What changed in this filing

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Item 1A. Risk Factors

2026-02-05 compared with 2025-02-06 · 95 added, 83 removed, 269 unchanged (40% of the section changed)

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Additionally, our pricing models may not reflect the value of our technologies in the eyes of our customers.

And, because this market is less developed, holdout behavior may be more likely than in device licensing.

Because we have not yet entered into our first video services license, the revenue we expect to realize from this program is uncertain and inherently subject to risk.

And, because the services licensing market is less developed, holdout behavior may be more likely than in device licensing.

Service providers may also opt to use alternative technologies for which we have little or no patent coverage.

Accordingly, we may not be able to enter into license agreements with these providers on terms that are favorable to us, or at all.

Services revenue is a key component of our future growth, and if we are unable to successfully launch and execute a services licensing program, we will not reach our revenue targets, and our business, financial condition and prospects could be harmed.

Services revenue is a key component of our future growth, and if we are unable to successfully execute a services licensing program and monetize our video patents in respect of video services as we currently intend, we will not reach our revenue and other financial targets, and our business, financial condition and prospects could be harmed.

Challenges relating to our ability to enter into new license agreements and renew existing license agreements could cause our revenue and cash flow to decline.

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Once identified, it is not feasible for us to seek licenses from all users of our patented technologies, so we have to make strategic decisions with respect to which companies we should approach for license negotiations.

Uncertainty related to entry into new license agreements could impact our forecasts and ultimately, revenue, cash flow and business.

In particular, the CE/IoT market is much more fragmented than our traditional smartphone core.

Uncertainty related to entry into new license agreements impacts our forecasts and ultimately, revenue, cash flow and business.

We also face challenges in renewing our existing license agreements.

Although we endeavor to renew license agreements prior to their expiration, due to various factors, including the technology and business needs and competitive positions of our licensees and, at times, reluctance on the part of our licensees to participate in renewal discussions, we may not be able to renegotiate the license agreements on acceptable terms before the expiration of the license agreement, or at all.

If there is a delay in renegotiating and renewing a license agreement prior to its expiration, there could be a gap in time during which we may be unable to recognize revenue from that licensee or we may be forced to renegotiate and renew the license agreement on terms that are more favorable to such licensee.

Delays in renegotiating and renewing a license agreement prior to its expiration, cause gaps in time during which we may be unable to recognize revenue from that licensee.

We may also be forced to renegotiate and renew the license agreement on terms that are more favorable to such licensee.

If we fail to renegotiate and renew our license agreements prior to their expiration, at all or on terms that are favorable to us, our forecasts, revenue and cash flow could be materially adversely affected.

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We have no guarantee that the royalties or other terms set by arbitrators, courts or other third parties will be favorable to us.

It is possible that courts or regulators could decide to set or otherwise determine the FRAND consistency of such terms or the manner in which such terms are determined, including by determining a worldwide royalty for our SEPs.

Changes to or clarifications of our obligations to be prepared to offer licenses to SEPs on FRAND terms and conditions could require such terms, including our royalties, to be determined through third party adjudications.

Finally, we and certain of our current and prospective licensees have initiated, and we and others could in the future initiate, legal proceedings or regulatory proceedings requesting third party adjudicators or regulators to set FRAND terms and conditions for a worldwide license to our SEPs, or to determine the FRAND-consistency of current terms and conditions in our patent license agreements.

Finally, we and certain of our current and prospective licensees have initiated, and we and others could in the future initiate, legal proceedings or regulatory proceedings requesting third party adjudicators or regulators to set FRAND terms and conditions for a worldwide license to our SEPs or our entire portfolio, or to determine the FRAND-consistency of current terms and conditions in our patent license agreements.

Chinese courts have affirmed their position that in certain SEP licensing disputes, Chinese courts can set worldwide royalties, and in December 2023, one such court issued such a decision setting a worldwide royalty for Nokia’s cellular patents.

