What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-07-31 compared with 2025-05-01 · 167 added, 116 removed, 387 unchanged (42% of the section changed)

45 unchanged sentences

(in thousands, except per share data)

Three Months Ended March 31,

Revenues $ 210,507 $ 263,542

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue $ 300,596 $ 223,493 $ 511,103 $ 487,035

Operating expenses:

19 unchanged sentences

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 180,568 $ 109,664 $ 296,170 $ 191,316

6 unchanged sentences

(in thousands, except per share data)

Common Stock Additional Paid-In Capital

Retained Earnings Accumulated Other Comprehensive Loss

Treasury Stock Total Shareholders' Equity

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

Shares Amount Shares Amount

10 unchanged sentences

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

Common Stock Additional Paid-In Capital

Retained Earnings Accumulated Other Comprehensive Loss

Treasury Stock Total Shareholders' Equity

— — — 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

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

Shares Amount Shares Amount

11 unchanged sentences

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

— — — 180,568 — — — 180,568

Net change in unrealized gain on short-term investments — — — — 95 — — 95

Dividends declared ($ 0.60 per share)

— — 538 ( 16,045 ) — — — ( 15,507 )

Exercise of common stock options 1 — 15 — — — — 15

Issuance of common stock, net 15 1 ( 940 ) — — — — ( 939 )

Share-based compensation — — 11,836 — — — — 11,836

Repurchase of common stock — — — — — 123 ( 26,168 ) ( 26,168 )

Balance, June 30, 2025

70,911 $ 709 $ 805,073 $ 2,039,921 $ ( 107 ) 45,042 $ ( 1,758,812 ) $ 1,086,784

The accompanying notes are an integral part of these statements.

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

8 unchanged sentences

Share-based compensation 21,334 19,041

(Increase) Decrease in assets:

Increase in assets:

Receivables ( 200,405 ) ( 106,348 )

Deferred charges and other assets ( 14,044 ) ( 41,151 )

(Decrease) Increase in liabilities:

Increase (Decrease) in liabilities:

Accounts payable 801 ( 611 )

Customer deposit

Accrued compensation and other expenses ( 14,929 ) ( 408 )

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

Net cash provided by operating activities 85,129 1,863

Cash flows from investing activities:

4 unchanged sentences

Long-term investments — 1,194

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

Net cash (used in) provided by investing activities ( 22,220 ) 97,498

Cash flows from financing activities:

5 unchanged sentences

Net cash used in financing activities ( 85,620 ) ( 233,327 )

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

Net decrease in cash, cash equivalents and restricted cash ( 22,711 ) ( 133,966 )

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

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 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 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.

(individually and/or collectively with its subsidiaries referred to as “InterDigital,” the “Company,” “we,” “us” or “our,” unless otherwise indicated) as of June 30, 2025, the results of our operations for the three and six months ended June 30, 2025 and 2024 and our cash flows for the six months ended June 30, 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”).

4 unchanged sentences

We have one reportable segment.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from these estimates.

4 unchanged sentences

Supplemental Cash Flow Information

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,

The following table presents additional supplemental cash flow information for the six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 30,

Supplemental cash flow information:

Interest paid $ 8,050 $ 9,311

Income taxes paid, including foreign withholding taxes 21,764 16,920

16 unchanged sentences

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

5 unchanged sentences

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

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.

Disaggregated Revenue

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,

The following table presents the disaggregation of our revenue for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

2025 2024 Increase/(Decrease)

2 unchanged sentences

Other 181 539 ( 358 ) ( 66 ) %

Total Revenues

Total Revenue $ 300,596 $ 223,493 $ 77,103 34 %

Catch-up revenue (a) , included above

$ 162,328 $ 127,551 $ 34,777 27 %

Catch-up revenues (a) , included above

Six Months Ended June 30,

2025 2024 Increase/(Decrease)

Smartphone $ 419,075 $ 279,505 $ 139,570 50 %

CE, IoT/Auto 91,598 206,272 ( 114,674 ) ( 56 ) %

Other 430 1,258 ( 828 ) ( 66 ) %

Total Revenue $ 511,103 $ 487,035 $ 24,068 5 %

Catch-up revenue (a) , included above

$ 247,113 $ 294,229 $ ( 47,116 ) ( 16 ) %

(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.

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

During the six months ended June 30, 2025, we recognized $ 108.5 million of revenue that had been included in deferred revenue as of the beginning of the period.

