What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 159 added, 96 removed, 607 unchanged (30% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Operating expenses:

7 unchanged sentences

Other income and expense, net

Loss on debt extinguishment

Income before income taxes

6 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income (loss), net of tax:

1 unchanged sentence

Net unrealized losses on available-for-sale debt securities

Other comprehensive income (loss), net of tax

Other comprehensive loss, net of tax

Total comprehensive income

50 unchanged sentences

(in thousands)

Three Months Ended

March 31, 2024

March 31, 2023

Six Months Ended

June 30, 2024

June 30, 2023

Cash flows from operating activities:

Adjustments to reconcile net income to net cash from operating activities:

Depreciation of property and equipment

Amortization of intangible assets

1 unchanged sentence

Deferred income taxes

Loss on debt extinguishment

Amortization of debt issuance costs

28 unchanged sentences

(in thousands, except per share amount)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Paid-In Capital

2 unchanged sentences

Stockholders' Equity

Balance at April 1, 2024

Other comprehensive loss

Cash dividends paid on common stock ($ 0.05 per share)

Issuance of common stock in connection with exercise of stock options

Issuance of common stock in connection with employee stock purchase plan

Issuance of restricted stock, net of shares canceled

Withholding taxes related to net share settlement of restricted awards

Stock-based compensation expense

Balance at June 30, 2024

Six Months Ended June 30, 2024

Paid-In Capital

Treasury Stock

Other Comprehensive Loss

Stockholders' Equity

Balance at January 1, 2024

2 unchanged sentences

Issuance of common stock in connection with exercise of stock options

Issuance of common stock in connection with employee stock purchase plan

Issuance of restricted stock, net of shares canceled

1 unchanged sentence

Stock-based compensation expense

Balance at March 31, 2024

Balance at June 30, 2024

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

Total Company Stockholders' Equity

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Treasury Stock

Comprehensive Loss

Stockholders' Equity

Balance at April 1, 2023

Other comprehensive loss

Cash dividends paid on common stock ($ 0.05 per share)

Issuance of common stock in connection with employee stock purchase plan

Issuance of restricted stock, net of shares canceled

Withholding taxes related to net share settlement of restricted awards

Stock-based compensation expense

Balance at June 30, 2023

Total Company Stockholders' Equity

Six Months Ended June 30, 2023

Paid-In Capital

Treasury Stock

Comprehensive Income (Loss)

Comprehensive Loss

Stockholders' Equity

Balance at January 1, 2023

Other comprehensive income

Other comprehensive loss

Cash dividends paid on common stock ($ 0.10 per share)

Issuance of common stock in connection with exercise of stock options

Issuance of common stock in connection with employee stock purchase plan

Issuance of restricted stock, net of shares canceled

1 unchanged sentence

Stock-based compensation expense

Balance at March 31, 2023

Balance at June 30, 2023

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

16 unchanged sentences

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly the financial position of the Company and its results of operations and cash flows as of and for the periods presented.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024 or any future period and the Company makes no representations related thereto.

The results of operations for the three months and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024 or any future period and the Company makes no representations related thereto.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no significant changes in the Company’s significant accounting policies during the three months ended March 31, 2024, as compared to the significant accounting policies described in the Form 10-K.

There have been no significant changes in the Company’s significant accounting policies during the three and six months ended June 30, 2024, as compared to the significant accounting policies described in the Form 10-K.

Use of Estimates

83 unchanged sentences

Three Months Ended

Six Months Ended

Recurring revenue

4 unchanged sentences

Three Months Ended

Six Months Ended

Semiconductor

6 unchanged sentences

Contract assets were recorded in the Condensed Consolidated Balance Sheets as follows (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

10 unchanged sentences

It is generally considered to be of high credit quality due to past collection history and the nature of the customers.

The Company allowance for credit losses at March 31, 2024 and December 31, 2023 wa s $ 1.5 million and it is presented as part of accounts receivable, net in the Condensed Consolidated Balance Sheets.

The allowance for credit losses at June 30, 2024 and December 31, 2023 wa s $ 0.7 million and $ 1.5 million, respectively and is presented as part of accounts receivable, net in the Condensed Consolidated Balance Sheets.

Additional Disclosures

1 unchanged sentence

Three Months Ended

Six Months Ended

Revenue recognized in the period from:

2 unchanged sentences

(1) Performance obligations satisfied in previous periods consist mainly of fees associated with releases for past patent infringement, settlements of litigation during the period, and revenue from past royalties owed pursuant to expired or terminated IP license agreements.

