InterDigital (IDCC) Q1 2025 Earnings Call May 01, 2025 10:00 AM ET Speaker0 Thank you. I would now like to turn the call over to Speaker1 Rayford Head of Investor Relations. Please go ahead. Thank you, France, and good morning, everyone. Welcome to InterDigital's first quarter twenty twenty five earnings conference call. I'm Raeford Garabrandt, Head of Investor Relations for InterDigital. With me on today's call are Liran Chen, our President and CEO and Rich Breske, our CFO. Consistent with prior calls, we ...

PART I — FINANCIAL INFORMATION [Item 1. FINANCIAL STATEMENTS](index=3&type=section&id=Item%201%20Financial%20Statements%20(unaudited)) This section presents the company's unaudited condensed consolidated financial statements for Q1 2025 and 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%94%20March%2031%2C%202025%20and%20December%2031%2C%202024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $1,242,196 | $1,230,822 | | Total assets | $1,861,844 | $1,835,529 | | **Liabilities & Equity** | | | | Total current liabilities | $704,457 | $725,810 | | Total liabilities | $924,960 | $978,314 | | Total shareholders' equity | $936,884 | $857,215 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%E2%80%94%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenues | $210,507 | $263,542 | (20)% | | Total operating expenses | $78,675 | $159,804 | (51)% | | Income from operations | $131,832 | $103,738 | 27% | | Net income | $115,602 | $81,652 | 42% | | Net income per common share — Basic | $4.49 | $3.20 | 40% | | Net income per common share — Diluted | $3.45 | $2.88 | 20% | | Cash dividends declared per common share | $0.60 | $0.40 | 50% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%E2%80%94%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net income | $115,602 | $81,652 | | Unrealized gain (loss) on investments, net of tax | $256 | $(495) | | Comprehensive income | $115,858 | $81,157 | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20%E2%80%94%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Shareholders' Equity | $936,884 | $857,215 | | Retained Earnings | $1,875,398 | $1,775,823 | | Treasury Stock | $(1,732,644) | $(1,727,395) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%94%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(19,989) | $50,773 | | Net cash provided by investing activities | $59,508 | $16,775 | | Net cash used in financing activities | $(42,951) | $(49,319) | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(3,432) | $18,229 | | Cash, cash equivalents and restricted cash, end of period | $548,115 | $461,190 | Notes to Condensed Consolidated Financial Statements [1. BASIS OF PRESENTATION](index=8&type=section&id=1.%20BASIS%20OF%20PRESENTATION) - The unaudited condensed consolidated financial statements are prepared in accordance with Form 10-Q instructions and GAAP, with management's estimates and assumptions[23](index=23&type=chunk)[24](index=24&type=chunk) - The company adopted ASU 2023-09 (Income Tax Disclosures) as of January 1, 2025, with no impact on this Form 10-Q as disclosures are annual[28](index=28&type=chunk) - The company is evaluating the impact of ASU 2024-04 (Convertible Debt Instruments) and ASU 2024-03 (Expense Disaggregation Disclosures)[29](index=29&type=chunk)[30](index=30&type=chunk) [2. REVENUE](index=9&type=section&id=2.%20REVENUE) | Revenue Category | March 31, 2025 (in thousands) | March 31, 2024 (in thousands) | Increase/(Decrease) | Change % | | :--- | :--- | :--- | :--- | :--- | | Smartphone | $183,991 | $80,280 | $103,711 | 129% | | CE, IoT/Auto | $26,267 | $182,543 | $(156,276) | (86)% | | Other | $249 | $719 | $(470) | (65)% | | Total Revenues | $210,507 | $263,542 | $(53,035) | (20)% | | Catch-up revenues | $84,785 | $166,678 | $(81,893) | (49)% | **Expected Contracted Revenue (in thousands):** | Period | Revenue | | :--- | :--- | | Remainder of 2025 | $341,744 | | 2026 | $362,495 | | 2027 | $350,978 | | 2028 | $259,821 | | 2029 | $206,185 | | Thereafter | $179,697 | | Total Revenue | $1,700,920 | - Contract assets increased from **$162.8 million** as of December 31, 2024, to **$190.9 million** as of March 31, 2025, included in 'Accounts receivable'[32](index=32&type=chunk) [3. CASH, CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS](index=10&type=section&id=3.