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Item 7. Management’s Discussion and Analysis

2026-02-05 compared with 2025-02-06 · 175 added, 158 removed, 339 unchanged (50% of the section changed)

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A discussion regarding our financial condition and results of operations for December 31, 2024 compared to our fiscal year ended December 31, 2023 can be found in Part II, Item 7 of our Annual Report on Form 10-K for fiscal year 2024, filed with the Securities and Exchange Commission (the “SEC”) on February 6, 2025.

Throughout the following discussion and elsewhere in this Form 10-K, we refer to “recurring revenues” and “catch-up revenues.” For variable and dynamic fixed-fee license agreements, “catch-up revenues” primarily represents revenue associated with reporting periods prior to the execution of the license agreement, while “recurring revenue” represents revenue associated with reporting periods beginning with the execution of the license agreement.

For static fixed-fee license agreements, we typically classify the associated revenue as catch-up revenues.

Throughout the following discussion and elsewhere in this Form 10-K, we refer to “catch-up revenue.” For variable and dynamic fixed-fee license agreements, “catch-up revenue” primarily represents revenue associated with reporting periods prior to the execution of the license agreement.

InterDigital, Inc.

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Our portfolio includes numerous patents and patent applications that we believe are or may be essential to existing standards, or may become essential to future standards, established by many Standards Development Organizations ("SDOs").

We have contributed technology to wireless standards including the 3G, 4G, and 5G cellular standards and the IEEE 802 suite of standards.

We have contributed technology to wireless standards including the 3G, 4G, 5G, and the development of 6G cellular standards and the IEEE 802.11 suite of standards.

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

We also develop technologies and associated patents enabling high dynamic range (HDR) production, distribution and display solutions.

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

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

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

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

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

In 2024 and 2023, our total revenues were $868.5 million and $549.6 million, respectively.

Our recurring revenues were $408.4 million in both 2024 and 2023.

In 2024 and 2023, we recognized $460.1 million and $141.2 million, respectively, of catch-up revenues as more fully discussed below.

In 2024, fixed-fee royalties accounted for 89% of our recurring revenues.

These fixed-fee revenues are not affected by the related licensees’ success in the market or the general economic climate.

The majority of the remaining portion of our recurring revenue was variable in nature due to the per-unit structure of the related license agreements.

The Company considers Smartphone and CE, Auto/IoT as the groupings that best reflect the Company's core licensing programs.

We believe our patented innovations are also used in the training of video based generative AI models as well as in the distribution and storage of the content generated by such models.

In 2025 and 2024, our total revenue was $834.0 million and $868.5 million, respectively, which includes $277.4 million and $460.1 million, respectively, of catch-up revenue as more fully discussed below.

In 2025, fixed-fee agreements accounted for 93% of our revenue.

These fixed-fee revenue are not affected by the related licensees’ success in the market or the general economic climate.

The majority of the remaining portion of our revenue was variable in nature due to the per-unit structure of the related license agreements.

Smartphone, CE, IoT/Auto, and Video Services are the Company's licensing programs.

The Smartphone revenue grouping consists primarily of smartphones and also includes other wireless communication devices and infrastructure equipment, such as tablets, and base stations.

The CE, IoT/Auto revenue grouping consists of consumer electronics and IoT products, such as televisions, laptops, gaming consoles, set-top boxes, streaming devices, and connected automobiles.

We do not yet have revenue from Video Services but a Video Services grouping would consist of SVOD, AVOD, global pay-TV, video conferencing, cloud gaming, and other cloud-based services.

New Agreements

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

During 2025, we entered into eight patent license agreements as discussed below.

Direct Licenses

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

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

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

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

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

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

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

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

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

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

In 2025, we signed new multi-year, worldwide, non-exclusive, royalty-bearing license agreements with two major Chinese smartphone vendors, vivo and Honor.

As a result, we now have eight of the ten largest smartphone vendors based on shipments and approximately 85% of the entire global smartphone market under license.

In April 2025, we signed a new multi-year license agreement with HP Inc.

The agreement licenses HP personal computers to InterDigital’s Wi-Fi and video decoding technologies.

Additionally, we entered into device licenses covering our technologies with a significant social media company, along with Eaton, Seiko Solutions Inc., Sharp, and Teltronic.

Samsung Arbitration

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

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

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

The arbitration panel set the total royalties at $1.05 billion for the eight-year patent license, which commenced on January 1, 2023 and runs through December 31, 2030.

Under this agreement, we now recognize approximately $131 million of recurring revenue per year, a 67% increase from the previous license agreement.

In 2025, the agreement contributed $118 million of catch-up revenue due to a true-up of the $78 million per year we had been recognizing based on the level of our prior agreement from January 1, 2023 to June 30, 2025.

Subsequent Agreements

In January 2026, we signed a new patent license agreement with LG Electronics.

The agreement licenses LG’s digital TVs and computer display monitors under InterDigital´s joint licensing program with Sony and includes licenses to technologies including ATSC 3.0, Wi-Fi and video codecs.

In January 2026, we renewed a worldwide, non-exclusive, royalty bearing license with Xiaomi.

The renewed license has a term of five years and covers the vendor’s cellular products, including its smartphones and other cellular-enabled devices, under InterDigital’s standard essential cellular, Wi-Fi, and HEVC patents.

Expiration of License Agreements

Our patent license agreements with five licensees that expired between January 1, 2024 and December 31, 2024 have not yet been renewed.

These patent license agreements contributed $17.2 million of recurring revenues in 2024.

Seven of our revenue generating patent license agreements are scheduled to expire at the end of 2025, including the Samsung TV agreement and the agreement with Xiaomi.

Collectively, these expiring agreements not yet renewed accounted for $91.8 million, or approximately 22%, of recurring revenues in 2024.

We are actively working to renew these agreements on terms consistent with the licensees' respective market positions and utilization of our technology.

