InterDigital Announces Financial Results for Second Quarter 2025

Samsung arbitration decision and new HP license agreement drive Q2 results, exceeding outlookAnnualized recurring revenue1, at all-time high of $553 million, up 44% YoYCompany raises full year 2025 revenue guidance by $110 million WILMINGTON, Del., July 31, 2025 (GLOBE NEWSWIRE) -- InterDigital, Inc. (Nasdaq: IDCC), a mobile, video, and AI technology research and development company, today announced results for the quarter ended June 30, 2025. Revenue of $300.6 million, up 34% year-over-year, driven by the conclusion of the Samsung arbitration and the new license agreement with HP.Net income was $180.6 million and diluted EPS was $5.35, up year-over-year 65% and 36%, respectively.Non-GAAP EPS2 at all-time high of $6.52 and Adjusted EBITDA3 of $236.7 million. "Our agreement with Samsung is the largest license InterDigital has ever signed, worth more than $1 billion in total contract value over eight years. We have increased the mid-point of our annual revenue guidance by $110 million to $820 million and driven annualized recurring revenue to well over half a billion dollars,” commented Liren Chen, President and CEO, InterDigital. “As we continue to make progress across our licensing programs, the total contract value of licenses that we have signed since 2021 is now more than $4 billion, demonstrating the accelerating momentum of our IP-as-a-service business model.” Second Quarter 2025 Financial Highlights, as compared to Second Quarter 2024: Three Months Ended June 30,(in millions, except per share data)2025 2024 ChangeGAAP Results: Revenue$300.6 $223.5 34%Operating expenses$95.2 $89.6 6%Net income$180.6 $109.7 65%Net income margin60% 49% 11 pptDiluted EPS$5.35 $3.93 36% Non-GAAP Results: Adjusted EBITDA 3$236.7 $157.7 50%Adjusted EBITDA margin 379% 71% 8 pptNon-GAAP Net income 2$195.3 $118.9 64%Non-GAAP EPS 2$6.52 $4.57 43% Additional Information: Revenue by type: Annualized recurring revenue 1$553.1 $383.8 44%Catch-up revenue$162.3 $127.6 27% Revenue by program: Smartphone$235.1 $199.2 18%CE, IoT/Auto$65.3 $23.7 175%Other$0.2 $0.5 (66)% Return of Capital to Shareholders (in millions, except per share data)Share Repurchases Dividends Declared Total Returnof CapitalShares Value Per Share Value Second quarter 20250.1 $26.2 $0.60 $15.5 $41.7 Convertibility of 2027 Notes Pursuant to the terms of the Indenture governing InterDigital’s 3.50% Senior Convertible Notes due 2027 (the “Notes”), the Notes are convertible during its calendar quarter ending September 30, 2025. The current conversion rate of the Notes is 12.9041 shares of InterDigital’s Common Stock per $1,000 principal amount of the Notes. Upon the conversion of any Notes, InterDigital will pay cash up to the aggregate principal amount of the Notes to be converted, and will pay cash, shares of its Common Stock, or a combination of cash and shares of its Common Stock for any conversion obligation in excess of the aggregate principal amount being converted, if any, at InterDigital’s election, as set forth in the Indenture governing the Notes. At the time InterDigital issued the Notes, InterDigital entered into call spread transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the Notes by, in effect, increasing the conversion price of the Notes from InterDigital’s economic standpoint from $77.49 to $106.06. Refer to Footnote 5 of the Financial Statements from InterDigital’s Form 10-Q for the quarter ended June 30, 2025 for more information. Near Term Outlook The Company raised its full year 2025 outlook and provided an initial outlook for third quarter 2025 in the table below. The outlook for third quarter 2025 covers existing licenses and does not include any new agreements or enforcement action results we may sign or receive over the balance of the third quarter. The outlook for full year 2025 includes both existing licenses and the expected contributions from new agreements over the balance of the year. Full Year 2025(in millions, except per share data)Q3 2025 Current PriorRevenue$136 - $140 $790 - $850 $660 - $760Adjusted EBITDA 3$69 - $75 $551 - $569 $400 - $495Diluted EPS$0.94 - $1.11 $10.94 - $11.47 $6.79 - $9.67Non-GAAP EPS 2$1.52 - $1.72 $14.17 - $14.77 $9.69 - $12.92 