InterDigital Beats Q4 Earnings Estimates Despite Lower Y/Y Revenues

Core Insights - InterDigital, Inc. (IDCC) reported strong fourth-quarter 2025 results, with both revenue and earnings exceeding Zacks Consensus Estimates despite a decline in catch-up revenues [2][8] Financial Performance - Net income on a GAAP basis for Q4 2025 was $43 million or $1.20 per share, down from $133.1 million or $4.09 per share in Q4 2024, primarily due to lower net sales [3] - Non-GAAP net income for Q4 2025 was $65.9 million or $2.12 per share, compared to $150.6 million or $5.15 per share in the prior year, beating the Zacks Consensus Estimate of $1.65 [3] - For the full year 2025, GAAP net income was $406.6 million or $11.80 per share, an increase from $358.6 million or $12.07 per share in 2024 [4] - Non-GAAP net income for 2025 was $465.1 million or $15.31 per share, up from $408.9 million or $14.97 per share in 2024 [4] Revenue Analysis - Quarterly revenues for Q4 2025 decreased to $158.2 million from $252.8 million in Q4 2024, but exceeded the Zacks Consensus Estimate of $147.1 million [5] - For the full year 2025, revenues declined to $834 million from $868.5 million in 2024 [5] - Smartphone revenues in Q4 2025 fell to $123.4 million from $230.6 million in the year-ago quarter, while revenues from CE and IoT/Auto groups increased to $34.8 million from $21.8 million [5][6] Recurring Revenues - Annualized recurring revenues increased by 24.4% year over year to $582.4 million, while catch-up revenues dropped to $12.6 million from $135.8 million a year ago [6] Operating Metrics - Adjusted EBITDA for Q4 2025 declined to $88.2 million from $198.1 million in the prior year [7] - Total operating expenses rose to $110.4 million from $90.3 million in Q4 2024, leading to a decrease in operating income to $47.8 million from $162.5 million [7] Cash Flow and Liquidity - In Q4 2025, InterDigital generated $63.4 million in cash from operations, down from $192 million in the year-ago quarter [8] - For the full year 2025, cash generated from operating activities was $544.5 million, compared to $271.5 million in 2024 [8] - As of December 31, 2025, the company had $1.24 billion in cash and short-term investments, with long-term debt and other liabilities totaling $74.8 million [9] Future Outlook - For Q1 2026, InterDigital estimates revenues between $194 million and $200 million, with adjusted EBITDA expected in the range of $101-$110 million [10] - For the full year 2026, the company anticipates revenues between $675 million and $775 million, with adjusted EBITDA forecasted at $381-$477 million [10]