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Item 1. Financial Statements

2026-04-30 compared with 2025-10-30 · 254 added, 227 removed, 394 unchanged (55% of the section changed)

4 unchanged sentences

(in thousands, except per share data)

September 30,

2026 December 31,

29 unchanged sentences

Retained earnings 2,170,071 2,113,240

Accumulated other comprehensive gain (loss) 220 ( 458 )

Accumulated other comprehensive (loss) gain

Treasury stock, 46,106 and 45,280 shares of common stock held at cost

7 unchanged sentences

(in thousands, except per share data)

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

2025 2024 2025 2024

Three Months Ended March 31,

Revenue $ 205,416 $ 210,507

22 unchanged sentences

(in thousands)

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

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 75,329 $ 115,602

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

Unrealized (loss) gain on investments, net of tax

Comprehensive income $ 74,394 $ 115,858

10 unchanged sentences

Net change in unrealized loss on short-term investments

Dividends declared ($ 0.40 per share)

— — — — 256 — — 256

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

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

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

Balance, March 31, 2024

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

— — — 109,664 — — — 109,664

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

Dividends declared ($ 0.60 per share)

— — 450 ( 16,027 ) — — — ( 15,577 )

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

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

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

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

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

Balance, June 30, 2024

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

Net income — — — 34,190 — — — 34,190

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

Dividends declared ($ 0.45 per share)

— — 451 ( 11,817 ) — — — ( 11,366 )

Exercise of common stock options 100 1 7,314 — — — — 7,315

2 unchanged sentences

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

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

Balance, September 30, 2024

Balance, March 31, 2025

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

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

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss)

Treasury Stock Total Shareholders' Equity

Shares Amount Shares Amount

2 unchanged sentences

Net income — — — 75,329 — — — 75,329

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

Dividends declared ($ 0.60 per share)

— — 450 ( 16,027 ) — — — ( 15,577 )

Exercise of common stock options 100 1 7,314 — — — — 7,315

Issuance of common stock, net 218 2 ( 32,178 ) — — — — ( 32,176 )

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

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

Balance, March 31, 2025

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

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

— — — — ( 935 ) — — ( 935 )

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

Dividends declared ($ 0.70 per share)

— — 392 ( 18,498 ) — — — ( 18,106 )

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

Issuance of common stock, net 212 2 ( 55,005 ) — — — — ( 55,003 )

1 unchanged sentence

Repurchase of common stock — — — — — 24 ( 8,165 ) ( 8,165 )

Balance, June 30, 2025

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

Net income — — — 67,503 — — — 67,503

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

Dividends declared ($ 0.70 per share)

Settlement of the 2027 Notes

802 8 ( 503 ) — — — — ( 495 )

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

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

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

Settlement of the 2027 Hedge — — 291,815 — — 802 ( 291,813 ) 2

Balance, September 30, 2025

Balance, March 31, 2026

71,979 $ 719 $ 1,063,941 $ 2,170,071 $ ( 636 ) 46,106 $ ( 2,130,009 ) $ 1,104,086

4 unchanged sentences

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income $ 75,329 $ 115,602

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 19,208 18,213

Non-cash interest income, net

( 3,362 ) ( 8,290 )

Change in deferred revenue 85,861 ( 38,750 )

2 unchanged sentences

Other ( 944 ) ( 1,057 )

Decrease (Increase) in assets:

Increase in assets:

Receivables ( 138,511 ) ( 115,966 )

2 unchanged sentences

Accounts payable 6,800 1,730

Customer deposit

Accrued compensation and other expenses ( 5,484 ) ( 17,709 )

Net cash provided by operating activities 481,059 79,494

Net cash provided by (used in) operating activities

16,081 ( 19,989 )

Cash flows from investing activities:

4 unchanged sentences

Long-term investments 1,709 —

Net cash (used in) provided by investing activities ( 36,937 ) 139,350

Net cash provided by investing activities

16,406 59,508

Cash flows from financing activities:

