Adeia (NasdaqGS:ADEA) Q4 2025 Earnings call February 23, 2026 05:00 PM ET Company ParticipantsChris Chaney - VP of Investor RelationsHamed Khorsand - Principal and Director of ResearchKeith Jones - CFOPaul Davis - President and CEOConference Call ParticipantsKevin Cassidy - Senior Research Analyst - SemiconductorsMatthew Galinko - SVP and Senior Equity Research Analyst - Technology and Special SituationsScott Searle - Managing Director, Senior Research Analyst - Wireless, Communications, and IoTOperatorGood ...

Financial Data and Key Metrics Changes - The company reported record revenue of $183 million for Q4 2025, exceeding the high end of guidance, driven by nine deals, including significant agreements with Disney and Microsoft [5][6][16] - Full year 2025 revenue reached $443 million, with operating income of $276 million and adjusted EBITDA of $278 million, all above the high end of guidance [8][9] - Non-pay TV recurring revenue grew by 30% year-over-year in Q4 2025, and over 20% for the full year [6][12] Business Line Data and Key Metrics Changes - The company executed 26 license agreements across various sectors, including OTT, semiconductors, consumer electronics, and pay-TV, with a record 12 new customers added in 2025 [9][10] - In the semiconductor sector, revenue increased from $18 million in 2024 to $26 million in 2025, marking a 40% increase [38] - The media business accounted for approximately 94% of total revenue in Q4 2025, reflecting strong performance in licensing agreements [40] Market Data and Key Metrics Changes - The company anticipates that pay-TV will represent approximately 35%-40% of forecasted revenue in 2026, down from the historical average of 50%-60% [10][11] - The OTT market is expected to contribute about 30%-35% of total revenue in 2026, indicating significant growth potential [51] Company Strategy and Development Direction - The company is focused on diversifying its revenue base, particularly in non-pay-TV verticals such as OTT and semiconductors, to mitigate risks associated with declining pay-TV revenues [11][12] - Recent leadership changes aim to strengthen execution towards long-term growth priorities, including the appointment of a Chief Semiconductor Officer and a Chief Revenue Officer [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges within the pay-TV licensing program and highlighted ongoing litigation as a means to protect intellectual property [11][70] - The company is optimistic about its growth prospects in 2026, supported by a strong sales pipeline and recent agreements [22][49] Other Important Information - The company reduced debt by $60 million in 2025 and returned capital through dividends and share repurchases while growing its cash balance [9][20] - The company expects litigation expenses to increase in 2026, reflecting a more normalized level of spending to defend its intellectual property [70][72] Q&A Session Summary Question: Subscriber loss trends in pay-TV - Management noted moderation in subscriber declines and emphasized the importance of diversifying revenue sources beyond pay-TV [27][28] Question: Competitive landscape for RapidCool technology - Management highlighted the unique plug-and-play nature of RapidCool, which differentiates it from competitors and aligns with current customer needs [29][30] Question: Breakdown of recurring vs. non-recurring revenue - In Q4, revenue was nearly split 50/50 between recurring and non-recurring, with 80% recurring revenue for the full year [37][38] Question: Pricing dynamics in the NAND market - Management clarified that revenue agreements are based on unit volumes rather than selling prices, benefiting from increased production [42][43] Question: Guidance for 2026 and growth expectations - Management expressed optimism for both media and semiconductor segments, with expectations for sequential growth throughout the year [46][51]

Adeia (NasdaqGS:ADEA) Q4 2025 Earnings call February 23, 2026 05:00 PM ET Speaker5Good day, everyone. Thank you for standing by. Welcome to Adeia's fourth quarter 2025 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. I would now like to turn the call over to Chris Chaney, Vice President of Investor Relations for Adeia. Chris, please go ahead.Speaker0Good afternoon, everyone. Thank you for joinin ...

