Earnings call transcript: InterDigital Q2 2025 beats expectations, stock rises

InterDigital Inc. (IDCC) reported its Q2 2025 earnings, significantly surpassing expectations with an earnings per share (EPS) of $6.52 compared to the forecasted $2.17, marking a surprise of over 200%. Revenue came in at $300 million, exceeding the expected $167.93 million. The company’s impressive performance is backed by robust fundamentals, with InvestingPro data showing an outstanding gross profit margin of 88.38% and a "GREAT" financial health score. Following these results, InterDigital’s stock rose by 6.04% in pre-market trading, reflecting strong investor confidence.

Key Takeaways

• InterDigital’s Q2 earnings and revenue far exceeded forecasts, showcasing robust financial performance.
• The company’s stock increased by 6.04% in pre-market trading, following the positive earnings report.
• New licensing agreements, particularly with Samsung, significantly contributed to revenue growth.
• InterDigital continues to lead in 6G technology development and has expanded its licensing reach in the smartphone and PC markets.
• The company projects a strong revenue and earnings outlook for the remainder of 2025.

Company Performance

InterDigital’s Q2 performance was marked by substantial financial gains, driven by strategic licensing agreements and technological advancements. The company has successfully expanded its market presence, now covering 80% of the smartphone market under license, up from 50% previously. This expansion, coupled with a new $1 billion, 8-year agreement with Samsung, has bolstered its financial standing. The company continues to innovate in 6G and AI integration into cellular networks, maintaining a competitive edge in the telecommunications sector.

Financial Highlights

• Revenue: $300 million, up significantly from the forecast of $167.93 million.
• Earnings per share: $6.52, compared to a forecast of $2.17.
• Adjusted EBITDA: $237 million, representing a 79% margin.
• Annualized Recurring Revenue (ARR): $553 million, a 44% increase year-over-year.
• Free Cash Flow: $92 million.

Earnings vs. Forecast

InterDigital’s Q2 2025 results showed a remarkable earnings surprise, with EPS exceeding expectations by over 200%. This significant beat is one of the largest in recent quarters, reflecting strong operational performance and successful strategic initiatives. The revenue surprise of 79% further underscores the company’s effective business model and market strategy.

Market Reaction

Following the earnings announcement, InterDigital’s stock saw a pre-market rise of 6.04%, with shares trading at $260. This movement reflects investor optimism about the company’s future growth prospects. According to InvestingPro data, the stock has delivered an impressive 102% return over the past year, though technical indicators suggest it’s currently in overbought territory. The stock’s performance is notable, considering its 52-week range, with a high of $277.95 and a low of $126.43, indicating strong recovery and potential for future appreciation. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value.

Outlook & Guidance

InterDigital has provided a positive outlook for the remainder of 2025, with revenue guidance set between $790 million and $850 million. The company expects adjusted EBITDA to range from $551 million to $569 million, and Non-GAAP EPS to be between $14.17 and $14.77. The projected Free Cash Flow may exceed $400 million, demonstrating strong financial health and operational efficiency.

Executive Commentary

CEO Laren Chin highlighted the company’s strategic focus on foundational technology and its valuable IP portfolio, stating, "Our beauty for our business model is we invest in foundational technology and then we build out a very strong and one of the most valuable IP portfolios in the industry." CFO Rich Breske emphasized the company’s multi-path approach, which supports its diverse licensing strategy across various tech sectors.

Risks and Challenges

• Potential IP-related legislation could impact licensing agreements and revenue streams.
• Market saturation in the smartphone sector may limit future growth opportunities.
• Macroeconomic pressures, such as inflation and exchange rate fluctuations, could affect financial performance.
• Ongoing litigation, including the Disney case, poses legal and financial risks.
• Technological advancements by competitors in 6G and AI could challenge InterDigital’s market position.

Q&A

During the earnings call, analysts focused on the impact of the Samsung arbitration and the company’s renewal strategies for licensing agreements. Executives also addressed concerns about potential IP-related legislation and outlined their ongoing litigation strategy with Disney, reassuring investors of their proactive approach to these challenges.

