IDCC - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the InterDigital, Inc.

Third Quarter 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Richard Lloyd. Please go ahead, sir.

Richard Lloyd

and InterDigital's everyone, Earnings Quarter to Call. Conference morning welcome Third to XXXX Good Lloyd, Communications Richard am I Director. our me Liren and Brezski, Chen, with our And in President CEO; today's and call are CFO. Rich we will with quarter the for and company quarter's up Consistent open call offer and the last then questions. highlights about some the call,

future call, beliefs, begin forward-looking of statements make our to and plans Before not will expectations, performance I we are remind you only the our current made we need remarks, that and which in as this hereof. date are regarding guarantees of

Forward-looking the quarter that These our to statements. statements results XX-Q XXXX Factors XXXX our Risk third SEC contemplated are on differ subject Form and cause events in forward-looking in to such risks risks sections XX-K of and events and and and report and our by could quarterly annual uncertainties uncertainties materially include other Form on results from report described actual those filings.

may non-GAAP is website. available are taken Investor addition, financial I that which included Tracker contain measures the of, In section over turn of metrics call Relations references will in financial care to presentation financial the on Liren. directly GAAP to With today's our comparable most to our measures the

Lawrence Chen

excellent year-over-year morning, XX% Good of to highly today. strong This more successful for you $XXX everyone, was blend Richard. past you, by royalty for payments than Thank driven a revenue reocurring with quarter thank and joining an by growing sales. us revenues for and million, InterDigital

our the But to details and is kind global give business when the manufacturers. goals with It's on Xiaomi when license in most consumer device deals I on adaptivity, that these of when with major license have XXXX, will closely including XX been is remembering fueled signed the beginning the key only far TV the with top let of manufacturers, this and is initiatives. signed have a Since during prospective electronic across agreements, we the licensing deals more the superbly XXXX. was company mobile a that have worth demonstrates made with licensees so execute we you a strategic aligned COVID I by place possible new XX XX signed the of whole This want performance achievement our numbers. of X expertise result of remarkable the Our team. and and tenacity taken several virtually. emphasize our meetings with pandemic, Rich including

video importance created. of Additionally, connectivity our and the we these the highlights use technologies have video negotiations of conferencing in

our manufacturers become During quarter, Xiaomi, the to and our the consistent, closed top substantial, third we which in of has in patent new XG X cellular of the value particularly portfolio, the underscores video of for and our XXXX. This well smartphone in agreement Wi-Fi. to come, provides in license importance reoccurring as revenue world the with years one risen coverage as

sector. agreement top recent underlines progress, to we of manufacturer In our the research also our points license our a quality this in Seiko. breadth with and the portfolio. CE addition license a agreement renewed global both also It our the Xiaomi with agreement TV deal, excellent to including new Together, patent XX the and deals signed and

IoT video more our technology been never performance adoption the leading Our highlights momentum in of status cements innovator the increasing build and as technologies. strong With services, our video continue and to we and important. mobile has

fronts engaged agreement but be InterDigital via are prefer has benefit from with major to unable to We created the them. licensing necessary enforce manufacturers many to like continue our the to innovation on However, there prepared that when peers. fee And we pay commercial actively yet those while negotiations, have we IP an a rights are to of would multiple manufacturers. still reach should with agreement to we come remain

appointed our of consistently do, groundbreaking one of we everything industry. engineers R&I of and group Institute, with working the was for foundation are leadership the their as could Telecommunications working of the recognized research chair a Recently, technology of for improve is is engineers the our which Our and the dramatically senior connectivity. key Standards wireless use the on research quality case that European

for working the technical video technology. his the side, Regional our cutting Advanced on honor given edge Standards highest Head years video been of the the Television by has of Standard the Team of On Committee

commended battery Wi-Fi technology which Our has speeds. contributions power-saving and for increases further significantly work dramatically in in received in also being also Wi-Fi, network extend research life which their team our with recognition high-frequency

work particularly of innovation why the of stages I'm accolades, XX% XG While engineers we how focused early on development industry the a almost competitive. number are of our is pride of the of and highlight and in team than board story of video technologies contributes pleased wireless our to in been portfolio. XX% some well-deserved never doing and forefront we are inventors next of world-class XX our receive InterDigital disclosures of by more we of InterDigital, pace grow More patent our our research being pandemic, short, the XX% has remain see to R&I inventors are to year-over-year. connectivity, generation which key developing standard engineers XG in to the At XG we our are invention least the the of by impact more believe with than the year-over-year always well across of In over on delighted is patents. have XX% XG. contribution we and at ourselves at Despite

of we Austin with founding the Samsung. are Center, Research example, along fellow Texas member XG a and at For University AT&T, Qualcomm founders, NVIDIA, of

for event X,XXX together in over virtual that Next X-day that brought in The attracted and also Northeastern of We and XG XX we held In and with will more. advances and over industry, the from and learning, to work machine discuss in cohosted with XG. core speakers Fall, beyond as September, the the priorities, University academia University will and such areas challenges XGSymposium the partnership AI form technologies event the we garment participants of opportunities G some Alliance. a

