IDCC - Earnings call transcript Q1 2024

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Operator

Good day, and thank you for standing by. Welcome to the InterDigital First Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Raiford Garrabrant, Head of Investor Relations. ahead. go Please

Raiford Garrabrant

are everyone, Earnings to of to First today's InterDigital's Relations Good our Call. up our prior Consistent questions. the and highlights I the XXXX call on call me calls, Conference InterDigital. Rich Head Chen, am company Quarter for the some with quarter offer morning for With CFO. welcome Liren Raiford Investor and President will and and and about CEO; Brezski, we then open Garrabrant,

access can that you details, earnings on release Investor presentation additional For slide a our accompany our and call this Relations website.

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

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

over comparable financial addition, financial measures. non-GAAP care I Relations Investor to website. today's Liren. that references the our included With to measures call the measures financial will non-GAAP taken to of, posted presentation most these of In to the are Reconciliations may turn directly in GAAP materials contain supplemental section the of

Lawrence Chen

the the million. have in end opportunity annual highlights the growth On XX% we between for of million, rest for our of identified increasing of pleased you, year. This annual last achieving quarter Thank XXXX made and everyone. the goal morning, provided $XXX business headwinds significant that and to above of you our the million us Raiford. were Good high share guidance year-over-year through guidance guidance. guidance. up I'm reconfirm Revenue and and expect and by momentum that first XXXX $XXX $XXX our joining we have our multiple Thank call, achieve Today, we our for to today. the revenue

XG and Wi-Fi Our landmark the We introduce TV and an agreement licensing our and us multiple range high with quarter, great licensing progress QX our Sony IT a still much program. portfolio. agreed increased essential manner to were and that negotiations CE the negotiations InterDigital in agreements InterDigital we revenue that that has highest pattern term their video and sense on-leading Wi-Fi have almost in we friend expected enjoined have with TV Staying year. consumer X which smartphone $X.X a the progress certain agreements. out position record a to arbitration of selling quarter of injunction growth for both the X new that In acted by issue agreements fronts against in innovation fined manner has to court. OPPO court last against with our dispute and Through in OPPO the how Germany. new pay but first to the final in OEMs. to received friend deposit of in one received standard of market. the the acted that ordered electronics OPPO OPPO, to of end license, license licensing in on the new The a new means the and this technologies. programs license The business. of our to The Lenovo German smartphone an in with which will I XG billion, smart giving and to licensee, a positive another contracts this across leader in the today, German X quarter devices in be this track are smartphone drive XXXX renew was XG prohibited Lenovo was and decision, be quarter, agreement yet end a we history to that royalties separate We long-term a announced our infringed Interdigital in both growth believe in part held includes resolution for virus an mass wrote other the in for hearing, advance Interdigital's application the new XG agreements sector. which made Lenovo. With We license that has the be Samsung the from subject is business. the we enhanced of on is we to highlights as and is positive on consumer with all-time video of pattern OPPO, who receive start criticized will also with dispute the and summer licensing orders The Samsung the and licensee in emphasize we engaged security Samsung we of in began our court signed help smartphone and we CE from in Also, for license The Samsung recurring license. effort for us is program our OPPO. from and a video, German signed in our significant The tactics also further to contract of signed an continue our joint from the at on-leading opportunities. cumulative we unlicensed IT ensure value to base Samsung OEMs. and OPPO also of several issued patents standard before see continue as decision our on own another delaying our and of heavily would concluded TV, that sued. should revenue across decisions, QX We and that positive one additional XG reflect that and a injunction size. in both a revenue program we trial over Earlier during is we agreement this be The build of and and and The therefore strong court core in are patents XG our of leader court route the momentum pursue closed that compensation hold court India, market incredible in our a and innovation covers AI that the electronics very our value us final Lenovo the our strength we Indian year. making and form infringed all the the particular. years payouts IT unlicensed court with have awarded

by with encouraged built companies. are this have our both in significant believe in We our development recent negotiations cases, momentum we and we

necessary. I said our license through before, if always prefer sign enforce times are As rights, patent but many we amicable we to have to negotiations, ready a long-term

progress. critical Our strength innovator in technology of to our underpin continue fundamental

