IDCC

InterDigital, Inc. IDCC reported better-than-expected second-quarter 2026 results, driven by healthy licensing momentum and contributions from its new Streaming and Cloud Services business. The company generated second-quarter revenues of $260.2 million, which declined 13% year over year but surpassed the Zacks Consensus Estimate. Non-GAAP earnings of $4.62 per share also comfortably beat expectations. The year-over-year decline largely reflected lower catch-up revenues compared with the prior-year period.Annualized recurring revenue increased 13% year over year to a record $625.7 million, highlighting strength in IDCC's underlying licensing portfolio. The increasing recurring revenue base provides greater revenue visibility and should help support continued investments in wireless, video and artificial intelligence (AI) technologies. InterDigital's recently signed agreement with Amazon.com, Inc. AMZN represents a significant step in expanding its licensing business beyond smartphones. The agreement covers Amazon services and devices, including Prime Video, with final financial terms to be established through binding arbitration.The deal helped Streaming and Cloud Services generate $110 million in second-quarter revenues against no revenues in the year-ago quarter. This emerging business could become an important growth driver as InterDigital looks to monetize its intellectual property across streaming platforms, cloud services, consumer electronics, IoT devices and automobiles. Such diversification should gradually reduce the company's dependence on traditional smartphone licensing opportunities.IDCC also remains well-positioned to capitalize on increasing investments in 5G, connected devices and next-generation video technologies. Its extensive patent portfolio and continued research investments provide a foundation for signing additional licensing agreements. InterDigital has collaborated with major academic institutions worldwide to expedite 6G research as it aims to strengthen its position in the next generation of wireless communications. Data traffic demand is growing exponentially worldwide and 5G networks are required to support this high-capacity end-user throughput. The MIMO (Multiple-Input, Multiple-Output) technology leverages an active antenna system that consists of multiple antenna elements to augment the performance, reliability and overall efficiency of wireless communication systems. The 6G technology, which relies on Massive MIMO, will enable significantly higher data rates than its predecessors, leading to improved spectrum efficiency. The company is actively contributing to the development of 6G standards, with research spanning integrated sensing and communication, sub-terahertz technologies, AI-native network architecture and post-quantum security. Its work also builds on advancements in 5G-Advanced, including massive MIMO, non-terrestrial networks, extended reality and AI/ML-driven network optimization.These initiatives are particularly important given InterDigital's licensing-focused business model. By developing technologies that could become essential to future wireless standards, the company is seeking to expand its portfolio of standard-essential patents and create additional licensing opportunities over the long term. Although commercial 6G deployment remains several years away, InterDigital's continued investment in next-generation wireless research could strengthen its technological leadership and support future royalty growth. InterDigital has surged 23.2% in the past year compared with the industry’s growth of 28.2%. It has outperformed peers like Aviat Networks, Inc. AVNW and Comtech Telecommunications Corp. CMTL. While Aviat has declined 6.6%, Comtech is down 10.3% over this period. One-Year IDCC Stock Price Performance Image Source: Zacks Investment Research Following strong quarterly results, InterDigital raised its 2026 revenue outlook to $775-$845 million from the previous range of $675-$775 million. Adjusted EBITDA is now projected between $469 million and $529 million, up from the prior forecast of $381-$477 million.The company also increased its non-GAAP earnings guidance to $10.85-$12.81 per share from $8.74-$11.84. InterDigital's healthy financial position provides additional flexibility. The company exited June with approximately $1.11 billion in cash, cash equivalents and short-term investments. Its asset-light licensing model and strong liquidity should help fund research initiatives while supporting shareholder returns. InterDigital's solid second-quarter performance, record recurring revenues, Amazon deal and raised guidance paint an encouraging picture. Expansion into Streaming and Cloud Services also broadens the company's long-term addressable market. Investors seeking exposure to the expanding wireless, streaming and connected-device ecosystems may consider buying IDCC stock following its solid second-quarter performance. InterDigital sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report InterDigital, Inc. (IDCC) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Aviat Networks, Inc. (AVNW) : Free Stock Analysis Report Comtech Telecommunications Corp. (CMTL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 10:00 a.m. ET Vice President, Investor Relations - Raiford Garrabrant President and Chief Executive Officer - Liren Chen Chief Financial Officer - Richard J. Brezski Operator: Thank you for standing by. My name is Kathleen, and I will be your conference operator for today. At this time, I would like to welcome everyone to the InterDigital Second Quarter 2026 Earnings Call. [Operator Instructions] And now I would like to turn the call over to Raiford Garrabrant, Vice President, Investor Relations. Please go ahead, sir. Raiford Garrabrant: Thank you, Kathleen, and good morning, everyone. Welcome to InterDigital's Second Quarter 2026 Earnings Conference Call. I am Raiford Garrabrant, VP of Investor Relations for InterDigital. With me on today's call are Liren Chen, our President and CEO; and Rich Brezski, our CFO. Consistent with prior calls, we will offer some highlights about the quarter and the company and then open the call up for questions. For additional details, you can access our earnings release and slide presentation that accompany this call on our Investor Relations website. Before we begin our remarks, I need to remind you that, in this call, we will make forward-looking statements regarding our current beliefs, plans and expectations, which are not guarantees of future performance and are made only as of the date hereof. Forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward-looking statements. These risks and uncertainties include those described in the Risk Factors sections of our 2025 annual report on Form 10-K and in our other SEC filings. In addition, today's presentation may contain references to non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the supplemental materials posted to the Investor Relations section of our website. With that taken care of, I will turn the call over to Liren. Lawrence Chen: Thank you, Raiford. Good morning, everyone. Thanks for joining us today. We have delivered an outstanding quarter with continued momentum across each part of our business. We achieved revenue of $260 million, adjusted EBITDA of $184 million and non-GAAP EPS of $4.62, all far exceeded the top end of our guidance. We also increased our annualized recurring revenue to a record of $626 million, an increase of 13% year-over-year, keeping us well on track to reach our goal of $1 billion plus ARR by 2030. Building on the strength of our second quarter results, the increased business momentum and the opportunity to drive more progress over the balance of this year, we have raised our 2026 full year guidance to between $775 million and $845 million, up $85 million at the midpoint. As in previous quarters, Rich will cover our financial performance in more detail. The highlights of the quarter were the important milestone we achieved in our streaming and cloud service licensing program. I'll cover our new agreement with Amazon first. As we have previously announced, we have agreed to enter into a patent license agreement with Amazon, covering Amazon's devices and services, including Amazon's Prime Video, with the final terms to be determined through arbitration. We expect the process will take roughly 18 months to 24 months to complete. As part of the agreement, we have resolved all pending litigations between us. The Amazon agreement is an important milestone in our goal to drive growth through our streaming and cloud service licensing program and to hit our goal of $300 million plus in ARR from this program by 2030. It's also a clear recognition of the value of foundational video technology in both devices and services. As I have said many times, our