Five revenue-generating patent license agreements expired during 2025 and have not yet been renewed, including the Samsung TV agreement.

These agreements contributed $31.7 million of recurring revenue in 2025.

These five licensees exclude a license with Xiaomi that also expired during 2025 but was renewed in January 2026 as noted above.

Fourteen revenue-generating patent license agreements are scheduled to expire by the end of 2026.

These agreements contributed $15.0 million of recurring revenue in 2025.

We are actively working to renew these agreements on terms consistent with each licensee’s market position and use of our technology.

Notes, Hedge, and Warrant Transactions

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2027 Notes and Related Note Hedge and Warrant Transactions

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

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

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.

2027 Notes and Related Note Hedge and Warrant Transactions

During 2025, the 2027 Notes had a dilutive impact of 4.1 million shares, which are offset from an economic standpoint by the 2027 Note Hedge Transactions and would result in no incremental shares being issued upon conversion.

However, under GAAP, we are required to exclude the impact of the shares received from the 2027 Note Hedge Transactions counterparties from the calculation of weighted average diluted shares outstanding.

However, under Generally Accepted Accounting Principles in the United States ("GAAP"), we are required to exclude the impact of the shares received from the 2027 Note Hedge Transactions counterparties from the calculation of weighted-average diluted shares outstanding.

From the period January 1, 2024 through March 31, 2026, 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.

In December 2025, certain holders elected to convert $80.0 million of principal, which will settle in first quarter 2026.

The principal of the converted notes will be paid in cash and the remaining amount will be settled in shares.

No incremental shares will be outstanding upon conversion due to the offsetting impact of a corresponding partial settlement of the 2027 Note Hedge Transactions.

As of December 31, 2025, 6.0 million warrants remain outstanding related to the 2027 Warrant Transactions at a weighted-average strike price of $105.67 per share, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028.

Assuming a share price of $175, we would issue 2.3 million of common shares related to the 2027 Warrant Transactions.

Refer to " Financial Position, Liquidity, and Capital Resources — Convertible Notes " for further information regarding how changes in our stock price would affect the number of shares issuable related to the 2027 Warrant Transactions.

For example, if the share price was $350, we would issue 4.2 million of common shares related to the 2027 Warrant Transactions.

Intellectual Property Rights Enforcement

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As part of these agreements, we and both third parties agreed to dismiss all pending litigations between us, and accordingly all litigations with Lenovo and OPPO have been dismissed as of fourth quarter 2024.

Currently, our open enforcement actions include the arbitration proceedings with Lenovo and Samsung.

The Samsung proceeding resulted from the arbitration agreement reached with Samsung Electronics, in which we agreed to binding arbitration to establish the royalties to be paid by Samsung for a worldwide license to certain of our patents.

We expect a decision in early 2025.

The Lenovo arbitration is in its early stages, and no schedule has been set yet.

Currently, our open enforcement actions include proceedings with Transsion, Disney, and Amazon, and the arbitration proceedings with Lenovo.

The Company anticipates that the arbitration hearing will occur before year end.

These matters are more fully discussed in Note 12, “ Litigation and Legal Proceedings ,” to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K.

In 2024, our intellectual property enforcement costs increased to $56.2 million, from $48.8 million in 2023.

In 2025, our intellectual property enforcement costs decreased to $48.9 million, from $56.2 million in 2024.

These costs represented 52% of our total licensing costs of $93.6 million in 2025.

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Cash and Short-Term Investments

As of December 31, 2024, we had $982.4 million of cash, restricted cash, and short-term investments and an additional $1.4 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under the Samsung and Lenovo arbitrations.

89% of our recurring revenue comes from fixed-fee royalties.

As of December 31, 2025, we had $1.3 billion of cash, restricted cash, and short-term investments and approximately $1.5 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under the Lenovo arbitration.

93% of our 2025 revenue comes from fixed-fee agreements.

Such agreements often have prescribed payment schedules that are uneven and sometimes front-loaded, resulting in timing differences between when we collect the cash payments and recognize the related revenue.

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24,251 9,193 8,390 13,229 55,063

Decrease (increase) in deferred revenue 27,542 26,866 (50,495) 20,422 24,335

Increase (decrease) in receivables 28,337 78,011 (11,220) (24,118) 71,010

Change in deferred revenue

38,750 32,456 (119,991) 82,309 33,524

Change in receivables

115,966 84,439 (228,066) (90,825) (118,486)

Other 8,961 12,368 12,329 7,678 41,336

Total Revenue $ 210,507 $ 300,596 $ 164,682 $ 158,230 $ 834,015

Net cash provided by (used in) operating activities $ 50,773 $ (48,910) $ 77,631 $ 192,034 $ 271,528

Net cash (used in) provided by operating activities $ (19,989) $ 105,118 $ 395,930 $ 63,391 $ 544,450

Non-cash revenue:

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10,773 14,583 9,919 12,700 47,975

Decrease (increase) in deferred revenue 42,766 38,641 (77,474) 45,243 49,176

Increase (decrease) in receivables 90,856 92,756 (167,222) 47,720 64,110

Change in deferred revenue

27,542 26,866 (50,495) 20,422 24,335

Change in receivables

28,337 78,011 (11,220) (24,118) 71,010

Other 5,905 70,328 20,175 2,853 99,261

Total Revenue $ 263,542 $ 223,493 $ 128,679 $ 252,802 $ 868,516

Net cash (used in) provided by operating activities $ (27,852) $ (45,440) $ 310,610 $ (23,585) $ 213,733

(a) Fixed fee cash receipts are comprised of cash receipts from Dynamic Fixed-Fee Agreement royalties, including the associated catch-up revenues.

(b) Other cash receipts are primarily comprised of cash receipts related to our variable patent royalty revenue and catch-up revenues.

