What changed in this filing

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Item 1. Business

2025-02-06 compared with 2024-02-15 · 136 added, 137 removed, 170 unchanged (62% of the section changed)

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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.

We license our innovations worldwide to companies providing such products and services, including makers of wireless communications devices, consumer electronics, internet of things ("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.

We are also a leader in video processing and video encoding/decoding technology used in video-enabled products and services.

Our AI research effort is focused on the intersection of AI with both wireless and video technologies.

InterDigital is one of the largest pure research and development and licensing companies in the world, with one of the most significant patent portfolios of fundamental wireless and video technologies.

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We have contributed technology to video standards including standards established by ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others.

Our wireless portfolio has largely been built through internal development, supplemented by joint development projects with other companies, and select acquisitions of patents and companies.

Our video technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the patent licensing business and research and innovation unit of visual technology industry leader Technicolor SA and patents and applications created by internal development.

Our patented inventions have been implemented in a wide variety of products, including smartphones, other wireless communication devices and infrastructure equipment, such as tablets, and base stations, consumer electronics and Internet of Things ("IoT") products, such as televisions, laptops, gaming consoles, set-top boxes, streaming devices and connected automobiles.

In addition, our patented inventions have been implemented in a wide variety of services, such as video streaming and other cloud-based services.

Our wireless portfolio has largely been built through internal investment in a world-class research team, supplemented by joint development projects with other companies, and select acquisitions of patents and companies.

Our video technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the research and innovation unit and patent licensing business of visual technology industry leader Technicolor SA and patents and applications created by internal development.

Our patented inventions have been implemented in a wide variety of products, including smartphones, tablets, base stations, televisions, laptops, gaming consoles, set-top boxes, streaming devices, connected automobiles, and other consumer electronics and IoT products.

Our patented inventions have also been implemented in a wide variety of services, such as video streaming, user generated content sharing, video conferencing, video gaming, and other cloud-based services.

InterDigital derives revenues primarily from licensing our patented innovations.

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Additional information about our revenues, profits, and assets, as well as additional financial data, is provided in the Consolidated Financial Statements and accompanying Notes in Part II, Item 8, of this Form 10-K.

Our strategy is to continue to be a leading innovator, designer and developer of fundamental, horizontal technologies and to receive fair compensation from the companies that implement our patented innovations in their products and services across licensing programs.

Our strategy is to continue to be a leading innovator, designer and developer of fundamental, horizontal technologies and to receive fair compensation for this research by licensing our technology to the companies that benefit from including our patented innovations in their products and services.

To execute our strategy, we intend to:

• Grow and enhance our patent portfolio through continued investment in advanced research and development.

• Continue to invest in advanced research to grow and enhance our patent portfolio.

We intend to grow and enhance our worldwide patent portfolio in advanced wireless technology, video coding, AI, and other related technology areas by growing our investment in our industry-leading research and development organization, actively participating in SDOs and other industry consortia, and partnering with leading inventors and industry players to source and develop new technologies.

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• Grow our patent-based revenue.

We intend to grow our licensing revenue base by adding licensees in the existing product markets that we serve, and by expanding our licensing activities into video streaming and other cloud-based services.

We intend to grow our licensing revenue base by adding licensees in the existing product markets that we serve, expanding our licensing activities into video streaming and other cloud-based services and expanding into new product markets.

These licensing efforts may be direct or executed in conjunction with licensing partnerships and other efforts, and may require the enforcement and defense of our intellectual property through litigation and other means.

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That early involvement and our continued development of advanced digital wireless technologies have enabled us to create our significant worldwide portfolio of patents.

InterDigital is also a leader in key video technologies, including emerging technologies such as immersive video and AI-based video coding.

Our current research efforts are focused on a variety of areas related to future technology and devices, including cellular wireless technology, advanced video coding and transmission, and AI.

InterDigital is also a leader in key video technologies, including 2D video coding and emerging technologies such as immersive video and AI-based video coding.

Our current research efforts are focused on a variety of areas related to future technology and devices, including cellular wireless and WiFi technologies, advanced video coding and transmission, and AI.

The InterDigital R&I team’s technical expertise is recognized by the worldwide wireless and video standards bodies where our delegates hold key leadership positions.

Our capabilities in the development of advanced technologies are based on the efforts of a highly specialized engineering team, leveraging leading-edge equipment and software platforms.

In 2023, 2022, and 2021, our research and innovation costs were $78.3 million, $74.3 million, and $89.4 million, respectively, and the largest portion of this expense has been personnel costs.

In 2024 and 2023, our research and portfolio development costs were $196.9 million and $195.3 million, respectively, and the largest portion of this expense has been personnel costs.

Wireless Technology

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We continue to be engaged in development efforts to build and enhance our 3GPP (as defined herein) technology portfolio in the current and future generations including 5G, 5G Advanced and 6G.

The horizontal technologies we develop are essential to support a variety of use cases across several vertical market segments that use connected devices such as automobiles and autonomous vehicles, wearables, smart factories and smart homes, robots, drones and many other connected consumer electronic products including mobile phones and tablets.

The horizontal technologies we develop are essential to support a variety of use cases across several vertical market segments that use connected devices such as mobile phones, automobiles and autonomous vehicles, wearables, smart factories and smart homes, robots, drones and many other connected consumer electronic products including tablets and PCs.

