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Item 1. Financial Statements

2025-05-01 compared with 2024-10-31 · 163 added, 308 removed, 340 unchanged (58% of the section changed)

4 unchanged sentences

(in thousands, except per share data)

SEPTEMBER 30,

2025 December 31,

29 unchanged sentences

Retained earnings 1,875,398 1,775,823

Accumulated other comprehensive gain (loss)

Accumulated other comprehensive loss ( 202 ) ( 458 )

Treasury stock, 44,919 and 44,895 shares of common stock held at cost

7 unchanged sentences

(in thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Revenues $ 210,507 $ 263,542

10 unchanged sentences

Net income $ 115,602 $ 81,652

Net loss attributable to noncontrolling interest — ( 787 ) — ( 3,016 )

Net income attributable to InterDigital, Inc.

$ 34,190 $ 47,941 $ 225,506 $ 174,983

Net income per common share — Basic $ 4.49 $ 3.20

8 unchanged sentences

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net income $ 115,602 $ 81,652

1 unchanged sentence

Comprehensive income $ 115,858 $ 81,157

Comprehensive loss attributable to noncontrolling interest — ( 787 ) — ( 3,016 )

Total comprehensive income attributable to InterDigital, Inc.

$ 35,556 $ 47,971 $ 226,287 $ 173,753

The accompanying notes are an integral part of these statements.

3 unchanged sentences

(in thousands, except per share data)

Common Stock Additional

Paid-In Capital Retained Earnings Accumulated

Comprehensive

Loss Treasury Stock Non-Controlling

Interest Total

Shareholders'

Common Stock Additional Paid-In Capital

Retained Earnings Accumulated Other Comprehensive Loss

Treasury Stock Total Shareholders' Equity

Shares Amount Shares Amount

1 unchanged sentence

69,507 $ 694 $ 742,981 $ 1,462,070 $ ( 647 ) 43,927 $ ( 1,623,549 ) $ 581,549

Net income attributable to InterDigital, Inc.

— — — 105,259 — — — — 105,259

Net loss attributable to noncontrolling interest — — — — — — — ( 1,739 ) ( 1,739 )

Non-controlling interest contributions — — — — — — — 1,750 1,750

Net income — — — 81,652 — — — 81,652

Net change in unrealized loss on short-term investments — — — — ( 495 ) — — ( 495 )

— — — — 579 — — — 579

Dividends declared ($ 0.40 per share)

— — 343 ( 10,490 ) — — — ( 10,147 )

Exercise of common stock options 13 — 687 — — — — — 687

Issuance of common stock, net 131 2 ( 8,637 ) — — — — ( 8,635 )

Share-based compensation — — 9,386 — — — — 9,386

— — 7,790 — — — — — 7,790

Repurchase of common stock — — — — — 277 ( 29,019 ) ( 29,019 )

1 unchanged sentence

69,638 $ 696 $ 744,073 $ 1,533,232 $ ( 1,142 ) 44,204 $ ( 1,652,568 ) $ 624,291

Net income attributable to InterDigital, Inc.

— — — 21,783 — — — — 21,783

Net loss attributable to noncontrolling interest — — — — — — — ( 490 ) ( 490 )

Net change in unrealized loss on short-term investments — — — — ( 1,839 ) — — — ( 1,839 )

Dividends declared ($ 0.35 per share)

— — 360 ( 9,633 ) — — — — ( 9,273 )

Exercise of common stock options 1 — 12 — — — — — 12

Issuance of common stock, net 42 — ( 1,389 ) — — — — — ( 1,389 )

Share-based compensation — — 8,740 — — — — — 8,740

Repurchase of common stock — — — — — 548 ( 42,489 ) — ( 42,489 )

Balance, June 30, 2023

69,372 $ 693 $ 726,852 $ 1,396,393 $ ( 2,176 ) 42,803 $ ( 1,526,545 ) $ 5,139 $ 600,356

Net income attributable to InterDigital, Inc.

— — — 47,941 — — — — 47,941

Net loss attributable to noncontrolling interest — — — — — — — ( 787 ) ( 787 )

Net change in unrealized loss on short-term investments

— — — — 30 — — — 30

Dividends declared ($ 0.40 per share)

— — 328 ( 10,676 ) — — — — ( 10,348 )

Issuance of common stock, net 59 1 ( 2,888 ) — — — — — ( 2,887 )

Amortization of unearned compensation — — 10,335 — — — — — 10,335

Repurchase of common stock — — — — — 653 ( 56,858 ) — ( 56,858 )

BALANCE, SEPTEMBER 30, 2023

69,431 $ 694 $ 734,627 $ 1,433,658 $ ( 2,146 ) 43,456 $ ( 1,583,403 ) $ 4,352 $ 587,782

Common Stock Additional

Paid-In Capital Retained Earnings Accumulated

Comprehensive

Treasury Stock Non-Controlling

Interest Total

Shareholders'

Common Stock Additional Paid-In Capital

Retained Earnings Accumulated Other Comprehensive Loss

Treasury Stock Total Shareholders' Equity

Shares Amount Shares Amount

1 unchanged sentence

70,577 $ 705 $ 808,540 $ 1,775,823 $ ( 458 ) 44,895 $ ( 1,727,395 ) $ 857,215

Net income attributable to InterDigital, Inc.

— — — 81,652 — — — — 81,652

Net change in unrealized loss on short-term investments — — — — ( 495 ) — — — ( 495 )

Dividends declared ($ 0.40 per share)

— — 343 ( 10,490 ) — — — — ( 10,147 )

Issuance of common stock, net 131 2 ( 8,637 ) — — — — — ( 8,635 )

Share-based compensation

— — 9,386 — — — — — 9,386

Repurchase of common stock — — — — — 277 ( 29,019 ) — ( 29,019 )

Balance, March 31, 2024

69,638 $ 696 $ 744,073 $ 1,533,232 $ ( 1,142 ) 44,204 $ ( 1,652,568 ) $ — $ 624,291

Net income attributable to InterDigital, Inc.

