Core Insights - InterDigital and Razer have established the Haptic Excellence Center to promote innovation and education in haptic technology for enhanced media experiences [1][3] - Haptic technology is becoming a primary media type, with approximately 4.1 billion haptic-enabled consumer devices in use by the end of 2024, and projections indicate that 53% of consumer devices will be haptic-enabled by 2028 [2] Company Overview: InterDigital - InterDigital is a global research and development company focused on wireless, video, and AI technologies, providing foundational technologies for connected and immersive experiences [5] - The company licenses its innovations to various sectors, including wireless communications, consumer electronics, IoT devices, and cloud-based services [5] Company Overview: Razer - Razer is recognized as the leading lifestyle brand for gamers, with a significant global presence and a focus on creating a comprehensive ecosystem of gaming hardware, software, and services [7][8] - The company has developed award-winning gaming peripherals and laptops, along with a software suite that has over 250 million users [8] Haptic Excellence Center Objectives - The Haptic Excellence Center aims to overcome barriers to haptic technology scalability by developing a dedicated haptic streaming platform for the reliable creation and delivery of haptic data [3] - The initiative focuses on fostering innovation in haptic content and collaborating with academic institutions to enhance education and skills development in this field [3][4]

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]

Financial Data and Key Metrics Changes - For the full year 2025, total revenue was $834 million, the second highest in the company's history, with a year-over-year increase of approximately 2 times compared to 2021 levels of $425 million [16][17] - Adjusted EBITDA reached a record high of $589 million for 2025, nearly 3 times the 2021 level of $208 million [17] - Non-GAAP EPS for 2025 was $15.31 per share, more than 4 times the $3.73 per share reported in 2021 [17] - In Q4 2025, total revenue was $158 million, exceeding the high end of the outlook of $144-$148 million [15] - Q4 adjusted EBITDA was $88 million, exceeding the high end of the outlook of $68-$76 million, resulting in an adjusted EBITDA margin of 56% [15][16] - Non-GAAP EPS for Q4 was $2.12, exceeding the high end of the outlook of $1.38-$1.63 [16] Business Line Data and Key Metrics Changes - Smartphone revenue for 2025 was just below $680 million, up 14% year-over-year, marking an all-time high [7] - The company licensed 8 of the top 10 largest smartphone manufacturers, covering about 85% of the overall market [6] - In the CE and IoT program, a new agreement was signed with HP, covering about half of the global PC market [7] - The company has now licensed over 50 agreements with a total contract value of more than $4.6 billion since 2021 [8] Market Data and Key Metrics Changes - The company has renewed licenses with major smartphone vendors, including Xiaomi and LG Electronics, which are expected to contribute to recurring revenue [7][8] - The enforcement campaign against major streaming services like Disney+ and Amazon is ongoing, with positive preliminary results in Brazil and Germany [9][27] Company Strategy and Development Direction - The company aims to grow its annualized recurring revenue and margin expansion, focusing on AI research and the development of 6G and next-generation video codecs [4][5] - The acquisition of AI startup Deep Render is part of the strategy to strengthen AI research capabilities [11] - The company is actively contributing to 6G standards development, which is expected to be the first native AI wireless standard [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to drive shareholder value in 2026, with expectations for total revenue in the range of $675 million-$775 million [18] - The company anticipates a step down in annualized recurring revenue (ARR) due to expirations but expects to renew about two-thirds of the $92 million that expired at the end of 2025 [19] - Management emphasized the importance of their patent portfolio and ongoing litigation efforts to ensure fair compensation for their innovations [36][37] Other Important Information - The company received recognition from multiple third parties, including being named one of America's greatest companies by Newsweek and the number one most successful mid-cap company in America for 2026 by Forbes [13] - The company will showcase its technology at the Mobile Congress in Barcelona, highlighting innovations in 6G and AI [14] Q&A Session Summary Question: Guidance for Q1 revenue and recurring fees - Management confirmed that the guidance for Q1 includes $55-$60 million of catch-up sales, indicating a decrease in recurring revenue due to expirations [24][25] Question: Timeline for litigation with Disney and Amazon - Management provided updates on the positive outcomes in Brazil and Germany for the Disney case, with further developments expected in the U.S. later in the year [26][27] Question: Details on the consumer electronic device agreement - The agreement with the social media company is a device agreement that licenses radio assets and Wi-Fi, but is not expected to be a high-volume agreement [33] Question: Threats on the litigation front - Management acknowledged the inherent risks in litigation but expressed confidence in the quality of their patent portfolio and the strategy to enforce their rights [36][37] Question: M&A as part of R&D efforts - The company is open to M&A opportunities to enhance its research capabilities and fill gaps in its portfolio [41] Question: Differences in litigation for streaming services - Management noted that the streaming industry is relatively new for the company, requiring more time to establish the strength of their portfolio compared to established relationships in the smartphone industry [42]