increasing with to Keysight, quality. in standing operation, of our newer increasingly, the learning significantly network. One demonstrated in immersive and technology. in video while team to is to a research AI leads a which world second video developed year's World engineers forefront. Also And standard eSports reduce machine X was and showed picture AI technology, Wi-Fi. At evolution at streaming network pillar and will the hedge demonstrations, specific a AI our demonstrate coming which Congress In Barcelona, by of communications case of integrated has we Mobile advanced a committee video emerging combined [Indiscernible], MWC, XG. and been in of of our at our and energy we partnership X leadership consumption technology development and which has AI preserving the our be was genres heart. the haptic sensing senior use appointed cutting-edge in AI leaders to application of long Our and the wireless compression in one this in of development the which by recognized of video QX, showcased the leadership And use their

continue success global development patent the Recently, research last pattern new most be with reflected were office top year. of our we the among to XX applications in that patent filed confirmed European Our portfolio. the globally companies

leading that, into Our manufacturers of licensing are patent platform hand our by assets. give over number excellent as indication of green reach innovation our strength target to in increased XX% translating you services. us record video the cloud-based growth our in through for new we new details. delivering license with EPO to track year-over-year applications I'll excellent believe with clear in such Rich with The filed patent program our field as foundational the numbers drive success an in to agreements to talk for more our further Samsung, the And existing an year. footprint With position and and innovation in opportunities a financial it we in such of

Richard J. Brezski

EPS way. another strong year-over-year strong EBITDA most high our with of QX Liren. combined both powered increased new year-over-year growth This for highlights revenue and million. and revenue roughly was last rate Thanks, deliver delivering $XX end revenue reached consistent our reached doubled CE smartphone When outstanding the our TV. CE combined reached leading agreements our to with adjusted to long-term XX% years. margins. of licensing revenue an the was revenue annualized of revenue beyond support for objective at and million, over of This Based range. performance almost on quarter notably of new with has Samsung guidance by These quarter growth results drove the $XXX as growth in XX% growth QX, IoT market. CE non-GAAP agreements, total licensing InterDigital an and and IoT the the all-time high for run ability million, X increase an significant recurring IoT $XXX catch-up Total

million These the with our margin business EBITDA to XX%, of equates close quarter results the guidance. demonstrate consistent adjusted $XXX adjusted for Our power an EBITDA to model. of our

fundamental line growth verticals Our drive across reuse multiple technologies margins investments high while of delivers top the drives in flow. technologies and cash those

XX $X billion, $XX operations free flow cash balance strong of of we QX, a of dividend Our produced million million supports XXX,XXX outstanding XX million In count share We shares. X.X return our XXXX, XXX,XXX by In we have repurchased over to first from cash returned left current approximately for that on than QX more in shareholders. done and million. another year-to-date and of buyback paid $XXX a shareholders reduced nearly XX% $XX we're buybacks repurchased $X.X with approximately with almost roughly million. authorization, through $XX capital for cash we combined Since cash our yet. the shares continued billion shares flow, strong to million shares And dividends. in of April share performance our we shares. now to This time, in million just total from not

million adjusted only would quarter. the to contracts, totals. Any from per existing forward and revenue non-GAAP new will of may agreements $X.XX. Looking we $XX be contracts an of recurring additional EBITDA margin about from we we plus to share revenue Based of the recognize existing agreements of earnings include diluted to $X.XX any QX, on to XX% additive balance we sign expect those amounts million over $XX any expect

are of have our guidance strong quarter to of we in reaffirming and to track Our on full us $XXX million first our prior million. meet XXXX revenue year the results range $XXX targets,

expect $X.XX adjusted of share full an of year for to non-GAAP $X.XX. XXXX roughly XX% EBITDA earnings diluted the margin to and continue per We of

to we'll Conference Investor Bank attending New Stock Before in like at June schedule you'd I that, on June Chicago to back And I'll Conference Conference the conclude, the like the London with IDEAS representatives if quarter, on X, it Global remainder second With in the Blair XXth that the San on over June those America XX June Growth XX check of conferences meeting. turn a William mention Roth in firms Raiford. Tech on your be Francisco York X the I'd to X. and Annual and Conference Please of XX.

