SAN JOSE, Calif., Oct. 13, 2025 (GLOBE NEWSWIRE) -- Adeia Inc. (Nasdaq: ADEA) will announce its financial results for the third quarter ended September 30, 2025, on Monday, November 3, 2025. The company will host an earnings conference call at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) that same day. To access the earnings conference call: U.S. callers, please dial +1 (888) 660-6411International callers, please dial +1 (929) 203-0849 All participants should dial in 15 minutes prior to the start of the ...

SAN JOSE, Calif., Sept. 30, 2025 (GLOBE NEWSWIRE) -- Adeia Inc. (Nasdaq: ADEA), the company whose innovations shape the way the world explores and experiences entertainment, announced it has signed a long-term intellectual property (IP) license agreement with Altice USA, offering products and services nationwide as Optimum (“Optimum”), one of the largest broadband and video service providers in the United States. This agreement supports Optimum’s services, including internet services, as well as cable tele ...

Group 1 - Adeia Inc. (NASDAQ: ADEA) is identified as a promising investment opportunity due to its favorable market positioning and potential for revenue growth and multiple expansion [1] - The analysis emphasizes a bottom-up approach focusing on operational fundamentals, execution history, and sustainable growth drivers, particularly in the Consumer Discretionary and Consumer Staples sectors [1] - The investment philosophy combines income and value investing strategies, highlighting the importance of dividend yield as a risk mitigation criterion, especially for low coverage stocks [1]

Group 1 - Adeia (ADEA) shares have increased by 4.2% over the past four weeks, closing at $14.77, with a mean price target of $19.75 indicating a potential upside of 33.7% [1] - The average price targets range from a low of $17.00 to a high of $27.00, with a standard deviation of $4.86, suggesting a potential increase of 15.1% to 82.8% from the current price [2] - Analysts show strong agreement on ADEA's ability to report better earnings than previously predicted, which supports the view of potential upside [4][11] Group 2 - The Zacks Consensus Estimate for ADEA's current year earnings has risen by 4.9% over the past month, with two estimates increasing and no negative revisions [12] - ADEA holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting the extent of gains, they can indicate the direction of price movement [14]

Group 1 - Adeia (ADEA) has gained about 0.6% year-to-date, outperforming the average return of -1.2% for the Business Services sector [4] - Adeia is currently ranked 1 (Strong Buy) in the Zacks Rank, indicating strong analyst sentiment and an improving earnings outlook, with a 5.4% increase in the consensus estimate for full-year earnings over the past quarter [3] - Adeia belongs to the Technology Services industry, which has an average gain of 18.8% this year, indicating that ADEA is slightly underperforming its industry [6] Group 2 - The Business Services sector consists of 255 individual stocks and is ranked 5 in the Zacks Sector Rank, which measures the strength of sector groups based on the average Zacks Rank of individual stocks [2] - Alithya Group (ALYAF) is another stock in the Business Services sector that has significantly outperformed, with a year-to-date increase of 72.3% and a consensus EPS estimate increase of 8.9% over the past three months, also holding a Zacks Rank of 1 (Strong Buy) [4][5] - Investors interested in Business Services stocks should monitor both Adeia and Alithya Group for their continued solid performance [7]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents Adeia Inc.'s unaudited condensed consolidated financial statements for Q2 2025 and 2024, with notes on policies, revenue, and debt [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $85,735 | $87,350 | $173,405 | $170,755 | | Operating income | $16,405 | $23,642 | $39,240 | $43,006 | | Income before income taxes | $7,623 | $11,321 | $21,521 | $17,910 | | Net income | $16,722 | $8,382 | $28,536 | $9,281 | | Basic net income per share | $0.15 | $0.08 | $0.26 | $0.09 | | Diluted net income per share | $0.15 | $0.07 | $0.25 | $0.08 | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income | $16,722 | $8,382 | $28,536 | $9,281 | | Other comprehensive income (loss), net of tax | $1 | $(25) | $45 | $(88) | | Total comprehensive income | $16,723 | $8,357 | $28,581 | $9,193 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Cash and cash equivalents | $84,247 | $78,825 | | Marketable securities | $32,232 | $31,567 | | Total cash, cash equivalents, and marketable securities | $116,479 | $110,392 | | Total current assets | $267,286 | $258,376 | | Total assets | $1,082,893 | $1,097,961 | | Total current liabilities | $86,532 | $73,106 | | Total liabilities | $679,977 | $701,390 | | Total stockholders' equity | $402,916 | $396,571 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $80,256 | $90,690 | | Net cash used in investing activities | $(6,159) | $(8,241) | | Net cash used in financing activities | $(68,675) | $(70,555) | | Net increase in cash and cash equivalents | $5,422 | $11,894 | | Cash and cash equivalents at end of period | $84,247 | $66,454 | [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Condensed Consolidated Statements of Equity (Six Months Ended June 30, 2025, in thousands) | Category | Common Stock (Shares) | Common Stock (Amount) | Additional Paid-In Capital | Treasury Stock (Shares) | Treasury Stock (Amount) | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Stockholders' Equity | | :------------------------------------ | :-------------------- | :-------------------- | :------------------------- | :---------------------- | :---------------------- | :-------------------------------------------- | :---------------- | :------------------------- | | Balance at January 1, 2025 | 108,072 | $125 | $648,914 | 15,880 | $(255,301) | $(1) | $2,834 | $396,571 | | Net income | — | — | — | — | — | — | $28,536 | $28,536 | | Other comprehensive income | — | — | — | — | — | $45 | — | $45 | | Cash dividends paid ($0.10 per share) | — | — | — | — | — | — | $(10,857) | $(10,857) | | Issuance of common stock (options) | 15 | — | $186 | — | — | — | — | $186 | | Issuance of common stock (ESPP) | 144 | — | $1,206 | — | — | — | — | $1,206 | | Issuance of restricted stock, net | 3,231 | $2 | — | — | — | — | — | $2 | | Withholding taxes on equity awards | (1,377) | — | — | 1,377 | $(19,706) | — | — | $(19,706) | | Repurchases of common stock | (760) | — | — | 760 | $(10,011) | — | — | $(10,011) | | Stock-based compensation expense | — | — | $16,944 | — | — | — | — | $16,944 | | **Balance at June 30, 2025** | **109,325** | **$127** | **$667,250** | **18,017** | **$(285,018)** | **$44** | **$20,513** | **$402,916** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION](index=10&type=section&id=NOTE%201%20%E2%80%93%20THE%20COMPANY%20AND%20BASIS%20OF%20PRESENTATION) - Adeia Inc. is a leading intellectual property (IP) licensing platform with a diverse portfolio of over **13,000 patents** and patent applications worldwide, operating as a single reportable segment: IP Licensing[24](index=24&type=chunk)[27](index=27&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - There have been no significant changes in the Company's accounting policies during the three and six months ended June 30, 2025, compared to those described in the Form 10-K[28](index=28&type=chunk) - The Company adopted ASU 2020-04 (Reference Rate Reform) in Q2 2023 and ASU 2023-07 (Segment Reporting) in Q4 2024, neither of which had a material impact on the financial statements[30](index=30&type=chunk)[31](index=31&type=chunk) - The Company is currently evaluating the impact of ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[32](index=32&type=chunk)[33](index=33&type=chunk) [NOTE 3 – REVENUE](index=11&type=section&id=NOTE%203%20%E2%80%93%20REVENUE) - Revenue is recognized upon transfer of control of IP rights, reflecting the consideration expected, and includes various combinations of IP rights and services[34](index=34&type=chunk) - The Company licenses its Media IP and Semiconductor IP portfolios through per-unit/per-subscriber royalty, fixed-fee, or minimum guarantee models[39](index=39&type=chunk) Revenue Disaggregated by Recurring and Non-Recurring Nature (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Recurring revenue | $85,097 | $82,269 | $169,506 | $165,045 | | Non-recurring revenue | $638 | $5,081 | $3,899 | $5,710 | | **Total revenue** | **$85,735** | **$87,350** | **$173,405** | **$170,755** | Revenue by Market Vertical (in thousands) | Market Vertical | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Media | $81,041 | $83,626 | $165,027 | $164,063 | | Semiconductor | $4,694 | $3,724 | $8,378 | $6,692 | | **Total revenue** | **$85,735** | **$87,350** | **$173,405** | **$170,755** | Total Contract Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Unbilled contracts receivable | $107,015 | $104,047 | | Other current assets | $597 | $711 | | Long-term unbilled contracts receivable | $47,933 | $62,767 | | Other long-term assets | $970 | $919 | | **Total contract assets** | **$156,515** | **$168,444** | Remaining Revenue Under Contracts with Performance Obligations (in thousands) | Year | Amounts | | :------------------------ | :-------- | | 2025 (remaining 6 months) | $94,446 | | 2026 | $91,357 | | 2027 | $76,166 | | 2028 | $66,191 | | 2029 | $58,816 | | Thereafter | $17,732 | | **Total** | **$404,708** | [NOTE 4 – COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS](index=16&type=section&id=NOTE%204%20%E2%80%93%20COMPOSITION%20OF%20CERTAIN%20FINANCIAL%20STATEMENT%20CAPTIONS) Other Current Assets (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------ | :-------------- | :---------------- | | Prepaid income taxes | $7,077 | $2,934 | | Prepaid expenses | $3,281 | $2,287 | | Prepaid insurance | $1,097 | $1,124 | | Other | $3,711 | $3,447 | | **Total other current assets** | **$15,166** | **$9,792** | Property and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Equipment, furniture and other | $17,781 | $17,376 | | Leasehold improvements | $6,293 | $6,293 | | Total property and equipment | $24,074 | $23,669 | | Less: accumulated depreciation | $(18,388) | $(17,391) | | **Total property and equipment, net** | **$5,686** | **$6,278** | Accrued Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Employee compensation and benefits | $5,999 | $11,461 | | Current portion of guarantee | $3,850 | $3,850 | | Accrued expenses | $6,380 | $2,936 | | Current portion of operating lease liabilities | $518 | $481 | | Accrued income taxes | $0 | $325 | | Other | $2,424 | $3,674 | | **Total accrued liabilities** | **$19,171** | **$22,727** | [NOTE 5 – FINANCIAL INSTRUMENTS](index=17&type=section&id=NOTE%205%20%E2%80%93%20FINANCIAL%20INSTRUMENTS) Summary of Marketable Securities (Fair Value, in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Commercial paper | $2,760 | $2,689 | | Corporate bonds and notes | $25,000 | $25,762 | | Treasury and agency notes and bills | $4,472 | $3,616 | | Money market funds | $5,025 | $4,322 | | **Total marketable securities** | **$37,257** | **$36,389** | - Total cash, cash equivalents, and marketable securities increased to **$116.5 million** at June 30, 2025, from **$110.4 million** at December 31, 2024[66](index=66&type=chunk) Estimated Fair Value of Marketable Debt Securities by Contractual Maturity at June 30, 2025 (in thousands) | Maturity | Estimated Fair Value | | :------------------ | :------------------- | | Due in one year or less | $16,182 | | Due in one to two years | $8,301 | | Due in two to three years | $7,749 | | **Total** | **$32,232** | [NOTE 6 – FAIR VALUE](index=19&type=section&id=NOTE%206%20%E2%80%93%20FAIR%20VALUE) - The Company classifies its financial instruments into Level 1 (quoted prices in active markets) and Level 2 (observable market-based inputs) for fair value measurement, with no significant transfers between levels[70](index=70&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) Fair Value Hierarchy of Assets at June 30, 2025 (in