Financial Data and Key Metrics Changes - For the full year 2025, total revenue reached $834 million, the second highest in the company's history, with a year-over-year increase of approximately 2 times compared to 2021 levels of $425 million [16] - Adjusted EBITDA for 2025 was a record high of $589 million, nearly 3 times the 2021 level of $208 million [17] - Non-GAAP EPS for 2025 was $15.31 per share, more than 4 times the $3.73 per share reported in 2021 [17] - In Q4 2025, total revenue was $158 million, exceeding the high end of the outlook of $144-148 million [15] - Q4 adjusted EBITDA was $88 million, exceeding the high end of the outlook of $68-76 million, resulting in an adjusted EBITDA margin of 56% [15] Business Line Data and Key Metrics Changes - Smartphone revenue for 2025 was just below $680 million, up 14% year-over-year, marking an all-time high [7] - Annualized recurring revenue (ARR) increased to $582 million, up 24% year-over-year [5] - The company signed new licensing agreements with major smartphone vendors, including Vivo and Honor, and renewed agreements with Xiaomi, Samsung, Sharp, and Seiko [6][7] - In the CE and IoT program, the company signed a new agreement with HP, covering about half of the global PC market [7] Market Data and Key Metrics Changes - The company has now licensed eight of the top ten largest smartphone manufacturers, covering about 85% of the overall market [6] - The licensing agreements signed since 2021 have a total contract value of more than $4.6 billion [8] Company Strategy and Development Direction - The company aims to grow its licensing pipeline, particularly in the Video Service Licensing Program and AI research capabilities [4] - The focus is on expanding the patent portfolio and advancing technologies related to 6G and next-generation video codecs [4] - The company emphasizes the importance of AI in enhancing network efficiency and video quality, with a recent acquisition of AI startup Deep Render to strengthen its capabilities [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to drive shareholder value in 2026, with expectations for total revenue in the range of $675-775 million and adjusted EBITDA of $381-477 million [18] - The company anticipates further increases in ARR, aiming to reach $1 billion by 2030 [19] - Management highlighted the importance of ongoing litigation efforts to protect intellectual property and secure fair compensation for investments in research [10][36] Other Important Information - The company received recognition from multiple third parties, including being named one of America's greatest companies by Newsweek and the number one most successful mid-cap company in America for 2026 by Forbes [13] - The company will showcase its technology at the Mobile Congress in Barcelona, focusing on 6G and AI innovations [14] Q&A Session Summary Question: Guidance for Q1 revenue and recurring fees - Management confirmed that the guidance for Q1 includes $50-55 million of catch-up revenue, indicating a decrease in recurring fees due to expirations, but noted that two-thirds of the $92 million expired contracts have been renewed [24][25] Question: Timeline for litigation with Disney and Amazon - Management reported positive outcomes in the Disney case with preliminary injunctions in Brazil and Germany, with further trials expected in the US and UPC later in the year [26][27] - The Amazon case is in earlier stages, with multiple jurisdictions involved [27] Question: Litigation costs outlook - Management indicated an expected increase in litigation expenses for Q1 and throughout 2026, which is factored into the full-year guidance [29] Question: Details on the consumer electronic device agreement - The agreement with the social media company is a device agreement that licenses radio assets and Wi-Fi, but is not expected to be a high-volume agreement [33] Question: Differences in litigation for streaming services - Management noted that while they prefer negotiations, the streaming industry is relatively new for them, requiring more time to demonstrate the strength of their patent portfolio [42]