— — — 109,664 — — — — 109,664

Net change in unrealized loss on short-term investments — — — — ( 90 ) — — — ( 90 )

Dividends declared ($ 0.40 per share)

— — 443 ( 10,495 ) — — — — ( 10,052 )

Issuance of common stock, net 39 — ( 1,580 ) — — — — — ( 1,580 )

Share-based compensation — — 9,655 — — — — — 9,655

Repurchase of common stock — — — — — 344 ( 35,111 ) — ( 35,111 )

Settlement of the 2024 Notes 324 3 ( 3 ) — — — — — —

Settlement of the 2024 Hedges — — 37,120 — — 324 ( 37,120 ) — —

Balance, June 30, 2024

70,001 $ 699 $ 789,708 $ 1,632,401 $ ( 1,232 ) 44,872 $ ( 1,724,799 ) $ — $ 696,777

Net income attributable to InterDigital, Inc.

— — — 34,190 — — — — 34,190

Net change in unrealized gain (loss) on short-term investments

— — — — 1,366 — — — 1,366

Net income — — — 115,602 — — — 115,602

Net change in unrealized gain on short-term investments — — — — 256 — — 256

Dividends declared ($ 0.60 per share)

3 unchanged sentences

Share-based compensation — — 9,498 — — — — 9,498

— — 9,081 — — — — — 9,081

Repurchase of common stock — — — — — 24 ( 5,249 ) ( 5,249 )

Settlement of the 2024 Warrants 82 1 ( 5 ) — — — — — ( 4 )

BALANCE, SEPTEMBER 30, 2024

Balance, March 31, 2025

70,895 $ 708 $ 793,624 $ 1,875,398 $ ( 202 ) 44,919 $ ( 1,732,644 ) $ 936,884

4 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

8 unchanged sentences

Share-based compensation 9,498 9,386

Other — 2,616

Increase in assets:

(Increase) Decrease in assets:

Receivables ( 115,966 ) ( 28,337 )

2 unchanged sentences

Accounts payable 1,730 3,522

Customer deposit

( 76,100 ) 76,100

Accrued compensation and other expenses ( 17,709 ) 13,054

Net cash provided by operating activities

79,494 237,318

Net cash (used in) provided by operating activities ( 19,989 ) 50,773

Cash flows from investing activities:

4 unchanged sentences

Long-term investments — 1,576

Net cash provided by (used in) investing activities 139,350 ( 74,298 )

Net cash provided by investing activities 59,508 16,775

Cash flows from financing activities:

Payments on long-term debt ( 1,284 ) ( 1,590 )

Payments of debt issuance costs — ( 100 )

Repurchase of common stock ( 5,249 ) ( 28,868 )

Net proceeds from exercise of stock options 7,316 —

Non-controlling interest contribution — 1,750

Taxes withheld upon restricted stock unit vestings ( 32,177 ) ( 8,635 )

1 unchanged sentence

Net cash used in financing activities ( 42,951 ) ( 49,319 )

Net decrease in cash, cash equivalents and restricted cash ( 32,181 ) ( 177,449 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 3,432 ) 18,229

Cash, cash equivalents and restricted cash, beginning of period 551,547 442,961

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited, condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial position of InterDigital, Inc.

(individually and/or collectively with its subsidiaries referred to as “InterDigital,” the “Company,” “we,” “us” or “our,” unless otherwise indicated) as of September 30, 2024, the results of our operations for the three and nine months ended September 30, 2024 and 2023 and our cash flows for the nine months ended September 30, 2024 and 2023.

(individually and/or collectively with its subsidiaries referred to as “InterDigital,” the “Company,” “we,” “us” or “our,” unless otherwise indicated) as of March 31, 2025, the results of our operations for the three months ended March 31, 2025 and 2024 and our cash flows for the three months ended March 31, 2025 and 2024.

The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, accordingly, do not include all of the detailed schedules, information and notes necessary to state fairly the financial condition, results of operations and cash flows in conformity with United States generally accepted accounting principles (“GAAP”).

11 unchanged sentences

Supplemental Cash Flow Information

The following table presents additional supplemental cash flow information for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

The following table presents additional supplemental cash flow information for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

Supplemental cash flow information:

Interest paid $ 9,311 $ 9,312

Income taxes paid, including foreign withholding taxes $ 10,204 $ 9,335

Non-cash investing and financing activities:

Settlement of the 2024 Hedge Transactions

Dividend payable 15,577 10,155

Right-of-use assets obtained in exchange of operating lease liabilities — 2,189

Non-cash acquisition of patents 13,000 —

Accrued capitalized patent costs and property and equipment purchases 4,470 ( 1,358 )

2 unchanged sentences

Accounting Standards Update:

Improvements to Reportable Segment Disclosure s

In November 2023, the FASB issued ASU No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”.

The amendments in the ASU require disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption allowed.

We are currently evaluating the impact of adoption on our financial disclosures.

Accounting Standards Update:

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No.

2023-09, “Income Taxes (Topic 740):

2 unchanged sentences

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption allowed.

We adopted this guidance as of January 1, 2025, and we will include the necessary disclosures in our annual Form 10-K.

The disclosures are required on an annual basis so there was no impact to this Form 10-Q.

Accounting Standards Update:

Induced Conversions of Convertible Debt Instruments

In November 2024, the FASB issued ASU No.

2024-04, "Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments".

The amendments in the ASU require disclosures for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, with early adoption allowed.

We are currently evaluating the impact of adoption on our consolidated financial statements.

Accounting Standards Update:

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses".

The amendments in the ASU require disclosures about specific types of expenses included in the expense captions presented on the Consolidated Statements of Income, as well as disclosures about selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with early adoption allowed.

We are currently evaluating the impact of adoption on our financial disclosures.

Disaggregated Revenue

The following table presents the disaggregation of our revenue for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended September 30,

The following table presents the disaggregation of our revenue for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended March 31,

2025 2024 Increase/(Decrease)

Recurring revenues:

Smartphone $ 183,991 $ 80,280 $ 103,711 129 %

1 unchanged sentence

Other 249 719 ( 470 ) ( 65 ) %

Total recurring revenues 98,634 104,476 ( 5,842 ) ( 6 ) %

Catch-up revenues a

30,045 35,630 ( 5,585 ) ( 16 ) %

Total Revenues

Nine Months Ended September 30,

2024 2023 Increase/(Decrease)

Recurring revenues:

Smartphone $ 221,738 $ 260,882 $ ( 39,144 ) ( 15 ) %

CE, IoT/Auto 67,824 43,177 24,647 57 %

Other 1,878 1,063 815 77 %

Total recurring revenues 291,440 305,122 ( 13,682 ) ( 4 ) %

Catch-up revenues a

$ 210,507 $ 263,542 $ ( 53,035 ) ( 20 ) %

Total revenues $ 615,714 $ 444,070 $ 171,644 39 %

(a) Catch-up revenues are comprised of past patent royalties and revenues from static fixed-fee agreements.

During the nine months ended September 30, 2024, we recognized $ 119.8 million of revenue that had been included in deferred revenue as of the beginning of the period.

As of September 30, 2024, we had contract assets of $ 161.1 million included within " Accounts receivable " in the condensed consolidated balance sheet.

Catch-up revenues (a) , included above

$ 84,785 $ 166,678 $ ( 81,893 ) ( 49 ) %

(a) Catch-up revenues represent revenue associated with reporting periods prior to the execution of the license agreement.

During the three months ended March 31, 2025, we recognized $ 68.6 million of revenue that had been included in deferred revenue as of the beginning of the period.

As of March 31, 2025, we had contract assets of $ 190.9 million included within " Accounts receivable " and $ 3.0 million included within " Other non-current assets, net " in the condensed consolidated balance sheet.

As of December 31, 2024, we had contract assets of $ 162.8 million included within " Accounts receivable " in the condensed consolidated balance sheet.

Contracted Revenue

Based on contracts signed and committed as of September 30, 2024, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of such contracts (in thousands):

Based on contracts signed and committed as of March 31, 2025, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of such contracts (in thousands):

Remainder of 2025 $ 341,744

1 unchanged sentence

Total Revenue $ 1,700,920

(a) This table includes estimated revenue related to our Samsung arbitration.

In accordance with ASC 606, these estimates are limited to the amount of revenue we expect to recognize only to the extent it is probable that a subsequent change in the estimate would not result in a significant revenue reversal.

(a) This table includes estimated revenue related to our Samsung and Lenovo arbitrations.

In accordance with ASC 606, these estimates are limited to the amount of revenue we expect to recognize only to the extent we believe it is probable that a subsequent change in the estimate would not result in a significant revenue reversal.

CASH, CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS

1 unchanged sentence

Cash, cash equivalents, and restricted cash currently consist of money market and demand accounts.

The following table provides a reconciliation of total cash, cash equivalents and restricted cash as of September 30, 2024, December 31, 2023 and September 30, 2023 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):

September 30, December 31, September 30,

The following table provides a reconciliation of total cash, cash equivalents, and restricted cash as of March 31, 2025, December 31, 2024, and March 31, 2024 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):

March 31, December 31, March 31,

2025 2024 2024

7 unchanged sentences

Our accounts receivable and contract assets are derived principally from patent license and technology solutions agreements.

Four licensees comprised 85 % and 84 % of our accounts receivable balances of September 30, 2024 and December 31, 2023, respectively.

Three licensees comprised 87 % and 84 % of our accounts receivable balances of March 31, 2025 and December 31, 2024, respectively.

We perform ongoing credit evaluations of our licensees, who generally include large, multinational, wireless telecommunications equipment manufacturers.

13 unchanged sentences

Our financial assets are generally included within short-term investments on our condensed consolidated balance sheets, unless otherwise indicated.

Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of September 30, 2024 and December 31, 2023 (in thousands):

Fair Value as of September 30, 2024

Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of March 31, 2025 and December 31, 2024 (in thousands):

Fair Value as of March 31, 2025

Level 1 Level 2 Level 3 Total

1 unchanged sentence

$ 509,097 $ — $ — $ 509,097

Commercial paper — 95,932 — 95,932

government securities — 192,507 — 192,507

Corporate bonds, asset backed and other securities (c)

Commercial paper (b)

— 100,297 — 100,297

government securities (c)

— 171,296 — 171,296

Corporate bonds, asset backed and other securities (d)

— 113,667 — 113,667

Total $ 509,097 $ 385,260 $ — $ 894,357

5 unchanged sentences

— 78,870 — 78,870

government securities — 256,850 — 256,850

Corporate bonds, asset backed and other securities (c)

government securities (c)

— 230,561 — 230,561

Corporate bonds, asset backed and other securities (d)

— 137,219 — 137,219

Total $ 535,745 $ 446,650 $ — $ 982,395

1 unchanged sentence

(a) Primarily included within cash and cash equivalents.

(b) As of December 31, 2023, $ 5.7 million of commercial paper was included within cash and cash equivalents.

(c) As of September 30, 2024 and December 31, 2023, $ 10.4 million and $ 6.5 million of corporate bonds, asset backed and other securities was included within cash and cash equivalents, respectively.

Non-Recurring Fair Value Measurements

During the nine months ended September 30, 2023, we incurred a one-time impairment of $ 2.5 million on our patents held for sale.

We determined the fair value based upon evaluation of market conditions.

Investment in Other Entities

During the three and nine months ended September 30, 2024, we recognized net gains of $ 0.3 million and $ 1.8 million, respectively, resulting from fair value changes of our long-term strategic investments, which was included within “ Other income, net ” in the condensed consolidated statement of income.

During the three and nine months ended September 30, 2023, we recognized gains of $ 6.1 million and $ 9.4 million, respectively, resulting from fair value changes of one of our long-term strategic investments, which was included within “ Other income, net ” in the condensed consolidated statement of income.

(b) As of March 31, 2025 and December 31, 2024, $ 23.1 million and $ 4.1 million of commercial paper was included within cash and cash equivalents, respectively.

government securities was included within cash and cash equivalents.

(d) As of March 31, 2025 and December 31, 2024, $ 10.4 million and $ 11.7 million of corporate bonds, asset backed and other securities was included within cash and cash equivalents, respectively.

Fair Value of Long-Term Debt

Convertible Notes

The principal amount, carrying value and related estimated fair value of the Company's Convertible Notes reported as of September 30, 2024 and December 31, 2023 was as follows (in thousands).

The principal amount, carrying value and related estimated fair value of the Company's Convertible Notes reported as of March 31, 2025 and December 31, 2024 was as follows (in thousands).

The aggregate fair value of the principal amount of the Convertible Notes is a Level 2 fair value measurement.

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Amount Carrying

2 unchanged sentences

2027 Senior Convertible Long-Term Debt $ 460,000 $ 455,241 $ 1,236,963 $ 460,000 $ 454,739 $ 1,166,155

2024 Senior Convertible Long-Term Debt $ — $ — $ — $ 126,174 $ 125,922 $ 171,130

Technicolor Patent Acquisition Long-term Debt

The carrying value and related estimated fair value of the Technicolor Patent Acquisition long-term debt reported as of September 30, 2024 and December 31, 2023 was as follows (in thousands).

The carrying value and related estimated fair value of the Technicolor Patent Acquisition long-term debt reported as of March 31, 2025 and December 31, 2024 was as follows (in thousands).

The aggregate fair value of the Technicolor Patent Acquisition long-term debt is a Level 3 fair value measurement.

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Value Carrying

1 unchanged sentence

OTHER ASSETS AND LIABILITIES

The amounts included in " Prepaid and other current assets " in the condensed consolidated balance sheet as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30, 2024 December 31, 2023

The amounts included in " Prepaid and other current assets " in the condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Prepaid assets $ 23,134 $ 38,952

3 unchanged sentences

Total Prepaid and other current assets $ 54,636 $ 84,312

The amounts included in " Other non-current assets, net " in the condensed consolidated balance sheet as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30, 2024 December 31, 2023

The amounts included in " Other non-current assets, net " in the condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Tax receivables $ 95,056 $ 88,619

4 unchanged sentences

Total Other non-current assets, net $ 157,957 $ 149,400

The amounts included in " Other accrued expenses " in the condensed consolidated balance sheet as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30, 2024 December 31, 2023

The amounts included in " Other accrued expenses " in the condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Accrued legal fees $ 10,240 $ 9,571

Customer deposit — 76,100

Other accrued expenses 13,958 15,563

Total Other accrued expenses $ 24,198 $ 25,134

The amounts included in " Other long-term liabilities " in the condensed consolidated balance sheet as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

September 30, 2024 December 31, 2023

The amounts included in " Other long-term liabilities " in the condensed consolidated balance sheet as of March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Deferred compensation liabilities $ 21,161 $ 19,969

7 unchanged sentences

The 2027 Notes will be convertible into cash up to the aggregate principal amount of the notes to be converted and in respect of the remainder, if any, of the Company’s obligation in excess of the aggregate principal amount of the notes being converted, pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof, at the Company’s election, at an initial conversion rate of 12.9041 shares of Common Stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $ 77.49 per share).

From the period January 1, 2024 through December 31, 2024, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes.

As such, the 2027 Notes are included in " Current portion of long-term debt " in our condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023.

From the period January 1, 2024 through June 30, 2025, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes.

As such, the 2027 Notes are included in " Current portion of long-term debt " in our condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024.

The 2027 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with any of the Company’s current and any future senior unsecured indebtedness.

2 unchanged sentences

Also, on May 24 and May 25, 2022, we entered into privately negotiated warrant transactions ("2027 Warrant Transactions"), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 5.9 million shares of common stock.

As of September 30, 2024, the warrants under the 2027 Warrant Transactions had a weighted average strike price of $ 106.31 per share, subject to adjustment, and mature beginning September 2027 through April 2028.

As of March 31, 2025, the warrants under the 2027 Warrant Transactions had a weighted average strike price of $ 106.14 per share, subject to adjustment, and mature beginning September 2027 through April 2028.

2024 Notes, and Related Note Hedge and Warrant Transactions

On June 3, 2019, we issued $ 400.0 million in aggregate principal amount of Senior Convertible Notes due in 2024 (the "2024 Notes") that bore interest at a rate of 2.00 % per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2019, and matured on June 1, 2024.

In connection with the offering of the 2024 Notes, we entered into convertible note hedge transactions (collectively, the "2024 Note Hedge Transactions") that covered, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock, in the aggregate, at a strike price that corresponded to the conversion price of the 2024 Notes, subject to adjustment, and were exercisable upon any conversion of the 2024 Notes.

We also entered into privately negotiated warrant transactions (collectively, the "2024 Warrant Transactions" and, together with the 2024 Note Hedge Transactions, the "2024 Call Spread Transactions"), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock at an initial strike price of approximately $ 109.43 per share, subject to adjustment.

During second quarter 2022, we repurchased $ 273.8 million in aggregate principal amount of the 2024 Notes in privately negotiated transactions concurrently with the offering of the 2027 Notes.

We repaid the remaining $ 126.2 million in aggregate principal at maturity on June 1, 2024.

On May 29 and May 31, 2019, in connection with the offering of the 2024 Notes, we entered into convertible note hedge transactions (collectively, the "2024 Note Hedge Transactions") that covered, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock, in the aggregate, at a strike price that corresponded to the conversion price of the 2024 Notes, subject to adjustment, and were exercisable upon any conversion of the 2024 Notes.

On May 29 and May 31, 2019, we also entered into privately negotiated warrant transactions (collectively, the "2024 Warrant Transactions" and, together with the 2024 Note Hedge Transactions, the "2024 Call Spread Transactions"), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 4.9 million shares of common stock at an initial strike price of approximately $ 109.43 per share, subject to adjustment.

At maturity on June 1, 2024, the Company issued 0.3 million shares to settle the 2024 Notes that had been converted by holders.

In connection with the partial repurchase of the 2024 Notes, we entered into partial unwind agreements that amended the terms of the 2024 Call Spread Transactions to reduce the number of options corresponding to the principal amount of the repurchased 2024 Notes.

The unwind agreements also reduce the number of warrants exercisable under the 2024 Warrant Transactions.

As a result of the partial unwind transactions, approximately 3.3 million shares of common stock in the aggregate that were covered under each of the 2024 Note Hedge Transactions and the 2024 Warrant Transactions were unwound.

On June 1, 2024, the 2024 Notes matured and we repaid the remaining $ 126.2 million in aggregate principal in cash and issued 0.3 million common shares to settle the remaining obligation.

This issuance was effectively offset by our receipt of 0.3 million shares from the settlement of the 2024 Note Hedge Transactions.

The 2024 Warrants settle during the period September 3, 2024 through December 17, 2024 on a net-share basis.

0.1 million shares have been issued related to the 2024 Warrant Transactions as of September 30, 2024, and warrants to acquire 1.1 million shares of common stock at an initial strike price of approximately $ 109.43 per share, subject to adjustment, remain outstanding.

The following table reflects the carrying value of our Convertible Notes long-term debt as of September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024 December 31, 2023

Additionally, the 2024 Warrant Transactions settled, on a net-share basis, during September through December 2024 resulting in the issuance of 0.5 million shares.

The following table reflects the carrying value of our Convertible Notes long-term debt as of March 31, 2025 and December 31, 2024 (in thousands):

March 31, 2025 December 31, 2024

3.50 % Senior Convertible Notes due 2027

$ 460,000 $ 460,000

2.00 % Senior Convertible Notes due 2024

Deferred financing costs ( 4,759 ) ( 5,261 )

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Long-term net carrying amount of the Convertible Notes $ — $ —

The following table presents the amount of interest cost recognized, which is included within " Interest expense" in our condensed consolidated statements of income, for the three and nine months ended September 30, 2024 and 2023 relating to the contractual interest coupon and the amortization of deferred financing costs of the Convertible Notes (in thousands):

Three months ended September 30,

2027 Notes 2024 Notes Total 2027 Notes 2024 Notes Total

Contractual coupon interest $ 4,025 $ — $ 4,025 $ 4,025 $ 631 $ 4,656

Amortization of deferred financing costs 483 — 483 448 147 595

Total $ 4,508 $ — $ 4,508 $ 4,473 $ 778 $ 5,251

Nine months ended September 30,

2027 Notes 2024 Notes Total 2027 Notes 2024 Notes Total

The following table presents the amount of interest cost recognized, which is included within " Interest expense" in our condensed consolidated statements of income, for the three months ended March 31, 2025 and 2024 relating to the contractual interest coupon and the amortization of deferred financing costs of the Convertible Notes (in thousands):

Three Months Ended March 31,

2027 Notes 2027 Notes 2024 Notes Total

Contractual coupon interest $ 4,025 $ 4,025 $ 631 $ 4,656

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This initial fair value measurement was based on the perspective of a market participant and included significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy.

The fair value of the long-term debt as of September 30, 2024 and December 31, 2023 is disclosed within Note 3, " Cash, Concentration of Credit Risk and Fair Value of Financial Instruments.

The fair value of the long-term debt as of March 31, 2025 and December 31, 2024 is disclosed within Note 3, " Cash, Concentration of Credit Risk and Fair Value of Financial Instruments.

" Our repayment obligations are contingent upon future royalty revenues generated from the Madison Arrangement and there are no minimum or maximum payments under the arrangement.

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This rate represents the discount rate that equates the estimated future cash flows with the fair value of the debt as of the acquisition date and is used to compute the amount of interest to be recognized each period based on the estimated life of the future revenue streams.

During the three and nine months ended September 30, 2024, we recognized $ 0.6 million and $ 2.2 million, respectively, of interest expense related to this debt, compared to $ 1.1 million and $ 2.5 million during the three and nine months ended September 30, 2023, respectively.

During the three months ended March 31, 2025 and 2024, we recognized $ 0.3 million and $ 0.6 million, respectively, of interest expense related to this debt.

This was included within “ Interest Expense ” in the condensed consolidated statements of income.

Any future payments made to CPPIB Credit, or additional proceeds received from CPPIB Credit, will decrease or increase the long-term debt balance accordingly.

We made $ 12.9 million in payments to CPPIB Credit during the nine months ended September 30, 2024, and no payments were made during the nine months ended September 30, 2023.

We made $ 1.3 million in payments to CPPIB Credit during the three months ended March 31, 2025, and $ 1.6 million in payments were made during the three months ended March 31, 2024.

Technicolor Contingent Consideration

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Under the revenue-sharing arrangement, Technicolor receives 42.5 % of future cash receipts from new licensing efforts from the Madison Arrangement only, subject to certain conditions and hurdles.

As of September 30, 2024, the contingent consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not reflected within the consolidated financial statements.

As of March 31, 2025, the contingent consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not reflected within the consolidated financial statements.

LITIGATION AND LEGAL PROCEEDINGS

ARBITRATIONS AND COURT PROCEEDINGS

In fourth quarter 2024, the Company reached an agreement with Lenovo Group Limited and certain of its subsidiaries (“Lenovo”) to enter into binding arbitration to determine the final terms of a new patent license agreement, which will be effective from January 1, 2024.

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

UK Proceedings

In August 2019, the Company and certain of its subsidiaries filed a claim in the UK High Court against Lenovo.

The claim, as amended, alleged infringement of five of the Company ’s patents relating to 3G and/or 4G/LTE standards.

The Company sought, among other relief, injunctive relief to prevent further infringement of the asserted patents or, in the alternative, a determination of the terms of a FRAND license.

Between 2021 and 2023, three of the Company’s European Patents were found by UK courts to be valid, essential and infringed by Lenovo.

In March 2023, the UK High Court issued an order staying all deadlines with respect to the fourth and fifth technical trials.

On March 16, 2023, the UK High Court issued its order regarding judgment in the trial to determine how much Lenovo must pay for a license to the Company’s portfolio of cellular assets, awarding the Company a lump sum of $ 138.7 million for such license through December 31, 2023.

On June 27, 2023, the court issued an order awarding the Company an additional $ 46.2 million, thus increasing the total award to $ 184.9 million, which was paid on July 11, 2023.

The court also found that the Company should pay a portion of Lenovo’s costs and granted both parties permission to appeal on certain grounds.

Both parties appealed certain aspects of the ruling, and in July 2024, the UK Court of Appeal ruled in favor of InterDigital and awarded the Company an additional amount of $ 55.2 million to a total of approximately $ 240.1 million.

It rejected Lenovo’s appeal in its entirety and confirmed that Lenovo must pay for all of its past sales starting from 2007 through December 31, 2023.

The court also found that Lenovo should pay the Company’s costs for the appeal and reduced the costs that Lenovo was awarded from the initial decision.

Lenovo sought permission to appeal, and permission to appeal was refused by the UK Court of Appeals.

Lenovo filed an application to the UK Supreme Court requesting permission to appeal on August 9, 2024;

Lenovo withdrew its application to appeal in October 2024 following entry into the arbitration agreement described above.

On September 24, 2023, Lenovo filed a new claim in the UK High Court, which alleged invalidity of two of the Company’s patents relating to 4G/LTE standards.

Lenovo sought, among other relief, a declaration that the patents at issue were invalid, not essential, and not infringed, revocation of the patents at issue, and a declaration that, upon expiration of the current license in 2023, Lenovo is licensed under terms to be determined by the UK High Court through 2028 or, in the alternative, a determination of the terms of a FRAND license.

In October 2023, Lenovo filed a request for an order that the Company indicate whether it is prepared to give an unconditional undertaking to enter into a global license on terms set by the UK Court, or failing that, a declaration that the Defendants are unwilling licensors;

a hearing was held in December 2023 during which Lenovo agreed to stay its application.

The Company filed a jurisdiction challenge in October 2023, and a hearing on such challenge took place in April 2024, following which, the jurisdiction challenge was denied.

In November 2023, Lenovo filed an application seeking an expedited FRAND trial and an interim license until a FRAND decision is issued in the UK.

A hearing on the interim license was held in February 2024;

in March 2024 the UK High Court denied Lenovo’s request for the interim license.

A FRAND trial was set for June-July 2025.

District of Delaware Patent Proceedings

In August 2019, the Company and certain of its subsidiaries filed a complaint in the United States District Court for the District of Delaware (the "Delaware District Court") against Lenovo alleging that Lenovo infringes eight of the Company’s U.S.

patents by making, using, offering for sale, and/or selling Lenovo wireless devices with 3G and/or 4G LTE capabilities.

As relief, InterDigital sought:

(a) a declaration that the Company is not in breach of its relevant FRAND commitments with respect to Lenovo;

(b) to the extent Lenovo does not agree to negotiate a worldwide patent license, does not agree to enter into binding international arbitration to set the terms of a FRAND license, and does not agree to be bound by the terms to be set by the UK High Court in the separately filed UK proceedings described above, an injunction prohibiting Lenovo from continued infringement;

and (d) attorneys’ fees and costs.

In June 2023, the parties requested that the entire case be stayed pending resolution of all appeals in the UK proceedings, and this request was granted.

District of Delaware Antitrust Proceedings

In April 2020, Lenovo and Motorola Mobility LLC filed a complaint in the Delaware District Court against the Company and certain of its subsidiaries, alleging that the Company defendants violated Sections 1 and 2 of the Sherman Act in connection with, among other things, their licensing of 3G and 4G standards essential patents ("SEPs").

The complaint further alleged that the Company defendants have violated their commitment to the ETSI with respect to the licensing of 3G and 4G SEPs on FRAND terms and conditions.

The complaint sought, among other things (i) rulings that the Company defendants have violated Sections 1 and 2 of the Sherman Act and are liable for breach of their ETSI FRAND commitments, (ii) a judgment that the plaintiffs are entitled to a license with respect to the Company’s 3G and 4G SEPs on FRAND terms and conditions, and (iii) injunctions against any demand for allegedly excessive royalties or enforcement of the Company defendants’ 3G and 4G U.S.

SEPs against the plaintiffs or their customers via patent infringement proceedings.

In June 2020, the Company filed a motion to dismiss Lenovo’s Sherman Act claims with prejudice, and to dismiss Lenovo’s breach of contract claim with leave to re-file as a counterclaim in the Company’s legal proceeding against Lenovo in the Delaware District Court discussed above.

In March 2021, the Delaware District Court dismissed the Sherman Act Section 1 claim without prejudice, denied the motion to dismiss the Sherman Act Section 2 claim, and consolidated the Section 2 and breach of contract claims with Company’s Delaware patent proceeding discussed above.

International Trade Commission and Companion District Court Proceedings

In September 2023, the Company and certain of its subsidiaries filed a complaint in the United States International Trade Commission (the "International Trade Commission") alleging that Lenovo infringes five of the Company’s U.S.

patents by making, using, offering for sale, and/or selling certain electronic devices, including smartphones, computers, tablet computers, and components thereof that infringe certain claims of the asserted patents.

As relief, the Company sought:

(a) a limited exclusion order against Lenovo barring from entry into the United States all of Lenovo’s products that infringe the asserted patents;

(b) cease and desist orders prohibiting Lenovo from importing, selling, offering for sale, marketing, advertising, and distributing, infringing products;

and (c) a bond during the 60-day Presidential review period.

An evidentiary hearing was held in August 2024.

Also in September 2023, the Company and certain of its subsidiaries filed a complaint in the United States District Court for the Eastern District of North Carolina (the "North Carolina District Court") alleging that Lenovo infringes those same five of the Company’s U.S.

As relief, the Company sought:

(a) a finding that Lenovo is liable for infringement of the asserted patents;

(b) an injunction against further infringement;

and (d) costs.

Germany Proceedings

In September 2023, the Company filed a complaint with the Munich Regional Court against Lenovo and certain of its affiliates, alleging infringement of a European patent relating to cellular 4G/LTE and/or 5G standards.

The Company sought, among other relief, injunctive relief to prevent further infringement of the asserted patents.

In May 2024, the Munich Regional Court issued a judgment finding Lenovo infringed the Company’s European patent and that the Company complied with its FRAND obligations while Lenovo did not;

the Court ordered Lenovo to cease and desist selling infringing products.

The Company served Lenovo with an enforcement note of the judgment in May 2024.

Lenovo appealed the judgment and requested a stay of the enforcement of the judgment, and in June 2024, the Munich Regional Court rejected Lenovo’s request.

Oppo, OnePlus and realme

In fourth quarter 2024, the Company entered into a license agreement with Guangdong Oppo Mobile Telecommunications Corp., Ltd.

(“Oppo”) and certain of its subsidiaries and affiliates, (collectively, “Oppo Group”).

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

UK Proceedings

In December 2021, the Company filed a patent infringement claim in the UK High Court against Oppo and certain of its affiliates, OnePlus Technology (Shenzhen) Co., Ltd.

(“OnePlus”) and certain of its affiliates, and realme Mobile Telecommunications (Shenzhen) Co., Ltd.

(“realme”) and certain of its affiliates, collectively, Oppo Group, alleging infringement of the Company’s European patents relating to cellular 3G, 4G/LTE or 5G standards.

The Company was seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

In March 2023, the parties agreed to stay all technical trials.

The FRAND trial to determine the royalties to be paid under the license with Oppo was held in March and April 2024;

a second hearing was held in September 2024 regarding the parties’ submissions relating to the UK Court of Appeal ’s decision in the Lenovo litigation.

India Proceedings

In December 2021, the Company and certain of its subsidiaries filed patent infringement claims in the Delhi High Court in New Delhi, India against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme Mobile Telecommunication (India) Private Limited, alleging infringement of certain of the Company’s Indian patents relating to cellular 3G, 4G/LTE, and/or 5G, and HEVC standards.

The Company was seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

In February 2024, the Delhi High Court granted the Company’s application for pro tem security, and Oppo appealed.

Evidentiary trial proceedings began in October 2024 and were expected to take place through December 2024.

Germany Proceedings

In December 2021, a subsidiary of the Company filed three patent infringement claims, two in the Munich Regional Court and one in the Mannheim Regional Court, against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme and certain of its affiliates, alleging infringement of certain of the Company’s European patents relating to cellular 3G, 4G/LTE and/or 5G standards.

The Company was seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

The Munich Regional Court held hearings in March and December 2023, and in December 2023, the Munich Regional Court issued a decision finding infringement and issuing an injunction against Oppo.

Oppo appealed this decision.

In March and November 2023, the Munich Regional Court entered stays of the proceedings in respect of specific patents.

China Proceedings

In January 2022, the Company was informed that Oppo had purportedly filed a complaint against the Company in the Guangzhou Intellectual Property Court (the “Guangzhou IP Court”) seeking a determination of a global FRAND royalty rate for the Company’s 3G, 4G, 5G, 802.11 and HEVC SEPs.

In May 2022, the Company filed an application challenging, among other things, process of service and the jurisdiction of the Guangzhou IP Court.

The Guangzhou IP Court denied the application, and the Company appealed that decision.

The Supreme People’s Court denied the appeal, and an initial evidentiary hearing was held in October 2023.

Spain Proceedings

In March 2022, a subsidiary of the Company filed patent infringement claims in the Barcelona Commercial Courts against Oppo and certain of its affiliates, OnePlus and certain of its affiliates, and realme and certain of its affiliates.

The Company filed an amended complaint in April 2022, alleging infringement of certain of its European patents relating to cellular 3G, 4G/LTE and/or 5G standards.

The Company was seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

Evidentiary trial proceedings were scheduled to take place in May 2025.

In fourth quarter 2024, the Company reached an agreement with Lenovo Group Limited and certain of its subsidiaries (“Lenovo”) to enter into binding arbitration to determine the final terms of a new paten t license agreement, which will be effective from January 1, 2024.

On November 6, 2024, the Company filed a request for arbitration with the International Chamber of Commerce.

On March 19, 2025, the International Chamber of Commerce confirmed the full tribunal for the arbitration.

The Company reached an agreement with Samsung Electronics Co.

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On July 21, 2023, the International Chamber of Commerce confirmed the full tribunal for the arbitration.

The two-week arbitration hearing was held in July 2024 , and we expect a decision by the end of 2024.

The two-week arbitration hearing was held in July 2024 , and closing arguments were held on October 23, 2024.

We expect a decision soon .

On December 5, 2023, Tesla and certain of its subsidiaries filed a claim in the UK High Court against the Company and Avanci.

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the jurisdiction challenge was heard on May 24-25 and June 4, 2024, and on July 15, 2024 the UK High Court issued a judgment dismissing Tesla’s FRAND claims against the Company and Avanci, and maintaining Tesla’s patent claims against the Company.

The patent claims against the Company were further stayed by the UK High Court, and a hearing on costs and permission to appeal is scheduled for July 30, 2024.

The patent claims against the Company were further stayed by the UK High Court.

A hearing on costs and permission to appeal was held on July 30, 2024.

On July 16, 2024, Tesla sought permission to appeal the decision;

the Company also sought permission to appeal on two limited grounds conditionally, should Tesla’s request for an appeal be granted.

The appeal hearing is scheduled to take place on December 2-3, 2024.

The appeal he aring was held on December 2-3, 2024, and on March 6, 2025 the UK Court of Appeal upheld the lower court's decision and re fused Tesla’s request for permission to appeal.

On April 3, 2025 Tesla filed an application for permission to appeal to the Supreme Court.

The Company filed its response on April 29, 2025 .

US Central District of California Proceedings

On February 3, 2025, the Company and certain of its subsidiaries filed a claim in the Federal District Court of the Central District of California against The Walt Disney Co.

and certain of its subsidiaries.

The claim alleges infringement of certain of the Company’s patents relating to video coding and video streaming technologies.

The Company is seeking, among other relief, damages to prevent further infringement of the asserted patents.

Brazil Proceedings

On February 3, 2025, the Company and certain of its subsidiaries filed a claim in the Regional Business Court of Rio de Janeiro against The Walt Disney Co.

and certain of its subsidiaries.

The claim alleges infringement of certain of the Company’s patents relating to video coding technologies .

The Company is seeking, among other relief, damages and injunctive relief to prevent further infringement of the asserted patents.

Germany Proceedings

On February 3, 2025, the Company and certain of its subsidiaries filed patent infringement claims in the Munich Regional Court against The Walt Disney Co.

and certain of its subsidiaries.

The claims allege infringement of certain of the Company’s patents relating to video coding and video streaming technologies .

The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

UPC Proceedings

On February 3, 2025, the Company and certain of its subsidiaries filed patent infringement claims in the Mannheim Local Divisional Court and Dusseldorf Local Divisional Court against The Walt Disney Co.

and certain of its subsidiaries.

The claims allege infringement of certain of the Company’s patents relating to video coding and video streaming technologies.

The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.

We are party to certain other disputes and legal actions in the ordinary course of business, including arbitrations and legal proceedings with licensees regarding the terms of their agreements and the negotiation thereof.

We do not currently believe that these matters, even if adversely adjudicated or settled, would have a material adverse effect on our financial condition, results of operations or cash flows.

None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of September 30, 2024, except as noted above.

In the nine months ended September 30, 2024 and 2023, the Company had an estimated effective tax rate of 18.4 % and 14.7 %, respectively.

The change in effective tax rate is due to a decrease in the amount of Foreign Derived Intangible Income deduction benefit available to the Company.

In addition, the Company is subject to an increase in the Global Intangible Low-Tax Income inclusion derived from the increase in revenue in certain foreign jurisdictions.

The effective tax rate in the nine months ended September 30, 2023 was impacted by losses in certain jurisdictions where the Company recorded a valuation allowance against the related tax benefit.

Excluding this valuation allowance, our effective tax rate for the nine months ended September 30, 2023 would have been 13.4 %.

During both the nine months ended September 30, 2024 and 2023, the Company recorded discrete net benefits of $ 4.3 million and $ 2.9 million, respectively, primarily related to share-based compensation.

None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of March 31, 2025, except as noted above.

In the three months ended March 31, 2025 and 2024, the Company had an estimated effective tax rate of 12.6 % and 19.2 %, respectively.

The change in effective tax rate is due to an increase in the amount of Foreign Derived Intangible Income deduction benefit available to the Company and tax benefits related to share-based compensation.

In addition, the Company is subject to a decrease in the Global Intangible Low-Tax Income inclusion derived from the increase in French revenue.

During both the three months ended March 31, 2025 and 2024, the Company recorded discrete net benefits of $ 3.9 million and $ 1.7 million, respectively, primarily related to share-based compensation.

The effective tax rate reported in any given year will continue to be influenced by a variety of factors, including timing differences between the recognition of book and tax revenue, the level of pre-tax income or loss, the foreign vs.

domestic classification of the Company’s customers, and any discrete items that may occur.

During the nine months ended September 30, 2024 and 2023, the Company paid approximately $ 14.5 million and $ 8.4 million, respectively, in foreign source creditable withholding tax.

During the three months ended March 31, 2025 and 2024, the Company paid approximately $ 3.2 million and $ 9.3 million, respectively, in foreign source creditable withholding tax.

NET INCOME PER SHARE

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The following tables reconcile the numerator and the denominator of the basic and diluted net income per share computation (in thousands, except for per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income applicable to InterDigital, Inc.

Three Months Ended March 31,

$ 115,602 $ 81,652

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Basic 25,741 25,510

Dilutive effect of stock options, RSUs, and warrants

2,446 784 1,389 669

Dilutive effect of stock options and RSUs

Dilutive effect of warrants

Dilutive effect of convertible securities

2,439 743 2,084 333

Diluted 33,505 28,341

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Basic $ 4.49 $ 3.20

Dilutive effect of stock options, RSUs, and warrants

Dilutive effect of stock options and RSUs

( 0.17 ) ( 0.10 )

Dilutive effect of warrants

Dilutive effect of convertible securities

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Set forth below are the securities and the weighted average number of shares of common stock underlying such securities that were excluded from our computation of EPS for the periods presented (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Restricted stock units and stock options — 1 1 142

Three Months Ended March 31,

Warrants 3,136 7,488

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As a result, in periods where the average market price of the Company's common stock is above the conversion price or strike price, as applicable, under the if-converted method, the Company calculates the number of shares issuable under the terms of the convertible notes and the warrants based on the average market price of the stock during the period, and includes that number in the total diluted shares outstanding for the period.

OTHER INCOME, NET

The amounts included in " Other income, net " in the condensed consolidated statements of income for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

SEGMENT PERFORMANCE MEASURES AND EXPENSES

Our chief operating decision maker (“CODM”), who is our Chief Executive Officer, assesses company-wide performance and allocates resources based on consolidated financial information.

Consequently, we view the entire organization as one reportable segment and the strategic purpose of all operating activities is to support that one segment.

Our CODM evaluates company-wide performance based on multiple performance measures, including, but not limited to, net income.

Our CODM does not generally evaluate our performance using asset or historical cash flow information.

The table below provides the calculation of net income, which is the performance measure that is most consistent with GAAP, and the significant operating expenses included in this performance measure (in thousands):

Three Months Ended March 31,

Revenue $ 210,507 $ 263,542

Departmental expenses (a)

41,337 44,466

Depreciation and amortization 18,213 17,240

Intellectual property enforcement 6,978 19,744

Share-based compensation 9,498 9,386

Revenue share costs 2,649 68,968

Other non-operating (income) expense, net (b)

( 387 ) 2,675

Income tax provision 16,617 19,411

Net income $ 115,602 $ 81,652

(a) Includes personnel-costs, consulting costs, outside services, administrative costs, and other operating expenses.

(b) Includes interest income, interest expense, and other non-operating income and expenses

OTHER INCOME, NET

The amounts included in " Other income, net " in the condensed consolidated statements of income for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Three Months Ended March 31,

Interest and investment income $ 9,264 $ 11,778

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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