%20CASH%2C%20CONCENTRATION%20OF%20CREDIT%20RISK%20AND%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) **Cash, Cash Equivalents, and Restricted Cash (in thousands):** | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $536,639 | $527,360 | $440,242 | | Restricted cash | $11,476 | $24,187 | $20,948 | | Total cash, cash equivalents, and restricted cash | $548,115 | $551,547 | $461,190 | - **Three licensees** accounted for **87%** and **84%** of accounts receivable balances as of March 31, 2025, and December 31, 2024, respectively[37](index=37&type=chunk) **Fair Value of Financial Assets (in thousands):** | Asset Category | March 31, 2025 Total | December 31, 2024 Total | | :--- | :--- | :--- | | Money market and demand accounts | $509,097 | $535,745 | | Commercial paper | $100,297 | $78,870 | | U.S. government securities | $171,296 | $230,561 | | Corporate bonds, asset backed and other securities | $113,667 | $137,219 | | **Total** | **$894,357** | **$982,395** | **Fair Value of Long-Term Debt (in thousands):** | Debt Type | March 31, 2025 Fair Value | December 31, 2024 Fair Value | | :--- | :--- | :--- | | 2027 Senior Convertible Long-Term Debt | $1,236,963 | $1,166,155 | | Technicolor Patent Acquisition Long-Term Debt | $16,067 | $17,102 | [4. OTHER ASSETS AND LIABILITIES](index=12&type=section&id=4.%20OTHER%20ASSETS%20AND%20LIABILITIES) **Prepaid and Other Current Assets (in thousands):** | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepaid assets | $23,134 | $38,952 | | Tax receivables | $16,947 | $16,691 | | Restricted cash | $11,476 | $24,187 | | Other current assets | $3,079 | $4,482 | | **Total** | **$54,636** | **$84,312** | **Other Non-Current Assets, Net (in thousands):** | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Tax receivables | $95,056 | $88,619 | | Goodwill | $22,421 | $22,421 | | Long-term investments | $19,375 | $19,851 | | Right-of-use assets | $14,545 | $15,218 | | Other non-current assets | $6,560 | $3,291 | | **Total** | **$157,957** | **$149,400** | **Other Accrued Expenses (in thousands):** | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accrued legal fees | $10,240 | $9,571 | | Other accrued expenses | $13,958 | $15,563 | | **Total** | **$24,198** | **$25,134** | **Other Long-Term Liabilities (in thousands):** | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deferred compensation liabilities | $21,161 | $19,969 | | Operating lease liabilities | $15,055 | $15,772 | | Other long-term liabilities | $19,155 | $19,201 | | **Total** | **$55,371** | **$54,942** | [5. OBLIGATIONS](index=13&type=section&id=5.%20OBLIGATIONS) - The 2027 Notes, with an aggregate principal of **$460.0 million**, are convertible and classified as current portion of long-term debt due to holder conversion rights[50](index=50&type=chunk)[51](index=51&type=chunk) - The 2024 Notes matured on June 1, 2024, with the remaining **$126.2 million** principal repaid in cash and **0.3 million** common shares issued[57](index=57&type=chunk) **Convertible Notes Interest Expense (in thousands):** | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Contractual coupon interest (2027 Notes) | $4,025 | $4,025 | | Contractual coupon interest (2024 Notes) | — | $631 | | Amortization of deferred financing costs | $502 | $616 | | **Total Interest Expense** | **$4,527** | **$5,272** | - The Technicolor Patent Acquisition long-term debt had an effective interest rate of approximately **14.5%** at acquisition[60](index=60&type=chunk)[61](index=61&type=chunk) [6. LITIGATION AND LEGAL PROCEEDINGS](index=15&type=section&id=6.%20LITIGATION%20AND%20LEGAL%20PROCEEDINGS) - The company entered binding arbitration with Lenovo in Q4 2024 to determine terms for a new patent license agreement, effective January 1, 2024[63](index=63&type=chunk) - A decision is expected soon in the arbitration with Samsung for a renewed patent license agreement effective January 1, 2023[64](index=64&type=chunk)[65](index=65&type=chunk) - In the Tesla litigation, the UK Court of Appeal upheld the lower court's decision on March 6, 2025, and Tesla has applied to appeal to the Supreme Court[66](index=66&type=chunk)[67](index=67&type=chunk) - On February 3, 2025, the company filed patent infringement claims against The Walt Disney Co and its subsidiaries in multiple jurisdictions[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) [7. INCOME TAXES](index=16&type=section&id=7.%20INCOME%20TAXES) **Effective Tax Rate:** | Period | Effective Tax Rate | | :--- | :--- | | Three Months Ended March 31, 2025 | 12.6% | | Three Months Ended March 31, 2024 | 19.2% | - The decrease in the effective tax rate is attributed to an increase in Foreign Derived Intangible Income deduction benefits and other tax benefits[73](index=73&type=chunk) **Foreign Withholding Taxes Paid (in thousands):** | Period | Amount Paid | | :--- | :--- | | Three Months Ended March 31, 2025 | $3,200 | | Three Months Ended March 31, 2024 | $9,300 | [8. NET INCOME PER SHARE](index=17&type=section&id=8.