InterDigital Surpasses Every Guidance Metric, Quietly Driven by Social Media Deal

Date of Call: Feb 5, 2026

Financials Results

• Revenue: $158M, exceeding the high end of outlook of $144M-$148M; full year revenue $834M, up 56% from $425M in 2021
• EPS: Non-GAAP EPS of $2.12 per quarter, exceeding high end of outlook of $1.38-$1.63; full year non-GAAP EPS $15.31, up 4x from $3.73 in 2021
• Gross Margin: Not explicitly provided in transcript
• Operating Margin: Adjusted EBITDA margin of 56% in Q4

Guidance:

• Q1 2026 revenue expected to be $194M-$200M, including $55M-$60M of catch-up sales.
• Q1 adjusted EBITDA margin expected to be 52%-55%.
• Q1 non-GAAP diluted EPS expected to be $2.39-$2.68.
• Full year 2026 revenue expected to be $675M-$775M.
• Full year 2026 adjusted EBITDA expected to be $381M-$477M.
• Full year 2026 non-GAAP diluted EPS expected to be $8.74-$11.84.

Business Commentary:

Revenue and Earnings Performance:

• InterDigital reported revenue of $158 million for Q4 2025, exceeding the high end of their outlook range of $144 million to $148 million. The adjusted EBITDA was $88 million, surpassing the outlook of $68 million to $76 million, resulting in an adjusted EBITDA margin of 56%. The non-GAAP EPS for the quarter was $2.12, exceeding the outlook of $1.38 to $1.63.
• The strong performance was primarily driven by a new CE device license agreement with a significant social media company and robust cash generation, with cash from operations of $63 million and free cash flow of $48 million.

Full Year 2025 Financial Highlights:

• InterDigital achieved a near record total revenue of $834 million for full year 2025, approximately double the 2021 levels of $425 million. The adjusted EBITDA for the full year reached a record high of $589 million, nearly triple the 2021 level of $208 million, and the non-GAAP EPS was $15.31 per share, more than four times the $3.73 per share in 2021.
• The significant growth was attributed to strong execution and the operating leverage in their business model, driven by long-term investments in research.

Smartphone Licensing Program:

• InterDigital's smartphone revenue was just below $680 million for 2025, marking a 14% year-over-year increase to an all-time high. They licensed 8 of the top 10 largest smartphone manufacturers, covering about 85% of the overall market.
• The growth was driven by completing Samsung smartphone licensing contracts extending to 2030, signing new deals with Vivo and Honor, and renewing agreements with Sharp and Seiko.

AI and Research Expansion:

• In 2025, InterDigital emphasized deepening AI expertise, with a focus on AI-based solutions for next-generation standardized technologies. They acquired the AI startup Deep Render to strengthen their engineering team in AI and video compression.
• The expansion aimed at contributing to 6G standard development, positioning AI as a central element in wireless standards, and enhancing their leadership in AI working groups within standard organizations.

Portfolio Growth and Recognition:

• InterDigital's patent portfolio grew by 14% year-over-year in 2025, surpassing 38,000 granted patents and applications. The company was recognized by multiple third parties, including being named #1 most successful mid-cap company by Forbes for 2026.
• The growth in portfolio quality and quantity, along with their leadership in standard organizations, underpinned their business success and industry recognition.

Sentiment Analysis:

Overall Tone: Positive

• Management described Q4 as a 'strong finish to an excellent year' and stated they 'have exceeded our goals on all these fronts.' They highlighted 'record-breaking high' patent portfolio growth, 'record-setting year' in smartphone licensing, and delivery of 'all-time highs' in adjusted EBITDA and non-GAAP EPS. The outlook is for 'another very strong year in 2026.'

Q&A:

• Question from Scott Searle (ROTH Capital Partners, LLC): Could you provide color on the recurring fee outlook and expirations, and the status of renewals like Xiaomi and Samsung TV?
  Response: About two-thirds of the ~$92M in expirations at year-end have been renewed (including Xiaomi and LG), but not all; the company expects further renewals and new agreements to drive ARR increases.

• Question from Scott Searle (ROTH Capital Partners, LLC): What are the time lines for Disney and Amazon litigation updates, and how should we think about litigation costs going forward?
  Response: Disney case has positive preliminary injunctions; trials are starting in summer and second half of 2026. Amazon case is newer but multi-jurisdictional. Litigation costs are expected to be higher in Q1 and 2026, factored into guidance.

• Question from Kevin Garrigan (Jefferies LLC): Can you talk about the consumer electronic device agreement with the social media company and if it's high-volume?
  Response: The agreement is a device license covering video and WiFi patents, but it is not a high-volume agreement and does not apply to services.

• Question from Kevin Garrigan (Jefferies LLC): What are the biggest threats or risks on the litigation front with Disney and Amazon?
  Response: The company asserts a broad portfolio of high-quality patents across multiple jurisdictions; while litigation carries inherent risk, the strategy is to secure fair compensation to fund R&D, and the company is confident in its case.

