UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-39304 ADEIA INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 84-4734590 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. E ...

Trevor Williams Introduction Adeia Inc. (NASDAQ:ADEA) had a decent show in Q2 2024. They posted Non-GAAP EPS of $0.28, beating estimates by $0.05. Revenue hit $87.4 million, topping expectations by $3.15 million. But the plot leads to the climax. Despite the wins, growth metrics indicate cracks in their core are reaching concerning levels: revenue has declined, debt has increased, and earnings growth is slowing down. Such issues may likely hit Adeia’s longer-term sustainability and valuation. Seeking ...

Financial Data and Key Metrics Changes - The company reported revenue of $87.4 million for Q2 2024, with adjusted EBITDA of $52.8 million, reflecting a 60% adjusted EBITDA margin [7][16] - Operating expenses were $35.1 million, an increase of $1.2 million or 3% from the prior quarter [16] - Interest expense decreased to $13.3 million, down $879,000 from the prior quarter due to lower interest rates following debt repricing [17][19] Business Line Data and Key Metrics Changes - Five license agreements were signed across various markets, including social media, consumer electronics, semiconductors, and Pay-TV [7][16] - A multi-year renewal was signed with Liberty Global, enhancing the company's international customer base [9][10] - In semiconductors, a new long-term agreement was established with Hamamatsu, adding access to hybrid bonding technology [10] Market Data and Key Metrics Changes - The company is focused on expanding its customer base in OTT, adjacent media markets, and semiconductors, while maintaining strong renewal rates [11] - The company closed the quarter with over 11,500 worldwide patent assets, indicating a strong IP portfolio [11] Company Strategy and Development Direction - The company aims to drive revenue growth by expanding its IP portfolio and pursuing tuck-in acquisitions to enhance organic growth efforts [12] - The focus remains on internal R&D investments while also exploring acquisition opportunities to accelerate revenue [12][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strategic objectives for 2024, with expectations of strong momentum in the second half of the year [7][21] - The company reiterated its revenue guidance for 2024, expecting revenue between $380 million and $420 million [21][22] Other Important Information - The company successfully repriced its term loan, resulting in annual savings of over $3 million in interest expenses [8][19] - A cash dividend of $0.05 per share was paid, with another dividend approved for September [20] Q&A Session Summary Question: Impact of OTT price increases on markets - Management believes that price increases in the OTT market will not significantly impact licensing opportunities [25][27] Question: Semiconductor market challenges - Management noted ongoing trends in chiplet architecture and high bandwidth memory, indicating potential growth in licensing opportunities [28][29] Question: Changes in business focus on acquisitions - Management clarified that tuck-in acquisitions have always been part of the strategy, with a focus on internal R&D [31][32] Question: Timing of streaming and semiconductor license deals - Management indicated that while timing can shift, confidence remains high for closing deals within the year [34] Question: Baseline revenue expectations - Management stated that the current run rate of $85 million is not expected to be the ongoing baseline, with higher revenue anticipated from upcoming license agreements [36] Question: Influence of macroeconomic conditions on licensing discussions - Management expressed that macroeconomic uncertainty typically has little impact on the timing or economics of licensing deals [38][39] Question: Operating expenses outlook - Management indicated that R&D expenses will continue to rise, while overall operating expenses are expected to be lower than initially guided [40][42]

Adeia (ADEA) came out with quarterly earnings of $0.28 per share, beating the Zacks Consensus Estimate of $0.23 per share. This compares to earnings of $0.26 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 21.74%. A quarter ago, it was expected that this provider of chip technology for small electronic devices would post earnings of $0.22 per share when it actually produced earnings of $0.25, delivering a surprise of 13.64%.Ov ...

[Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) Adeia reported Q2 2024 revenue of $87.4 million, generated strong H1 operating cash flow, secured key licensing agreements, and optimized its debt structure while declaring a quarterly dividend Q2 2024 Financial Highlights | Metric | Value (in millions) | | :--- | :--- | | Revenue | $87.4 | | GAAP Net Income | $8.4 | | GAAP Diluted EPS | $0.07 | | Non-GAAP Diluted EPS | $0.28 | | Adjusted EBITDA | $52.8 | | Cash Flow from Operations (Q2) | $23.5 | | Cash Flow from Operations (H1 2024) | Over $90 | - Signed **5 agreements** across social media, consumer electronics, semiconductor, and Pay-TV markets[2](index=2&type=chunk) - A key agreement was a **multi-year license renewal with X Corp.** (formerly Twitter), which resolved all outstanding litigation between the two companies[2](index=2&type=chunk) - Other significant deals include renewals with Panasonic and two U.S. Pay-TV providers, a new license with Hamamatsu for hybrid bonding technology, and a post-quarter renewal with Liberty Global[2](index=2&type=chunk) - The company repriced its term loan, lowering the interest rate by **61 basis points**, resulting in annual interest savings of approximately **$3 million**[1](index=1&type=chunk)[2](index=2&type=chunk) - Made **$12.0 million** in principal payments on its term loan, reducing the outstanding balance to **$549.1 million**[2](index=2&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.05 per share**, payable on September 17, 2024[3](index=3&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Adeia reiterated its full-year 2024 revenue outlook of $380.0-$420.0 million while updating guidance for lower GAAP operating expenses and reduced interest expense Full-Year 2024 Financial Outlook (Updated) | Category (in millions) | GAAP Updated Outlook | Non-GAAP Updated Outlook | | :--- | :--- | :--- | | Revenue | $380.0 - 420.0 | $380.0 - 420.0 | | Operating expenses | $249.0 - 263.0 | $145.0 - 155.0 | | Interest expense | $52.0 - 55.0 | $52.0 - 55.0 | | Net income | $71.4 - 75.6 | $144.8 - 166.3 | | Adjusted EBITDA | N/A | $237.5 - 267.5 | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q2 2024 revenue increased to $87.4 million with net income of $8.4 million, while H1 2024 revenue and net income decreased compared to the prior year period Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $87,350 | $83,217 | $170,755 | $200,524 | | Operating Income | $23,642 | $17,723 | $43,006 | $72,846 | | Net Income | $8,382 | $1,419 | $9,281 | $30,440 | | Diluted EPS | $0.07 | $0.01 | $0.08 | $0.27 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2024, total assets and liabilities decreased, while cash and cash equivalents increased, with total debt at $535.6 million Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $66,454 | $54,560 | | Total current assets | $219,383 | $205,842 | | Total assets | $1,068,674 | $1,105,556 | | Total current liabilities | $73,223 | $102,038 | | Long-term debt, net | $510,857 | $519,550 | | Total liabilities | $709,538 | $748,934 | | Total stockholders' equity | $359,136 | $356,622 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities for H1 2024 was $90.7 million, with significant cash used in financing activities primarily for debt repayments and dividends Cash Flow Summary (in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $90,690 | $92,068 | | Net cash from investing activities | ($8,241) | ($25,406) | | Net cash from financing activities | ($70,555) | ($120,747) | | Net increase (decrease) in cash | $11,894 | ($54,085) | | Cash at end of period | $66,454 | $60,470 | [GAAP to Non-GAAP Reconciliations](index=11&type=section&id=GAAP%20TO%20NON-GAAP%20RECONCILIATIONS) [Reconciliation of Net Income and EPS](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20and%20EPS) Q2 2024 GAAP net income of $8.4 million was reconciled to a non-GAAP net income of $31.1 million, resulting in a non-GAAP diluted EPS of $0.28, primarily due to amortization and stock-based compensation adjustments Q2 2024 GAAP to Non-GAAP Reconciliation (in thousands, except per share) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Net Income | $8,382 | $22,740 | $31,122 | | Diluted EPS | $0.07 | $0.21 | $0.28 | [GAAP Net Income to Adjusted EBITDA Reconciliation](index=13&type=section&id=GAAP%20NET%20INCOME%20TO%20ADJUSTED%20EBITDA%20RECONCILIATION) Q2 2024 Adjusted EBITDA was $52.8 million, reconciled from GAAP net income by adding back amortization, interest expense, and stock-based compensation, with H1 2024 Adjusted EBITDA reaching $102.8 million Adjusted EBITDA Reconciliation (in thousands) | Period | GAAP Net Income | Adjusted EBITDA | | :--- | :--- | :--- | | Q2 2024 | $8,382 | $52,776 | | Q2 2023 | $1,419 | $51,698 | | H1 2024 | $9,281 | $102,786 | | H1 2023 | $30,440 | $137,536 | [Reconciliation for Guidance](index=13&type=section&id=RECONCILIATION%20FOR%20GUIDANCE) Full-year 2024 guidance includes reconciliations from GAAP to non-GAAP for operating expenses, net income, and Adjusted EBITDA, providing a comprehensive financial outlook FY 2024 Guidance Reconciliation (in millions) | Metric | GAAP Range | Non-GAAP Range | | :--- | :--- | :--- | | Operating Expenses | $249.0 - $263.0 | $145.0 - $155.0 | | Net Income | $71.4 - $75.6 | $144.8 - $166.3 | | Adjusted EBITDA | N/A | $237.5 - $267.5 |

Group 1 - Adeia Inc. will announce its financial results for Q2 2024 on August 6, 2024, after market close [1] - An earnings conference call will be held at 2:00 p.m. Pacific Time on the same day [1] - Participants are encouraged to dial in 15 minutes prior to the start of the conference call [1] Group 2 - Adeia is a leading R&D and intellectual property licensing company in the media and semiconductor industries [2] - The company's innovations support technology solutions that enhance digital entertainment and electronics [2] - Adeia's IP portfolios are integral to connected devices used by millions globally [2]

Core Viewpoint - Adeia Inc. has announced a long-term renewal agreement with Liberty Global for its media intellectual property portfolio, highlighting the significance of Adeia's innovations in enhancing customer experiences in the European video services market [1][2]. Group 1: Company Overview - Adeia is a leading R&D and intellectual property licensing company that focuses on innovative technologies in the media and semiconductor industries, aiming to shape the future of digital entertainment [4]. - Liberty Global is a global leader in converged broadband, video, and mobile communications, providing over 85 million connections across Europe and the UK through various well-known consumer brands [5]. Group 2: Agreement Details - The renewal agreement encompasses Liberty Global's network service provider operations, including mobile, broadband, and pay-TV services, emphasizing the importance of Adeia's media IP portfolio in the European market [2]. - Adeia's media IP portfolio enables pay-TV providers to offer personalized media experiences through enhanced content discovery, search, and recommendation capabilities [2]. Group 3: Innovation and Customer Experience - Innovation is crucial for enhancing entertainment solutions to meet the demands of digital-first customers, and Liberty Global aims to leverage Adeia's media IP portfolio to provide compelling experiences for its subscribers [3].

Core Viewpoint - Adeia Inc. has announced a long-term renewal agreement with Liberty Global for its media intellectual property portfolio, highlighting the significance of Adeia's innovations in enhancing customer experiences in the European video services market [1][2]. Group 1: Agreement Details - The renewal agreement encompasses Liberty Global's network service provider operations, including mobile, broadband, and pay-TV services, indicating the critical role of Adeia's media IP portfolio in the European market [2]. - Adeia's media IP portfolio enables pay-TV providers to offer personalized media experiences through improved content discovery, search, and recommendation capabilities [2]. Group 2: Company Insights - Adeia is recognized as a leading R&D and IP licensing company that accelerates the adoption of innovative technologies in the media and semiconductor industries, shaping the future of digital entertainment [4]. - Liberty Global is a prominent player in converged broadband, video, and mobile communications, providing over 85 million connections across Europe and the UK, and is committed to innovation and infrastructure investment [5].

SAN JOSE, Calif., July 01, 2024 (GLOBE NEWSWIRE) -- Adeia Inc. (Nasdaq: ADEA), the company whose patented innovations enhance billions of devices and shape the way the world explores and experiences entertainment, has entered into a multi-year license agreement with X Corp., the owner of the social media platform formerly known as Twitter. The agreement also resolves all of the outstanding litigation between the companies. “We are pleased to enter into this agreement and resolve the outstanding litigation w ...

SAN JOSE, Calif., July 01, 2024 (GLOBE NEWSWIRE) -- Adeia Inc. (Nasdaq: ADEA), the company whose patented innovations enhance billions of devices and shape the way the world explores and experiences entertainment, has entered into a multi-year license agreement with X Corp., the owner of the social media platform formerly known as Twitter. The agreement also resolves all of the outstanding litigation between the companies. “We are pleased to enter into this agreement and resolve the outstanding litigation w ...