IDCC - Earnings call transcript Q2 2024

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Operator

Good day, everyone, and thank you for standing by. Welcome to InterDigital Second Quarter 2024 Earnings Call. [Operator Instructions] Today's conference is being recorded. I will hand the call over to the Head of Investor Relations, Raiford Garrabrant. Please go ahead.

Raiford Garrabrant

Carmen. you, Thank everyone, Earnings to to Second InterDigital's Good Call. and XXXX Conference Quarter morning welcome I Head Raiford am Garrabrant, for InterDigital. of Investor Relations me our are CEO; With call our today's and President Liren and CFO. Chen, Brezski, Rich on

Consistent up the and and about some quarter questions. calls, with the the call we prior open offer highlights will then for company

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

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

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

addition, comparable section today's financial most the materials Relations may the to financial website. non-GAAP our are to measures these to directly Reconciliations posted references of financial in measures. the non-GAAP measures Investor included supplemental In of GAAP contain presentation

to of, turn I With that taken care the Liren. call will over

Lawrence Chen

that of momentum business. $XXX Thank million, a by of $XXX to million range quarter, share far million a new today. raised XXXX everyone. result to of revenue the our full exceeds that of you, year half million, $XX the Raiford. revenue top guidance results in guidance and $XXX have Thanks first to positive for we $XXX million Good the the continued as us I'm we QX pleased morning, for joining at have our record delivered end a

Lenovo. new results, which with Google license in with device multiple a were in financial by our court detail, litigation Rich wins and Our driven more cover will

in confirmed highest one In drive so of our addition, portfolio and quality our the to forward world. video as we continue the innovation

WiFi Our consumer to importance is example of Fitbit Pixel range an the new Google The wearable patterns. and renews of had portfolio our XG our licenses devices. Google's HEVC and included of and license our of devices agreement, a to license cover to expands array smartphones we device for Google innovation wide XG growing cellular, It with agreement with assets. a already video of

our announced In with license also patents. Panasonic, addition XG Google, our HEVC video and we a XG as to agreement morning, WiFi this covering assets as new and well

also for through million. over court past the of with cellular a in licensing XXXX highlight Lenovo of pay the court the developments of and the end U.K. the required Next, by the more court handed license a to several just The amount Lenovo, patents that than our for let our must positive going appeal resounding on us to increased $XXX sales legal all The court expenses Lenovo appeal. dispute our me front. for pay million victory our judgment. FRAND of for litigation In $XX XXXX confirmed [indiscernible] appeal to Lenovo the back

pleased in believe multiple licensing taking is delay we must from pay. Lenovo license. Court are potential cellular ongoing fee hold increased has reasons, there the believe help decision of innovation user its is not in even compensation the for higher, us with that of I significantly that While are up licensees, could sals further for in licensees, because value removing receive impact important, This innovation decision We negotiations also but Lenovo, our other and past our incentive only paying SEP other Appeal licenses. [indiscernible] of the the terms

end covers in a of a us XXXX. this to important keep through it's that give ruling our Appeal of dispute only in the mind Lenovo, Court the litigation decision While win cellular with license

of court are Thus In German behavior May, and with agreements court in Lenovo against the awarding remain in criticized video has in heavily a patents. course acted that cellular of negotiations committed litigation Lenovo's and we an through The with InterDigital manner our Germany pleased infringement a reflects innovation friendly our Lenovo's our wrote injunction to value sign we all wins, a AI. wireless, that at the fundamental times. forward-looking fairly of InterDigital

arbitration monetary track. for Samsung the license to In of decide a on July, end X-week to with we arbitration a to we decision by hope have be this devices a continue long Our terms hearing mobile and completed final of year.

January of a the the addition digital from X, As take of license license license. year, XXXX. at Samsung to start Samsung TV which binding a the Samsung's our we to will have to this is agreement signed The the already displays. And portfolio covers agreement determine with reminder, agreed value this final and in

video are the common quality of consistently conduct and that we and many innovation of that While in friend thread has one a specific, case licensing details wireless manner. recognized the we litigation AI negotiations file courts confirmed of is

Our innovation Not leading and video been do in quality quantity, we are leaders but portfolio we of X own among one where analyze XG never innovation. the the the only also both pipeline are top in has stronger. we worldwide will

of in CODEC video services. is of range one that HEVC, for are of largest a growing highest We compression the the and choice a and portfolio devices quality standard

video was in is deployment. now of latest is the coding early in video few also ago versatile a VVC, in finalized Our and or standard, stage strength compression years video clear which

is quality. areas is both VVC to our support of we top the are cornerstones video of Our of augmented we wide use is [indiscernible] such are as reality, versatility of depth the quantity video virtual portfolio assess leaders includes application where that potential and they This what X cases recent HEVC new in driver and why a and range we AI owners progress. from make a LexisNexis X of continue to are is innovation. devices and we across believe our breadth terms VVC occasions patents we ability innovation just and greenfield for make to our report about a we among services video The its to up among of confirmed Video name and long-term services. in in will also the in excited shareholder more a its video believe and of broad one opportunity where video its be of considerable efficient. cloud-based the is of value of the open area array network

year pipeline quarter second In given exceeded performance on how our financial across momentum we the business, year $XX continue and increasing our highlight million strategy revenue full our between first innovation the by all-time our are our the support long-term to raising to and our summary, the in the we million million. for growth, of $XXX our revenue $XXX and outlook to record -- half guidance strengthen and execute far

through more that, With detail. numbers talk over in I'll will hand who the to Rich, you