Net cash provided by (used in) operating activities $ 50,773 $ (48,910) $ 77,631 $ 192,034 $ 271,528

(a) Fixed fee cash receipts are comprised of cash receipts from Dynamic Fixed-Fee Agreement royalties, including the associated catch-up revenue.

(b) Other cash receipts are primarily comprised of cash receipts related to our variable patent royalty revenue and catch-up revenue.

When we collect payments on a front-loaded basis, we recognize a deferred revenue liability equal to the cash received and accounts receivable recorded which relate to revenue expected to be recognized in future periods.

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2026 $ 193,722

Thereafter 1,269

Total $ 329,604

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In June 2014, our Board of Directors authorized a $300 million share repurchase program (the “Share Repurchase Program”).

Subsequently our Board of Directors authorized five $100 million increases to the program, an additional $333 million in December 2022, and an additional $235 million in December 2023, bringing the total amount of the Share Repurchase Program to nearly $1.4 billion.

Subsequently our Board of Directors authorized additional increases to the program, most recently in December 2023, bringing the total authorization of the Share Repurchase Program to nearly $1.4 billion.

Since 2014, we have repurchased $1.2 billion of shares at an average price of $62.50, adjusted for dividends.

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As of December 31, 2025, there was $127.2 million remaining under the Share Repurchase Program authorization.

Since January 2014, we have paid $437.5 million in dividends, bringing our total return of capital over this period to nearly $1.6 billion.

Since January 2014, we have paid $504.6 million in dividends, bringing our total return of capital over this period to more than $1.7 billion.

In September 2025, we announced a second dividend increase during 2025, increasing the quarterly cash dividend by $0.10 per share to $0.70 per share.

Combined with previous increases, we have increased the dividend by 75% since the start of 2024.

The table below sets forth the total number of shares repurchased and the dollar value of shares repurchased under the Share Repurchase Program, cash dividends on outstanding common stock declared, and the total capital returned to our shareholders (in thousands):

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2015 1,836 96,410 0.80 28,726 125,136

2014 3,554 152,625 0.70 27,153 179,778

Total 18,369 $ 1,241,730 $ 16.60 $ 504,632 $ 1,746,362

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We have been actively monitoring the impact of the current macroeconomic environment in the U.S.

and globally characterized by inflation, supply chain issues, high interest rates, labor shortages, and the potential for a recession.

These market factors, as well as the impacts of the Ukraine-Russia and Middle East conflicts, have not had a material impact on our business to date.

and globally characterized by market volatility, inflation, supply chain issues, high interest rates, tariffs and other potential trade-related sanctions, and the potential for a recession.

These market factors, as well as the impacts of the Ukraine-Russia, Middle East and other global conflicts, have not had a material impact on our business to date.

However, if these conditions continue or worsen, they could have an adverse effect on our operating results and our financial condition.

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When comparing our 2025 financial results against the financial results of other periods, the following items should be taken into consideration:

• Our 2024 revenue includes $460.1 million of catch-up revenues primarily resulting from the Samsung TV and OPPO agreements entered into in 2024, as well as revenue recognized on the Lenovo cellular license resulting from the UK proceedings and arbitration agreement.

• Our 2025 revenue includes $277.4 million of catch-up revenue primarily related to the Samsung arbitration decision and from the vivo, HP, and Honor patent license agreements entered into in 2025.

Operating Expenses

• In 2024, we incurred $68.8 million of nonrecurring revenue share costs associated with the catch-up revenues recognized in the period.

• In 2024, we recorded $4.4 million of one-time contra expenses for a net litigation fee reimbursement resulting from intellectual property enforcement successes.

• In 2024, we incurred $1.0 million of nonrecurring share-based compensation costs driven by licensing successes.

Non-Operating Income (Expense), Net

• In 2024, we recognized $2.0 million of net gains resulting from observable price changes of our long-term strategic investments, which was included within “ Other income (expense), net ” in the consolidated statement of income.

• In 2025, we incurred $7.4 million nonrecurring costs, which includes severance costs from executive and non-executive departures, litigation fee reimbursement, and costs associated with the acquisition of Deep Render.

Critical Accounting Policies and Estimates

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These steps include (1) identifying the contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity satisfies the performance obligation(s).

Additionally, we have elected to utilize certain practical expedients in the application of ASC 606.

Additionally, we have elected to utilize certain practical expedients in the application of ASC 606, Revenue From Contracts with Customers .

In evaluating the presence of a significant financing component in our agreements, we utilize the practical expedient to exclude any contracts wherein the gap between payment by our customers and the delivery of our performance obligation is less than one year.

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Timing of revenue recognition may differ significantly from the timing of invoicing to customers.

Contract assets are included in accounts receivable and represent unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and right to payment is subject to the underlying contractual terms.

Contract assets are classified as long-term assets if the payments are expected to be received more than one year from the reporting date.

Contract assets represent unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and right to payment is subject to the underlying contractual terms.

Contract assets due within less than twelve months of the balance sheet date are included within accounts receivable in our consolidated balance sheets.

Contract assets due more than twelve months after the balance sheet date are included within other non-current assets.

Contract assets are classified as long-term assets within other non-current assets if the payments are expected to be received more than one year from the reporting date.

For certain patent license agreements or other contractual arrangements, the amount of consideration that we will receive is uncertain.

In such cases, we estimate and recognize licensing revenues only when we have a contract, as defined in the revenue recognition guidance.

Such estimates are only recognized to the extent it is probable that a significant reversal of cumulative revenues recognized will not occur.

We analyze the risk of a significant revenue reversal considering both the likelihood and magnitude of the reversal and, if necessary, constrain the amount of estimated revenues in order to mitigate this risk, which may result in recognizing revenues less than amounts we expect we are most likely to receive.

In such cases, we estimate and recognize licensing revenue only when we have a contract, as defined in the revenue recognition guidance.

