InterDigital, Inc. 10-Q

Item 1. FINANCIAL STATEMENTS INTERDIGITAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (unaudited) June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 615,590 $ 738,960 Short-term investments 496,821 504,200 Accounts receivable 193,001 69,816 Prepaid and other current assets 91,151 74,994 Total current assets 1,396,563 1,387,970 Property and equipment, net 22,274 23,713 Patents, net 317,569 318,756 Deferred tax assets 123,650 141,326 Other non-current assets, net 332,036 192,525 Total assets $ 2,192,092 $ 2,064,290 Liabilities and Shareholders' equity Current liabilities: Current portion of long-term debt $ 378,239 $ 458,376 Accounts payable 9,831 10,048 Accrued compensation and related expenses 33,236 50,050 Deferred revenue 325,740 193,722 Dividends payable 18,064 17,980 Other accrued expenses 35,960 22,326 Total current liabilities 801,070 752,502 Long-term debt 10,861 16,292 Long-term deferred revenue 116,472 135,882 Other long-term liabilities 61,520 58,494 Total liabilities 989,923 963,170 Commitments and contingencies Shareholders' equity: Preferred Stock, $ 0.10 par value, 14,399 shares authorized, 0 shares issued and outstanding — — Common Stock, $ 0.01 par value, 100,000 shares authorized, 71,988 and 70,965 shares issued and 25,806 and 25,685 shares outstanding 719 709 Additional paid-in capital 1,087,741 816,903 Retained earnings 2,267,959 2,113,240 Accumulated other comprehensive (loss) gain ( 1,257 ) 299 Treasury stock, 46,182 and 45,280 shares of common stock held at cost ( 2,152,993 ) ( 1,830,031 ) Total shareholders' equity 1,202,169 1,101,120 Total liabilities and shareholders' equity $ 2,192,092 $ 2,064,290 The accompanying notes are an integral part of these statements. 3 Table of Contents INTERDIGITAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 260,170 $ 300,596 $ 465,586 $ 511,103 Operating expenses: Research and portfolio development 56,407 53,674 112,242 101,104 Licensing 34,725 23,909 86,844 41,586 General and administrative 29,799 17,586 45,000 31,154 Total operating expenses 120,931 95,169 244,086 173,844 Income from operations 139,239 205,427 221,500 337,259 Interest expense ( 8,583 ) ( 9,537 ) ( 17,650 ) ( 19,408 ) Other income, net 12,722 15,144 19,322 25,402 Income before income taxes 143,378 211,034 223,172 343,253 Income tax provision ( 27,006 ) ( 30,466 ) ( 31,471 ) ( 47,083 ) Net income $ 116,372 $ 180,568 $ 191,701 $ 296,170 Net income per common share: Basic $ 4.51 $ 6.97 $ 7.44 $ 11.47 Diluted $ 3.40 $ 5.35 $ 5.51 $ 8.81 Weighted-average number of common shares outstanding: Basic 25,831 25,917 25,776 25,829 Diluted 34,260 33,725 34,770 33,615 Cash dividends declared per common share $ 0.70 $ 0.60 $ 1.40 $ 1.20 The accompanying notes are an integral part of these statements. 4 Table of Contents INTERDIGITAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 116,372 $ 180,568 $ 191,701 $ 296,170 Unrealized (loss) gain on investments, net of tax ( 621 ) 95 ( 1,556 ) 351 Comprehensive income $ 115,751 $ 180,663 $ 190,145 $ 296,521 The accompanying notes are an integral part of these statements. 5 Table of Contents INTERDIGITAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in thousands, except per share data) (unaudited) Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Shareholders' Equity Shares Amount Shares Amount Balance, December 31, 2024 70,577 $ 705 $ 808,540 $ 1,775,823 $ ( 458 ) 44,895 $ ( 1,727,395 ) $ 857,215 Net income — — — 115,602 — — — 115,602 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 income — — — 180,568 — — — 180,568 Net change in unrealized gain on short-term investments — — — — 95 — — 95 Dividends declared ($ 0.60 per share) — — 538 ( 16,045 ) — — — ( 15,507 ) Exercise of common stock options 1 — 15 — — — — 15 Issuance of common stock, net 15 1 ( 940 ) — — — — ( 939 ) Share-based compensation — — 11,836 — — — — 11,836 Repurchase of common stock — — — — — 123 ( 26,168 ) ( 26,168 ) Balance, June 30, 2025 70,911 $ 709 $ 805,073 $ 2,039,921 $ ( 107 ) 45,042 $ ( 1,758,812 ) $ 1,086,784 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Shareholders' Equity Shares Amount Shares Amount Balance, December 31, 2025 70,965 $ 709 $ 816,903 $ 2,113,240 $ 299 45,280 $ ( 1,830,031 ) $ 1,101,120 Net income — — — 75,329 — — — 75,329 Net change in unrealized loss on short-term investments — — — — ( 935 ) — — ( 935 ) Dividends declared ($ 0.70 per share) — — 392 ( 18,498 ) — — — ( 18,106 ) Issuance of common stock, net 212 2 ( 55,005 ) — — — — ( 55,003 ) Share-based compensation — — 10,339 — — — — 10,339 Repurchase of common stock — — — — — 24 ( 8,165 ) ( 8,165 ) Settlement of the 2027 Notes 802 8 ( 503 ) — — — — ( 495 ) Settlement of the 2027 Hedge — — 291,815 — — 802 ( 291,813 ) 2 Balance, March 31, 2026 71,979 $ 719 $ 1,063,941 $ 2,170,071 $ ( 636 ) 46,106 $ ( 2,130,009 ) $ 1,104,086 Net income — — — 116,372 — — — 116,372 Net change in unrealized loss on short-term investments — — — — ( 621 ) — — ( 621 ) Dividends declared ($ 0.70 per share) — — 420 ( 18,484 ) — — — ( 18,064 ) Issuance of common stock, net 9 — ( 726 ) — — — — ( 726 ) Share-based compensation — — 24,103 — — — — 24,103 Repurchase of common stock — — — — — 76 ( 22,981 ) ( 22,981 ) Settlement of the 2027 Notes and Hedge — — 3 — — — ( 3 ) — Balance, June 30, 2026 71,988 $ 719 $ 1,087,741 $ 2,267,959 $ ( 1,257 ) 46,182 $ ( 2,152,993 ) $ 1,202,169 The accompanying notes are an integral part of these statements. 6 Table of Contents INTERDIGITAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 191,701 $ 296,170 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 38,690 37,678 Change in deferred revenue 107,608 ( 71,206 ) Deferred income taxes 18,090 31,572 Share-based compensation 34,442 21,334 Other ( 3,353 ) ( 1,842 ) Increase in assets: Receivables ( 123,185 ) ( 200,405 ) Non-current contract assets ( 122,000 ) ( 9,000 ) Deferred charges and other assets ( 40,267 ) ( 5,044 ) (Decrease) Increase in liabilities: Accounts payable ( 2,278 ) 801 Accrued compensation and other expenses ( 831 ) ( 14,929 ) Net cash provided by operating activities 98,617 85,129 Cash flows from investing activities: Purchases of short-term investments ( 278,941 ) ( 236,016 ) Proceeds from maturities and sales of short-term investments 291,002 254,003 Capital expenditures ( 2,549 ) ( 15,082 ) Capitalized patent costs ( 28,466 ) ( 25,125 ) Long-term investments 1,709 — Net cash used in investing activities ( 17,245 ) ( 22,220 ) Cash flows from financing activities: Payments on long-term debt ( 88,019 ) ( 1,284 ) Net proceeds from exercise of stock options — 7,331 Taxes withheld upon restricted stock unit vestings ( 55,729 ) ( 33,116 ) Repurchase of common stock ( 31,146 ) ( 31,417 ) Taxes paid on repurchase of common stock ( 277 ) — Dividends paid ( 36,086 ) ( 27,134 ) Net cash used in financing activities ( 211,257 ) ( 85,620 ) Net decrease in cash, cash equivalents, and restricted cash ( 129,885 ) ( 22,711 ) Cash, cash equivalents, and restricted cash, beginning of period 754,268 551,547 Cash, cash equivalents, and restricted cash, end of period $ 624,383 $ 528,836 Refer to Note 1, " Basis of Presentation, " for additional supplemental cash flow information. Additionally, refer to Note 3, " Cash, Concentration of Credit Risk and Fair Value of Financial Instruments " for a reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets. The accompanying notes are an integral part of these statements. 7 Table of Contents INTERDIGITAL, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2026 (unaudited) 1. BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited, condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the financial position of InterDigital, Inc. (individually and/or collectively with its subsidiaries referred to as “InterDigital,” the “Company,” “we,” “us” or “our,” unless otherwise indicated) as of June 30, 2026, the results of our operations for the three and six months ended June 30, 2026 and 2025 and our cash flows for the six months ended June 30, 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”). The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for year-end financial statements. Therefore, these financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (our “2025 Form 10-K”) as filed with the U.S. Securities and Exchange Commission (“SEC”) on February 5, 2026. Definitions of capitalized terms not defined herein appear within our 2025 Form 10-K. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year. We have one reportable segment. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Change in Accounting Policies There have been no material changes or updates to our existing accounting policies from the disclosures included in our 2025 Form 10-K, except as indicated below in " New Accounting Guidance ". Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Supplemental Cash Flow Information The following table presents additional supplemental cash flow information for the six months ended June 30, 2026 and 2025 (in thousands): Six Months Ended June 30, Supplemental cash flow information: 2026 2025 Interest paid $ 6,650 $ 8,050 Income taxes paid, including foreign withholding taxes 24,342 21,764 Non-cash investing and financing activities: Non-cash acquisition of patents 3,000 19,319 Dividend payable 18,064 15,507 (Increase)/Decrease in accrued capitalized expenditures and patent costs ( 2,061 ) 4,961 Right-of-use assets obtained in exchange of operating lease liabilities 597 880 Settlement of the 2027 Notes and Hedge Transactions 291,314 — Unsettled repurchase of common stock — 468 8 Table of Contents New Accounting Guidance Accounting Standards Update: Induced Conversions of Convertible Debt Instruments In November 2024, the FASB issued ASU 2024-04, "Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments". The amendments in ASU 2024-04 require disclosures for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, with early adoption allowed. 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: Targeted Improvements to the Accounting for Internal-Use Software In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other Internal-Use Software (Subtopic 350-40)". The amendments in ASU 2025-06 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 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". The amendments in ASU 2024-03 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: 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 amendments provide 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. ASU 2025-11 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. 