Conference Call Information InterDigital will host a conference call on Thursday, July 31, 2025 at 10:00 a.m. ET to discuss its second quarter 2025 financial performance and other company matters. For a live Internet webcast of the conference call, visit www.interdigital.com and click on the “Webcast” link on the Investors page. The company encourages participants to take advantage of the Internet option. For telephone access to the conference call, visit www.interdigital.com and click on the “Dial In Registration” link on the Investors page. Registration is necessary to obtain a dial in phone number and PIN to join. An Internet replay of the conference call will be available on InterDigital’s website under Events in the Investors section. The replay will be available for one year. About InterDigital® InterDigital is a global research and development company focused primarily on wireless, video, artificial intelligence (“AI”), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today’s most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. Founded in 1972, InterDigital is listed on Nasdaq. InterDigital is a registered trademark of InterDigital, Inc. For more information, visit the InterDigital website: www.interdigital.com. For additional financial measures, refer to our second quarter 2025 Form 10-Q and the financial metrics tracker, which are available on the Investor Relations section of our website. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding our current beliefs, plans and expectations. Words such as “believe,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” “goal,” “could,” "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," and variations of any such words or similar expressions are intended to identify such forward-looking statements. Forward-looking statements are made on the basis of management’s current views and assumptions and are not guarantees of future performance. Forward-looking statements, including but not limited to statements regarding our outlook for Q3 and full year 2025, are inherently subject to risks and uncertainties that could cause actual results, and actual events that occur, to differ materially from results contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to: (i) unanticipated delays or difficulties in the execution of patent license agreements on acceptable terms or at all; (ii) our ability to expand our revenue opportunities by entering into licensing arrangements with streaming and cloud-based service providers; (iii) the resolution of legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith; (iv) our ability to maintain a strong patent portfolio and make strategic decisions related to our intellectual property protection; (v) the failure of markets for our technologies to materialize to the extent that we expect; (vi) our continued ability to develop new technologies; (vii) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act and other U.S. and non-U.S. tax laws; (viii) the timing and impact of potential regulatory, administrative and legislative matters; (ix) the potential effects of macroeconomic conditions or trade conflicts; (x) our ability to hire and retain key personnel; (xi) operational risks, including cybersecurity events, human failures or other difficulties with our information technology systems; and (xii) risks related to any new accounting standards or our assumptions and application of relevant accounting standards, including with respect to revenue recognition. We undertake no duty to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law. Footnotes 1 Annualized recurring revenue ("ARR") for any quarter is defined as total revenue for the quarter less catch-up revenue for the quarter, multiplied by four. Management believes ARR provides useful information about our financial performance, and our progress toward our 2030 targets. ARR is not a projection or forecast, and actual recurring revenue for any 12-month period will depend on a number of factors beyond our ability to predict or control, including those risks and uncertainties listed above. Additionally, ARR may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. 