As of June 30, 2025, we had contract assets of $ 343.8 million included within " Accounts receivable " and $ 9.0 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 March 31, 2025, 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 June 30, 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 $ 259,231

1 unchanged sentence

Total Revenue $ 1,922,425

(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.

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

In accordance with ASC 606, this estimate is 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 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,

The following table provides a reconciliation of total cash, cash equivalents, and restricted cash as of June 30, 2025, December 31, 2024, and June 30, 2024 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):

June 30, December 31, June 30,

2025 2024 2024

7 unchanged sentences

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

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

Three licensees comprised 90 % and 84 % of our accounts receivable balances of June 30, 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 March 31, 2025 and December 31, 2024 (in thousands):

Fair Value as of March 31, 2025

Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of June 30, 2025 and December 31, 2024 (in thousands):

Fair Value as of June 30, 2025

Level 1 Level 2 Level 3 Total

3 unchanged sentences

— 73,055 — 73,055

government securities (c)

— 171,296 — 171,296

Corporate bonds, asset backed and other securities (d)

government securities — 217,899 — 217,899

Corporate bonds, asset backed and other securities (c)

— 129,164 — 129,164

6 unchanged sentences

— 78,870 — 78,870

government securities (c)

— 230,561 — 230,561

Corporate bonds, asset backed and other securities (d)

government securities — 230,561 — 230,561

Corporate bonds, asset backed and other securities (c)

— 137,219 — 137,219

2 unchanged sentences

(a) Primarily included within cash and cash equivalents.

(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.

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

(c) As of June 30, 2025 and December 31, 2024, $ 1.0 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 March 31, 2025 and December 31, 2024 was as follows (in thousands).

The principal amount, carrying value and related estimated fair value of the Company's Convertible Notes reported as of June 30, 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.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Amount Carrying

3 unchanged sentences

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 March 31, 2025 and December 31, 2024 was as follows (in thousands).

The carrying value and related estimated fair value of the Technicolor Patent Acquisition long-term debt reported as of June 30, 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.

March 31, 2025 December 31, 2024

June 30, 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 March 31, 2025 and December 31, 2024 were as follows (in thousands):

March 31, 2025 December 31, 2024

Prepaid assets $ 23,134 $ 38,952

The amounts included in " Prepaid and other current assets " in the condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024 were as follows (in thousands):

June 30, 2025 December 31, 2024

Tax receivables $ 23,837 $ 16,691

Prepaid assets 22,096 38,952

Restricted cash 10,942 24,187

1 unchanged sentence

Total Prepaid and other current assets $ 60,717 $ 84,312

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

The amounts included in " Other non-current assets, net " in the condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024 were as follows (in thousands):

June 30, 2025 December 31, 2024

Tax receivables $ 93,943 $ 88,619

Goodwill 22,421 22,421

Long-term investments 19,375 19,851

Right-of-use assets 14,741 15,218

Long-term investments 12,947 19,851

Contract asset 9,000 —

Other non-current assets 4,441 3,291

Total Other non-current assets, net $ 157,493 $ 149,400

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

The amounts included in " Other accrued expenses " in the condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024 were as follows (in thousands):

June 30, 2025 December 31, 2024

Accrued legal fees $ 13,107 $ 9,571

1 unchanged sentence

Total Other accrued expenses $ 22,498 $ 25,134

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

The amounts included in " Other long-term liabilities " in the condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024 were as follows (in thousands):

June 30, 2025 December 31, 2024

Deferred compensation liabilities $ 23,627 $ 19,969

3 unchanged sentences

2027 Notes, and Related Note Hedge and Warrant Transactions

On May 27, 2022, we issued $ 460.0 million in aggregate principal amount of 3.50 % Senior Convertible Notes due 2027 (the "2027 Notes").

On May 27, 2022, we issued $ 460.0 million in aggregate principal amount of 3.50 % Senior Convertible Notes due in 2027 (the "2027 Notes").

The net proceeds from the issuance of the 2027 Notes, after deducting the initial purchasers' transaction fees and offering expenses, were approximately $ 450.0 million.

The 2027 Notes bear interest at a rate of 3.50 % per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2022, and mature on June 1, 2027, unless earlier redeemed, converted or repurchased.

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 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 will be convertible into cash up to the aggregate principal amount of the 2027 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 2027 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 the 2027 Notes (which is equivalent to an initial conversion price of approximately $ 77.49 per share).

From the period January 1, 2024 through September 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 June 30, 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 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.