We have faced similar proceedings with OPPO in China to determine a worldwide royalty for certain of our SEPs as well as royalty-setting proceedings in the UK initiated by Lenovo and Tesla.

We have faced similar proceedings with OPPO in China to determine a worldwide royalty for certain of our SEPs as well as royalty-setting proceedings in the UK initiated by Amazon and Tesla.

If any court or arbitration tribunal decision sets a worldwide royalty rate that is unfavorable to us, our standard essential patent portfolio could be significantly devalued as it relates to the FRAND royalty an implementer should pay, which could in turn negatively impact pricing with other licensees.

To the extent that our patent royalties for our patent license agreements are determined through arbitration or other third party adjudications or regulatory or court proceedings rather than through bilateral negotiations, because such proceedings are inherently unpredictable and uncertain and there are currently few precedents for such determinations, it is possible that royalties may be lower than our accounting estimates and/or comparable licenses.

This could also have a negative impact on royalties we are able to obtain from future licensees, which may have an adverse effect on our revenue and cash flow.

This could also have a negative impact on royalties we are able to obtain from future licensees, which may have an adverse effect on our revenue and cash flow and render us unable to meet our revenue and other financial targets.

Prospective customers may delay, and in some cases have delayed, negotiations on the basis of an adverse decision.

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We could continue to be involved in a number of costly litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices.

Although we always seek to enter into licenses through bi-lateral negotiations, sometimes licensees are unwilling and litigation is necessary.

This may be even more true with respect to video services licensing than device licensing since licensing efforts in this space are newer.

Although we always seek to enter into licenses through bilateral negotiations, sometimes licensees are unwilling and litigation is necessary.

This may be even more true with respect to video services licensing than device licensing, because the licensing market is less developed.

While some companies seek licenses before they commence manufacturing and/or selling devices or services that use our patented inventions, the vast majority do not.

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In addition, litigation, arbitration and administrative proceedings require significant key employee involvement for significant periods of time, which could divert these employees from other business activities.

Potential patent and litigation reform legislation, potential USPTO and international patent rule changes, potential legislation affecting mechanisms for patent enforcement and available remedies, and potential changes to the intellectual property rights (“IPR”) policies of worldwide standards bodies, as well as rulings in legal proceedings, may affect our investments in research and development and our strategies for patent prosecution, licensing and enforcement and could have a material adverse effect on our licensing business as well as our business as a whole.

Potential changes to certain U.S.

and international patent laws, rules and regulations may occur in the future, some or all of which may affect our research and development investments, patent prosecution costs, the scope of future patent coverage we secure, the number of forums in which we can seek to enforce our patents, the remedies that we may be entitled to in patent litigation, and attorneys’ fees or other remedies that could be sought against us, and may require us to reevaluate and modify our research and development activities and patent prosecution, licensing and enforcement strategies.

and international patent laws, rules and regulations may occur in the future, some or all of which may affect our research and development investments, patent prosecution or maintenance costs, the scope of future patent coverage we secure, the number of forums in which we can seek to enforce our patents, the remedies that we may be entitled to in patent litigation, and attorneys’ fees or other remedies that could be sought against us, and may require us to reevaluate and modify our research and development activities and patent prosecution, licensing and enforcement strategies.

For example, the State Administration for Market Regulation in China regularly reviews its policies related to intellectual property and antitrust laws, and any such review could result in ambiguous standards and/or create a worse position for patent holders like us.

Additionally, the European Commission (“EC”) has initiated a review of the EU’s IP policies as they relate to SEPs and FRAND.

This review is currently being discussed and debated inside the European Parliament and the European Council and any change to the legal or regulatory landscape as a result of this review could impact our ability to negotiate license agreements on favorable terms or at all, while also limiting our potential legal remedies and materially impacting our business.

Additionally, there is uncertainty surrounding future EU IP policy.

In 2023, the European Commission (“EC”) introduced a proposal for SEP regulation that would have increased regulation of and requirements on SEP holders.