Such estimates are only recognized to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur.

We analyze the risk of a significant revenue reversal considering both the likelihood and magnitude of the reversal and, if necessary, constrain the amount of estimated revenue in order to mitigate this risk, which may result in recognizing revenue less than amounts we expect we are most likely to receive.

These aforementioned estimates may require significant judgment.

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Fixed-fee license agreements include fixed, non-refundable royalty payments that fulfill the licensee’s obligations to us under a patent license agreement for a specified time period or for the term of the agreement for specified products, under certain patents or patent claims, for sales in certain countries, or a combination thereof - in each case for a specified time period (including for the life of the patents licensed under the agreement).

Dynamic fixed-fee license agreements contain a single performance obligation that represents ongoing access to a portfolio of technology over the license term, since our promise to transfer to the licensee access to the portfolio as it exists at inception of the license, along with promises to provide any technology updates to the portfolio during the term, are not separately identifiable.

Upon entering a new agreement, we allocate the transaction price to the performance obligations delivered at signing (e.g.

our existing patent portfolio) and future performance obligations (e.g.

the technology updates).

Dynamic fixed-fee license agreements contain a performance obligation that represents ongoing access to a portfolio of technology over the license term, since our promise to transfer to the licensee access to the portfolio as it exists at inception of the license, along with promises to provide any technology updates to the portfolio during the term, are not separately identifiable.

We use a time-based input method of progress to determine the timing of revenue recognition, and as such we recognize the future deliverables on a straight-line basis over the term of the agreement.

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Upon entering a new variable patent license agreement, the licensee typically agrees to pay royalties or license fees on licensed products sold during the term of the agreement.

We utilize the sales- or usage- based royalty exception for these agreements and recognize revenues during the contract term when the underlying sale or usage occurs.

Our licensees under variable agreements provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us.

We typically receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred.

As a result, we are required to estimate revenues and recognize sales-based royalties on such licensed products in the period in which the associated sales occur, considering all relevant information (historical, current and forecasted) that is reasonably available to us.

We utilize the sales- or usage- based royalty exception for these agreements and recognize revenue during the contract term when the underlying sale or usage occurs.

Our licensees under variable agreements typically provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us.

We receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred.

As a result, we are required to estimate revenue and recognize sales-based royalties on such licensed products in the period in which the associated sales occur, considering all relevant information (historical, current and forecasted) that is reasonably available to us.

Estimating licensees’ quarterly royalties prior to receiving the royalty reports requires us to make assumptions and judgments related to forecasted trends and growth rates used to estimate our licensees’ sales, which could have an impact on the amount of revenue we report on a quarterly basis.

As a result of recognizing revenues in the period in which the licensees’ sales occur using estimates, adjustments to revenues are required in subsequent periods to reflect changes in estimates as new information becomes available, primarily resulting from actual amounts reported by our licensees.

As a result of recognizing revenue in the period in which the licensees’ sales occur using estimates, adjustments to revenue are required in subsequent periods to reflect changes in estimates as new information becomes available, including market information, royalty reports provided by our licensees, audit results, among others.

Hybrid Agreements

We enter into hybrid patent license agreements that include (i) a fixed-fee minimum guarantee and (ii) additional per-unit royalties for units sold in excess of the units covered by the minimum guarantee.

Under these agreements, the fixed-fee component represents a minimum amount the licensee is required to pay and provides a license to our technologies up to a specified number of units sold, with incremental per-unit royalties due for units sold in excess of the unit cap.

When a licensee's sales exceed the unit cap, we recognize revenue for the additional per-unit royalties in the periods in which we estimate the licensee has exceeded the minimum and adjust revenue based on actual usage once reported by the licensee.

The fixed-fee, or minimum guarantee, portion of a hybrid agreement is recognized on the same basis as our other fixed-fee agreements, as described above.

Agreements with Multiple Performance Obligations

During 2025, we signed new fixed-fee agreements that had multiple performance obligations.

Consistent with the revenue recognition policies disclosed above, we (1) identified the contract with the customer, (2) identified the performance obligations, (3) determined the transaction price, (4) allocated the transaction price to the performance obligations, and (5) recognized revenue as we satisfy the performance obligations.

We allocated the transaction price to each performance obligation for accounting purposes using our best estimate of the term and value.

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These inputs and assumptions represent management's best estimates at the time of the transaction.

The impact that a five percent change in the aggregate amount allocated to catch-up revenues under these agreements would have had on 2024 revenue is summarized in the following table (in thousands):

The impact that a five percent change in the aggregate amount allocated to catch-up revenue under these agreements would have had on 2025 revenue is summarized in the following table (in thousands):

Change in amount allocated

Allocation to catch-up revenues +5% -%5

Allocation to catch-up revenue

Change in revenue $ 11,689 $ (11,689)

Revenue from Non-financial Sources

During 2024, 2023, and 2022, approximately 2%, 3% and 4%, respectively, of our total revenue was based on the estimated fair value of non-financial consideration received, principally patents.

During 2025, 2024, and 2023, less than 1%, 2% and 3%, respectively, of our total revenue was based on the estimated fair value of non-financial consideration received, principally patents.

The process for determining the value of revenue from non-financial sources requires estimating the fair value of patents received.

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Our estimated progress toward goals under performance equity grants is based on meeting a minimum confidence level of achievement in accordance with accounting rules for share-based compensation.

Due to the binary nature of patent license agreements, performance awards with milestone goals are typically not expensed until the goal has been achieved.

Due to the uncertain nature of patent license agreements, performance awards with milestone goals are typically not expensed until the goal has been achieved.

Achievement rates can vary by performance cycle and from period to period, resulting in variability in our compensation expense.

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The inclusion of windfalls and shortfalls in the tax provision could increase our earnings volatility between periods.