Payments on long-term debt ( 88,017 ) ( 1,284 )

Repurchase of common stock ( 66,669 ) ( 66,726 )

Net proceeds from exercise of stock options — 7,316

Taxes withheld upon restricted stock unit vestings ( 55,003 ) ( 32,177 )

Repurchase of common stock ( 8,165 ) ( 5,249 )

Dividends paid ( 17,980 ) ( 11,557 )

Net cash used in financing activities ( 169,165 ) ( 42,951 )

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

Net decrease in cash, cash equivalents, and restricted cash

( 136,678 ) ( 3,432 )

Cash, cash equivalents, and restricted cash, beginning of period

754,268 551,547

Cash, cash equivalents, and restricted cash, end of period

$ 617,590 $ 548,115

Refer to Note 1, " Basis of Presentation, " for additional supplemental cash flow information.

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

March 31, 2026

BASIS OF PRESENTATION

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

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

(individually and/or collectively with its subsidiaries referred to as “InterDigital,” the “Company,” “we,” “us” or “our,” unless otherwise indicated) as of March 31, 2026, the results of our operations for the three months ended March 31, 2026 and 2025 and our cash flows for the three months ended March 31, 2026 and 2025.

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

11 unchanged sentences

Supplemental Cash Flow Information

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

Nine Months Ended September 30,

The following table presents additional supplemental cash flow information for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Supplemental cash flow information:

Interest paid $ 8,050 $ 9,311

Income taxes paid, including foreign withholding taxes $ 6,462 $ 10,204

4 unchanged sentences

Right-of-use assets obtained in exchange of operating lease liabilities 597 —

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

Settlement of the 2027 Notes and Hedge Transactions

Unsettled repurchase of common stock 451 411

New Accounting Guidance

Accounting Standards Update:

Improvements to Income Tax Disclosures

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

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”.

The amendments in the ASU enhance income tax disclosures, primarily through standardization, disaggregation of rate reconciliation categories, and income taxes paid by jurisdiction.

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

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

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

Accounting Standards Update:

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

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

Disaggregation of Income Statement Expenses".

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

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

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

Accounting Standards Update:

Induced Conversions of Convertible Debt Instruments

4 unchanged sentences

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

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

We adopted this guidance as of January 1, 2026, and there was no impact of this adoption on our consolidated financial statements.

Accounting Standards Update:

2 unchanged sentences

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

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

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

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption allowed.

We adopted this guidance as of January 1, 2026, and there was no material impact of this adoption on our consolidated financial statements.

Accounting Standards Update:

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No.

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

Disaggregation of Income Statement Expenses".

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

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

Accounting Standards Update:

Interim Reporting (Topic 270):

Narrow-Scope Improvements

In December 2025, the FASB issued ASU 2025-11 to amend the guidance in “Interim Reporting” (Topic 270).

The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period.

The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application.

The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years.

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

Disaggregated Revenue

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

Three Months Ended September 30,

2025 2024 Increase/(Decrease)

Smartphone $ 136,407 $ 87,426 $ 48,981 56 %

CE, IoT/Auto 28,219 40,633 ( 12,414 ) ( 31 ) %

Other 56 620 ( 564 ) ( 91 ) %

Total Revenue $ 164,682 $ 128,679 $ 36,003 28 %

Catch-up revenue (a) , included above

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

Nine Months Ended September 30,

The following table presents the disaggregation of our revenue for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

2026 2025 Increase/(Decrease)

6 unchanged sentences

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

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

As of September 30, 2025, we had contract assets of $ 33.6 million included within " Accounts receivable " and $ 15.0 million included within " Other non-current assets, net " in the condensed consolidated balance sheet.

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

During the three months ended March 31, 2026, we recognized $ 61.4 million of revenue that had been included in deferred revenue as of the beginning of the period.

As of March 31, 2026, we had contract assets of $ 58.4 million included within " Accounts receivable " and $ 27.0 million included within " Other non-current assets, net " in the condensed consolidated balance sheet.