Following discussion and debate inside of the European Parliament (“EP”) and the EC, the EC withdrew the proposed policy in 2025, but discussions between the EP and EC continue as they relate to the future of SEPs and FRAND policy in the EU.

Any change to the legal or regulatory landscape as a result of this review could impact our ability to negotiate license agreements on favorable terms or at all, while also limiting our potential legal remedies and materially impacting our business.

Further, legislation designed to reduce the value of SEPs and alter the U.S.

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or in international forums may change the law applicable to various patent law issues, such as, for example, patentability, validity, claim construction, patent exhaustion, patent misuse, permissible licensing practices, available forums, and remedies such as damages and injunctive relief, in ways that are detrimental to the ability of patentees to enforce patents and obtain suitable relief.

There are regularly discussions within the EC regarding potential regulations and policy changes that could determine how and whether a patent is essential to a standard.

The risk of having our patents determined essential based on a single methodology or specific criteria and conditions associated with patent enforcement and licensing as imposed by the EC would affect our strategies as well.

Ongoing uncertainty related to the feasibility and criteria used for this evaluation as well as the cost associated with such essentiality determination could impact the assessment of our SEP portfolio.

We continue to monitor and evaluate our strategies for prosecution, licensing and enforcement with regard to these developments;

however, any resulting change in such strategies may have an adverse impact on our business and financial condition.

Our ability to license device manufacturers and service providers in China may be adversely affected by a deterioration in United States-China trade and geopolitical relations, our customers facing economic uncertainty there or our failure to establish a positive reputation in China.

Companies headquartered in China currently comprise a substantial portion of the handset manufacturers that remain unlicensed to our patent portfolio as well as manufacturers of other devices and services that use our patented inventions.

Our business and operations may be adversely affected by a deterioration in United States-China relations or broader trade and geopolitical conditions.

The imposition of tariffs by the United States could materially harm our business.

Companies headquartered in China currently comprise a substantial portion of customers that utilize our patented inventions in their devices and services.

Our ability to renew license agreements with current licensees in China as well as license new manufacturers is, among other things, affected by the macroeconomic and geopolitical climate, as well as our business relationships and perceived reputation in China.

and Chinese governments are regularly engaged in various trade discussions, and the U.S.

State Department originally issued a travel advisory in January 2019 and reissued this travel advisory on January 11, 2023 advising U.S.

citizens to exercise increased caution in China due to arbitrary enforcement of local laws.

In January 2020, the U.S.

and China entered into Phase One of the Economic and Trade Agreement, which took steps to ease certain trade tensions between the U.S.

and China, including tensions involving intellectual property theft and forced intellectual property transfers by China.

Although the Phase One Trade Agreement was an encouraging sign of progress in the trade negotiations between the U.S.

and China, questions still remain as to the enforcement of its terms, the resolution of a number of other points of dispute between the parties, and the prevention of further tensions.

Additionally, President Trump has indicated that his administration would potentially impose greater restrictions on trade with China through significant increases in tariffs on goods imported into the U.S., which could increase tensions and create greater uncertainty in our business dealings in China and with Chinese companies.

Our ability to renew or conclude new license agreements with such manufacturers could also be affected by economic uncertainty, particularly in the handset market, in China or by our failure to establish a positive reputation and relationships in China.

China is a key market for us, and any of these factors could harm our ability to execute our business plans there and could in turn cause our long-term business, financial condition and operating results to be materially adversely affected.

Although the U.S.

and Chinese governments are regularly engaged in various trade discussions, the imposition of tariffs by the US government in 2025 increased trade tensions, both with China and globally.

Countermeasures imposed in response to such government actions could materially harm our business prospects, financial condition and cash flow.

Currently, the future of existing tariffs, and the possibility for new tariffs or changes in trade policies, remains uncertain.

So far, these tariffs and trade policies have not had a significant impact on our ability to develop foundational technologies or to participate and lead open standard development, or our business operations or financial results more generally;

however, there is no guarantee that we can avoid the impact of tariff and related economic effects in the future, and these trade measures and any retaliatory measures imposed could directly or indirectly harm our business.