Tax windfalls and shortfalls related to share-based compensation was windfalls of $4.9 million and $3.1 million for the years ended 2024 and 2023, respectively, and shortfalls for the year ended 2022 of $0.4 million.

Tax windfalls related to share-based compensation was windfalls of $7.4 million, $4.9 million, and $3.1 million for the years ended 2025, 2024, and 2023, respectively.

The below table summarizes our supplemental compensation expense for 2025, 2024 and 2023, in thousands:

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If the matter had been resolved as of December 31, 2025, we would have recognized a loss up to $22.5 million based on exchange rates and prior competent authority resolutions.

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

The OBBBA 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 tax law changes did not have an impact on the tax provision in 2025.

On November 8, 2019, the Company received notification that its request for competent authority pertaining to Article 25 (Mutual Agreement Procedure) of the United States-Republic of Finland Income Tax Convention had been reviewed by the IRS and an agreement has been reached (the “Finland Competent Authority Proceeding”).

As a result of this agreement, the Company does not anticipate any tax consequences.

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

While we have historically benefited from the CIR, the French government has recently challenged our eligibility for portions of the CIR that they previously accepted.

The Company received notification from the French Tax Authorities that the CIR credit on patent costs has been rejected for tax years 2019 and 2020.

The Company has filed petitions in the Lower Court of Paris to litigate this matter.

Between 2019 and 2025, the Company has recorded benefits totaling approximately $29 million for CIR credit on patent related costs.

New Accounting Guidance

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$ 1,258,468 $ 982,395 $ 276,073

The net decrease in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash used in financing activities of $272.4 million and cash used in investing activities of $47.2 million, excluding sales and purchases of short-term investments, partially offset by cash provided by operating activities of $271.5 million.

The net increase in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash provided by operating activities of $544.5 million partially offset by cash used in financing activities of $201.4 million and cash used in investing activities of $79.7 million, excluding sales and purchases of short-term investments.

Refer to the sections below for further discussion of these items.

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Our cash flows provided by operating activities are principally derived from cash receipts from patent license agreements, offset by cash operating expenses and income tax payments.

The $57.8 million change in net cash provided by operating activities was driven by higher cash receipts from new agreements and due to timing of cash receipts under existing agreements.

This increase was partially offset by an increase in cash operating expenses primarily due to increased revenue share costs from new patent license agreements.

The $272.9 million change in net cash provided by operating activities was driven by higher cash receipts resulting from timing of cash receipts on existing agreements and new agreements, and was partially offset by higher foreign withholding tax payments on those cash receipts.

Additionally, cash operating expenses were lower primarily due to lower revenue share and litigation costs.

The table below sets forth the significant items comprising our cash flows provided by operating activities during the years ended December 31, 2025 and 2024 (in thousands):

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Cash flows provided by operating activities $ 544,450 $ 271,528 $ 272,922

(a) Cash operating expenses include operating expenses less depreciation of fixed assets, amortization of patents, and non-cash compensation.

(a) Cash operating expenses include operating expenses less depreciation, amortization, and share-based compensation.

Amount includes revenue share costs of $10.1 million and $81.3 million in 2025 and 2024, respectively.

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Cash provided by or used in investing and financing activities

Net cash provided by investing activities in 2024 was $109.5 million, a $194.6 million change from $85.2 million net cash used in investing activities in 2023.

During 2024, we sold $156.7 million of short-term marketable securities, net of purchases, and capitalized $63.0 million of patent costs, patent purchases, and property and equipment purchases.

Additionally, we received $15.8 million of net cash receipts from the sales our long-term strategic investments.

Net cash used in investing activities in 2025 was $140.3 million, a $249.7 million change from $109.5 million net cash provided by investing activities in 2024.

During 2025, we purchased $60.6 million of short-term marketable securities, net of sales, and capitalized $70.5 million of patent costs and property and equipment purchases.

Net cash used in financing activities for 2024 was $272.4 million, a $116.4 million change from net cash used in financing activities of $388.8 million in 2023.

This change was primarily attributable to a $273.0 million decrease in share repurchases in 2024 compared to 2023, of which $203.4 million was related to the Company's modified "Dutch auction" tender offer in 2023.

This change was partially offset by $141.4 million of payments on our long-term debt, of which $126.2 million was related to the maturity of the 2024 Notes.

During 2024, we sold $156.7 million of short-term marketable securities, net of purchases, and capitalized $58.7 million of patent costs and property and equipment purchases.

Additionally, we received $15.8 million of net cash receipts from the sales of our long-term strategic investments.

Net cash used in financing activities for 2025 was $201.4 million, a $70.9 million decrease from $272.4 million in 2024.

The decrease was driven primarily by a $126.2 million payment made in 2024 upon the maturity of the 2024 Notes.

The decrease was partially offset by increased cash outflows in 2025, including a $35.6 million increase in share repurchases, a $25.0 million increase in taxes withheld on restricted stock unit vestings due to a higher share price at vesting, and a $18.9 million increase in dividends paid following the incremental increases in the declared dividend from $0.40 to $0.70.

Our combined short-term and long-term deferred revenue balance at December 31, 2025 was $329.6 million, a decrease of $30.5 million from December 31, 2024.

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Convertible Notes

Refer to Note 10, " Obligations " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for definitions of capitalized terms used below.

The 2024 Notes matured on June 1, 2024 resulting in 0.3 million of common shares being issued.

This issuance was effectively offset by the settlement of the 2024 Note Hedge Transactions resulting in zero net shares being issued on June 1, 2024.

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

Our 2027 Notes are included in the dilutive earnings per share calculation using the if-converted method.

Under the if-converted method, we must assume that conversion of convertible securities occurs at the beginning of the reporting period.

The 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any remaining obligation may be settled in cash, shares of the Company’s common stock or a combination thereof.

As the principal amount must be paid in cash and only the conversion spread is settled in shares, we only include the net number of incremental shares that would be issued upon conversion.