LTE On new all parties Xiaomi agreement still pending license cease. between our Lenovo suit a means in In ongoing We patent with U.K. infringed front, to won the complete we with and valid, which U.K., Lenovo. found victory standard essential proceedings to and have from the will August, High our cases in Court our the China. litigation technical the first XG U.S. by in trial, be

January and will preparing will our XXXX applicable determine U.K. now with in are place terms to that which the trial for FRAND We in worldwide be license will a take of Lenovo.

to the Moving changes some internal company. on at

restructure announced savings cost our first in functions, our taken and largely with at we structure steps U.S., annual a focus result G&A beginning centered XXXX in research effort in in which have we We As XXXX. to innovation of in will France. look recently the total expanded group in June, cost to that significant

his X team. where in-depth ESG initiatives. public he corporate range and Additionally, we a employment, like And to company governance, third InterDigital is a will addition has retirement. Rick and over until taking for has transition, understanding Rick is to and Chief excellent Corporate let with new to ago, and well as details as InterDigital After who announced that, and I Deputy X of Josh a several smooth appointed thank of December Rich agreements you strategic M&A, Gulino reporting, his Rick with board superb was Counsel years executive the collaboration after more ensure from provide company managed our is our Schmidt of our service on R&D leadership InterDigital, Josh to wish Secretary. stay our at to Legal matters, for our wide years Chief adviser on retiring General previously he him with business as including Officer. a weeks we I'd Josh performance. contribution quarter Legal to agreed Officer as

Richard Brezski

headlined XX our X the both our adoption and a license combination video quarter in Led and standard Both global Liren. agreements, of the who top by manufacturer our $XX I'm this more This side, the by strong Xiaomi now recurring revenue driven never what of a last expect than and by have With XXX has in these X contracts with evident and million and our pleased HEVC revenue, is video important. the the of on cellular revenue. million and in were including year. financial the been wireless million to market HEVC Xiaomi third years. our new wireless license to taken the on side. has be years. provide under results, CE XG technologies smartphone Thanks, and smartphone strongest shipped the really license aggregate almost increase standard, billion. increased video during wireless been of including has sales on technologies, $X.X XG paid major $XXX the be of is is X to the technologies XX% smartphones roughly recurring TV past We details manufacturer on about in of video value mobile to more expected

basis. about our Given opportunity $XX have our market to our the time, the revenue roughly At raised are the to markets XX% share where believe by to increasing a we latest penetration market, on an increase CE adding same annualized an in increased concentration customers. license we few we million within have the licenses recurring

operating mark $XX costs EPS expense FRAND despite quarter income. with expenses, our our litigation including increase occurred toward in in substantial GAAP Lenovo. remaining share, reported increase $X.XX the by per of quarterly as to our operating This led Even onetime we we was operating leverage, XX% first move expenses we million. reporting XXXX the best a The scheduled which Given XXX% revenue increase total million $X increase sequential XXXX. onetime in January trial since reported driven in was a of

$XX free quarter cash the on to $XXX to quarter, driving million reported cash. We cash end in our flow million. balance Moving of

year-to-date repurchases our We that also reported have as $XX of reached million X. share November approximately

revenue the QX, revenue expected $XX million in to $XX $XXX we be to including range me, to of -- in recurring million. million Looking total excuse to million, forward $XXX an increase to expect

always, we do these sign over might As agreements of any figures new include balance not the quarter. the

expenses in to actions better driving we QX. position We program of from for further by returns recognize believe over $XX related of quarter. the base expenses, for expect expanded the while expense on fourth in our third will just space As to million our areas better Liren profit We higher growth recurring leadership providing margins and early million these shareholders. top $X key restructuring to investments fourth to in the make additional noted, of restructuring million another quarter, $X our our now already to quarter us expand

of levels will in We reinvestment that, developing on our provide With the actions it savings net to from we long-term as additional turn plan. XXXX I'll back updates connection these over with Richard. evaluate our

Richard Lloyd

Thank we questions. Thank the for you, now And Liren. will you, Rich. open call

Operator

first [Operator from Instructions]. with question Zaffino And Ian Oppenheimer. we'll our take

Ian Zaffino

get a Just smaller And there? little I know wanted going video help What's pools. detail going understand that's on doing to progress the on, what's to some us patent how proceed? players? you the talked about on

Richard Brezski

beginning we your question. the Ian, missed of

I there to proceed video think versus you asking status with how were players is smaller plan pools? the individual and licensing what we

Ian Zaffino

because in there. it the Yes, talked you about somewhere Yes. video

maybe I tier next on a that. to wanted to the little and go So down color get

Richard Brezski

Yes.

to part I of quite making signed smaller that last the think script, number with players. a the of -- in Liren few, video announced we was you the And Ian, is over his historical by mentioned some progress particularly that which we've compare of if year patterns. licenses So

I deals HEVC Of is manufacturer. that signed quarter TV the since course, we've global is But closing that top Technicolor the most That's on a signing plays video side includes course, still into which, answer Xiaomi acquisition. technology. deal, question? that as -- XX big news CE Does your the for of acquisition that's the still significant the the mentioned,

Ian Zaffino

Yes.

Operator

our next And Colliers comes with Soderberg question Derek Securities. from

Derek Soderberg

results. the the congrats on And Congrats strong to very retirement. you, on Rich,

XX% that of handset you guys line do the you have the -- see market. deals benefit those from for well? wait what What you XX% getting wait needs of, go envision as potentially until put with those sort license that could can the you of up And On re-sign existing key deals? those that industry? players you you time number? potentially Wondering as of you to need happen have in guys the sort to that concentration to until to sort guys you the commentary Or

Lawrence Chen

of share. XX% is the discussion exact sort this signing market by And Derek, dynamic. that the see regarding get of to the each timing signing regarding Liren. another its significant agreements, discussion we market concentration we question, Yes, has individual that can of few do vendors simply own has number those

do earlier, of described we through our commercial get most negotiations and As deals done always commercial prefer negotiations. we

our However, enforce indicated. we our have as as to track record right,

every enforce able to supports agreement successfully are leads our We to that license a a valuation. single right, which time

in So agreements key market increase. regarding already Of vast agreement. are $X place, player amount our has a the agreement majority that of the

throughout So we have in but do but that reoccurring, agreement. the of portion smaller program. payment a the a of agreements, same the we got are And they context, some it substantial is variable course licensing

However, our terms. agreements, have here, all as certain you pointed out have they

the future indicators are when the when expires we as well consider. increased do of volume next key that agreement, them negotiate the as we with So for will the agreement projections some

Derek Soderberg

agreement. in looks TV higher. Got then due it. that That's helpful. came noncurrent royalties to It like And on

to seems additional provide to that color bit the atypical brought a consumer close was agreement. That a million. any why for as case think this Could time? electronics in you I that $XX

Richard Brezski

Yes.

think just infringement I period there prior is I'll was there what a signing say agreement. of the to

So that prior that covering result was the infringement. some of of

Derek Soderberg

Got million looks It this $X contributed of decent that revenue. quarter, like it. deal guidance X to a $X.X it. sort on million but And just implies Got another step-up. recurring then quick TV

revenue to guys in Just recurring in of helpful. Any tech sequential you receiving -- on some can be revenue upside timing out you a it parse new guidance curious solutions? relates as if the deals, color of that of sort revenue, recurring growth would the

Richard Brezski

sure. Yes,

around deals And to does of an the we bit been more deal, had the first about the million little talked move side being CE. there's because CE. I've $XX proportion, proportion on recurring greater million variable $XX annualized greater that revenue thing TV than I'll much that relative guess annualized reporting a in basis. roughly I'd that, kind say note recurring now I CE of revenue a on a mobile So

up in revenue that's price agreements, it, X.X be quarter. we coming quarter more really That move fixed side, the you So and down the you increase, shipments Where that's based which dollar-weighted a take $X on generally mobile on annualized, much particularly going going about to on a just from if given think after same have, million $X if are to about quarter. million. basis,

want of So variability to that's of overly kind precise we because in quarter-to-quarter. be again, that And don't the zone.

Derek, another addresses please was So know. the hopefully, there that question. If let me aspect I missed,

Derek Soderberg

no, that No, very was helpful.

Richard Brezski

let just plethora Derek, then a that clarify, me of Richards And got. Okay. there's I

It we Gulino, addition In to Rick was myself, retired had have that Legal Richard Lloyd here Officer, today. Chief so. our

Derek Soderberg

Congratulations to him.