Our ability to renew or conclude new license agreements could also be affected by economic uncertainty, particularly in the handset market, in China or globally.

China is a key market for us, and any of the above-mentioned factors could harm our ability to execute our business plans.

The ultimate impact of ongoing trade tensions is uncertain, but if tensions continue or escalate, we could suffer material harm to our business, financial condition and operating results.

We may face setbacks in defending our patent licensing practices.

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We invest significant resources in the development of advanced technology and related solutions.

However, certain of our inventions that we believe will be employed in current and future products, including 4G, 5G, HEVC, VVC and others, are the subject of patent applications where no patent has been issued to us yet by the relevant patent issuing authorities.

However, certain of our inventions that we believe will be employed in current and future products, including 5G, HEVC, VVC and others, are the subject of patent applications where no patent has been issued to us yet by the relevant patent issuing authorities.

There is no assurance that these applications will issue as patents, either at all or with claims that would be required by products in the market currently or in the future.

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We cannot ensure that the validity and enforceability of our patents will be maintained or that our patents will be determined to be applicable to any particular product or standard.

Moreover, third parties could attempt to circumvent certain of our patents through design changes.

Moreover, third parties could and do attempt to circumvent certain of our patents through design changes.

Any significant adverse findings as to the validity, infringement, enforceability or scope of our patents and/or any successful design-around of our patents could result in the loss of patent licensing revenue from existing licensees, through termination or modification of agreements or otherwise, and could substantially impair our ability to secure new patent licensing arrangements, either at all or on beneficial terms.

Macroeconomic conditions may harm our business.

A decline in economic conditions, such as a recession, economic downturn or inflationary conditions in the U.S.

or elsewhere could adversely affect our business.

In particular, inflation has accelerated and remained high in the U.S.

and globally.

Trade tensions or restrictions on free trade, including the tariffs that have been proposed by President Trump, could exacerbate these effects.

A majority of our revenue is derived from patent license agreements that provide for fixed payments that were negotiated before the recent rise in inflation.

An inflationary environment can increase our cost of labor, as well as our other operating costs, without a corresponding increase in our revenue, which may have a material adverse impact on our operating results and financial condition.

Scrutiny by antitrust authorities may affect our strategies for patent prosecution, licensing and enforcement and may increase our costs of doing business and/or lead to monetary fines, penalties or other remedies or sanctions.

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Such scrutiny has in the past resulted in enforcement actions against Qualcomm and other licensing companies, and could lead to additional investigations of, or enforcement actions against, us.

Additionally, potential licensees may initiate antitrust complaints against us, such as the complaint that Disney recently filed against us.

Such inquiries and/or enforcement actions could impact the availability of injunctive and monetary relief, which may adversely affect our strategies for patent prosecution, licensing and enforcement and increase our costs of operation.

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We are subject to risks resulting from customer concentration.

We earn a significant amount of our revenues from a limited number of licensees or customers, and we expect that a significant portion of our revenues will continue to come from a limited number of licensees or customers for the foreseeable future.

For example, in 2024, Samsung, Lenovo, Apple, and OPPO each comprised 10% or more of our consolidated revenues.

We earn a significant amount of our revenue from a limited number of licensees or customers, and we expect that a significant portion of our revenue will continue to come from a limited number of licensees or customers for the foreseeable future.

For example, in 2025, Samsung, Apple, and vivo each comprised 10% or more of our consolidated revenue.

Further, because of the limited number of licensees and potential licensees, any opportunistic behavior during license negotiations by a company or companies using our technology could create large exposure for us.

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In the event that one or more of our significant licensees or customers fail to meet their payment or reporting obligations (for example, due to a credit issue or in connection with a legal dispute or similar proceeding) under their respective license agreements, our future revenue and cash flow could be materially adversely affected.

In addition, in the event that there is a material decrease in shipments of licensed products by one of our per-unit licensees, our revenues from such licensee could significantly decline and our future revenue and cash flow could be adversely affected.