We must calculate the number of shares of our common stock issuable under the terms of the 2027 Notes based on the average market price of our common stock during the applicable reporting period and include that number in the total diluted shares figure for the period.

At the time we issued the 2027 Notes, we entered into the 2027 Call Spread Transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the 2027 Notes by, in effect, increasing the conversion price of the 2027 Notes from our economic standpoint.

However, under GAAP, since the impact of the 2027 Note Hedge Transactions is anti-dilutive, we exclude from the calculation of fully diluted shares the number of shares of our common stock that we would receive from the counterparties to these agreements upon settlement.

During periods in which the average market price of our common stock is above the applicable conversion price of the Convertible Notes ($77.49 per share for the 2027 Notes as of December 31, 2024) or above the weighted average strike price of the warrants ($106.22 per share for the 2027 Warrant Transactions s as of December 31, 2024), the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share.

As a result, in periods where the average market price of our common stock is above the conversion price or strike price, as applicable, under the if-converted method, we calculate the number of shares issuable under the terms of the 2027 Notes and the warrants based on the average market price of the stock during the period, and include that number in the total diluted shares outstanding for the period.

Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the fully diluted earnings per share calculation.

As described in Note 10, " Obligations " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, the 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any remaining obligation may be in cash, shares of the Company’s common stock or a combination thereof ("net share settlement").

Assuming net share settlement upon conversion, the following tables illustrate how, based on the $460.0 million aggregate principal amount of the 2027 Notes outstanding as of December 31, 2024, and the approximately 5.9 million warrants related to the 2027 Notes, outstanding as of the same date, changes in our stock price would affect (i) the number of shares issuable upon conversion of the 2027 Notes, (ii) the number of shares issuable upon exercise of the warrants subject to the 2027 Warrant Transactions, (iii) the number of additional shares deemed outstanding with respect to the 2027 Notes, after applying the if-converted method, for purposes of calculating diluted earnings per share ("Total If-Converted Method Incremental Shares"), (iv) the number of shares of our common stock deliverable to us upon settlement of the 2027 Note Hedge Transactions and (v) the number of shares issuable upon concurrent conversion of the 2027 Notes, exercise of the warrants subject to the 2027 Warrant Transactions, and settlement of the 2027 Note Hedge Transactions (in thousands):

Refer to Note 10, " Obligations " in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for definitions of the capitalized terms used in this section.

From January 1, 2024 through March 31, 2026, 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.

Our 2027 Notes are included in the diluted earnings per share ("diluted EPS") calculation using the if-converted method in accordance with GAAP.

Under the if-converted method, we assume that conversion of convertible securities occurs at the beginning of the reporting period.

The 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any value in excess of the principal amount ("the conversion spread") may be settled in cash, shares of the Company’s common stock, or a combination thereof.

As the principal amount is required to be paid in cash and only the conversion spread may result in shares being issued, we only include the net number of incremental shares that would be issued upon conversion.

We calculate the number of shares of our common stock issuable under the terms of the 2027 Notes based on the average market price of our common stock during the applicable reporting period and include that number in the weighted‑average diluted shares outstanding for the period.

At the time we issued the 2027 Notes, we entered into the 2027 Call Spread Transactions that together were designed to have the economic effect of reducing potential dilution upon conversion of the 2027 Notes by, in effect, increasing the conversion price of the 2027 Notes on an economic basis.

However, under GAAP, since the impact of the 2027 Note Hedge Transactions is anti-dilutive, we exclude from the calculation of diluted EPS the shares of our common stock that we would receive from the counterparties upon settlement of the 2027 Note Hedge Transactions.

During periods in which the average market price of our common stock is above the applicable conversion price of the 2027 Notes (initial conversion price of approximately $77.49 per share), or above the strike price of the warrants (weighted average strike price of $105.67 per share), the impact of conversion of the 2027 Notes or exercise of the warrants, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share.

In those periods, we calculate the incremental shares associated with the 2027 Notes (under the if‑converted method) or the warrants based on the average market price of our common stock during the period and include those incremental shares in weighted‑average diluted shares outstanding.

Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the diluted EPS calculation.

As described in Note 10, " Obligations " in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, the 2027 Notes are convertible into cash up to the aggregate principal amount of 2027 Notes to be converted and any remaining obligations may be settled in cash, shares of the Company’s common stock or a combination thereof ("net share settlement").

Assuming net share settlement upon conversion, the following table illustrates how changes in our stock price would affect the shares issuable under the 2027 Notes and related warrant transactions, the incremental shares included in diluted EPS under the if‑converted method (“Total Incremental Shares”), the shares deliverable to us under the 2027 Note Hedge Transactions, and the resulting net incremental shares, based on $460.0 million aggregate principal amount outstanding and approximately 6.0 million related warrants as of December 31, 2025 (in thousands):

Market Price Per Share Shares Issuable Upon Conversion of the 2027 Notes Shares Issuable Upon Exercise of the 2027 Warrant Transactions Total If-Converted Method Incremental Shares Shares Deliverable to InterDigital upon Settlement of the 2027 Note Hedge Transactions Incremental Shares Issuable (a)

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$450 4,953 4,572 9,525 (4,953) 4,572

(a) Represents incremental shares issuable upon concurrent conversion of convertible notes, exercise of warrants and settlement of the hedge agreements.

$475 5,007 4,646 9,653 (5,007) 4,646

$500 5,055 4,712 9,767 (5,055) 4,712

(a) Represents net incremental shares issuable upon concurrent conversion of the 2027 Notes, exercise of the 2027 Warrants, and settlement of the 2027 Note Hedge Transactions.

Contractual Obligations

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Total contractual obligations $ 521,653 $ 116,437 $ 394,633 $ 6,853 $ 3,730

(a) The table above represents the payment made on the maturity date of the 2027 Notes.