preference is always to conclude license agreement through bilateral negotiation and, when dispute do arise, to use binding arbitration to decide the final terms of an agreement. This is the path we had followed recently in our arbitration with both Samsung and Lenovo. Staying on the streaming and cloud service licensing program, we continue to make excellent progress in our enforcement efforts against Disney. During the quarter, we were awarded our first injunction against Disney from Europe's Unified Patent Court. The court ruled that Disney infringed one of our patents covering video encoding technology related to HEVC and confirmed the validity of our patent. In addition, the court found that Disney was an unwilling licensee. The UPC is a pan-European court and the injunction applies across 11 EU countries, including major markets like France, Germany, Italy and Netherlands. Last week, we received our second injunction against Disney from UPC, covering another patent that covers video encoding related to HEVC. Plus with the first UPC injunction, this decision apply across the same 11 countries in the EU. In this decision, the court was highly critical of Disney's conduct, again it found Disney was an unwilling licensee and found that InterDigital has acted in a fair manner in the licensing negotiations. These are the latest injunctions that we have against Disney, and we are working with the court to enforce them. We believe they are important steps to reach a long-term license agreement with Disney on fair terms that reflect the value of our technology that can enable Disney to build one of the world's leading streaming business. Our recent round of success against Disney is also an indication of the quality of our research and our patent portfolio as multiple courts have found our patents to be valid and infringed. While we always prefer completing license agreement through bilateral negotiation, when we do enforce our patents, we have a strong track record of reaching agreement in the end. As we continue to build momentum across our licensing program, in the second quarter, we signed a new IoT licensing agreement with a leading fintech company in the payment space. The agreement covers the licensed point-of-sale devices and our cellular and WiFi patents. After the end of the quarter, we closed another new license with KEBA to cover the company's EV chargers also and our cellular and WiFi patents. Both agreements are good demonstration of the reach of our technology and the range of industry that depends on the standard we have built. Wireless connectivity is now embedded in an expanding number of verticals, and these deals are signs of broader IoT opportunity ahead of us. We believe this trend will only continue with the development and rolling out of 6G, which is why we continue to invest in our research engine and in our leadership of global standards. The quality of research across wireless, video and AI, combined with our standard leadership continue to be a major competitive advantage for us. In the second quarter, one of our senior wireless engineers was elected Vice Chair of a key working group in 3GPP, which is the standard organization that leads the development of each generation of mobile, including 6G. Our total standard leadership position is now well over 100, and we remain one of the only 3 companies in the world and the only U.S. company with multiple chair position across 3GPP. These positions help inform the direction of research and place us in an even stronger position to define key technology standards across wireless, video and AI. I was also pleased to say that during the quarter, we were recognized by Business Insider as one of America's high-growth companies. This award recognizes the progress we have made in recent years and the momentum we are carrying into the second half of 2026. With that, I'll hand it over to Rich, who will walk you through the numbers in more detail. Richard J. Brezski: Thanks, Liren. I'm thrilled to report that Q2 was another outstanding quarter for InterDigital and an important milestone in the expansion of our licensing programs. Our results were well above the guidance we provided on our last call, and they included quantifiable progress towards our goal of $300 million plus of ARR from streaming and cloud services by 2030. This milestone was driven by our new agreement with Amazon. As Liren discussed, Amazon has agreed to enter into a patent license agreement covering both services and devices, including Prime Video, with the final terms to be determined through binding arbitration. The agreement also resolves the pending litigation between the parties. Total revenue for the quarter was $260.2 million compared with our Q2 guidance range of $139 million to $143 million. Revenue included $103.7 million of catch-up revenue, while annualized recurring revenue, or ARR, increased 13% year-over-year to a record $625.7 million. Looking at revenue by program, smartphone revenue was $122.7 million, CE, IoT and auto revenue was $27.5 million and streaming and cloud services contributed $110 million. Let me take a second to discuss revenue recognition for Amazon. While Amazon has agreed to enter into a patent license agreement, the final terms, including the value of the agreement, will be determined through arbitration. Under GAAP, we recognize revenue in this circumstance based on a conservative estimate of the consideration we expect to be entitled. While the final outcome of the arbitration cannot be assured at this stage, we currently expect that any adjustment to revenue at the conclusion of the process is more likely to increase rather than reduce recognized revenue. This is similar to the approach we took in 2023 after Samsung agreed to take a new license, effective January 1, 2023, while the final terms were still being determined through binding arbitration. In that case, we recorded revenue based on a conservative estimate during the arbitration period and then recorded an adjustment once the final arbitration decision was received. With respect to Amazon, if the final arbitration award differs from the cumulative revenue recognized during the arbitration process, we will record the resulting adjustment when the award is finalized. Turning to profitability. Adjusted EBITDA for the quarter was $184.1 million compared with our guidance range of $67 million to $73 million. Our adjusted EBITDA margin was 71% compared with the roughly 50% margin implied in our prior outlook. Operating expenses increased $25.8 million year-over-year, primarily due to an increase in intellectual property enforcement costs and performance-based compensation driven by business success. GAAP diluted EPS for the quarter was $3.40 compared with our guidance range of $0.80 to $0.97. Non-GAAP EPS was $4.62 compared with our guidance range of $1.41 to $1.60. Cash generation was strong with cash from operations of $82.5 million and free cash flow of $66.6 million. As we noted on our last call, we expect the collection of accounts receivable from new agreements signed in Q1 to drive strong cash flow in Q2, and our second quarter cash generation was consistent with that expectation. Consistent with our capital allocation priorities, we continue to invest for growth, maintain a fortress balance sheet and return excess capital to shareholders. During the quarter, we returned $41.1 million to shareholders through $23 million of share repurchases and $18 million of dividends. We ended the quarter with cash, cash equivalents and short-term investments of $1.1 billion. Our Q2 results again demonstrate the leverage in our subscription-based licensing model. The long-term fixed fee nature of most of our agreements provides visibility into our business, supports ongoing investment in research and portfolio development and gives us the flexibility to pursue opportunities across our licensing programs while continuing to return capital to shareholders. Looking forward to Q3, we expect $154 million to $158 million of revenue from existing contracts. Any revenue from any new agreements or enforcement decisions over the balance of the quarter would be additive to these amounts. Based only on existing contracts, we expect adjusted EBITDA margin of about 57% and non-GAAP diluted earnings per share of $1.94 to $2.13. In addition, we expect another strong quarter of free cash flow in Q3 driven by scheduled payments due under existing agreements. As Liren noted, we are increasing our full year 2026 guidance. We now expect revenue in the range of $775 million to $845 million, up from our prior range of $675 million to $775 million. That is an increase of $85 million at the midpoint. We now expect full year 2026 adjusted EBITDA in the range of $469 million to $529 million, with non-GAAP EPS in a range of $10.85 to $12.81. As we have said before, we