Full transcript - InterDigital Inc (IDCC) Q2 2025:

Conference Operator: Thank you for standing by. At this time, I would like to welcome everyone to InterDigital Second Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. Thank you.

I would now like to turn the conference over to Wayne Ford Garabrand, Head of Investor Relations.

Wayne Ford Garabrand, Head of Investor Relations, InterDigital: Thank you, Demi, and good morning, everyone. Welcome to InterDigital’s second quarter twenty twenty five earnings conference call. I am Raeford Garibrandt, Head of Investor Relations for InterDigital. With me on today’s call are Laren Chin, our President and CEO and Rich Breske, our CFO. Consistent with prior calls, we will offer some highlights about the quarter and the company and then open the call up for questions.

For additional details, you can access our earnings release and slide presentation that accompany this call on our Investor Relations website. Before we begin our remarks, I need to remind you that in this call, we will make forward looking statements regarding our current beliefs, plans and expectations, which are not guarantees of future performance and are made only as of the date hereof. Forward looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from results and events contemplated by such forward looking statements. These risks and uncertainties include those described in the Risk Factors section of our 2024 Annual Report on Form 10 ks and in our other SEC filings. In addition, today’s presentation may contain references to non GAAP financial measures.

Measures. Reconciliations of these non GAAP financial measures to the most directly comparable GAAP financial measures are included in the supplemental materials and the financial metrics tracker posted to the Investor Relations section of our website. With that taken care of, I will turn the call over to Liren.

Laren Chin, President and CEO, InterDigital: Thank you, Riffer. Good morning, Thanks for joining us today. This week, we announced the conclusion of our arbitration with Samsung, which finalized the largest agreement we have signed in our company history. And at the term of our eight year license lasting through 02/1930, Samsung will pay us more than $1,000,000,000 which equals to $131,000,000 per year and it’s an increase of 67% compared to our previous agreement. This excellent result demonstrate once again the value of foundational research, the strength of our IP portfolio and the momentum we have built in our licensing programs.

It also increased our annualized recurring revenue to an all time record of $553,000,000 an increase of 44% year over year. Our new long term Samsung agreement helped us deliver revenue, adjusted EBITDA and non GAAP EPS far exceeding the top end of our guidance. Building on the strengths of our second quarter result, the increased business momentum and the opportunity to make more progress over the balance of this year, we have raised the full year 2025 guidance to between $790,000,000 and $850,000,000 up $110,000,000 at midpoint. Rich will cover the numbers in more detail in his section. We are delighted with the result of this arbitration is another validation of how foundational our innovation is to our connected world.

Samsung is the world’s largest smartphone manufacturer and one of our longest licensees dating back almost thirty years. We look forward to continue our collaboration with Samsung, but we keep on driving innovation forward and sharing our technology. So the standard process and through our licensing programs. It’s worth noting that the new agreement does not cover Samsung’s digital TV and display monitors, which are part of a separate license that we announced early last year. Our new license means that the world’s two leading device manufacturer Apple and Samsung are now licensed to our portfolio through the end of this decade.

Following the recent agreement with major Chinese OEMs including Oppo and Vivo, we have clear momentum in our smartphone program where we have almost 80% of the global market under license and ARR from smartphone program of $465,000,000 which is another all time record. Staying with our smartphone program, we continue to make progress in our arbitration with Lenovo, which is processing in a timely fashion and according to plan. Our consumer electronics and IoT program, the new license agreement with HP which we signed at the start of the second quarter is another good example of the progress we are making in growing revenue outside the smartphone program. The agreement license HP personal computers to our Wi Fi and video decoding technology and we now have more than 50% of the PC market under license. With the HP contract, revenue from our CE and IoT program increased 175% in the second quarter to about $65,000,000 Counting the HP and Samsung agreement, the total contract value of license that we have signed since 2021 is now more than $4,000,000,000 Demonstrating the accelerating momentum of our IP as a service business model.