We are developing evolutionary and revolutionary solutions that enable connectivity in both licensed and unlicensed spectrum, terrestrial and non-terrestrial networks to provide ubiquitous coverage, across a large range of frequencies up to the terahertz (THz) wave bands.

Segments outside of 3GPP primarily fall within the scope of the IEEE 802 and IETF standards.

We continue to grow a portfolio of technology related to Wi-Fi, Internet Standards, and Edge Computing, that includes, for example, improvements to the IEEE 802.11 PHY and MAC to increase peak data rates (802.11be - Extremely High Throughput), cloud gaming, security, and terminal mobility for edge services.

Segments outside of 3GPP primarily fall within the scope of the IEEE 802 for WiFi devices and IETF standards for Internet protocols.

Our IEEE 802 standards-based inventions are used in devices that are certified for WiFi 4/5/6/7 and provide improvements in spectral efficiency, higher throughput, reduced latency, energy efficiency and many other features.

We continue to participate and develop new technologies towards WiFi 8 through our leadership positions in IEEE 802 and WiFi Alliance.

Advanced Video Coding and Transmission Technology

An important and growing segment of wireless traffic is devoted to video streaming.

We have a rich history in developing advanced technologies that address the challenges of video as it relates to mobile.

We have a rich history in developing advanced technologies that address the challenges of video products and services.

Specifically, in the area of video research, we have a long history of research and innovation in technologies that provide the basis for nearly all of the modern video codecs.

We have been actively engaged in video standards development work in the ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET).

Those efforts have focused on H.265/High Efficiency Video Coding ("HEVC") versions 1 to 4, as well as development of the VCC/H.266 and the MPEG Immersive (MPEG-I) standards suite for the future.

Those efforts have focused on H264/Advanced Video Coding, H.265/High Efficiency Video Coding ("HEVC") versions 1 to 4, as well as development of the H.266/VCC and the MPEG Immersive (MPEG-I) standards suite.

InterDigital R&I is now conducting research in groundbreaking technologies preparing for the next generation of video codecs beyond VVC, investigating new media coding such as point cloud compression, haptics or avatars using both traditional and AI-based techniques.

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energy-efficient deep learning aimed at reducing the energy-intensive rollout of AI;

deep video compression, seeking to design novel video codecs based on deep learning techniques and optimized for different use cases (e.g., for machine consumption);

and AI for dynamic wireless environments, which could help enhance and optimize wireless systems, particularly when channel characteristics are highly dynamic.

design of novel video codecs based on deep learning techniques and optimized for different use cases (e.g., for machine consumption);

and the integration of AI into current and next generation 3GPP wireless systems.

Patent Portfolio

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Device-based Licensing Revenue

Companies making, importing, using or selling products compliant with the standards covered by our patent portfolio, including all manufacturers of mobile handsets, tablets and other devices, and many consumer electronics products, such as televisions, personal computers and other devices, require a license under our patents.

Companies making, importing, using or selling products compliant with the standards covered by our patent portfolio, including all manufacturers of smartphones, tablets and other devices, and many consumer electronics products, such as televisions, personal computers and other devices, require a license under our patents.

We have successfully entered into patent license agreements with many of the leading mobile communications and consumer electronics companies globally, including Amazon Technologies, Inc.

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("Apple"), Lenovo Group Limited ("Lenovo"), Google LLC ("Google"), LG Electronics, Inc.

("LG"), Samsung Electronics Co., Ltd.

("LG"), Guangdong OPPO Mobile Telecommunications Corp., Ltd.

("OPPO"), Samsung Electronics Co., Ltd.

("Samsung"), Sony Corporation of America ("Sony"), and Xiaomi Corporation ("Xiaomi"), among others.

Service-based Licensing Revenue Opportunities

We also believe that companies providing certain video streaming and other cloud services require a license under our patents and we intend to seek license agreements with such companies.

We also believe that companies providing video streaming and certain other cloud services require a license under our patents, and we will seek to license our relevant assets to such companies.

We launched our Video Services licensing program with an initial focus on the subscription-based video on demand (“SVOD”) and advertisement-based video on demand (“AVOD”) markets.

Companies participating in these markets make, import, use or sell services making use of a number of video codecs and other technologies covered by our patent portfolio.

Overview of Patent Licenses

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The licensing platform brings together many of InterDigital’s peers in standards-essential technology leadership, and makes 2G, 3G, 4G, and 5G standards-essential patents available to IoT players in specific product segments with one flat-rate license.

The Avanci licensing programs in specific product segments for the IoT industry will provide access to the entire applicable standards-essential wireless patent portfolios held by all of the platform participants, as well as any additions to their portfolios during the term of the license.

The Avanci licensing programs in specific product segments for the IoT industry will provide access to the entire applicable standards-essential cellular patent portfolios held by all of the platform participants, as well as any additions to their portfolios during the term of the license.

Since December 2017, Avanci has primarily focused on the automotive market, and has signed patent license agreements with BMW Group, Audi, Porsche, Volkswagen, and Volvo Cars, among others, collectively representing over 80% of annual connected car shipments.

Through Avanci, InterDigital’s cellular standard essential patents are also made available to certain other product verticals in the IoT area, such as smart meters and vehicle aftermarket products.