In addition, in the event that there is a material decrease in shipments of licensed products by one of our per-unit licensees, our revenue from such licensee could significantly decline and our future revenue and cash flow could be adversely affected.

Additionally, there is significant concentration in the wireless communications industry in general, and these trends may continue.

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Any further concentration or sale within the wireless industry among handset providers may reduce the number of licensing opportunities or, in some instances, result in the reduction, loss or elimination of existing royalty obligations.

Further, if wireless carriers consolidate with companies that utilize technologies that are competitive with our technologies or that are not covered by our patents, we could lose market opportunities, which could negatively impact our revenues and financial condition.

We may not be successful in growing our business inorganically, and any acquisitions or strategic reactions could create risk and/or fail to yield the anticipated benefits.

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In addition, we cannot be certain that the integration of acquired companies, businesses, technology and/or intellectual property with our business will result in the realization of the full benefits that we anticipate will be realized from such acquisitions.

For example, in October 2025, we acquired AI startup Deep Render, and we may not realize the benefits of the acquisition to the extent anticipated.

Our plans to integrate and/or expand upon research and development programs and technologies obtained through acquisitions may result in products or technologies that are not adopted by the market, or the market may adopt solutions competitive to our technologies.

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We own an evolving portfolio of issued and pending patents related to 3G, 4G and 5G cellular technologies and non-cellular technologies including video coding technologies, and our patent portfolio licensing program for future-generation wireless standards or video coding standards may not be as successful in generating licensing income as our current licensing programs.

Although we continue to participate in worldwide standards bodies and contribute our intellectual property to future-generation wireless and video coding standards, including standards that will define 5G and beyond, our technologies might not be adopted by the relevant standards.

In addition, we may not be as successful in the licensing of future-generation products as we have been in licensing products deploying existing wireless and video coding standards, or we may not achieve a level of royalty revenues on such products that is comparable to that which we have historically received on products deploying existing wireless and video coding standards.

Furthermore, if there is a delay in the standardization and/or deployment of 5G or future video coding standards, our business and revenue could be negatively impacted.

If there is a delay in the standardization and/or deployment of future standards, our business and revenue could be negatively impacted.

The licenses that we grant under our patent license agreements typically only cover products designed to operate in accordance with specified technologies and that were manufactured or deployed or anticipated to be manufactured or deployed at the time of entry into the agreement.

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Further, such extensions, modifications or new license agreements may adversely affect our revenue on the sale of products covered by the license prior to any extension, modification or new license.

We may not be able to attract and retain qualified employees.

Competition for top talent is substantial.

In order to be successful, we must attract, develop, and retain employees.

Implementing our business strategy requires specialized engineering and other technical talent, and these skills are in high demand among our competitors.

The market for employees in our industry is extremely competitive, and competitors for talent, particularly engineering talent, have and could in the future attempt to hire our employees or employment candidates.

Further, the increased availability of remote working arrangements has expanded the pool of companies that can compete for our employees and employment candidates.

A number of such competitors for talent are significantly larger than us and may be able to offer compensation, benefits or work arrangements perceived as more desirable than what we are able to offer.

If we are unable to recruit, retain, and motivate our employees, then we may not be able to innovate, execute on our strategy and grow our business as planned.

Further, the cost and loss of efficiency related to turnover, particularly at senior levels, may be significant.

Our business and operations could suffer in the event of security breaches.

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These attempts, which in some cases could be related to industrial or other espionage, include covertly introducing malware to computers and networks and impersonating authorized users, among others.

Advancements in technology, including artificial intelligence and machine learning, may continue to change the way bad actors seek to gain unauthorized access and disrupt systems, thereby increasing the risks of security breaches.

Advancements in technology, including artificial intelligence (“AI”) and machine learning, may continue to change the way bad actors seek to gain unauthorized access and disrupt systems, thereby increasing the risks of security breaches.

Material security events could also require public disclosure, which could further harm our business or reputation.