As of December 31, 2025, we had contract assets of $ 19.7 million included within " Accounts receivable " and $ 21.0 million included within " Other non-current assets, net " in the condensed consolidated balance sheet.

Contracted Revenue

Based on contracts signed and committed as of September 30, 2025, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of such contracts (in thousands):

Based on contracts signed and committed as of March 31, 2026, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of such contracts (in thousands):

Remainder of 2026 $ 393,262

6 unchanged sentences

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

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

September 30, December 31, September 30,

The following table provides a reconciliation of total cash, cash equivalents, and restricted cash as of March 31, 2026, December 31, 2025, and March 31, 2025 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands):

March 31, December 31, March 31,

2026 2025 2025

7 unchanged sentences

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

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

Three licensees comprised 81 % and 55 % of our accounts receivable balances as of March 31, 2026 and December 31, 2025, respectively.

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

13 unchanged sentences

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

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

Fair Value as of September 30, 2025

Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of March 31, 2026 and December 31, 2025 (in thousands):

Fair Value as of March 31, 2026

Level 1 Level 2 Level 3 Total

1 unchanged sentence

$ 598,672 $ — $ — $ 598,672

Commercial paper (b)

Commercial paper

— 111,958 — 111,958

government securities — 234,542 — 234,542

government securities (b)

— 232,898 — 232,898

Corporate bonds, asset backed and other securities

5 unchanged sentences

$ 745,024 $ — $ — $ 745,024

Commercial paper (b)

Commercial paper

— 121,361 — 121,361

5 unchanged sentences

(a) Primarily included within cash and cash equivalents.

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

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

(b) As of March 31, 2026, $ 18.9 million of U.S.

government securities was included within cash and cash equivalents.

(c) As of December 31, 2025, $ 9.2 million of corporate bonds, asset backed and other securities was included within cash and cash equivalents.

Fair Value of Long-Term Debt

Convertible Notes

The principal amount, carrying value and related estimated fair value of the Company's convertible notes (the "Convertible Notes") reported as of September 30, 2025 and December 31, 2024 was as follows (in thousands).

The principal amount, carrying value and related estimated fair value of the Company's convertible notes (the "Convertible Notes") reported as of March 31, 2026 and December 31, 2025 was as follows (in thousands).

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Amount Carrying

3 unchanged sentences

Technicolor Patent Acquisition Long-term Debt

The carrying value and related estimated fair value of the Technicolor Patent Acquisition (as defined below) long-term debt reported as of September 30, 2025 and December 31, 2024 was as follows (in thousands).

The carrying value and related estimated fair value of the Technicolor Patent Acquisition (as defined below) long-term debt reported as of March 31, 2026 and December 31, 2025 was as follows (in thousands).

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

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Value Carrying

1 unchanged sentence

OTHER ASSETS AND LIABILITIES

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

September 30, 2025 December 31, 2024

The amounts included in " Prepaid and other current assets " in the condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025 were as follows (in thousands):

March 31, 2026 December 31, 2025

Tax receivables $ 50,565 $ 39,638

3 unchanged sentences

Total Prepaid and other current assets $ 96,491 $ 74,994

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

September 30, 2025 December 31, 2024

The amounts included in " Other non-current assets, net " in the condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025 were as follows (in thousands):

March 31, 2026 December 31, 2025

Tax receivables $ 100,854 $ 98,846

Goodwill 22,421 22,421

Contract asset 27,000 21,000

Goodwill 24,073 24,073

Right-of-use assets 13,631 13,797

2 unchanged sentences

Total Other non-current assets, net $ 209,164 $ 192,525

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

September 30, 2025 December 31, 2024

The amounts included in " Other accrued expenses " in the condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025 were as follows (in thousands):

March 31, 2026 December 31, 2025

Accrued legal fees $ 20,016 $ 14,008

1 unchanged sentence

Total Other accrued expenses $ 31,207 $ 22,326

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

September 30, 2025 December 31, 2024

The amounts included in " Other long-term liabilities " in the condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025 were as follows (in thousands):

March 31, 2026 December 31, 2025

Deferred compensation liabilities $ 25,927 $ 25,454

7 unchanged sentences

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

From the period January 1, 2024 through December 31, 2025, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes.