Financial Data and Key Metrics Changes - For the full year 2025, total revenue was $834 million, the second highest in the company's history, with a year-over-year increase of approximately 2 times compared to 2021 levels of $425 million [18] - Adjusted EBITDA reached a record high of $589 million, nearly 3 times the 2021 level of $208 million [19] - Non-GAAP EPS for the full year was $15.31 per share, more than 4 times the $3.73 per share reported in 2021 [19] - In Q4 2025, total revenue was $158 million, exceeding the high end of the outlook of $144-$148 million [17] - Adjusted EBITDA for Q4 was $88 million, exceeding the high end of the outlook of $68-$76 million, resulting in an adjusted EBITDA margin of 56% [17] Business Line Data and Key Metrics Changes - Smartphone revenue for 2025 was just below $680 million, up 14% year-over-year, marking an all-time high [7] - Annualized recurring revenue (ARR) increased to $582 million, up 24% year-over-year [5] - The company signed new licensing agreements with major smartphone vendors, including Vivo and Honor, and renewed agreements with Samsung, Sharp, and Seiko [6][8] - In the CE and IoT program, the company licensed about half of the global PC market after signing a new agreement with HP [8] Market Data and Key Metrics Changes - The company has now licensed 8 of the top 10 largest smartphone manufacturers, covering about 85% of the overall market [6] - The licensing agreements signed since 2021 have a total contract value of more than $4.6 billion [9] Company Strategy and Development Direction - The company aims to grow its licensing pipeline, particularly in the Video Service Licensing Program and AI research capabilities [4] - The focus is on deepening AI expertise and leading the development of AI-based solutions for next-generation technologies [12] - The company is actively contributing to 6G standards development, which is expected to be the first native AI wireless standard [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position to drive shareholder value in 2026, with expectations for total revenue in the range of $675 million-$775 million [20] - The company anticipates a strong year in 2026, despite a step down in ARR from year-end expirations, with plans to renew contracts and drive further increases in ARR [21] Other Important Information - The company completed a key acquisition of AI startup Deep Render to strengthen its research capabilities in AI and video compression [12] - The company received recognition from multiple third parties, including being named one of America's greatest companies by Newsweek and the number one most successful mid-cap company in America for 2026 by Forbes [14] Q&A Session Summary Question: Guidance on Q1 revenue and recurring fees - Management confirmed that the guidance for Q1 includes $55 million-$60 million of catch-up sales, indicating a decrease in recurring fees due to expirations [25][26] Question: Timeline for litigation with Disney and Amazon - Management provided updates on the positive outcomes in Brazil and Germany for the Disney case, with further developments expected in the U.S. later in the year [27][28] Question: Details on the consumer electronic device agreement - The agreement with the social media company is a device agreement that licenses radio assets and Wi-Fi, but is not expected to be a high-volume agreement [33] Question: M&A strategy for expanding the patent portfolio - The company is open to M&A opportunities to fill gaps in research and accelerate areas of strength, leveraging its industry reputation [40] Question: Differences in litigation for streaming services compared to smartphones - Management noted that the streaming industry is relatively new for the company, requiring more time to demonstrate the strength of its patent portfolio [41]

Core Insights - InterDigital (IDCC) reported quarterly earnings of $2.12 per share, exceeding the Zacks Consensus Estimate of $1.65 per share, but down from $5.15 per share a year ago, indicating an earnings surprise of +28.74% [1] - The company achieved revenues of $158.23 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 7.59%, although this is a decline from year-ago revenues of $252.8 million [2] Earnings Performance - Over the last four quarters, InterDigital has consistently surpassed consensus EPS estimates [2] - The company has also topped consensus revenue estimates four times in the last four quarters [2] Stock Performance - InterDigital shares have decreased by approximately 1.4% since the beginning of the year, while the S&P 500 has gained 0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.19 on revenues of $155.3 million, and for the current fiscal year, it is $9.24 on revenues of $660.9 million [7] - The outlook for the Wireless Equipment industry, where InterDigital operates, is favorable, ranking in the top 30% of over 250 Zacks industries [8] Industry Context - Another company in the same industry, Motorola (MSI), is expected to report quarterly earnings of $4.36 per share, reflecting a year-over-year change of +7.9%, with revenues projected at $3.34 billion, up 11.1% from the previous year [9][10]

Fourth Quarter 2025 Results February 5, 2026 ©2026 InterDigital, Inc. All Rights Reserved. 1 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Exchange Act, including but not limited to statements related to our outlook for Q1 and full year 2026, and other financial and business goals. Forward-looking statements are based on our expectations as of the date of this presentation and are subject to a number of risks, uncertaint ...