2 Non-GAAP net income, Non-GAAP EPS, and Non-GAAP weighted-average diluted shares are supplemental non-GAAP financial measures that InterDigital believes provides investors with important insight into the Company's ongoing business performance. InterDigital defines Non-GAAP net income as net income attributable to InterDigital, Inc. plus share-based compensation, acquisition related amortization, depreciation and amortization, restructuring costs, impairment charges and one-time adjustments, losses on extinguishments of long-term debt, the related income tax effect of the preceding items, and adjustments to income taxes. Non-GAAP EPS is defined as Non-GAAP net income divided by Non-GAAP weighted average diluted shares, which adjusts the weighted average number of common shares outstanding for the dilutive effect of the Company's convertible notes, offset by our hedging arrangements. InterDigital’s computation of these non-GAAP financial measures might not be comparable to similarly named measures reported by other companies. The presentation of these financial measures, which are not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of each of these metrics to its most directly comparable GAAP financial measure is provided below. 3 Adjusted EBITDA and Adjusted EBITDA margin are supplemental non-GAAP financial measures that InterDigital believes provide investors with important insight into the Company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income attributable to InterDigital Inc. plus net loss attributable to non-controlling interest, income tax (provision) benefit, other income (expense) & interest expense, depreciation and amortization, share-based compensation, and other items. Other items include restructuring costs, impairment charges and other non-recurring items. Adjusted EBITDA margin is Adjusted EBITDA over total revenue. These non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The presentation of these financial measures, which are not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure is provided below. SUMMARY CONSOLIDATED STATEMENTS OF INCOME(in thousands except per share data)(unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue$300,596 $223,493 $511,103 $487,035 Operating expenses: Research and portfolio development 53,674 50,145 101,104 99,520 Licensing 23,909 25,156 41,586 121,745 General and administrative 17,586 14,286 31,154 28,126 Total operating expenses 95,169 89,587 173,844 249,391 Income from operations 205,427 133,906 337,259 237,644 Interest expense (9,537) (11,483) (19,408) (23,405)Other income, net 15,144 11,682 25,402 20,929 Income before income taxes 211,034 134,105 343,253 235,168 Income tax provision (30,466) (24,441) (47,083) (43,852)Net income$180,568 $109,664 $296,170 $191,316 Net income per common share — Basic$6.97 $4.35 $11.47 $7.54 Weighted average number of common shares outstanding — Basic 25,917 25,207 25,829 25,359 Net income per common share — Diluted$5.35 $3.93 $8.81 $6.80 Weighted average number of common shares outstanding — Diluted 33,725 27,910 33,615 28,125 Cash dividends declared per common share$0.60 $0.40 $1.20 $0.80 SUMMARY CONSOLIDATED CASH FLOWS(in thousands)(unaudited) Three Months Ended June 30, Six Months EndedJune 30, 2025 2024 2025 2024 Cash flows from operating activities: Net income$180,568 $109,664 $296,170 $191,316 Non-cash adjustments 18,981 13,706 17,536 22,165 Working capital changes (94,431) (172,280) (228,577) (211,618)Net cash provided by (used in) operating activities 105,118 (48,910) 85,129 1,863 Cash flows from investing activities: Net (purchases) sales of short-term investments (68,178) 94,286 17,987 118,902 Capitalized patent costs and property and equipment (13,550) (13,181) (40,207) (22,598)Long-term investments — (382) — 1,194 Net cash (used in) provided by investing activities (81,728) 80,723 (22,220) 97,498 Cash flows from financing activities: Payments on long-term debt — (137,479) (1,284) (139,069)Repurchase of common stock (26,168) (34,802) (31,417) (63,670)Dividends paid (15,577) (10,147) (27,134) (20,373)Other (924) (1,580) (25,785) (10,215)Net cash used in financing activities (42,669) (184,008) (85,620) (233,327)Net decrease in cash, cash equivalents and restricted cash (19,279) (152,195) (22,711) (133,966)Cash, cash equivalents and restricted cash, beginning of period 