%20NET%20INCOME%20PER%20SHARE) **Net Income Per Share (in thousands, except per share data):** | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $115,602 | $81,652 | | Weighted-average shares outstanding — Basic | 25,741 | 25,510 | | Weighted-average shares outstanding — Diluted | 33,505 | 28,341 | | Earnings per share — Basic | $4.49 | $3.20 | | Earnings per share — Diluted | $3.45 | $2.88 | **Securities Excluded from EPS Calculation (in thousands):** | Security Type | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Warrants | 3,136 | 7,488 | | Total | 3,136 | 7,488 | [9. SEGMENT PERFORMANCE MEASURES AND EXPENSES](index=18&type=section&id=9.%20SEGMENT%20PERFORMANCE%20MEASURES%20AND%20EXPENSES) - The company operates as **one reportable segment**, with the CEO assessing performance based on consolidated financial information[77](index=77&type=chunk) **Significant Operating Expenses (in thousands):** | Expense Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Departmental expenses | $41,337 | $44,466 | | Depreciation and amortization | $18,213 | $17,240 | | Intellectual property enforcement | $6,978 | $19,744 | | Share-based compensation | $9,498 | $9,386 | | Revenue share costs | $2,649 | $68,968 | | Other non-operating (income) expense, net | $(387) | $2,675 | | Income tax provision | $16,617 | $19,411 | | **Net income** | **$115,602** | **$81,652** | [10. OTHER INCOME, NET](index=18&type=section&id=10.%20OTHER%20INCOME%2C%20NET) **Other Income, Net (in thousands):** | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Interest and investment income | $9,264 | $11,778 | | Other | $994 | $(2,531) | | **Other income, net** | **$10,258** | **$9,247** | [Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=19&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q1 2025 financial condition and operational results compared to the prior year [OVERVIEW](index=19&type=section&id=OVERVIEW) - In March 2025, InterDigital signed a new license agreement with vivo Mobile, bringing the total to **seven of the ten largest smartphone vendors** under license[82](index=82&type=chunk) - In April 2025, a new multi-year license agreement was signed with HP Inc for Wi-Fi and video decoding technologies[83](index=83&type=chunk) - The quarterly cash dividend was increased by $0.15 per share to **$0.60 per share**, and **$20.8 million** was returned to shareholders in Q1 2025[84](index=84&type=chunk) - As of March 31, 2025, the company held **$894.8 million** in cash, restricted cash, and short-term investments[86](index=86&type=chunk) - **92% of Q1 2025 revenues** were from fixed-fee agreements, which can lead to timing differences between cash collection and revenue recognition[87](index=87&type=chunk) **Projected Amortization of Deferred Revenue (in thousands):** | Period | Deferred Revenue | | :--- | :--- | | Remainder of 2025 | $140,156 | | 2026 | $141,119 | | 2027 | $39,486 | | 2028 | $1,141 | | 2029 | $1,206 | | Thereafter | $1,270 | | **Total Revenue** | **$324,378** | [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=20&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) - There have been **no material changes** to the company's critical accounting policies from those disclosed in the 2024 Form 10-K[93](index=93&type=chunk) [FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES](index=20&type=section&id=FINANCIAL%20POSITION%2C%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - The company's primary liquidity sources are believed to be sufficient for short-term and long-term financing needs[94](index=94&type=chunk) **Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments (in thousands):** | Metric | March 31, 2025 | December 31, 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $536,639 | $527,360 | $9,279 | | Restricted cash | $11,476 | $24,187 | $(12,711) | | Short-term investments | $346,653 | $430,848 | $(84,195) | | **Total** | **$894,768** | **$982,395** | **$(87,627)** | - The net decrease in total cash and investments was due to cash used in financing, investing, and operating activities[95](index=95&type=chunk) **Net Cash (Used in) Provided by Operating Activities (in thousands):** | Period | Net Cash (Used in) Provided by Operating Activities | | :--- | :--- | | Three Months Ended March 31, 2025 | $(19,989) | | Three Months Ended March 31, 2024 | $50,773 | | **Change** | **$(70,762)** | - The **$70.8 million decrease** in operating cash flow was driven by lower cash receipts in Q1 2025, primarily due to large catch-up revenues in Q1 2024[96](index=96&type=chunk) **Cash Flows from Investing and Financing Activities (in thousands):** | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by investing activities | $59,508 | $16,775 | $42,733 | | Net cash used in financing activities | $(42,951) | $(49,319) | $6,368 | | Taxes withheld on restricted stock unit vestings | $(32,177) | $(8,635) | $(23,542) | | Share repurchases | $(5,249) | $(28,868) | $23,619 | | Proceeds from exercise of stock options | $7,316 | $0 | $7,316 | - The combined deferred revenue balance decreased by **$35.8 million** to **$324.4 million** as of March 31, 2025, due to amortization[100](index=100&type=chunk) [RESULTS OF OPERATIONS](index=24&type=section&id=RESULTS%20OF%20OPERATIONS) **Revenues by Category (in thousands):** | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) | Change % | | :--- | :--- | :--- | :--- | :--- | | Smartphone | $183,991 | $80,280 | $103,711 | 129% | | CE, IoT/Auto | $26,267 | $182,543 | $(156,276) | (86)% | | Other | $249 | $719 | $(470) | (65)% | | **Total Revenues** | **$210,507** | **$263,542** | **$(53,035)** | **(20)%** | | Catch-up revenues | $84,785 | $166,678 | $(81,893) | (49)% | - Total revenues decreased by **$53.0 million (20%)** primarily due to catch-up revenues from the Samsung TV agreement in Q1 2024[110](index=110&type=chunk) **Licensees Accounting for 10% or More of Total Revenue:** | Customer | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Customer A | 43% | —% | | Customer B | 16% | 13% | | Customer C | 12% | 71% | **Operating Expenses by Category (in thousands):** | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) | Change % | | :--- | :--- | :--- | :--- | :--- | | Research and portfolio development | $47,430 | $49,375 | $(1,945) | (4)% | | Licensing | $17,677 | $96,589 | $(78,912) | (82)% | | General and administrative | $13,568 | $13,840 | $(272) | (2)% | | **Total Operating expenses** | **$78,675** | **$159,804** | **$(81,129)** | **(51)%** | - The **$81.1 million decrease** in total operating expenses was primarily driven by a **$66.3 million decrease** in revenue share costs and a **$12.8 million decrease** in IP enforcement costs[112](index=112&type=chunk)[113](index=113&type=chunk) **Non-Operating Income (Expense), Net (in thousands):** | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) | Change % | | :--- | :--- | :--- | :--- | :--- | | Interest expense | $(9,871) | $(11,922) | $2,051 | 17% | | Interest and investment income | $9,264 | $11,778 | $(2,514) | (21)% | | Other income (expense), net | $994 | $(2,531) | $3,525 | 139% | | **Total non-operating income (expense), net** | **$387** | **$(2,675)** | **$3,062** | **114%** | - The change in non-operating income was primarily due to a **$2.2 million** foreign currency translation net gain in Q1 2025[115](index=115&type=chunk) [STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 — FORWARD-LOOKING STATEMENTS](index=25&type=section&id=STATEMENT%20PURSUANT%20TO%20THE%20PRIVATE%20SECURITIES%20LITIGATION%20REFORM%20ACT%20OF%201995%20%E2%80%94%20FORWARD-LOOKING%20STATEMENTS) - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially[117](index=117&type=chunk) - Key risks include delays in license agreements, resolution of legal proceedings, and macroeconomic conditions[117](index=117&type=chunk)[121](index=121&type=chunk) [Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=26&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes have occurred in the company's market risk disclosures since the 2024 Form 10-K - No material changes in quantitative and qualitative market risk from the disclosures included in the 2024 Form 10-K[119](index=119&type=chunk) [Item 4. CONTROLS AND PROCEDURES](index=26&type=section&id=Item%204%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and procedures with no material changes to internal controls - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were **effective** as of March 31, 2025[120](index=120&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that materially affected, or are likely to materially affect, internal controls[120](index=120&type=chunk) PART II — OTHER INFORMATION [Item 1. LEGAL PROCEEDINGS](index=27&type=section&id=Item%201%20Legal%20Proceedings) This section incorporates legal proceedings information by reference from Note 6 of the financial statements - Legal proceedings information is incorporated by reference from Note 6, 'Litigation and Legal Proceedings,' to the Notes to Condensed Consolidated Financial Statements[123](index=123&type=chunk) [Item 1A. RISK FACTORS](index=27&type=section&id=Item%201A%20Risk%20Factors) This section highlights updated risks, particularly concerning United States-China relations, referencing the 2024 Form 10-K - Reference is made to Part I, Item 1A, 'Risk Factors' in the 2024 Form 10-K, with no material changes except for the specific risk related to **United States-China relations**[124](index=124&type=chunk) - The company's business may be adversely affected by a deterioration in United States-China relations or broader geopolitical conditions[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=28&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 