continue to think about the full year through a multipath approach with different combinations of existing contracts, renewals, new agreements and enforcement outcomes that can deliver financial results within our guided ranges. With that, I'll turn it back to Raiford. Raiford Garrabrant: Thanks, Rich. Before we move to Q&A, I'd like to mention that we'll be attending a number of investor events in Q3, including the Jefferies Semiconductor, IT Hardware & Communications Hardware Conference (sic) [ Jefferies Semiconductor, IT Hardware & Communications Technology Conference ] in Chicago; the Midwest IDEAS Conference in Chicago; and the Sidoti Small Cap Conference, which is virtual. Please reach out to your representatives at those firms if you'd like to schedule a meeting. Now we are ready to take questions. Operator: [Operator Instructions] And your first question comes from the line of Scott Searle from ROTH Capital. Scott Searle: Congrats on the quarter and congrats on the progress that you're making on the streaming side of the equation, particularly with Amazon. Liren, maybe just to dive in on that front, you've had some important milestones with Disney as well now with 2 separate injunctions awarded by UPC. Can you take us through the time lines and the next steps? It sounds like you are working with the courts in terms of that injunction and otherwise. But what are the various avenues here to move forward, if you could give us some idea? And then from a broader perspective, a couple of years ago, when you guys articulated the opportunity for streaming services, you estimated the market at $300 million, which you guys have reiterated today. And I think that was more of a baseline kind of opportunity. I'm wondering now, as you're getting in and you're starting to get some of those data points with the baseline from Amazon in terms of what you're seeing from a rev rec standpoint as well as the expansion of the marketplace, is that opportunity actually expanding beyond the $300 million that you guys initially talked about? Lawrence Chen: Yes, Scott, so let me explain the UPC process as well as the broader view for the overall market. So as I mentioned in my prepared remarks, we have done very well in our enforcement campaign. As you are aware, we have received multiple injunctions from different jurisdictions with the latest one being UPC, one received during the Q2, one received, frankly, only last week. So we're in the process of enforcing them, and there's a process in those court systems for us to go through the process. We do feel our patents are extraordinarily important. As you are aware, both the patents we received for the UPC injunction are related to the core features of encoding technique related to HEVC that we believe drive a lot of value. And I do feel this is a -- and by the way, the court also found Amazon (sic) [ Disney ] to be an unwilling licensee that we are conducting our license fairly. As I commented before, as we commented in our press release, we do believe the right outcome is for Amazon (sic) [ Disney ] to take license. That's fair to both parties -- for Disney, I'm sorry. And we absolutely think we are on track to do so, okay? Regarding the broader picture for the licensing opportunity in streaming and cloud services, notice that when we disclosed this opportunity in the Investor Day, we said we believe this opportunity will be a $200 million -- $300 million plus ARR by 2030, but we do emphasize there's a plus sign to it. So this is not an endpoint. This is essentially a milestone point we see. We believe we are executing really well. Obviously, there's still multiple years in this journey, and we have to keep on focusing on doing everything we can to execute on our strategy. Scott Searle: Okay. Very helpful. And if I could, just to follow up in terms of the level of engagement that you have now with Amazon on the board or the books, how are the conversations proceeding with other large streaming vendors? Is this a wait-and-see for them to see the final outcome and potentially the pricing as it relates to Amazon? Or they continue on their own parallel tracks? And a quick question for Rich. Just in terms of the OpEx costs, I believe this quarter, the enforcement comps were pretty high, up substantially, I think, from the first quarter. But given the progress that you've made now with Amazon, some of the wins you've had with Disney, how should we be thinking about litigation and enforcement costs as well as the broader OpEx as we're going into the second half of this year? Lawrence Chen: Scott, let me take the first half. We are proceeding well with other negotiations. So frankly, we have a strategy to approach all the major customers in both the SVOD as well as the AVOD space. So we are proceeding well. I do believe people are paying attention to our progress with the Amazon discussion as well as the Disney progress. And I'm hoping to report more progress as we are proceeding with other negotiations in coming weeks and in coming quarters. Richard J. Brezski: Yes. And Scott, regarding the Amazon moving to arbitration and the outlook for enforcement costs, certainly, one of the benefits of arbitration is it kind of ring-fences things. It can be more efficient. So that's definitely a benefit, and we expect that to impact what we otherwise would have expected from a multi-jurisdictional litigation campaign against Amazon. At the same time, we have a number of other enforcement actions ongoing. So while I think it's helpful, I don't want to oversell it that expenses would come down too much in that area while we have these other cases ongoing. Operator: And your next question comes from the line of Arjun of William Blair. Arjun Bhatia: Congrats to you guys on the Amazon deal. I know that's an important milestone for the company. Liren, maybe if I can kind of touch on a few of the points that you were talking about in the prior set of questions. Do you have a sense now that sort of the -- with Amazon having reached an agreement with final terms still to be determined, the positive sort of results you're seeing with Disney litigation, do you sense that you could sort of push on the pedal a little bit more to litigate against other streaming services where maybe they're not coming to the table to negotiate? Or how do you view sort of your position in this market now, given that you have some positive outcomes and certainly, courts and Amazon as a counterparty has agreed to the sort of legitimacy of your IP? Lawrence Chen: Yes. Arjun, as I commented earlier, we feel really good about where we are. Obviously, the Amazon agreement we reached is a major milestone, and we have been proceeding well with Disney. I do believe the rest of the industry is paying attention. As of now, I don't have a status to update on our litigation or enforcement strategy. As I commented before, we always prefer to get deals done through bilateral negotiation, and we are patient and, frankly, fairly balancing those negotiations. And as of now, I don't have an update on other litigation possibilities. Arjun Bhatia: Okay. That's fair enough. And then, Rich, I had a couple of questions for you just on the Amazon rev rec dynamics that you laid out. Is there an initial agreement or initial terms with Amazon? Or what you're recognizing in the sort of $60 million recurring revenue and the catch-up, are those all purely estimates? Or are there some terms that you've agreed with Amazon initially that get finalized in arbitration? Richard J. Brezski: Yes, Arjun, some of those details at this stage are confidential. So I'll go back to my -- and emphasize some of the comments I made that we are basing that revenue on an estimate while we're in arbitration with some terms, including the final value of the license agreement to be determined by that arbitration. And that's similar to -- at that high level, the situation we were in a couple of years ago with Samsung. Arjun Bhatia: Okay. Got it. And then it would include presumably the catch-up payment or the catch-up revenue that you pointed out this quarter, like that is also subject to arbitration. Is that correct? Richard J. Brezski: Yes. Well, again, it's the value of the agreement. So that would be part of that value. Arjun Bhatia: Okay. All right. Got it. And then just final one, maybe Liren, for you, on Disney. Some of these -- some of the recent injunctions from UPC sound fairly material, meaning if it's related to video encoding and HEVC, and there's an injunction, it seems like it may result in significantly sort of degraded service from Disney. What is their sort of response to how this is now playing out in the courts? And do you expect these -- that these are more material than prior injunctions that you've had with Disney earlier in 2026? Lawrence Chen: Yes. Arjun, as you are aware, when we started