thousands) | Asset Category | Fair Value | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :--------- | :-------- | :-------- | :-------- | | Money market funds - equity securities | $5,025 | $5,025 | $0 | $0 | | Corporate bonds and notes - debt securities | $25,000 | $0 | $25,000 | $0 | | Commercial paper - debt securities | $2,760 | $0 | $2,760 | $0 | | Treasury and agency notes and bills - debt securities | $4,472 | $0 | $4,472 | $0 | | **Total Assets** | **$37,257** | **$5,025** | **$32,232** | **$0** | - The fair value of the Company's long-term debt approximates its carrying value and would be classified within Level 2 of the fair value hierarchy[75](index=75&type=chunk)[76](index=76&type=chunk) [NOTE 7 – GOODWILL AND IDENTIFIED INTANGIBLE ASSETS](index=20&type=section&id=NOTE%207%20%E2%80%93%20GOODWILL%20AND%20IDENTIFIED%20INTANGIBLE%20ASSETS) - The carrying value of goodwill remained at **$313.7 million** at June 30, 2025, with no impairment charges recognized during the three and six months ended June 30, 2025 and 2024[77](index=77&type=chunk) Identified Intangible Assets, Net (in thousands) | Category | June 30, 2025 Net | December 31, 2024 Net | | :-------------------------------- | :---------------- | :------------------ | | Acquired patents / core technology | $277,525 | $301,177 | | Customer contracts and related relationships | $0 | $0 | | Existing technology / content database | $0 | $0 | | Trademarks/trade name | $0 | $0 | | **Total intangible assets** | **$277,525** | **$301,177** | Estimated Future Amortization Expense of Finite-Lived Intangible Assets (in thousands) | Year | Amounts | | :------------------------ | :-------- | | 2025 (remaining 6 months) | $28,334 | | 2026 | $56,541 | | 2027 | $56,189 | | 2028 | $51,146 | | 2029 | $48,897 | | Thereafter | $36,418 | | **Total** | **$277,525** | [NOTE 8 – DEBT](index=21&type=section&id=NOTE%208%20%E2%80%93%20DEBT) Outstanding Debt (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :-------------- | :---------------- | | Long-term debt | $458,906 | $487,083 | | Unamortized debt discount and issuance costs | $(9,975) | $(11,627) | | **Total long-term debt, net of current portion** | **$427,924** | **$454,435** | - The Company repriced its Term Loan B in January 2025 (Amendment No. 4), reducing the interest rate margin for SOFR loans to **2.50%** and for base rate loans to **1.50%**, with maturity remaining June 8, 2028[84](index=84&type=chunk) - Interest expense decreased to **$8.9 million** (3M) and **$18.2 million** (6M) in 2025, from **$12.9 million** (3M) and **$25.4 million** (6M) in 2024, primarily due to lower debt balance and reduced interest rates[87](index=87&type=chunk) Future Minimum Principal Payments for Long-Term Debt as of June 30, 2025 (in thousands) | Year | Amounts | | :------------------------ | :-------- | | 2025 (remaining 6 months) | $12,177 | | 2026 | $24,354 | | 2027 | $24,354 | | 2028 | $398,021 | | **Total** | **$458,906** | [NOTE 9 – NET INCOME PER SHARE](index=24&type=section&id=NOTE%209%20%E2%80%93%20NET%20INCOME%20PER%20SHARE) Net Income Per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income | $16,722 | $8,382 | $28,536 | $9,281 | | Basic net income per share | $0.15 | $0.08 | $0.26 | $0.09 | | Diluted net income per share | $0.15 | $0.07 | $0.25 | $0.08 | | Weighted average shares (Basic) | 108,832 | 108,667 | 108,387 | 108,216 | | Weighted average shares (Diluted) | 112,179 | 112,536 | 112,597 | 112,757 | [NOTE 10 – STOCKHOLDERS' EQUITY](index=24&type=section&id=NOTE%2010%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) - The 2020 Equity Incentive Plan (EIP) was amended in May 2024, increasing shares reserved for issuance by **8.9 million** to **25.7 million** and removing the fungible share ratio. Approximately **5.0 million** shares remained for future grants as of June 30, 2025[91](index=91&type=chunk) - Quarterly cash dividends of **$0.05 per common share** were declared for periods ended June 30, 2025 and 2024[101](index=101&type=chunk) - The Board approved an increase in share repurchase authorization to **$200.0 million** in October 2024. During the six months ended June 30, 2025, the Company repurchased **0.8 million shares** for **$10.0 million**, with **$170.0 million** remaining available[103](index=103&type=chunk) Restricted Stock Awards Activity (in thousands, except per share amounts) | Category | Number of Shares Subject to Time-based Vesting | Number of Shares Subject to Performance-based Vesting | Total Number of Shares | Weighted Average Grant Date Fair Value Per Share | | :-------------------------- | :--------------------------------------------- | :---------------------------------------------------- | :--------------------- | :--------------------------------------------- | | Balance at December 31, 2024 | 6,380 | 2,247 | 8,627 | $10.98 | | Awards granted | 2,648 | 291 | 2,939 | $14.98 | | Awards vested / earned | (2,274) | (957) | (3,231) | $10.98 | | Awards canceled / forfeited | (147) | — | (147) | $10.32 | | **Balance at June 30, 2025** | **6,607** | **1,581** | **8,188** | **$12.43** | [NOTE 11 – STOCK-BASED COMPENSATION EXPENSE](index=28&type=section&id=NOTE%2011%20%E2%80%93%20STOCK-BASED%20COMPENSATION%20EXPENSE) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Research and development | $1,422 | $1,093 | $2,656 | $1,902 | | Selling, general and administrative | $7,278 | $5,499 | $14,288 | $9,835 | | **Total stock-based compensation expense** | **$8,700** | **$6,592** | **$16,944** | **$11,737** | [NOTE 12 – INCOME TAXES](index=28&type=section&id=NOTE%2012%20%E2%80%93%20INCOME%20TAXES) - The Company recorded income tax benefits of **$9.1 million** (3M) and **$7.0 million** (6M) for the periods ended June 30, 2025, compared to income tax expenses of **$2.9 million** (3M) and **$8.6 million** (6M) for the same periods in 2024[108](index=108&type=chunk) - The decrease in income tax expense in 2025 was primarily due to unrealized benefits associated with South Korea withholding tax refund claims[108](index=108&type=chunk) [NOTE 13 – LEASES](index=28&type=section&id=NOTE%2013%20%E2%80%93%20LEASES) Components