Adeia(ADEA) - 2024 Q2 - Quarterly Results

Financial and Business Highlights 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] - A key agreement was a multi-year license renewal with X Corp. (formerly Twitter), which resolved all outstanding litigation between the two companies[2] - 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] - The company repriced its term loan, lowering the interest rate by 61 basis points, resulting in annual interest savings of approximately $3 million[1][2] - Made $12.0 million in principal payments on its term loan, reducing the outstanding balance to $549.1 million[2] - The Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on September 17, 2024[3] Financial Outlook 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 Condensed Consolidated Statements of Operations 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 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 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 Reconciliation of Net Income and EPS 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 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 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 |