the enforcement campaign, we had a comprehensive strategy. We intentionally take patent covering different areas of technology and [ assert the domain ] in various different jurisdictions. And we are very happy with the win we have. And as I mentioned earlier, we are in the process of enforcing them. By the way, we also noticed this from third-party report, certain key services have been disrupted in European market, including 4K HD content, which I believe are very important features to their premium tier customers. And so -- by the way, we also noticed there's report of consumer protection agents investigation that's been either triggered or discussed. So I do believe those are important services, which again reflect on the foundational nature of our technology and our patent and, frankly, indicate the fair value that we are trying to receive. Operator: Next question comes from the line of Kevin Garrigan of Jefferies. Kevin Garrigan: Let me echo my congrats. Just looking at your guide for flat for Q3, step-up in Q4. And I know you came into the year with $92 million of renewals. I think you said 2/3 of that was already renewed. So if I'm right, you're expecting a final 1/3 of those renewals really in Q4. And can you just remind us which end markets those renewals are across? Richard J. Brezski: Yes. So Kevin, when we talk about our full year guidance, I mentioned that we have a multipath approach, which could include renewals or if, for whatever reason, we don't execute on those renewals, we have other opportunities as well. So we see a couple of different paths to get there. We're not locked in on any one. We're working across all those opportunities. Kevin Garrigan: Okay. Got it. And then with Amazon being the first streaming agreement, whatever the terms kind of come to be, is this the framework for how we should think about terms for other streaming agreements? Richard J. Brezski: Yes. So I think in terms of -- at this point, we're really just estimating the revenue based on the eventual arbitration outcome. And as far as getting into the terms, I can't really say more than what we've commented on at this point. Operator: And your next question comes from the line of Anja Soderstrom. Anja Soderstrom: Congrats on the great quarter and the Amazon agreement. Hopefully, others will follow suit soon. Most of my questions have been addressed, but I'm curious about the capital allocation. I saw you were light on the buybacks for the quarter, and you also have some short-term debt coming due. How should we think about your capital allocation priorities? Richard J. Brezski: Yes. So Anja, when we think about capital allocation, we think we have a great business. We want to keep investing in it. So that's certainly paramount. We want to make sure that we keep a strong balance sheet because we do have these enforcement actions against very large companies, and we do want to return capital to shareholders. We did so in -- we continue to do so in Q2. As far as the level and timing, that's always subject to a number of different factors. I always say like if you broaden the aperture, we're always doing quite a bit there. If you focus on any small window, you're not necessarily going to get the whole picture. And then in terms of the debt, back in Q1, we had about $80 million of early conversions and paid that off. You'll see in the Q that we talked about another $83 million that's in the process and is expected to close in terms of early conversions in the next quarter. So it's part of our capital structure that we're always looking at. Those conversions are actually driven by the debt holders, but we're happy to remove the debt. Anja Soderstrom: Okay. And also just curious with the Amazon arbitration process, you said you expect it to take 18 to 24 months. So what's the -- how do you come up with that time frame? And can you remind me how long the arbitration took for Samsung? Lawrence Chen: Yes. So -- Anja, this is Liren. So generally speaking, this process worked like this, right? We are currently trying to get some of the term resolved. And then whatever term we could not agree upon go to the arbitration. And then there will be a process to select the arbitrator. I think we described this in the prior call before. Either party -- both parties come up with one arbitrator and collectively take the third one, and that process can take a little bit time. And afterwards, both parties will present their [ events ] to the arbitrator and that process can, generally speaking, take roughly 12 to 18 months. So we at the front end of the process, combined with the whole thing, we are currently estimating to be about 18 to 24 months. And that's pretty much aligned with our Samsung experience, and that's also well aligned with our Lenovo experience regarding time line. Operator: And there are no further questions at this time. I will now turn the conference back over to Liren Chen, our CEO, for the closing remarks. Lawrence Chen: Thank you, Kathleen. Before we close, I'd like to again thank our colleagues for their dedication and contribution to InterDigital as well as our many partners and customers for a strong quarter. Thank you all for everyone who joined the call today, and we look forward to updating you on our progress next quarter. Operator: Ladies and gentlemen, that concludes today's call. Thank you, everyone, for joining. You may now disconnect. Before you buy stock in InterDigital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and InterDigital wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. InterDigital (IDCC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

InterDigital, Inc. IDCC has strengthened its investment case with another quarter of better-than-expected financial results, rising recurring revenue and higher full-year guidance. At the same time, investors must weigh those positives against a premium valuation and the inherent volatility of a licensing-driven business.The company's expanding presence in streaming, cloud services and Internet of Things (IoT) markets also suggests its long-term growth story extends well beyond traditional smartphone licensing. InterDigital delivered a strong second quarter, reporting revenue of $260.2 million and non-GAAP earnings per share of $4.62, both comfortably ahead of expectations. Although reported revenue declined year over year due to licensing timing, the quarter reflected solid operating execution. Management also raised its full-year 2026 revenue outlook to a range of $775 million to $845 million, increasing the midpoint by $85 million. InterDigital, Inc. price-consensus-eps-surprise-chart | InterDigital, Inc. Quote Another encouraging indicator was recurring revenue. Annualized recurring revenue reached a record $626 million, up 13% from a year earlier, demonstrating continued progress toward building a more predictable licensing business. The combination of stronger recurring revenue and higher guidance reinforces confidence in the company's operating momentum despite quarter-to-quarter fluctuations in reported licensing revenue. InterDigital continues to diversify its licensing base beyond smartphones. Recent agreements with Amazon covering devices and services, including Prime Video, along with new IoT licensing agreements involving a leading fintech company and KEBA, expand the company's recurring royalty opportunities across cloud services, streaming and connected devices. The company also benefits from healthy cash generation and a strong balance sheet. At June 30, 2026, InterDigital held more than $1.1 billion in cash and short-term investments, providing ample financial flexibility to fund research, pursue intellectual property development, support shareholder returns and continue patent enforcement activities. Companies such as QUALCOMM Incorporated QCOM and Nokia Corporation NOK also rely on intellectual property licensing to generate recurring revenue, highlighting the value of diversified patent portfolios in the communications technology industry. Despite favorable business trends, several risks could temper future returns. Customer concentration remains significant, making results sensitive to negotiations with a relatively small number of major licensees. Revenue can also fluctuate depending on the timing of licensing renewals, new agreements and arbitration outcomes.In addition, intellectual property enforcement requires ongoing legal spending, while maintaining leadership in wireless, video and artificial intelligence technologies demands continued research investment. Because large licensing agreements may not occur evenly from quarter to quarter, earnings volatility is likely to remain a characteristic of the business model. The investment case now rests on balancing premium valuation against improving fundamentals. According to the latest research report, the shares