• Question from Alinda Li (William Blair & Company L.L.C.): How should we think about M&A as part of the effort to expand the patent portfolio?
  Response: M&A is considered as part of a broad R&D strategy to fill gaps and accelerate existing strengths; the company is open-minded and evaluates opportunities as they arise, like the recent Deep Render acquisition.

• Question from Alinda Li (William Blair & Company L.L.C.): Is litigation against streaming services fundamentally different from smartphone or CE/IoT litigation?
  Response: Yes, streaming is a newer industry for licensing, requiring extra time to demonstrate portfolio strength and convince parties of fair price, unlike the long-standing relationships in smartphones.

Contradiction Point 1

Characterization of Deep Render Acquisition and Its Role

Contradiction on whether the acquisition is for immediate monetization or long-term technology integration.

Could you provide details on the CE device agreement with the major social media company, including its volume? - Kevin Garrigan (Jefferies)

2025Q4: The agreement is a device-level license covering video coding and WiFi patents. It is not characterized as a high-volume agreement and does not apply to the service side of streaming. - Lawrence Chen(CTO)

How do you plan to integrate Deep Render with your video codec technology, and are you exploring partnerships or acquisitions to enhance your streaming business? - Kevin Garrigan (Jefferies)

2025Q3: Deep Render adds significant AI expertise to accelerate InterDigital's native AI video research. Their technology represents a new paradigm for video delivery, which could be integrated into next-generation video standards. - Lawrence Chen(CTO)

Contradiction Point 2

Potential for AI as a Stand-Alone Monetization Opportunity

Contradiction on the immediacy and nature of new monetization avenues from AI.

What are the biggest threats in 2025 litigation with Disney and Amazon, such as unfavorable outcomes or lack of settlements? - Kevin Garrigan (Jefferies)

2025Q4: The company’s litigation strategy is carefully managed... The strategy is not dependent on winning every patent but on demonstrating the overall value of the portfolio to secure fair compensation, which is essential to fund ongoing R&D. - Lawrence Chen(CTO)

Are there opportunities to license AI as a standalone technology and how aggressive is the company regarding M&A over the next 2-3 years? - Scott Searle (ROTH Capital Partners)

2025Q3: AI could provide new monetization opportunities beyond their existing standard-based IP licensing model. - Lawrence Chen(CTO)

Contradiction Point 3

Contract Renewal and ARR Growth Outlook

Conflicting statements on the renewability and value of expiring contracts.

Does the Q1 guidance with $55–$60 million catch-up revenue imply a sequential decline in recurring revenue? Could you provide color on the 2026 recurring fees starting point and expectations for renewing expiring contracts (e.g., Xiaomi, Samsung TV)? - Scott Searle (ROTH Capital Partners)

2025Q4: The outlook is positive, with expectations for further renewals and new agreements to drive ARR growth and keep pace with reaching $1 billion by 2030. - Richard J. Brezski(CFO)

What was Samsung's contribution to recurring revenue this quarter, what were initial expectations, what is the expected growth trajectory based on current agreements, and historically does recurring revenue typically grow or contract upon contract renewals? - Tal Liani (BofA Securities)

2025Q2: Historically... is there typically growth or contraction in the recurring revenue?... they are often renewed, typically at higher values (e.g., Apple's recent renewal was ~15% higher; Samsung's renewal was a 67% increase due to its long-term nature and the inclusion of 5G). - Richard J. Brezski(CFO)

Contradiction Point 4

Litigation Strategy and Timeline

Inconsistent messaging on the approach and progress of litigation against streaming services.

What are the biggest threats from litigation with Disney in 2025 and ongoing Amazon litigation, such as unfavorable outcomes or settlement delays? - Kevin Garrigan (Jefferies)

2025Q4: The company’s litigation strategy is carefully managed, with a preference for negotiation... The strategy is... to demonstrate the overall value of the portfolio to secure fair compensation... - Lawrence Chen(CLO)

What's the current status of the streaming opportunity and Disney litigation? - Scott Wallace Searle (ROTH Capital Partners, LLC)

2025Q2: Continuous dialogue is ongoing with major streaming players, but no concrete progress to report. The Disney litigation is multi-jurisdictional; there have been procedural wins... - Lawrence Chen(CLO)

Contradiction Point 5

Disney+ Litigation Timeline

Conflicting statements on when the Disney+ litigation will be resolved.

What's the expected timeline for the Disney+ litigation, considering positive outcomes in Brazil and Germany, and the Amazon litigation? - Scott Searle (ROTH Capital Partners)

2025Q4: The majority of the case will be tried in larger jurisdictions like the U.S. and the Unified Patent Court (UPC) in the summer and second half of 2026. - Lawrence Chen(CLO)

What is the current status and expected timeline for the Disney litigation? - Anja Soderstrom (Sidoti)

2025Q1: Proceedings expected to start in Q4 2025 and extend into early 2026. - Liren Chen(CLO)