Financial Performance - In 2025, the arbitration panel set the total royalties for Samsung's patent license agreement at $1.05 billion for an eight-year term, resulting in approximately $131 million of recurring revenue per year, a 67% increase from the previous agreement[46]. - Revenue from Samsung, Apple, and vivo each comprised 10% or more of the company's consolidated revenue in fiscal 2025[47]. - As of December 31, 2025, InterDigital's investment portfolio includes cash, cash equivalents, and short-term investments valued at $1,258.5 million, with a diversified approach to maintain liquidity and capture market returns[245]. - The average interest rate on short-term investments is 3.7%, with a total principal amount of $513.4 million due by 2030[248]. - InterDigital has approximately $745.0 million in money market and operating accounts, primarily held with domestic financial institutions, ensuring liquidity[249]. - The company has paid approximately $205.2 million in foreign taxes from 2014 to 2025, with potential for a partial refund based on tax treaty negotiations[251]. - InterDigital's marketable securities, classified as available-for-sale, have a fair value of $513.4 million as of December 31, 2025, reflecting a diversified investment strategy[252]. - The company is exposed to equity risk due to fluctuations in the market price of its common stock, which affects earnings per share calculations[253]. Market Trends - The smartphone market is projected to ship 1.2 billion units worldwide in 2025, with the company holding licenses for approximately 85% of the global smartphone market[35]. - The automotive segment of the IoT market is expected to see significant growth, with approximately 65 million connected passenger vehicles shipped in 2025[37]. - The Video Services market is anticipated to grow from approximately $475 billion in annual revenue in 2025 to approximately $675 billion by 2029[38]. - Total global cellular IoT device shipments are expected to grow from approximately 550 million in 2025 to approximately 800 million by 2029[37]. Licensing Agreements - The company has entered into eight patent license agreements in 2025, including new agreements with major Chinese smartphone vendors vivo and Honor, and HP Inc.[42][43]. - The company is actively working to renew the Samsung TV agreement, which includes licenses for key technologies such as ATSC 3.0, HEVC, and VVC[49]. - The company has a joint licensing program with Sony, known as the Madison Arrangement, for digital televisions and standalone computer display monitors[33]. Research and Development - InterDigital's research and development activities are focused on enhancing energy efficiency and reducing power consumption across billions of devices, contributing to sustainability goals[60]. - The company has developed the Pixel Value Reduction (PVR) solution, which can achieve up to a 15% reduction in display power consumption, significantly impacting energy savings when applied globally[61]. Corporate Governance and Culture - InterDigital's commitment to sustainability is overseen by its Nominating and Corporate Governance Committee, which focuses on long-term strategic decisions[59]. - The company employs approximately 460 employees globally, with a strong emphasis on creating an inclusive and engaging workplace culture[64].