From the period January 1, 2024 through March 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.

(a) From the period January 1, 2024 through March 31, 2026, 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.

We will pay cash up to the aggregate principal amount of the 2027 Notes to be converted, if any, and will pay cash, shares of our Common Stock, or a combination of cash and shares of our Common Stock for any conversion obligation in excess of the aggregate principal amount being converted at our election.

In December 2025, holders elected to convert $80.0 million of principal, which will settle in first quarter 2026.

The principal of the converted notes will be paid in cash and the remaining amount will be settled in shares.

The remaining $380.0 million will be repaid upon maturity in 2027, unless earlier converted.

Refer to Note 10, “Obligations,” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for details of our 2027 Notes.

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Estimated future benefit payments included above are through 2030.

As discussed above we believe our available sources of funds, including cash, cash equivalents, short-term investments, and cash generated from our operations, will be sufficient to finance these contractual obligations discussed below in both the short-term over the next twelve month, and the long-term beyond twelve months.

As of December 31, 2024, we have a debt obligation of $17.0 million related to the Technicolor Patent Acquisition.

As discussed above we believe our available sources of funds, including cash, cash equivalents, short-term investments, and cash generated from our operations, will be sufficient to finance these contractual obligations discussed above in both the short-term over the next twelve months, and the long-term beyond twelve months.

As of December 31, 2025, we have a debt obligation of $17.9 million related to the Technicolor Patent Acquisition and due to the uncertainty regarding the timing and amount of future payments, the amounts are excluded from the contractual obligations table above.

Additionally, we are subject to a revenue-sharing arrangement with Technicolor resulting from the Technicolor Acquisitions.

There is no liability associated with the revenue-share agreement at December 31, 2024, as there are no minimum or maximum payments under the revenue-sharing arrangement, and, except in certain circumstances, the arrangement continues through December 31, 2038.

There is no liability associated with the revenue-share agreement at December 31, 2025, as it is deemed not probable.

Refer to Note 10, " Obligations ," within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information.

Due to the uncertainty regarding the timing and amount of future payments related to these items, the amounts are excluded from the contractual obligations table above.

RESULTS OF OPERATIONS

2025 Compared with 2024

The following table compares 2024 revenues to 2023 revenues (in thousands):

The following table compares 2025 revenue to 2024 revenue (in thousands):

Year Ended December 31,

2025 2024 Increase/(Decrease)

Recurring revenues:

Smartphone $ 678,855 $ 597,540 $ 81,315 14 %

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Other 529 2,296 (1,767) (77) %

Total recurring revenues 408,447 408,392 55 — %

Catch-up revenues (a)

Total Revenue $ 834,015 $ 868,516 $ (34,501) (4) %

Catch-up revenue (a) , included above

$ 277,409 $ 460,069 $ (182,660) (40) %

Total revenues $ 868,516 $ 549,588 $ 318,928 58 %

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

Total revenues of $868.5 million increased 58% from $549.6 million in 2023 primarily due to catch-up revenues from new agreements signed in 2024, including the Samsung TV and OPPO agreements, as well as revenue recognized on the Lenovo cellular license resulting from the UK proceedings and arbitration agreement.

Recurring revenues were relatively flat compared to 2023 with increased CE, IoT/Auto revenue mostly offsetting the 2023 expiration of Huawei and other smartphone agreements.

In 2024 and 2023, 79% and 76% of our total revenues were attributable to companies that individually accounted for 10% or more of our total revenues, respectively.

In 2024 and 2023, the following licensees or customers accounted for 10% or more of our total revenues:

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

Total revenue of $834.0 million decreased $34.5 million from 2024 primarily due to larger catch-up revenue in 2024 resulting primarily from the Samsung TV and OPPO agreements, as well as the Lenovo UK ruling and arbitration agreement, partially offset by catch-up revenue on the Samsung arbitration decision and the vivo agreement in 2025.

This decrease was also offset by revenue from fifteen new patent license agreements signed in the last twenty-one months.

In 2025 and 2024, 61% and 79% of our total revenue was attributable to companies that individually accounted for 10% or more of our total revenue, respectively.

In 2025 and 2024, the following licensees or customers accounted for 10% or more of our total revenue:

Year Ended December 31,

Customer B 16% 15%

Customer C 14% —%

Customer D <10% 20%

Customer E <10% 14%

Operating Expenses

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Total operating expenses $ 373,162 $ 429,004 $ (55,842) (13) %

Operating expenses increased 31% to $429.0 million in 2024 from $328.0 million in 2023.

The $101.0 million increase in total operating expenses was primarily due to increases/(decreases) in the following items (in thousands):

Operating expenses decreased 13% to $373.2 million in 2025 from $429.0 million in 2024.

The $55.8 million decrease in total operating expenses was primarily due to the following items (in thousands):

Increase/(Decrease)

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Intellectual property enforcement (12,524)

Performance-based compensation 17,603

Depreciation and amortization

Severance costs

Net litigation fee reimbursement 5,223

Other (1,939)

Total increase in operating expenses $ 101,031

The $101.0 million increase in operating expenses was driven by a $78.0 million increase in revenue share costs primarily related to the catch-up revenues recognized from the Samsung TV and TPV agreements.

Additionally, intellectual property enforcement costs increased $19.3 million due to costs associated with the Lenovo and OPPO proceedings, as well as the Samsung arbitration, and performance-based compensation increased $17.6 million due to higher accrual rates driven by licensing successes.

These increases were partially offset by a change in the nonrecurring net litigation reimbursement of $4.4 million contra-expense recorded in 2024 compared to $7.5 million of expense recorded in 2023.

Total decrease in operating expenses

The $55.8 million decrease in operating expenses was driven by a $71.2 million reduction in revenue share costs, mainly related to the Samsung TV and TPV agreements signed in 2024, and a $12.5 million reduction in intellectual property enforcement costs, primarily due to resolutions of the OPPO, Lenovo UK, and Samsung matters.