As such, the 2027 Notes are included in " Current portion of long-term debt " in our condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

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

As such, the 2027 Notes are included in " Current portion of long-term debt " in our condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025.

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

2 unchanged sentences

Also, on May 24 and May 25, 2022, we entered into privately negotiated warrant transactions ("2027 Warrant Transactions"), whereby we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 6.0 million shares of common stock.

As of September 30, 2025, the warrants under the 2027 Warrant Transactions had a weighted average strike price of $ 105.77 per share, subject to adjustment, and mature beginning September 2027 through April 2028.

2024 Notes, and Related Note Hedge and Warrant Transactions

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

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

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

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

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

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

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

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

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

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

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

September 30, 2025 December 31, 2024

As of March 31, 2026, the warrants under the 2027 Warrant Transactions had a weighted average strike price of $ 105.55 per share, subject to adjustment, and mature beginning September 2027 through April 2028.

In December 2025, holders elected to convert $ 80.0 million principal amount of the 2027 Notes, which was settled in the first quarter of 2026.

We paid the $ 80.0 million principal amount in cash and issued 0.8 million shares to settle the conversion spread.

These shares issued were offset by 0.8 million shares received upon partial settlement of the 2027 Note Hedge Transactions, resulting in no incremental outstanding shares resulting from the conversion.

The following table reflects the carrying value of our Convertible Notes long-term debt as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

3.50 % Senior Convertible Notes due 2027

4 unchanged sentences

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

The following table presents the amount of interest cost recognized, which is included within " Interest expense" in our condensed consolidated statements of income, for the three and nine months ended September 30, 2025 and 2024 relating to the contractual interest coupon and the amortization of deferred financing costs of the Convertible Notes (in thousands):

Three Months Ended September 30,

2027 Notes 2027 Notes 2024 Notes Total

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

Amortization of deferred financing costs 522 483 — 483

Total $ 4,547 $ 4,508 $ — $ 4,508

Nine Months Ended September 30,

2027 Notes 2027 Notes 2024 Notes Total

The following table presents the amount of interest cost recognized, which is included within " Interest expense" in our condensed consolidated statements of income, for the three months ended March 31, 2026 and 2025 relating to the contractual interest coupon and the amortization of deferred financing costs of the 2027 Notes (in thousands):

Three Months Ended March 31,

Contractual coupon interest $ 3,325 $ 4,025

10 unchanged sentences

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

The fair value of the long-term debt as of September 30, 2025 and December 31, 2024 is disclosed within Note 3, " Cash, Concentration of Credit Risk and Fair Value of Financial Instruments.

The fair value of the long-term debt as of March 31, 2026 and December 31, 2025 is disclosed within Note 3, " Cash, Concentration of Credit Risk and Fair Value of Financial Instruments.

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

4 unchanged sentences

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

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

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

During the three months ended March 31, 2026 and 2025, we recognized $ 0.6 million and $ 0.3 million, respectively, of interest expense related to this debt.

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

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

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

We made $ 8.0 million and $ 1.3 million in payments to CPPIB Credit during the three months ended March 31, 2026 and 2025, respectively.

Technicolor Contingent Consideration

As part of the Technicolor Patent Acquisition, we entered into a revenue-sharing arrangement with Technicolor that created a contingent consideration liability.

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

As of September 30, 2025, the contingent consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not reflected within the consolidated financial statements.

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

As of March 31, 2026, the contingent consideration liability from the revenue-sharing arrangement was deemed not probable and is therefore not reflected within the condensed consolidated financial statements.

LITIGATION AND LEGAL PROCEEDINGS

ARBITRATIONS AND COURT PROCEEDINGS

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

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

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

The Company reached an agreement with Samsung Electronics Co.