As of June 30, 2025, the warrants under the 2027 Warrant Transactions had a weighted average strike price of $ 106.06 per share, subject to adjustment, and mature beginning September 2027 through April 2028.

2024 Notes, and Related Note Hedge and Warrant Transactions

9 unchanged sentences

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

The following table reflects the carrying value of our Convertible Notes long-term debt as of June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025 December 31, 2024

3.50 % Senior Convertible Notes due 2027

4 unchanged sentences

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 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,

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 six months ended June 30, 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 June 30,

2027 Notes 2027 Notes 2024 Notes Total

2 unchanged sentences

Total $ 4,534 $ 4,496 $ 529 $ 5,025

Six Months Ended June 30,

2027 Notes 2027 Notes 2024 Notes Total

Contractual coupon interest $ 8,050 $ 8,050 $ 1,059 $ 9,109

Amortization of deferred financing costs 1,011 936 252 1,188

Total $ 9,061 $ 8,986 $ 1,311 $ 10,297

Technicolor Patent Acquisition Long-Term Debt

3 unchanged sentences

("CPPIB Credit"), a wholly owned subsidiary of Canada Pension Plan Investment Board, is a third-party investor in the Madison Arrangement.

CPPIB Credit made certain payments to Technicolor and Sony and agreed to contribute cash to fund certain capital reserve obligations under the arrangement in exchange for a percentage of future revenues, specifically through September 11, 2030 in regard to the Technicolor patents.

CPPIB Credit made certain payments to Technicolor and Sony and agreed to contribute cash to fund certain capital reserve obligations under the arrangement in exchange for a percentage of future revenue, specifically through September 11, 2030 in regard to the Technicolor patents.

Upon our assumption of Technicolor’s rights and obligations under the Madison Arrangement, our relationship with CPPIB Credit meets the criteria in ASC 470-10-25 - Sales of Future Revenues or Various Other Measures of Income ("ASC 470"), which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period.

1 unchanged sentence

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 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.

The fair value of the long-term debt as of June 30, 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 revenue generated from the Madison Arrangement and there are no minimum or maximum payments under the arrangement.

Under ASC 470, amounts recorded as debt are amortized under the interest method.

3 unchanged sentences

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

During the three and six months ended June 30, 2025, we recognized $ 0.6 million and $ 0.8 million, respectively, of interest expense related to this debt, compared to $ 1.0 million and $ 1.6 million during the three and six months ended June 30, 2024, respectively.

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 $ 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.

We made $ 1.3 million in payments to CPPIB Credit during the six months ended June 30, 2025 and $ 12.9 million in payments were made during the six months ended June 30, 2024.

Technicolor Contingent Consideration

1 unchanged sentence

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 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.

As of June 30, 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 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.

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.

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

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

The Company reached an agreement with Samsung Electronics Co.

(“Samsung”) to enter into binding arbitration to determine the final terms of a renewed patent license agreement to certain of the Company’s patents, which will be effective from January 1, 2023.

The Company and Samsung have also agreed not to initiate certain claims against the other during the arbitration.

On March 31, 2023, the Company filed a request for arbitration with the International Chamber of Commerce.

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 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.

(“Samsung”) to enter into binding arbitration to determine the final terms of a renewed patent license agreement to certain of the Company ’s patents, to be effective from January 1, 2023.

The Company and Samsung also agreed not to initiate certain claims against the other during the arbitration.

In March 2023, the Company filed a request for arbitration with the International Chamber of Commerce.

The arbitration hearing was held in July 2024 , and closing arguments were held in October 2024.

On July 28, 2025, a panel of International Chamber of Commerce arbitrators determined the royalties of the patent license between the Company and Samsung covering Samsung’s products other than digital televisions and computer display monitors, which have been licensed under a separate agreement.

The panel set the total royalties at $ 1.05 billion for the eight-year patent license.

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

The claim alleges invalidity of three of the Company’s patents relating to 5G standards:

2 unchanged sentences

Tesla sought, among other relief, a declaration that the patents at issue are invalid, not essential, and not infringed, revocation of the patents at issue, a declaration that the terms of the Avanci 5G Connected Vehicle platform license are not FRAND, and a determination of FRAND terms for a license between Tesla and Avanci covering its Avanci’s 5G Connected Vehicle platform.

On March 8, 2024, the Company filed a jurisdiction challenge;

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.

In March 2024, the Company filed a jurisdiction challenge;

the jurisdiction challenge was heard during May and June 2024, and in July 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.

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;

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 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 .

The appeal hearing was held in December 2024, and the UK Court of Appeal upheld the lower court's decision and refused Tesla’s request for permission to appeal.

Tesla filed an application for permission to appeal to the Supreme Court.

In July 2025, the Supreme Court granted Tesla’s request for permission to appeal the issues of whether pool licenses are arguably required to be FRAND, whether all members of the Avanci 5G Platform must be joined to the case, and whether Tesla’s claim advances the possibility of a bilateral license from the Company.

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.

In February 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 (“Disney”).

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.

In March 2025, Disney filed an answer and asserted multiple counterclaims against the Company.

In April 2025 Disney filed a motion for an anti-suit injunction to prevent enforcement of any potential injunctive relief in Brazil, which the court denied.

A trial is scheduled for September 2026.

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.

In February 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 .

1 unchanged sentence

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

In March 2025, Disney filed an answer and asserted a rate-setting counterclaim.

In May 2025 the Company requested an anti-interference injunction to prevent Disney from continuing with its anti-suit injunction in California.

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.

In February and April of 2025, the Company and certain of its subsidiaries filed patent infringement claims in four separate proceedings in the Munich Regional Court against The Walt Disney Co.

and certain of its subsidiaries.

1 unchanged sentence

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

In May 2025, the Company filed a request for an anti-interference injunction to prevent interference with the proceedings in Munich by an anti-suit injunction.

The court issued the anti-interference injunction against Disney.

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.

In February and April of 2025, the Company and certain of its subsidiaries filed patent infringement claims in four separate proceedings in the Mannheim Local Divisional Court and Dusseldorf Local Divisional Court of the Unified Patent Court (“the UPC”) against The Walt Disney Co.

and certain of its subsidiaries.

1 unchanged sentence

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

In May 2025, the Company filed a request for an anti-interference injunction to prevent interference with the proceedings at the UPC by an anti-suit injunction.

The Mannheim Local Division granted the anti-interference injunction against Disney.

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 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.

None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of June 30, 2025, except as noted above.

In the six months ended June 30, 2025 and 2024, the Company had an estimated effective tax rate of 13.7 % and 18.6 %, respectively.

The change in effective tax rate is due to an increase in the amount of Foreign Derived Intangible Income ("FDII") 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 decrease in French revenue.

During the six months ended June 30, 2025 and 2024, the Company recorded discrete net benefits of $ 5.6 million and $ 2.4 million, respectively, primarily related to share-based compensation.

The One Big Beautiful Bill Act (the “Act”) was signed into law on July 4th, 2025.

The Act contains significant tax law changes with various effective dates affecting business taxpayers.

Among the tax law changes that will impact the Company relate to the timing and amount of certain tax deductions including FDII, depreciation expense, R& D expenditures and interest expense.

The Company will implement the tax law changes in the third quarter of 2025.

The Company is still in the process of evaluating the Act and an estimate of the financial impact cannot be made at this time.

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 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.

During the six months ended June 30, 2025 and 2024, the Company paid approximately $ 14.5 million and $ 13.4 million, respectively, in foreign source creditable withholding tax.

NET INCOME PER SHARE

2 unchanged sentences

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

$ 180,568 $ 109,664 $ 296,170 $ 191,316

Weighted-average shares outstanding:

1 unchanged sentence

Dilutive effect of stock options and RSUs

1,035 794 1,154 841

Dilutive effect of warrants

2,982 38 2,901 19

Dilutive effect of convertible securities

3,791 1,871 3,731 1,906

Diluted 33,725 27,910 33,615 28,125

4 unchanged sentences

Dilutive effect of warrants

( 0.62 ) ( 0.01 ) ( 0.99 ) ( 0.01 )

Dilutive effect of convertible securities

3 unchanged sentences

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Warrants 2,980 7,462 3,058 7,475

Total 3,136 7,488

Convertible Notes and Warrants

8 unchanged sentences

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,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue $ 300,596 $ 223,493 $ 511,103 $ 487,035

12 unchanged sentences

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,

The amounts included in " Other income, net " in the condensed consolidated statements of income for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Interest and investment income $ 8,828 $ 10,125 $ 18,092 $ 21,903

1 unchanged sentence

Other income, net $ 15,144 $ 11,682 $ 25,402 $ 20,929

The change in Other was primarily due to a foreign currency translation net gains arising from translation of our foreign subsidiaries of $ 3.6 million and $ 5.8 million in the three and six months ending June 30, 2025, respectively, compared to losses of $ 0.9 million and $ 3.3 million in the three and six months ending June 30, 2024, respectively.

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