24,000 shares in Q1 2025, with $224.3 million remaining under its authorization **Issuer Purchases of Equity Securities (Q1 2025):** | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | | January 1, 2025 - January 31, 2025 | — | $— | $229,532,849 | | February 1, 2025 - February 28, 2025 | — | $— | $229,532,849 | | March 1, 2025 - March 31, 2025 | 24,000 | $218.67 | $224,284,034 | | **Total** | **24,000** | **$218.67** | | - The Share Repurchase Program has no expiration date and was authorized for **$300 million** in June 2014, with additional authorizations totaling **$735 million** through December 2023[130](index=130&type=chunk) [Item 3. DEFAULTS UPON SENIOR SECURITIES](index=28&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) This item is marked as not applicable, indicating no defaults upon senior securities - This item is not applicable[132](index=132&type=chunk) [Item 4. MINE SAFETY DISCLOSURES](index=28&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is marked as not applicable, indicating no mine safety disclosures - This item is not applicable[133](index=133&type=chunk) [Item 5. OTHER INFORMATION](index=28&type=section&id=Item%205%20Other%20Information) This section details Rule 10b5-1 trading arrangements adopted or modified by officers during Q1 2025 **Rule 10b5-1 Trading Arrangements (Q1 2025):** | Officer | Action | Date | Rule 10b5-1 | Non-Rule 10b5-1 | Maximum Shares to be Sold | Expiration Date | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | John Markley, Jr. | Terminate | March 17, 2025 | X | | 856 | June 30, 2025 | | John Markley, Jr. | Adopt | March 18, 2025 | X | | 1,370 | June 30, 2025 | | Rajesh Pankaj | Adopt | March 20, 2025 | X | | 9,000 | March 31, 2026 | | Joshua Schmidt | Adopt | March 21, 2025 | X | | 8,331 | March 31, 2026 | [Item 6. EXHIBITS](index=29&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q - The exhibits include certifications of the Principal Executive Officer and Principal Financial Officer, and various interactive data files[135](index=135&type=chunk) SIGNATURES [Signatures](index=30&type=section&id=Signatures) The report is duly signed by the CEO and CFO on May 1, 2025 - The report was signed by Liren Chen, President and Chief Executive Officer, and Richard J. Brezski, Chief Financial Officer, on May 1, 2025[140](index=140&type=chunk)

Revenue Performance - Revenue for Q1 2025 was $210.5 million, a decrease of 20% compared to $263.5 million in Q1 2024[4] - The outlook for Q2 2025 projects revenue between $165 million and $170 million, with full-year 2025 revenue expected to be between $660 million and $760 million[10] Net Income and Earnings Per Share - Net income increased by 42% to $115.6 million, with a net income margin of 55%, up from 31% in the previous year[4] - Diluted EPS for Q1 2025 was $3.45, up 20% from $2.88 in Q1 2024[4] - Non-GAAP net income for Q1 2025 was $125,658, compared to $94,544 in Q1 2024, marking a year-over-year increase of about 33%[30] - The company expects Q2 2025 net income to be between $64 million and $71 million, with a full year 2025 guidance of $224 million to $319 million[32] Adjusted EBITDA - Adjusted EBITDA for Q1 2025 was $159.1 million, a 22% increase from $130.4 million in Q1 2024, with an adjusted EBITDA margin of 76%[4] - Adjusted EBITDA for Q1 2025 reached $159,060, up from $130,364 in Q1 2024, reflecting a growth of approximately 22%[29] Operating Expenses and Cash Flow - Operating expenses decreased by 51% to $78.7 million compared to $159.8 million in Q1 2024[4] - Cash flows from operating activities showed a net cash outflow of $19,989 in Q1 2025, compared to a net inflow of $50,773 in Q1 2024[25] - The company reported a net cash inflow from investing activities of $59,508 in Q1 2025, compared to $16,775 in Q1 2024, indicating a significant increase in investment activity[25] Shareholder Equity and Dividends - Total shareholders' equity rose to $936,884, up from $857,215 at the end of 2024, indicating an increase of approximately 9.2%[27] - Cash dividends declared per common share increased to $0.60 from $0.40 in the previous year[23] Licensing Agreement - The company signed a major licensing agreement with vivo Mobile, increasing its total contract value to over $3.6 billion since 2021[3] Guidance and Future Outlook - The company reaffirmed its full-year 2025 guidance, indicating confidence in future performance[9]