9 Table of Contents 2. REVENUE Disaggregated Revenue The following table presents the disaggregation of our revenue for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, 2026 2025 Increase/(Decrease) Smartphone $ 122,700 $ 235,084 $ ( 112,384 ) ( 48 ) % CE, IoT/Auto 27,470 65,331 ( 37,861 ) ( 58 ) % Streaming and Cloud Services 110,000 — 110,000 N/M Other — 181 ( 181 ) ( 100 ) % Total Revenue $ 260,170 $ 300,596 $ ( 40,426 ) ( 13 ) % Catch-up revenue (a) , included above $ 103,745 $ 162,328 $ ( 58,583 ) ( 36 ) % Six Months Ended June 30, 2026 2025 Increase/(Decrease) Smartphone $ 246,091 $ 419,075 $ ( 172,984 ) ( 41 ) % CE, IoT/Auto 109,361 91,598 17,763 19 % Streaming and Cloud Services 110,000 — 110,000 N/M Other 134 430 ( 296 ) ( 69 ) % Total Revenue $ 465,586 $ 511,103 $ ( 45,517 ) ( 9 ) % Catch-up revenue (a) , included above $ 167,368 $ 247,113 $ ( 79,745 ) ( 32 ) % (a) Catch-up revenue represents revenue associated with reporting periods prior to the execution of the license agreement. N/M Not meaningful During the six months ended June 30, 2026, we recognized $ 108.1 million of revenue that had been included in deferred revenue as of the beginning of the period. As of June 30, 2026, we had contract assets of $ 32.3 million included within " Accounts receivable " and $ 143.0 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 As of June 30, 2026, we expect to recognize the following revenue from dynamic fixed-fee royalty payments over the term of existing contracts (in thousands): Revenue (a) Remainder of 2026 $ 292,266 2027 572,557 2028 476,769 2029 416,840 2030 280,601 Thereafter 73,758 Total Revenue $ 2,112,791 (a) This table includes estimated revenue related to our Lenovo and Amazon arbitrations. In accordance with ASC 606, this estimate is limited to the amount of revenue we expect to recognize only to the extent we believe it is probable that a subsequent change in the estimate would not result in a significant revenue reversal. 10 Table of Contents 3. CASH, CONCENTRATION OF CREDIT RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash currently consist of money market and demand accounts. The following table provides a reconciliation of total cash, cash equivalents, and restricted cash as of June 30, 2026, December 31, 2025, and June 30, 2025 to the captions within the condensed consolidated balance sheets and condensed consolidated statements of cash flows (in thousands): June 30, December 31, June 30, 2026 2025 2025 Cash and cash equivalents $ 615,590 $ 738,960 $ 517,894 Restricted cash included within prepaid and other current assets 8,793 15,308 10,942 Total cash, cash equivalents, and restricted cash $ 624,383 $ 754,268 $ 528,836 Concentration of Credit Risk and Fair Value of Financial Instruments Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash equivalents, short-term investments, and accounts receivable. We place our cash equivalents and short-term investments only in highly rated financial instruments and in United States government instruments. Our accounts receivable and contract assets are derived principally from patent license and technology solutions agreements. Three licensees comprised 83 % and 55 % of our accounts receivable balances as of June 30, 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. We believe that the book values of our financial instruments approximate their fair values. Fair Value Measurements We use various valuation techniques and assumptions when measuring the fair value of our assets and liabilities. We utilize market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. This guidance established a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below: Level 1 Inputs — Level 1 includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 2 Inputs — Level 2 includes financial instruments for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets with insufficient volume or infrequent transactions (less active markets) or model-driven valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data, including market interest rate curves, referenced credit spreads and pre-payment rates. Level 3 Inputs — Level 3 includes financial instruments for which fair value is derived from valuation techniques including pricing models and discounted cash flow models in which one or more significant inputs are unobservable, including the Company’s own assumptions. The pricing models incorporate transaction details such as contractual terms, maturity and, in certain instances, timing and amount of future cash flows, as well as assumptions related to liquidity and credit valuation adjustments of marketplace participants. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. We use quoted market prices for similar assets to estimate the fair value of our Level 2 investments. 11 Table of Contents Recurring Fair Value Measurements Our financial assets are generally included within short-term investments on our condensed consolidated balance sheets, unless otherwise indicated. Our financial assets and liabilities that are accounted for at fair value on a recurring basis are presented in the tables below as of June 30, 2026 and December 31, 2025 (in thousands): Fair Value as of June 30, 2026 Level 1 Level 2 Level 3 Total Assets: Money market and demand accounts (a) $ 605,024 $ — $ — $ 605,024 Commercial paper (b) — 157,289 — 157,289 U.S. government securities — 166,507 — 166,507 Corporate bonds, asset backed and other securities — 192,384 — 192,384 Total $ 605,024 $ 516,180 $ — $ 1,121,204 Fair Value as of December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Money market and demand accounts (a) $ 745,024 $ — $ — $ 745,024 Commercial paper — 121,361 — 121,361 U.S. government securities — 240,556 — 240,556 Corporate bonds, asset backed and other securities (c) — 151,527 — 151,527 Total $ 745,024 $ 513,444 $ — $ 1,258,468 ______________________________ (a) Primarily included within cash and cash equivalents. (b) As of June 30, 2026, $ 19.4 million of commercial paper 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 June 30, 2026 and December 31, 2025, were as follows (in thousands). The aggregate fair value of the principal amount of the Convertible Notes is a Level 2 fair value measurement. June 30, 2026 December 31, 2025 Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value 2027 Senior Convertible Long-Term Debt $ 379,981 $ 378,239 $ 1,387,079 $ 459,986 $ 456,786 $ 1,905,819 Technicolor Patent Acquisition Long-Term Debt The carrying value and related estimated fair value of the Technicolor Patent Acquisition (as defined in Note 5, " Obligations ") long-term debt reported as of June 30, 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. June 30, 2026 December 31, 2025 Carrying Value Fair Value Carrying Value Fair Value Technicolor Patent Acquisition Long-Term Debt $ 10,861 $ 10,506 $ 17,882 $ 18,178 12 Table of Contents 4. OTHER ASSETS AND LIABILITIES The amounts included in " Prepaid and other current assets " in the condensed consolidated balance sheet as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Tax receivables $ 55,576 $ 39,638 Prepaid assets 22,231 13,335 Restricted cash 8,793 15,308 Other current assets 4,551 6,713 Total Prepaid and other current assets $ 91,151 $ 74,994 The amounts included in " Other non-current assets, net " in the condensed consolidated balance sheet as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Contract asset $ 143,000 $ 21,000 Tax receivables 97,231 98,846 Goodwill 24,073 24,073 Right-of-use assets 12,832 13,797 Long-term investments 12,735 11,718 Other non-current assets 42,165 23,091 Total Other non-current assets, net $ 332,036 $ 192,525 The amounts included in " Other accrued expenses " in the condensed consolidated balance sheet as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Accrued legal fees $ 29,754 $ 14,008 Other accrued expenses 6,206 8,318 Total Other accrued expenses $ 35,960 $ 22,326 The amounts included in " Other long-term liabilities " in the condensed consolidated balance sheet as of June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 Deferred compensation liabilities $ 29,969 $ 25,454 Operating lease liabilities 12,440 13,540 Other long-term liabilities 19,111 19,500 Total Other long-term liabilities $ 61,520 $ 58,494 5. OBLIGATIONS 2027 Notes and Related Note Hedge and Warrant Transactions On May 27, 2022, we issued $ 460.0 million in aggregate principal amount of 3.50 % Senior Convertible Notes due in 2027 (the "2027 Notes"). The net proceeds from the issuance of the 2027 Notes, after deducting the initial purchasers' transaction fees and offering expenses, were approximately $ 450.0 million. The 2027 Notes bear interest at a rate of 3.50 % per year, payable in cash on June 1 and December 1 of each year, commencing on December 1, 2022, and mature on June 1, 2027, unless earlier redeemed, converted or repurchased. 13 Table of Contents 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. The initial conversion rate was 12.9041 shares of common stock per $1,000 principal amount of the 2027 Notes. Effective July 8, 2026, the conversion rate was adjusted to 13.0351 shares of common stock per $1,000 principal amount of the 2027 Notes (which is equivalent to a conversion price of approximately $ 76.72 per share), subject to further adjustment. From the period January 1, 2024 through September 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 June 30, 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. The 2027 Notes are effectively subordinated to all of the Company’s future secured indebtedness, if any, to the extent of the value of the related collateral, and the 2027 Notes are structurally subordinated to indebtedness and other liabilities, including trade payables, of the Company’s subsidiaries. On May 24 and May 25, 2022, in connection with the offering of the 2027 Notes, we entered into convertible note hedge transactions ("2027 Note Hedge Transactions") that cover, subject to customary anti-dilution adjustments, approximately 5.9 million shares of common stock, in the aggregate, at a strike price that corresponds to the conversion price of the 2027 Notes, subject to adjustment, and are exercisable upon any conversion of the 2027 Notes. 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 June 30, 2026, the warrants under the 2027 Warrant Transactions had a strike price of $ 105.43 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. As of June 30, 2026, $ 380.0 million in principal of the 2027 Notes remains outstanding, of which holders had elected to convert $ 80.3 million principal amount, which will settle in third quarter 2026. No incremental outstanding shares will result from such conversions due to the offsetting impact of the 2027 Note Hedge Transactions, however the 2027 Warrant Transactions described above remain outstanding. The following table reflects the carrying value of our Convertible Notes long-term debt as of June 30, 2026 and December 31, 2025 (in thousands): June 30, 2026 December 31, 2025 3.50 % Senior Convertible Notes due 2027 $ 379,981 $ 459,986 Less: Deferred financing costs ( 1,742 ) ( 3,200 ) Net carrying amount of the Convertible Notes 378,239 456,786 Less: Current portion of long-term debt ( 378,239 ) ( 456,786 ) Long-term net carrying amount of the Convertible Notes $ — $ — The following table presents the amount of interest cost