Raiford Garrabrant

Thanks, At this point, we Rich. are to operator, ready take questions.

Operator

Instructions]. [Operator

Bhatia Arjun comes of Blair. first Our William from question

Arjun Bhatia

are the maybe should arbitration? necessarily side, about that Liren, of going how potential summer outcomes us that? prices couple looking the there just this royalty smartphone about Samsung then and for you're the up? rate be the range a and how And is on Samsung here that maybe thing revenue smartphone the as over a remind at license on through Can outcome contributing And in the from how same far? the year, later side. we think I result something But up arbitration start, could mean, you going line considering do And that possibility handicap for is from of think just that maybe thus on Rich, that's side. coming side. to More revenue. the how the smartphone the questions you're recurring To in a not accounting is recurring decline you might you that on your TV Samsung

Lawrence Chen

have lot a So on generation for with we the actually the the was as and a the since before and not The technology valuable smartphone having XXXX including video since contract guidance. our prior last advanced in arbitration, agreement a like the time the variables, frankly, technology have discussed long they we done. covered customer for and and previous smartphone very assets release XX-year of XG Samsung side call, which

agreement that the they XXXX, and we without and through disruption negotiations in couldn't time. agreed XX, December renew both frankly a that acts will pricing upon has agreed So parties for agreement that get

both a that binding we do XXXX. to So started X, January agreed arbitration

of panel process. and well the summer end this has assembled the be current frankly, the projection. the hearing We decided before The and will has confirmed been as into year are, been the

multiple valuation the that of we years that agreement. the of very portfolio more for the time to has last the value up, reasons, gone regarding Santa's compared So confident benefited through feel

it belief. Rich go we comment over to I'll the recognition side. that to the our on need confirm So revenue to have to hand obviously, And still to arbitration through

Richard J. Brezski

million since On with the last at year. what That's recognizing quarter $XX the been a agreement, rec, level first believe rev year prior which is Samsung we've shy a of we conservative the just is estimate. of

going concluded. because have ultimate with on we're the the positive of in conservative And effectively question have recurring when true-up what of outcome on just million a we're presume and ultimately We But will the it's GAAP mean 'XX. conservative a into certainly license be in the the Samsung, estimating you a nature hopeful to decline place we'll basis. I that revenue, $XX as requirement,

just of which but it's other the So Huawei, expiration of not most on based I last what at because rather agreements, end Samsung, expired year. said, of notably

Arjun Bhatia

and the -- OPPO. injections, was have bring or past? these strike to be how Liren, they to a experienced against One is these And to you an a strike those it if to It Like can. the more, I do with deal." I'm I manufacturers interesting curious, in how in hear you mean, these how injunction the can behavior negotiation the get enough of they maybe have past, Lenovo of extent table companies think with changed to some for the "Hey, deal to punitive them you? say, injunctions and want incentive to them of we

Lawrence Chen

that this said hold times. press combined in court call phase has all in decision, decided in The systematically under actually we has Lenovo the at that InterDigital morning, Munich In and separate the the decision. basically, a act a it's the obligation of also good has front not front out, in issued obligation. frankly, announced As court consistently

German So devices the injunction features market. in And has of both happens, patent selling that's as with XG. result, prohibited court be the a will standard XG a from Lenovo and those essential unless issued something for

pretty on to Regarding major the to see and don't obviously of cell here. beyond how the apply Samsung want phone. wide range Lenovo can a very company from a Germany may devices the market I spec behave, on I proceed injunction is -- the will

will us. I'm hope And licensing hopeful. and back come fair that take I from Lenovo frankly, and, definitely So terms a decision this with

Operator

And Soderstrom question comes our of Sidoti. Anja from Instructions]. next [Operator

Anja Soderstrom

this Can you over in but maybe have reach XXXX. your the guidance just the talk go to past, opportunities you about again different for

Lawrence Chen

Liren. is This

renewed which passes decision licensed multiple for just as we have has just have last negotiation and smartphone have mentioned we we So of example, side was where cellular expired, until through OPPO the UK here, are year. side, them, for the end the the will, Lenovo on with Rich court discussion we

and we sign announced agreement we court morning, be to, long-term as unlicensed this them. hope with the to frankly, received Now a able injunctions, we

the So on that's smartphone just side.

