InterDigital Announces Financial Results For Third Quarter 2025

New license agreements drive Revenue and EPS above increased outlookAnnualized recurring revenue1 at all-time high of $588 million, up 49% YoY WILMINGTON, Del., Oct. 30, 2025 (GLOBE NEWSWIRE) -- InterDigital, Inc. (Nasdaq: IDCC), a mobile, video, and AI technology research and development company, today announced results for the quarter ended September 30, 2025. Revenue of $164.7 million, up 28% year-over-year, driven by new license agreements.Net income was $67.5 million and diluted EPS was $1.93, up 97% and 69% year-over-year, respectively.Non-GAAP EPS2 at $2.55, up 56% year-over-year and Adjusted EBITDA3 of $104.9 million, up 62% year-over-year. “This was another outstanding quarter for InterDigital with annualized recurring revenue1 up 49% year-over-year to an all-time high of $588 million, and net income and diluted EPS up 97% and 69% respectively,” commented InterDigital President and CEO, Liren Chen. “Among numerous business highlights, we completed the Samsung smartphone arbitration, closed four new license agreements, appointed a new chief licensing officer, once again demonstrated our leadership in key technology standards, and deepened our AI expertise.” Third Quarter 2025 Financial Highlights, as compared to Third Quarter 2024: Three Months EndedSeptember 30,(in millions, except per share data) 2025 2024 ChangeGAAP Results: Revenue$164.7 $128.7 28% Operating expenses$88.9 $89.3 (1)% Net income$67.5 $34.2 97% Net income margin 41% 27% 14 ppt Diluted EPS$1.93 $1.14 69% Non-GAAP Results: Adjusted EBITDA 3$104.9 $64.8 62% Adjusted EBITDA margin 3 64% 50% 14 ppt Non-GAAP Net income 2$78.2 $44.9 74% Non-GAAP EPS 2$2.55 $1.63 56% Additional Information: Revenue by type: Annualized recurring revenue 1$588.0 $394.5 49% Catch-up revenue$17.7 $30.0 (41)% Revenue by program: Smartphone$136.4 $87.4 56% CE, IoT/Auto$28.2 $40.6 (31)% Other$0.1 $0.6 (91)% Return of Capital to Shareholders (in millions, except per share data)Share Repurchases Dividends Declared Total Returnof CapitalShares Value Per Share Value Third quarter 20250.1 $35.3 $0.70 $18.0 $53.3 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 December 31, 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 $105.77. Refer to Footnote 5 of the Financial Statements from InterDigital’s Form 10-Q for the quarter ended September 30, 2025 for more information. Near Term Outlook The Company has provided an outlook for fourth quarter and full year 2025, in both cases based on existing agreements only, in the table below. Any new agreements that might be reached over the balance of the fourth quarter would be additive. (in millions, except per share data)Q4 2025 Full Year 2025Revenue$144 - $148 $820 - $824Adjusted EBITDA 3$68 - $76 $569 - $577Diluted EPS$0.72 - $0.95 $11.27 - $11.50Non-GAAP EPS 2$1.38 - $1.63 $14.57 - $14.83 Conference Call Information InterDigital will host a conference call on Thursday, October 30, 2025 at 10:00 a.m. ET to discuss its third 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 third 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) our ability to successfully integrate Deep Render and to recognize the anticipated benefits of the transaction; (vi) the failure of markets for our technologies to materialize to the extent that we expect; (vii) our continued ability to develop new technologies; (viii) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the One Big Beautiful Bill Act, the 2017 Tax Cuts and Jobs Act and other U.S. and non-U.S. tax laws; (ix) the timing and impact of potential regulatory, administrative and legislative matters; (x) the potential effects of macroeconomic conditions or trade conflicts; (xi) our ability to hire and retain key personnel; (xii) operational risks, including cybersecurity events, human failures or other difficulties with our information technology systems; and (xiii) 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenue$164,682 $128,679 $675,785 $615,714 Operating expenses: Research and portfolio development 53,068 48,331 154,172 147,851 Licensing 19,715 27,467 61,301 149,212 General and administrative 16,091 13,539 47,245 41,665 Total operating expenses 88,874 89,337 262,718 338,728 Income from operations 75,808 39,342 413,067 276,986 Interest expense (10,019) (10,681) (29,427) (34,086)Other income, net 10,188 12,554 35,590 33,483 Income before income taxes 75,977 41,215 419,230 276,383 Income tax provision (8,474) (7,025) (55,557) (50,877)Net income$67,503 $34,190 $363,673 $225,506 Net income per common share Basic$2.62 $1.36 $14.09 $8.92 Diluted$1.93 $1.14 $10.68 $7.84 Weighted average number of common shares outstanding Basic 25,797 25,149 25,818 25,286 Diluted 34,925 30,034 34,051 