InterDigital — Third Quarter 2026 Earnings Summary

Financial Performance:

• Q3 2026 revenue was $193.4 million, a 17% increase year-over-year from $164.7 million.
• Net income was $80.2 million, up 19% year-over-year from $67.5 million.
• Adjusted EBITDA was $131.3 million, up 25% year-over-year from $104.9 million, with an adjusted EBITDA margin of 68% (up 4 percentage points from 64%).
• Diluted EPS was $2.34, up 21% year-over-year from $1.93.
• Non-GAAP net income was $95.7 million, up 22% year-over-year from $78.2 million.
• Non-GAAP EPS was $3.11, up 22% year-over-year from $2.55.
• Net income margin remained flat at 41% year-over-year.
• Operating expenses were $94.1 million, up 6% from $88.9 million.
• Catch-up revenue included in Q3 2026 was $36.2 million, compared to $17.7 million in Q3 2025.
• Annualized recurring revenue reached a record $629 million, up 7% from $588 million.
• Cash provided by operating activities for the quarter was $150.4 million.
• Cash, cash equivalents, and restricted cash ended the quarter at $646.7 million.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance increased to $813–$819 million.
• Q4 2026 revenue guidance is $154–$160 million.
• Full-year 2026 Adjusted EBITDA guidance is $507–$515 million.
• Q4 2026 Adjusted EBITDA guidance is $80–$88 million.
• Full-year 2026 Diluted EPS guidance is $8.93–$9.16.
• Q4 2026 Diluted EPS guidance is $1.04–$1.27.
• Full-year 2026 Non-GAAP EPS guidance is $11.99–$12.25.
• Q4 2026 Non-GAAP EPS guidance is $1.72–$1.98.
• Guidance is based on contracted revenue only and excludes new agreements or enforcement action results expected in Q4.

Business Segments and Product Lines:

• Smartphone segment revenue was $122.6 million, down 10% from $136.4 million.
• CE, IoT/Auto segment revenue was $55.7 million, up 97% from $28.2 million.
• Streaming and Cloud Services revenue was $15.0 million, compared to $0 in the prior year period.
• Other revenue was $0.1 million.
• Reached agreement with a top PC manufacturer, licensing 4 of the top 5 PC makers globally.
• Signed a new IoT license agreement with EV charging company KEBA.
• Advanced the video services program.

Market and Competitive Landscape:

• Awarded two new injunctions against Disney by Europe's Unified Patent Court; total of eight injunctions won against Disney out of eight patent cases decided to date.
• Recognized as one of America's Greatest Companies by Newsweek and one of America's Growth Leaders by Time.

Risks and Challenges:

• Forward-looking statements are subject to risks including delays in executing license agreements, ability to expand into streaming/cloud services, resolution of legal proceedings, integration of Deep Render, market failure to materialize, and changes in tax laws or accounting standards.

Management Commentary and Tone:

• CEO Liren Chen described the quarter as "excellent" with double-digit growth in revenue and profitability.
• Management noted strong execution in Q3 supports an increase to the full-year revenue guidance midpoint based on contracted revenue.
• Management stated they continue to pursue additional business in Q4 to build on results.

Other Key Points:

• Declared an increase in the quarterly cash dividend from $0.70 to $0.75 per share.
• Total return of capital for the quarter was $121.2 million, comprising $18.7 million in share repurchases, $19.3 million in dividends declared, and $83.2 million in debt reduction.
• $296.7 million in principal of 3.50% Senior Convertible Notes due 2027 remains outstanding; $2.2 million elected for conversion.
• Hedging arrangements offset incremental shares from convertible note conversions.
• 6.0 million warrants remain outstanding with a strike price of $105.30, maturing net-share basis starting September 2027.
• Current portion of long-term debt decreased to $295.8 million from $458.4 million at the end of 2025.
• Current deferred revenue increased to $294.9 million from $193.7 million at the end of 2025.