that, can you give us any brackets around how much that investment is or kind of non-core -- I don’t want to call non-core, but what were the free -- give us a sense of what the free cash flow might be as you were making that growth investment right now, investment budget?

[Robert Andersen:]

Yeah. This is Robert. In terms of our investment, there is sort of you had a right. There is a direct investment and then the sort of indirect investment which is the support and other apps development that goes on supporting and I think if you add it altogether you can figure, it’s in kind of $20 million to $25 million range each year at least at period FY 2021.

[Jon Kirchner:]

That’s right. And I think that that’s, if I do just free cash flow actually I want to appreciate that, Robert. Thanks for your time, gentlemen.

[Operator:]

With no further questions in the queue, I would like to turn the conference back to Jon Kirchner for any additional or closing remarks.

[Jon Kirchner:]

Thanks, operator, and thanks, everyone for joining us on today's call. I want to close by thanking our employees for their efforts to successfully navigate through the pandemic thus far and to deliver -- and for the delivery on our key strategic priorities. We've made great progress in 2020 towards our longer-term goals and we entered 2021 with continued momentum. And I'm personally quite excited about that. To our shareholders, I look forward to sharing updates obviously probably virtually as we go through the year and at some point hopefully we'll be able to get back to doing so in person. Thank you for joining us. And operator, this concludes today's call.

[Operator:]

Thank you. Ladies and gentlemen, this concludes today's conference. And we appreciate your participation. You may now disconnect.