On the research front, the development of six gs is picking up steam and our engineers are at the forefront of dividing the foundational technology for the next generation of mobile. Our engineers are also leading the development of 60 standard with multiple working group chair position for three gs PPP. So wider integration of AI into cellular networks and the development of new technology such as integrated sensing and communication offers what could be an exciting new monetization opportunity for service providers and device manufacturers and make our patent portfolio even more valuable. We believe six gs will also further the penetration of cellular wireless in new verticals such as industrial IoT, smart city, healthcare and automobile where connectivity is increasingly important and we are creating new licensing opportunity for us. We excel not only in converting our innovation to broad patent portfolio, but also into one of the highest quality portfolio in the world.

Recently, we were ranked number two among all the global leaders in telecoms in terms of both quality and quantity of our IP portfolio by an IEEE report. With our research leadership and the breadth and depth our portfolio reflects, we are in a strong position to deliver value for our customers well into the next decade. Our long term success is also underpinned by our ability to acquire, retain and enhance our people. We continue to advance our talent strategy placing an emphasize on mentorship, ongoing training and leadership development. We believe that long term stability of our business and the continuous success put us in an excellent position as a destination for premier talents in our industry.

You can find more information in our 2025 Corporate Sustainability Report on our website. And with that, I hand you over to Rich.

Rich Breske, CFO, InterDigital: Thanks, Liren. Q2 was an exceptional quarter for InterDigital as we delivered all time record levels of annualized recurring revenue and non GAAP EPS. The results for the quarter far exceeded the top end of our guidance range with the upside driven by the favorable conclusion of our arbitration with Samsung, which we just received this week. This conclusion also resulted in a significant step up in ARR, catch up revenue and full year guidance for 2025. I’ll provide more detail on each of these items in a moment.

Revenue for the quarter was $300,000,000 which far exceeded the top end of our guidance of $170,000,000 and was driven by the Samsung arbitration award and HP license agreement. This compares to revenue of $224,000,000 in Q2 of last year when favorable court rulings and our enforcement against Lenovo helped generate $128,000,000 in catch up revenue. Let me take a second to discuss the impact of the Samsung arbitration award. Since entering into the agreement, we have been accruing revenue at the level of the prior agreement, which was $78,000,000 per year. We received the arbitration decision just a few days ago in Q3.

But since we had not yet closed the books on Q2, GAAP requires us to update our Q2 estimate based on the final decision. As a result, the award contributed $152,000,000 of revenue to Q2. The $152,000,000 of revenue was comprised of $33,000,000 of recurring revenue and $119,000,000 of catch up revenue to true up the prior nine quarters from 01/01/2023 to 03/31/2025. Turning to annualized recurring revenue. Our ARR increased 44% year over year to an all time high of $553,000,000 in Q2.

This was driven primarily by momentum in our smartphone program, where recent patent license agreements with Oppo, Vivo and Lenovo increased our share of the smartphone market under license from about 50% to roughly 80%. These agreements together with our excellent Samsung arbitration result increased our smartphone ARR 58% year over year from $294,000,000 in Q2 last year to $465,000,000 in Q2 this year. With smartphone ARR at $465,000,000 we are now drawing near our smartphone ARR goal of $500,000,000 by 2027. In CE and IoT, the HP agreement is just the latest example of the significant growth opportunities that exist beyond the smartphone market. And we believe we can more than double the ARR from CE and IoT by 02/1930.

Through the growth in smartphone and CE IoT, together with our massive opportunity in video services, we are making good progress toward our goal of $1,000,000,000 plus in ARR across all programs by 02/1930. And it’s important to remember that while ARR is a great metric to track the growth in our business, there is economic value above ARR alone. Over the last ten years, we have recognized $1,500,000,000 of catch up revenue. This has been tremendously valuable because we use the majority of that money to fund share repurchases over that time period. Today, we continue to have a lot of catch up opportunity remaining, which tends to be 100% gross margin as we pursue our goal of $1,000,000,000 of ARR by 02/1930.