we remarks, in On TV, in the prepared mentioned is the space. we largest vendor TV CE side, signed the which as Samsung

LG, TV the diligently We next and include Hisense. multiple are working on layers TCL vendors of

able end positive a So on we get top the revenue stuff recognition will we're of And that of if here, all be working the sense that and finished before favorable are year. on on true-up beyond the judgment pass. arbitration, also expect be a to to we the the

Anja Soderstrom

given constructive Huawei you agreement And an fairly when discussions comes how them? signed are those to with it recently

Lawrence Chen

proceeding end of business and frankly, And our up last of plan. negotiation of down. amount and period gone Huawei the has through the to Probably by certain according agreement is as a year,

in So will down with deal we we we and with are them, long-term negotiation us currently are hopeful soon. get a

Operator

Scott of question next Our from ROTH comes MKM. Searle

Scott Searle

to in process that's Lenovo that of it? And there how is believe an with in and to period procedure their Liren, associated terms are is be standpoint. actual regard going there costs the there appeal what injunction, the I implemented? from additional

So milestones cost element? and walk on through time can us you line the the

Lawrence Chen

we were were Scott, not call certain you describing it the I'm on when earlier.

have and time. them court and manner the a has XG on-leading front the are, consistently the licensee their covers basically, against and decided has they sold features in The that result, issued acted as all XG that So out built court with non-infant systematic devices has Lenovo but frankly, we obligation injunction in. conduct

this is is be and first stuff And which working automatically decision, quickly we what frankly is insulin appealable. through as a injunction this they enforce you call teat are we will there which procedure our to intention So can. also some

the that's spend them. to strategy, want up frankly Noble's legal don't I to but So

Scott Searle

Germany. to the the on extend that This is up terms rest follow you plan marketplace? front. how in the quickly to what is the in just across that of Will Or EU? Liren, And pan-European implement of there

Lawrence Chen

this a the court. German this and that Scott, is case pattern, is a German it's

decision will limited the be the German So to market.

in technology we including As ITC decision are them area. other only. terminally cases, against in our different have this aware, PC, you Scott, do U.S. particular But is

Scott Searle

others, I X if And could.

model. of video impact latest updated and streaming licensing into terms the 'XX? and in Are the the and of lines any evolving in terms 'XX services there thoughts, update how in that's time Just IP

Lawrence Chen

is a cloud field do view licensing service good, green we Scott, very the very, opportunity. video

We are very IP we leadership. strong frankly, have believe and proceeding according technology plan, to we valuable asset very which

Regarding we as projecting XXXX. financial impact, more we with share our And direct impact of update, to not have timely. now, are if material will we you

Scott Searle

And can lastly, terms if if just it, not paths could, $XXX things sure address are in to million if have if and to that kind versus are probability of range $XXX lower the you the of of become for a million. little wondering about. I'm probability. there guidance certain of to I range moved I'm get higher know I you've but maintained multiple that more bit around have materialized year some things -- there kind confident

Lawrence Chen

prepared as top my has EPS key and in delivered And and record our multiple adjusted strong now when identified in recency we our resounding of especially we line or EBITDA space. recent past in increased, the both results. QX and beginning a quarter the issued that the feel have for and the guidance remarks, very said we momentum Scott, I business strongly we year, have

track deliver our very And confident of either deliver results. to year. feel the than quarter the now, about about we are are rest we we for ability the not the other where we as to we and So on very predict feel good of are,

Operator

the to for At concludes like Chen to I'd closing back session. time, turn This it remarks. you. Thank question-and-answer this Liren

Lawrence Chen

you, Thank operator.

our contribution and Thanks our InterDigital I'd all look everyone our today, dedication forward for employees partners close, and to quarter. who for many call to we Before XXXX. as thank joined progress as well next start and updating to licensee outstanding an like to you their to on our we

Operator

Thank disconnect. today's call. for may conference you you participating, concludes This and now

InterDigital (IDCC) 2 May 242024 Q1 Earnings call transcript