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Item 1. Financial Statements

2025-10-30 compared with 2025-07-31 · 148 added, 81 removed, 473 unchanged (33% of the section changed)

4 unchanged sentences

(in thousands, except per share data)

September 30,

2025 December 31,

29 unchanged sentences

Retained earnings 2,088,823 1,775,823

Accumulated other comprehensive loss ( 107 ) ( 458 )

Accumulated other comprehensive gain (loss) 220 ( 458 )

Treasury stock, 45,180 and 44,895 shares of common stock held at cost

7 unchanged sentences

(in thousands, except per share data)

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

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

2025 2024 2025 2024

11 unchanged sentences

Net income $ 67,503 $ 34,190 $ 363,673 $ 225,506

Net income per common share — Basic $ 6.97 $ 4.35 $ 11.47 $ 7.54

Weighted average number of common shares outstanding — Basic 25,917 25,207 25,829 25,359

Net income per common share — Diluted $ 5.35 $ 3.93 $ 8.81 $ 6.80

Weighted average number of common shares outstanding — Diluted 33,725 27,910 33,615 28,125

Net income per common share:

Basic $ 2.62 $ 1.36 $ 14.09 $ 8.92

Diluted $ 1.93 $ 1.14 $ 10.68 $ 7.84

Weighted average number of common shares outstanding:

Basic 25,797 25,149 25,818 25,286

Diluted 34,925 30,034 34,051 28,759

Cash dividends declared per common share $ 0.70 $ 0.45 $ 1.90 $ 1.25

4 unchanged sentences

(in thousands)

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

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

2025 2024 2025 2024

Net income $ 67,503 $ 34,190 $ 363,673 $ 225,506

Unrealized gain (loss) on investments, net of tax 95 ( 90 ) 351 ( 585 )

Unrealized gain on investments, net of tax 327 1,366 678 781

Comprehensive income $ 67,830 $ 35,556 $ 364,351 $ 226,287

4 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 Income (Loss) Treasury Stock Total Shareholders' Equity

Shares Amount Shares Amount

21 unchanged sentences

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

Net income — — — 34,190 — — — 34,190

Net change in unrealized gain on short-term investments — — — — 1,366 — — 1,366

Dividends declared ($ 0.45 per share)

— — 451 ( 11,817 ) — — — ( 11,366 )

Exercise of common stock options 1 — 11 — — — — 11

Issuance of common stock, net 53 1 ( 4,602 ) — — — — ( 4,601 )

Share-based compensation — — 9,081 — — — — 9,081

Repurchase of common stock — — — — — 23 ( 2,917 ) ( 2,917 )

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

Balance, September 30, 2024

70,137 $ 701 $ 794,644 $ 1,654,774 $ 134 44,895 $ ( 1,727,716 ) $ 722,537

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

Shares Amount Shares Amount

21 unchanged sentences

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

Net income — — — 67,503 — — — 67,503

Net change in unrealized gain on short-term investments — — — — 327 — — 327

Dividends declared ($ 0.70 per share)

— — 560 ( 18,601 ) — — — ( 18,041 )

Issuance of common stock, net 52 — ( 10,646 ) — — — — ( 10,646 )

Share-based compensation — — 9,301 — — — — 9,301

Repurchase of common stock — — — — — 138 ( 35,252 ) ( 35,252 )

Settlement of the 2027 Hedge — — 40 — — — ( 40 ) —

Balance, September 30, 2025

70,963 $ 709 $ 804,328 $ 2,088,823 $ 220 45,180 $ ( 1,794,104 ) $ 1,099,976

The accompanying notes are an integral part of these statements.

3 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

4 unchanged sentences

( 3,362 ) ( 8,290 )

Non-cash change in investments 584 ( 150 )

Change in deferred revenue 48,785 ( 3,913 )

1 unchanged sentence

Share-based compensation 30,635 28,122

Increase in assets:

Other 914 329

Decrease (Increase) in assets:

Receivables 27,661 ( 95,128 )

7 unchanged sentences

Purchases of short-term investments ( 317,357 ) ( 445,434 )

Sales of short-term investments 254,003 415,988

Proceeds from maturities and sales of short-term investments 335,682 618,642

Purchases of property and equipment ( 15,671 ) ( 1,928 )

9 unchanged sentences

Net cash used in financing activities ( 147,039 ) ( 251,025 )

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

Net increase (decrease) in cash, cash equivalents and restricted cash 297,083 ( 32,181 )

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 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.