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

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

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

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

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

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

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

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

European Patent (UK) Nos.

3,718,369, 3,566,413, and 3,455,985.

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

In March 2024, the Company filed a jurisdiction challenge;

the jurisdiction challenge was heard during May and June 2024, and in July 2024 the UK High Court issued a judgment dismissing Tesla’s FRAND claims against the Company and Avanci, and maintaining Tesla’s patent claims against the Company.

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

Tesla sought permission to appeal the decision;

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

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

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

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

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

United Kingdom Proceedings

In August 2025, Amazon.com, Inc.

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

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

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

The Company made a jurisdictional challenge, which was denied in December 2025.

The Company has appealed that decision.

A subset of the issues raised by Amazon’s complaint are scheduled to be tried in September 2026, with the remainder to be scheduled later.

Brazil Proceedings

In September 2025, Amazon filed a claim in the Second Business Court of Sao Paulo (“Sao Paulo Court”) against the Company and certain of its subsidiaries.

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

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

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

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

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

Germany Proceedings

In November and December 2025, the Company and certain of its subsidiaries filed patent infringement claims in three separate proceedings in the Munich and Mannheim Regional Courts against Amazon.

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

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

Trials are expected in two of the three proceedings in third quarter and fourth quarter 2026.

UPC Proceedings

In November and December of 2025, the Company and certain of its subsidiaries filed patent infringement claims in three separate proceedings in the Mannheim Local Divisional Court and Dusseldorf Local Divisional Court of the UPC against Amazon.

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

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

International Trade Commission and Companion District Court Proceedings

In November 2025, the Company and certain of its subsidiaries filed a companion patent infringement complaint against Amazon in the Federal District Court of the District of Delaware.

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

The Company is seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents.The case is currently stayed pending resolution of the ITC case described below.

In December 2025, the Company and certain of its subsidiaries filed a complaint in the United States International Trade Commission ("ITC") alleging that Amazon is engaged in unfair trade practices, and that certain of Amazon's video-capable electronic devices like smart TVs, streaming devices, tablets and smart display devices, and components thereof, infringe certain claims of the asserted patents.

As relief, the Company is seeking, among other relief, a limited exclusion order against Amazon barring from entry into the United States all of Amazon’s products that infringe the asserted patents and cease and desist orders prohibiting Amazon from importing, selling, offering for sale, marketing, advertising, and distributing, infringing products.

The ITC has instituted the investigation.

Eastern District of Virginia Proceedings

In December 2025, the Company and certain of its subsidiaries filed a claim in the Federal District Court of the Eastern District of Virginia against Amazon.

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

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

Western District of Texas Proceedings

In February 2026, the Company and certain of its subsidiaries filed a complaint with the District Court for the Western District of Texas.

The claim alleges infringement of six of the Company’s patents covering certain networking technologies relating to the delivery of video content.

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

US Central District of California Proceedings

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

A trial is scheduled for September 2026.

In March of 2026, the court issued a claim construction decision holding that certain claims of a subset of the asserted patents were invalid for lack of sufficient definiteness;

the balance of the decision was favorable.

The Company is seeking reconsideration as to one of the claims held to be indefinite, and further intends to appeal such conclusions.

A trial is scheduled for February 2027.

Brazil Proceedings

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

and certain of its subsidiaries .

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

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

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

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

In October 2025, the Company filed another claim in the Regional Business Court of Rio de Janeiro against The Walt Disney Co.

and certain of its subsidiaries.

In October 2025, the Company filed another claim in the Regional Business Court of Rio de Janeiro against Disney.

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

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Germany Proceedings

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

and certain of its subsidiaries.

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

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

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

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

In October 2025, the Court held a hearing and issued an order finding validity of and infringement by Disney of one of the Company’s patents.

The order enjoined Disney from further infringement.

Disney is currently appealing the Court’s determinations.