of Operating Lease Costs (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Fixed lease cost | $523 | $511 | $1,046 | $1,023 | | Variable lease cost | $190 | $207 | $257 | $482 | | **Total operating lease cost** | **$713** | **$718** | **$1,303** | **$1,505** | Future Minimum Lease Payments and Related Lease Liabilities as of June 30, 2025 (in thousands) | Year | Operating Lease Payments | | :------------------------ | :----------------------- | | 2025 (remaining 6 months) | $159 | | 2026 | $1,191 | | 2027 | $2,455 | | 2028 | $1,888 | | 2029 | $1,944 | | Thereafter | $5,828 | | **Total lease payments** | **$13,465** | | Less: imputed interest | $(4,024) | | **Present value of lease liabilities** | **$9,441** | | Less: current obligations under leases | $518 | | **Noncurrent operating lease liabilities** | **$8,923** | [NOTE 14 – COMMITMENTS AND CONTINGENCIES](index=29&type=section&id=NOTE%2014%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) - Total future unconditional purchase obligations were approximately **$4.8 million** as of June 30, 2025, with **$1.9 million** due in the remainder of 2025[113](index=113&type=chunk) - A guarantee liability of **$17.1 million** was recognized as of June 30, 2025, related to Adeia Media's guarantee of Xperi Sub's performance under a specified agreement[114](index=114&type=chunk) - The Company provides indemnifications to licensees, customers, and partners, but cannot reasonably estimate potential losses; no claims have been filed to date[115](index=115&type=chunk) [NOTE 15 – SEGMENT INFORMATION](index=30&type=section&id=NOTE%2015%20%E2%80%93%20SEGMENT%20INFORMATION) - The Company operates under one reportable segment: IP Licensing, deriving revenue from media and semiconductor patent portfolios primarily in North America[119](index=119&type=chunk) Revenue by Geography (in thousands, except for percentages) | Geography | Three Months Ended June 30, 2025 | % | Three Months Ended June 30, 2024 | % | Six Months Ended June 30, 2025 | % | Six Months Ended June 30, 2024 | % | | :------------------ | :------------------------------- | :-- | :------------------------------- | :-- | :------------------------------- | :-- | :------------------------------- | :-- | | U.S. | $67,908 | 79% | $71,608 | 82% | $139,423 | 80% | $140,047 | 75% | | Asia | $12,340 | 14% | $10,325 | 11% | $23,279 | 13% | $19,840 | 18% | | Canada | $3,093 | 4% | $3,376 | 4% | $6,223 | 4% | $6,573 | 4% | | Europe and Middle East | $1,930 | 2% | $1,586 | 2% | $3,551 | 2% | $3,389 | 2% | | Other | $464 | 1% | $455 | 1% | $929 | 1% | $906 | 1% | | **Total** | **$85,735** | **100%** | **$87,350** | **100%** | **$173,405** | **100%** | **$170,755** | **100%** | Customer Concentration (Revenue % of Total) | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Customer A | 20.0% | 19.7% | 19.8% | 20.1% | | Customer B | 10.4% | 11.4% | 10.5% | 11.9% | - At June 30, 2025, one customer represented **63%** of aggregate accounts receivable, compared to two customers representing **52%** and **11%** at December 31, 2024[123](index=123&type=chunk) [NOTE 16 – SUBSEQUENT EVENTS](index=32&type=section&id=NOTE%2016%20%E2%80%93%20SUBSEQUENT%20EVENTS) - On July 24, 2025, the Board declared a cash dividend of **$0.05 per share** of common stock, payable on September 16, 2025[125](index=125&type=chunk) - The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, making certain 2017 tax provisions permanent. The Company is evaluating its impact for the third quarter financial statements[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Adeia Inc.'s financial condition and operational performance for Q2 2025 and 2024, covering key metrics, revenue, expenses, and capital resources [Business Overview](index=33&type=section&id=Business%20Overview) - Adeia Inc. is a leading IP licensing platform in the consumer and entertainment space, with a diverse portfolio of over **13,000 media and semiconductor patents** globally[130](index=130&type=chunk) - Headquartered in Silicon Valley with over **35 years of experience**, the Company has approximately **150 employees**, primarily located in the U.S[131](index=131&type=chunk) [Macroeconomic Conditions](index=34&type=section&id=Macroeconomic%20Conditions) - Macroeconomic conditions, including inflation, geopolitical instability, and global health events, may adversely impact the business, particularly the consumer electronics market, potentially leading to asset impairment and increased credit losses[132](index=132&type=chunk) - While a significant portion of revenue is derived from fixed-fee arrangements, per-unit and variable-fee based revenue remains susceptible to direct or indirect effects from macroeconomic events[133](index=133&type=chunk) [Reportable Segments](index=34&type=section&id=Reportable%20Segments) - The Company operates and reports in one segment: IP Licensing, with the Chief Executive Officer designated as the Chief Operating Decision Maker (CODM)[134](index=134&type=chunk) - Innovations are licensed to leading companies in the media entertainment and semiconductor industries, providing access to foundational patent portfolios and industry-leading technologies[135](index=135&type=chunk) [Key Metrics](index=34&type=section&id=Key%20Metrics) Key Financial Metrics (Three Months Ended June 30, 2025 vs 2024) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :--------- | :--------- | :------- | :--------- | | Revenue | $85.7M | $87.3M | $(1.6)M | (1.8)% | | Recurring revenues | $85.1M | $82.3M | $2.8M | 3.4% | | Non-recurring revenues | $0.6M | $5.1M | $(4.4)M | (87.4)% | | Cash provided by operating activities | $23.1M | $23.5M | $(0.4)M | (1.5)% | | Principal payments on term loan | $11.1M | N/A | N/A | N/A | | Outstanding term loan balance | $458.9M | N/A | N/A | N/A | Key Financial Metrics (Six Months Ended June 30, 2025 vs 2024) | Metric | 2025 | 2024 | Change | % Change | | :-------------------------------- | :--------- | :--------- | :------- | :--------- | | Revenue | $173.4M | $170.8M | $2.7M | 1.6% | | Recurring revenues | $169.5M | $165.0M | $4.5M | 2.7% | | Non-recurring revenues | $3.9M | $5.7M | $(1.8)M | (31.7)% | | Cash provided by operating activities | $80.3M | $90.7M | $(10.4)M | (11.5)% | | Principal payments on term loan | $28.2M | N/A | N/A | N/A | | Outstanding term loan balance | $458.9M | N/A | N/A | N/A | | Common stock repurchased | $10.0M | $0 | $10.0M | N/A | - The Company completed another repricing of its term loan in January 2025, further reducing its interest rate by **50 basis points**[136](index=136&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) [Revenue](index=35&type=section&id=Revenue_MD%26A) Revenue (in thousands, except for percentages) | Period | 2025 | 2024 | Change | % Change | | :------------------ | :--------- | :--------- | :------- | :--------- | | Three Months Ended June 30 | $85,735 | $87,350 | $(1,615) | (2)% | | Six Months Ended June 30 | $173,405 | $170,755 | $2,650 | 2% | - The decrease in revenue during the three months ended June 30, 2025, was primarily due to non-recurring revenue from a settlement and multi-year renewal with X Corp. in Q2 2024 that did not recur[137](index=137&type=chunk)[139](index=139&type=chunk) - Recurring revenue increased by **$2.8 million (3.4%)** for Q2 2025 and **$4.5 million (2.7%)** for 6M 2025, driven by new customer license agreements, partially offset by declines in royalty revenue from certain Pay-TV customers[138](index=138&type=chunk)[141](index=141&type=chunk) [Research and Development](index=37&type=section&id=Research%20and%20Development_MD%26A) Research and Development Expense (in thousands, except for percentages) | Period | 2025 | 2024 | Increase | % Change | | :------------------ | :--------- | :--------- | :------- | :--------- | | Three Months Ended June 30 | $15,857 | $14,799 | $1,058 | 7% | | Six Months Ended June 30 | $32,324 | $28,724 | $3,600 | 13% | - The increase in R&D expense was primarily due to higher patent portfolio expenses, patent technical support expenses, and increased personnel costs resulting from higher headcount[144](index=144&type=chunk) [Selling, General and Administrative](index=37&type=section&id=Selling%2C%20General%20and%20Administrative_MD%26A) Selling, General and Administrative Expense (in thousands, except for percentages) | Period | 2025 | 2024 | Increase | % Change | | :------------------ | :--------- | :--------- | :------- | :--------- | | Three Months Ended June 30 | $32,129 | $24,617 | $7,512 | 31% | | Six Months Ended June 30 | $60,561 | $48,646 | $11,915 | 24% | - The increase in SG&A expense was mainly due to higher personnel-related costs from increased headcount, advertising expense, and administrative costs associated with the credit facility repricing in Q1 2025, partially offset by decreased outside services[146](index=146&type=chunk)[147](index=147&type=chunk) [Amortization Expense](index=37&type=section&id=Amortization%20Expense_MD%26A) Amortization Expense (in thousands, except for percentages) | Period | 2025 | 2024 | Decrease | % Change | | :------------------ | :--------- | :--------- | :-------- | :--------- | | Three Months Ended June 30 | $14,170 | $20,030 | $(5,860) | (29)% | | Six Months Ended June 30 | $28,252 | $43,187 | $(14,935) | (35)% | - The decrease in amortization expense was primarily due to certain intangible assets becoming fully amortized during 2024, partially offset by an increase in amortization from patents acquired in the second half of 2024 and first half of 2025[148](index=148&type=chunk) [Litigation Expense](index=39&type=section&id=Litigation%20Expense_MD%26A) Litigation Expense (in thousands, except for percentages) | Period | 2025 | 2024 | Increase | % Change | | :------------------ | :--------- | :--------- | :------- | :--------- | | Three Months Ended June 30 | $7,174 | $4,262 | $2,912 | 68% | | Six Months Ended June 30 | $13,028 | $7,192 | $5,836 | 81% | - The increase in litigation expense was primarily due to increased activity in current litigation matters[149](index=149&type=chunk) - Litigation expense is expected to remain a significant portion of operating expenses as it is used to enforce and protect the Company's IP and contract rights[150](index=150&type=chunk) [Interest Expense](index=39&type=section&id=Interest%20Expense_MD%26A) Interest Expense (in thousands, except for percentages) | Period | 2025 | 2024 | Decrease | % Change | | :------------------ | :--------- | :--------- | :-------- | :--------- | | Three Months Ended June 30 | $10,216 | $13,296 | $(3,080) | (23)% | | Six Months Ended June 30 | $20,865 | $27,471 | $(6,606) | (24)% | - The decrease in interest expense was primarily due to a lower debt balance, reduced interest rate margins from Term Loan B repricings in Q2 2024 and Q1 2025, and a Federal Reserve interest rate cut in Q3 2024[151](index=151&type=chunk) [Other Income and Expense, Net](index=39&type=section&id=Other%20Income%20and%20Expense%2C%20Net_MD%26A) Other Income and Expense, Net (in thousands, except for percentages) | Period | 2025 | 2024 | Increase | % Change | | :------------------ | :--------- | :--------- | :------- | :--------- | | Three Months Ended June 30 | $1,434 | $1,428 | $6 | 0% | | Six Months Ended June 30 | $3,146 | $2,828 | $318 | 11% | - The increase in other income and expense, net, was primarily due to an increase in interest income from significant financing components from certain revenue contracts[152](index=152&type=chunk) [Loss on Debt Extinguishment](index=39&type=section&id=Loss%20on%20Debt%20Extinguishment_MD%26A) - The Company recognized a **$0.5 million** loss on debt extinguishment during the three and six months ended June 30, 2024, related to the repricing of its Term Loan B; no such costs were incurred in 2025[153](index=153&type=chunk) [Provision for Income Taxes](index=39&type=section&id=Provision%20for%20Income%20Taxes_MD%26A) Provision for (Benefit from) Income Taxes (in thousands, except for percentages) | Period | 2025 | 2024 | Decrease | % Change | | :------------------------------------ | :--------- | :--------- | :-------- | :--------- | | Three Months Ended June 30 | $(9,099) | $2,939 | $(12,038) | (410)% | | Six Months Ended June 30 | $(7,015) | $8,629 | $(15,644) | (181)% | - The Company recorded income tax benefits in 2025, resulting in effective tax rates of **(119.4%)** (3M) and **(32.6%)** (6M), primarily due to unrealized benefits from South Korea withholding tax refund claims[155](index=155&type=chunk)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Selected Financial Information Related to Liquidity (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $84,247 | $78,825 | | Marketable securities | $32,232 | $31,567 | | **Total cash, cash equivalents and marketable securities** | **$116,479** | **$110,392** | Net Cash Flows (in thousands) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $80,256 | $90,690 | | Net cash used in investing activities | $(6,159) | $(8,241) | | Net cash used in financing activities | $(68,675) | $(70,555) | - Cash, cash equivalents, and marketable securities increased by **$6.1 million** to **$116.5 million** at June 30, 2025, driven by operating cash flows, partially offset by debt repayments, stock repurchases, and dividends[160](index=160&type=chunk) - The Company believes its cash from operations, along with current cash and cash equivalents, will be sufficient to satisfy anticipated cash requirements for at least the next 12 months and the foreseeable future[164](index=164&type=chunk) [Quarterly Dividends](index=42&type=section&id=Quarterly%20Dividends_Liquidity) - The Company paid quarterly cash dividends of **$0.05 per share** in June 2025 and authorized another **$0.05 per share** dividend in July 2025, payable in September 2025[165](index=165&type=chunk) [Stock Repurchase Plan](index=42&type=section&id=Stock%20Repurchase%20Plan_Liquidity) - The Board increased the share repurchase authorization to **$200.0 million** in October 2024. During the six months ended June 30, 2025, **$10.0 million** was used to repurchase **0.8 million shares**, leaving **$170.0 million** available[166](index=166&type=chunk) [Cash Flows from Operating Activities](index=42&type=section&id=Cash%20Flows%20from%20Operating%20Activities_Liquidity) - Net cash provided by operating activities was **$80.3 million** for the six months ended June 30, 2025, primarily due to net income adjusted for non-cash items like amortization of intangible assets (**$28.3 million**) and stock-based compensation expense (**$16.9 million**)[168](index=168&type=chunk) - Net cash provided by operating activities was **$90.7 million** for the six months ended June 30, 2024, primarily due to net income adjusted for non-cash items like amortization of intangible assets (**$43.2 million**) and stock-based compensation expense (**$11.7 million**)[169](index=169&type=chunk) [Cash Flows from Investing Activities](index=42&type=section&id=Cash%20Flows%20from%20Investing%20Activities_Liquidity) - Net cash used in investing activities was **$6.2 million** for the six months ended June 30, 2025, mainly due to purchases of short-term investments (**$13.0 million**) and intangible assets (**$5.4 million**), partially offset by proceeds from maturities of investments (**$12.6 million**)[170](index=170&type=chunk) - Net cash used in investing activities was **$8.2 million** for the six months ended June 30, 2024, primarily due to purchases of short-term investments (**$18.7 million**) and intangible assets (**$8.5 million**), offset by proceeds from maturities of investments (**$20.2 million**)[171](index=171&type=chunk) [Capital Expenditures](index=42&type=section&id=Capital%20Expenditures) Capital Expenditures (in millions) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | | Property and equipment | $0.4 | $1.2 | | Intangible assets | $5.4 | $8.5 | [Cash Flows from Financing Activities](index=43&type=section&id=Cash%20Flows%20from%20Financing%20Activities_Liquidity) - Net cash used in financing activities was **$68.7 million** for the six months ended June 30, 2025, primarily due to **$28.2 million** in debt repayment, **$10.9 million** in dividends paid, and **$31.0 million** in common stock repurchases (including tax withholdings)[174](index=174&type=chunk) - Net cash used in financing activities was **$70.5 million** for the six months ended June 30, 2024, mainly from **$52.1 million** in debt repayment, **$10.9 million** in dividends paid, and **$9.1 million** in stock repurchases for tax withholdings[175](index=175&type=chunk) [Long-term Debt](index=43&type=section&id=Long-term%20Debt_Liquidity) - As of June 30, 2025, **$458.9 million** was outstanding under the Term Loan B facility, with an interest rate of **7.8%** (including unamortized debt discount and issuance costs)[180](index=180&type=chunk) - The Company entered Amendment No. 4 on January 30, 2025, repricing the Term Loan B to **$487.1 million** and reducing interest rate margins (SOFR loans to **2.50%**, base rate loans to **1.50%**)[179](index=179&type=chunk) - No excess cash flow payment is required in 2025 due to leverage ratios and voluntary prepayments made in 2024. The Company was in full compliance with all debt covenants as of June 30, 2025[180](index=180&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There were no significant changes in the Company's critical accounting policies and estimates during the six months ended June 30, 2025[181](index=181&type=chunk) [Recent Accounting Pronouncements](index=44&type=section&id=Recent%20Accounting%20Pronouncements_MD%26A) - Refer to Note 2 – Summary of Significant Accounting Policies for a full description of recent accounting pronouncements, including their respective expected dates of adoption[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the Annual Report on Form 10-K for a detailed discussion of the Company's market risk exposures, indicating no new material disclosures in this quarterly report - For a discussion of market risk, refer to Part II, Item 7A – Quantitative and Qualitative Disclosures About Market Risk in the Company's Annual Report on Form 10-K[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of Adeia Inc.'s disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, and reports no material changes in internal control over financial reporting during the quarter [Evaluation of Controls and Procedures](index=45&type=section&id=Evaluation%20of%20Controls%20and%20Procedures) - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance for timely and accurate SEC reporting[187](index=187&type=chunk) [Changes in Internal Control over Financial Reporting](index=45&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in internal control over financial reporting during the last fiscal quarter that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting[188](index=188&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) Details Adeia Inc.'s ongoing legal proceedings, including patent infringement and breach of contract cases, to protect its IP - The Company is involved in litigation to protect its IP from infringement, preferring commercial licensing but resorting to lawsuits when necessary[192](index=192&type=chunk) [Patent Infringement Litigation](index=46&type=section&id=Patent%20Infringement%20Litigation) - **Videotron Patent Infringement Litigation:** Trial commenced on February 3, 2025, with closing arguments held April 15-17, 2025. A decision from the Federal Court of Canada is pending[193](index=193&type=chunk) - **Bell Patent Infringement Litigation:** Trial commenced on April 28, 2025, with closing arguments held June 2-4, 2025. A decision from the Federal Court of Canada is pending[194](index=194&type=chunk) - **Shaw Breach of Contract Litigation:** Adeia Media Companies filed a complaint against Shaw in October 2023 for failure to pay royalties. Shaw filed a motion to dismiss in October 2024, which is pending[195](index=195&type=chunk) - **Disney Patent Infringement Litigation:** Multiple complaints filed in November 2024 across the U.S., Germany, and Brazil, alleging infringement of several patents. The U.S. trial is set for June 7-11, 2027[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - **Altice Declaratory Judgment of Noninfringement Litigation:** Altice filed a complaint on June 27, 2025, seeking a declaratory judgment of noninfringement for ten of Adeia's patents[202](index=202&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section states that there were no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors previously disclosed in Part 1, Item 1A. of the Annual Report on Form 10-K for the year ended December 31, 2024[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is marked as 'Not applicable,' indicating no information to report regarding unregistered sales of equity securities or use of proceeds - Not applicable[204](index=204&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is marked as 'Not applicable,' indicating no information to report regarding defaults upon senior securities - Not applicable[205](index=205&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is marked as 'Not applicable,' indicating no information to report regarding mine safety disclosures - Not applicable[206](index=206&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) This section reports that no Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by any director or officer during the three and six months ended June 30, 2025 - No Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by any director or officer during the three and six months ended June 30, 2025[207](index=207&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including joinder agreements, guaranty supplements, CEO and CFO certifications, and Inline XBRL documents - Exhibits include Joinder Agreement, Guaranty Supplement, CEO and CFO Certifications (Rule 13a-14(a) and 13a-14(b)), and Inline XBRL documents[208](index=208&type=chunk) Signatures - The report was duly caused to be signed on behalf of Adeia Inc. by Keith A. Jones, Chief Financial Officer, on August 7, 2025[212](index=212&type=chunk)[213](index=213&type=chunk)

Company Overview - Adeia Inc. is recognized for its innovative semiconductor 3D integration and advanced packaging technologies, recently winning the "Most Innovative Technology" award at FMS: the Future of Memory and Storage [1][2] - The company focuses on hybrid bonding technology that enhances interconnect density, speed, power efficiency, and reliability in NAND, DRAM, and logic products [2][3] Technology Highlights - Adeia's hybrid bonding technology enables 3D integration of electronic systems, significantly improving performance metrics in semiconductor applications [2][3] - The technology supports submicron interconnect pitch, facilitating chiplet architectures and heterogeneous integration, which reduces latency and increases bandwidth [3] Industry Context - FMS is a premier global event that showcases advancements in high-speed memory and storage technologies, attracting professionals and companies from around the world [4][6] - The event highlights key trends and innovations in sectors such as AI, enterprise data centers, and high-performance computing, emphasizing the importance of memory and storage in these applications [6][7]

Core Insights - Adeia reported Q2 2025 GAAP revenue of $85.7 million, slightly below analyst estimates of $88.5 million, with Non-GAAP EPS at $0.25, also under expectations [1][2] - The company achieved a significant year-over-year increase in GAAP net income, reaching $16.7 million, nearly doubling from $8.4 million in Q2 2024 [2][5] Financial Performance - Non-GAAP EPS for Q2 2025 was $0.25, down 10.7% from $0.28 in Q2 2024 [2] - Adjusted EBITDA for Q2 2025 was $45.7 million, a decrease of 13.5% from $52.8 million in Q2 2024 [2] - GAAP net income surged to $16.7 million in Q2 2025, a 98.8% increase year-over-year [2][5] Business Overview - Adeia specializes in IP licensing, focusing on patents in semiconductor and media technologies, generating revenue through licensing agreements with large companies [3][4] - The company’s patent portfolio includes thousands of assets related to advanced chip packaging, media content delivery, and digital imaging [4] Strategic Focus - Adeia aims to secure more