For long-term and multi-year revenue contracts, the Company recorded revenue from the releases for past infringement and the prospective license during the three months ended March 31, 2024 and 2023 and expects to record revenue from the prospective license in future periods.

For long-term and multi-year revenue contracts, the Company recorded revenue from the releases for past infringement during the three months and six months ended June 30, 2024 and 2023 and expects to record revenue from the prospective license in future periods.

Remaining revenue under contracts with performance obligations represents the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied (or partially unsatisfied) under certain of the Company’s fixed fee arrangements (in thousands).

March 31, 2024

June 30, 2024

Revenue from contracts with performance obligations expected to be satisfied in:

2 unchanged sentences

Other current assets consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

4 unchanged sentences

Property and equipment, net, consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

1 unchanged sentence

Leasehold improvements

Total property and equipment

accumulated depreciation and amortization

1 unchanged sentence

Other long-term assets consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

2 unchanged sentences

Accrued liabilities consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

7 unchanged sentences

Other long-term liabilities consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

6 unchanged sentences

Under ASU 2016-01 (Topic 321), equity securities are measured at fair value with unrealized gains and losses recognized in other income and expense, net, in the Consolidated Statements of Income.

The following is a summary of marketable securities at March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

The following is a summary of marketable securities at June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

Allowance for Credit Losses

8 unchanged sentences

Cash and cash equivalents

Available-for-sale debt securities

Marketable securities

Total marketable securities

10 unchanged sentences

Cash and cash equivalents

Available-for-sale debt securities

Marketable securities

Total marketable securities

At March 31, 2024 and December 31, 2023, the Company ha d $ 89.0 mil lion and $ 83.6 million, respectively, in cash and cash equivalents and short-term investments.

At June 30, 2024 and December 31, 2023, the Company ha d $ 94.5 mil lion and $ 83.6 million, respectively, in cash and cash equivalents and short-term investments.

A portion of these amounts was held in marketable securities, as shown above.

The remaining balances o f $ 53.9 mi llion and $ 48.8 million at March 31, 2024 and December 31, 2023, respectively, consisted of cash held in operating accounts not included in the tables above.

The remaining balances o f $ 59.0 mi llion and $ 48.8 million at June 30, 2024 and December 31, 2023, respectively, consisted of cash held in operating accounts not included in the tables above.

Debt Securities

The gross realized gains and losses on sales of marketable debt securities were immaterial during the three months ended March 31, 2024 and 2023.

Unrealized losses on AFS debt securities were immaterial as of March 31, 2024 and December 31, 2023.

The gross realized gains and losses on sales of marketable debt securities were immaterial during the three months and six months ended June 30, 2024 and 2023.

Unrealized losses on AFS debt securities were immaterial as of June 30, 2024 and December 31, 2023.

The Company evaluated whether the decline in fair value has resulted from credit losses or other factors and concluded these amounts were related to temporary fluctuations in value of AFS securities and were due primarily to changes in interest rates and market conditions of the underlying securities.

The Compan y did no t rec ognize a provision for credit losses related to its AFS debt securities during the three months ended March 31, 2024 and 2023, respectively.

The estimated fair value of marketable debt securities by contractual maturity at March 31, 2024 is shown below (in thousands).

The Compan y did no t rec ognize a provision for credit losses related to its AFS debt securities during the three months and six months ended June 30, 2024 and 2023, respectively.

The estimated fair value of AFS debt securities by contractual maturity at June 30, 2024 is shown below (in thousands).

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties.

14 unchanged sentences

The Company calculates the fair value of its Level 1 and Level 2 instruments based on the exchange traded price of similar or identical instruments, where available, or based on other observable inputs.

There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2023 and March 31, 2024.

The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of March 31, 2024 (in thousands):

There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2023 and June 30, 2024.

The following sets forth the fair value, and classification within the hierarchy, of the Company’s assets required to be measured at fair value on a recurring basis as of June 30, 2024 (in thousands):

Active Markets

24 unchanged sentences

The carrying amounts and estimated fair values are as follows (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

Refinanced Term B Loans (1)

2021 Refinanced Term Loan B (1)

2024 Term Loan B (1)

Total long-term debt, net

(1) Carrying amounts of long-term debt are net of unamortized debt discount and issuance costs of $ 14.8 m illion and $ 15.6 million as of March 31, 2024 and December 31, 2023, respectively.