548,115 461,190 551,547 442,961 Cash, cash equivalents and restricted cash, end of period$528,836 $308,995 $528,836 $308,995 SUMMARY CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited) June 30, 2025 December 31, 2024Assets Cash, cash equivalents, and short-term investments$936,985 $958,208Accounts receivable 388,707 188,302Prepaid and other current assets 60,717 84,312Property & equipment and patents, net 344,339 327,174Other long-term assets, net 253,961 277,533Total assets$1,984,709 $1,835,529Liabilities and Shareholders' equity Current portion of long-term debt$455,750 $456,329Current deferred revenue 178,291 178,009Other current liabilities 74,817 91,472Long-term deferred revenue 113,631 182,119Long-term debt & other long-term liabilities 75,436 70,385Total liabilities 897,925 978,314Total shareholders' equity 1,086,784 857,215Total liabilities and shareholders' equity$1,984,709 $1,835,529 RECONCILIATION OF NON-GAAP MEASURES The following tables present InterDigital's GAAP financial measures reconciled to the non-GAAP financial measures included in this release for the second quarter and year-to-date periods ended June 30, 2025 and 2024: Three Months Ended June 30, Six Months Ended June 30, (in thousands) (in thousands) 2025 2024 2025 2024 Net income$180,568 $109,664 $296,170 $191,316 Income tax provision 30,466 24,441 47,083 43,852 Other income, net & interest expense (5,607) (199) (5,994) 2,476 Depreciation and amortization 19,465 17,376 37,678 34,616 Share-based compensation 11,836 9,655 21,334 19,041 Other items (a) — (3,200) (483) (3,200)Adjusted EBITDA 3$236,728 $157,737 $395,788 $288,101 (a) Other items in the above tables include one-time contra-expenses related to litigation fee reimbursements. Three Months Ended June 30, Six Months Ended June 30, (in thousands, except for per share data) (in thousands, except for per share data) 2025 2024 2025 2024 Net income$180,568 $109,664 $296,170 $191,316 Share-based compensation 11,836 9,655 21,334 19,041 Acquisition related amortization 8,900 8,324 17,550 16,745 Other operating items (a) — (3,200) (483) (3,200)Other non-operating items (b) — (2,200) — (1,526)Related income tax effect of above items (4,355) (2,642) (8,065) (6,523)Adjustments to income taxes (1,667) (701) (5,566) (2,409)Non-GAAP net income 2$195,282 $118,900 $320,940 $213,444 Weighted average dilutive shares - GAAP 33,725 27,910 33,615 28,125 Less: Dilutive impact of the Convertible Notes 3,791 1,871 3,731 1,906 Weighted average dilutive shares - Non-GAAP 2 29,934 26,039 29,884 26,219 Diluted EPS$5.35 $3.93 $8.81 $6.80 Non-GAAP EPS 2$6.52 $4.57 $10.74 $8.14 (a) Other items in the above tables include one-time contra-expenses related to litigation fee reimbursements.(b) Other non-operating items includes losses from observable price changes of our long-term strategic investments. The following tables present a reconciliation between GAAP and non-GAAP versions of the estimated financial measures for the third quarter of fiscal 2025 and full year fiscal 2025 included in this release: Outlook (in millions) Full Year 2025 Q3 2025 Current PriorNet income$32 - $38 $372 - $390 $224 - $319 Income tax provision8 65 56 Other income, net & interest expense— (6) (2)Depreciation and amortization20 78 78 Share-based compensation9 42 44 Other items— — — Adjusted EBITDA 3$69 - $75 $551 - $569 $400 - $495 Outlook (in millions, except for per share data) Full Year 2025 Q3 2025 Current PriorNet income$32 - $38 $372 - $390 $224 - $319 Share-based compensation9 42 44 Acquisition related amortization9 36 35 Other operating items— — — Other non-operating items— — — Related income tax effect of above items(4) (16) (17)Adjustments to income taxes— (6) — Non-GAAP net income 2$46 - $52 $428 - $446 $286 - $381 Weighted average dilutive shares - GAAP34.1 34.0 33.0 Less: Dilutive impact of the Convertible Notes(4.0) (3.8) 3.5 Weighted average dilutive shares - Non-GAAP 230.2 30.2 29.5 Diluted EPS$0.94 - $1.11 $10.94 - $11.47 $6.79 - $9.67 Non-GAAP EPS 2$1.52 - $1.72 $14.17 - $14.77 $9.69 - $12.92 CONTACT:InterDigital, Inc. Email: investor.relations@interdigital.com +1 (302) 300-1857

InterDigital Announces Financial Results for Second Quarter 2025

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