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

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Supplemental Cash Flow Information

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,

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

Nine Months Ended September 30,

Supplemental cash flow information:

2 unchanged sentences

Non-cash investing and financing activities:

Dividend payable 15,507 10,052

Right-of-use assets obtained in exchange of operating lease liabilities 880 2,189

Non-cash acquisition of patents 19,319 —

Dividend payable 18,041 11,366

Accrued capitalized patent costs and property and equipment purchases 5,499 ( 2,261 )

Unsettled repurchase of common stock 468 —

Right-of-use assets obtained in exchange of operating lease liabilities 880 2,023

Settlement of the 2027 and 2024 Hedge Transactions 40 37,120

New Accounting Guidance

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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.

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

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

Accounting Standards Update:

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

Accounting Standards Update:

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU No.

2025-06, "Intangibles—Goodwill and Other Internal-Use Software (Subtopic 350-40)".

The amendments in the ASU amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, 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 and six months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

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

Three Months Ended September 30,

2025 2024 Increase/(Decrease)

5 unchanged sentences

$ 17,678 $ 30,045 $ ( 12,367 ) ( 41 ) %

Six Months Ended June 30,

Nine Months Ended September 30,

2025 2024 Increase/(Decrease)

6 unchanged sentences

(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.

During the nine months ended September 30, 2025, we recognized $ 143.8 million of revenue that had been included in deferred revenue as of the beginning of the period.

As of September 30, 2025, we had contract assets of $ 33.6 million included within " Accounts receivable " and $ 15.0 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 June 30, 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 September 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 $ 136,379

6 unchanged sentences

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 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,

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

September 30, December 31, September 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 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.

Three licensees comprised 65 % and 84 % of our accounts receivable balances of September 30, 2025 and December 31, 2024, respectively.

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

We believe that the book values of our financial instruments approximate their fair values.

12 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 June 30, 2025 and December 31, 2024 (in thousands):

Fair Value as of June 30, 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 September 30, 2025 and December 31, 2024 (in thousands):

Fair Value as of September 30, 2025

Level 1 Level 2 Level 3 Total

4 unchanged sentences

government securities — 234,542 — 234,542

Corporate bonds, asset backed and other securities (c)

Corporate bonds, asset backed and other securities

— 129,107 — 129,107

12 unchanged sentences

(a) Primarily included within cash and cash equivalents.

(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.

(b) As of September 30, 2025 and December 31, 2024, $ 12.1 million and $ 4.1 million of commercial paper was included within cash and cash equivalents, respectively.

(c) As of December 31, 2024, $ 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 June 30, 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 (the "Convertible Notes") reported as of September 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.

June 30, 2025 December 31, 2024

September 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 June 30, 2025 and December 31, 2024 was as follows (in thousands).

The carrying value and related estimated fair value of the Technicolor Patent Acquisition (as defined below) long-term debt reported as of September 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.

June 30, 2025 December 31, 2024

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

June 30, 2025 December 31, 2024

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

September 30, 2025 December 31, 2024

Tax receivables $ 24,964 $ 16,691

3 unchanged sentences

Total Prepaid and other current assets $ 56,927 $ 84,312

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

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

September 30, 2025 December 31, 2024

Tax receivables $ 96,502 $ 88,619

Goodwill 22,421 22,421

Contract asset 15,000 —

Right-of-use assets 14,050 15,218

Long-term investments 12,700 19,851

Contract asset 9,000 —

Other non-current assets 4,273 3,291

Total Other non-current assets, net $ 164,946 $ 149,400

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

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

September 30, 2025 December 31, 2024

Accrued legal fees $ 16,443 $ 9,571

1 unchanged sentence

Total Other accrued expenses $ 29,584 $ 25,134

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

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

September 30, 2025 December 31, 2024

Deferred compensation liabilities $ 25,604 $ 19,969

7 unchanged sentences

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.

From the period January 1, 2024 through December 31, 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 September 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 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.

As of September 30, 2025, the warrants under the 2027 Warrant Transactions had a weighted average strike price of $ 105.77 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 June 30, 2025 and December 31, 2024 (in thousands):

June 30, 2025 December 31, 2024

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

September 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 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,

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, 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 September 30,

2027 Notes 2027 Notes 2024 Notes Total

2 unchanged sentences

Total $ 4,547 $ 4,508 $ — $ 4,508

Six Months Ended June 30,

Nine Months Ended September 30,

2027 Notes 2027 Notes 2024 Notes Total

11 unchanged sentences

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 June 30, 2025 and December 31, 2024 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 September 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.

4 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 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.

During the three and nine months ended September 30, 2025, we recognized $ 0.6 million and $ 1.4 million, respectively, of interest expense related to this debt, compared to $ 0.6 million and $ 2.2 million during the three and nine months ended September 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 six months ended June 30, 2025 and $ 12.9 million in payments were made during the six months ended June 30, 2024.

