InterDigital raises third quarter outlook
Rhea-AI Summary
InterDigital (NASDAQ: IDCC), a mobile, video and AI technology R&D company, has announced a significant upgrade to its Q3 2025 outlook following a new smartphone license agreement with a major Chinese vendor. The deal increases InterDigital's projected annualized recurring revenue (ARR) by $26 million to a record $579 million.
The company has revised its Q3 2025 guidance upward, with revenue now expected between $155-159 million (up from $136-140 million), and adjusted EBITDA projected at $91-97 million (up from $69-75 million). The company now has licensing agreements with eight of the ten largest smartphone vendors, covering approximately 85% of the global smartphone market.
Positive
- New license agreement increases ARR by $26 million to record $579 million
- Significant Q3 guidance raise with revenue increasing by ~$19 million
- Adjusted EBITDA guidance raised by ~$22 million for Q3
- Coverage of 85% of global smartphone market with 8 of 10 largest vendors
- Non-GAAP EPS guidance increased substantially to $2.08-$2.27 from $1.52-$1.72
Negative
- None.
New smartphone license agreement drives projected ARR1 to all-time high of
WILMINGTON, Del., Sept. 22, 2025 (GLOBE NEWSWIRE) -- InterDigital, Inc. (Nasdaq: IDCC), a mobile, video and AI technology research and development company, today announced that it has signed a new license agreement with a major Chinese smartphone vendor and has raised its outlook for third quarter 2025.
"This new license agreement, which was concluded through amicable negotiation, adds another major smartphone player to our customer base and increases our projected annualized recurring revenue (ARR) by approximately
Along with InterDigital's agreements with Apple, Samsung, Xiaomi, OPPO and vivo, the company now has eight of the ten largest smartphone vendors and approximately
Near-Term Outlook
The table below presents the company's current and prior outlook for the third quarter 2025. The outlook covers existing licenses signed as of the time of this release and does not include any new agreements or enforcement actions that we may sign or receive over the balance of the third quarter.
| Third Quarter 2025 | |||
| (in millions, except per share data) | Current | Prior | |
| Revenue | |||
| Adjusted EBITDA2 | |||
| Diluted EPS | |||
| Non-GAAP EPS3 | |||
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: www.interdigital.com.
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," "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 2025, 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 resolution of 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) the failure of markets for our technologies to materialize to the extent that we expect; (vi) our continued ability to develop new technologies; (vii) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act and other U.S. and non-U.S. tax laws; (viii) the timing and impact of potential regulatory, administrative and legislative matters; (ix) the potential effects of macroeconomic conditions or trade conflicts; (x) our ability to hire and retain key personnel; (xi) operational risks, including cybersecurity events, human failures or other difficulties with our information technology systems; and (xii) risks related to any new accounting standards or our assumptions and application of relevant accounting standards, including with respect to revenue recognition.
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 is a supplemental non-GAAP financial measure that InterDigital believes provides investors with important insight into the Company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income attributable to InterDigital Inc. plus net loss attributable to non-controlling interest, income tax (provision) benefit, other income (expense) & interest expense, depreciation and amortization, share-based compensation, and other items. Other items include restructuring costs, impairment charges and other non-recurring items. This non-GAAP financial measure 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 this financial measure, which is 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 provides investors with important insight into the Company's ongoing business performance. InterDigital defines Non-GAAP net income as net income attributable to InterDigital, Inc. plus share-based compensation, acquisition related amortization, depreciation and 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.
RECONCILIATION OF NON-GAAP MEASURES
The following tables present a reconciliation between GAAP and non-GAAP versions of the estimated financial measures for the third quarter of fiscal 2025 included in this release:
| Third Quarter Outlook (in millions) | ||||
| Current | Prior | |||
| Net income | ||||
| Income tax provision | 11 | 8 | ||
| Other expense, net & interest income | 1 | — | ||
| Depreciation and amortization | 20 | 20 | ||
| Share-based compensation | 10 | 9 | ||
| Other items | — | — | ||
| Adjusted EBITDA 2 | ||||
| Third Quarter Outlook (in millions, except for per share data) | ||||
| Current | Prior | |||
| Net income | ||||
| Share-based compensation | 10 | 9 | ||
| Acquisition related amortization | 9 | 9 | ||
| Other operating items | — | — | ||
| Other non-operating items | — | — | ||
| Related income tax effect of above items | (4) | (4) | ||
| Adjustments to income taxes | — | — | ||
| Non-GAAP net income 3 | ||||
| Weighted average dilutive shares - GAAP | 35.3 | 34.1 | ||
| Less: Dilutive impact of the Convertible Notes | (4.5) | (4.0) | ||
| Weighted average dilutive shares - Non-GAAP3 | 30.8 | 30.2 | ||
| Diluted EPS | ||||
| Non-GAAP EPS 3 | ||||
InterDigital Contact:
investor.relations@interdigital.com
+1 (302) 300-1857
FAQ
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