We seek to detect and investigate all security incidents and to prevent their recurrence, but, in some cases, we might be unaware of an incident or its magnitude and effects.

The increasing use of AI tools also exposes us to additional risks of security breach and information loss.

While we have not identified any material incidents of unauthorized access to date, the theft, unauthorized use or publication of our intellectual property and/or confidential business or personal information (whether through a breach of our own systems or the breach of a system of a third party that provides services to us) could harm our competitive or negotiating positions, reduce the value of our investment in research and development and other strategic initiatives, compromise our patent enforcement strategies or outlook, damage our reputation or otherwise adversely affect our business.

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A significant portion of our licensees, potential licensees and customers are international, and our licensees, potential licensees and customers sell their products to markets throughout the world.

In addition, in recent years, we have expanded, and we may continue to expand, our international operations, opening offices in China, France and Finland.

Accordingly, a significant portion of our revenue are derived from operations outside of the United States.

In recent years, we have expanded, and we may continue to expand, our international operations, opening offices in China, France and Finland.

Accordingly, we are subject to the risks and uncertainties of operating internationally.

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In addition, adverse movements in currency exchange rates may negatively affect our business due to a number of situations, including the following:

• If the effective price of products sold by our licensees were to increase as a result of fluctuations in the exchange rate of the relevant currencies, demand for the products could fall, which in turn would reduce our royalty revenues.

• Assets or liabilities of our consolidated subsidiaries may be subject to the effects of currency fluctuations, which may affect our reported earnings.

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Changes in industry standards and needs could adversely affect the development of, and demand for, our technology, rendering our technology currently under development obsolete and unmarketable.

The rapid adoption of AI, including its use in video codecs and related technologies, and widespread use of AI tools and could accelerate these changes.

The patents and applications comprising our portfolio have fixed terms, and, if we fail to anticipate or respond adequately to these changes through the development or acquisition of new patentable inventions, patents or other technology, we could miss a critical market opportunity, reducing or eliminating our ability to capitalize on our patents, technology solutions or both.

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We are a U.S.

multinational company subject to complex and changing tax laws in the United States and foreign jurisdictions where we do business.

Significant judgement is required in determining our worldwide provision of income taxes.

headquartered multinational company subject to complex and changing tax laws in the United States and foreign jurisdictions where we do business.

Significant judgment is required in determining our worldwide provision of income taxes.

multinational company, we are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities, and we have ongoing tax audits in various jurisdictions.

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Although we believe that our tax estimates are reasonable, the final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our income tax provisions and accruals.

In such case, our income tax provision, results of operations and cash flows in the period or periods in which that determination is made could be negatively affected.

Due to governmental and regulatory delays, the timing of the resolution of certain of our open audits has been extended, creating additional uncertainty.

If the final determination of any of our open audits materially differs from our estimates and accruals, our income tax provision, results of operations and cash flows in the period or periods in which that determination is made could be negatively affected.

And, the timing of the resolution of these audits could impact our cash position.

Our tax rate could be adversely affected by several factors beyond our control, including changes in tax laws, regulations, interpretations, tax rates, assessments and any related tax, interest or penalties.

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For example, most of our income is taxable in the United States with a significant portion qualifying for preferential treatment as foreign-derived intangible income ("FDII").

Beginning in 2026, the effective tax rate for FDII increases from 13% to 16%.

Further, if U.S.

tax rates increase and/or the FDII deduction is eliminated or reduced, our provision for income taxes, results of operations and cash flows would be adversely affected.

Beginning in 2026, the effective tax rate for FDII will increase from 13% to 14%.

Any reduction or elimination of the FDII deduction would negatively impact our business.

In France, where we have substantial operations, we benefit from research tax credits applicable to French technology companies, including the Crédit Impôt Recherche (CIR).

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We believe our estimates are reasonable and consistent with the regulation, but if this challenge is successful and our eligibility for the CIR is reduced, it could adversely impact our results of operations and cash flows.

