Adeia(ADEA)2024-11-12 19:00Revenue Performance - Revenue for the three months ended September 30, 2024, decreased by $15.3 million, or 15.1%, to $86.1 million compared to $101.4 million in 2023[147]. - For the nine months ended September 30, 2024, revenue decreased by $45.1 million, or 14.9%, to $256.9 million compared to $301.9 million in 2023[150]. Recurring and Non-Recurring Revenues - Recurring revenues for the same period decreased by $0.9 million, or 1.1%, from $83.6 million in 2023 to $82.7 million in 2024[147]. - Non-recurring revenues for the three months ended September 30, 2024, decreased by $14.4 million, or 80.9%, from $17.8 million in 2023 to $3.4 million in 2024[148]. - Recurring revenues for the nine months ended September 30, 2024, decreased by $5.2 million, or 2.1%, from $255.1 million in 2023 to $249.8 million in 2024[150]. - Non-recurring revenues for the nine months ended September 30, 2024, decreased by $39.8 million, or 85.0%, from $46.8 million in 2023 to $7.0 million in 2024[159]. Cash Flow and Operating Activities - Cash provided by operating activities decreased by $6.9 million, or 32.6%, from $21.2 million in 2023 to $14.3 million in 2024[148]. - Net cash from operating activities was $105.0 million for the nine months ended September 30, 2024, compared to $113.3 million for the same period in 2023[188][190]. - Cash and cash equivalents increased to $60.7 million as of September 30, 2024, from $54.6 million at December 31, 2023, primarily due to $105.0 million generated from operations[178][180]. Expenses - Research and development expenses for the three months ended September 30, 2024, increased by $1.1 million, or 8%, to $14.8 million compared to $13.8 million in 2023[161]. - SG&A expenses rose by 23% to $26.9 million for the three months ended September 30, 2024, and by 6% to $75.5 million for the nine months ended September 30, 2024, primarily due to increased headcount and professional services costs[164][165]. - Amortization expense decreased by 42% to $13.6 million for the three months and by 20% to $56.8 million for the nine months ended September 30, 2024, due to certain intangible assets becoming fully amortized[166]. - Litigation expenses increased by 20% to $2.7 million for the three months and by 37% to $9.8 million for the nine months ended September 30, 2024, driven by increased litigation activity[167]. - Interest expense decreased by 19% to $12.8 million for the three months and by 15% to $40.2 million for the nine months ended September 30, 2024, due to lower debt balance and interest rates[170][171]. Debt and Financing Activities - The company made $12.0 million in principal payments on its term loan, bringing the outstanding balance to $537.1 million as of September 30, 2024[148]. - As of September 30, 2024, $537.1 million was outstanding under the term loan B facility, with future minimum principal payments of $7.0 million in 2024 and $28.1 million annually from 2025 to 2027[200]. - The 2024 Term Loan B was established with an aggregate principal amount of $561.1 million, reducing the interest rate margin to SOFR plus 3.00% per annum[199]. - The company paid $29.1 million during the nine months ended September 30, 2024, based on leverage ratios and excess cash flow generated for the year ended December 31, 2023[200]. - Cash used in financing activities was $90.5 million for the nine months ended September 30, 2024, compared to $144.2 million in the same period of 2023, primarily due to debt repayment and dividends paid[194][195]. Capital Expenditures - Capital expenditures for property and equipment were $1.3 million in the nine months ended September 30, 2024, down from $1.9 million in the same period of 2023, with an expected $1.0 million for the remainder of 2024[193]. - Capital expenditures for intangible assets amounted to $8.5 million during the nine months ended September 30, 2024, primarily for acquired patents[193]. Dividends and Stock Repurchase - The company paid quarterly cash dividends of $0.05 per share in September 2024, with another dividend authorized for December 2024[185]. - The stock repurchase plan has repurchased approximately 10.0 million shares at a total cost of $172.2 million, with $77.8 million remaining for future repurchases[186]. Accounting Policies and Compliance - The company has no significant changes in critical accounting policies and estimates during the three and nine months ended September 30, 2024[201]. - The 2020 Credit Agreement was amended to replace LIBOR with SOFR as the base rate on May 30, 2023[198]. - The term loan B facility contains customary covenants, and the company was in full compliance as of September 30, 2024[200].