Overview of Smartphone, Consumer Electronics, IoT, and Video Services Industries

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The smartphone market, with an estimated 1.2 billion units shipped worldwide in 2024, is driven by several large, global brands.

The market was relatively flat in 2023 due to a broad economic slowdown in China and economic challenges globally, but smartphone sales began to recover in the fourth calendar quarter.

The market is expected to maintain this momentum in 2024 due to the continued global uptake of 5G smartphones as well as the migration from feature phones to smartphones in emerging regions.

The market rebounded in 2024 after several stagnant years due to the continued global uptake of 5G smartphones as well as the migration from feature phones to smartphones in emerging regions.

Continued growth beyond 2024 is anticipated due in part to the introduction of new technologies and form factors.

In addition to smartphones there is a large universe of other consumer electronic devices and ecosystems, with a mix of mature and emerging, as well as consolidated and fragmented, device segments.

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Automobiles represent a significant opportunity within the IoT market, with approximately 60 million connected vehicles shipped in 2024, which is expected to grow significantly in the future.

Video Services, a rapidly growing market, encompass a wide range of consumer video entertainment platforms, including Subscription Video on Demand (SVOD), Advertising-Based Video on Demand (AVOD), Virtual Multichannel Video Programming Distributor (vMVPD), Free Ad-Supported Streaming TV (FAST), and social media platforms.

Collectively, the Video Services market is expected to grow from $350 billion of annual revenue in 2023 to $480 billion of annual revenue by 2027.

Video Services, a rapidly growing market, encompass a wide range of consumer video entertainment platforms, including SVOD, AVOD, Virtual Multichannel Video Programming Distributor ("vMVPD"), Free Ad-Supported Streaming TV ("FAST"), and social media platforms.

Collectively, the Video Services market is expected to grow from approximately $370 billion of annual revenue in 2024 to approximately $500 billion of annual revenue by 2027.

Overview of Standardization

To achieve economies of scale and support interoperability among different participants, many wireless and consumer electronics products have been designed to operate in accordance with certain industry standards.

Wireless industry standards are formal requirements and guidelines for engineers, designers, manufacturers and service providers that regulate and define the use of the radio frequency spectrum in conjunction with providing detailed specifications for wireless communications products.

New wireless standards are typically adopted with each new generation of products, are often compatible with previous generations and are defined to ensure equipment interoperability and regulatory compliance.

The consumer electronics industry also implements many of the same standards, including standards related to Wi-Fi and increasingly, cellular technologies, as well as a broad range of video coding standards that enable the efficient transmission and rendering of video content.

Wireless industry standards, for example, are formal requirements and guidelines for engineers, designers, manufacturers and service providers that regulate and define the use of the radio frequency spectrum in conjunction with providing detailed specifications for wireless communications products.

The consumer electronics industry also implements many of the same standards, including standards related to Wi-Fi and increasingly, cellular technologies, as well as a broad range of video coding standards and technical specifications that enable the efficient rendering of video content.

Technology related to these video coding standards also enable the media content and video streaming industries.

New standards and specifications are typically adopted with each new generation of products and services, are often compatible with previous generations and are defined to ensure equipment interoperability and regulatory compliance.

SDOs, which facilitate and govern the development of standards, typically ask participating companies to declare formally whether they believe they hold patents or patent applications essential or potentially essential to a particular standard and whether they are willing to license those patents on either a royalty-bearing basis on fair, reasonable and nondiscriminatory terms or on a royalty-free basis.

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2024 Patent Licensing Activity

During 2023, we entered into eight patent license agreements as discussed below.

During 2024, we entered into fourteen patent license agreements as discussed below.

Direct Licenses

In 2023, we signed a multi-year, worldwide, non-exclusive, royalty bearing license with Lenovo, covering InterDigital’s HEVC patents (the "Lenovo HEVC PLA").

The new license resolved all related HEVC litigation at the time.

We also entered into a multi-year, worldwide, non-exclusive, royalty bearing license with TCL Communication Technology Holdings, Ltd.

covering InterDigital’s portfolio of 3G and 4G patents.

In 2023, we also entered into five other licenses covering digital televisions, set-top boxes, and/or video patents, including licenses with Humax Co., Ltd., Alps Alpine Co., Ltd., Panasonic Entertainment & Communication Co., LTD., and Funai Electronic Co., LTD.

Other Licensing Activities

On March 16, 2023, the U K’s High Court handed down its judgment in the Company’s licensing dispute with Lenovo.

The Court ruled that Lenovo should pay a total of $138.7 million for a license to InterDigital’s portfolio of 3G, 4G and 5G patents, including past sales.

On June 27, 2023, we were awarded an additional $46.2 million, increasing the total Lenovo must pay for a cellular patent license through 2023 to $184.9 million.

During 2023, we recognized a total of $150.1 million of revenue from Lenovo, including amounts received under the Lenovo HEVC PLA.

The Company will defer recognizing any additional revenue related to the UK proceedings until the appeal process progresses.

In January 2024, we signed a patent license agreement with Samsung Electronics (the "Samsung TV agreement").

The agreement licenses Samsung’s digital TVs and computer display monitors under InterDigital's joint licensing program with Sony and includes licenses to key technologies including ATSC 3.0, as well as licenses under InterDigital’s patents including HEVC, VVC and Wi-Fi.