(1) Carrying amounts of long-term debt are net of unamortized debt discount and issuance costs of $ 13.5 m illion and $ 15.6 million as of June 30, 2024 and December 31, 2023, respectively.

See “Note 8 – Debt ” for additional information.

2 unchanged sentences

NOTE 7 – GOODWILL AND IDENTIFIED INTANGIBLE ASSETS

The carrying value of goodwill at March 31, 2024 and December 31, 2023 wa s $ 313.7 million.

There were no changes t o the carrying value of goodwill from January 1, through March 31, 2024.

The carrying value of goodwill at June 30, 2024 and December 31, 2023 wa s $ 313.7 million.

There were no changes t o the carrying value of goodwill from January 1, through June 30, 2024.

Goodwill at each reporting unit is evaluated for potential impairment annually, as of the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying amount of goodwill may not be recoverable.

The process of evaluating goodwill for potential impairment is subjective and requires significant estimates, assumptions and judgments particularly related to the identification of reporting units, the assignment of assets and liabilities to reporting units and estimating the fair value of each reporting unit.

No impairment charges were recognized for the three months ended March 31, 2024 and 2023.

No impairment charges were recognized for the three months and six months ended June 30, 2024 and 2023.

Identified Intangible Assets

Identified intangible assets consisted of the following (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Total intangible assets

As of March 31, 2024, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands):

As of June 30, 2024, the estimated future amortization expense of total finite-lived intangible assets was as follows (in thousands):

2024 (remaining 6 months)

1 unchanged sentence

The outstanding amounts of debt were as follows (in thousands):

March 31, 2024

June 30, 2024

December 31, 2023

Refinanced Term B Loans

2021 Refinanced Term Loan B

2024 Term Loan B

Unamortized debt discount and issuance costs

1 unchanged sentence

Total long-term debt, net of current portion

Refinanced Term B Loans

On June 8, 2021, the Company amended that certain Credit Agreement dated June 1, 2020 by and among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “2020 Credit Agreement”).

The 2020 Credit Agreement initially provided for a five-year senior secured term B loan facility in an aggregate principal amount of $ 1,050 million (the “2020 Term B Loan Facility”).

In connection with the amendment (the “Amendment”), the Company made a voluntary prepayment of $ 50.6 million of the term loan outstanding under the 2020 Credit Agreement using cash on hand.

The Amendment provided for, among other things, (i) a new tranche of term loans (the “Refinanced Term B Loans”) in an aggregate principal amount of $ 810.0 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of base rate loans, 2.50 % per annum and (y) in the case of Eurodollar loans, LIBOR plus a margin of 3.50 % per annum, (iii) a prepayment premium of 1.00 % in connection with any repricing transaction with respect to the Refinanced Term B Loans within six months of the closing date of the Amendment, (iv) an extension of the maturity to June 8, 2028 , and (v) certain additional amendments, including amendments to provide the Company with additional flexibility under the covenant governing restricted payments.

The Company commenced repaying quarterly installments under the Refinanced Term B Loans in the third quarter of 2021.

On May 30, 2023, the Company amended the 2020 Credit Agreement to replace the reference to LIBOR as the base rate with the reference to the Secured Overnight Financing Rate “SOFR” as administered by the Federal Reserve Bank of New York.

On June 8, 2021, the Company entered into Amendment No.

1 (“Amendment No.

1”) to that certain Credit Agreement dated June 1, 2020 by and among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “2020 Credit Agreement”).

The 2020 Credit Agreement initially provided for a five-year senior secured term loan B facility in an aggregate principal amount of $ 1,050 million (the “2020 Term Loan B Facility”).

In connection with Amendment No.

1, the Company made a voluntary prepayment of $ 50.6 million of the term loan outstanding under the 2020 Credit Agreement using cash on hand.

Amendment No.

1 provided for, among other things, (i) a new tranche of term loans (the “2021 Refinanced Term Loan B”) in an aggregate principal amount of $ 810.0 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of base rate loans, 2.50 % per annum and (y) in the case of Eurodollar loans, LIBOR plus a margin of 3.50 % per annum, (iii) a prepayment premium of 1.00 % in connection with any repricing transaction with respect to the 2021 Refinanced Term Loan B within six months of the closing date of Amendment No.