Our adjusted EBITDA for the quarter was $237,000,000 and equates to an adjusted EBITDA margin of 79%, up from 71% in Q2 last year. Non GAAP EPS also came in at an all time high of $6.52 for Q2, well above the high end of our guidance range of $2.67 to $2.9 and powered by the strength of our financial model, where a high percentage of incremental revenue falls to the bottom line. Cash from operations was a robust $105,000,000 in Q2, resulting in free cash flow of $92,000,000 Consistent with our capital allocation priorities, we continue to maintain a fortress balance sheet, invest for growth and return excess capital to shareholders. In Q2, we returned $42,000,000 to shareholders through $26,000,000 in buybacks and $16,000,000 through our recently increased dividend. In July, we bought back another $15,000,000 of stock and made another $16,000,000 dividend payment, bringing total return of capital to almost $90,000,000 year to date.

In just the last 3.5, we have repurchased more than $05,000,000,000 of stock and we expect to continue to buy back shares over the remainder of this year. Looking forward to Q3, we expect recurring revenue will include $136,000,000 to $140,000,000 of revenue from existing contracts, including the new run rate related to Samsung. Any revenue from any new agreements we may sign over the balance of the quarter would be additive to these amounts. Based only on existing contracts, we expect adjusted EBITDA margin of about 52 and non GAAP diluted earnings per share of $1.52 to 1.72 As Liren noted, we are increasing our full year 2025 guidance based not only on our excellent results, but also on the opportunity to continue our progress. We now expect revenue in the range of $790,000,000 to $850,000,000 with adjusted EBITDA in a range of $551,000,000 to $569,000,000 and non GAAP earnings per share of $14.17 to $14.77 In addition, I’ll note that we previously communicated that we expected double digit growth in free cash flow for 2025 over the $212,000,000 level we reported in 2024.

Based on our updated expectations for strong free cash flow over the second half of the year, we now believe our free cash flow for full year 2025 could exceed $400,000,000 close to double 2024 levels. With that, I’ll turn it

Wayne Ford Garabrand, Head of Investor Relations, InterDigital: back to Rayford. Thanks, Rich. Before we move to Q and A, I’d like to mention that we’ll be attending a number of investor events in Q3, including the Jefferies Tech Conference, the Evercore Tech Conference and the Midwest IDEAS Conference, all in Chicago, as well as the Sidoti Conference, which is virtual. Please reach out to your representatives at those firms if you’d like to schedule a meeting. At this point, Demi, we are ready to take questions.

Conference Operator: Your first question comes from the line of Anja Soderstrom with Sidoti. Congratulations

Anja Soderstrom, Analyst, Sidoti: on the strong quarter here and outlook. I’m just curious, tax rate was a little bit How should we think about that going forward given this new revenue contributions?

Rich Breske, CFO, InterDigital: Yes. Thanks, Anya for your comment. Yes, the tax rate was a little bit lower. We are still evaluating the impacts of the new tax legislation, but generally think that they’re a net positive. We see our kind of long term tax rate still in the mid to high teens, but maybe a tick below what we might have thought otherwise.

But we continue to evaluate that.

Anja Soderstrom, Analyst, Sidoti: Okay. Thank you. And also there were some noise earlier this week or last week about some potential legislation that there would be some sort of tariffs or something on the IP. Do you have any comments around that or do you have anything built into your contract where you can pass that on or?

Laren Chin, President and CEO, InterDigital: Yes, Anya. Hey, this is Loren. I believe you’re referring to a Wall Street Journal article regarding a potential proposal. We actually don’t know any details. We are not exactly certain where it will go.

So, any details for the proposal for IP, we don’t think it’s a property for us to comment, but we are watching the situation pretty carefully and we have a very healthy open dialogue with key policymakers in Washington DC.

Anja Soderstrom, Analyst, Sidoti: Okay. Thank you. And then also your updated guidance for the full year that assumes some more catch up payment potentially, right?

Rich Breske, CFO, InterDigital: Yes, Anja. So when we look at our guidance and the updated guidance is no different than we’ve done in the past. We typically look at what we call a multi path approach. So there’s different combinations of different opportunities that we think we could bring across the line. And some of those opportunities would include catch up.

That’s right.

Anja Soderstrom, Analyst, Sidoti: Okay. Thank you. That was all for me.

Rich Breske, CFO, InterDigital: Thanks.

Conference Operator: Next question comes from the line of Scott Searle with ROTH Capital. Your line is open.

Scott Searle, Analyst, ROTH Capital: Hey, good morning. Thanks for taking my questions and congrats on getting Samsung across the finish line. Pete?

Laren Chin, President and CEO, InterDigital: Thanks, Scott.

Scott Searle, Analyst, ROTH Capital: Larry, looking at the wireless market now, you’ve got 80% of the market under license. You’re approaching your $500,000,000 target. I’m wondering how you’re thinking about the long term opportunity now with wireless. You’re starting to talk a little bit about six gs, about some AI related to that as well. Are there other avenues to monetize within the traditional wireless market and or in adjacencies, whether it be WiFi, Bluetooth, other connectivity protocols that you guys are thinking about to drive a figure higher than that $500,000,000 ARR target?

Laren Chin, President and CEO, InterDigital: Yes. Hey, Scott. Good morning. Yes, if you look at our smartphone program here, we are currently at about 80% market penetration. Our ARR as we just reported is about $465,000,000 And we still have three major accounts we are working on trying to get them signed regarding the top 10 customers.

So we feel very good about where we are, but Rich commented here, we feel we are very close to reaching our target on the smartphone side. Regarding the future of wireless, we are very optimistic about the strengths of our portfolio, but more important about the way we are leading six gs development. As I commented in my remark, we believe six gs will open up not just enabling more smartphone growth, but also open up adjacent area for verticals in smart city, industrial IoT, healthcare and a bunch of other industry where connectivity clearly will drive a lot of more work out options here. So we are optimistic these will open up new opportunity for us. But as of now, we don’t put a number to them yet.

Scott Searle, Analyst, ROTH Capital: Liren, just to follow-up on those comments, are you starting to invest pretty actively in some of those verticals and particularly smart city, industrial IoT healthcare? Or should we be expecting some incremental dollars in R and D going in that direction? And then just the quick update on the streaming opportunity with the over the top players. Can you give us an update in terms of engagements that you’re seeing at that level of ongoing dialogue? And maybe if there’s any update as it relates to the Disney litigation?

Thanks.

Laren Chin, President and CEO, InterDigital: Yes. Hey, Scott. So, beauty for our business model is we invest in foundational technology and then we build out a very strong and one of the most valuable IP portfolio in the industry. So, when we go license different verticals, we actually do not have to incur additional cost into these different verticals other than some licensing activity itself. So, that’s sort of the six gs development here.

Regarding the streaming side here, we are in continuous dialogue with all the major players. And as of today, we don’t have any real concrete progress to report yet. Regarding the Disney litigation, we have done a lot of work as you all worry it’s a multi jurisdictional enforcement activity. And we have done a lot of early stage progress and frankly have got multiple wins on the procedure side. And we have a substance file coming up in later this year and early next year.

Now you can see all the details they are 10 Q filing that’s on our website.

Scott Searle, Analyst, ROTH Capital: Hey, Laren, maybe just to quickly follow-up on

Laren Chin, President and CEO, InterDigital: that and then I’ll get

Scott Searle, Analyst, ROTH Capital: back in the queue. But given the Disney litigation, is that slowing down dialogue with any of the other players out there? Are they waiting to see the outcome there before they more actively engage and continue in their process? And second, the broad general timelines of when you would expect some sort of resolution. Is 2026 the timeframe of when we could expect an initial deal?

Anything from a timeline perspective would be helpful. Thanks.

Laren Chin, President and CEO, InterDigital: Yes. Hey, Scott, for the first half of your question here, we do not see Disney litigation that’s impacting our dialogue with other potential customers here. Regarding the timeline for Disney, it’s hard to predict exactly when a settlement may happen. We are always open for open dialogues even though sometime via email enforcement activity. And but sometimes certainly litigation takes longer time and sometimes takes shorter.