The French government could also eliminate or reduce the CIR entirely, which could harm our business.

Additionally, any new tax legislation, or any new guidance or interpretations of the same, could expose us to additional tax liabilities.

Although this minimum tax has been adopted by various jurisdictions where we do business, including France and the UK, we are not yet subject to the minimum tax based on our revenues.

If we become subject to the Pillar Two minimum tax, our business, results of operations and cash flows would be adversely affected.

The French government could also eliminate or reduce the CIR entirely, in which case our provision for income taxes, results of operations and cash flows would be adversely affected.

In July 2025 budget reconciliation bill H.R.

1, referred to as the One Big Beautiful Bill Act (the “OBBBA”), was signed into law.

The OBBBA contains several changes to corporate taxation rules which may affect our business.

These provisions, their interpretations, and other proposed changes to law could further impact our tax rate and cash flow in future years.

Additionally, any increase in tax rates or new tax legislation, or any new guidance or interpretations of the same, could expose us to additional tax liabilities.

For example, the OECD Model Rules under Pillar Two introduced a minimum corporate tax rate of 15% on multinational enterprises with annual consolidated revenue exceeding €750 million in at least two of the prior four years, and beginning in 2026, we are subject to this minimum tax, which has been adopted by various jurisdictions where we do business, including France and the UK.

This and any of the other factors described above could have an adverse impact on our provision for income taxes, cash flows, results of operations and business.

Market projections and data are forward-looking in nature.

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Our portfolio review activities may place substantial demands on our management, which could lead to the diversion of management’s attention from other business priorities.

We have divested a number of assets, including as part of a recent strategic portfolio rationalization review.

We may divest or abandon assets as part of efforts to optimize spending on our patent portfolio.

Any assets that we divest could turn out to be more valuable than we had anticipated and we may not realize the anticipated benefits of any strategic decision about our patent portfolio.

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These decisions could later prove to be incorrect, which could ultimately harm our licensing potential or enforcement options, which could in turn harm our financial results and business prospects.

Our technology development activities may experience delays.

We may experience technical, financial, resource or other difficulties or delays related to the further development of our technologies.

Delays may have adverse financial effects and may allow competitors with comparable technology offerings to gain an advantage over us in the marketplace or in the standards setting arena.

There can be no assurance that we will continue to have adequate staffing or that our development efforts will ultimately be successful.

Moreover, certain of our technologies have not been tested for commercial use, and it is possible that they may not perform as expected.

In such cases, our business, financial condition and operating results could be adversely affected, and our ability to secure new licensees and other business opportunities could be diminished.

Our business is subject to a variety of domestic and international laws, rules and policies and other obligations regarding data protection.

We may be affected by existing and proposed laws and regulations, as well as government policies and practices related to cybersecurity, privacy and data protection.

For example, the European General Data Protection Regulation ("GDPR"), the United Kingdom’s GDPR, the California Consumer Privacy Act of 2018 and the California Privacy Rights Act of 2020 impose obligations on companies such as ours regarding the handling of personal data.

Additionally, in 2021, China adopted the Personal Information Protection Law (“PIPL”), which, together China’s existing cyber and data securities regulations, have required and will continue to require significant investment and resources to ensure compliance.

Complying with the these and other privacy and cybersecurity regulations could cause us to incur substantial costs or require us to change our business practices.

If we cannot implement an effective compliance mechanism for cross-border privacy and security matters, we may face increased exposure to regulatory actions, substantial fines and other penalties.

Complying with these and other privacy and cybersecurity regulations could cause us to incur substantial costs or require us to change our business practices.

If we cannot implement an effective compliance mechanism for cross-border privacy and security matters, we may face increased exposure to regulatory actions, substantial fines and other penalties and damage to our reputation, any of which could have a material adverse effect on our business.

Further, these areas are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.

Our commercial and cybersecurity insurance policies may be insufficient to insure us against these risks, and future escalations in premiums and deductibles under these policies may render them cost-prohibitive.