Core Insights - InterDigital, Inc. reported strong financial results for Q1 2025, with revenues and adjusted EBITDA exceeding the top end of guidance, and an all-time record annualized recurring revenue, up 30% year-over-year [1][4][9] Financial Performance - Revenues for Q1 2025 were $210.5 million, a decrease of 20% compared to $263.5 million in Q1 2024 [4] - Operating expenses significantly reduced to $78.7 million, down 51% from $159.8 million in the previous year [4] - Net income increased by 42% to $115.6 million, resulting in a net income margin of 55%, up from 31% [4] - Diluted EPS rose by 20% to $3.45, compared to $2.88 in Q1 2024 [4] - Adjusted EBITDA was $159.1 million, reflecting a 22% increase from $130.4 million in the prior year, with an adjusted EBITDA margin of 76%, up from 49% [4] Revenue Breakdown - Annualized recurring revenue reached $502.9 million, a 30% increase from $387.5 million in Q1 2024 [4] - Revenue from smartphone licensing surged by 129% to $184.0 million, while revenues from consumer electronics and IoT/Auto dropped by 86% to $26.3 million [4] - Catch-up revenues fell by 49% to $84.8 million, primarily impacting overall revenue [4] Licensing Agreements - The company licensed vivo Mobile, enhancing revenue and achieving a record level of annualized recurring revenue [3] - InterDigital now holds licensing agreements with seven of the ten largest smartphone vendors, covering nearly 80% of the global smartphone market [3] - A new major licensing agreement with HP was signed in Q2 2025, contributing to a cumulative total contract value exceeding $3.6 billion since 2021 [3] Capital Return to Shareholders - In Q1 2025, the company repurchased shares valued at $5.2 million and declared dividends totaling $15.6 million, resulting in a total return of capital of $20.8 million [5] Outlook - The company reaffirmed its full-year 2025 guidance, projecting revenues between $660 million and $760 million, with adjusted EBITDA between $400 million and $495 million [9][10] - For Q2 2025, revenue is expected to be between $165 million and $170 million, with diluted EPS projected between $1.90 and $2.11 [10]

Core Insights - Silicon Motion Technology Corporation (SIMO) reported strong first-quarter 2025 results, with adjusted earnings and revenues exceeding the Zacks Consensus Estimate [1][3] Financial Performance - GAAP net income for the quarter was $19.5 million (58 cents per ADS), up from $16 million (48 cents per ADS) in the prior-year quarter, attributed to income tax benefits and unrealized gains on investments [2] - Non-GAAP net income was $20.3 million (60 cents per ADS), down from $21.6 million (64 cents per ADS) year-over-year, but still beating the Zacks Consensus Estimate of 43 cents [3] - Quarterly revenues decreased to $166.5 million from $189.3 million year-over-year, yet surpassed the Zacks Consensus Estimate of $163 million [3] Market Trends - Revenue contraction was noted due to weak demand trends across multiple markets, with SSD controller sales down 10%-15% sequentially and 20%-25% year-over-year [4] - eMMC+UFS sales decreased 15%-20% sequentially and 0%-5% year-over-year, while revenues in SSD solutions declined 20%-25% sequentially and 35%-40% year-over-year [4] Margin Analysis - Non-GAAP gross profit was $78.4 million, down from $85.2 million year-over-year, with margins of 47.1% compared to 45% [5] - Non-GAAP operating expenses rose to $63.6 million from $62.5 million, driven by increased R&D and administrative expenses [5] - Non-GAAP operating income decreased to $14.9 million from $22.6 million, with margins of 8.9% compared to 12% [5] Cash Flow & Liquidity - As of March 31, 2025, the company had cash and equivalents totaling $331.7 million, down from $349.3 million year-over-year [6] - Cash generated from operations was $50.3 million, significantly higher than $7.8 million in the prior-year quarter [6] Capital Expenditure - Capital expenditure for the first quarter of 2025 was $11.7 million, including $7 million for testing equipment and $4.7 million for building construction in Hsinchu [7] Future Outlook - For Q2 2025, management estimates non-GAAP revenues between $175-$183 million, with gross margins expected at 47-48% and operating margins in the range of 8.9-10.9% [8] - For the full year 2025, the company anticipates benefits from new product launches, including an 8-channel PCIe Gen 5 controller and a high-end UFS 4.1 controller [9]