recognized, which is included within " Interest expense" in our condensed consolidated statements of income, for the three and six months ended June 30, 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Contractual coupon interest $ 3,091 $ 4,025 $ 6,416 $ 8,050 Amortization of deferred financing costs 454 509 965 1,011 Total $ 3,545 $ 4,534 $ 7,381 $ 9,061 14 Table of Contents Technicolor Patent Acquisition Long-Term Debt On July 30, 2018, we completed our acquisition of the patent licensing business of Technicolor SA ("Technicolor"), a worldwide technology leader in the media and entertainment sector (the "Technicolor Patent Acquisition"). In conjunction with the Technicolor Patent Acquisition, we assumed Technicolor’s rights and obligations under a joint licensing program with Sony relating to digital televisions and standalone computer display monitors, which commenced in 2015 (the "Madison Arrangement"). An affiliate of CPPIB Credit Investments Inc. ("CPPIB Credit"), a wholly owned subsidiary of Canada Pension Plan Investment Board, is a third-party investor in the Madison Arrangement. CPPIB Credit made certain payments to Technicolor and Sony and agreed to contribute cash to fund certain capital reserve obligations under the arrangement in exchange for a percentage of future revenue, specifically through September 11, 2030 in regard to the Technicolor patents. Upon our assumption of Technicolor’s rights and obligations under the Madison Arrangement, our relationship with CPPIB Credit meets the criteria in ASC 470-10-25 - Sales of Future Revenues or Various Other Measures of Income ("ASC 470"), which relates to cash received from an investor in exchange for a specified percentage or amount of revenue or other measure of income of a particular product line, business segment, trademark, patent, or contractual right for a defined period. Under this guidance, we recognized the fair value of our contingent obligation to CPPIB Credit, as of the acquisition date, as long-term debt in our condensed consolidated balance sheet. This initial fair value measurement was based on the perspective of a market participant and included significant unobservable inputs which are classified as Level 3 inputs within the fair value hierarchy. The fair value of the long-term debt as of June 30, 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. Under ASC 470, amounts recorded as debt are amortized under the interest method. At each reporting period, we will review the discounted expected future cash flows over the life of the obligation. The Company made an accounting policy election to utilize the catch-up method when there is a change in the estimated future cash flows, whereby we will adjust the carrying amount of the debt to the present value of the revised estimated future cash flows, discounted at the original effective interest rate, with a corresponding adjustment recognized as interest expense within “ Interest expense ” in the condensed consolidated statements of income. The effective interest rate as of the acquisition date was approximately 14.5 %. This rate represents the discount rate that equates the estimated future cash flows with the fair value of the debt as of the acquisition date and is used to compute the amount of interest to be recognized each period based on the estimated life of the future revenue streams. During the three and six months ended June 30, 2026, we recognized $ 0.4 million and $ 1.0 million, respectively, of interest expense related to this debt, compared to $ 0.6 million and $ 0.8 million during the three and six months ended June 30, 2025, respectively. These amounts were included within “ Interest expense ” in the condensed consolidated statements of income. Any future payments made to, or additional proceeds received from, CPPIB Credit will decrease or increase the long-term debt balance accordingly. We made $ 8.0 million and $ 1.3 million in payments to CPPIB Credit during the six months ended June 30, 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 under the Madison Arrangement only, subject to certain conditions and hurdles. As of June 30, 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. 6. LITIGATION AND LEGAL PROCEEDINGS ARBITRATIONS AND COURT PROCEEDINGS Amazon In June 2026, the Company reached an agreement with Amazon.com, Inc. and certain of its subsidiaries (“Amazon”) to suspend or withdraw all pending litigation and enter into binding arbitration to determine the final terms of a patent license agreement. 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 alleged the non-infringement and non-essentiality of certain patents relating to video coding and video streaming technologies. Amazon was seeking a declaration that the challenged Brazilian patents were not infringed, and a declaration preventing enforcement by the Company of any video coding patents anywhere in Brazil. 15 Table of Contents 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 alleged infringement of certain of the Company’s patents relating to video coding technologies. The Company was seeking, among other relief, damages and injunctive relief to prevent further infringement of the asserted patents. In July 2026, the parties stayed all Brazil proceedings pending the outcome of the arbitration described above. 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 alleged infringement of four of the Company’s patents relating to video coding and video streaming technologies. The Company was seeking, among other relief, damages to prevent further infringement of the asserted patents. In July 2026, the court stayed the case in view of the arbitration agreement described above. 