This decrease in intellectual property enforcement costs was partially offset by one-time net litigation fee reimbursements resulting in contra-expense of $4.4 million in 2024 compared to a $0.9 million charge in 2025.

These decreased intellectual property and enforcement costs were also partially offset by increases related to the announced Disney and Amazon proceedings, which are expected to continue into 2026 and increase as these, and other matters, progress.

These decreases were offset by a $7.6 million increase in depreciation and amortization due to our increased patent portfolio and investments in internal infrastructure and a $6.1 million increase in severance costs from executive and non-executive departures.

Research and portfolio development expense:

Research and portfolio development expense were relatively flat compared to 2023.

Research and portfolio development expense increased by $14.5 million compared to 2024 primarily resulting from the above-noted increase in depreciation and amortization and severance costs.

Licensing expense:

The $89.8 million increase in licensing expense primarily resulted from the above-noted increases in revenue share, intellectual property enforcement, and performance-based compensation costs, partially offset by the net litigation fee reimbursement activity.

Licensing expense decreased by $75.6 million compared to 2024 primarily resulting from the above-noted decreased revenue share and intellectual property enforcement costs, partially offset by the above-noted litigation fee reimbursements and severance costs.

General and administrative expense:

The $9.6 million increase in general and administrative expense was primarily driven by the above-noted increase in performance-based compensation.

Non-Operating (Expense) Income, Net

The following table compares 2024 non-operating expense to 2023 non-operating income (in thousands):

General and administrative expense increased by $5.2 million compared to 2024 primarily due to the above noted increases in severance costs.

Non-Operating Income (Expense), Net

The following table compares 2025 non-operating income to 2024 non-operating expense (in thousands):

Year Ended December 31,

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Other 8,516 (5,070) 13,586 268 %

Total non-operating (expense) income, net $ (10,096) $ 12,995 $ (23,091) (178) %

Interest expense was flat compared to 2023 and the $6.2 million decrease in interest and investment income was primarily due to lower average amounts held in short-term investments.

The change in Other was primarily due to fair value adjustments of our investments and pension obligation resulting in $5.4 million and $12.1 million of net gains in 2024 and 2023, respectively, and due to a foreign currency translation net loss arising primarily from euro translation of our foreign subsidiaries of $7.9 million in 2024, compared to $1.0 million foreign currency translation net gains in 2023.

Total non-operating income (expense), net

$ 8,579 $ (10,096) $ 18,675 185 %

Interest expense decreased $5.5 million due to lower expense related to significant financing components on our patent license agreements and a reduction due to the maturity of the 2024 Notes.

The change in Other was primarily due to a foreign currency translation net gain arising primarily from euro translation of our foreign subsidiaries of $4.7 million in 2025, compared to a $7.9 million foreign currency translation net loss in 2024.

In 2025, based on the statutory federal tax rate net of discrete federal and state taxes, our effective tax rate is 13.4%, as compared to an effective tax of 16.5% in 2024.

The increase in the effective rate was primarily attributable the impact of a higher percentage of foreign derived intangible income and a larger reversal of a valuation allowance in the prior year.

The decrease in the effective rate was primarily attributable the impact of a higher percentage of foreign derived intangible income deduction and increase in share-based compensation deductions.

FORWARD-LOOKING STATEMENTS

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We caution readers that actual results and outcomes could differ materially from those expressed in or anticipated by such forward-looking statements due to a variety of factors, including those set forth below:

• unanticipated delays, difficulties or accelerations in the execution of patent license agreements on acceptable terms or at all;

• our ability to expand our revenue opportunities by entering into licensing arrangements with video streaming and other cloud-based service providers;

• unanticipated delays or difficulties in the execution of patent license agreements on acceptable terms or at all;

• our ability to expand our revenue opportunities by entering into licensing arrangements with streaming and cloud-based service providers;

• the resolution of legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith;

• our ability to identify and acquire technology and patent portfolios that align with our roadmap;

• our ability to commercialize our technologies;

• the failure of the markets for our current or new technologies to materialize to the extent or at the rate that we expect;

• our continued ability to develop new technologies and secure new patents, including the risk of unexpected delays or difficulties related to the development of our technologies;

• our continued leadership within standards and industry groups and our ability to ensure our inventions become standardized;

• risks associated with our capital allocation strategies, including risks associated with our planned dividend payments and share repurchases;

• changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act and other U.S.

• our ability to maintain a strong patent portfolio and make strategic decisions related to our intellectual property protection;

• our ability to successfully integrate Deep Render and to recognize the anticipated benefits of the transaction;

• the failure of markets for our technologies to materialize to the extent that we expect;

• our continued ability to develop new technologies;

• changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the One Big Beautiful Bill Act, the 2017 Tax Cuts and Jobs Act and other U.S.

tax laws and other tax matters;

• the timing and impact of potential regulatory, administrative and legislative matters;

• U.S./China trade and/or national security tensions;

• changes or inaccuracies in market projections;

• our ability to retain and hire key personnel;

• our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets;

• the potential effects that macroeconomic uncertainty could have on our financial position, results of operations and cash flows;

• operational risks, including cybersecurity events, external hazards, human failures or other difficulties with our information technology systems that could disrupt our business or result in the loss of critical and confidential information and/or increased costs;

• impacts from acts of terrorism, war or political or civil unrest, or any responses thereto, in the United States or elsewhere;

• changes in our business strategy;

• the potential effects of macroeconomic conditions or trade conflicts;

• our ability to hire and retain key personnel;

• operational risks, including cybersecurity events, human failures or other difficulties with our information technology systems;

• risks related to any new accounting standards or our assumptions and application of relevant accounting standards, including with respect to revenue recognition.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis