What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-30 · 112 added, 166 removed, 131 unchanged (68% of the section changed)

3 unchanged sentences

New Agreements

During third quarter 2025, we signed four patent license agreements, including with Honor Device Co., Ltd.

("Honor"), a major Chinese smartphone vendor.

We now have eight of the ten largest smartphone vendors and approximately 85% of the entire global smartphone market under license.

Disney Proceedings

In September 2025, we were awarded a preliminary injunction against Disney by a court in Brazil.

The court ruled that we are entitled to a preliminary injunction over Disney’s infringement of two InterDigital patents related to AVC and HEVC video coding technology.

The decision followed the publication of an independent expert report, commissioned by the Rio de Janeiro court, which fully supported our position that Disney infringed both of the patents-in-suit, and that InterDigital does not have a RAND obligation arising from the asserted encoder claims.

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.

For more information on the Disney proceedings, see Note 6, “ Litigation and Legal Proceedings ,” to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Deep Render Acquisition

In October, we acquired Deep Render, an AI startup with a team of world-class AI experts focusing on video codecs.

We believe the acquisition adds significant depth to our existing AI expertise and strengthens the company’s leadership in video compression.

The transaction also adds Deep Render’s patent portfolio in AI-based video coding to our market-leading video portfolio.

As part of the deal, a team of AI experts will join our Video Lab.

Founded in London in 2018, Deep Render has pioneered the use of AI in video and image compression to change the way that video is processed and ultimately distributed to connected devices and services.

Return of Capital to Shareholders

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, beginning with the quarterly dividend paid in fourth quarter 2025.

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

During third quarter 2025, we returned $53.3 million to shareholders, including $18.0 million, or $0.70 per share, of cash dividends declared and $35.3 million through the repurchase of shares of common stock.

As of October 30, 2025, there was $147.9 million remaining under the share repurchase authorization, which we plan to utilize to periodically repurchase additional common shares.

During first quarter 2026, we entered into six patent license agreements, including agreements with Xiaomi, LG Electronics, Sony, Buffalo Americas, Inc., and Metz.

The agreement with Xiaomi has a term of five years and covers Xiaomi's cellular products, including its smartphones and other cellular-enabled devices, under InterDigital's standard essential cellular, WiFi, and HEVC patents.

The agreement with LG Electronics (the "LG TV 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.

The agreement with Sony covers all of Sony’s end user devices under InterDigital's global patent portfolio, including InterDigital's standard essential cellular, Wi-Fi, and video patents.

Injunction Awards

During first quarter 2026, we were awarded injunctions in our intellectual property enforcement actions against Disney and Transsion.

In Germany, the Munich Regional Court granted an injunction relating to Disney’s infringement of an InterDigital patent related to HEVC compression technology, representing the fifth injunction we have obtained in proceedings involving Disney.

In Brazil, the Third Regional Business Court of Rio de Janeiro granted a preliminary injunction relating to Transsion’s infringement of two InterDigital 5G patents and found that our licensing offer was fair, reasonable, and non-discriminatory (FRAND).

For more information on these proceedings, see Note 6, “ Litigation and Legal Proceedings ,” to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Notes, Hedge, and Warrant Transactions

During first quarter 2026, the 2027 Notes had a dilutive impact of 4.4 million shares, which are offset from an economic standpoint by the 2027 Note Hedge Transactions and would result in no incremental outstanding shares after conversion.

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.

During the period from January 1, 2024 through June 30, 2026, 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, 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.

As of March 31, 2026, 6.0 million warrants remain outstanding related to the 2027 Warrant Transactions at a weighted-average strike price of $105.55 per share, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028.

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 were $350, we would issue 4.2 million shares of common stock related to the 2027 Warrant Transactions.

Return of Capital

In March 2026, we announced a regular quarterly cash dividend of $0.70 per share, which is a 17% increase compared to the dividend declared in first quarter 2025.

During first quarter 2026, we returned $26.3 million to shareholders, including $18.1 million, or $0.70 per share, of cash dividends declared and $8.2 million through the repurchase of shares of common stock.

We also reduced our debt by $88.0 million, including the $80.0 million principle payment on the conversion of the 2027 Notes.

As of April 30, 2026, there was $108.0 million remaining under the share repurchase authorization, which we plan to utilize to periodically repurchase additional common shares.

See Part II, Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds—Issuer Purchases of Equity Securities of this Quarterly Report on Form 10-Q.

Cash & Short-term Investments

As of September 30, 2025, we had $1.3 billion of cash, restricted cash, and short-term investments and approximately $1.6 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.

91% of our third quarter 2025 revenue is from fixed-fee agreements.

As of March 31, 2026, we had $1.1 billion of cash, restricted cash, and short-term investments and approximately $1.7 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.

94% of our first quarter 2026 revenue came 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.

The following table reconciles the timing differences between cash receipts and recognized revenue during the three and nine months ended September 30, 2025 and 2024, including the resulting operating cash flow (in thousands):

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

The following table reconciles the timing differences between cash receipts and recognized revenue during the three months ended March 31, 2026 and 2025, including the resulting operating cash flow (in thousands):

Three Months Ended March 31,

Non-cash revenue:

2025 2024 2025 2024

Fixed fee cash receipts (a)

1 unchanged sentence

Other cash receipts (b)

8,390 9,919 41,834 35,275

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

2 unchanged sentences

Total Revenue $ 205,416 $ 210,507

Net cash provided by operating activities $ 395,930 $ 77,631 $ 481,059 $ 79,494

Net cash provided by (used in) operating activities

$ 16,081 $ (19,989)

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

2 unchanged sentences

That liability is then reduced as we recognize revenue over the balance of the agreement.

The following table shows the projected amortization of our current and long term deferred revenue as of September 30, 2025 (in thousands):

The following table shows the projected amortization of our current and long-term deferred revenue as of March 31, 2026 (in thousands):

Deferred Revenue

Remainder of 2026 $ 204,073

Thereafter 1,270

Total Revenue $ 420,465

Third quarter 2025 revenue of $164.7 million includes $17.7 million of catch-up revenue, while third quarter 2024 revenue of $128.7 million includes $30.0 million of catch-up revenue.

The $36.0 million increase was primarily due to recurring revenue recognized from nine patent license agreements signed since third quarter 2024, partially offset by lower catch-up revenue in third quarter 2025.

In third quarter 2025, revenue (in descending order) from Samsung, Apple, and Honor each comprised 10% or more of our consolidated revenue.

Refer to " Results of Operations --Third Quarter 2025 Compared to Third Quarter 2024 " for further discussion of our 2025 revenue.

First quarter 2026 revenue of $205.4 million includes $63.6 million of catch-up revenue, while first quarter 2025 revenue of $210.5 million includes $84.8 million of catch-up revenue.

The $5.1 million decrease in total revenue was driven by lower catch-up revenue, partially offset by recurring revenue recognized from thirteen patent license agreements signed since first quarter 2025.

In first quarter 2026, revenue (in descending order) from LG, Apple, and Samsung each comprised 10% or more of our consolidated revenue.

Refer to " Results of Operations — First Quarter 2026 Compared to First Quarter 2025 " for further discussion of our 2026 revenue.

Impact of Macroeconomic and Geopolitical Factors

1 unchanged sentence

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 and Middle East conflicts, have not had a material impact on our business to date.

These market factors, as well as the impacts of 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.

Comparability of Financial Results

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

• Our third quarter 2025 revenue includes $17.7 million of catch-up revenue primarily related to the new patent license agreement with Honor signed in third quarter 2025.

When comparing first quarter 2026 financial results against other periods, the following items should be taken into consideration:

• Our first quarter 2026 revenue includes $63.6 million of catch-up revenue primarily related to the new patent license agreements with LG and Sony signed in first quarter 2026.

Operating Expenses

• During first quarter 2026, we incurred $26.3 million of nonrecurring revenue share costs associated with the catch-up revenue recognized in the period.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our significant accounting policies are described in Note 2, " Summary of Significant Accounting Policies and New Accounting Guidance ", in the notes to consolidated financial statements included in our 2024 Form 10-K.

Our significant accounting policies are described in Note 2, " Summary of Significant Accounting Policies and New Accounting Guidance ", in the notes to condensed consolidated financial statements included in our 2025 Form 10-K.

A discussion of our critical accounting policies, and the estimates related to them, are included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K.

7 unchanged sentences

Cash, cash equivalents, restricted cash, and short-term investments

As of September 30, 2025 and December 31, 2024, we had the following amounts of cash and cash equivalents, restricted cash, and short-term investments (in thousands):

September 30, 2025 December 31, 2024 Increase / (Decrease)

As of March 31, 2026 and December 31, 2025, we had the following amounts of cash and cash equivalents, restricted cash, and short-term investments (in thousands):

March 31, 2026 December 31, 2025 Increase / (Decrease)

Cash and cash equivalents $ 607,599 $ 738,960 $ (131,361)

3 unchanged sentences

$ 1,091,850 $ 1,258,468 $ (166,618)

The net increase in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash provided by operating activities of $481.1 million, partially offset by cash used in financing activities of $147.0 million and cash used in investing activities of $55.3 million, excluding sales and purchases of short-term investments.

The net decrease in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash used in financing activities of $169.2 million and cash used in investing activities of $13.4 million, excluding sales and purchases of short-term investments, partially offset by cash provided by operating activities of $16.1 million.

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

Cash flows provided by operating activities

Cash flows provided by operating activities in the first nine months 2025 and 2024 (in thousands) were as follows:

Nine Months Ended September 30,

Cash flows provided by (used in) operating activities

Cash flows provided by (used in) operating activities in the first quarter 2026 and 2025 (in thousands) were as follows:

Three Months Ended March 31,

2026 2025 Change

Net cash provided by operating activities $ 481,059 $ 79,494 $ 401,565

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 $401.6 million change in cash provided by operating activities was primarily driven by higher cash receipts 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 nine months ended September 30, 2025 and 2024 (in thousands):

Nine Months Ended September 30,

Net cash provided by (used in) operating activities

$ 16,081 $ (19,989) $ 36,070

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

The $36.1 million change in cash provided by (used in) operating activities was primarily driven by higher cash receipts due to the timing of receipts under new and existing agreements and was partially offset by higher cash operating expenses, including increased revenue share and intellectual property enforcement costs.

The table below sets forth the significant items comprising our cash flows provided by (used in) operating activities during the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

2026 2025 Change

7 unchanged sentences

Other working capital adjustments (25,723) (5,651) (20,072)

Cash flows provided by operating activities $ 481,059 $ 79,494 $ 401,565

Cash flows provided by (used in) operating activities

$ 16,081 $ (19,989) $ 36,070

______________________________

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

Amount includes revenue share costs of $7.6 million and $78.7 million in first nine months 2025 and 2024, respectively.

Amount includes revenue share costs of $27.5 million and $2.6 million in first quarter 2026 and 2025, respectively.

(b) Income taxes paid include foreign withholding taxes.

Cash flows from investing and financing activities

Net cash used in investing activities for first nine months 2025 was $36.9 million, a $176.3 million change from $139.4 million provided by investing activities in first nine months 2024.

During first nine months 2025, we sold $18.3 million of short-term marketable securities, net of purchases, and capitalized $55.3 million of patent costs and property and equipment purchases.

During first nine months 2024, we sold $173.2 million of short-term marketable securities, net of purchases, and capitalized $35.4 million of patent costs and property and equipment purchases.

Net cash used in financing activities for first nine months 2025 was $147.0 million, a change of $104.0 million from $251.0 million the first nine months 2024.

This change was primarily attributable to a $126.2 million payment made on maturity of the 2024 Notes in first half 2024 and $7.3 million of proceeds from the exercise of stock options.

This change was partially offset by a $28.9 million increase of taxes withheld on restricted stock unit vestings primarily due to the increased share price at vesting and a $12.2 million increase in dividends paid due to the announced increases in the declared dividend from $0.40 to $0.70.

Our combined short-term and long-term deferred revenue balance as of September 30, 2025 was approximately $411.9 million, a net increase of $51.8 million from December 31, 2024.

This increase in deferred revenue was primarily due cash receipts on new and existing patent license agreements, partially offset by amortization of deferred revenue recognized in the period.

Based on current license agreements, we expect the amortization of dynamic fixed-fee royalty payments to reduce the September 30, 2025 deferred revenue balance of $411.9 million by $234.5 million over the next twelve months.

Net cash provided by investing activities for first quarter 2026 was $16.4 million, a $43.1 million change from $59.5 million in first quarter 2025.

During first quarter 2026, we sold $29.8 million of short-term marketable securities, net of purchases, and capitalized $15.1 million of patent costs and property and equipment purchases.

During first quarter 2025, we sold $86.2 million of short-term marketable securities, net of purchases, and capitalized $26.7 million of patent costs and property and equipment purchases.

Net cash used in financing activities for first quarter 2026 was $169.2 million, a change of $126.2 million from $43.0 million in first quarter 2025.

This change was primarily attributable to an $80.0 million payment related to the partial conversion of the 2027 Notes in first quarter 2026.

The change also reflects higher cash outflows in 2026, including a $22.8 million increase in taxes withheld on restricted stock unit vestings due to a higher share price at vesting and a $6.4 million increase in dividends paid following the increases in the declared dividend from $0.45 to $0.70.

In addition, during first quarter 2025, we received $7.3 million due to the exercise of stock options.

Our combined short-term and long-term deferred revenue balance as of March 31, 2026 was approximately $420.5 million, a net increase of $90.9 million from December 31, 2025.

This increase in deferred revenue was primarily due to cash receipts on new and existing patent license agreements, partially offset by amortization of deferred revenue recognized in the period.

Based on current license agreements, we expect the amortization of dynamic fixed-fee royalty payments to reduce the March 31, 2026 deferred revenue balance of $420.5 million by $261.1 million over the next twelve months.

Convertible Notes

See Note 5, “ Obligations ” to the Notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for definitions of capitalized terms below.

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.

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 obligations 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 2027 Notes (initial conversion price of approximately $77.49 per share), or above the strike price of the warrants (weighted average strike price of $105.77 per share), 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 2027 Warrant Transactions 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 5, " Obligations, " the 2027 Notes are convertible into cash up to the aggregate principal amount 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 tables illustrate how, based on the $460.0 million aggregate principal amount of the 2027 Notes outstanding as of September 30, 2025, and the approximately 5.9 million warrants related to the 2027 Notes, 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):

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)

From 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.

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 $105.55 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 5, "Obligations" in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, 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 $380.0 million aggregate principal amount outstanding and approximately 6.0 million related warrants as of March 31, 2026 (in thousands):

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)

$105 1,322 — 1,322 (1,322) —

18 unchanged sentences

RESULTS OF OPERATIONS

Third Quarter 2025 Compared to Third Quarter 2024

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

Three Months Ended September 30,

First Quarter 2026 Compared to First Quarter 2025

The following table compares first quarter 2026 revenue to first quarter 2025 revenue (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.

Total revenue of $164.7 million increased $36.0 million from third quarter 2024 primarily due to revenue from nine new patent license agreements signed in the last twelve months, including the agreement signed with Honor in third quarter 2025 and the previously announced agreements with vivo Mobile and OPPO.

Additionally, the Samsung arbitration decision contributed to the increase.

These increases were partially offset by catch-up revenue recognized on new agreements and the resolution of litigation in third quarter 2024.

In third quarter 2025 and 2024, 54% and 83%, respectively, of our total revenue was attributable to licensees that individually accounted for 10% or more of our total revenue.

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

Three Months Ended September 30,

Total revenue of $205.4 million was relatively flat compared to first quarter 2025, decreasing slightly primarily due to lower catch-up revenue recognized from the LG TV and Sony agreements in first quarter 2026, as compared to catch-up revenue from vivo Mobile in first quarter 2025, and the expiration of the Samsung TV agreement.

This decrease was partially offset by new revenue from the Samsung arbitration decision and from thirteen new patent license agreements signed in the last twelve months.

In first quarter 2026 and 2025, 61% and 71%, respectively, of our total revenue was attributable to licensees that individually accounted for 10% or more of our total revenue.

In first quarter 2026 and 2025, the following licensees accounted for 10% or more of our total revenue:

Three Months Ended March 31,

Customer D <10% 43%

Customer E <10% 12%

Customer F <10% 12%

Operating Expenses

The following table summarizes the changes in operating expenses between third quarter 2025 and third quarter 2024 by category (in thousands):

Three Months Ended September 30,

The following table summarizes the changes in operating expenses between first quarter 2026 and first quarter 2025 by category (in thousands):

Three Months Ended March 31,

2026 2025 Increase/(Decrease)

3 unchanged sentences

Total operating expenses

Operating expenses remained flat at $88.9 million in third quarter 2025 compared to $89.3 million in third quarter 2024.

The $0.5 million decrease in total operating expenses was primarily due to changes in the following items (in thousands):

Increase/(Decrease)

Revenue share $ (4,586)

Intellectual property enforcement, net (2,380)

Total change in operating expenses

The $0.5 million decrease in operating expenses was due to a number of offsetting changes including a $4.6 million decrease in revenue share costs primarily related to catch-up revenue on agreements signed in third quarter 2024.

Additionally, intellectual property enforcement costs, net decreased $2.4 million primarily due to resolutions of the OPPO, Lenovo UK, and Samsung matters, partially offset by increases related to the announced Disney proceedings and a $1.2 million one-time contra expense for a net litigation fee reimbursement resulting from intellectual property enforcement successes received in third quarter 2024.

Research and portfolio development expense:

Research and portfolio development expense increased compared to third quarter 2024 primarily due to the costs associated with our growing patent portfolio and increased investment in the computer network that supports our research activities.

Licensing expense:

Licensing expense decreased compared to third quarter 2024 primarily due to the above noted changes in revenue share and intellectual property enforcement costs, partially offset by the one-time net litigation fee reimbursement contra expense recognized in third quarter 2024.

General and administrative expense:

General and administrative expense increased compared to third quarter 2024 primarily due to an increase in share-based compensation costs.

Non-Operating Income, net

The following table compares third quarter 2025 non-operating income, net to third quarter 2024 (in thousands):

Three Months Ended September 30,

2025 2024 Increase/(Decrease)

Interest expense $ (10,019) $ (10,681) $ 662 6 %

Interest and investment income 9,484 9,175 309 3 %

Other income, net 704 3,379 (2,675) (79) %

Total non-operating income, net $ 169 $ 1,873 $ (1,704) (91) %

The change in non-operating income, net was primarily due to a foreign currency translation net loss arising from translation of our foreign subsidiaries of $0.6 million in third quarter 2025, compared to a $2.8 million net gain in third quarter 2024.

In third quarter 2025 and 2024, based on the statutory federal tax rate net of discrete federal and state taxes, we had an effective tax rate of 11.2% and 17.0%, respectively.

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

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

First Nine Months 2025 Compared to First Nine Months 2024

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

Nine Months Ended September 30,

2025 2024 Increase/(Decrease)

Smartphone $ 555,482 $ 366,931 $ 188,551 51 %

CE, IoT/Auto 119,817 246,905 (127,088) (51) %

Other 486 1,878 (1,392) (74) %

Total Revenue $ 675,785 $ 615,714 $ 60,071 10 %

Catch-up revenue (a) , included above

$ 123,155 $ 78,675 $ 44,480 57 %

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

Total revenue of $675.8 million increased $60.1 million from first nine months 2024 primarily due to revenue from fifteen new patent license agreements signed in the last eighteen months, including the agreement signed with Honor in third quarter 2025 and the previously announced agreements with vivo Mobile, OPPO, Lenovo, and HP.

Additionally, the Samsung arbitration ruling contributed to the increase.

These increases were partially offset by catch-up revenue recognized in first nine months 2024 from the Samsung TV agreement, Lenovo UK ruling and arbitration agreement, and other new agreements signed during first nine months 2024.

In first nine months 2025 and 2024, 64% and 77% of our total revenue, respectively, was attributable to companies that individually accounted for 10% or more of our total revenue.

In first nine months 2025 and 2024, the following companies accounted for 10% or more of our total revenue:

Nine Months Ended September 30,

Customer A 33% 38%

Customer G 16% —%

Customer B 15% 16%

Customer E <10% 23%

Operating Expenses

The following table summarizes the changes in operating expenses between first nine months 2025 and first nine months 2024 by category (in thousands):

Nine Months Ended September 30,

2025 2024 Increase/(Decrease)

Research and portfolio development $ 154,172 $ 147,851 $ 6,321 4 %

Licensing 61,301 149,212 (87,911) (59) %

General and administrative 47,245 41,665 5,580 13 %

Total operating expenses $ 262,718 $ 338,728 $ (76,010) (22) %

Operating expenses decreased 22% to $262.7 million in first nine months 2025 from $338.7 million in first nine months 2024.

The $76.0 million decrease in total operating expenses was primarily due to changes in the following items (in thousands):

Operating expenses increased to $123.2 million in first quarter 2026 compared to $78.7 million in first quarter 2025.

The $44.5 million increase in total operating expenses was primarily due to changes in the following items (in thousands):

Increase/(Decrease)

Revenue share $ 24,849

Intellectual property enforcement (22,405)

Depreciation and amortization

Net litigation fee reimbursement 3,877

Share-based compensation

Total change in operating expenses

The $76.0 million decrease in operating expenses was driven by a $71.1 million decrease in revenue share costs primarily related to the Samsung TV and TPV agreements signed in first nine months 2024.

Additionally, intellectual property enforcement costs decreased $22.4 million primarily due to resolutions of the OPPO, Lenovo UK, and Samsung matters, partially offset by increases related to the announced Disney proceedings.

This decrease in intellectual property enforcement costs was partially offset by one-time contra expenses for net litigation fee reimbursements of $0.5 million in first nine months 2025 compared to $4.4 million in first nine months 2024 resulting from intellectual property enforcement successes.

These decreases were offset by a $5.3 million increase in depreciation and amortization due to non-cash patent acquisitions and investments in internal infrastructure and a $2.5 million increase in share-based compensation due to higher accrual rates driven by licensing successes.

Intellectual property enforcement, net 10,527

Personnel-related costs

Total increase in operating expenses

The $44.5 million increase in operating expenses was driven by a $24.8 million increase in revenue share costs, primarily related to the catch-up revenue recognized on the LG TV agreement signed in first quarter 2026, and a $10.5 million increase in intellectual property enforcement costs related to the Disney, Amazon, and Transsion proceedings.

These enforcement costs are expected to continue through 2026 and could increase as these and other matters progress.

In addition, personnel-related costs increased $4.3 million primarily due to higher wages and employer-paid payroll taxes.

Research and portfolio development expense:

Research and portfolio development expense increased slightly compared to first nine months 2024 primarily due to the above noted increase in depreciation and amortization.

Research and portfolio development expense increased compared to first quarter 2025 primarily due to the above noted increase in personnel-related costs.

Licensing expense:

Licensing expense decreased by $87.9 million compared to first nine months 2024 primarily driven by the above-noted decreased revenue share costs and intellectual property enforcement costs, partially offset by the one-time net litigation fee reimbursement.

Licensing expense increased compared to first quarter 2025 primarily due to the above noted changes in revenue share and intellectual property enforcement costs.

General and administrative expense:

General and administrative expense increased compared to first nine months 2024 primarily due to the above noted increases in share-based compensation and depreciation of internal infrastructure investments.

General and administrative expense increased compared to first quarter 2025 primarily due to the above noted increase in personnel-related costs.

Non-Operating Income (expense), net

The following table compares first nine months 2025 non-operating income, net to first nine months 2024 non-operating expense, net (in thousands):

Nine Months Ended September 30,

The following table compares first quarter 2026 non-operating expense, net to first quarter 2025 non-operating income, net (in thousands):

Three Months Ended March 31,

2026 2025 Increase/(Decrease)

1 unchanged sentence

Interest and investment income 10,529 9,264 1,265 14 %

Other non-operating income, net 8,014 2,405 5,609 233 %

Total non-operating income (expense), net

Other (expense) income, net

(3,929) 994 (4,923) (495) %

The change in non-operating income (expense), net was primarily due to a foreign currency translation net gain arising from translation of our foreign subsidiaries of $5.9 million in first nine months 2025, compared to a $0.5 million net loss in first nine months 2024.

In first nine months 2025 and 2024, we had an effective tax rate of 13.3% and 18.4%, respectively.

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

Total non-operating (expense) income, net

$ (2,467) $ 387 $ (2,854) (737) %

The change in non-operating (expense) income, net was primarily due to a foreign currency translation net loss arising from translation of our foreign subsidiaries of $2.9 million in first quarter 2026, compared to a $2.2 million net gain in first quarter 2025.

In first quarter 2026 and 2025, based on the statutory federal tax rate net of discrete federal and state taxes, we had an effective tax rate of 5.6% and 12.6%, respectively.

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

STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 — FORWARD-LOOKING STATEMENTS

8 unchanged sentences

• 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;

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

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

4 unchanged sentences

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

• the potential effects of macroeconomic conditions or trade conflicts;

• the potential effects of macroeconomic conditions or global conflicts;

• our ability to hire and retain key personnel;

9 unchanged sentences

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 2. Management’s Discussion and Analysis