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 alleged infringement of certain of the Company’s patents relating to video coding and video streaming technologies. The Company was seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. The Company withdrew its Germany proceedings following entry into the arbitration agreement described above. 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 alleged infringement of certain of the Company’s patents relating to video coding and video streaming technologies. The Company was seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. The case has been stayed pending resolution of the arbitration. In December 2025, the Company and certain of its subsidiaries filed a complaint in the United States International Trade Commission ("ITC") alleging that Amazon was 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 was 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. In July 2026, the ITC terminated the investigation following entry into the arbitration agreement. United Kingdom Proceedings In August 2025, Amazon.com filed a claim in the High Court of Justice of England and Wales against the Company and certain of its subsidiaries. The claims alleged the non-infringement and invalidity of certain patents relating to video coding and video streaming technologies. Amazon was 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. All deadlines in the UK proceedings were suspended following entry into the arbitration agreement described above. 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 alleged infringement of certain of the Company’s patents relating to video coding and video streaming technologies. The Company was seeking, among other relief, injunctive relief to prevent further infringement of the asserted patents. The UPC proceedings were stayed in July 2026 following entry into the arbitration agreement described above. 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 alleged infringement of six of the Company’s patents covering certain networking technologies relating to the delivery of video content. The Company was seeking, among other relief, damages to prevent further infringement of the asserted patents. In July 2026, the court stayed the case in view of the arbitration agreement described above. 16 Table of Contents Disney 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 Disney. 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. In March 2025, Disney filed an answer and asserted a rate-setting counterclaim. In May 2025, the Company requested an anti-interference injunction to prevent Disney from continuing with its anti-suit injunction in California. In September 2025, the Court granted the Company’s preliminary injunction request. The Appellate Court initially granted Disney’s request to stay the preliminary injunction pending hearing of an appeal, but that stay was lifted. In May 2026, the Court affirmed the lower court’s preliminary injunction decision. 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. The Company is seeking, among other relief, damages and injunctive relief to prevent further infringement of the asserted patent. Central District of California Proceedings In February 2025, the Company and certain of its subsidiaries filed a claim in the Federal District Court of the Central District of California against The Walt Disney Co. and certain of its subsidiaries (“Disney”). The claim alleges infringement of certain 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. In March 2025, Disney filed an answer and asserted multiple counterclaims against the Company. 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. In March 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. The case was stayed in June 2026 pending resolution of ex parte reexamination proceedings and the declaratory judgment action filed by Dolby referenced below. Delaware Proceedings In August 2025, a subsidiary of Disney filed an antitrust complaint against the Company and certain of its subsidiaries, and Technicolor in the Federal District Court of the District of Delaware. The claims allege the Company has engaged in monopolistic conduct in the licensing of its patents relating to video coding and video streaming technologies. Disney is seeking, among other relief, injunctive relief to halt the licensing practices it views as unlawful, and damages. In September 2025, the Company filed a motion to dismiss Disney’s complaint, or in the alternative, stay the case pending resolution of the Company’s cases against Disney in California, Europe, and Brazil. In October 2025, the Antitrust Division of the United States Department of Justice filed a Statement of Interest in the Delaware case. Germany Proceedings In February and April 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. 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. Disney appealed, and the fine was adjusted on appeal to € 50,000 . Enforcement of the patent was stayed in May 2026 pending final decision from the Federal Patent Court on validity. 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 July 2026, the Court imposed fines of € 150,000 for Disney’s violations of the injunction following a request for coercive measures from the Company. 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. 