We have seen that on the smartphone side. So, but as always when we started our enforcement here, we are prepared to go all the way through, but we are always open for business dialogue in the meantime.

Scott Searle, Analyst, ROTH Capital: Great. Thanks so much. I’ll get back in the queue.

Wayne Ford Garabrand, Head of Investor Relations, InterDigital: Thanks.

Conference Operator: Next question comes from the line of Arjun Bhatia with William Blair. Your line is open.

Laren Chin, President and CEO, InterDigital: All

Arjun Bhatia, Analyst, William Blair: right. Thank you. And I’ll add my congrats on the Samsung outcome. Obviously, a big success there. Maybe if we can start there, Laren.

I’m curious just if you reflect on the outcome, what it says about your tech, your patent portfolio, because the 67% uplift, I think is well above kind of what we were expecting. A lot of investors were expecting and obviously the implied kind of royalty rates in that agreement from an economic perspective are quite strong. So what does it say about, I guess, for your technology, how you’re investing and then what might it mean for some of the other negotiations you’re having with other smartphone OEMs or you might have in the future, generally this year or even others that are not under contract yet? Thank you.

Laren Chin, President and CEO, InterDigital: Yes. Hey, Arjun, good morning. Yes, regarding the sensor arbitration readout, as we have stated in our press release as well as our earning remarks here, we are quite pleased with the readout. We believe it properly reflects the value of foundational research as well as our IP portfolio. And I do think our team has done a very good job conveying all the value of portfolio with arbitrator who in our opinion properly reached a conclusion.

And we also want to thank the Samsung team for their professionalism in this process. Regarding the 67% increase compared to the prior agreement, we think that’s very appropriate. Consider the prior agreement with a 10 agreement at the time didn’t really factor in the value of our five gs portfolio, as well as a lot of other innovations on videos and AI research we continue to do. I do think these are very valuable development for our program. And as you know Arjun in our program here a major license agreement tend to be use a comparable license for other customers waste time for renewal or sometime we time to sign up with the first customer for the first time.

So, believe it will have a positive impact for our overall program and we are really pleased about the outcome.

Arjun Bhatia, Analyst, William Blair: Perfect. That’s great to hear. And then maybe Rich to follow-up on that point a little bit. Just as we’re thinking about the changes to the model, I think the way you come up with guidance, obviously, it’s bit unique, but I imagine there was some, whether directly or indirectly, some Samsung catch up revenue based into your prior guidance. Is it possible at all to quantify what that was and how we should kind of just reflect on the change in Q3 and Q4 or sorry, Q3, the Q3 guidance that you provided relative to what the prior what was prior was previously implied in the back half numbers?

Rich Breske, CFO, InterDigital: Yes, I mean, the way I discuss it or describe it, Arjun, is under that multi path approach, we considered a range of potential outcomes for the Samsung result. And now that we’ve it’s no longer a range, it’s a point estimate, we have the result, right? And that along with the other progress that we’ve made, puts us in a position to update the guidance based on the new multi path that we see going forward.

Arjun Bhatia, Analyst, William Blair: Okay. Understood. Very helpful. And then sorry, one last one, if I can. Just when you have a big win like this and a kind of a step function change in outcome.

Can you just talk a little bit about what it means for your cost structure? Is there like a one time fee that you kind of recognize in expenses that when you get an outcome like this or are those costs relatively fixed?

Rich Breske, CFO, InterDigital: Yes. So Arjun, the thing that I love about our business is that we’ve made the investment that made this agreement possible over the last years or decades, right? We’ve been investing for a long time in smartphone, in four gs, five gs and the video acquisition and continued video research thereafter. So that’s what made that legacy investment as well as the ongoing investment we’re already making and would be making anyway is what makes this agreement possible. So, there really isn’t any incremental cost as a result of this agreement.

We true up some performance accruals and things like that, but it’s very, very small relative to the size of the agreement. So, it’s as I typically say, a lot of times new agreements or incremental value from renewals or 100% gross margin.