Risks Relating to Our Common Stock and our Convertible Notes

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Our operating results may fluctuate from quarter to quarter as a result of a number of factors, many of which are outside of our control and may be difficult to predict.

In particular, the timing of revenue recognition may cause our revenues and earnings to fluctuate, and there is significant judgment in the application of our revenue recognition principles.

In particular, the timing of revenue recognition may cause our revenue and earnings to fluctuate, and there is significant judgment in the application of our revenue recognition principles.

For example, accounting principles sometimes require us to recognize revenue before the actual amount is certain, which could add to uncertainty in our revenue guidance.

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limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industry in which we operate and the general economy;

• placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged.

and placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged.

Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations under the 2027 Notes.

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The warrants will have a dilutive effect on our earnings per share to the extent that the market price of our common stock exceeds the applicable strike price of the warrants on any expiration date of the warrants.

Given the trading price of our stock in recent months, dilution related to these instruments will be substantial, and the market could react negatively.

In addition, the respective option counterparties (and/or their affiliates) may modify their respective hedge positions from time to time (including during any observation period related to a conversion of the notes) by entering into or unwinding various derivative transactions with respect to our common stock and/or by purchasing or selling our common stock in open market transactions and/or privately negotiated transactions.

The potential effect, if any, of any of these transactions and activities on the market price of our common stock will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the market price of our common stock.

The potential effect, if any, of any of these transactions and activities on the market price of our common stock will depend in part on investor expectations and market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the market price of our common stock.

We are subject to counterparty risk with respect to the convertible note hedge transactions.

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These provisions could limit the price that some investors might be willing to pay in the future for shares of our common stock.

Anti-takeover provisions could delay and discourage takeover attempts that shareholders may consider to be favorable.

Certain provisions of our amended and restated articles of incorporation and amended and restated bylaws and applicable provisions of Pennsylvania law may make it more difficult or impossible for a third party to acquire control of us or effect a change in our Board of Directors and management.

Our amended and restated articles of incorporation and amended and restated bylaws, together with other applicable provisions of Pennsylvania law, could delay, defer or prevent a change of control or changes in our Board of Directors or management.

Any delay or prevention of a change of control transaction or changes in our Board of Directors or management could deter potential acquirers or prevent the completion of a transaction in which our shareholders could receive a substantial premium over the then current market price for their shares of our common stock.

For further discussion of such anti-takeover provisions, see the sections titled “Certain Provisions of Our Articles and Bylaws” and “Anti-Takeover Statutes” in the Description of InterDigital's Securities exhibit incorporated by reference as Exhibit 4.2 to this Annual Report on Form 10-K

General Risk Factors

We may not be able to attract and retain qualified employees.

Competition for top talent is substantial.

In order to be successful, we must attract, develop, and retain employees.

Implementing our business strategy requires specialized engineering, business and operational talent, and these skills are in high demand among our competitors.

The market for employees in our industry is extremely competitive, and competitors for talent have and could in the future attempt to hire our employees or employment candidates.

Additionally, our equity compensation programs are a key element in our ability to attract and retain talent.

The future value of these awards is uncertain and depends on our stock price performance over time, so their effectiveness, particularly for retentive purposes, is difficult to predict.

Further, the increased availability of remote working arrangements has expanded the pool of companies that can compete for our employees and employment candidates.

If we are unable to recruit, retain, and motivate our employees, then we may not be able to innovate, execute on our strategy and grow our business as planned.

Further, the cost and loss of efficiency related to turnover, particularly at senior levels, may be significant.

Macroeconomic conditions may harm our business.

A decline in economic conditions, such as a recession, economic downturn or inflationary conditions in the U.S.

or elsewhere could adversely affect our business.

In particular, inflation has remained high in the U.S.

and globally.

Trade tensions or restrictions on free trade could exacerbate these effects.

A majority of our revenue is derived from patent license agreements that provide for fixed payments that were negotiated before the recent rise in inflation.

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

What changed 10-K

Item 1A. Risk Factors