trade at approximately 25.6 times trailing earnings and 9.9 times trailing sales. The report also carries a 6–12-month price target of $348.83, reflecting expectations that expanding recurring licensing revenue and continued execution could support additional earnings growth over time. Investors should recognize, however, that premium valuation multiples leave less room for operational missteps. Continued execution on recurring revenue growth, licensing expansion and management's updated outlook will likely remain important factors supporting the company's longer-term valuation. Overall, InterDigital presents a favorable combination of improving operating performance, expanding licensing opportunities and strong financial resources, although investors should remain mindful of the risks associated with a licensing-focused business model.The stock currently sports a Zacks Rank #1 (Strong Buy), reflecting positive earnings estimate momentum and a favorable near-term outlook. You can see the complete list of today’s Zacks #1 Rank stocks here. At the same time, its Value Score of D, Growth Score of C, Momentum Score of F and VGM Score of F indicate that valuation and recent share-price characteristics are less compelling than its earnings outlook. Together, these measures suggest investors should evaluate the company's strong business fundamentals alongside its valuation and momentum profile when assessing the stock. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report InterDigital, Inc. (IDCC) : Free Stock Analysis Report QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report Nokia Corporation (NOK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The second-quarter earnings season has continued to produce impressive winners, and several companies are separating themselves from the pack by delivering results that comfortably exceeded Wall Street's expectations this week. Better still, these stocks currently reside on the coveted Zacks Rank #1 (Strong Buy) list, reflecting the favorable trend of rising earnings estimate revisions that often precedes additional outperformance. Among the latest standouts are Aperam APEMY), Cohu COHU),InterDigital IDCC), and PBF Energy PBF). While these businesses operate in very different industries — from specialty steel and semiconductor equipment to wireless licensing and energy refining — each company crushed Q2 EPS expectations by more than 50%, reinforcing the improving fundamentals behind their strong buy ratings. Aperam turned in one of its strongest quarterly performances in recent years, describing the period as its best quarter in four years despite challenging market conditions. The Luxembourg- based global stainless and specialty steel producer benefited from improved profitability across each of its operating segments, highlighting the success of its ongoing efficiency initiatives. More importantly for investors, Aperam crushed Q2 EPS expectations by 80%, reporting earnings of $1.01 per share versus estimates of $0.56. Adjusted EBITDA surged 44% sequentially to €130 million, while net income jumped to €116 million from just €3 million in the prior quarter. The company also generated €106 million in free cash flow before dividends, allowing net debt to continue declining. Management acknowledged that normal seasonal weakness may pressure third-quarter results but still expects debt to decline further by year-end. The combination of expanding profitability, improving cash generation, and strengthening earnings revisions has helped keep APEMY among the market's highest-rated stocks. Semiconductor test equipment supplier Cohu produced an impressive second quarter as demand improved across several end markets, particularly AI computing and high-performance computing applications. Cohu reported Q2 EPS of $0.26, handily topping estimates of $0.14 by nearly 86%. Revenue climbed 38% year over year to $149 million, while recurring revenue represented approximately 53% of total sales, underscoring the increasing stability of Cohu's business model. Most importantly for investors was Cohu’s expanding margins and disciplined operating execution. Cohu also highlighted continued customer adoption of its semiconductor test and inspection solutions, positioning the company to benefit from the ongoing AI infrastructure buildout. As semiconductor capital spending gradually recovers, Cohu appears well positioned to capitalize on improving industry fundamentals. InterDigital once again demonstrated why its licensing business remains one of the market's most profitable technology models. Leading the way, InterDigital delivered one of the largest beats of this earnings season, with Q2 EPS of $4.62 crushing consensus estimates of $1.60 by nearly 189%. InterDigital reported another quarter of results above expectations after signing new licensing agreements, including its first Streaming and Cloud Services agreement with Amazon AMZN. Annualized recurring revenue (ARR) climbed to a record $626 million, up 13% year over year, prompting management to raise its full-year 2026 revenue outlook by $85 million at the midpoint. Although reported revenue declined from last year's unusually elevated level because of lower catch-up licensing revenue, InterDigital's recurring licensing base has kept expanding, providing investors with greater visibility into future cash flows. The raised guidance and improving licensing momentum have helped reinforce the bullish outlook surrounding IDCC stock. PBF Energy also delivered a better-than-expected second quarter as refining margins improved from earlier in the year and operational performance strengthened. The company reported Q2 EPS of $6.22, comfortably exceeding consensus estimates of $4.05 for a 53% earnings surprise. The independent oil refiner benefited from healthier crack spreads, improved refinery utilization, and disciplined cost management. Investors have also welcomed signs that industry conditions are stabilizing after a volatile start to the year, with stronger cash generation helping improve confidence in PBF's earnings outlook. As refining fundamentals continue normalizing, analysts have become increasingly optimistic about PBF's near-term earnings potential, supporting its current position on the Zacks Rank #1 (Strong Buy) list. Aperam, Cohu, InterDigital, and PBF Energy all demonstrated that strong operational execution can translate into significant earnings beats and bolster investor confidence. Backed by favorable earnings estimate revisions, these stocks appear well positioned to remain on investors' watchlists as their improving fundamentals continue to unfold. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report InterDigital, Inc. (IDCC) : Free Stock Analysis Report Cohu, Inc. (COHU) : Free Stock Analysis Report PBF Energy Inc. (PBF) : Free Stock Analysis Report Aperam (APEMY) : Free Stock Analysis Report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

First Streaming and Cloud Services agreement drives Q2 results above outlookAnnualized recurring revenue1 at all-time high of $626 million, up 13% YoYCompany raises full year 2026 revenue outlook by $85 million WILMINGTON, Del., July 30, 2026 (GLOBE NEWSWIRE) -- InterDigital, Inc. (Nasdaq: IDCC), a wireless, video, and AI technology research and development company, today announced results for the quarter ended June 30, 2026. “We have delivered another outstanding quarter, with continued momentum across our business, including our new agreement with Amazon, driving annualized recurring revenue1 to a record $626 million,” commented Liren Chen, InterDigital CEO and President. “Building on the strength of our second quarter results, the increased business momentum, and the opportunity to make more progress over the balance of this year, we have raised the full year 2026 guidance to between $775 million and $845 million, an increase of $85 million at the midpoint.” Recent Business Highlights Reached agreement with Amazon, covering Amazon’s services and devices, including Amazon Prime Video, with final terms to be determined by binding arbitration Signed new IoT license agreement with a leading fintech company covering point-of-sale devices Awarded two injunctions against Disney from Europe’s Unified Patent Court covering eleven countries Annualized recurring revenue1 ("ARR") increased 13% year-over-year from $553.1 million to $625.7 million Second Quarter 2026 Financial Summary: Second quarter 2026 revenue included $103.7 million of catch-up revenue, compared with $162.3 million of catch-up revenue in second quarter 2025. Operating expenses increased $25.8 million primarily due to increases in intellectual property enforcement costs and share-based compensation driven by business successes. Return of Capital Near Term Outlook The Company raised its full year 2026 outlook and provided an initial outlook for third quarter 2026 in the table below. The outlook for third quarter 2026 covers existing licenses and does not include any new agreements or enforcement action results we may sign or receive over the balance of the third quarter. The outlook for full year 2026 includes both existing licenses and the expected contributions from new agreements and/or enforcement actions we may receive over the balance of the year. Convertibility of 2027 Notes Pursuant to the terms of the Indenture governing InterDigital’s 3.50% Senior Convertible Notes due 2027 (the “Notes”), the Notes are convertible during the calendar quarter ending September 30, 2026. The current conversion rate of the Notes is 13.0351 shares of InterDigital’s Common Stock per $1,000 principal amount of the Notes. Upon the conversion of any Notes, InterDigital will pay cash up to the aggregate principal amount of the Notes to be converted, and will pay cash, shares of its Common Stock or a combination of cash and shares of its Common Stock for any conversion obligation in excess of the aggregate principal amount being converted, if any, at InterDigital’s election, as set forth in the Indenture governing the Notes. At the time InterDigital issued the Notes, InterDigital entered into call spread transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the Notes by, in effect, increasing the conversion price of the Notes from InterDigital’s economic standpoint from $76.72 to $105.43. In connection with the Notes issuance, we also issued warrants to acquire, subject to customary anti-dilution adjustments, approximately 6.0 million shares of common stock. Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations - Notes, Hedge, and Warrant Transactions" in InterDigital’s Form 10-Q for the quarter ended June 30, 2026 for more information. As of June 30, 2026, $380.0 million in principal of the 2027 Notes remains outstanding, of which holders have elected to convert $80.3 million principal amount, which will settle in third quarter 2026. No incremental outstanding shares will result from such conversions due to the offsetting impact of hedging arrangements. As of June 30, 2026, warrants to acquire 6.0 million shares of common stock remain outstanding at a strike price of $105.43, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028. Conference Call Information InterDigital will host a conference call on Thursday, July 30, 2026 at 10:00 a.m. ET to discuss its second quarter 2026 financial performance and other company matters. For a live webcast of the conference call visit www.interdigital.com and click on the “Webcast” link on the Investors page. The company encourages participants to take advantage of the webcast option. See below for dial-in details to join the call telephonically:USA - Toll-Free (800) 715-9871USA / International Toll +1 (646) 307-1963Conference ID 5903891 or Conference Name A replay of the conference call will be available on InterDigital’s website under Events in the Investors section. The replay will be available for one year. About InterDigital® InterDigital is a global research and development company focused primarily on wireless, video, artificial intelligence (“AI”), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services. We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, IoT devices, cars and other motor vehicles, and providers of cloud-based services such as video streaming. As a leader in wireless technology, our engineers have designed and developed a wide range of innovations that are used in wireless products and networks, from the earliest digital cellular systems to 5G and today’s most advanced Wi-Fi technologies. We are also a leader in video processing and video encoding/decoding technology, with a significant AI research effort that intersects with both wireless and video technologies. Founded in 1972, InterDigital is listed on Nasdaq. InterDigital is a registered trademark of InterDigital, Inc. For more information, visit the InterDigital website: www.interdigital.com. For additional financial measures, refer to our second quarter 2026 Form 10-Q and the financial metrics tracker, which are available on the Investor Relations section of our website. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include information regarding our current beliefs, plans and expectations. Words such as “believe,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” "outlook," “goal,” “could,” "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," and variations of any such words or similar expressions are intended to identify such forward-looking statements. Forward-looking statements are made on the basis of management’s current views and assumptions and are not guarantees of future performance. Forward-looking statements, including but not limited to statements regarding our outlook for Q3 and full year 2026, are inherently subject to risks and uncertainties that could cause actual results, and actual events that occur, to differ materially from results contemplated by the forward-looking statements. These risks and uncertainties include, but are not limited to: (i) unanticipated delays or difficulties in the execution of patent license agreements on acceptable terms or at all; (ii) our ability to expand our revenue opportunities by entering into licensing arrangements with streaming and cloud-based service providers; (iii) the initiation of new legal proceedings or the resolution of ongoing legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith; (iv) our ability to maintain a strong patent portfolio and make strategic decisions related to our intellectual property protection; (v) our ability to successfully integrate Deep Render and to recognize the anticipated benefits of the transaction; (vi) the failure of markets for our technologies to materialize to the extent that we expect; (vii) our continued ability to develop new technologies; (viii) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the One Big Beautiful Bill Act, the 2017 Tax Cuts and Jobs Act and other U.S. and non-U.S. tax laws and other tax matters; (ix) the timing and impact of potential regulatory, administrative and legislative matters; (x) the potential effects of macroeconomic conditions or global conflicts; (xi) our ability to hire and retain key personnel; (xii) operational risks, including cybersecurity events, human failures or other difficulties with our information technology systems; and (xiii) risks related to any new accounting standards or our estimates, assumptions and the application of relevant accounting standards, including with respect to revenue recognition. You should not place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this release. We undertake no duty to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law. Footnotes 1   Annualized recurring revenue ("ARR") for any quarter is defined as total revenue for the quarter less catch-up revenue for the quarter, multiplied by four. Management believes ARR provides useful information about our financial performance, and our progress toward our 2030 targets. ARR is not a projection or forecast, and actual recurring revenue for any 12-month period will depend on a number of factors beyond our ability to predict or control, including those risks and uncertainties listed above. Additionally, ARR may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. 2   Adjusted EBITDA and Adjusted EBITDA margin are supplemental non-GAAP financial measures that InterDigital believes provide investors with important insight into the Company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income plus income tax (provision) benefit, other income, net & interest expense, depreciation and amortization, share-based compensation, and other items. Other items include restructuring costs, impairment charges and other non-recurring items. Adjusted EBITDA margin is Adjusted EBITDA over total revenue. These non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The presentation of these financial measures, which are not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure is provided below. 3   Non-GAAP net income, Non-GAAP EPS, and Non-GAAP weighted-average diluted shares are supplemental non-GAAP financial measures that InterDigital believes provide investors with important insight into the Company's ongoing business performance. InterDigital defines Non-GAAP net income as net income plus share-based compensation, acquisition related amortization, restructuring costs, impairment charges and one-time adjustments, losses on extinguishments of long-term debt, the related income tax effect of the preceding items, and adjustments to income taxes. Non-GAAP EPS is defined as Non-GAAP net income divided by Non-GAAP weighted-average diluted shares, which adjusts the weighted-average number of common shares outstanding for the dilutive effect of the Company's convertible notes, offset by our hedging arrangements. InterDigital’s computation of these non-GAAP financial measures might not be comparable to similarly named measures reported by other companies. The presentation of these financial measures, which are not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. A reconciliation of each of these metrics to its most directly comparable GAAP financial measure is provided below. The following tables present InterDigital's GAAP financial measures reconciled to the non-GAAP financial measures included in this release for the second quarter ended June 30, 2026 and 2025: (a)   Other items in the above tables include one-time expenses related to litigation fee reimbursements in three and six months ended June 30, 2026, compared to one-time contra-expenses related to litigation fee reimbursements in six months ended June 30, 2025.(b)   Other non-operating items includes gains from observable price changes of our long-term strategic investments. The following tables present a reconciliation between GAAP and non-GAAP versions of the estimated financial measures for the third quarter of 2026 and full year fiscal 2026 included in this release:

Interested in InterDigital, Inc.? Here are five stocks we like better. InterDigital exceeded its second-quarter outlook, reporting $260.2 million in revenue, $184.1 million in adjusted EBITDA and $4.62 in non-GAAP diluted EPS. Results included $103.7 million in catch-up revenue and benefited from recurring licensing growth. The company raised its full-year 2026 guidance to $775 million–$845 million in revenue, $469 million–$529 million in adjusted EBITDA and $10.85–$12.81 in non-GAAP EPS. Annualized recurring revenue reached a record $625.7 million, up 13% year over year. An Amazon patent-license agreement covering devices and services such as Prime Video resolved all pending litigation, though final economics will be determined through 18–24 months of binding arbitration. InterDigital also secured injunctions against Disney over HEVC patents and signed additional IoT and EV-charging licenses. 3 Sector ETFs Catching Fire After Earnings Beats InterDigital (NASDAQ:IDCC) reported second-quarter 2026 results that exceeded its prior outlook, supported by growth in recurring licensing revenue and a new patent-license agreement with Amazon covering devices and services, including Prime Video. Revenue totaled $260.2 million for the quarter, above the company’s guidance range of $139 million to $143 million. Adjusted EBITDA was $184.1 million, compared with prior guidance of $67 million to $73 million, while non-GAAP diluted earnings per share reached $4.62, above the company’s forecast of $1.41 to $1.60. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now 2 Sizzling Mid-Caps That Could Stay Hot This Summer The company raised its full-year 2026 revenue guidance to a range of $775 million to $845 million, from a previous range of $675 million to $775 million. It now expects adjusted EBITDA of $469 million to $529 million and non-GAAP EPS of $10.85 to $12.81. President and CEO Liren Chen said InterDigital’s annualized recurring revenue rose 13% from a year earlier to a record $625.7 million, keeping the company on track toward its stated goal of more than $1 billion in ARR by 2030. → 3 Value ETFs to Consider as Growth Stocks Lag Behind InterDigital Raises Its Earnings Guidance A key development during the period was an agreement for Amazon to enter into a patent license covering its devices and services, including Prime Video. Final terms, including the value of the agreement, will be determined through binding arbitration, which InterDigital expects to take roughly 18 to 24 months. The agreement also resolved all pending litigation between the companies. Chen characterized the arrangement as an important milestone for the company’s streaming and cloud-services licensing program, which InterDigital has said could generate more than $300 million in ARR by 2030. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Chief Financial Officer Rich Brezski said the company recognizes Amazon-related revenue under GAAP using a conservative estimate of the consideration it expects to receive while arbitration is pending. If the final award differs from cumulative revenue recognized during the process, InterDigital will record an adjustment after the award is finalized. Brezski said the approach is similar to the company’s treatment of its Samsung license while that agreement’s final terms were being arbitrated. InterDigital currently expects any eventual adjustment tied to Amazon to be more likely to increase, rather than reduce, revenue already recognized, though he said the arbitration outcome cannot be assured. Second-quarter revenue included $103.7 million of catch-up revenue. By licensing program, smartphone revenue was $122.7 million, consumer electronics, Internet of Things and automotive revenue was $27.5 million, and streaming and cloud services contributed $110 million. GAAP diluted EPS was $3.40. The company generated $82.5 million in cash from operations and $66.6 million in free cash flow, which Brezski said was consistent with expectations for collections on receivables associated with agreements signed in the first quarter. Operating expenses increased $25.8 million from a year earlier, primarily due to higher intellectual-property enforcement costs and performance-based compensation, Brezski said. Despite those costs, adjusted EBITDA margin was 71%, compared with the roughly 50% margin implied by the company’s prior outlook. InterDigital returned $41.1 million to shareholders during the quarter, including $23 million in share repurchases and $18 million in dividends. It ended the quarter with $1.1 billion in cash equivalents and short-term investments. Chen also highlighted progress in InterDigital’s enforcement actions against Disney. During the quarter, Europe’s Unified Patent Court granted an injunction after finding that Disney infringed a patent related to HEVC video-encoding technology and confirming the patent’s validity, according to the company. The ruling applies across 11 European Union countries, including France, Germany, Italy and the Netherlands. InterDigital said it received a second UPC injunction against Disney last week involving another HEVC video-encoding patent. Chen said the court again found Disney to be an unwilling licensee and found that InterDigital had acted fairly in licensing negotiations. The company said it is working with the court to enforce the injunctions and believes they will help support a long-term license agreement with Disney. During the question-and-answer session, Chen said InterDigital was continuing negotiations with other major subscription-video-on-demand and advertising-supported streaming providers. He said the company prefers bilateral negotiations over litigation and did not provide an update on potential additional enforcement actions. Outside streaming, InterDigital signed a new IoT licensing agreement with a fintech company covering point-of-sale devices and its cellular and Wi-Fi patents. After the quarter ended, it also signed a license with EV-charger maker KEBA covering cellular and Wi-Fi technology. For the third quarter, InterDigital expects $154 million to $158 million in revenue from existing contracts. Revenue from any new agreements or enforcement decisions would be additive, Brezski said. Based solely on existing contracts, the company expects an adjusted EBITDA margin of approximately 57% and non-GAAP diluted EPS of $1.94 to $2.13. Brezski said InterDigital also expects another strong quarter of free cash flow, driven by scheduled payments under existing agreements. He added that moving the Amazon matter to arbitration could make enforcement more efficient than a multi-jurisdictional litigation campaign, although the company continues to have other enforcement actions underway. InterDigital, Inc is a mobile and video technology research and development company that designs and licenses wireless communications and video compression innovations. Its patent portfolio encompasses key standards across 3G, 4G LTE and 5G wireless networks, as well as video and multimedia technologies. By focusing on fundamental technology creation rather than device manufacturing, InterDigital delivers core intellectual property to smartphone manufacturers, chipset vendors and telecommunications operators worldwide. The company's principal services include patent licensing, technology evaluation and consulting. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "InterDigital Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

InterDigital (IDCC) came out with quarterly earnings of $4.62 per share, beating the Zacks Consensus Estimate of $1.6 per share. This compares to earnings of $6.52 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +188.75%. A quarter ago, it was expected that this wireless research and development company would post earnings of $2.54 per share when it actually produced earnings of $2.57, delivering a surprise of +1.18%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. InterDigital, which belongs to the Zacks Wireless Equipment industry, posted revenues of $260.17 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 80.65%. This compares to year-ago revenues of $300.6 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. InterDigital shares have lost about 18% since the beginning of the year versus the S&P 500's gain of 6.9%. While InterDigital has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for InterDigital was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.13 on $157.39 million in revenues for the coming quarter and $8.77 on $679.75 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Wireless Equipment is currently in the top 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Clearfield (CLFD), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This maker of fiber optic management products is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of +81.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Clearfield's revenues are expected to be $44 million, down 11.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report InterDigital, Inc. (IDCC) : Free Stock Analysis Report Clearfield, Inc. (CLFD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: $260.2 million, far exceeding the top end of guidance ($139M-$143M). Annualized Recurring Revenue (ARR): Record $625.7 million, up 13% year-over-year. Adjusted EBITDA: $184.1 million, with a margin of 71%. Non-GAAP EPS: $4.62, compared to guidance of $1.41-$1.60. GAAP Diluted EPS: $3.40, compared to guidance of $0.80-$0.97. Cash from Operations: $82.5 million. Free Cash Flow: $66.6 million. Revenue by Program: Smartphone revenue of $122.7 million; CE, IoT & Auto revenue of $27.5 million; Streaming & Cloud Services revenue of $110 million. Full-Year 2026 Guidance (Raised): Revenue of $775M-$845M; Adjusted EBITDA of $469M-$529M; Non-GAAP EPS of $10.85-$12.81. Shareholder Returns: $41.1 million returned via $23 million in share repurchases and $18 million in dividends. Warning! GuruFocus has detected 5 Warning Signs with ADT. Is IDCC fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. InterDigital Inc (NASDAQ:IDCC) delivered an outstanding Q2 2026 with revenue of $260 million, adjusted EBITDA of $184 million, and non-GAAP EPS of $4.62, all far exceeding the top end of guidance. The company achieved a record annualized recurring revenue (ARR) of $626 million, a 13% year-over-year increase, keeping it on track for its $1 billion+ ARR goal by 2030. A major milestone was reached with a new patent license agreement with Amazon, covering devices and Prime Video services, with final terms to be set via arbitration, resolving all pending litigation. InterDigital Inc (NASDAQ:IDCC) secured two injunctions against Disney from the European Unified Patent Court (UPC), affirming the validity of its HEVC video encoding patents and Disney's status as an unwilling licensee. The company signed new IoT licensing agreements with a leading fintech company for point-of-sale devices and with Kabom for EV chargers, demonstrating expanding reach into new verticals. The final terms of the Amazon license agreement are subject to a lengthy 18-24 month arbitration process, creating uncertainty around the ultimate revenue recognition. Revenue from the Amazon agreement is currently recognized based on a conservative estimate, with a risk that the final arbitration award could differ, potentially requiring adjustments. Operating expenses increased $25.8 million year-over-year, driven by higher intellectual property enforcement costs and performance-based compensation, impacting profitability. The company faces ongoing enforcement actions against other streaming services, such as Disney, which continue to incur significant litigation costs and may not resolve quickly. While progress is being made, the streaming and cloud services licensing program still relies on future negotiations and enforcement outcomes to achieve its $300 million+ ARR target by 2030. Q: Can you take us through the timelines and next steps for the Disney injunctions from the UPC? And is the $300 million-plus streaming opportunity expanding?A: Liren Chen (CEO): We have received multiple UPC injunctions against Disney, including one in Q2 and another last week, both related to core HEVC encoding features. We are in the process of enforcing them. The court found Disney an unwilling licensee and InterDigital fair. We believe the right outcome is for Disney to take a fair license. Regarding the $300 million-plus ARR target by 2030, we emphasized the 'plus' sign at Investor Daythis is a milestone, not an endpoint. We are executing well, but there are still multiple years in this journey. Q: How are conversations proceeding with other large streaming vendors? And how should we think about litigation costs going forward?A: Liren Chen (CEO): We are proceeding well with other negotiations in both the SVOD and AVOD spaces. People are paying attention to our progress with Amazon and Disney, and we hope to report more progress in coming weeks and quarters. Rich Brezski (CFO): One benefit of the Amazon arbitration is that it ring-fences litigation, making it more efficient. However, we have other enforcement actions ongoing, so we don't expect expenses to drop too much in that area. Q: Do you sense you can push harder to litigate against other streaming services now, given the positive outcomes with Amazon and Disney?A: Liren Chen (CEO): We feel really good about our position. The Amazon agreement is a major milestone, and we are proceeding well with Disney. The rest of the industry is paying attention. We always prefer bilateral negotiation and are patiently balancing those negotiations. I don't have an update on other litigation possibilities at this time. Q: Is the initial revenue recognized from Amazon based on agreed terms or purely estimates?A: Rich Brezski (CFO): Some details are confidential at this stage. We are basing that revenue on a conservative estimate while in arbitration, with the final value of the license agreement to be determined by arbitration. This is similar to the situation we were in a couple of years ago with Samsung. Q: The recent UPC injunctions against Disney seem material, potentially degrading service. What is Disney's response?A: Liren Chen (CEO): We had a comprehensive enforcement strategy, picking patents covering different technologies and jurisdictions. We are in the process of enforcing them. We have noted from third-party reports that certain key services, including 4K HD content, have been disrupted in the European market. There are also reports of consumer protection agency investigations being triggered or discussed. This reflects the foundational nature of our technology and the fair value we seek. Q: Your Q3 guide is flat with a step-up in Q4. You had $92 million of renewals, with two-thirds already renewed. Is the final third expected in Q4, and which end markets are they across?A: Rich Brezski (CFO): When we discuss our full-year guidance, we have a multi-path approach that could include renewals or other opportunities if we don't execute on those renewals. We see several different paths to get there and are working across all opportunities. Q: Is the Amazon agreement the framework for how we should think about terms for other streaming agreements?A: Rich Brezski (CFO): At this point, we are estimating revenue based on the eventual arbitration outcome. I cannot comment further on the specific terms. Q: How should we think about your capital allocation priorities, given the buybacks and short-term debt coming due?A: Rich Brezski (CFO): Our priorities are to invest in the business, maintain a strong balance sheet for enforcement actions, and return capital to shareholders. The level and timing of buybacks are subject to various factors. Regarding the debt, we had about $80 million of early conversions in Q1 and another $83 million expected to close in the next quarter. These conversions are driven by debt holders, but we are happy to remove the debt. Q: How did you arrive at the 18-to-24-month timeline for the Amazon arbitration, and how long did the Samsung arbitration take?A: Liren Chen (CEO): The process involves resolving some terms, then selecting a panel of arbitrators, which takes time. After that, both parties present evidence, which generally takes 12 to 18 months. Combined, we estimate 18 to 24 months. This is well-aligned with our Samsung and Lenovo experiences. For the complete transcript of the earnings call, please refer to the full earnings call transcript.