licensing revenue from growth markets like OTT streaming services and the semiconductor sector [4] - Key performance variables include renewing and signing new multi-year deals, expanding IP protection, and investing in research [4] Operational Highlights - In Q2 2025, Adeia closed five deals, including a multi-year license with ST Microelectronics and a renewal with a major OTT streaming service [6] - The company launched RapidCool™, a liquid cooling technology for high-performance semiconductors, addressing the cooling needs of AI hardware [7] Capital Allocation - Adeia maintained a disciplined capital allocation strategy, paying a $0.05 per share dividend and reducing its outstanding term loan to $458.9 million [9] Future Guidance - Management reiterated full-year 2025 revenue guidance of $390.0 to $430.0 million, with slightly lower operating expense forecasts [10] - Interest expense expectations for FY2025 were reduced by $1.0 million, reflecting tighter cost control [10] Market Outlook - Adeia did not indicate any major upcoming licensing wins but highlighted continued efforts in semiconductors and OTT streaming as growth drivers [11] - The company’s recurring revenue from multi-year licenses and diversified customer base provides stability, but significant upside will depend on new partnerships and legal risk management [11]

Core Viewpoint - Adeia (ADEA) reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, but down from $0.28 per share a year ago, indicating a mixed performance in earnings despite a positive surprise [1][2]. Financial Performance - The company posted revenues of $85.74 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.53% and down from $87.35 million year-over-year [2]. - Over the last four quarters, Adeia has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2]. Stock Performance - Adeia shares have declined approximately 11.4% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [3]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $101.27 million, and for the current fiscal year, it is $1.36 on revenues of $406.91 million [7]. - The trend of estimate revisions for Adeia was mixed ahead of the earnings release, which could change following the recent report [6]. Industry Context - The Technology Services industry, to which Adeia belongs, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8].

Financial Data and Key Metrics Changes - The company reported revenue of $85.7 million for Q2 2025, with cash from operations amounting to $23.1 million [6][18] - Total debt was reduced by $11.1 million during the quarter, with total debt paydowns exceeding $300 million since separation [6][22] - Adjusted EBITDA for the quarter was $45.7 million, reflecting an adjusted EBITDA margin of 53% [20] Business Line Data and Key Metrics Changes - The company signed five license agreements in Q2, including four in media and one in semiconductors, with three agreements made with new customers [12][18] - Recurring revenue increased modestly year-over-year, with non-pay TV recurring revenue up 28% [13][36] - The patent portfolio grew by 2% to over 13,000 assets, contributing to the company's growth strategy [16] Market Data and Key Metrics Changes - The semiconductor business is experiencing significant demand due to the rise of AI and data centers, leading to the introduction of the RapidCool technology [10][11] - The company is targeting new customers in growth markets, particularly in semiconductors and e-commerce, which are expected to drive future revenue [12][15] Company Strategy and Development Direction - The company is focused on multiple paths to achieve its revenue goals, emphasizing the importance of the semiconductor opportunity while also exploring other high-potential opportunities [7][8] - The introduction of RapidCool technology is seen as a mid to long-term growth driver, addressing the thermal management needs of high-performance semiconductors [11][44] - The company aims to maintain a balanced capital allocation strategy, investing in strategic acquisitions, reducing debt, and returning capital to shareholders [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue guidance, reiterating a revenue range of $390 million to $430 million [23][25] - The company is prepared for potential challenges in closing large semiconductor agreements, having developed alternative strategies to meet revenue targets [39] - Management remains optimistic about the stability of the macroeconomic environment and the strength of the sales pipeline [25][58] Other Important Information - The company was recognized as a best company to work for by US News and World Report for the second consecutive year, reflecting its strong culture [17] - The company plans to pay a cash dividend of $0.05 per share, with another dividend approved for September [22] Q&A Session Summary Question: Is the OTT renewal contract structurally different from the previous one? - The renewal is in line with prior agreements, typically remaining standard unless there are significant changes in circumstances [27] Question: Can you elaborate on the new opportunities mentioned earlier? - These opportunities were initially expected in 2026 but are now anticipated to close in 2025, providing multiple avenues to meet revenue goals [28][29] Question: What is the mix between recurring and nonrecurring revenue, particularly in media and semiconductors? - A substantial portion of revenue this quarter was recurring, with new customer agreements expected to enhance future revenue [33] Question: What growth rates are expected in the non-pay TV media segment? - Non-pay TV recurring revenue saw a 28% increase, driven by growth in the semiconductor business and other media segments [36] Question: What is the status of the large semiconductor deal? - The goal remains to close the deal this year, but the company is prepared with alternative strategies if necessary [39] Question: Can you provide more details on the RapidCool technology? - RapidCool is targeted primarily at data centers, with potential applications in other areas being explored [48]