1, (iv) an extension of the maturity to June 8, 2028 , and (v) certain additional amendments, including amendments to provide the Company with additional flexibility under the covenant governing restricted payments.

On May 30, 2023, the Company entered into Amendment No.

2 (“Amendment No.

2”) to the 2020 Credit Agreement, to replace the reference to LIBOR as the base rate with the reference to the Secured Overnight Financing Rate “SOFR” as administered by the Federal Reserve Bank of New York.

The new reference rate was effective July 1, 2023.

The obligations under the 2020 Credit Agreement, inclusive of any changes by the Amendment, continue to be guaranteed by the Company’s wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all of the assets of the Company and the Guarantors.

On May 20, 2024, the Company entered into Amendment No.

3 (“Amendment No.

3”) to the 2020 Credit Agreement, which provided for, among other things, (i) a repricing of the 2020 Term Loan B Facility through a refinancing of the entire amount of the 2021 Refinanced Term Loan B with a new tranche of term loans (the “2024 Term Loan B”) in an aggregate principal amount of $ 561.1 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of SOFR loans,

SOFR plus a margin of 3.00 % per annum and (y) in the case of base rate loans, 2.00 % per annum, (iii) a reduction in the excess cash flow mandatory payment thresholds and (iv) a prepayment premium of 1.00 % in connection with any repricing transaction with respect to the 2024 Term Loan B within six months of the closing date of Amendment No.

The 2024 Term Loan B will mature on June 8, 2028 , the same date upon which the 2021 Refinanced Term Loan B matured prior to giving effect to Amendment No.

The obligations under the 2020 Credit Agreement, inclusive of any changes by Amendment No.

1, Amendment No.

2 and Amendment No.

3, continue to be guaranteed by the Company’s wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all of the assets of the Company and the Guarantors.

The 2020 Credit Agreement, as amended, contains customary events of default, upon the occurrence of which, after any applicable cure period, the lenders will have the ability to accelerate all outstanding loans thereunder.

2 unchanged sentences

The 2020 Credit Agreement, as amended, requires the Company to maintain a total net leverage ratio of no greater than 3.00x in order access an annual basket from which to make restricted payments (such as dividend payments and share repurchases).

The Company was in compliance with all requirements as of March 31, 2024.

The 2020 Credit Agreement, as amended, also requires the Company to make additional cash payments on an annual basis beginning in April 2023 based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year.

The additional cash payments are applied to the remaining principal balance due at final maturity.

Accordingly, during the three months ended March 31, 2024, the Company paid $ 29.1 million under the excess cash flow provisions.

The Company was in compliance with all requirements as of June 30, 2024.

The 2020 Credit Agreement, as amended, also requires the Company to continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year.

The cash payments are applied to the remaining principal balance due at final maturity.

Interest Expense and Expected Principal Payments

At March 31, 2024, the Company had $ 561.1 million in total debt outstanding.

At June 30, 2024, the Company had $ 549.1 million in total debt outstanding.

There were also $ 13.5 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt.

The interest rate on the Refinanced Term B Loans as of March 31, 2024, including the amortization of debt discount and issuance costs, was 10.0 % and interest is payable monthly.

Interest expens e was $ 14.0 million and $ 15.9 million for the three months ended March 31, 2024 and 2023, respectively .

Amortized debt discount and issuance costs, which were included in interest expense, amounted to $ 0.8 million and $ 1.2 m illion for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, future minimum principal payments for long-term debt, excluding any additional principal payment required by the excess cash flow provision, are summarized as follows (in thousands):

The interest rate on the 2024 Term Loan B as of June 30, 2024, including the amortization of debt discount and issuance costs, was 9.6 % and interest is payable monthly.

Interest expens e was $ 12.9 million and $ 25.4 million for the three and six months ended June 30, 2024, respectively .

Interest expense was $ 15.4 million and $ 31.3 million for the three and six months ended June 30, 2023, respectively.

Amortized debt discount and issuance costs, which were included in interest expense, amounted to $ 0.9 million and $ 1.6 million for the three and six months ended June 30, 2024, respectively, and $ 1.1 million and $ 2.2 million for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, future minimum principal payments for long-term debt, excluding any additional principal payment required by the excess cash flow provision, are summarized as follows (in thousands):

2024 (remaining 6 months)

2 unchanged sentences

Three Months Ended

Six Months Ended

Weighted average shares of common stock outstanding

14 unchanged sentences

Under the 2020 EIP, the Company may grant equity-based awards to employees, non-employee directors, and consultants for services rendered to the Company (or any parent or subsidiary) in the form of stock options, stock awards, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and performance awards (or any combination thereof).