In June 2024, we signed a new device license agreement with Google.

The agreement licenses a range of devices including Pixel smartphones, Fitbit wearables, and other consumer electronics devices to InterDigital’s cellular wireless, Wi-Fi, and HEVC video patented technologies.

In October 2024, we entered into a patent license agreement with OPPO.

The agreement covers OPPO, realme and OnePlus branded mobile devices worldwide.

As part of the agreement, both parties agreed to dismiss all pending litigations between us.

In October 2024, we entered into an arbitration agreement with Lenovo to determine the terms of a new patent license.

As part of the agreement to arbitrate, both parties agreed to dismiss all pending litigations between us.

Additionally, we entered into licenses covering our technologies with Arcelik, Blu, Ericsson, Kyocera, Panasonic, Teltronic, TPV, and ZTE.

Customers Generating Revenues Exceeding 10% of Total 2024 Revenues

A small number of customers historically have accounted for a significant portion of our consolidated revenues.

In fiscal 2023, revenues (in descendin g order) from Lenovo, Apple, Samsung, and Xiaomi eac h comprised 10% or more of our consolidated revenues.

Additional information regarding revenue concentrations is provided in this Annual Report in Note 4, " Geographic/Customer Concentration " in the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K.

As discussed above in 2023 Patent Licensing Activity , we recognized a total of $150.1 million of revenue from Lenovo, including amounts received under the Lenovo HEVC PLA and our UK proceedings.

The Company will defer recognizing any additional revenue related to the UK proceedings until the appeal process progresses.

In 2022, we renewed a multi-year, royalty-bearing, worldwide and non-exclusive patent license agreement with Apple (the “Apple PLA”).

The agreement sets forth terms covering the sale by Apple of its products and services, including, but not limited to, its 3G, 4G, and 5G cellular and wireless-enabled products.

The term of the Apple PLA extends through September 30, 2029.

A small number of customers histo rically have accounted for a significant portion of our consolidated revenues.

In fiscal 2024, revenues (in descending order) from Samsung, Lenovo, Apple, and OPPO each comprised 10% or more of our consolidated revenues.

Additional information regarding revenue concentrations is provided in this Annual Report in Note 4, " Segment and Concentration Information " in the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K.

In 2022, we agreed to renew our patent license agreement with Samsung and enter into binding arbitration to determine the final terms of the license, including the amount payable by Samsung under the new agreement.

In 2023, we began recognizing revenue for Samsung at a conservative level consistent with the revenue we recognized from our patent license agreement that expired on December 31, 2022.

We believe that it is likely the arbitration award will exceed the conservative estimate and require a true-up at that time.

We expect resolution in late 2024.

In 2021, we entered into a multi-year, worldwide, non-exclusive, royalty bearing license with Xiaomi.

The license covers Xiaomi’s cellular-enabled mobile devices under our standard essential patents related to 3G, 4G, 5G, WiFi and HEVC and extends through December 31, 2025.

We believe that it is likely the arbitration award will exceed the conservative estimate and require a true-up at the time of the award.

The two-week arbitration hearing was held in July 2024, and we expect a decision in early 2025.

Additionally, we recognized revenue from the Samsung TV agreement signed in 2024 as noted above in 2024 Patent Licensing Activity.

As discussed above in 2024 Patent Licensing Activity , in 2024 we entered into an arbitration agreement with Lenovo to determine the terms of a new patent license.

We began recognizing revenue at a conservative level, consistent with Generally Accepted Accounting Principles in the United States ("GAAP").

Additionally, in 2024 we recognized revenues from the multi-year, worldwide, non-exclusive, royalty bearing license with Lenovo covering InterDigital’s HEVC patents that was signed in 2023.

In 2022, we renewed a multi-year, royalty-bearing, worldwide, and non-exclusive patent license agreement with Apple (the “Apple PLA”).

The agreement sets forth terms covering Apple's business, including its sale of 3G, 4G, and 5G cellular and wireless-enabled products.

The term of the Apple PLA extends through September 30, 2029.

In 2024, we entered into the above-noted patent license agreement with OPPO.

The term of the OPPO patent license agreement extends through December 31, 2027, and we began recognizing revenue from this agreement in fourth quarter 2024.

Patent Infringement and Declaratory Judgment Proceedings

From time to time, if we believe a party is required to license our patents in order to manufacture, use and/or sell certain products and such party refuses to do so, we may agree with such party to have royalty rates, or other terms, set by third party adjudicators (such as arbitrators) or, in certain circumstances, we may institute legal action against them.

From time to time, if we believe a party is required to license our patents in order to manufacture, use and/or sell certain products and such party refuses to do so, we may agree with such party to have royalties or other terms set by third party adjudicators (such as arbitrators) or, in certain circumstances, we may institute legal action against them.

Enforcing our intellectual property through legal action is an important alternative to bilateral negotiations with respect to licensees who engage in the pernicious practice of "holdout".

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In addition, arbitration may be a particularly effective means for resolving disputes with prospective licensees concerning the appropriate FRAND terms and conditions for license agreements that include SEPs, particularly where negotiations have otherwise reached an impasse.