Richard J. Brezski

that revenue in I'm guidance Liren. increased share adjusted end of $XXX of XXX% and to pleased revenue, we QX, EBITDA all year-over-year. the range. EPS our Thanks, non-GAAP delivered million Total exceeding far high

a pending a to royalty As measure the a Liren portion through discussed, license In increased as XXXX, deferred prior recognizing must Appeal $XXX sum we from our ruling the million. cellular XXXX renewal. revenue U.K. IoT the the over conservative the of $XXX award just million Meanwhile, in of to Lenovo from higher Court agreement, for pay of while with catch-up of offset The the agreement, revenue our U.K. XXXX mostly recurring Court negotiate process. Appeal together CE and ruling Huawei we our appellate that quarter. drove continue expiration latest Google lump

revenue to an million EBITDA equates in EPS for $XXX the quarter $X.XX flowed upside as adjusted XX% came to adjusted of to robust of the the EBITDA. at adjusted majority a through share. Our close margin EBITDA per Non-GAAP vast

we first had As Liren record noted, half. a

quarters of and of of history the a $XXX of of our the provide of our X power first delivering business an of of further results company's revenue, EPS. $XXX year combining adjusted this and ranked in aggregate top million the non-GAAP each These revenue total demonstration fact, model. of in EBITDA $X.XX for terms million In X

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

on Moving we notes. million In on our repaid remaining XXXX QX, to $XXX principal allocation. capital of

We conversion net also cover issued to premium. a XXX,XXX the shares

by exercise our note was options under related hedge dilution resulting offset and corresponding the However, we held transactions. fully

funded the balance over those with options [indiscernible] of initial of the will purchase this which have an the sale year. expire through $XXX, of We strike partially price of

from based price we Lenovo $XX of Net-net, late payment stock roughly the plus at additional legal of spared the on closing settlement, note our us reimbursement In portion the expenses. a million million collected $XX the dilution. hedge July, of

receipts other alone and existing $XXX flow this in to from of cash expect million close drive will licensees QX. free We

million supports Our a cash strong capital of balance cash return with combined to continued shareholders. our over $XXX flow,

XX% we $X.XX, the of $XX current share authorization. over million for are XX shares We time, on currently bringing XXX,XXX XXX,XXX have than total QX, that through than EBITDA over dividends. million still now have approximately case to guiding In $XXX more Based customers more billion of dividend recurring our share $XX with exit midpoint. existing buybacks outstanding per year-to-date only about buyback for In adjusted we non-GAAP QX, we of reduced $X.X almost and each at and million. count first for And $XX over just the shares shares on share repurchased to XX revenue we returned million, our in our XXXX, $XX paid to earnings by shareholders we shares. million. million QX Since million to for left we in

agreements Of be signed those would amounts. course, any additional additive in QX we to

million a million full to an to midpoint prior compares deliver We Furthermore, of non-GAAP expect share are we now $XXX $XXX $XX to midpoint, our than guidance. the more million. increasing of adjusted a per compared with at $X.XX of Liren EBITDA than prior our million year share per $XXX midpoint As at the full mentioned, we expect more increase This of year guidance earnings share margin. expect revenue the and roughly XX% $XXX with XXXX per about to representing by of in our of million now XX%. margin range $XX.XX

to turn Raiford. I'll that, With it back

Raiford Garrabrant

Rich. Thanks,

in hosting Q&A, person Tuesday, current investors announce to details. City registration under hope I'm longer-term XX. Investor that we'll excited business can and September be be Before or for Please press first join our make see you Day vision update New it and team Investor are the growth. for an Day our release continued management virtually. We to This we today's on York excited that moving our on in to will

schedule our to a Chicago Conference. In and Please meeting. to a conferences BWS will Sidoti's reach and Jefferies number addition the be if Conference, tech Day, in you'd Evercore conference firms, the Investor those QX, SMID in out York, Cap representatives at Virtual attending to Small in conferences New the BofA including Virtual we of your like

take Now Carmen, to we ready are questions.