17 Table of Contents In July 2026, the Company filed an additional suit asserting infringement of a patent relating to video streaming technologies. UPC Proceedings In February and April of 2025, the Company and certain of its subsidiaries filed patent infringement claims in four separate proceedings, two in each court, in the Mannheim Local Divisional Court and Dusseldorf Local Divisional Court of the UPC 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. The Mannheim Court held a hearing for one of the two asserted patents in May 2026, found infringement and issued an injunction in June 2026. The Dusseldorf Court held a hearing on one of the asserted patents in June 2026, also found infringement and issued an injunction in July 2026. Each of these injunctions spans 11 EU countries. The Dusseldorf Court held an additional hearing on the second asserted patent in July 2026, with a decision expected in September 2026. In July 2026, the Company filed an additional suit asserting infringement of a patent relating to video streaming technologies in the Mannheim Local Divisional Court. Dolby 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 have been asserted against Amazon, Hisense and TCL. In April 2026, the Company filed a motion to dismiss the first complaint; that motion was denied. The Company filed a motion to dismiss the second complaint, which was granted in July 2026. Hisense 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 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. In April 2026, Hisense filed an antitrust action against the Company in the Conselho Administrativo de Defesa Econômica, alleging that the Company has acted as an unwilling licensor. The Company submitted its answer to the complaint in May 2026. 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 first quarter 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. 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. 18 Table of Contents 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. A hearing is scheduled for second quarter 2027, with a final determination currently expected by the end of 2027. 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. Lenovo 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 confirm ed the full tribunal for the arbitration. The arbitration hearing is scheduled for fourth quarter 2026. Samsung The Company reached an agreement with Samsung Electronics Co. Ltd. (“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. In July 2026, the Company filed jurisdictional objections. TCL 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 third quarter 2026. China Proceedings In July 2026, the Company and certain of its subsidiaries were served with two complaints filed by TCL in the Shenzhen Intermediate People’s Court. The first suit seeks, among other things, a declaration that the Company’s proposed licensing terms for its HEVC portfolio does not comply with FRAND principles, and for the court to determine global FRAND licensing terms for the Company’s HEVC portfolio applicable to TCL’s television products. The second suit seeks, among other things, a declaration that the Company has abused a dominant market position in licensing its Chinese SEPs, and compensation for alleged economic losses caused by this abuse of dominant market position. 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 first quarter 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. 19 Table of Contents 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. An evidentiary hearing is scheduled for second quarter 2027, with a final determination currently expected by the end of 2027. UPC Proceedings 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. Tesla In December 2023, Tesla, Inc. ("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 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. 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 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. The Supreme Court heard the appeal in April 2026 . In July 2026, the Supreme Court reversed the decision of the lower courts finding that there was an issue to be tried regarding Tesla’s FRAND claims against the Company and Avanci, and that the UK High Court has jurisdiction to hear those claims. Transsion Brazil Proceedings In September 2025, the Company and certain of its subsidiaries filed a claim in the Regional Business Court of Rio de Janeiro against Transsion and distributors. The claim alleges infringement of certain of the Company’s patents relating to cellular SEP technologies. The Company is seeking, among other relief, damages and injunctive relief to prevent further infringement of the asserted patents. 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. 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 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. 20 Table of Contents 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”) and distributors. 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 first quarter 2027. OTHER We are party to certain other disputes and legal actions in the ordinary course of business, including arbitrations and legal proceedings with licensees regarding the terms of their agreements and the negotiation thereof. We do not currently believe that these matters, even if adversely adjudicated or settled, would have a material adverse effect on our financial condition, results of operations or cash flows. None of the preceding matters have met the requirements for accrual or disclosure of a potential range as of June 30, 2026, except as noted above. 