Financial Performance - Annualized recurring revenue (ARR) increased by 24% year-over-year from $468.0 million to $582.4 million[5] - Total revenue for full year 2025 was $834.0 million, a decrease of 4% compared to $868.5 million in 2024[6] - Net income reached a record level of $406.6 million, up 13% from $358.6 million in 2024[6] - GAAP EPS for full year 2025 was $11.80, a slight decrease of 2% from $12.07 in 2024[6] - Adjusted EBITDA for full year 2025 was $588.9 million, an increase of 7% from $551.0 million in 2024[6] - Revenue for Q4 2025 was $158,230,000, a decrease of 37.4% compared to Q4 2024's $252,802,000[25] - Net income for Q4 2025 was $42,971,000, down 67.7% from $133,108,000 in Q4 2024[25] - Non-GAAP net income for the twelve months ended December 31, 2025, was $465,082,000, compared to $408,938,000 in 2024, representing a 13.7% increase[31] - The outlook for Q1 2026 projects net income between $57 million and $66 million, with a full year 2026 net income forecasted between $202 million and $298 million[33] Cash Flow and Assets - Free cash flow for the twelve months ended December 31, 2025, was $544,450,000, significantly higher than $271,528,000 for the previous year[27] - Cash, cash equivalents, and short-term investments increased to $1,243,160,000 as of December 31, 2025, compared to $958,208,000 a year earlier[29] - Total assets rose to $2,064,290,000 in 2025, up from $1,835,529,000 in 2024, reflecting a growth of 12.5%[29] - Free cash flow for the twelve months ended December 31, 2025, was $473,935,000, up from $212,791,000 in the previous year, representing an increase of about 123%[33] Shareholder Returns - The company returned $169.4 million to shareholders through share repurchases and dividends in fiscal year 2025[7] - The company declared cash dividends of $0.70 per common share in Q4 2025, compared to $0.45 in Q4 2024[25] Operational Highlights - The company completed a significant licensing agreement with Samsung and secured new agreements with top smartphone vendors vivo and Honor[5] - The patent portfolio grew by 14% to approximately 38,000 granted patents and patent applications[5] - The company acquired video AI start-up Deep Render to enhance its technology capabilities[5] Future Guidance - Guidance for Q1 2026 projects revenue between $675 million and $775 million, with adjusted EBITDA expected between $381 million and $477 million[12] - Adjusted EBITDA for Q1 2026 is expected to be between $101 million and $110 million, with a full year 2026 estimate of $381 million to $477 million[33] - Non-GAAP net income for Q1 2026 is projected to be between $74 million and $83 million, with a full year 2026 forecast of $271 million to $367 million[33] - Diluted EPS for Q1 2026 is estimated to be between $1.61 and $1.86, while the full year 2026 diluted EPS is projected to be between $5.77 and $8.51[33] Expenses and Share-Based Compensation - Total operating expenses increased to $110,444,000 in Q4 2025, up 22.3% from $90,276,000 in Q4 2024[25] - The company incurred $12 million in share-based compensation for Q1 2026, with a total of $52 million expected for the full year 2026[33] - Capitalized patent costs for Q4 2025 were $15,036,000, compared to $19,382,000 in Q4 2024, showing a decrease of approximately 22%[33]

Core Insights - InterDigital, Inc. reported a record year driven by licensing momentum, achieving a 24% increase in annualized recurring revenue (ARR) [1][7] - The company experienced near-record annual revenue, resulting in all-time high levels of net income, adjusted EBITDA, non-GAAP EPS, and free cash flow [1][7] Business Performance - The company finished 2025 with strong quarterly performance, particularly in licensing programs, smartphone revenue, and AI expertise [2][7] - Full year 2025 revenue was $834.0 million, a slight decrease of 4% from $868.5 million in 2024, while operating expenses decreased by $55.8 million year-over-year [5][6] Financial Highlights - Fourth quarter 2025 revenue was $158.2 million, down 37% from $252.8 million in the fourth quarter of 2024, primarily due to a decline in catch-up revenue [4][6] - Full year 2025 net income reached $406.6 million, a 13% increase from $358.6 million in 2024, with a GAAP EPS of $11.80 [6][7] - Adjusted EBITDA for the full year was $588.9 million, up 7% from $551.0 million in 2024 [8] Revenue Breakdown - Annualized recurring revenue (ARR) increased to $582.4 million from $468.0 million, marking a 24% year-over-year growth [7][8] - Smartphone revenue for the full year was $678.9 million, a 14% increase from $597.5 million in 2024 [7][8] - Catch-up revenue for the full year was $277.4 million, down 40% from $460.1 million in 2024 [5][8] Shareholder Returns - The company declared dividends of $2.60 per share for the fiscal year 2025, up from $1.70 in 2024 [9][27] - Total return of capital to shareholders for the fiscal year was $169.4 million, including share repurchases and dividends [9] Future Outlook - For Q1 2026, the company projects revenue between $194 million and $200 million, and for the full year 2026, revenue is expected to be between $675 million and $775 million [13][14] - Adjusted EBITDA for Q1 2026 is forecasted to be between $101 million and $110 million, with full year 2026 adjusted EBITDA expected to range from $381 million to $477 million [14]