Binding arbitration to resolve the terms and conditions of a worldwide FRAND license to our relevant portfolio of SEPs is an efficient and cost-effective mechanism, as it allows the parties to avoid piecemeal litigation in multiple jurisdictions and ensures that an enforceable patent license agreement that is consistent with FRAND commitments will be in place at the end of the arbitration process.

Binding arbitration to resolve the terms and conditions of a worldwide FRAND license to our patent portfolio is an efficient and cost-effective mechanism, as it allows the parties to avoid piecemeal litigation in multiple jurisdictions and ensures that an enforceable patent license agreement that is consistent with FRAND commitments will be in place at the end of the arbitration process.

With respect to our technology development activities and resulting commercialization efforts, we face competition from companies, including in-house development teams at other wireless and video technology companies, consumer electronics device companies, semiconductor companies, wireless operators, video streaming and cloud service companies, and other technology providers, developing other and similar technologies that are competitive with our technologies that we may market or set forth into the standards-setting arena.

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In licensing our patent portfolio, we compete with other patent holders for a share of the royalties that certain licensees may argue to be the total royalty that is supported by certain products or services, which they may argue face practical limitations.

We believe that licenses under a number of our patents are required to manufacture and sell 3G, 4G, 5G and other wireless products, as well as other consumer electronics devices, and to implement certain technology services.

However, numerous companies also claim that they hold patents that are or may be essential or may become essential to standards-based technology deployed on wireless products, other consumer electronics devices or services.

We believe that licenses under a number of our patents are required to manufacture and sell wireless products, as well as other consumer electronics devices, and to implement certain technology services.

To the extent that multiple parties all seek royalties on the same product or service, the manufacturers could claim to have difficulty in meeting the financial requirements of each patent holder.

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In addition, certain manufacturers have sought to limit aggregate licensing fees or rates for SEPs.

Environmental, Social and Governance ("ESG")

Sustainability

We believe our innovation provides the framework for a future increasingly shaped by the profound convergence of wireless, video, and AI technologies.

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Our heritage of innovation has produced technologies that fundamentally improve efficiency and power consumption across billions of devices, network infrastructure, and delivered services.

Our ESG principles continue this legacy and shape our pursuit of a more sustainable, representative, diverse, and equitable world.

Our Board of Directors has oversight over environmental, social and other sustainability matters, including diversity initiatives, in conjunction with the committees of the Board.

Our sustainability principles continue this legacy and shape our pursuit of a more sustainable, representative, diverse, and equitable world.

Our Nominating and Corporate Governance Committee has primary oversight over environmental, social and other sustainability matters, which it exercises in conjunction with the committees of the Board.

In addition, our Chief Financial Officer oversees a committee of senior executives that steers the process of setting purpose, strategies, policies and goals related to economic, environmental and social topics.

We are committed to sustainable business principles, to thinking long-term, and to making strategic decisions that adhere to our mission and values.

Among other things, this means supporting the United Nations Global Compact and its underlying principles around the environment, the workforce, anti-corruption, and human rights.

We strive to focus and make progress on initiatives that matter most to our business, our employees, communities, and external stakeholders.

Among other things, this means aligning our standards to the United Nations’ Sustainable Development Goals and its underlying principles around the environment, the workforce, anti-corruption, and human rights.

We are committed to driving positive progress towards reducing the environmental footprint that the deployment of 5G, wireless networks, and other video technologies will bring.

While our business activities do not entail the same concerns related to manufacturing or raw materials sourcing and disposal, our corporate sustainability strategy addresses the following:

• investing in best practices to track and reduce our carbon footprint, including environmental considerations, tracking, and reporting related to data center needs;

• implemented a hybrid work program, allowing employees to work from for home part of the week;

• investing in best practices to track and reduce our carbon footprint, including environmental considerations, and reporting related to data center needs;

• investigating and reducing unnecessary energy consumption;

• selected a location for our new Rennes office that is certified by BREEM (Building Research Establishment Environmental Assessment Method), a sustainability assessment method.

InterDigital ranks among the industry leaders for ETSI-disclosed patents and applications as potentially essential to 5G standards.

• continuing to manage our environmental footprint with our office improvements;

• supporting our employee community in reducing commuting impact through embracing a hybrid office schedule and offering mobility programs.

As a pure research business, we consider our carbon impact through our “handprint” and the ways our innovation and contributions to global standards empower energy efficiencies and sustainable outcomes.

Our research not only offers significant advances in the operational performance of various systems, but also reduced environmental impact through efficiency improvements, reduced power consumption, and by altering the way that products are used, serviced, or maintained worldwide.

We were named by LexisNexis as one of the top 100 companies whose innovation is helping progress towards achieving the United Nations’ Sustainable Development Goals.

InterDigital ranks among the industry leaders for highest patent quality for 5G and video codec patents.

5G technology is designed to efficiently use energy throughout its ecosystem and will play a significant role in promoting and attaining sustainability goals.

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We believe that the benefits to be derived from 5G are substantial and will be felt throughout society.

The foregoing discussion includes information regarding ESG matters that we believe may be of interest to our shareholders generally.

The foregoing discussion includes information regarding sustainability matters that we believe may be of interest to our shareholders generally.

We recognize that certain other stakeholders (such as customers, employees and non-governmental organizations), as well as certain of our shareholders, may be interested in more detailed information on these topics.

We encourage you to review our most recent Corporate Sustainability Report (located on our website) for more detailed information regarding our Corporate Sustainability and ESG governance, goals, priorities, accomplishments and initiatives, as well as the Corporate Governance section of our most recent Proxy Statement, and our Corporate Governance Principles and Practices (located on our website), for additional information regarding governance matters, including Board and Committee leadership, oversight, roles and responsibilities, and Director independence, tenure, refreshment and diversity.

We encourage you to review our most recent Corporate Sustainability Report (located on our website) for more detailed information regarding our Corporate Sustainability governance, goals, priorities, accomplishments and initiatives, as well as the Corporate Governance section of our most recent Proxy Statement, and our Corporate Governance Principles and Practices (located on our website), for additional information regarding governance matters, including Board and Committee leadership, oversight, roles and responsibilities, and Director independence, tenure, refreshment and diversity.

Nothing on our website, including the aforementioned reports and documents, or sections thereof, shall be deemed incorporated by reference into this Annual Report.

Human Capital

We strive to make InterDigital an exceptional place to work for all employees.

We are committed to creating a workplace where employees feel valued, respected, included, and challenged, while fostering an environment that attracts and engages a talented workforce who contribute to the company’s growth and sustained success.

Our Human Capital Committee (formerly known as the Compensation Committee) is responsible for overseeing our policies and strategies related to our culture and human capital, including diversity, equity and inclusion.

As of December 31, 2023, we had approximately 450 employees worldwide, of whom approximately 230 were based outside of the U.S, and nearly all of whom were full-time.

Our employees based in France are represented by works councils and subject to collective bargaining agreements.

We are committed to making InterDigital an exceptional place to work, fostering a workplace where all employees feel valued, respected, included, and challenged.

We aim to create an environment that attracts, engages, and retains a talented workforce that drives the company’s growth and long-term sustained success.

Our Human Capital Committee is responsible for overseeing our policies and strategies related to culture and human capital.

As of December 31, 2024, we had approximately 430 employees worldwide, of whom approximately 220 employees based outside of the United States, nearly all of whom were full-time.

Our employees in France are represented by works councils and are subject to collective bargaining agreements.

None of our employees based in the United States or Canada are unionized or subject to collective bargaining agreements.

Management believes that its relations with our employees and works councils are strong and healthy.

Management believes that its relationships with our employees and works councils are strong and productive.

Health, Safety & Well-Being

As the way we live and work has evolved with the pandemic, we have been focused on creating a new work model that supports our employees.

We have been on the forefront of providing employees with the flexibility to work full time in the office, fully virtually, or a hybrid of both.

Over the past few years, as our work and lifestyle have evolved, we’ve been dedicated to developing a flexible work model that supports our employees.

This model offers the option to work full-time in the office, fully remotely, or a combination of both, ensuring we meet the diverse needs of our team.

We provide holistic benefits and maintain company policies that promote a culture of wellness.

We recently increased our paid parental leave from eight to twelve weeks and have kept employees connected to volunteer opportunities that benefited both their mental health and communities through our ‘Charity Day’ paid time off program.

We offer a minimum of twelve weeks of paid parental leave globally and have kept employees connected to volunteer opportunities that benefited both their mental health and communities through our ‘Charity Day’ paid time off program.

Compensation & Benefits

Our compensation program is rooted in market competitive base salaries and incentives that reward contributions that advance the Company’s strategy and mission.

We provide a total compensation package that is targeted to be competitive with the markets in which we compete for talent, while allowing individual pay to vary equitably based on performance, skills and experience.

Our total rewards plans include base salary, short- and long-term incentives, healthcare benefits, retirement savings plans, physical and mental well-being programs, hybrid-work schedules, monetary and social recognition in each of our locations around the globe.

In addition to comprehensive health benefits, depending on location, employees may also enjoy subsidized fitness programs, commuter benefits, wellness incentives, tuition reimbursement opportunities and professional development opportunities among other benefits.

We routinely review our total rewards programs to ensure they are competitive, allowing us to recruit and retain the diverse talent we need to be successful.

Our compensation program is designed to be market competitive, offering base salaries and incentives that reward individual contributions aligned with the Company’s strategy and mission.

We provide a total compensation package that is competitive with the markets in which we operate, with individual pay differentiated based on performance, skills and experience.

Our total rewards plans include base salary, short- and long-term incentives, healthcare benefits, retirement savings plans, well-being programs, hybrid work arrangements, and both monetary and social recognition across our global locations.

In addition to comprehensive health benefits, employees may have access to location-specific perks, such as subsidized fitness programs, commuter benefits, wellness incentives, tuition reimbursement, and professional development opportunities.

We routinely review our total rewards programs to ensure they remain competitive, supporting our ability attract and retain the diverse talent necessary for business growth.

Talent and Culture

Research, learning and growth are fundamental to executing our promise to the world to invent the technologies that make life boundless.

In addition, consistently evaluating our talent promotes opportunities to provide actionable learning experiences for our employees to further their career development.

Our Talent Acquisition philosophy is based on InterDigital’s cultural attributes and business goals.

Our talent programs are instrumental in our ability to attract the right talent to the organization by offering learning opportunities and career advancement.

Our Leadership Essentials competency development model is available to all employees and provides a comprehensive suite of tools and resources for growth across four key areas;

Research, learning, and growth are fundamental to executing our promise to the world to innovate today to empower tomorrow.

