Summary of InterDigital (IDCC) FY Conference Call - August 27, 2025 Company Overview - InterDigital is a technology and research company established in 1972, focusing on advanced wireless technologies, video compression, and AI [4][5] - The company has a strong leadership team, including CEO Liren Chen, who joined from Qualcomm [8][9] Core Business Model - InterDigital operates on a dual track model: - **Technology Track**: Research and development of fundamental technologies, contributing to global standards like 5G and video codecs [10][11] - **Business Track**: Monetization through licensing agreements with major companies [13][30] - The company holds a significant patent portfolio of 34,000 assets, up from 19,000 prior to the Technicolor acquisition [27][28] Industry Position and Achievements - InterDigital is recognized as a leader in the development of standards, holding chair positions in over 100 different standards bodies, including 3GPP for cellular technology [22][24] - The company has been listed among the top 100 most innovative companies globally for four consecutive years [25] - In 2023, InterDigital ranked 24th among the top patent filers in Europe [26] Financial Performance - Revenue has been growing at a compound annual growth rate (CAGR) of approximately 25% since 2020, with adjusted EBITDA margins around 60% [33][51] - The company signed over 40 licensing agreements since 2021, including renewals with Apple and Samsung, which are under long-term licenses [29][30] - Annualized recurring revenue (ARR) has increased significantly, reaching approximately $555 million, with goals of $1 billion by 2030 [40][41] Future Growth Strategy - InterDigital aims to achieve $1 billion in ARR by 2030, with specific targets in various segments: - **Smartphones**: Targeting $500 million in ARR by 2027 [40] - **Consumer Electronics and IoT**: Aiming for $200 million by 2030 [41] - **Streaming and Cloud Services**: Targeting over $300 million, currently at zero [41] - The company plans to maintain a strong balance sheet with close to $1 billion in cash, allowing for continued investment in R&D and potential acquisitions [47][48] Key Technologies and Market Trends - Video technology is crucial, accounting for 80-90% of mobile data traffic, and is essential for the streaming ecosystem [16][19] - The shift from 4G to 5G in the automotive sector is expected to drive growth, particularly for connected and autonomous vehicles [44] Conclusion - InterDigital is positioned as a leader in technology innovation and patent licensing, with a robust growth strategy focused on expanding its market presence and enhancing its technology offerings [51]