7. INCOME TAXES In the six months ended June 30, 2026 and 2025, the Company had an estimated effective tax rate of 14.1 % and 13.7 %, respectively. The change in effective tax rate is due to an increase in the amount of non-deductible officer’s compensation. During the six months ended June 30, 2026 and 2025, the Company recorded discrete net benefits of $ 11.0 million and $ 5.6 million, respectively, primarily related to share-based compensation. The One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4, 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 Foreign-Derived Deduction Eligible Income (FDDEI), Net CFC Tested Income (NCTI), depreciation, R&D expenditures, and interest expense. The OBBBA did not have a material impact on our financial statements in second 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 six months ended June 30, 2026 and 2025, the Company paid approximately $ 19.7 million and $ 14.5 million, respectively, in foreign source creditable withholding tax. 21 Table of Contents 8. NET INCOME PER SHARE Basic Earnings Per Share ("EPS") is calculated by dividing net income or loss available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if options or other securities with features that could result in the issuance of common stock were exercised or converted to common stock or resulting from the unvested outstanding restricted stock units ("RSUs"). The following tables reconcile the numerator and the denominator of the basic and diluted net income per share computation (in thousands, except for per share data): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 116,372 $ 180,568 $ 191,701 $ 296,170 Weighted-average shares outstanding: Basic 25,831 25,917 25,776 25,829 Dilutive effect of stock options and RSUs 895 1,035 966 1,154 Dilutive effect of warrants 3,865 2,982 3,995 2,901 Dilutive effect of convertible securities 3,669 3,791 4,033 3,731 Diluted 34,260 33,725 34,770 33,615 Earnings per share: Basic $ 4.51 $ 6.97 $ 7.44 $ 11.47 Dilutive effect of stock options and RSUs ( 0.12 ) ( 0.22 ) ( 0.22 ) ( 0.40 ) Dilutive effect of warrants ( 0.51 ) ( 0.62 ) ( 0.85 ) ( 0.99 ) Dilutive effect of convertible securities ( 0.48 ) ( 0.78 ) ( 0.86 ) ( 1.27 ) Diluted $ 3.40 $ 5.35 $ 5.51 $ 8.81 Shares of common stock issuable upon the exercise or conversion of certain securities have been excluded from our computation of EPS because the strike price or conversion rate, as applicable, of such securities was greater than the average market price of our common stock and, as a result, the effect of such exercise or conversion would have been anti-dilutive. Set forth below are the securities and the weighted-average number of shares of common stock underlying such securities that were excluded from our computation of EPS for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Warrants 2,123 2,980 1,991 3,058 Convertible Notes and Warrants Refer to Note 5, " Obligations ," for information about the Company's convertible notes and warrants and related conversion and strike prices. During periods in which the average market price of the Company's common stock is above the applicable conversion price of the Company's convertible notes, or above the strike price of the Company's outstanding warrants, the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted EPS. As a result, in periods where the average market price of the Company's common stock is above the conversion price or strike price, as applicable, under the if-converted method, the Company calculates the number of shares issuable under the terms of the convertible notes and the warrants based on the average market price of the stock during the period, and includes that number in the total diluted shares outstanding for the period. 22 Table of Contents 9. SEGMENT PERFORMANCE MEASURES AND EXPENSES 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. Our CODM evaluates company-wide performance based on multiple performance measures, including, but not limited to, net income. Our CODM does not generally evaluate our performance using asset or historical cash flow information. The table below provides the calculation of net income, which is the performance measure that is most consistent with GAAP, and the significant operating expenses included in this performance measure (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $ 260,170 $ 300,596 $ 465,586 $ 511,103 Less: Departmental expenses (a) 51,005 49,355 99,610 90,692 Depreciation and amortization 19,482 19,465 38,690 37,678 Intellectual property enforcement 25,417 11,963 42,922 18,941 Share-based compensation 24,103 11,836 34,442 21,334 Revenue share costs 924 2,550 28,422 5,199 Other non-operating income, net (b) ( 4,139 ) ( 5,607 ) ( 1,672 ) ( 5,994 ) Income tax provision 27,006 30,466 31,471 47,083 Net income $ 116,372 $ 180,568 $ 191,701 $ 296,170 (a) Includes personnel costs, consulting costs, outside services, administrative costs, and other operating expenses. (b) Includes interest income, interest expense, and other non-operating income and expenses . 10. OTHER INCOME, NET The amounts included in " Other income, net " in the condensed consolidated statements of income for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Interest and investment income $ 10,100 $ 8,828 $ 20,629 $ 18,092 Other 2,622 6,316 ( 1,307 ) 7,310 Other income, net $ 12,722 $ 15,144 $ 19,322 $ 25,402 23 Table of Contents