We believe our talent drives our business success and we focus on investing in our talent practices to provide the most benefit to our employees.

Our Talent philosophy focuses on cultivating a culture of high performance, career development, and employee engagement, empowering our workforce its full potential.

Our Talent Acquisition strategy is aligned with this philosophy and supports InterDigital’s cultural values and business objectives.

Through targeted talent programs, we are able to attract and retain top talent by offering opportunities for learning and career advancement.

We take a proactive approach by regularly evaluating our talent offerings and deploying strategies that promote actionable experiences to attract, develop, and retain top talent.

Our company values are central to our operations and talent practices.

In 2024, we redefined these values based on employee feedback to better align with our evolving culture.

These values are now integrated into our learning practices and will be incorporated into future goal setting and performance management practices.

Our Leadership Development model, available to all employees, provides a comprehensive suite of tools and resources for growth across four key areas;

thought leadership, results leadership, people leadership, and self-leadership.

This model has been seamlessly integrated into our organizational culture initiatives, forming an integral part of our Performance Management philosophy.

Moreover, we’ve integrated the Leadership Essentials into our recruitment strategies, incorporating these competencies into our interview guides to align with our competency model.

By encouraging an ongoing dialogue between leaders and employees, we promote proactive planning for personal development.

Our goal is to empower individuals to leverage the resources available to create meaningful and actionable development plans that not only drive personal growth but also contribute to the Company’s overall advancement.

All employees are encouraged to actively explore and participate in external development opportunities.

These experiences enhance their knowledge and skills while also bringing valuable perspectives to our Company.

Recognizing that all employees are leaders at every level, this model is integrated into our culture and recruitment strategies to align with our competency model.

The development of leadership skills is pivotal in fostering our culture of innovation, inclusivity, and collaboration.

To support this, our leaders have access to a range of structured development and learning experiences.

These include our performance management training, which guides employees and managers on integrating Leadership Essential competencies into our performance model.

Additionally, our global coaching program provides one-on-one coaching focused on career goals, leadership and performance enhancement.

Emphasis is also placed on the importance of feedback in performance, educating individuals on both requesting and delivering constructive feedback.

We continue to invest in processes to help the organization assess and develop talent, including a formalized annual performance evaluation program, an annual critical skills and potential analysis, and succession planning for the organization’s most critical and senior roles.

All employees receive an annual performance review.

We conducted an engagement survey in 2023 that provided direct insight and guidance from our employees on what our strengths in building an innovative and inclusive culture are, and how we can continue to be a winning team.

We believe that our workplace culture, values, and competitive employee compensation are critical to maintaining low levels of attrition, thereby enabling us to attract and retain talent.

Leaders have access to a range of structured development and learning experiences, including performance management training, focused on behavior-based competencies and feedback practices.

We encourage ongoing dialogue between leaders and employees, promoting ongoing development and empowering employees to leverage create meaningful and actionable development plans that drive personal and company growth.

InterDigital encourages all employees to participate in internal and external development opportunities, including, training sessions, workshops, and industry conferences.

We invest in these opportunities to support employee growth, which in turn, drives organizational success.

These experiences enhance employee knowledge and skills while contributing valuable perspectives to our Company.

We continue to invest in processes to assess and develop talent, including a formalized annual performance evaluation program, critical skills and potential analysis, and succession planning for key and senior roles.

All employees undergo an annual performance review and participate in our engagement survey efforts.

The performance review process includes bi-annual assessments of individual performance, allowing employees to assess their own achievements and receive feedback on goals and development opportunities.

In 2024, we conducted an engagement pulse survey to supplement our broader 2023 survey efforts, providing additional insights into our strengths in fostering an innovative and inclusive culture, and areas for continued improvement to be a winning team.

We believe our workplace culture, values, and competitive compensation and benefits are critical to maintaining low levels of attrition, thereby enabling us to attract and retain top talent.

For the year ended December 31, 2024, our voluntary attrition percentage was less than 5%.

Diversity, Equity and Inclusion ("DE&I")

We participate in the highly competitive process to evolve and revolutionize communication, video, and AI technologies through our participation in worldwide SDOs.

We require a highly educated and specialized workforce and maintaining a diverse, equitable and inclusive workforce is critical to our ability to succeed in the global marketplace.

Since its launch in 2022, our employee-led DE&I Taskforce has focused on supporting the execution of InterDigital’s DE&I strategy.

In 2023, we designed and launched our DE&I mission under the four pillars of TEAM - Talent, Empowerment, Amplify, Membership.

Within our pillar of Talent, our talent acquisition and talent development teams evaluated and evolved their processes to optimize results for diversity and inclusion with our hiring, onboarding, and employee development.

This resulted in participation in diversity and outreach events, supporting production of internal company media with inclusive material, and the development of a plan to launch our DE&I LinkedIn Life page, which is intended to create visibility and connection to our DE&I journey for external constituents.

We empowered our workforce through education and launched a mandatory company-wide training on DE&I to create understanding of this initiative, the benefits, and the tools to create inclusive and equitable environments.

Work under the Amplify pillar focused on socializing and creating awareness of our purpose with the execution of our company DE&I branding and a company-wide townhall dedicated to providing an understanding of the taskforce's work, and insight into future actions.