Richard Brezski

worry. No

to wanted Just clarify.

Operator

question next with from our And Scott Searle comes ROTH Capital.

Scott Searle

follow up the to prior on question. Just

and In ramp recognized looks up sure recurring IoT starting that relationship in to what there the term. any a if was quarter. where pipeline want TV to the kind quarter, wondering And near of the make was contribution in was to the element signed. that was of terms Also that's like the there during that that if that, stands? that I

Richard Brezski

Yes.

the was there a the recurring element during TV deal signed to quarter. Scott, So

to material that. start to IoT, don't a -- contributions from there certainly, as we'll you And revenue call continues of But out Avanci think I be to evolve. in keep there. with there's platform. does change updated the that I'll as recognition from terms anything So

Scott Searle

update their that I'm of going any handset Great. means sort potential front? quick opportunities any LG business. forward. if of and in the and terms there that market terms a relationship discussions of update wondering in that you with on potential the give And for Is from could licensee sell exit What

Lawrence Chen

this Scott, Liren. is

the pointed you program. exit has licensing smartphone decided as out, LG So to

program result, in the no longer place. mobile So licensing as a

player LG significant is in a TV market. So very

having market, active to engaging expanding consumer CE more them. don't in the with other are CE discussions are on getting So we as regarding market, electronic are paid side. as engagement than report I the we have precise active we

Scott Searle

Okay. And lastly, if could, Liren. I

you've that been certainly a cash flow. for amount you in bid, generating Now are of guys significant

in on terms your think plate on in starting to the wondering have looking Are that of to you do opportunity? executing mobile as But Or buybacks some that well opportunities. the providers video otherwise. return as front? you about with you're inorganic terms and enough how to unlicensed start shareholders You I'm of of actively

Lawrence Chen

Yes.

have have So very consider cash sheet, And impactful very a of I right portfolio substantial team, strong enforcing is strength regarding company. -- on a strong yes, a we strong very patent for we the to. our amount which a have do balance we track record when super and our

new at looking always are We opportunities.

sense for to coming So and very, consider we opportunity we strong. But very acquisition, makes if that there's will. right internally, us are merger a

prefer are I also right you track And earlier, also. on as that opportunities to in pointing vendors earlier, always I commercial with multiple we as ready out mentioned to necessary. are we multiple negotiations are And enforce very if negotiation, on-license that a the we we Regarding good have our and fronts. having here, mentioned record space

Operator

our Upstream take We'll Joseph Kowalsky Instructions]. [Operator Investment question Partners. next with from

Joseph Kowalsky

to Congrats a new the quarter you shareholder as have XXX was since I'm his answered much. And my shareholders think it been management XXXX, that see but team. But collaborative brief did great our a about a beginning style, indications I and a more want Bill the great and early really appreciate for to I've questions, the showed has new make really great a in happy comments. on that X well. very I management I approach, and litigator. clients to and management Merritt I

renew that company. as I movement see all the shareholders resource of much in past, And the the relations very seems just has an relations a the taking its you call. really company very for again at grateful example it absolute simply the of of is its circling for could shareholders -- questions comment right comments be the with was direction. and point other to good distant more on this encourages the and acted And thank be I think there really to I months it for working with to being I'm The good And who good too last in for think And that company wagon. several to the me, some that entire that. want known frequently not public in a years the of resource. just is that relations InterDigital free been a

Richard Brezski

Thank you, Joe. your comments. Appreciate

Lawrence Chen

build for for also you wanted want your a we he company Liren. is what success. legacy, which obviously I definitely to InterDigital. shareholders new management, with on the being we Bill's we're I collectively had wanted grateful to comments. strong we this Joseph, And thank the for shareholder also built a level very to have, of and next long-term appreciate work and for

Operator

At showing additional for hand queue. closing over speaker Instructions]. would back remarks. to or [Operator our in I questions no this it I'm any time, like to

Richard Lloyd

Thank you, have Amy. remarks? Liren, do final you any

Lawrence Chen

saying for the you Yes. for stays and Thank I'll thank employees us to continue also by to everyone you dedication we through for close and navigate strong the execution. safe as all today. your joining I everyone pandemic. all healthy hope

Richard Lloyd

can Amy, you. And Liren. Thanks, hand to it back we

Operator

your today's for concludes Thank This you. call. participation. Thank you

may disconnect. now You

InterDigital (IDCC) 4 Nov 212021 Q3 Earnings call transcript