Core Insights - Qorvo, Inc. reported strong fourth-quarter fiscal 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimates [1] Financial Performance - The company reported a GAAP net income of $31.4 million or 33 cents per share, up from $2.7 million or 3 cents per share in the prior-year quarter, attributed to lower operating expenses and an income tax benefit [3] - Non-GAAP net income was $133.3 million or $1.42 per share, slightly down from $135.5 million or $1.39 per share year-over-year, surpassing the Zacks Consensus Estimate by 41 cents [4] - Total revenues for fiscal 2025 were $3.72 billion, a decrease from $3.77 billion in fiscal 2024 [6] Revenue Breakdown - Net sales for the quarter declined to $869.5 million from $941 million in the prior-year quarter, impacted by a drop in Advanced Cellular Group (ACG) and Connectivity and Sensors Group (CSG) verticals, but secured major design wins in various applications [5][2] - High Performance Analog revenues increased to $187.9 million from $164.6 million year-over-year, driven by strong demand in defense and aerospace sectors [7] - Revenues from CSG were $101.3 million, down from $122.8 million in the year-ago quarter, missing estimates [8] Cash Flow and Liquidity - As of March 31, 2025, Qorvo had $1.02 billion in cash and cash equivalents and $1.55 billion in long-term debt, with net cash from operating activities of $199.2 million and free cash flow of $170.7 million for the quarter [11] Outlook - For the first quarter of fiscal 2026, the company expects revenues of $775 million (+/- $25 million) and non-GAAP gross margin between 42% and 44%, with non-GAAP earnings per share projected in the range of 50-75 cents [12]

Core Insights - T-Mobile US, Inc. reported better-than-expected first-quarter fiscal 2025 results with non-GAAP earnings of $2.58 per share, exceeding the Zacks Consensus Estimate by $0.13. Revenues increased by 6.6% year over year to $20.88 billion, surpassing the Zacks Consensus Estimate of $20.57 billion [1] Segment Performance - Total postpaid revenues rose by 7.6% year over year to $13.59 billion, exceeding the estimate of $13.54 billion. The company achieved its strongest first-quarter postpaid net addition with 1.3 million net customer additions, an increase of 117,000 year over year [2] - The majority of new customers are opting for premium plans, leading to a 4% year-over-year growth in Postpaid average revenues per account, marking the best first-quarter growth in eight years [3] - In 5G broadband, T-Mobile added 424,000 net high-speed Internet customers with record-low churn, supported by updated pricing plans and a focus on network slicing and advanced 5G infrastructure [4] Financial Position - T-Mobile generated $6.84 billion in cash from operating activities, up from $5.08 billion in the prior-year quarter. Adjusted free cash flow was reported at $4.39 billion, indicating strong operational efficiency [7] - As of March 31, 2025, the company had $12 billion in cash and cash equivalents, with long-term debt of $76 billion, an increase from $72.7 billion at the end of the previous quarter [8] Share Buyback and Guidance - During the March quarter, T-Mobile repurchased 10.1 million shares for approximately $2.5 billion, with $10.5 billion remaining under its 2025 buyback program [9] - For 2025, T-Mobile expects postpaid net customer additions between 5.5-6 million and has raised its growth expectation for postpaid ARPA to 3.5% for the full year [9][10]

Core Insights - Corning Incorporated (GLW) reported strong first-quarter 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimates, driven by robust sales across various end markets and increased adoption of advanced products for Gen-AI applications [1][3] Financial Performance - The company reported a GAAP net income of $157 million or 18 cents per share, down from $209 million or 24 cents per share in the same quarter last year, impacted by higher operating expenses despite revenue growth [2] - Core earnings for the quarter were $467 million or 54 cents per share, an increase from $330 million or 38 cents per share year-over-year, beating the Zacks Consensus Estimate by 4 cents [3] - Net sales on a GAAP basis reached $3.45 billion, up from $2.97 billion in the prior year, with core sales increasing by 13% to $3.67 billion, surpassing the consensus estimate of $3.54 billion [3] Segment Performance - Optical Communications segment generated $1.35 billion in revenues, a 46% increase year-over-year, driven by demand for Gen-AI solutions, with net income improving to $201 million from $100 million [4] - Display Technologies reported revenues of $905 million, up 4% year-over-year, although it missed the revenue estimate of $942.2 million, with net income rising to $243 million from $201 million [5] - Specialty Materials segment achieved $501 million in net sales, a 10% increase year-over-year, exceeding the estimate of $492.2 million, with net income rising to $74 million from $44 million [6] - Automotive business saw a decline in net sales to $440 million from $491 million year-over-year, primarily due to weakness in light and heavy-duty markets, with net income down 13% to $68 million [7] - Life Sciences segment revenues were $234 million, slightly down from $236 million year-over-year, with net income matching the prior year's figure at $13 million [8] - Hemlock and Emerging Growth Businesses reported an 11% decline in net sales to $244 million, resulting in a net loss of $16 million compared to a net income of $17 million in the previous year [8] Profitability and Cash Flow - Quarterly gross profit increased to $1.2 billion from $993 million, with gross margins improving to 35.2% from 33.4%, and operating income rose to $445 million from $254 million year-over-year [9] - Core gross margin improved to 37.9% from 36.8% due to productivity and pricing improvements across operations [9] - Corning generated $151 million of net cash from operations during the quarter, compared to $96 million in the same quarter last year, with $1.35 billion in cash and cash equivalents as of March 31, 2025, against $6.95 billion in long-term debt [10] Outlook - For the second quarter of 2025, core sales are projected to be $3.85 billion, with core EPS expected in the range of 55-59 cents [11]

Core Viewpoint - Sanmina Corporation reported strong second-quarter fiscal 2025 results, with adjusted earnings and revenues exceeding expectations, driven by growth across all segments and a significant increase in free cash flow [1] Financial Performance - Net income on a GAAP basis was $64.2 million or $1.16 per share, up from $52.5 million or 93 cents per share in the prior-year quarter, supported by top-line expansion [2] - Non-GAAP net income was $78 million or $1.41 per share, compared to $73.9 million or $1.30 in the prior-year quarter, surpassing the Zacks Consensus Estimate of $1.38 [2] Revenue Growth - Net sales increased to $1.98 billion from $1.83 billion in the year-ago quarter, beating the consensus estimate by $34 million [3] - Integrated Manufacturing Solutions generated $1.59 billion in revenues, a 9.7% year-over-year increase, contributing 80.2% to total revenues [4] - Components, Products and Services revenues rose to $391.9 million from $382.9 million in the prior-year quarter, driven by growth in several end markets [4] Segment Performance - Industrial & Energy, Medical, Defense & Aerospace, and Automotive markets generated $1.25 billion in revenues, up from $1.23 billion in the prior-year quarter [5] - Communications Networks and Cloud Infrastructure revenues increased to $732.9 million from $609.3 million in the year-ago quarter [5] Profitability Metrics - Gross profit was $176.2 million compared to $154.8 million in the year-ago quarter, driven by a favorable mix and improved operational efficiency [6] - Non-GAAP operating income totaled $110.6 million, up from $99.5 million in the prior-year period, with a non-GAAP operating margin of 5.6%, slightly up from 5.4% [6] Cash Flow and Liquidity - The company generated $156.9 million of net cash from operating activities, compared to $72.3 million in the previous year's quarter [7] - As of March 29, 2025, Sanmina had $647.1 million in cash and cash equivalents and $291.4 million in long-term debt [7] - During the quarter, approximately 1.03 million shares were repurchased for about $84 million [7] Future Outlook - For the third quarter of fiscal 2025, revenues are expected to be in the range of $1.925-$2.025 billion, with GAAP earnings per share forecasted between $1.05 and $1.15 [8] - Management estimates non-GAAP earnings per share in the band of $1.35-$1.45 [8]

Core Viewpoint - InterDigital, Inc. is expected to report a decline in revenue year over year due to intense competition and macroeconomic challenges, despite strong licensing momentum in the consumer electronics market and product innovation [1] Group 1: Licensing and Market Position - InterDigital has established licensing agreements with major companies such as Huawei, Samsung, LG, Amazon, Zebra Technologies, and Apple, enhancing its core market capabilities [2] - A recent multi-year license agreement with HP Inc. allows HP access to InterDigital's patented Wi-Fi and video decoding technologies, significantly expanding InterDigital's presence in the PC industry, now covering over 50% of the market [3] Group 2: Growth Opportunities and Strategic Direction - The company aims to be a leading designer and developer of technology solutions for the mobile industry and IoT, leveraging its R&D capabilities and industry experience [4] - InterDigital's strong portfolio in wireless technology, sensors, user interface, and video technologies positions it well for future growth, particularly with the ongoing 5G rollout [4] Group 3: Financial Expectations - Total recurring revenues are estimated at $63.4 million, indicating a 55.3% year-over-year growth, while catch-up revenues are estimated at $51.3 million [5] - The Zacks Consensus Estimate for revenues in the March quarter is $160.42 million, down from $263.54 million in the prior year, with adjusted earnings per share expected to decline to $2.05 from $3.58 [6]