Operator

[Operator Bhatia Instructions] the with And William Arjun of comes Blair. from line it

Arjun Bhatia

bit licensees be. when with here that nice commentary signing congrats how just And give the us come can use very might new those when for in, a do agreements a portfolio you on out And use little application potential think ones? maybe VVC those on about maybe existing you VR/AR just more Would that and would X the think interesting to for quarter. about you're for of your might far there. patents you of new you those When cases, agreements of cases sort with think be you detail? start be timing Liren,

Lawrence Chen

which use codec. will referring versus large of addition lot video cases so mind I have case the portfolio, VR in we is VVC to ], we use Yes, is of to portfolio the XRO portion our what the latest keep applicable here, AR a be in in that When strengths BBC. talk fairly was the about to [ a the

be portfolio patents patent For over HEVC either over applicable related them. or as cellular our patent the our as them for wireless well to example, in connectivity, will XG to connectivity, core Wi-Fi

most Regarding there's depends in customers versus other to who devices in And devices. be stand-alone addition will those combination XR of will negotiate it makers are those large XR only we And whether also the who combination on other devices. . There devices. contexts, other there of are in make likely of existing let's really what a licensees others, make devices. vendors

it's So out. say to generically this hard how will play

to our Frand a and gets under a try for return on will customer innovations important the in the they . make sure As fair fact, of what we are value to we our a of and try building top obligations good deal usual, make get innovation.

Arjun Bhatia

pricing some still. Understood. couple And maybe I Liren, and for on back questions helpful. of there's then and for It forth if on you, Lenovo Okay, could. had you, like one I Rich. a seems One

I You Can court your in for on, stand rate just to I the give is more the just or rev you back left then Rich, catch-up yet. perspective expect on the contract? what in got check. royalty a decision agreement double from And you wanted forward? rec your contract flow cash think don't where Lenovo us for that half should go there any go-forward Is be or but 'XX of there favor, that that either should we signed

Lawrence Chen

take me question here. the first let Arjun,

you as with litigations our multiple to there So referring and forth, back are pieces. Lenovo,

court issues. case. issue, issue, The is first appeal also the case, decided on we case, the I the as is all raised, win appeal cases to, we the what appeal important come very last goes the win start beyond decision. one year. a really past sales And from And just referred with award initial of This the court trial opening overwhelmingly by is a Lenovo. on frankly, of win the which trial we where court in Frankly, from was

will context cost So the case. court pay fee the Lenovo that and to expenses that for legal be for by in appeal legal the the issued here, or us way, also the

that's to important decision. XXXX, So to that particular know also in up It's that sales decision only essentially context, right? the end covers of

obviously now. We are in XXXX

were for of in is why May seeking patents. that's we we unlicensed this injunction year. Lenovo them our against So Germany, of And cellular which win essentially

enabled and currently, and Germany. that from in devices are selling their [indiscernible] cellular So cellular their include cell laptops they phones tablets

also we did they that agreement worth where paying HEVC a our it's So for noting have us been license -- already separate patents. that's are

and And be assets portfolio imputation -- other portfolio patents other continue frankly, infringing, there they patents. are other in our our to including WiFi

have them against against currently patents in them. U.S., a we So asserting where ITC in multiple are case we

I reflecting this the always here. continue a are is different as issue, repeating our assets license to have we fairly Lenovo. and on particular So status the absolutely get going forward there forward-looking But portfolio. current That's multiple pieces in goal to that's with

Richard J. Brezski

reimburse that reimbursement the mentioned And order, where last actually Arjun, our was we part collected month prepared the along that had additional I with that cash, the litigation remarks of that of was awarded regarding in my $XX million the expenses. Lenovo to part -- fee

Supreme to as resolved, our this as going before. conservative far they a process out so exist to represents the forward Court it's could the -- fundamentally As updated revenue, potentially appeal full It's until at . request point, play further estimate estimate a fully for U.K. with as an accounting just the facts today.

Operator

[Operator Instructions]

the from Sidoti. And comes it Anja of Soderstrom with line

Anja Soderstrom

nice Congratulations announced that included the Is Panasonic on the guidance? today. here quarter Or...? third in and the progress win you

Richard J. Brezski

were trouble you. a We little having hearing

that that the not I were you QX today whether about correct? was announcement asking into factored or Panasonic think guidance. Is and the

Anja Soderstrom

Yes.

Richard J. Brezski

Yes, Yes. is. it

Anja Soderstrom

Okay.

remind the full the so there? us just decline. then And you recurring will kind of of puts guidance, you takes Can and year it see implies the revenue

Richard J. Brezski

Yes.

to of million our does above in million QX, by year us $XXX guidance guidance, delivered the as course, we we to So that $XX there. results new prior business bake growth in some prior already million that just that drove range. had, increased full the with which $XXX

So that increase. warranted the

Operator

As further I remarks. in will Liren the call I closing no questions queue. see back Chen, turn for to the CEO,

Lawrence Chen

Thank you, operator.

half partners many Investor thank all-time as we their XXXX. at everyone, to InterDigital for all Before we to of Day. seeing forward setting today's employees to and like for record . all you, and dedication our contribution and as an for you look close, joining well our our call, I'd Thank customers first

Operator

you in all participating for conference. thank And today's

disconnect. now You may

InterDigital (IDCC) 1 Aug 242024 Q2 Earnings call transcript