As part of the Membership pillar, we established our first model for Employee Resource Groups (ERG) at InterDigital to promote employee-led groups to encourage inclusion, belonging, and camaraderie for shared interests, characteristics, experiences, or causes.

Through this Membership strategy, InterDigital committed to the creation of a global Women's Network ERG, which we plan to launch in 2024 and which is designed to offer women and their allies career development opportunities within InterDigital free from obstacles.

All of our targeted 2023 achievements occurred in addition to our foundational efforts to provide opportunity to employees from historically underrepresented groups and maintain policies that support a strong DE&I environment.

We have continually provided leaders from historically underrepresented groups the opportunity to attend targeted world-class external development programs that speak to the unique experiences these employees can face in the workplace while investing in their continued growth both personally and professionally.

We have also continued to maintain the core principles of our culture of inclusion are reflected in the mandatory all-employee training programs we offer on our policies against harassment and discrimination of any kind.

The diversity in our workforce is clear given that our approximately 450 person workforce originates from over sixty countries.

Still, with approximately 72% male employees and 28% female employees, we recognize that there is more to be done.

Our 2024 efforts will take the next step to enhance the community experience for our diverse workforce and to create better opportunities to attract a diverse workforce in the long-term with the aim to provide an inclusive environment where employees are encouraged to utilize their unique experiences and backgrounds when collaborating to develop new technologies.

We will continue our journey this year with the formal launch of our Women’s Network ERG, the growth of that global community, and the actions we take for all employees to support an environment that enables women, alongside their allies, to do their greatest work and be the greatest version of themselves.

Our DE&I Taskforce will continue to expand our actions within the TEAM pillars and support this journey.

We believe this investment will continue to better our workplace inclusion and will eventually contribute to the scientific community.

We publish our most recent Consolidated EEO-1 reports on our website to provide additional transparency into our workforce.

The foregoing discussion includes information regarding Human Capital matters that we believe may be of interest to shareholders generally.

We encourage you to review the “Workforce” section of our most recent Corporate Sustainability Report (located on our website) for more detailed information regarding our Human Capital programs and initiatives.

Nothing on our website, including our Consolidated EEO-1 reports and our Corporate Sustainability Report or sections thereof, shall be deemed incorporated by reference into this Annual Report.

Our Inclusive Global Workforce

We participate in the highly competitive process of advancing communication, video, and AI technologies through our engagement with global SDOs.

To succeed in the global marketplace, we require a highly educated, skilled, and specialized workforce, and we believe maintaining a diverse and inclusive environment is essential.

We are a company of world-class inventors that strive to foster a diverse and stimulating environment where creative, intelligent, and ambitious people can develop and grow.

Our workforce reflects significant global diversity, with approximately 430 employees representing nearly 60 countries and approximately 71% male employees and 29% female employees.

Our goal is to provide an environment where employees are empowered to leverage their unique experiences and backgrounds to drive collaboration and technological innovation, and ultimately allow us to execute on our business plans.

The foregoing discussion includes information regarding Human Capital matters intended to address topics of interest to shareholders generally.

We recognize that other stakeholders including customers, employees, organizations, and some shareholders, may seek more detailed insights on these topics.

We encourage stakeholders to review the “Human Capital” section of our most recent Corporate Sustainability Report, available on our website, for further details on our Human Capital programs and initiatives, which includes our most recent Consolidated EEO-1 reports detailing our workforce composition.

Nothing on our website, including the Consolidated EEO-1 reports and our Corporate Sustainability Report, or any sections thereof, shall be deemed incorporated by reference into this Annual Report.

Geographic Concentrations

See Note 4, " Geographic/Customer Concentration ," in the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K for financial information about geographic areas for the last three years.

See Note 4, " Segment and Concentration Information ," in the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K for financial information about geographic areas for the last three years.

Corporate Information

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was incorporated in 1972 under the laws of the Commonwealth of Pennsylvania and conducted its initial public offering in November 1981.

Our headquarters are located in Wilmington, Delaware, USA.

Our research and development activities are conducted primarily in facilities located in Conshohocken, Pennsylvania, USA;

London, United Kingdom;

Our headquarters are located in Wilmington, Delaware.

Our research and development activities are conducted primarily in facilities located in Conshohocken, Pennsylvania;

New York, New York;

Los Altos, California;

Montreal, Canada;

New York, New York, USA;

Los Altos, California, USA;

London, United Kingdom;

and Rennes, France.

We are also a party to leases for several smaller research and/or office spaces, including in Brussels, Belgium;

We are also a party to leases for several smaller research and/or office spaces, including in Melville, New York;

Indianapolis, Indiana;

Brussels, Belgium;

Espoo, Finland;

Indianapolis, Indiana, USA;

Melville, New York, USA;

Paris, France, and Beijing, China.

In addition, we own an administrative office space in Washington, District of Columbia, USA.

In addition, we own an administrative office space in Washington, District of Columbia.

Our Internet address is www.interdigital.com , where, in the "Investors" section , we make available, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, certain other reports and filings required to be filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and all amendments to those reports or filings as soon as reasonably practicable after such material is electronically filed with or furnished to the United States Securities and Exchange Commission at www.sec.gov.

1 unchanged sentence

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-K

Item 1. Business