We made $ 1.3 million and $ 12.9 million in payments to CPPIB Credit during the nine months ended September 30, 2025 and 2024, respectively.

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 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.

As of September 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

8 unchanged sentences

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.

I n July 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.

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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.

In September 2025, the Company filed an application for permission to cross-appeal.

US Central District of California Proceedings

13 unchanged sentences

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

In September 2025, the Court granted the Company’s preliminary injunction request.

The Appellate Court initially granted Disney’s request to stay the preliminary injunction pending hearing of an appeal, but that stay was lifted.

Disney now has until November 30, 2025, to comply fully with the injunction.

In October 2025, the Company filed another 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 one 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 patent.

Germany Proceedings

3 unchanged sentences

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.

Hearings on the asserted patents have been scheduled for October 2025, November 2025, February 2026 and June 2026.

UPC Proceedings

3 unchanged sentences

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.

The Mannheim Court has scheduled a hearing for one of the asserted patents in May 2026.

The Dusseldorf Court has scheduled hearings for two asserted patents in June and July 2026.

Delaware Proceedings

In August 2025, a subsidiary of Disney filed an antitrust complaint against the Company and certain of its subsidiaries, and Technicolor in the Federal District Court of the District of Delaware.

The claims allege the Company has engaged in monopolistic conduct in the licensing of its patents relating to video coding and video streaming technologies.

Disney is seeking, among other relief, injunctive relief to halt the licensing practices it views as unlawful, and damages.

In September 2025, the Company filed a motion to dismiss Disney’s complaint, or in the alternative, stay the case pending resolution of the Company’s cases against Disney in California, Europe, and Brazil.

In October 2025, the Antitrust Division of the United States Department of Justice filed a Statement of Interest in the Delaware case.

United Kingdom Proceedings

In August 2025, Amazon.com, Inc.

and certain of its subsidiaries (“Amazon”) filed a claim in the High Court of Justice of England and Wales against the Company and certain of its subsidiaries.

The claims allege the non-infringement and invalidity of certain patents relating to video coding and video streaming technologies.

Amazon is seeking, among other relief, a rate-setting and order that InterDigital offer Amazon a RAND license as declared by the Court, or a declaration that InterDigital is in breach of its RAND commitment and an unwilling licensor and damages arising from such breach, and a declaration that the challenged patents are invalid and non-essential and not infringed.

Brazil Proceedings

In September 2025, Amazon filed a claim in the Second Business Court of Sao Paolo against the Company and certain of its subsidiaries.

The claims allege the non-infringement of certain patents relating to video coding and video streaming technologies.

Amazon is seeking a declaration that the challenged Brazilian patents are not infringed, and a declaration preventing enforcement by the Company of any video coding patents anywhere in Brazil.

UPC Proceedings

In September 2025, the Company and certain of its subsidiaries filed patent infringement claims in the Munich Local Divisional Court of the Unified Patent Court against Transsion Holdings Pvt Ltd and certain of its subsidiaries (“Transsion”).

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

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

India Proceedings

In September and October 2025, the Company and certain of its subsidiaries filed patent infringement claims in the Delhi High Court against Transsion.

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

The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents, damages, and a declaration that the Company is FRAND complaint and that Transsion is an unwilling licensee with respect to the FRAND claims.

Brazil Proceedings

In September 2025, the Company and certain of its subsidiaries filed a claim in the Regional Business Court of Rio de Janeiro against Transsion.

The claim alleges infringement of certain of the Company’s patents relating to cellular SEP technologies.

The Company is seeking, among other relief, damages and 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 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.

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

In the nine months ended September 30, 2025 and 2024, the Company had an estimated effective tax rate of 13.3 % and 18.4 %, 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.

During the nine months ended September 30, 2025 and 2024, the Company recorded discrete net benefits of $ 9.3 million and $ 4.3 million, respectively, primarily related to share-based compensation.

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

1 unchanged sentence

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 tax law changes did not have an impact on the tax provision in the third quarter of 2025.

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 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.

During the nine months ended September 30, 2025 and 2024, the Company paid approximately $ 78.6 million and $ 14.5 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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

20 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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

10 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 June 30, Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

13 unchanged sentences

OTHER INCOME, NET

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,

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

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

2025 2024 2025 2024

2 unchanged sentences

Other income, net $ 10,188 $ 12,554 $ 35,590 $ 33,483

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.

The change in Other was primarily due to foreign currency translation which resulted in a loss of $ 0.6 million and a gain of $ 5.9 million in the three and nine months ending September 30, 2025, respectively, compared to a gain of $ 2.8 million and a loss of $ 0.5 million in the three and nine months ending September 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