Financial Data and Key Metrics Changes - The company reported third-quarter revenue of $87.3 million, which was in line with expectations, and non-Pay TV recurring revenue increased by 31% year over year [5][12] - Adjusted EBITDA for the third quarter was $50.7 million, reflecting an adjusted EBITDA margin of 58% [19] - Operating expenses were $37.1 million, a decrease of $3.5 million, or 9% from the prior quarter [17][18] Business Line Data and Key Metrics Changes - Non-Pay TV recurring revenue was up 81% since the company's separation, driven by new agreements in semiconductors, OTT, social media, and e-commerce [12][16] - The company closed two long-term license agreements during the third quarter, including a renewal with Altice and a new agreement with an e-commerce customer [11][17] Market Data and Key Metrics Changes - The company has signed four e-commerce customers since entering the market last year, indicating growth in this vertical [11] - The semiconductor business saw an increase in recurring revenue, attributed to the 3D NAND opportunity [30] Company Strategy and Development Direction - The company is focused on expanding beyond its core Pay TV business into new growth opportunities in semiconductors, OTT, social media, and e-commerce [12][16] - The company aims to deliver sustainable, long-term revenue growth and has adjusted its 2025 revenue guidance to a range of $360-$380 million due to litigation against AMD [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the patent portfolio and the value of innovations, particularly in light of ongoing litigation against AMD and Disney [9][10] - The company anticipates that opportunities not closed in 2025 will act as catalysts for growth in 2026 [22][23] Other Important Information - The company has paid down $312 million of its debt since separation and continues to focus on deleveraging its balance sheet [16][19] - The company has increased its patent portfolio from approximately 9,500 to over 13,000 patent assets, reflecting a growth of over 35% [13] Q&A Session Summary Question: Clarification on one-time catch-up fees and fourth-quarter revenue outlook - The recurring revenue in Q3 was modest at about $1 million, primarily from one new license agreement and one renewal [26] Question: Size and types of deals in the pipeline - The company expects recurring revenue to cross approximately $90 million in Q4, with strong foundations in both media and semiconductor sectors [27][28] Question: Timeline and milestones for AMD litigation - The company anticipates the AMD cases going to trial in 2027, with significant patents involved [30][31] Question: Implications of AMD litigation on other semiconductor deals - The company is excited about the adoption cycle of hybrid bonding and sees potential growth in the semiconductor pipeline [37] Question: Operating expenses in relation to expected revenue growth - The company plans to invest modestly in the business while maintaining a tight lid on spending [39]

Core Insights - Adeia Inc. reported third quarter revenue of $87.3 million, aligning with expectations, and achieved an adjusted EBITDA margin of 58% [2][6] - The company signed 20 license agreements with new customers in key growth areas since its separation, and non-Pay-TV recurring revenue grew 31% year-over-year [2][6] - Adeia filed patent infringement litigation against AMD for unauthorized use of its semiconductor portfolio, particularly related to hybrid bonding technology [2][6] Financial Highlights - Revenue for the third quarter was $87.3 million, compared to $85.7 million in the previous quarter [6] - GAAP diluted earnings per share (EPS) was $0.08, while non-GAAP diluted EPS was $0.28 [6] - GAAP net income was $8.8 million, and adjusted EBITDA was $50.7 million [6] Business Developments - The company paid down $11 million of debt in the third quarter, totaling $312 million since separation [1][5] - Two long-term media deals were closed during the quarter, including a renewal with a significant Pay-TV customer and a license with a new e-commerce customer [2][6] - Adeia's hybrid bonding technology received a 'Best of Show' award for 'Most Innovative Technology' at the FMS conference [2][6] Capital Allocation - The company made $11.1 million in principal payments towards its term loan, reducing the outstanding balance to $447.8 million as of September 30, 2025 [5][6] - A quarterly cash dividend of $0.05 per share was declared, payable on December 15, 2025 [7] Financial Outlook - The company updated its 2025 revenue guidance to a range of $360.0 million to $380.0 million, down from the previous range of $390.0 million to $430.0 million [8] - Operating expenses are projected to be between $260.0 million and $266.0 million, with interest expenses expected to be between $40.0 million and $41.0 million [8]