Arjun Bhatia, Analyst, William Blair: All right, perfect. Very helpful and congrats again to you and the team. Take care.

Rich Breske, CFO, InterDigital: Great, thanks.

Conference Operator: Next question comes from the line of Tal Liani with Bank of America. Your line is open.

Tal Liani, Analyst, Bank of America: Hi, guys. I’m trying to take the recurring revenue line and break it down just to understand. So this quarter is 138,000,000. What was the contribution of Samsung to this? And what was the expectation?

So going in, did you have any expectations of Samsung to be in recurring revenue?

Rich Breske, CFO, InterDigital: Yes. So, we had been booking Samsung at based on the prior agreement of 78,000,000. So we basically been booking just shy of $20,000,000 a quarter based on the new agreement. It’s now $33,000,000 of recurring revenue in the quarter.

Tal Liani, Analyst, Bank of America: Got it. As we go into the following quarter, assuming nothing else or can you just the recurring revenue line. What should we assume going forward in terms of the growth trajectory? And again, I know the way you guide is you don’t add any other agreements. So, on the current agreements, what are the expected trends for recurring revenues?

Rich Breske, CFO, InterDigital: Yes. So, that’s based on the current agreements, that’s really what our guide is limited to at 136 to 140. That’s based on our existing recurring revenue. And then anything that we’re able to sign or renew or whatever thereafter or above that would be additive.

Tal Liani, Analyst, Bank of America: Right. No, sorry. This is for the following quarter, which is in line with the 01/1938 this quarter. So, understand it. If I try to forecast for next year, and again, on the current agreements, how should recurring revenue trend if that’s my baseline?

I’m trying to understand my baseline and then do some assumptions about anything else. So, how is the recurring revenue line progresses if you don’t get any other contract?

Laren Chin, President and CEO, InterDigital: Todd, let me take this question and see if that makes sense. So if you look at here we are, right, we are end of Q2. We are projecting new deals will be down for the rest of the year. But as we said commented here, we don’t really know exactly which combination will be. So therefore as a year progress and then we will hopefully by Q4 having a very clear picture on where we are.

Leading into next year, we also disclosed in our filings about a few contract currently scheduled to expire. And you can see on our website. And so if you take out those expiration contracts that would be a starting point for next year assuming the current contract expired. But as you know, we always try to get them renewed and very often we have success to get them renewed before they expire. So that’s sort of the stepping function for starting of next year.

Tal Liani, Analyst, Bank of America: And normally, again, historically, when contracts expire and you renew them, is there growth or is there contraction in the contract? Like, this time it was Samsung, there was like, no 40 no, more than forty fifth, 60% growth or whatever with the recurring revenue quarterly recurring revenue at the renewal of of Samsung. What happens normally with renewals?

Laren Chin, President and CEO, InterDigital: Yes. Totally, it actually depends on the situation of certain customer. I’ll give you a couple of examples here. As you mentioned here, Samsung, the last contract was very long term contract in fact in five gs. So, times through arbitration, we are able to get a 67% increase compared to the prior one.

The other example is the Apple contract. As we have discussed before, the previous Apple contract was a longer term, but not as long as Samsung. So we renew the Apple contract in September 2022. And that contract on average was 15% higher than the prior contract. So, it really depend on the situation, depend on where the vendor is, how stable their business, how they increase volume, how they use more of our technology.

It’s a combination of different factors top. But based on those two examples here, do have success record in renew and higher value if that’s appropriate.

Tal Liani, Analyst, Bank of America: Got it. Perfect. Thank you so much.

Anja Soderstrom, Analyst, Sidoti: And

Conference Operator: that concludes the question and answer session. I would now turn the call back over to Liren Chen, CEO for closing remarks.

Laren Chin, President and CEO, InterDigital: Thank you, Demi. Before we close, I’d like to thank our employees for their dedication and contribution to InterDiesel, as well as our many partners and licensee for a strong quarter. Thank you all to everyone who joined today’s call and we look forward to updating you on our progress next quarter.

Conference Operator: This concludes today’s conference call. You may now disconnect.

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