28,759 Cash dividends declared per common share$0.70 $0.45 $1.90 $1.25 SUMMARY CONSOLIDATED CASH FLOWS(in thousands)(unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Cash flows from operating activities: Net income$67,503 $34,190 $363,673 $225,506 Non-cash adjustments 90,142 64,268 107,678 86,433 Working capital changes 238,285 (20,827) 9,708 (232,445)Net cash provided by operating activities 395,930 77,631 481,059 79,494 Cash flows from investing activities: Net proceeds from maturities and sales of short-term investments 338 54,306 18,325 173,208 Capitalized patent costs and property and equipment (15,055) (12,836) (55,262) (35,434)Long-term investments — 382 — 1,576 Net cash (used in) provided by investing activities (14,717) 41,852 (36,937) 139,350 Cash flows from financing activities: Payments on long-term debt (14) — (1,298) (139,069)Repurchase of common stock (35,252) (3,056) (66,669) (66,726)Dividends paid (15,507) (10,052) (42,641) (30,425)Other (10,646) (4,590) (36,431) (14,805)Net cash used in financing activities (61,419) (17,698) (147,039) (251,025)Net increase (decrease) in cash, cash equivalents and restricted cash 319,794 101,785 297,083 (32,181)Cash, cash equivalents and restricted cash, beginning of period 528,836 308,995 551,547 442,961 Cash, cash equivalents and restricted cash, end of period$848,630 $410,780 $848,630 $410,780 SUMMARY CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited) September 30, 2025 December 31, 2024Assets Cash, cash equivalents, and short-term investments$1,263,138 $958,208Accounts receivable 160,641 188,302Prepaid and other current assets 56,927 84,312Property & equipment and patents, net 339,119 327,174Other long-term assets, net 319,675 277,533Total assets$2,139,500 $1,835,529Liabilities and Shareholders' equity Current portion of long-term debt$456,258 $456,329Current deferred revenue 234,510 178,009Other current liabilities 94,342 91,472Long-term deferred revenue 177,403 182,119Long-term debt & other long-term liabilities 77,011 70,385Total liabilities 1,039,524 978,314Total shareholders' equity 1,099,976 857,215Total liabilities and shareholders' equity$2,139,500 $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 third quarter and year-to-date periods ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) (in thousands) 2025 2024 2025 2024 Net income$67,503 $34,190 $363,673 $225,506 Income tax provision 8,474 7,025 55,557 50,877 Other income, net & interest expense (169) (1,873) (6,163) 603 Depreciation and amortization 19,804 17,549 57,482 52,165 Share-based compensation 9,301 9,081 30,635 28,122 Other items (a) — (1,161) (483) (4,361)Adjusted EBITDA 3$104,913 $64,811 $500,701 $352,912 (a) Other items in the above tables include one-time contra-expenses related to litigation fee reimbursements. Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except for per share data) (in thousands, except for per share data) 2025 2024 2025 2024 Net income$67,503 $34,190 $363,673 $225,506 Share-based compensation 9,301 9,081 30,635 28,122 Acquisition related amortization 9,058 8,282 26,608 25,027 Other operating items (a) — (1,161) (483) (4,361)Other non-operating items (b) — (262) — (1,788)Related income tax effect of above items (3,855) (3,347) (11,920) (9,870)Adjustments to income taxes (3,771) (1,861) (9,337) (4,270)Non-GAAP net income 2$78,236 $44,922 $399,176 $258,366 Weighted average dilutive shares - GAAP 34,925 30,034 34,051 28,759 Less: Dilutive impact of the Convertible Notes 4,276 2,439 3,912 2,084 Weighted average dilutive shares - Non-GAAP 2 30,649 27,595 30,139 26,675 Diluted EPS$1.93 $1.14 $10.68 $7.84 Non-GAAP EPS 2$2.55 $1.63 $13.24 $9.69 (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 fourth quarter of fiscal 2025 and full year fiscal 2025 included in this release: Outlook (in millions) Q4 2025 Full Year 2025Net income$26 - $34 $389 - $397Income tax provision8 64Other income, net & interest expense — (6)Depreciation and amortization21 78Share-based compensation11 42Other items2 2Adjusted EBITDA 3$68 - $76 $569 - $577 Outlook (in millions, except for per share data) Q4 2025 Full Year 2025Net income$26 - $34 $389 - $397Share-based compensation11 42Acquisition related amortization9 36Other operating items2 2Other non-operating items— —Related income tax effect of above items(5) (17)Adjustments to income taxes— (9)Non-GAAP net income 2$43 - $51 $443 - $451 Weighted average dilutive shares - GAAP35.9 34.5Less: Dilutive impact of the Convertible Notes(4.7) (4.1)Weighted average dilutive shares - Non-GAAP 231.2 30.4 Diluted EPS$0.72 - $0.95 $11.27 - $11.50Non-GAAP EPS 2$1.38 - $1.63 $14.57 - $14.83

InterDigital Announces Financial Results For Third Quarter 2025

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