In January 2026, the Court imposed fines of € 550,000 for Disney’s violations of the injunction following a request for coercive measures from the Company.

In November 2025, the Court held another hearing and issued another order finding infringement by Disney of another of the Company’s patents.

The order also enjoined Disney from further infringement.

In February 2026, the Court held another hearing and issued another order finding infringement by Disney of another of the Company’s patents.

The order also enjoined Disney from further infringement.

A hearing on the remaining asserted patent has not yet been scheduled.

UPC Proceedings

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

and certain of its subsidiaries.

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

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

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

The Mannheim Court has scheduled a hearing for one of the two asserted patents in May 2026 with the remainder to be scheduled in the second half of 2026.

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

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

United Kingdom Proceedings

In August 2025, Amazon.com, Inc.

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

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

In March 2026, Dolby Laboratories filed two complaints in the Central District of California seeking declaratory judgment relief with respect to six of the Company’s patents.

The first complaint seeks declarations of invalidity and noninfringement with respect to one of the Company’s video technology patents that is also currently being asserted against Disney .

The second complaint seeks declarations of noninfringement with respect to five of the Company’s video technology patents that are also being asserted against Amazon, Hisense and TCL.

In April 2026, the Company filed a motion to dismiss the first complaint;

the deadline to respond to the second complaint has not yet passed.

UPC Proceedings

In February 2026, the Company and certain of its subsidiaries filed patent infringement claims in the Mannheim Local Divisional Court of the UPC against Hisense Group Co., Ltd.

and certain of its subsidiaries (“Hisense”).

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

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

Germany Proceedings

In February 2026, the Company and certain of its subsidiaries filed patent infringement claims in the Munich Regional Court against Hisense.

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

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

The Munich Court has scheduled a hearing for January 2027.

India Proceedings

In February 2026, the Company and certain of its subsidiaries filed patent infringement claims in the Delhi High Court against Hisense.

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

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

Brazil Proceedings

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

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

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

In February 2026, the Company and certain of its subsidiaries filed a claim in the Regional Business Court of Rio de Janeiro against Hisense.

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

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

International Trade Commission and Companion District Court Proceedings

In February 2026, the Company and certain of its subsidiaries filed a companion patent infringement complaint against Hisense in the Federal District Court of the Northern District of Georgia.

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

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

The case is currently stayed pending resolution of the ITC case described below.

In February 2026, the Company and certain of its subsidiaries filed a complaint in the ITC alleging that Hisense (and TCL, as further described below) is engaged in unfair trade practices by selling for importation, importing, and selling after importation products that infringe six of the Company's patents.

The products include certain video-capable electronic devices like smart TVs, monitor display devices, and components thereof that infringe certain claims of the asserted patents.

As relief, the Company is seeking, among other relief, a limited exclusion order against Hisense barring from entry into the United States all of Hisense’s products that infringe the asserted patents and cease and desist orders prohibiting Hisense from importing, selling, offering for sale, marketing, advertising, and distributing, infringing products.

The ITC has instituted the investigation.

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

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

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

The Company reached an agreement with Samsung Electronics Co.

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

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

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

In December 2025, Samsung filed a request to the International Chamber of Commerce seeking to challenge the previously determined royalties.

UPC Proceedings

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

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

In February 2026, the Company and certain of its subsidiaries filed patent infringement claims in the Munich Local Divisional Court of the UPC against TCL Technology Group Corp.

and certain of its subsidiaries (“TCL”).

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

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

Germany Proceedings

In February 2026, the Company and certain of its subsidiaries filed patent infringement claims in the Munich Regional Court against TCL.

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

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

The Munich Court has scheduled a hearing for January 2027.

India Proceedings

In February 2026, the Company and certain of its subsidiaries filed patent infringement claims in the Delhi High Court against TCL.

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

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

Brazil Proceedings

In February 2026, the Company and certain of its subsidiaries filed a claim in the Regional Business Court of Rio de Janeiro against TCL.

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

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

A hearing has been scheduled for July 2026.

International Trade Commission and Companion District Court Proceedings

In February 2026, the Company and certain of its subsidiaries filed a companion patent infringement complaint against TCL in the Federal District Court of the Eastern District of Texas.

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

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

The case is currently stayed pending resolution of the ITC case described below.

In February 2026, the Company and certain of its subsidiaries filed a complaint in the ITC, referenced above with respect to Hisense, alleging that TCL is engaged in unfair trade practices by selling for importation, importing, and selling after importation products that infringe six of the Company's patents.

The products include certain video-capable electronic devices like smart TVs, monitor display devices, and components thereof that infringe certain claims of the asserted patents.

As relief, the Company is seeking, among other relief, a limited exclusion order against TCL barring from entry into the United States all of TCL’s products that infringe the asserted patent and cease and desist orders prohibiting TCL from importing, selling, offering for sale, marketing, advertising, and distributing, infringing products.

The ITC has instituted the investigation.

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

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

European Patent (UK) Nos.

3,718,369, 3,566,413, and 3,455,985.

In March 2024, the Company filed a jurisdiction challenge;

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

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

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

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

The Supreme Court heard the appeal in April 2026, and a decision is forthcoming .

UPC Proceedings

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

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

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

The Munich Court has scheduled a hearing for March 2027.

India Proceedings

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

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

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

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

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

Brazil Proceedings

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

In March 2026, the Court issued a preliminary injunction enjoining Transsion from selling 5G-compliant devices in Brazil.

Transsion has appealed this decision, and the appeal is pending.

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

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

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

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

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

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

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

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

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

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

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

None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of March 31, 2026, except as noted above.

In the three months ended March 31, 2026 and 2025, the Company had an estimated effective tax rate of 5.6 % and 12.6 %, respectively.

The change in effective tax rate is due to an increase in the amount of tax benefits related to share-based compensation.

During the three months ended March 31, 2026 and 2025, the Company recorded discrete net benefits of $ 10.4 million and $ 3.9 million, respectively, primarily related to share-based compensation.

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.

The tax law changes affecting the Company primarily involve changes to the timing and amount of certain tax deductions, including those related to FDII, GILTI, depreciation, R&D expenditures, and interest expense.

This bill did not have a material impact on our financial statements in first quarter 2026.

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

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

During the nine months ended September 30, 2025 and 2024, the Company paid approximately $ 78.6 million and $ 14.5 million, respectively, in foreign source creditable withholding tax.

During the three months ended March 31, 2026 and 2025, the Company paid approximately $ 3.1 million and $ 3.2 million, respectively, in foreign source creditable withholding tax.

NET INCOME PER SHARE

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

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

2025 2024 2025 2024

Three Months Ended March 31,

$ 75,329 $ 115,602

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Dilutive effect of stock options and RSUs

1,207 1,067 1,172 917

Dilutive effect of warrants

3,645 1,379 3,149 472

Dilutive effect of convertible securities

4,276 2,439 3,912 2,084

Diluted 35,280 33,505

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

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

2025 2024 2025 2024

Three Months Ended March 31,

Warrants 1,858 3,136

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SEGMENT PERFORMANCE MEASURES AND EXPENSES

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

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

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

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

Three months ended March 31,

Revenue $ 205,416 $ 210,507

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Revenue share costs 27,498 2,649

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

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

2,467 ( 387 )

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OTHER INCOME, NET

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

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

2025 2024 2025 2024

The amounts included in " Other income, net " in the condensed consolidated statements of income for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

Three Months Ended March 31,

Interest and investment income $ 10,529 $ 9,264

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Other income, net $ 6,600 $ 10,258

The change in Other was primarily due to foreign currency translation which resulted in a loss of $ 0.6 million and a gain of $ 5.9 million in the three and nine months ending September 30, 2025, respectively, compared to a gain of $ 2.8 million and a loss of $ 0.5 million in the three and nine months ending September 30, 2024, respectively.

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

What changed 10-Q

Item 1. Financial Statements