A total of 16.8 million shares have been reserved for issuance under the 2020 EIP provided that each share issued pursuant to “full value” awards (i.e., stock awards, restricted stock awards, restricted stock units, performance awards and dividend equivalents) are counted against shares available for issuance under the 2020 EIP on a 1.5 to 1 ratio.

At the 2022 Annual Stockholders Meeting o n April 29, 2022, th e Company’s shareholders approved an amendment to the 2020 EIP and increased by 8.8 million the number of shares reserved for issuance.

As of March 31, 2024, there wer e 0.9 mi llion shares reserved for future grants under the 2020 EIP.

At the Company’s 2024 Annual Stockholders Meeting on May 9, 2024, the Company’s stockholders approved an amendment and restatement of the 2020 EIP, which provided for (i) an increase of the number of shares reserved for issuance by 8,900,000 (from an initial share reserve of 16,800,000 under the prior 2020 EIP to 25,700,000 under the amended and restated 2020 EIP) and (ii) the removal of the “fungible share ratio” for future awards, such that all equity awards granted on or after May 9, 2024 will count on a one-to-one basis against the number of shares authorized for issuance under the 2020 EIP (whereas each share granted pursuant to “full value”

stock awards, restricted stock awards, restricted stock units, performance awards and dividend equivalents) prior to May 9, 2024 are counted against shares available for issuance on a 1.5 to 1 ratio).

As of June 30, 2024, there wer e approximately 8.1 mi llion shares reserved for future grants under the 2020 EIP.

The 2020 EIP provides for option grants designed as either incentive stock options or non-statutory options.

5 unchanged sentences

Awards of restricted stock and restricted stock units assumed from the Assumed Plans are generally subject to a four year vesting period.

The Company has not issued any awards under these plans since the 2020 Plan was amended in 2022.

The Company has not issued any awards under these plans since the 2020 EIP was amended in 2022.

The number of shares subject to stock options and restricted stock units outstanding under these plans are included in the tables below.

5 unchanged sentences

Options canceled / forfeited / expired

Balance at March 31, 2024

Vested and exercisable at March 31, 2024

Balance at June 30, 2024

Vested and exercisable at June 30, 2024

Restricted Stock Awards

Information with respect to outstanding restricted stock units (including both time-based vesting and performance-based vesting) as of March 31, 2024 is as follows (in thousands, except per share amounts):

Information with respect to outstanding restricted stock units (including both time-based vesting and performance-based vesting) as of June 30, 2024 is as follows (in thousands, except per share amounts):

Restricted Stock Awards

5 unchanged sentences

Awards canceled / forfeited

Balance at March 31, 2024

Balance at June 30, 2024

Performance Awards

14 unchanged sentences

Due to the fair market value per share of Company’s common stock on November 30, 2023 as compared to the fair market value per share on June 1, 2023, the offering period was automatically terminated and a new 24-month offering period began on December 1, 2023 and will end on November 30, 2025.

At the 2022 Annual Stockholders Meeting on April 29, 2022, the Company’s shareholders approved an amendment to the 2020 ESPP and increased by 6.0 million the number of shares reserved for issuance.

As of March 31, 2024, the re were 5.3 million shares reserved for grant under the Company’s 2020 ESPP.

At the 2022 Annual Stockholders Meeting on April 29, 2022, the Company’s stockholders approved an amendment to the 2020 ESPP and increased by 6.0 million the number of shares reserved for issuance.

As of June 30, 2024, the re were approximately 5.2 million shares reserved for grant under the Company’s 2020 ESPP.

Modification of Equity Awards

8 unchanged sentences

Stockholders of the Company’s common stock are entitled to receive dividends when declared by the Company’s board of directors (the “Board”).

During the three months ended March 31, 2024 and 2023, quarterly dividends declared were $ 0.05 per common share, respectively.

During the period ended June 30, 2024 and 2023, quarterly dividends declared were $ 0.05 per common share, respectively.

The capacity to pay dividends in the future depends on many factors, including the Company’s financial condition, results of operations, capital requirements, capital structure, industry practice and other business conditions that the Board considers relevant.

2 unchanged sentences

On April 22, 2021, the Board authorized an additional $ 100.0 million of purchases under the existing stock repurchase plan.

There were no shares repurchased during the three months ended March 31, 2024.

As of March 31, 2024, the Company had repurchased a total of approximately 10.0 million shares of common stock, since inception of the plan, at an average price of $ 17.24 per share for a total cost of $ 172.2 million.

There were no shares repurchased during the three and six months ended June 30, 2024.

As of June 30, 2024, the Company had repurchased a total of approximately 10.0 million shares of common stock, since inception of the plan, at an average price of $ 17.24 per share for a total cost of $ 172.2 million.

The shares repurchased are recorded as treasury stock and are accounted for under the cost method.

No expiration date has been specified for this plan.

As of March 31, 2024, the total remaining amount available for repurchase under this plan w as $ 77.8 million.

As of June 30, 2024, the total remaining amount available for repurchase under this plan w as $ 77.8 million.

The Company may execute authorized repurchases from time to time under the plan.

5 unchanged sentences

However, these withheld shares are not included in common stock repurchases under the Company’s authorized share repurchase plan.

During the three months ended March 31, 2024 and 2023, the Company with held 0.7 million and 0.7 million shares of common stock to satisfy $ 7.7 million a nd $ 6.6 million of required withholding taxes, respectively.

During the three months ended June 30, 2024 and 2023, the Company withhel d 0.1 m illion an d 0.1 m illion shares of common stock to satisfy $ 1.4 million and $ 0.9 million of required withholding taxes, respectively.

During the six months ended June 30, 2024 and 2023, the Company withh eld 0.8 m illion and 0.8 million shares of common stock to satisfy $ 9.1 mi llion and $ 7.5 million of required withholding taxes, respectively.

NOTE 11 – STOCK-BASED COMPENSATION EXPENSE

The effect of recording stock-based compensation (“SBC”) expense for the three months ended March 31, 2024 and 2023 is as follows (in thousands):

The effect of recording stock-based compensation (“SBC”) expense for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands):

Three Months Ended

Six Months Ended

Research and development

1 unchanged sentence

Total stock-based compensation expense

There were no options granted during the three months ended March 31, 2024 and 2023.

There were no options granted during the three and six months ended June 30, 2024 and 2023 .

The Company uses a Monte Carlo simulation to determine the grant date fair value of performance stock awards subject to market conditions, or market-based PSUs.

There were no performance stock awards subject to market conditions granted during the three months ended March 31, 2024.

The following assumptions were used to value the restricted stock units subject to market conditions granted during the three months ended March 31, 2023:

The following assumptions were used to value the restricted stock units subject to market conditions granted during the six months ended June 30, 2024 and 2023:

Expected life (years)

2 unchanged sentences

Expected volatility

There were no ESPP grants during the three months ended March 31, 2024 and 2023.

Grants under the 2020 ESPP occur in June and December, as discussed in “Note 10 – Stockholders’ Equity ”.

The following assumptions were used to value the shares for these grants.

Expected life (years)

Risk-free interest rate

Dividend yield

Expected volatility

NOTE 12 – INCOME TAXES

The Company’s income tax provision and effective tax rate for interim periods are based on its estimated annual effective tax rate adjusted for discrete items during the period.

For the three months ended March 31, 2024 and 2023, the Company recorded income tax expense of $ 5.7 million and $ 11.8 million, respectively.

For the three and six months ended June 30, 2024, the Company recorded income tax expense of $ 2.9 million and $ 8.6 million, respectively.

For the three and six months ended June 30, 2023, the Company recorded income tax expense of $ 2.4 million and $ 14.2 million, respectively.

The effective tax rate varies from the 21 % U.S.

federal tax rate primarily due to foreign exchange gain or loss on prior year South Korea withholding tax refund claims.

The decrease in income tax expense for the three months ended March 31, 2024, as compared to the same period in the prior year was primarily due to a decrease in pretax income.

federal tax rate primarily due to unrealized foreign exchange gain or loss on prior year South Korea withholding tax refund claims.

The decrease in income tax expense for the six months ended June 30, 2024, as compared to the same period in the prior year was primarily due to a year to date decrease in pretax income.

NOTE 13 – LEASES

8 unchanged sentences

Three Months Ended

Six Months Ended

Fixed lease cost

7 unchanged sentences

Operating leases

March 31, 2024

June 30, 2024

December 31, 2023

3 unchanged sentences

Operating leases

Future minimum lease payments and related lease liabilities as of March 31, 2024 were as follows (in thousands):

Future minimum lease payments and related lease liabilities as of June 30, 2024 were as follows (in thousands):

Operating Lease Payments (1)

10 unchanged sentences

These arrangements primarily include unconditional purchase obligations to service providers.

As of March 31, 2024, the Company’s total future unconditional purchase obligations were approximately $ 3.3 million, including $ 1.5 million due in the remainder of 2024, $ 1.6 million due in 2025 and $ 0.2 million due thereafter.

As of June 30, 2024, the Company’s total future unconditional purchase obligations were approximately $ 3.0 million, including $ 1.2 milli on due in the remainder of 2024, $ 1.6 million due in 2025 and $ 0.2 million due thereafter.

Prior to the Separation, Adeia Media LLC, a subsidiary of the Company (“Adeia Media”), and a subsidiary of Xperi Inc.

4 unchanged sentences

The maximum potential amount of future payments subject to the guarantee is approximately $ 7.5 million per annum between 2024 and 2031 .

As of March 31, 2024 and December 31, 2023, the balance of the guarantee liability wa s $ 18.5 m illion.

The Company made no guarantee payment during the three months ended March 31, 2024.

During the three months ended March 31, 2023, the Company made guarantee payments of $ 0.5 million and recognized other income of $ 0.3 million in the Consolidated Statement of Income as a result of a change in the carrying value of the guarantee liability.

As of June 30, 2024 and December 31, 2023, the balance of the guarantee liability wa s $ 18.5 m illion.

The Company made no guarantee payment during the three and six months ended June 30, 2024.

During the three months and six months ended June 30, 2023, the Company made guarantee payments of $ 0.6 million and $ 1.1 million, respectively.

The Company recognized other income of $ 0.3 million during the six months ended June 30, 2023 in the Condensed Consolidated Statement of Operations as a result of a change in the carrying value of the guarantee liability.

Indemnifications

29 unchanged sentences

On November 28, 2023, the Federal Court of Appeal of Canada held a hearing on the appeal and took the matter under reserve.

There is no set date for the Federal Court of Appeal of Canada to issue its decision.

On August 6, 2024, the Federal Court of Appeal of Canada issued a judgment in the appeal in which it dismissed the appeal.

On January 19, 2018, Adeia Media filed a patent infringement complaint against Bell Canada (and four of its affiliates) (collectively, “Bell”) in Toronto, Canada, alleging infringement of six patents (“Bell 1”).

9 unchanged sentences

On November 29, 2023, the Federal Court of Appeal of Canada held a hearing on the appeal and took the matter under reserve.

There is no set date for the Federal Court of Appeal of Canada to issue its decision.

On August 6, 2024, the Federal Court of Appeal of Canada issued a judgment in the appeal in which it dismissed the appeal.

The Company is unable to predict the final outcome of other lawsuits, including other patent infringement lawsuits in Canada, to which it is a party and therefore cannot determine the likelihood of loss nor estimate a range of possible losses.

11 unchanged sentences

Three Months Ended

Six Months Ended

Europe and Middle East

For the three months ended March 31, 2024 and 2023, there wer e three and two customers, respectively, that each accounted for 10% or more of total revenue.

For the three and six months ended June 30, 2024 and 2023, there wer e two and three customers, respectively, that each accounted for 10% or more of total revenue.

The following table sets forth revenue generated from customers which comprise 10% or more of total revenue for the periods indicated:

Three Months Ended

Six Months Ended

* denotes less than 10% of total revenue.

As of March 31, 2024, the Company had one customer repre senting 60 % of aggr egate accounts receivable.

As of June 30, 2024, the Company had one customer repre senting 69 % of aggr egate accounts receivable.

At December 31, 2023, the Company had two customers representing 42 % and 28 % of aggregate accounts receivable, respectively.

As of March 31, 2024 and December 31, 2023, property and equipment, net, was all located in the U.S.

As of June 30, 2024 and December 31, 2023, property and equipment, net, was all located in the U.S.

NOTE 16 – SUBSEQUENT EVENTS

Declaration of Cash Dividends

On April 25, 2024 , the Board declared a cash dividend of $ 0.05 per share of common stock, payable on June 18, 2024 to the stockholders of record at the close of business on May 28, 2024 .

On July 24, 2024 , the Board declared a cash dividend of $ 0.05 per share of common stock, payable on September 17, 2024 to the stockholders of record at the close of business on August 27, 2024 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements