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What changed in InterDigital, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of InterDigital, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+351 added−343 removedSource: 10-K (2026-02-05) vs 10-K (2025-02-06)

Top changes in InterDigital, Inc.'s 2025 10-K

351 paragraphs added · 343 removed · 259 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

68 edited+24 added−31 removed59 unchanged
Biggest changeWe believe our talent drives our business success and we focus on investing in our talent practices to provide the most benefit to our employees. Our Talent philosophy focuses on cultivating a culture of high performance, career development, and employee engagement, empowering our workforce its full potential.
Biggest changeOur Talent philosophy focuses on cultivating a culture of high performance, career development, and employee engagement, empowering our workforce to reach its full potential. We invest in employee development and engagement through our talent practices, leadership development resources, and performance management processes. In 2025, we refreshed our company values based on employee feedback to align with our evolving culture.
As an early and ongoing participant in the digital wireless market, InterDigital has developed pioneering solutions for the cellular and Wi-Fi technologies that enable wireless transmission of voice, data and multimedia content in use today. That early involvement and our continued development of advanced digital wireless technologies have enabled us to create our significant worldwide portfolio of patents.
As an early and ongoing participant in the digital wireless market, InterDigital has developed pioneering solutions for cellular and Wi-Fi technologies that enable wireless transmission of voice, data and multimedia content in use today. That early involvement and our continued development of advanced digital wireless technologies have enabled us to create our significant worldwide portfolio of patents.
Our Nominating and Corporate Governance Committee has primary oversight over environmental, social and other sustainability matters, which it exercises in conjunction with the committees of the Board. In addition, our Chief Financial Officer oversees a committee of senior executives that steers the process of setting purpose, strategies, policies and goals related to economic, environmental and social topics.
Our Nominating and Corporate Governance Committee has primary oversight over environmental, social and other sustainability matters, which it exercises in conjunction with the committees of the Board. In addition, our Chief Financial Officer oversees a committee of senior executives that steers the process of setting strategies, policies and goals related to economic, environmental and social topics.
Our video technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the research and innovation unit and patent licensing business of visual technology industry leader Technicolor SA and patents and applications created by internal development.
Our video technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the research and innovation unit and patent licensing business of visual technology industry leader Technicolor SA (the "Technicolor Patent Acquisition") and patents and applications created by internal development.
We have been actively engaged in video standards development work in the ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET).
We have been actively engaged in video codec standards development work in the ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET).
Our portfolio includes numerous patents and patent applications that we believe are or may be essential to existing standards, or may become essential to future standards, established by many Standards Development Organizations ("SDOs"). We have contributed technology to wireless standards including the 3G, 4G, and 5G cellular standards and the IEEE 802 suite of standards.
Our portfolio includes numerous patents and patent applications that we believe are or may be essential to existing standards, or may become essential to future standards, established by many Standards Development Organizations ("SDOs"). We have contributed technology to wireless standards including the 3G, 4G, 5G, and the development of 6G cellular standards and the IEEE 802.11 suite of standards.
Additional information about our revenues, profits, and assets, as well as additional financial data, is provided in the Consolidated Financial Statements and accompanying Notes in Part II, Item 8, of this Form 10-K.
Additional information about our revenue, profits, and assets, as well as additional financial data, is provided in the Consolidated Financial Statements and accompanying Notes in Part II, Item 8, of this Form 10-K.
InterDigital is also a leader in key video technologies, including 2D video coding and emerging technologies such as immersive video and AI-based video coding. Our current research efforts are focused on a variety of areas related to future technology and devices, including cellular wireless and WiFi technologies, advanced video coding and transmission, and AI.
InterDigital is also a leader in key video technologies, including 2D video coding and emerging technologies such as immersive video and AI-based video coding. Our current research efforts are focused on a variety of areas related to future technology and devices, including cellular wireless and Wi-Fi technologies, advanced video coding and transmission, and AI.
In addition, certain manufacturers have sought to limit aggregate licensing fees or rates for SEPs. Sustainability We believe our innovation provides the framework for a future increasingly shaped by the profound convergence of wireless, video, and AI technologies.
In addition, certain manufacturers have sought to limit aggregate licensing fees or rates for SEPs. 10 Table of Contents Sustainability We believe our innovation provides the framework for a future increasingly shaped by the profound convergence of wireless, video, and AI technologies.
Competition With respect to our technology development activities and resulting commercialization efforts, we face competition from companies, including in-house development teams at other wireless and video technology companies, consumer electronics device companies, semiconductor companies, wireless operators, video streaming and cloud service companies, and other technology providers, developing other and similar technologies that are competitive with our technologies that we may market or set forth into the standards-setting arena.
Competition With respect to our technology development activities and resulting commercialization efforts, we face competition from companies, including other wireless and video technology companies, consumer electronics device companies, semiconductor companies, wireless operators, video streaming and cloud service companies, and other technology providers, developing other and similar technologies that are competitive with our technologies that we may market or set forth into the standards-setting arena.
Upon entering into a new patent license agreement, consideration should be paid for sales made prior to the period in which the agreement was executed, to the extent those past sales were previously unlicensed (i.e., catch-up revenues), in addition to royalties or license fees on licensed products sold during the term of the agreement.
Upon entering into a new patent license agreement, consideration should be paid for sales made prior to the period in which the agreement was executed, to the extent those past sales were previously unlicensed (i.e., catch-up revenue), in addition to royalties or license fees on licensed products and services sold during the term of the agreement.
We have successfully entered into patent license agreements with many of the leading mobile communications and consumer electronics companies globally, including Amazon Technologies, Inc. ("Amazon"), Apple Inc. ("Apple"), Lenovo Group Limited ("Lenovo"), Google LLC ("Google"), LG Electronics, Inc. ("LG"), Guangdong OPPO Mobile Telecommunications Corp., Ltd. ("OPPO"), Samsung Electronics Co., Ltd.
We have successfully entered into patent license agreements with many of the leading mobile communications and consumer electronics companies globally, including Apple Inc. ("Apple"), Google LLC ("Google"), Honor Device Co., Ltd. ("Honor"), Lenovo Group Limited ("Lenovo"), LG Electronics, Inc. ("LG"), Guangdong OPPO Mobile Telecommunications Corp., Ltd. ("OPPO"), Samsung Electronics Co., Ltd.
In addition, a party might file a declaratory judgment action to seek a court's declaration that our patents are invalid, unenforceable, not infringed by the other party's products or are not SEPs. Our response to such a declaratory judgment action may include claims of infringement.
In addition, a party might file a declaratory judgment action to seek a court's declaration that our patents are invalid, unenforceable, not infringed by the other party's products or are not SEPs, or that certain of our patents are subject to FRAND obligations. Our response to such a declaratory judgment action may include claims of infringement.
As of December 31, 2024, InterDigital's wholly owned subsidiaries held a portfolio of more than 33,000 patents and patent applications related to wireless communications, video coding, display technology, and other areas relevant to communications and entertainment products and services.
As of December 31, 2025, InterDigital's wholly owned subsidiaries held a portfolio of more than 38,000 patents and patent applications related to wireless communications, video coding, display technology, and other areas relevant to communications and entertainment products and services.
We intend to protect our investment in this innovation by seeking patent coverage in countries around the world for the technologies we develop. • Maintain a collaborative relationship with key industry players and worldwide standards bodies.
We intend to protect our investment in this innovation by seeking patent coverage in countries around the world for the technologies we develop. 4 Table of Contents • Maintain a collaborative relationship with key industry players and worldwide standards bodies.
Continued growth beyond 2024 is anticipated due in part to the introduction of new technologies and form factors. In addition to smartphones there is a large universe of other consumer electronic devices and ecosystems, with a mix of mature and emerging, as well as consolidated and fragmented, device segments.
Continued growth beyond 2025 is anticipated due in part to the introduction of new technologies and form factors. 7 Table of Contents In addition to smartphones, there is a large universe of other consumer electronic devices and ecosystems, with a mix of mature and emerging, as well as consolidated and fragmented, device segments.
Those efforts, and the knowledge gained through them, provide direction for internal development efforts and help guide technology and intellectual property sourcing through partners and other external sources. 4 Table of Contents • Grow our patent-based revenue.
Those efforts, and the knowledge gained through them, provide direction for internal development efforts and help guide technology and intellectual property sourcing through partners and other external sources. • Grow our patent-based revenue.
Since December 2017, Avanci has primarily focused on the automotive market, and has signed patent license agreements with BMW Group, Audi, Porsche, Volkswagen, and Volvo Cars, among others, collectively representing over 80% of annual connected car shipments.
Since December 2017, Avanci has primarily focused on the automotive market, and has signed patent license agreements with BMW Group, Audi, Ford, Toyota, BYD, and Volvo Cars, among others, collectively representing over 80% of annual connected car shipments.
We are developing evolutionary and revolutionary solutions that enable connectivity in both licensed and unlicensed spectrum, terrestrial and non-terrestrial networks to provide ubiquitous coverage, across a large range of frequencies up to the terahertz (THz) wave bands. Segments outside of 3GPP primarily fall within the scope of the IEEE 802 for WiFi devices and IETF standards for Internet protocols.
We are developing evolutionary and revolutionary solutions that enable connectivity in both licensed and unlicensed spectrum, terrestrial and non-terrestrial networks to provide ubiquitous coverage, across a large range of frequencies up to the terahertz (THz) bands. 5 Table of Contents Segments outside of 3GPP primarily fall within the scope of the IEEE 802.11 for Wi-Fi devices and IETF standards for Internet protocols.
Under the Madison Arrangement, Technicolor and Sony combined portions of their respective DTV and CDM patent portfolios and created a combined licensing opportunity for DTV and CDM manufacturers.
Under the Madison Arrangement, InterDigital and Sony combine portions of their respective DTV and CDM patent portfolios and have created a combined licensing opportunity for DTV and CDM manufacturers.
IoT/Automotive is an important and relatively new market that is expected to result in a significant increase in the number of connected devices worldwide and unlock new business capabilities. Total global cellular IoT device shipments are expected to grow from approximately 450 million in 2024 to approximately 700 million by 2028.
IoT/Automotive is an important and relatively new market that is expected to result in a significant increase in the number of connected devices worldwide and unlock new business capabilities. Total global cellular IoT device shipments are expected to grow from approximately 550 million in 2025 to approximately 800 million by 2029.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview - Critical Accounting Policies and Estimates - Revenue Recognition - Patent License Agreements .” Licensing Through Platforms As part of the Technicolor Patent Acquisition, we assumed Technicolor's rights and obligations under a joint licensing program with Sony relating to digital televisions ("DTVs") and standalone computer display monitors ("CDMs") (such program, the "Madison Arrangement"), including Technicolor's role as exclusive licensing agent.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview - Critical Accounting Policies and Estimates - Revenue Recognition - Patent License Agreements .” Licensing Through Platforms We are part of a joint licensing program with Sony relating to digital televisions ("DTVs") and standalone computer display monitors ("CDMs") (such program, the "Madison Arrangement"), and act as exclusive licensing agent.
Our business success is dependent on our ability to attract, grow, and retain top talent, such as specialized engineering and other technical talent. Technology Research and Development InterDigital R&I InterDigital operates a diversified research and development operation, InterDigital Research & Innovation ("InterDigital R&I").
Our business success is dependent on our ability to attract, grow, and retain top talent, such as specialized engineering and other technical talent; patent portfolio creation and enhancement experts, IP licensing and enforcement talent and other business and operational talent. Technology Research and Development InterDigital R&I InterDigital operates a diversified research and development operation, InterDigital Research & Innovation ("InterDigital R&I").
From time to time, these audits reveal underreporting or underpayments under the applicable agreements. In such cases, we seek payment for the amount owed and enter into negotiations with the licensee to resolve the discrepancy. For a discussion of our revenue recognition policies with respect to patent license agreements, see “Item 7.
In such cases, we seek payment for the amount owed and enter into negotiations with the licensee to resolve the discrepancy. For a discussion of our revenue recognition policies with respect to patent license agreements, see “Item 7.
We have a rich history in developing advanced technologies that address the challenges of video products and services. Specifically, in the area of video research, we have a long history of research and innovation in technologies that provide the basis for nearly all of the modern video codecs.
Specifically, in the area of video research, we have a long history of research and innovation in technologies that provide the basis for nearly all of the modern video codecs.
("Samsung"), Sony Corporation of America ("Sony"), and Xiaomi Corporation ("Xiaomi"), among others. Service-based Licensing Revenue Opportunities We also believe that companies providing video streaming and certain other cloud services require a license under our patents, and we will seek to license our relevant assets to such companies.
("Samsung"), vivo Mobile Communication Co., Ltd ("vivo"), and Xiaomi Corporation ("Xiaomi"), among others. 6 Table of Contents Service-based Licensing Revenue Opportunities We also believe that companies providing video streaming and certain other cloud services require a license under our patents, and we seek to license our relevant assets to such companies.
The agreement licenses Samsung’s digital TVs and computer display monitors under InterDigital's joint licensing program with Sony and includes licenses to key technologies including ATSC 3.0, as well as licenses under InterDigital’s patents including HEVC, VVC and Wi-Fi. In June 2024, we signed a new device license agreement with Google.
We also recognized revenue from the patent license agreement signed in 2024 with Samsung (the "Samsung TV agreement"). The Samsung TV agreement licenses Samsung’s digital TVs and computer display monitors under InterDigital's joint licensing program with Sony and includes licenses to key technologies including ATSC 3.0, as well as licenses under InterDigital’s patents including HEVC, VVC and Wi-Fi.
InterDigital ranks among the industry leaders for highest patent quality for 5G and video codec patents. 5G technology is designed to efficiently use energy throughout its ecosystem and will play a significant role in promoting and attaining sustainability goals. We have published white papers exploring how 5G and the emerging IoT ecosystem might shape sustainability efforts for the ICT industry.
InterDigital ranks among the industry leaders for highest patent quality for 5G and video codec patents. 5G and video codec technology is designed to efficiently use energy throughout its ecosystem and will play a significant role in promoting and attaining sustainability goals.
The foregoing discussion includes information regarding sustainability matters that we believe may be of interest to our shareholders generally. We recognize that certain other stakeholders (such as customers, employees and non-governmental organizations), as well as certain of our shareholders, may be interested in more detailed information on these topics.
We recognize that certain other stakeholders (such as customers, employees and non-governmental organizations), as well as certain of our shareholders, may be interested in more detailed information on these topics.
Our issued patents expire at differing times ranging from 2025 through 2044. We generally receive newly-issued patents on a weekly basis, which further extend the coverage of newly developed technologies and expiration dates of our patents.
We generally receive newly-issued patents on a weekly basis, which further extend the coverage of newly developed technologies and expiration dates of our patents.
We have contributed technology to video standards including standards established by ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others.
We have contributed technology to video standards including standards established by ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others. We also develop technologies and associated patents enabling high dynamic range (HDR) production, distribution and display solutions.
We will seek to bring such technologies, as well as other technologies we may develop or acquire, to market through various methods including technology licensing, joint ventures and partnerships. • Attract and retain top talent in wireless, video and AI research, patent portfolio creation, and licensing.
We will seek to bring such technologies, as well as other technologies we may develop or acquire, to market through various methods including technology licensing, joint ventures and partnerships. • Attract, cultivate, and retain top talent to build and grow our business.
When we include claims of infringement in a patent infringement lawsuit, a favorable ruling for the Company can result in the payment of monetary damages for past manufacture, use and/or sale of the patented invention, the setting of terms and conditions for a license, issuance by the court of an injunction enjoining the infringer from manufacturing, using and/or selling infringing products and/or a declaration of FRAND compliance. 9 Table of Contents Contractual Arbitration Proceedings We and our licensees, in the normal course of business, may have disagreements as to the rights and obligations of the parties under applicable agreements.
When we include claims of infringement in a patent infringement lawsuit, a favorable ruling for the Company can result in the payment of monetary damages for past manufacture, use and/or sale of the patented invention, the setting of terms and conditions for a license, issuance by the court of an injunction enjoining the infringer from manufacturing, using and/or selling infringing products and/or a declaration of FRAND compliance.
While our business activities do not entail the same concerns related to manufacturing or raw materials sourcing and disposal, our corporate sustainability strategy addresses the following: • investing in best practices to track and reduce our carbon footprint, including environmental considerations, and reporting related to data center needs; • investigating and reducing unnecessary energy consumption; • continuing to manage our environmental footprint with our office improvements; and • supporting our employee community in reducing commuting impact through embracing a hybrid office schedule and offering mobility programs.
While our business activities do not entail the same concerns related to manufacturing or raw materials sourcing and disposal, our corporate sustainability strategy addresses the following: • investing in best practices to track and reduce our carbon footprint, including environmental considerations, and reporting related to data center needs; • investigating and reducing unnecessary energy consumption; and • continuing to manage our environmental footprint with our office improvements As a pure research business, we consider our carbon impact through our “handprint” and the ways our innovation and contributions to global standards empower energy efficiencies and sustainable outcomes.
The purpose of such a proceeding is to secure a judgment that can be used for, if need be, seizing assets of the other party.
The party securing an arbitration award may seek to have that award confirmed as a judgment through an enforcement proceeding. The purpose of such a proceeding is to secure a judgment that can be used for, if need be, seizing assets of the other party.
In 2023, we began recognizing revenue for Samsung at a conservative level consistent with the revenue we recognized from our patent license agreement that expired on December 31, 2022. We believe that it is likely the arbitration award will exceed the conservative estimate and require a true-up at the time of the award.
In 2023, we began recognizing revenue for Samsung at a conservative level consistent with the revenue we recognized from our patent license agreement that expired on December 31, 2022.
Our IEEE 802 standards-based inventions are used in devices that are certified for WiFi 4/5/6/7 and provide improvements in spectral efficiency, higher throughput, reduced latency, energy efficiency and many other features.
Our IEEE 802.11 standards-based inventions are used in devices that are certified for Wi-Fi 4/5/6/7 and provide improvements in spectral efficiency, higher throughput, reduced latency, energy efficiency, and many other features. We are developing new technologies towards Wi-Fi 8 by continuing novel innovations and participation in IEEE 802.11 standards and Wi-Fi Alliance forums.
Patent Infringement and Declaratory Judgment Proceedings From time to time, if we believe a party is required to license our patents in order to manufacture, use and/or sell certain products and such party refuses to do so, we may agree with such party to have royalties or other terms set by third party adjudicators (such as arbitrators) or, in certain circumstances, we may institute legal action against them.
The term of the vivo patent license agreement runs through June 30, 2028. Patent Infringement and Declaratory Judgment Proceedings From time to time, if we believe a party is required to license our patents in order to manufacture, use and/or sell certain products and such party refuses to do so, we may in certain circumstances, institute legal action against them.
Parties to arbitration might have the right to have the award reviewed in a court of competent jurisdiction; however, based on public policy favoring the use of arbitration, it is generally difficult to have arbitration awards vacated or modified. The party securing an arbitration award may seek to have that award confirmed as a judgment through an enforcement proceeding.
Arbitration proceedings can be resolved through an award rendered by the arbitrators or by settlement between the parties. Parties to arbitration might have the right to have the award reviewed in a court of competent jurisdiction; however, based on public policy favoring the use of arbitration, it is generally difficult to have arbitration awards vacated or modified.
Our patented inventions have also been implemented in a wide variety of services, such as video streaming, user generated content sharing, video conferencing, video gaming, and other cloud-based services. InterDigital derives revenues primarily from licensing our patented innovations. In 2024 and 2023, our total revenues were $868.5 million and $549.6 million, respectively.
Our patented inventions have also been implemented in a wide variety of services, such as video streaming, user generated content sharing, video conferencing, video gaming, and other cloud-based services.
Patent Portfolio As of December 31, 2024, our patent portfolio consisted of more than 33,000 patents and patent applications worldwide. The patents and applications comprising our portfolio relate predominantly to cellular wireless standards, including 3G, 4G and 5G technologies, other wireless standards, including 802.11 (Wi-Fi) technology, and a variety of video technologies and standards, such as HEVC and VVC.
The patents and applications comprising our portfolio relate predominantly to cellular wireless standards, including 4G and 5G technologies, other wireless standards, including 802.11 (Wi-Fi) technology, and a variety of video technologies and standards, such as HEVC and VVC. Our issued patents expire at differing times ranging from 2026 through 2045.
Collectively, the Video Services market is expected to grow from approximately $370 billion of annual revenue in 2024 to approximately $500 billion of annual revenue by 2027. 7 Table of Contents Overview of Standardization To achieve economies of scale and support interoperability among different participants, many wireless and consumer electronics products have been designed to operate in accordance with certain industry standards and common technical specifications.
Overview of Standardization To achieve economies of scale and support interoperability among different participants, many wireless and consumer electronics products have been designed to operate in accordance with certain industry standards and common technical specifications.
Automobiles represent a significant opportunity within the IoT market, with approximately 60 million connected vehicles shipped in 2024, which is expected to grow significantly in the future. Video Services, a rapidly growing market, encompass a wide range of consumer video entertainment platforms, including SVOD, AVOD, Virtual Multichannel Video Programming Distributor ("vMVPD"), Free Ad-Supported Streaming TV ("FAST"), and social media platforms.
Video Services, a rapidly growing market, encompass a wide range of consumer video entertainment platforms, including SVOD, AVOD, Virtual Multichannel Video Programming Distributor ("vMVPD"), Free Ad-Supported Streaming TV ("FAST"), and social media platforms. Collectively, the Video Services market is expected to grow from approximately $475 billion of annual revenue in 2025 to approximately $675 billion of annual revenue by 2029.
The agreement sets forth terms covering Apple's business, including its sale of 3G, 4G, and 5G cellular and wireless-enabled products. The term of the Apple PLA extends through September 30, 2029. In 2024, we entered into the above-noted patent license agreement with OPPO.
The agreement sets forth terms covering Apple's business, including its sale of 3G, 4G, and 5G cellular and wireless-enabled products. The term of the Apple PLA extends through September 30, 2029. In 2025, we signed a new multi-year, worldwide, non-exclusive, royalty-bearing license agreement with vivo, a major Chinese smartphone vendor.
However, the definitions may evolve or change over time, including after we have characterized certain transactions. Business Activities 2024 Patent Licensing Activity During 2024, we entered into fourteen patent license agreements as discussed below. Direct Licenses In January 2024, we signed a patent license agreement with Samsung Electronics (the "Samsung TV agreement").
However, the definitions may evolve or change over time, including after we have characterized certain transactions. Business Activities 2025 Patent Licensing Activity During 2025, we entered into eight patent license agreements as discussed below. Direct Licenses In 2025, we signed new multi-year, worldwide, non-exclusive, royalty-bearing license agreements with two major Chinese smartphone vendors, vivo and Honor.
To succeed in the global marketplace, we require a highly educated, skilled, and specialized workforce, and we believe maintaining a diverse and inclusive environment is essential. We are a company of world-class inventors that strive to foster a diverse and stimulating environment where creative, intelligent, and ambitious people can develop and grow.
Our work in advancing wireless, video, and AI technologies requires a highly educated, skilled, and specialized workforce, and we believe an inclusive environment supports collaboration and innovation. We are a company of world-class inventors, representing more than 60 countries, that strive to foster a diverse and stimulating environment where creative, intelligent, and ambitious people can develop and grow.
Additional information regarding revenue concentrations is provided in this Annual Report in Note 4, " Segment and Concentration Information " in the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K. 8 Table of Contents In 2022, we agreed to renew our patent license agreement with Samsung and enter into binding arbitration to determine the final terms of the license, including the amount payable by Samsung under the new agreement.
Additional information regarding revenue concentrations is provided in this Annual Report in Note 4, " Segment and Concentration Information " in the Notes to Consolidated Financial Statements included in Part II, Item 8, of this Form 10-K.
The smartphone market, with an estimated 1.2 billion units shipped worldwide in 2024, is driven by several large, global brands. The market rebounded in 2024 after several stagnant years due to the continued global uptake of 5G smartphones as well as the migration from feature phones to smartphones in emerging regions.
The smartphone market once again grew in 2025 after several stagnant years due to the continued global uptake of 5G smartphones as well as the migration from feature phones to smartphones in emerging regions.
As of December 31, 2024, we had approximately 430 employees worldwide, of whom approximately 220 employees based outside of the United States, nearly all of whom were full-time. Our employees in France are represented by works councils and are subject to collective bargaining agreements.
Our Human Capital Committee is responsible for overseeing our policies and strategies related to culture and human capital. As of December 31, 2025, our global workforce included approximately 460 employees, with approximately 240 employees based outside the United States; nearly all were full-time. Our employees in France are represented by works councils and are subject to collective bargaining agreements.
Those efforts have focused on H264/Advanced Video Coding, H.265/High Efficiency Video Coding ("HEVC") versions 1 to 4, as well as development of the H.266/VCC and the MPEG Immersive (MPEG-I) standards suite.
Those efforts have focused on H.264/Advanced Video Coding, H.265/High Efficiency Video Coding ("HEVC") versions 1 to 4, as well as development of the H.266/VVC and the MPEG Immersive (MPEG-I) standards suite. InterDigital R&I is now conducting research in groundbreaking technologies preparing for the next generation of video codecs beyond VVC using both traditional and AI-based techniques.
Our research and development activities are conducted primarily in facilities located in Conshohocken, Pennsylvania; New York, New York; Los Altos, California; Montreal, Canada; London, United Kingdom; and Rennes, France. We are also a party to leases for several smaller research and/or office spaces, including in Melville, New York; Indianapolis, Indiana; Brussels, Belgium; Espoo, Finland; Paris, France, and Beijing, China.
We are also a party to leases for several smaller research and/or office spaces, including in Melville, New York; Indianapolis, Indiana; Brussels, Belgium; Espoo, Finland; Paris, France, Ottawa, Canada; and Beijing, China. In addition, we own an administrative office space in Washington, District of Columbia.
In arbitration, licensees may seek to assert various claims, defenses, or counterclaims, such as claims based on waiver, promissory estoppel, breach of contract, fraudulent inducement to contract, antitrust, and unfair competition. Arbitration proceedings can be resolved through an award rendered by the arbitrators or by settlement between the parties.
Our patent license agreements typically provide private confidential arbitration as the mechanism for resolving disputes with our licensees. In arbitration, licensees may seek to assert various claims, defenses, or counterclaims, such as claims based on waiver, promissory estoppel, breach of contract, fraudulent inducement to contract, antitrust, and unfair competition.
Almost all of our patent license agreements provide for the payment of royalties based on sales of licensed products designed to operate in accordance with particular standards (convenience-based licenses), as opposed to the payment of royalties if the manufacture, sale or use of the licensed product infringes one of our patents (infringement-based licenses). 6 Table of Contents Our variable royalty license agreements typically contain provisions that give us the right to audit our licensees' books and records to ensure compliance with the licensees' reporting and payment obligations under those agreements.
Almost all of our patent license agreements provide for the payment of royalties based on sales of licensed products and services (convenience-based licenses), as opposed to the payment of royalties if the manufacture, sale or use of the licensed product infringes one of our patents (infringement-based licenses).
Nothing on our website, including the Consolidated EEO-1 reports and our Corporate Sustainability Report, or any sections thereof, shall be deemed incorporated by reference into this Annual Report.
None of the information contained on our website or any other website referenced herein, including any reports or documents contained therein and referenced in this Annual Report, shall be deemed incorporated by reference into this Annual Report.
We welcome this development as it incentivizes potential licensees to negotiate in a timely and reasonable fashion as well as providing a necessary balance to FRAND negotiations. Enforcement of our patent portfolio has typically taken the form of a patent infringement lawsuit or an administrative proceeding, such as a Section 337 proceeding before the U.S.
We welcome this development as it incentivizes potential licensees to negotiate in a timely and reasonable fashion as well as providing a necessary balance to FRAND negotiations.
For example, we could have a disagreement with a licensee as to the amount of reported sales and royalties. Our patent license agreements typically provide for private confidential arbitration as the mechanism for resolving disputes with our licensees.
Contractual Arbitration Proceedings We and our licensees, in the normal course of business, may have disagreements as to the rights and obligations of the parties under applicable agreements. For example, we could have a disagreement with a licensee as to the amount of reported sales and royalties.
We encourage stakeholders to review the “Human Capital” section of our most recent Corporate Sustainability Report, available on our website, for further details on our Human Capital programs and initiatives, which includes our most recent Consolidated EEO-1 reports detailing our workforce composition.
The foregoing discussion is intended to address human capital matters of interest to shareholders generally. Stakeholders seeking additional detail are encouraged to review the “Human Capital” section of our most recent Corporate Sustainability Report available on our website, which includes our most recent Consolidated EEO-1 reports.
Our total rewards plans include base salary, short- and long-term incentives, healthcare benefits, retirement savings plans, well-being programs, hybrid work arrangements, and both monetary and social recognition across our global locations. In addition to comprehensive health benefits, employees may have access to location-specific perks, such as subsidized fitness programs, commuter benefits, wellness incentives, tuition reimbursement, and professional development opportunities.
Total rewards plans generally include base salary, short- and long-term incentives, healthcare benefits, retirement savings plans, well-being programs, and hybrid work arrangements, and both monetary and social recognition across our global locations. We routinely review our programs to support talent attraction and retention. • Talent and Culture.
Among other things, this means aligning our standards to the United Nations’ Sustainable Development Goals and its underlying principles around the environment, the workforce, anti-corruption, and human rights. 10 Table of Contents We are committed to driving positive progress towards reducing the environmental footprint that the deployment of 5G, wireless networks, and other video technologies will bring.
We are committed to driving positive progress towards reducing the environmental footprint that the deployment of 5G, wireless networks, and other video technologies will bring.
We aim to create an environment that attracts, engages, and retains a talented workforce that drives the company’s growth and long-term sustained success. Our Human Capital Committee is responsible for overseeing our policies and strategies related to culture and human capital.
Human Capital We are committed to making InterDigital an exceptional place to work, fostering a workplace where all employees feel valued, respected, included, and challenged. We aim to create an environment that attracts, engages, and retains a talented workforce that drives the company’s growth and long-term sustained success.
In 2024 and 2023, our research and portfolio development costs were $196.9 million and $195.3 million, respectively, and the largest portion of this expense has been personnel costs. Wireless Technology We have a long history of developing cellular technologies, including those related to CDMA and TDMA and OFDM/OFDMA and MIMO.
In 2025 and 2024, our research and portfolio development costs were $211.4 million and $196.9 million, respectively, and the largest portion of this expense has been personnel costs.
Many of our inventions are being used in all 2G, 3G, 4G and 5G wireless networks and mobile terminal devices. We continue to be engaged in development efforts to build and enhance our 3GPP (as defined herein) technology portfolio in the current and future generations including 5G, 5G Advanced and 6G.
We continue to be engaged in development efforts to build and enhance our 3rd Generation Partnership Project ("3GPP") technology portfolio in the current and future generations including 5G Advanced and 6G. We are one of a handful of companies bringing wireless, video and AI technologies together to meet IMT 2030 requirements for 6G.
Management believes that its relationships with our employees and works councils are strong and productive. 11 Table of Contents Health, Safety & Well-Being Over the past few years, as our work and lifestyle have evolved, we’ve been dedicated to developing a flexible work model that supports our employees.
Management believes that its relationships with our employees and works councils are strong and productive. 11 Table of Contents To attract and retain the specialized talent required to compete in our markets, we focus on the following human capital priorities: • Health, Safety & Well-Being. We support employee well-being through a flexible work model, holistic benefits, and wellness-oriented policies.
In fiscal 2024, revenues (in descending order) from Samsung, Lenovo, Apple, and OPPO each comprised 10% or more of our consolidated revenues.
Customers Generating Revenue Exceeding 10% of Total 2025 Revenue A small number of customers histo rically have accounted for a significant portion of our consolidated revenue. In fiscal 2025, revenue (in descending order) from Samsung, Apple, and vivo each comprised 10% or more of our consolidated revenue.
Overview of Patent Licenses The majority of our revenue is generated from fixed-fee patent license agreements, with a smaller portion coming from variable royalty agreements.
These matters are more fully discussed in Note 12, “Litigation and Legal Proceedings,” to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K. Overview of Patent Licenses The majority of our revenue is generated from fixed-fee patent license agreements, with a smaller portion coming from variable royalty agreements.
We continue to participate and develop new technologies towards WiFi 8 through our leadership positions in IEEE 802 and WiFi Alliance. 5 Table of Contents Advanced Video Coding and Transmission Technology An important and growing segment of wireless traffic is devoted to video streaming.
Advanced Video Coding and Transmission Technology An important and growing segment of wireless traffic is devoted to video streaming. We have a rich history in developing advanced technologies that address the challenges of video products and services.
We offer a minimum of twelve weeks of paid parental leave globally and have kept employees connected to volunteer opportunities that benefited both their mental health and communities through our ‘Charity Day’ paid time off program.
We provide a minimum of twelve weeks of paid parental leave globally and offer paid time off for employee volunteerism through our “Charity Day” program. • Compensation & Benefits. Our compensation programs are designed to be market competitive and to reward individual contributions aligned with our strategy.
Additionally, in 2024 we recognized revenues from the multi-year, worldwide, non-exclusive, royalty bearing license with Lenovo covering InterDigital’s HEVC patents that was signed in 2023. In 2022, we renewed a multi-year, royalty-bearing, worldwide, and non-exclusive patent license agreement with Apple (the “Apple PLA”).
This agreement expired as of December 31, 2025. We are actively working to renew this agreement on terms consistent with the licensees' respective market positions and utilization of our technology. In 2022, we renewed a multi-year, royalty-bearing, worldwide, and non-exclusive patent license agreement with Apple (the “Apple PLA”).
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InterDigital R&I is now conducting research in groundbreaking technologies preparing for the next generation of video codecs beyond VVC, investigating new media coding such as point cloud compression, haptics or avatars using both traditional and AI-based techniques. Even codecs, such as AV1/VP9, developed by non-standard groups, use fundamental techniques we have been instrumental in developing.
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We believe our patented innovations are also used in the training of video based generative AI models as well as in the distribution and storage of the content generated by such models. InterDigital derives revenue primarily from licensing our patented innovations. In 2025 and 2024, our total revenue was $834.0 million and $868.5 million, respectively.
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The agreement licenses a range of devices including Pixel smartphones, Fitbit wearables, and other consumer electronics devices to InterDigital’s cellular wireless, Wi-Fi, and HEVC video patented technologies. In October 2024, we entered into a patent license agreement with OPPO. The agreement covers OPPO, realme and OnePlus branded mobile devices worldwide.
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Wireless Technology We have a long history of developing cellular technologies that include physical layer design covering CDMA, TDMA, OFDM/OFDMA, and MIMO, radio interface protocols, as well as system architecture and services supporting cellular networks. Many of our inventions are being used in all 2G, 3G, 4G, and 5G wireless networks and mobile terminal devices.
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As part of the agreement, both parties agreed to dismiss all pending litigations between us. In October 2024, we entered into an arbitration agreement with Lenovo to determine the terms of a new patent license. As part of the agreement to arbitrate, both parties agreed to dismiss all pending litigations between us.
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The recent acquisition of the Deep Render team has enhanced our ability to develop novel end-to-end AI-based codecs. Even codecs, such as AV1/VP9, developed by non-standard groups, use fundamental techniques we have been instrumental in developing. In addition to the video codec, we have pioneered technologies that enhance video quality in other ways.
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Additionally, we entered into licenses covering our technologies with Arcelik, Blu, Ericsson, Kyocera, Panasonic, Teltronic, TPV, and ZTE. Customers Generating Revenues Exceeding 10% of Total 2024 Revenues A small number of customers histo rically have accounted for a significant portion of our consolidated revenues.
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An example is the technology enabling production, distribution and display of high dynamic range (HDR) video that leverages AI to maximize the quality of video delivered to consumers. We are also investigating new media coding such as point cloud compression, haptics, or avatars using both traditional and AI-based techniques that will form the basis of future immersive video experiences.
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The two-week arbitration hearing was held in July 2024, and we expect a decision in early 2025. Additionally, we recognized revenue from the Samsung TV agreement signed in 2024 as noted above in 2024 Patent Licensing Activity.
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The technologies we have developed in video compression and in high quality media delivery form the foundation of streaming and many other cloud services and enable consumers to enjoy them on their favorite devices.
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As discussed above in 2024 Patent Licensing Activity , in 2024 we entered into an arbitration agreement with Lenovo to determine the terms of a new patent license. We began recognizing revenue at a conservative level, consistent with Generally Accepted Accounting Principles in the United States ("GAAP").
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InterDigital is also actively investing in leveraging AI as technology, using existing large language model (LLM) based solutions to help us improve our research outcomes, streamline our internal workflows, and to further enhance our IP portfolio. Patent Portfolio As of December 31, 2025, our patent portfolio consisted of more than 38,000 patents and patent applications worldwide.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch scrutiny has in the past resulted in enforcement actions against Qualcomm and other licensing companies, and could lead to additional investigations of, or enforcement actions against, us. Such inquiries and/or enforcement actions could impact the availability of injunctive and monetary relief, which may adversely affect our strategies for patent prosecution, licensing and enforcement and increase our costs of operation.
Biggest changeSuch inquiries and/or enforcement actions could impact the availability of injunctive and monetary relief, which may adversely affect our strategies for patent prosecution, licensing and enforcement and increase our costs of operation. Such inquiries and/or enforcement actions could also result in monetary fines, penalties or other remedies or sanctions that could adversely affect our business and financial condition.
Additionally, in 2021, China adopted the Personal Information Protection Law (“PIPL”), which, together China’s existing cyber and data securities regulations, have required and will continue to require significant investment and resources to ensure compliance. Complying with the these and other privacy and cybersecurity regulations could cause us to incur substantial costs or require us to change our business practices.
Additionally, in 2021, China adopted the Personal Information Protection Law (“PIPL”), which, together China’s existing cyber and data securities regulations, have required and will continue to require significant investment and resources to ensure compliance. Complying with these and other privacy and cybersecurity regulations could cause us to incur substantial costs or require us to change our business practices.
Potential changes to certain U.S. and international patent laws, rules and regulations may occur in the future, some or all of which may affect our research and development investments, patent prosecution costs, the scope of future patent coverage we secure, the number of forums in which we can seek to enforce our patents, the remedies that we may be entitled to in patent litigation, and attorneys’ fees or other remedies that could be sought against us, and may require us to reevaluate and modify our research and development activities and patent prosecution, licensing and enforcement strategies.
Potential changes to certain U.S. and international patent laws, rules and regulations may occur in the future, some or all of which may affect our research and development investments, patent prosecution or maintenance costs, the scope of future patent coverage we secure, the number of forums in which we can seek to enforce our patents, the remedies that we may be entitled to in patent litigation, and attorneys’ fees or other remedies that could be sought against us, and may require us to reevaluate and modify our research and development activities and patent prosecution, licensing and enforcement strategies.
We invest significant resources in the development of advanced technology and related solutions. However, certain of our inventions that we believe will be employed in current and future products, including 4G, 5G, HEVC, VVC and others, are the subject of patent applications where no patent has been issued to us yet by the relevant patent issuing authorities.
We invest significant resources in the development of advanced technology and related solutions. However, certain of our inventions that we believe will be employed in current and future products, including 5G, HEVC, VVC and others, are the subject of patent applications where no patent has been issued to us yet by the relevant patent issuing authorities.
In addition, in the event that there is a material decrease in shipments of licensed products by one of our per-unit licensees, our revenues from such licensee could significantly decline and our future revenue and cash flow could be adversely affected. Additionally, there is significant concentration in the wireless communications industry in general, and these trends may continue.
In addition, in the event that there is a material decrease in shipments of licensed products by one of our per-unit licensees, our revenue from such licensee could significantly decline and our future revenue and cash flow could be adversely affected. Additionally, there is significant concentration in the wireless communications industry in general, and these trends may continue.
Our operating results may fluctuate from quarter to quarter as a result of a number of factors, many of which are outside of our control and may be difficult to predict. In particular, the timing of revenue recognition may cause our revenues and earnings to fluctuate, and there is significant judgment in the application of our revenue recognition principles.
Our operating results may fluctuate from quarter to quarter as a result of a number of factors, many of which are outside of our control and may be difficult to predict. In particular, the timing of revenue recognition may cause our revenue and earnings to fluctuate, and there is significant judgment in the application of our revenue recognition principles.
In addition, adverse movements in currency exchange rates may negatively affect our business due to a number of situations, including the following: • If the effective price of products sold by our licensees were to increase as a result of fluctuations in the exchange rate of the relevant currencies, demand for the products could fall, which in turn would reduce our royalty revenues. • Assets or liabilities of our consolidated subsidiaries may be subject to the effects of currency fluctuations, which may affect our reported earnings. • Certain of our operating and investing costs, such as foreign patent prosecution, are based in foreign currencies.
In addition, adverse movements in currency exchange rates may negatively affect our business due to a number of situations, including the following: • If the effective price of products sold by our licensees were to increase as a result of fluctuations in the exchange rate of the relevant currencies, demand for the products could fall, which in turn would reduce our royalty revenue. • Assets or liabilities of our consolidated subsidiaries may be subject to the effects of currency fluctuations, which may affect our reported earnings. • Certain of our operating and investing costs, such as foreign patent prosecution, are based in foreign currencies.
If we are not able to consummate any of these inorganic growth opportunities on a reasonable time frame, on terms that are attractive to us or at all, we may not be able to grow our business in line with our expectations. 18 Table of Contents Additionally, acquisitions or other strategic transactions may increase our costs, including but not limited to accounting and legal fees, and may not generate financial returns or result in increased adoption or continued use of our technologies or of any technologies we may acquire.
If we are not able to consummate any of these inorganic growth opportunities on a reasonable time frame, on terms that are attractive to us or at all, we may not be able to grow our business in line with our expectations. 17 Table of Contents Additionally, acquisitions or other strategic transactions may increase our costs, including but not limited to accounting and legal fees, and may not generate financial returns or result in increased adoption or continued use of our technologies or of any technologies we may acquire.
Finally, we and certain of our current and prospective licensees have initiated, and we and others could in the future initiate, legal proceedings or regulatory proceedings requesting third party adjudicators or regulators to set FRAND terms and conditions for a worldwide license to our SEPs, or to determine the FRAND-consistency of current terms and conditions in our patent license agreements.
Finally, we and certain of our current and prospective licensees have initiated, and we and others could in the future initiate, legal proceedings or regulatory proceedings requesting third party adjudicators or regulators to set FRAND terms and conditions for a worldwide license to our SEPs or our entire portfolio, or to determine the FRAND-consistency of current terms and conditions in our patent license agreements.
Our shareholders may not receive the level of dividends provided for in our dividend policy or any dividend at all, and any decrease in or suspension of the dividend could cause our stock price to decline. Our dividend policy contemplates the payment of a regular quarterly cash dividend of $0.60 per share on our outstanding common stock.
Our shareholders may not receive the level of dividends provided for in our dividend policy or any dividend at all, and any decrease in or suspension of the dividend could cause our stock price to decline. Our dividend policy contemplates the payment of a regular quarterly cash dividend of $0.70 per share on our outstanding common stock.
Additional risks not presently known to us or that we currently deem immaterial may also affect our business. 13 Table of Contents Risks Related to Our Business Our plans to expand our revenue opportunities may not be successful. As part of our business strategy, we regularly seek to expand our revenue opportunities both organically and inorganically.
Additional risks not presently known to us or that we currently deem immaterial may also affect our business. 12 Table of Contents Risks Related to Our Business Our plans to expand our revenue opportunities may not be successful. As part of our business strategy, we regularly seek to expand our revenue opportunities both organically and inorganically.
It is possible that courts or regulators could decide to set or otherwise determine the FRAND consistency of such terms or the manner in which such terms are determined, including by determining a worldwide royalty for our SEPs.
It is possible that courts or regulators could decide to set or otherwise determine the FRAND consistency of such terms or the manner in which such terms are determined, including by determining a worldwide royalty for our portfolio.
Further, if wireless carriers consolidate with companies that utilize technologies that are competitive with our technologies or that are not covered by our patents, we could lose market opportunities, which could negatively impact our revenues and financial condition.
Further, if wireless carriers consolidate with companies that utilize technologies that are competitive with our technologies or that are not covered by our patents, we could lose market opportunities, which could negatively impact our revenue and financial condition.
In addition, to the extent that any future security breach results in inappropriate disclosure of our employees’, licensees’, or customers’ confidential and /or personal information, we may incur liability or additional costs to remedy any damages caused by such breach. We face risks from doing business and maintaining offices in international markets.
In addition, to the extent that any future security breach results in inappropriate disclosure of our employees’, licensees’, or customers’ confidential and /or personal information, we may incur liability or additional costs to remedy any damages caused by such breach. 18 Table of Contents We face risks from doing business and maintaining offices in international markets.
We have faced similar proceedings with OPPO in China to determine a worldwide royalty for certain of our SEPs as well as royalty-setting proceedings in the UK initiated by Lenovo and Tesla.
We have faced similar proceedings with OPPO in China to determine a worldwide royalty for certain of our SEPs as well as royalty-setting proceedings in the UK initiated by Amazon and Tesla.
We could continue to be involved in a number of costly litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices. Although we always seek to enter into licenses through bi-lateral negotiations, sometimes licensees are unwilling and litigation is necessary.
We could continue to be involved in a number of costly litigation, arbitration and administrative proceedings to enforce or defend our intellectual property rights and to defend our licensing practices. Although we always seek to enter into licenses through bilateral negotiations, sometimes licensees are unwilling and litigation is necessary.
If we fail to meet or exceed such expectations for these or any other reasons, the market price of our common stock could fall substantially. Our stock repurchase program may not result in a positive return of capital to shareholders.
If we fail to meet or exceed such expectations for these or any other reasons, the market price of our common stock could fall substantially. 21 Table of Contents Our stock repurchase program may not result in a positive return of capital to shareholders.
For example, in 2024, Samsung, Apple, and Xiaomi collectively accounted for over 50% of worldwide smartphone shipments, and we anticipate a similar level of concentration in worldwide shipments for future years.
For example, in 2025, Samsung, Apple, and Xiaomi collectively accounted for over 50% of worldwide smartphone shipments, and we anticipate a similar level of concentration in worldwide shipments for future years.
We are a U.S. multinational company subject to complex and changing tax laws in the United States and foreign jurisdictions where we do business. Significant judgement is required in determining our worldwide provision of income taxes.
We are a U.S. headquartered multinational company subject to complex and changing tax laws in the United States and foreign jurisdictions where we do business. Significant judgment is required in determining our worldwide provision of income taxes.
Such decisions could also cause serious reputational harm. Finally, adverse legal decisions related to our licensing practices could have an adverse effect on our ability to enter into license agreements, which, in turn, could cause our cash flow and revenue to decline. 16 Table of Contents We face competition from companies developing other or similar technologies.
Such decisions could also cause serious reputational harm. Finally, adverse legal decisions related to our licensing practices could have an adverse effect on our ability to enter into license agreements, which, in turn, could cause our cash flow and revenue to decline. We face competition from companies developing other or similar technologies.
Moreover, third parties could attempt to circumvent certain of our patents through design changes.
Moreover, third parties could and do attempt to circumvent certain of our patents through design changes.
For example, the European General Data Protection Regulation ("GDPR"), the United Kingdom’s GDPR, the California Consumer Privacy Act of 2018 and the California Privacy Rights Act of 2020 impose obligations on companies such as ours regarding the handling of personal data.
For example, the European General Data Protection Regulation ("GDPR"), the United Kingdom’s GDPR, the California Consumer Privacy Act of 2018 and the California Privacy Rights Act of 2020 impose obligations on companies such as ours regarding the collection, use, retention, protection and processing of personal data.
Any significant adverse findings as to the validity, infringement, enforceability or scope of our patents and/or any successful design-around of our patents could result in the loss of patent licensing revenue from existing licensees, through termination or modification of agreements or otherwise, and could substantially impair our ability to secure new patent licensing arrangements, either at all or on beneficial terms. 17 Table of Contents Macroeconomic conditions may harm our business.
Any significant adverse findings as to the validity, infringement, enforceability or scope of our patents and/or any successful design-around of our patents could result in the loss of patent licensing revenue from existing licensees, through termination or modification of agreements or otherwise, and could substantially impair our ability to secure new patent licensing arrangements, either at all or on beneficial terms.
This could also have a negative impact on royalties we are able to obtain from future licensees, which may have an adverse effect on our revenue and cash flow. Prospective customers may delay, and in some cases have delayed, negotiations on the basis of an adverse decision.
This could also have a negative impact on royalties we are able to obtain from future licensees, which may have an adverse effect on our revenue and cash flow and render us unable to meet our revenue and other financial targets. Prospective customers may delay, and in some cases have delayed, negotiations on the basis of an adverse decision.
Furthermore, if there is a delay in the standardization and/or deployment of 5G or future video coding standards, our business and revenue could be negatively impacted.
If there is a delay in the standardization and/or deployment of future standards, our business and revenue could be negatively impacted.
Consequently, we approach companies and seek to establish license agreements for using our inventions. We expend significant time and effort identifying users and potential users of our inventions and negotiating license agreements with companies that may be reluctant to take licenses.
We expend significant time and effort identifying users and potential users of our inventions and negotiating license agreements with companies that may be reluctant to take licenses.
For example, the State Administration for Market Regulation in China regularly reviews its policies related to intellectual property and antitrust laws, and any such review could result in ambiguous standards and/or create a worse position for patent holders like us.
For example, the State Administration for Market Regulation in China regularly reviews its policies related to intellectual property and antitrust laws, and any such review could result in ambiguous standards and/or create a worse position for patent holders like us. Additionally, there is uncertainty surrounding future EU IP policy.
This review is currently being discussed and debated inside the European Parliament and the European Council and any change to the legal or regulatory landscape as a result of this review could impact our ability to negotiate license agreements on favorable terms or at all, while also limiting our potential legal remedies and materially impacting our business.
Any change to the legal or regulatory landscape as a result of this review could impact our ability to negotiate license agreements on favorable terms or at all, while also limiting our potential legal remedies and materially impacting our business.
Setbacks in defending and enforcing our patent rights could cause our revenue and cash flow to decline. Some third parties have challenged, and we expect will continue to challenge, the infringement, validity and enforceability of certain of our patents. In some instances, certain of our patent claims could be substantially narrowed or declared invalid, unenforceable, not essential or not infringed.
Some third parties have challenged, and we expect will continue to challenge, the infringement, validity and enforceability of certain of our patents. In some instances, certain of our patent claims could be substantially narrowed or declared invalid, unenforceable, not essential or not infringed.
We may also be required to issue additional shares upon conversion in the event of certain fundamental change transactions. These provisions could limit the price that some investors might be willing to pay in the future for shares of our common stock.
We may also be required to issue additional shares upon conversion in the event of certain fundamental change transactions. These provisions could limit the price that some investors might be willing to pay in the future for shares of our common stock. Anti-takeover provisions could delay and discourage takeover attempts that shareholders may consider to be favorable.
A decline in economic conditions, such as a recession, economic downturn or inflationary conditions in the U.S. or elsewhere could adversely affect our business. In particular, inflation has accelerated and remained high in the U.S. and globally. Trade tensions or restrictions on free trade, including the tariffs that have been proposed by President Trump, could exacerbate these effects.
A decline in economic conditions, such as a recession, economic downturn or inflationary conditions in the U.S. or elsewhere could adversely affect our business. In particular, inflation has remained high in the U.S. and globally. Trade tensions or restrictions on free trade could exacerbate these effects.
For example, these obligations may require us to make source code for derivative works available or license such derivative works under a particular type of license that is different from what we customarily use to license our technology .
Licensing of such technology may impose certain obligations on us if we were to distribute derivative works of the open source software. For example, these obligations may require us to make source code for derivative works available or license such derivative works under a particular type of license that is different from what we customarily use to license our technology.
Our exposure to the credit risk of the option counterparties is not secured by any collateral. If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the applicable convertible note hedge transactions.
If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the applicable convertible note hedge transactions.
Services revenue is a key component of our future growth, and if we are unable to successfully launch and execute a services licensing program, we will not reach our revenue targets, and our business, financial condition and prospects could be harmed.
Services revenue is a key component of our future growth, and if we are unable to successfully execute a services licensing program and monetize our video patents in respect of video services as we currently intend, we will not reach our revenue and other financial targets, and our business, financial condition and prospects could be harmed.
If there is a delay in renegotiating and renewing a license agreement prior to its expiration, there could be a gap in time during which we may be unable to recognize revenue from that licensee or we may be forced to renegotiate and renew the license agreement on terms that are more favorable to such licensee.
Delays in renegotiating and renewing a license agreement prior to its expiration, cause gaps in time during which we may be unable to recognize revenue from that licensee. We may also be forced to renegotiate and renew the license agreement on terms that are more favorable to such licensee.
Our ability to renew license agreements with current licensees in China as well as license new manufacturers is, among other things, affected by the macroeconomic and geopolitical climate, as well as our business relationships and perceived reputation in China. The U.S. and Chinese governments are regularly engaged in various trade discussions, and the U.S.
Our ability to renew license agreements with current licensees in China as well as license new manufacturers is, among other things, affected by the macroeconomic and geopolitical climate, as well as our business relationships and perceived reputation in China.
We believe our estimates are reasonable and consistent with the regulation, but if this challenge is successful and our eligibility for the CIR is reduced, it could adversely impact our results of operations and cash flows. The French government could also eliminate or reduce the CIR entirely, which could harm our business.
We believe our estimates are reasonable and consistent with the regulation, but if this challenge is successful and our eligibility for the CIR is reduced, it could adversely impact our results of operations and cash flows.
If we cannot implement an effective compliance mechanism for cross-border privacy and security matters, we may face increased exposure to regulatory actions, substantial fines and other penalties. Further, these areas are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.
If we cannot implement an effective compliance mechanism for cross-border privacy and security matters, we may face increased exposure to regulatory actions, substantial fines and other penalties and damage to our reputation, any of which could have a material adverse effect on our business. Further, these areas are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.
If the technologies in which we invest do not become patented, are not adopted by the relevant standards, or are not adopted by and deployed in the mainstream markets, at all or at the rate or within time periods that we expect, our business, financial condition and operating results could be adversely affected.
If the technologies in which we invest do not become patented, are not adopted by the relevant standards, or are not adopted by and deployed in the mainstream markets, at all or at the rate or within time periods that we expect, our business, financial condition and operating results could be adversely affected. 16 Table of Contents Setbacks in defending and enforcing our patent rights could cause our revenue and cash flow to decline.
Further, because of the limited number of licensees and potential licensees, any opportunistic behavior during license negotiations by a company or companies using our technology could create large exposure for us.
For example, in 2025, Samsung, Apple, and vivo each comprised 10% or more of our consolidated revenue. Further, because of the limited number of licensees and potential licensees, any opportunistic behavior during license negotiations by a company or companies using our technology could create large exposure for us.
And, because this market is less developed, holdout behavior may be more likely than in device licensing. Service providers may also opt to use alternative technologies for which we have little or no patent coverage. Accordingly, we may not be able to enter into license agreements with these providers on terms that are favorable to us, or at all.
Service providers may also opt to use alternative technologies for which we have little or no patent coverage. Accordingly, we may not be able to enter into license agreements with these providers on terms that are favorable to us, or at all.
Potential patent and litigation reform legislation, potential USPTO and international patent rule changes, potential legislation affecting mechanisms for patent enforcement and available remedies, and potential changes to the intellectual property rights (“IPR”) policies of worldwide standards bodies, as well as rulings in legal proceedings, may affect our investments in research and development and our strategies for patent prosecution, licensing and enforcement and could have a material adverse effect on our licensing business as well as our business as a whole.
In addition, litigation, arbitration and administrative proceedings require significant key employee involvement for significant periods of time, which could divert these employees from other business activities. 14 Table of Contents Potential patent and litigation reform legislation, potential USPTO and international patent rule changes, potential legislation affecting mechanisms for patent enforcement and available remedies, and potential changes to the intellectual property rights (“IPR”) policies of worldwide standards bodies, as well as rulings in legal proceedings, may affect our investments in research and development and our strategies for patent prosecution, licensing and enforcement and could have a material adverse effect on our business.
Further, legislation designed to reduce the value of SEPs and alter the U.S. patent system, including legislation designed to reduce the jurisdiction and remedial authority of the USITC, has periodically been introduced in Congress. 15 Table of Contents Any potential changes in the law, the IPR policies of standards bodies or other developments that reduce the available forums or the types of relief available in such forums (such as injunctive relief), restrict permissible licensing practices (such as our ability to license on a worldwide portfolio basis) or that otherwise cause us to seek alternative forums (such as arbitration or state court), would make it more difficult for us to enforce our patents, whether in adversarial proceedings or in negotiations.
Any potential changes in the law, the IPR policies of standards bodies or other developments that reduce the available forums or the types of relief available in such forums (such as injunctive relief), restrict permissible licensing practices (such as our ability to license on a worldwide portfolio basis) or that otherwise cause us to seek alternative forums (such as arbitration or state court), would make it more difficult for us to enforce our patents, whether in adversarial proceedings or in negotiations.
The patents and applications comprising our portfolio have fixed terms, and, if we fail to anticipate or respond adequately to these changes through the development or acquisition of new patentable inventions, patents or other technology, we could miss a critical market opportunity, reducing or eliminating our ability to capitalize on our patents, technology solutions or both.
The patents and applications comprising our portfolio have fixed terms, and, if we fail to anticipate or respond adequately to these changes through the development or acquisition of new patentable inventions, patents or other technology, we could miss a critical market opportunity, reducing or eliminating our ability to capitalize on our patents, technology solutions or both. 19 Table of Contents Our commercialization, licensing and/or M&A activities could lead to patent exhaustion or implied license issues that could materially adversely affect our business.
If any analyst or analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease and we could lose visibility in the financial markets, which could cause our stock price and trading volume to decline. 23 Table of Contents Our indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations under such indebtedness.
If any analyst or analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease and we could lose visibility in the financial markets, which could cause our stock price and trading volume to decline.
We are subject to counterparty risk with respect to the convertible note hedge transactions. The respective option counterparties are financial institutions or affiliates of financial institutions, and we will be subject to the risk that such option counterparties may default under the respective convertible note hedge transactions.
The respective option counterparties are financial institutions or affiliates of financial institutions, and we will be subject to the risk that such option counterparties may default under the respective convertible note hedge transactions. Our exposure to the credit risk of the option counterparties is not secured by any collateral.
In particular, we are subject to both California and European Union reporting regimes on emissions and climate-related risks. Tracking and reporting the required metrics is costly and demands substantial attention. If our governance and reporting practices fail to meet the expectations of any of our stakeholders’ evolving standards, our reputation, brand and employee retention may be negatively impacted.
Tracking and reporting the required metrics is costly and demands substantial attention. If our governance and reporting practices fail to meet the expectations of any of our stakeholders’ evolving standards, our reputation, brand and employee retention may be negatively impacted.
This may be even more true with respect to video services licensing than device licensing since licensing efforts in this space are newer. While some companies seek licenses before they commence manufacturing and/or selling devices or services that use our patented inventions, the vast majority do not.
This may be even more true with respect to video services licensing than device licensing, because the licensing market is less developed. While some companies seek licenses before they commence manufacturing and/or selling devices or services that use our patented inventions, the vast majority do not. Consequently, we approach companies and seek to establish license agreements for using our inventions.
We continue to monitor and evaluate our strategies for prosecution, licensing and enforcement with regard to these developments; however, any resulting change in such strategies may have an adverse impact on our business and financial condition.
We continue to monitor and evaluate our strategies for prosecution, licensing and enforcement with regard to these developments; however, any resulting change in such strategies may have an adverse impact on our business and financial condition. Our business and operations may be adversely affected by a deterioration in United States-China relations or broader trade and geopolitical conditions.
The potential effect, if any, of any of these transactions and activities on the market price of our common stock will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the market price of our common stock.
The potential effect, if any, of any of these transactions and activities on the market price of our common stock will depend in part on investor expectations and market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the market price of our common stock. 22 Table of Contents We are subject to counterparty risk with respect to the convertible note hedge transactions.
Although we believe that our tax estimates are reasonable, the final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our income tax provisions and accruals.
Although we believe that our tax estimates are reasonable, the final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our income tax provisions and accruals. Due to governmental and regulatory delays, the timing of the resolution of certain of our open audits has been extended, creating additional uncertainty.
Our portfolio review activities may place substantial demands on our management, which could lead to the diversion of management’s attention from other business priorities. We have divested a number of assets, including as part of a recent strategic portfolio rationalization review.
Our portfolio review activities may place substantial demands on our management, which could lead to the diversion of management’s attention from other business priorities. We may divest or abandon assets as part of efforts to optimize spending on our patent portfolio.
Further, the increased availability of remote working arrangements has expanded the pool of companies that can compete for our employees and employment candidates. A number of such competitors for talent are significantly larger than us and may be able to offer compensation, benefits or work arrangements perceived as more desirable than what we are able to offer.
A number of such competitors for talent are significantly larger than us and may be able to offer compensation, benefits or work arrangements perceived as more desirable than what we are able to offer.
We actively manage these issues and have established and publicly announced certain goals, commitments, and targets which we may refine or expand further in the future.
We actively manage these issues and have established and publicly announced certain goals, commitments, and targets which we may refine or expand further in the future. These goals, commitments, and targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
If we are unable to recruit, retain, and motivate our employees, then we may not be able to innovate, execute on our strategy and grow our business as planned.
If we are unable to recruit, retain, and motivate our employees, then we may not be able to innovate, execute on our strategy and grow our business as planned. Further, the cost and loss of efficiency related to turnover, particularly at senior levels, may be significant. Macroeconomic conditions may harm our business.
If we are deemed to owe additional taxes, it could negatively impact our business, financial condition, and results of operations. For example, most of our income is taxable in the United States with a significant portion qualifying for preferential treatment as foreign-derived intangible income ("FDII"). Beginning in 2026, the effective tax rate for FDII increases from 13% to 16%.
For example, most of our income is taxable in the United States with a significant portion qualifying for preferential treatment as foreign-derived intangible income ("FDII"). Beginning in 2026, the effective tax rate for FDII will increase from 13% to 14%. Any reduction or elimination of the FDII deduction would negatively impact our business.
If any court or arbitration tribunal decision sets a worldwide royalty rate that is unfavorable to us, our standard essential patent portfolio could be significantly devalued as it relates to the FRAND royalty an implementer should pay, which could in turn negatively impact pricing with other licensees. 14 Table of Contents To the extent that our patent royalties for our patent license agreements are determined through arbitration or other third party adjudications or regulatory or court proceedings rather than through bilateral negotiations, because such proceedings are inherently unpredictable and uncertain and there are currently few precedents for such determinations, it is possible that royalties may be lower than our accounting estimates and/or comparable licenses.
To the extent that our patent royalties for our patent license agreements are determined through arbitration or other third party adjudications or regulatory or court proceedings rather than through bilateral negotiations, because such proceedings are inherently unpredictable and uncertain and there are currently few precedents for such determinations, it is possible that royalties may be lower than our accounting estimates and/or comparable licenses.
We utilize these projections in various ways, including key strategic decisions that we regularly make regarding the direction of our business, research and licensing efforts.
Our strategy is based on our own projections and on analyst, industry observer and expert projections, which are forward-looking in nature and are inherently subject to risks and uncertainties. We utilize these projections in various ways, including key strategic decisions that we regularly make regarding the direction of our business, research and licensing efforts.
We earn a significant amount of our revenues from a limited number of licensees or customers, and we expect that a significant portion of our revenues will continue to come from a limited number of licensees or customers for the foreseeable future. For example, in 2024, Samsung, Lenovo, Apple, and OPPO each comprised 10% or more of our consolidated revenues.
We are subject to risks resulting from customer concentration. We earn a significant amount of our revenue from a limited number of licensees or customers, and we expect that a significant portion of our revenue will continue to come from a limited number of licensees or customers for the foreseeable future.
If we fail to renegotiate and renew our license agreements prior to their expiration, at all or on terms that are favorable to us, our forecasts, revenue and cash flow could be materially adversely affected.
If we fail to renegotiate and renew our license agreements prior to their expiration, at all or on terms that are favorable to us, our forecasts, revenue and cash flow could be materially adversely affected. 13 Table of Contents Royalties or other terms under our patent license agreements could be subject to determination through arbitration or other third-party adjudications or regulatory or court proceedings, and arbitrators, judges or other third-party adjudicators or regulators could make unfavorable determinations.
A significant portion of our licensees, potential licensees and customers are international, and our licensees, potential licensees and customers sell their products to markets throughout the world. In addition, in recent years, we have expanded, and we may continue to expand, our international operations, opening offices in China, France and Finland.
In recent years, we have expanded, and we may continue to expand, our international operations, opening offices in China, France and Finland. Accordingly, we are subject to the risks and uncertainties of operating internationally.
While we have historically benefited from the CIR, the French government has recently challenged our eligibility for portions of the CIR that they previously accepted.
In France, where we have substantial operations, we benefit from research tax credits applicable to French technology companies, including the Crédit Impôt Recherche (CIR). While we have historically benefited from the CIR, the French government has recently challenged our eligibility for portions of the CIR that they previously accepted.
Once identified, it is not feasible for us to seek licenses from all users of our patented technologies, so we have to make strategic decisions with respect to which companies we should approach for license negotiations. Uncertainty related to entry into new license agreements could impact our forecasts and ultimately, revenue, cash flow and business.
Once identified, it is not feasible for us to seek licenses from all users of our patented technologies, so we have to make strategic decisions with respect to which companies we should approach for license negotiations. In particular, the CE/IoT market is much more fragmented than our traditional smartphone core.
Material security events could also require public disclosure, which could further harm our business or reputation. We seek to detect and investigate all security incidents and to prevent their recurrence, but, in some cases, we might be unaware of an incident or its magnitude and effects.
We seek to detect and investigate all security incidents and to prevent their recurrence, but, in some cases, we might be unaware of an incident or its magnitude and effects. The increasing use of AI tools also exposes us to additional risks of security breach and information loss.
Our commercialization, licensing and/or M&A activities could lead to patent exhaustion or implied license issues that could materially adversely affect our business. The legal doctrines of patent exhaustion and implied license may be subject to different judicial interpretations.
The legal doctrines of patent exhaustion and implied license may be subject to different judicial interpretations.
Additionally, any new tax legislation, or any new guidance or interpretations of the same, could expose us to additional tax liabilities. For example, the OECD Model Rules under Pillar Two introduced a minimum corporate tax rate of 15% on multinational enterprises with annual consolidated revenue exceeding €750 million in at least two of the prior four years.
For example, the OECD Model Rules under Pillar Two introduced a minimum corporate tax rate of 15% on multinational enterprises with annual consolidated revenue exceeding €750 million in at least two of the prior four years, and beginning in 2026, we are subject to this minimum tax, which has been adopted by various jurisdictions where we do business, including France and the UK.
These attempts, which in some cases could be related to industrial or other espionage, include covertly introducing malware to computers and networks and impersonating authorized users, among others. Advancements in technology, including artificial intelligence and machine learning, may continue to change the way bad actors seek to gain unauthorized access and disrupt systems, thereby increasing the risks of security breaches.
These attempts, which in some cases could be related to industrial or other espionage, include covertly introducing malware to computers and networks and impersonating authorized users, among others.
In such case, our income tax provision, results of operations and cash flows in the period or periods in which that determination is made could be negatively affected. 21 Table of Contents Our tax rate could be adversely affected by several factors beyond our control, including changes in tax laws, regulations, interpretations, tax rates, assessments and any related tax, interest or penalties.
Our tax rate could be adversely affected by several factors beyond our control, including changes in tax laws, regulations, interpretations, tax rates, assessments and any related tax, interest or penalties. If we are deemed to owe additional taxes, it could negatively impact our business, financial condition, and results of operations.
These decisions could later prove to be incorrect, which could ultimately harm our licensing potential or enforcement options, which could in turn harm our financial results and business prospects. Our technology development activities may experience delays. We may experience technical, financial, resource or other difficulties or delays related to the further development of our technologies.
These decisions could later prove to be incorrect, which could ultimately harm our licensing potential or enforcement options, which could in turn harm our financial results and business prospects. Our business is subject to a variety of domestic and international laws, rules and policies and other obligations regarding data protection.
Our ability to renew or conclude new license agreements with such manufacturers could also be affected by economic uncertainty, particularly in the handset market, in China or by our failure to establish a positive reputation and relationships in China.
Our ability to renew or conclude new license agreements could also be affected by economic uncertainty, particularly in the handset market, in China or globally. 15 Table of Contents China is a key market for us, and any of the above-mentioned factors could harm our ability to execute our business plans.
Implementing our business strategy requires specialized engineering and other technical talent, and these skills are in high demand among our competitors. The market for employees in our industry is extremely competitive, and competitors for talent, particularly engineering talent, have and could in the future attempt to hire our employees or employment candidates.
The market for employees in our industry is extremely competitive, and competitors for talent have and could in the future attempt to hire our employees or employment candidates. Additionally, our equity compensation programs are a key element in our ability to attract and retain talent.
Further, the cost and loss of efficiency related to turnover, particularly at senior levels, may be significant. 19 Table of Contents Our business and operations could suffer in the event of security breaches. Attempts by others to gain unauthorized access to information technology systems are becoming more sophisticated.
Further, such extensions, modifications or new license agreements may adversely affect our revenue on the sale of products covered by the license prior to any extension, modification or new license. Our business and operations could suffer in the event of security breaches. Attempts by others to gain unauthorized access to information technology systems are becoming more sophisticated.
These goals, commitments, and targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. 20 Table of Contents Additionally, we are subject to various sustainability related reporting standards, which are rapidly evolving, and which have resulted in, and are likely to continue to result in, increased compliance costs and management attention.
Additionally, we are subject to various sustainability related reporting standards, which are rapidly evolving, and which have resulted in, and are likely to continue to result in, increased compliance costs and management attention. In particular, we are subject to both California and European Union reporting regimes on emissions and climate-related risks.
Companies headquartered in China currently comprise a substantial portion of the handset manufacturers that remain unlicensed to our patent portfolio as well as manufacturers of other devices and services that use our patented inventions.
The imposition of tariffs by the United States could materially harm our business. Companies headquartered in China currently comprise a substantial portion of customers that utilize our patented inventions in their devices and services.
We also face challenges in renewing our existing license agreements.
Uncertainty related to entry into new license agreements impacts our forecasts and ultimately, revenue, cash flow and business. We also face challenges in renewing our existing license agreements.
China is a key market for us, and any of these factors could harm our ability to execute our business plans there and could in turn cause our long-term business, financial condition and operating results to be materially adversely affected. We may face setbacks in defending our patent licensing practices.
The ultimate impact of ongoing trade tensions is uncertain, but if tensions continue or escalate, we could suffer material harm to our business, financial condition and operating results. We may face setbacks in defending our patent licensing practices.
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Royalties or other terms under our patent license agreements could be subject to determination through arbitration or other third-party adjudications or regulatory or court proceedings, and arbitrators, judges or other third-party adjudicators or regulators could make unfavorable determinations.
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Because we have not yet entered into our first video services license, the revenue we expect to realize from this program is uncertain and inherently subject to risk. And, because the services licensing market is less developed, holdout behavior may be more likely than in device licensing.
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In addition, litigation, arbitration and administrative proceedings require significant key employee involvement for significant periods of time, which could divert these employees from other business activities.
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If any court or arbitration tribunal decision sets a worldwide royalty rate that is unfavorable to us, our standard essential patent portfolio could be significantly devalued as it relates to the FRAND royalty an implementer should pay, which could in turn negatively impact pricing with other licensees.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also engage external vendors to assess the cybersecurity program as needed, including annual multi-stage penetration testing of our IT environment by independent third parties. The Audit Committee of our Board oversees risk from cybersecurity threats.
Biggest changeWe also engage independent third parties to evaluate our cybersecurity program, including annual multi-stage penetration testing of our IT environment. The Audit Committee of our Board oversees risks associated with cybersecurity threats. Both the Audit Committee and the full Board receive quarterly updates on cybersecurity risks identified through our enterprise risk management processes.
InterDigital evaluates cybersecurity risks as part of our overall enterprise risk management. A cybersecurity steering committee of senior executives is responsible for assessing and managing cybersecurity risks. The steering committee meets annually to evaluate any changes to the Company’s exposure to cybersecurity risks, discuss potential mitigation plans and provide updates on mitigation efforts already underway.
InterDigital evaluates cybersecurity risks as part of our overall enterprise risk management. A cybersecurity steering committee of senior executives is responsible for assessing and managing cybersecurity risks. The steering committee meets semi-annually to evaluate any changes to the Company’s exposure to cybersecurity risks, discuss potential mitigation plans and provide updates on mitigation efforts already underway.
However, to date, cybersecurity threats have not materially affected us, including our business strategy, results of operations, or financial condition. We identify nation state-sponsored threat actors and the rise in sophistication and proliferation of criminal cyber threat actors and ransomware campaigns as top reasonable material risks to the business.
To date, cybersecurity threats have not materially affected our business strategy, results of operations, or financial condition. We identify nation-state-sponsored threat actors, increasingly sophisticated criminal cyber actors, and ransomware campaigns as top reasonably likely material risks.
The theft, unauthorized use or publication of our intellectual property and/or confidential business or personal information (whether through a breach of our own systems or the breach of a system of a third party that provides services to us) could harm our competitive or negotiating positions, reduce the value of our investment in research and development and other strategic initiatives, compromise our patent enforcement strategies or outlook, damage our reputation or otherwise adversely affect our business.
Theft, unauthorized use, or disclosure of our intellectual property or confidential business or personal information—whether through a breach of our systems or those of a third-party service provider—could harm our competitive position, diminish the value of our investments in research and development and other strategic initiatives, compromise our patent enforcement strategies, damage our reputation, or otherwise adversely affect our business.
Item 1C. CYBERSECURITY. We take a defense-in-depth approach, leveraging multiple, layered security measures, to protect our data, our customers’ data, our infrastructure, and our employees. We embed data protection throughout our operations and information technology programs, relying on multiple and various controls to prevent and detect threats, with the goal of safeguarding our assets, data and personnel.
Item 1C. CYBERSECURITY. InterDigital employs a defense-in-depth security model that uses multiple, layered controls to protect our data, our customers’ data, our infrastructure, and our employees. We embed data protection throughout our operations and technology programs and rely on a combination of preventive and detective measures to safeguard our assets and personnel.
See Item 1A. “Risk Factors” for a discussion of cybersecurity risks. 25 Table of Contents
See Item 1A, “Risk Factors,” for additional information regarding cybersecurity risks. 24 Table of Contents
The CIO also presents a summary of recent incidents at each regular Audit Committee meeting. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
The Vice President of Information Services and the Head of Cybersecurity also present summaries of recent incidents quarterly at a regular Audit Committee meeting. Despite our extensive cybersecurity program, we may not be able to prevent or mitigate all cybersecurity incidents, any of which could have a material adverse effect on us.
The framework is a set of coordinated procedures and tasks that the InterDigital incident response team executes to ensure timely and accurate reporting and resolution of computer security incidents. The framework details who, how and when appropriate persons or committees, including the CIO, cybersecurity steering committee, and Audit Committee are kept informed on the status of potential cybersecurity incidents.
Our cybersecurity policies include an incident response framework that defines responsibilities, reporting procedures, and escalation paths to ensure timely and accurate response to security incidents. The framework specifies how and when the Executive Leadership Team, cybersecurity steering committee, and the Audit Committee are informed of potential incidents.
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The steering committee is led by the Director of Cybersecurity & Networks, a cybersecurity professional with 20 years of experience and industry-recognized certifications.
Added
The Senior Director, Head of Cybersecurity & Networks, with over 20 years of experience and industry-recognized certifications, reports to the VP of Information Services and manages the cybersecurity team that leads the steering committee. This team monitors threat intelligence from internal and external sources and oversees processes for evaluating cybersecurity risks associated with third-party service providers.
Removed
The Director of Cybersecurity & Networks reports directly to the Chief Information Officer ("CIO") and manages our cybersecurity team, which uses multiple internal and external sources to keep up to date on the latest threats and risks and manages a process to evaluate cybersecurity risks associated with third-party service providers.
Added
The cybersecurity team maintains a comprehensive set of cybersecurity policies and standards. We continually assess and update our cybersecurity strategy through activities such as tabletop exercises to anticipate emerging threats and evolving risks. InterDigital provides quarterly cybersecurity awareness training, conducts an annual Cybersecurity Awareness Month campaign, and performs quarterly phishing simulations to support ongoing employee education and vigilance.
Removed
Our cybersecurity team also maintains a comprehensive set of cybersecurity policies and standards. We continually reassess and review our cybersecurity strategy and policies, including through tabletop exercises, to identify and proactively address the constant changes in the global threat landscape.
Removed
The Audit Committee of the Board and the full Board each receive quarterly updates on cybersecurity risks identified through the enterprise risk management processes described above. The comprehensive set of cybersecurity policies and standards maintained by the cybersecurity team includes a security incident response framework.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table sets forth information with respect to our principal leased properties: Location Approximate Square Feet Principal Use Lease Expiration Date Wilmington, Delaware 7,190 Corporate headquarters November 2025 Rennes, France 33,000 Office and research space August 2031 Conshohocken, Pennsylvania 30,300 Office and research space September 2029 New York, New York 19,400 Office and research space July 2030 Montreal, Quebec 11,918 Office and research space June 2026 Los Altos, California 4,900 Office and research space November 2027 London, United Kingdom 3,700 Office and research space February 2031 We are also a party to leases for several smaller research and/or office spaces, including in Brussels, Belgium; Espoo, Finland; Indianapolis, Indiana, USA; Melville, New York, USA; Paris, France, and Beijing, China.
Biggest changeThe following table sets forth information with respect to our principal leased properties: Location Approximate Square Feet Principal Use Lease Expiration Date Wilmington, Delaware 7,200 Corporate headquarters November 2030 Rennes, France 33,000 Office and research space August 2031 Conshohocken, Pennsylvania 30,300 Office and research space September 2029 New York, New York 19,400 Office and research space July 2030 Montreal, Quebec 11,900 Office and research space June 2026 Los Altos, California 4,900 Office and research space November 2027 London, United Kingdom 3,700 Office and research space February 2031 London, United Kingdom 3,100 Office and research space March 2027 We are also a party to leases for several smaller research and/or office spaces, including in Brussels, Belgium; Espoo, Finland; Indianapolis, Indiana, USA; Melville, New York, USA; Paris, France; Beijing, China; and Ottawa, Canada.
Item 2. PROPERTIES. Our headquarters are located in Wilmington, Delaware, USA. Our research and development activities are conducted primarily in facilities located in Conshohocken, Pennsylvania, USA; London, United Kingdom; Montreal, Canada; New York, New York, USA; Los Altos, California, USA; and Rennes, France.
Item 2. PROPERTIES. Our headquarters are located in Wilmington, Delaware, USA. Our research and development activities are conducted primarily in facilities located in Conshohocken, Pennsylvania, USA; London, United Kingdom; Montreal, Quebec, Canada; New York, New York, USA; Los Altos, California, USA; and Rennes, France.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS. See Note 12, “ Litigation and Legal Proceedings ,” to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K for a description of our material legal proceedings, which is incorporated herein by reference. Item 4. MINE SAFETY DISCLOSURES. Not applicable. 26 Table of Contents PART II
Biggest changeItem 3. LEGAL PROCEEDINGS. See Note 12, “ Litigation and Legal Proceedings ,” to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K for a description of our material legal proceedings, which is incorporated herein by reference. Item 4. MINE SAFETY DISCLOSURES. Not applicable. 25 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends Cash dividends on outstanding common stock declared in 2024 and 2023 were as follows (in thousands, except per share data): 2024 Per Share Total Cumulative by Fiscal Year First quarter $ 0.40 $ 10,155 $ 10,155 Second quarter 0.40 10,052 20,207 Third quarter 0.45 11,366 31,573 Fourth quarter 0.45 11,557 43,130 $ 1.70 $ 43,130 2023 First quarter $ 0.35 $ 9,449 $ 9,449 Second quarter 0.35 9,273 18,722 Third quarter 0.40 10,348 29,070 Fourth quarter 0.40 10,226 39,296 $ 1.50 $ 39,296 We increased the quarterly cash dividend by $0.05 per share in both 2023 and 2024 to raise the dividend payable from $0.35 to $0.45 per share.
Biggest changeDividends Cash dividends on outstanding common stock declared in 2025 and 2024 were as follows (in thousands, except per share data): 2025 Per Share Total Cumulative by Fiscal Year First quarter $ 0.60 $ 15,577 $ 15,577 Second quarter 0.60 15,507 31,084 Third quarter 0.70 18,041 49,125 Fourth quarter 0.70 17,980 67,105 $ 2.60 $ 67,105 2024 First quarter $ 0.40 $ 10,155 $ 10,155 Second quarter 0.40 10,052 20,207 Third quarter 0.45 11,366 31,573 Fourth quarter 0.45 11,557 43,130 $ 1.70 $ 43,130 In September 2025, we announced a second dividend increase during 2025, increasing the quarterly cash dividend by $0.10 per share to $0.70 per share, beginning with the quarterly dividend declared in third quarter 2025 and paid in fourth quarter 2025.
We currently expect to continue to pay dividends in accordance with our dividend policy; however, continued payment of cash dividends and changes in the Company's dividend policy will depend on the Company's earnings, financial condition, capital resources and capital requirements, alternative uses of capital, restrictions imposed by any existing debt, economic conditions and other factors considered relevant by our Board of Directors. 27 Table of Contents Performance Graph The following graph compares five-year total shareholder return on common stock with the cumulative total returns of the Nasdaq Telecommunications index and the Russell 2000 index.
We currently expect to continue to pay dividends in accordance with our dividend policy; however, continued payment of cash dividends and changes in the Company's dividend policy will depend on the Company's earnings, financial condition, capital resources and capital requirements, alternative uses of capital, restrictions imposed by any existing debt, economic conditions and other factors considered relevant by our Board of Directors. 26 Table of Contents Performance Graph The following graph compares five-year total shareholder return on common stock with the cumulative total returns of the Nasdaq Telecommunications index and the Russell 2000 index.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information The Nasdaq Global Select Market (“Nasdaq”) is the principal market for our common stock, which is traded under the symbol "IDCC." Holders As of February 4, 2025, there were 389 holders of record of our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information The Nasdaq Global Select Market (“Nasdaq”) is the principal market for our common stock, which is traded under the symbol "IDCC." Holders As of February 3, 2026, there were 372 holders of record of our common stock.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2019 to 12/31/2024. 12/19 12/20 12/21 12/22 12/23 12/24 InterDigital, Inc. 100.00 114.30 137.72 97.43 217.89 394.45 Russell 2000 100.00 119.96 137.74 109.59 128.14 142.93 Nasdaq Telecommunications 100.00 110.08 112.44 82.21 90.96 103.21 The above performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of InterDigital under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 28 Table of Contents Issuer Purchases of Equity Securities Repurchase of Common Stock The following table provides information regarding Company purchases of its common stock during fourth quarter 2024.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2020 to 12/31/2025. 12/20 12/21 12/22 12/23 12/24 12/25 InterDigital, Inc. 100.00 120.49 85.24 190.63 345.10 572.81 Russell 2000 100.00 114.82 91.35 106.82 119.14 134.40 Nasdaq Telecommunications 100.00 102.14 74.69 82.63 93.76 107.59 The above performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of InterDigital under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 27 Table of Contents Issuer Purchases of Equity Securities Repurchase of Common Stock The following table provides information regarding Company purchases of its common stock during fourth quarter 2025.
Period Total Number of Shares (or Units) Purchased (1) Average Price Paid Per Share (or Unit) Total Number of Shares (or Units) Purchases as Part of Publicly Announced Plans or Programs (2) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (3) October 1, 2024 - October 31, 2024 — $ — — $ 229,532,849 November 1, 2024 - November 30, 2024 — $ — — $ 229,532,849 December 1, 2024 - December 31, 2024 — $ — — $ 229,532,849 Total — $ — — (1) Total number of shares purchased during each period reflects share purchase transactions that were completed (i.e., settled) during the period indicated.
Period Total Number of Shares (or Units) Purchased (1) Average Price Paid Per Share (or Unit) Total Number of Shares (or Units) Purchases as Part of Publicly Announced Plans or Programs (2) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (3) October 1, 2025 - October 31, 2025 41,560 $ 360.85 41,560 $ 147,866,283 November 1, 2025 - November 30, 2025 36,000 $ 357.52 36,000 $ 134,994,508 December 1, 2025 - December 31, 2025 22,000 $ 353.62 22,000 $ 127,214,100 Total 99,560 $ 358.05 99,560 (1) Total number of shares purchased during each period reflects share purchase transactions that were completed (i.e., settled) during the period indicated.
Removed
In February 2025, we announced an additional increase in the quarterly cash dividend by $0.15 per share, beginning with the quarterly dividend payable in second quarter 2025.
Added
Combined with previous increases, we have increased the dividend by 75% since the start of 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe caution readers that actual results and outcomes could differ materially from those expressed in or anticipated by such forward-looking statements due to a variety of factors, including those set forth below: • unanticipated delays, difficulties or accelerations in the execution of patent license agreements on acceptable terms or at all; • our ability to expand our revenue opportunities by entering into licensing arrangements with video streaming and other cloud-based service providers; • the resolution of legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith; • our ability to identify and acquire technology and patent portfolios that align with our roadmap; • our ability to commercialize our technologies; • the failure of the markets for our current or new technologies to materialize to the extent or at the rate that we expect; • our continued ability to develop new technologies and secure new patents, including the risk of unexpected delays or difficulties related to the development of our technologies; • our continued leadership within standards and industry groups and our ability to ensure our inventions become standardized; • risks associated with our capital allocation strategies, including risks associated with our planned dividend payments and share repurchases; • changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act and other U.S. and non-U.S. tax laws; • the timing and impact of potential regulatory, administrative and legislative matters; • U.S./China trade and/or national security tensions; • changes or inaccuracies in market projections; • our ability to retain and hire key personnel; • our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets; • the potential effects that macroeconomic uncertainty could have on our financial position, results of operations and cash flows; • operational risks, including cybersecurity events, external hazards, human failures or other difficulties with our information technology systems that could disrupt our business or result in the loss of critical and confidential information and/or increased costs; • impacts from acts of terrorism, war or political or civil unrest, or any responses thereto, in the United States or elsewhere; • changes in our business strategy; and • risks related to any new accounting standards or our assumptions and application of relevant accounting standards, including with respect to revenue recognition.
Biggest changeWe caution readers that actual results and outcomes could differ materially from those expressed in or anticipated by such forward-looking statements due to a variety of factors, including those set forth below: • unanticipated delays or difficulties in the execution of patent license agreements on acceptable terms or at all; • our ability to expand our revenue opportunities by entering into licensing arrangements with streaming and cloud-based service providers; • the resolution of legal proceedings, including any awards or judgments relating to such proceedings, and changes in the schedules or costs associated therewith; • our ability to maintain a strong patent portfolio and make strategic decisions related to our intellectual property protection; • our ability to successfully integrate Deep Render and to recognize the anticipated benefits of the transaction; • the failure of markets for our technologies to materialize to the extent that we expect; • our continued ability to develop new technologies; • changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the One Big Beautiful Bill Act, the 2017 Tax Cuts and Jobs Act and other U.S. and non-U.S. tax laws and other tax matters; • the timing and impact of potential regulatory, administrative and legislative matters; • the potential effects of macroeconomic conditions or trade conflicts; • our ability to hire and retain key personnel; • operational risks, including cybersecurity events, human failures or other difficulties with our information technology systems; and • risks related to any new accounting standards or our assumptions and application of relevant accounting standards, including with respect to revenue recognition.
Refer to Note 10, “ Obligations ,” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for details of our 2027 Notes. (b) Purchase obligations consist of agreements to purchase goods and services that are legally binding on us, as well as accounts payable.
Refer to Note 10, “Obligations,” within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for details of our 2027 Notes. (b) Purchase obligations consist of agreements to purchase goods and services that are legally binding on us, as well as accounts payable.
We analyze the risk of a significant revenue reversal considering both the likelihood and magnitude of the reversal and, if necessary, constrain the amount of estimated revenues in order to mitigate this risk, which may result in recognizing revenues less than amounts we expect we are most likely to receive. These aforementioned estimates may require significant judgment.
We analyze the risk of a significant revenue reversal considering both the likelihood and magnitude of the reversal and, if necessary, constrain the amount of estimated revenue in order to mitigate this risk, which may result in recognizing revenue less than amounts we expect we are most likely to receive. These aforementioned estimates may require significant judgment.
Our video technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the research and innovation unit and patent licensing business of visual technology industry leader Technicolor SA and patents and applications created by internal development.
Our video technology portfolio combines patents and applications that InterDigital obtained through the acquisitions of the research and innovation unit and patent licensing business of visual technology industry leader Technicolor SA (the "Technicolor Patent Acquisition") and patents and applications created by internal development.
Our estimated progress toward goals under performance equity grants is based on meeting a minimum confidence level of achievement in accordance with accounting rules for share-based compensation. Due to the binary nature of patent license agreements, performance awards with milestone goals are typically not expensed until the goal has been achieved.
Our estimated progress toward goals under performance equity grants is based on meeting a minimum confidence level of achievement in accordance with accounting rules for share-based compensation. Due to the uncertain nature of patent license agreements, performance awards with milestone goals are typically not expensed until the goal has been achieved.
Our portfolio includes numerous patents and patent applications that we believe are or may be essential to existing standards, or may become essential to future standards, established by many Standards Development Organizations ("SDOs"). We have contributed technology to wireless standards including the 3G, 4G, and 5G cellular standards and the IEEE 802 suite of standards.
Our portfolio includes numerous patents and patent applications that we believe are or may be essential to existing standards, or may become essential to future standards, established by many Standards Development Organizations ("SDOs"). We have contributed technology to wireless standards including the 3G, 4G, 5G, and the development of 6G cellular standards and the IEEE 802.11 suite of standards.
As discussed above we believe our available sources of funds, including cash, cash equivalents, short-term investments, and cash generated from our operations, will be sufficient to finance these contractual obligations discussed below in both the short-term over the next twelve month, and the long-term beyond twelve months.
As discussed above we believe our available sources of funds, including cash, cash equivalents, short-term investments, and cash generated from our operations, will be sufficient to finance these contractual obligations discussed above in both the short-term over the next twelve months, and the long-term beyond twelve months.
As described in Note 10, " Obligations " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, the 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any remaining obligation may be in cash, shares of the Company’s common stock or a combination thereof ("net share settlement").
As described in Note 10, " Obligations " in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, the 2027 Notes are convertible into cash up to the aggregate principal amount of 2027 Notes to be converted and any remaining obligations may be settled in cash, shares of the Company’s common stock or a combination thereof ("net share settlement").
We typically receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are required to estimate revenues and recognize sales-based royalties on such licensed products in the period in which the associated sales occur, considering all relevant information (historical, current and forecasted) that is reasonably available to us.
We receive these royalty reports subsequent to the period in which our licensees’ underlying sales occurred. As a result, we are required to estimate revenue and recognize sales-based royalties on such licensed products in the period in which the associated sales occur, considering all relevant information (historical, current and forecasted) that is reasonably available to us.
The following table reconciles the timing differences between cash receipts and recognized revenue on a quarterly basis for each of the last two years, including the resulting operating cash flow (in thousands): 2024 Cash vs.
The following table reconciles the timing differences between cash receipts and recognized revenue on a quarterly basis for each of the last two years, including the resulting operating cash flow (in thousands): 2025 Cash vs.
We utilize the sales- or usage- based royalty exception for these agreements and recognize revenues during the contract term when the underlying sale or usage occurs. Our licensees under variable agreements provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us.
We utilize the sales- or usage- based royalty exception for these agreements and recognize revenue during the contract term when the underlying sale or usage occurs. Our licensees under variable agreements typically provide us with quarterly royalty reports that summarize their sales of covered products and their related royalty obligations to us.
Contract assets are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. Contract assets due within less than twelve months of the balance sheet date are included within accounts receivable in our consolidated balance sheets.
Contract assets due within less than twelve months of the balance sheet date are included within accounts receivable in our consolidated balance sheets. Contract assets are classified as long-term assets within other non-current assets if the payments are expected to be received more than one year from the reporting date.
We undertake no obligation to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law. 46 Table of Contents
We undertake no obligation to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law. 45 Table of Contents
(b) Other cash receipts are primarily comprised of cash receipts related to our variable patent royalty revenue and catch-up revenues. 32 Table of Contents When we collect payments on a front-loaded basis, we recognize a deferred revenue liability equal to the cash received and accounts receivable recorded which relate to revenue expected to be recognized in future periods.
(b) Other cash receipts are primarily comprised of cash receipts related to our variable patent royalty revenue and catch-up revenue. When we collect payments on a front-loaded basis, we recognize a deferred revenue liability equal to the cash received and accounts receivable recorded which relate to revenue expected to be recognized in future periods.
The following section generally discusses our financial condition and results of operations for our fiscal year ended December 31, 2024 compared to our fiscal year ended December 31, 2023.
The following section generally discusses our financial condition and results of operations for our fiscal year ended December 31, 2025 compared to our fiscal year ended December 31, 2024.
A discussion regarding our financial condition and results of operations for December 31, 2023 compared to our fiscal year ended December 31, 2022 can be found in Part II, Item 7 of our Annual Report on Form 10-K for fiscal year 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2024.
A discussion regarding our financial condition and results of operations for December 31, 2024 compared to our fiscal year ended December 31, 2023 can be found in Part II, Item 7 of our Annual Report on Form 10-K for fiscal year 2024, filed with the Securities and Exchange Commission (the “SEC”) on February 6, 2025.
Our consolidated balance sheet as of December 31, 2024 includes a $13.8 million non-current liability for uncertain tax positions. The future payments related to uncertain tax positions have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.
Our consolidated balance sheet as of December 31, 2025 includes a $13.5 million non-current liability for uncertain tax positions. The future payments related to uncertain tax positions have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.
Such legal actions ultimately may be decided by the presiding court, third party adjudicator, or a negotiated resolution between the parties. 31 Table of Contents We initiated litigation against Lenovo and OPPO to enforce our intellectual patent rights in 2019 and 2021, respectively.
Such legal actions ultimately may be decided by the presiding court, third party adjudicator, or a negotiated resolution between the parties. We initiated litigation against Lenovo and OPPO to enforce our intellectual patent rights in 2019 and 2021, respectively.
As part of these agreements, we and both third parties agreed to dismiss all pending litigations between us, and accordingly all litigations with Lenovo and OPPO have been dismissed as of fourth quarter 2024. Currently, our open enforcement actions include the arbitration proceedings with Lenovo and Samsung.
As part of these agreements, we and both third parties agreed to dismiss all pending litigations between us, and accordingly all litigations with Lenovo and OPPO have been dismissed as of fourth quarter 2024. Currently, our open enforcement actions include proceedings with Transsion, Disney, and Amazon, and the arbitration proceedings with Lenovo.
Timing of revenue recognition may differ significantly from the timing of invoicing to customers. Contract assets are included in accounts receivable and represent unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and right to payment is subject to the underlying contractual terms.
Timing of revenue recognition may differ significantly from the timing of invoicing to customers. Contract assets represent unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and right to payment is subject to the underlying contractual terms.
If different assumptions were made or different conditions existed, our financial results could have been materially different. Revenue Recognition We derive the vast majority of our revenue from patent licensing.
If different assumptions were made or different conditions existed, our financial results could have been materially different. 33 Table of Contents Revenue Recognition We derive the vast majority of our revenue from patent licensing.
As of December 31, 2024, InterDigital's wholly owned subsidiaries held a portfolio of more than 33,000 patents and patent applications related to wireless communications, video coding, display technology, and other areas relevant to communications and entertainment products and services.
As of December 31, 2025, InterDigital's wholly owned subsidiaries held a portfolio of more than 38,000 patents and patent applications related to wireless communications, video coding, display technology, and other areas relevant to communications and entertainment products and services.
The impact that a five-percent change in the estimated aggregate value of the patents acquired would have had on 2024 revenue, patent amortization and pre-tax income is summarized in the following table (in thousands): Change in estimate Estimated value of patents acquired in connection with PLAs +5% -5% Revenue $ 732 $ (732) Less: Patent amortization 614 (614) Pre-tax income $ 118 $ (118) Compensation Programs We use a variety of compensation programs to attract, retain and motivate our employees, and to align employee compensation more closely with company performance.
The impact that a five-percent change in the estimated aggregate value of the patents acquired would have had on 2025 revenue, patent amortization and pre-tax income is summarized in the following table (in thousands): Change in estimate Estimated value of patents acquired in connection with PLAs +5% -5% Revenue $ 130 $ (130) Less: Patent amortization 664 (664) Pre-tax income $ (534) $ 534 Compensation Programs We use a variety of compensation programs to attract, retain and motivate our employees, and to align employee compensation more closely with company performance.
This amount includes the $199.9 million, excluding fees, expenses and excise tax, repurchased as part of the modified “Dutch auction” tender offer in 2023. As of December 31, 2024, there was $229.5 million remaining under the Share Repurchase Program authorization.
This amount includes the $199.9 million, excluding fees, expenses and excise tax, repurchased as part of the modified “Dutch auction” tender offer in 2023. As of December 31, 2025, there was $127.2 million remaining under the Share Repurchase Program authorization.
Between 2014 and 2024, we paid approximately $141.9 million in foreign taxes to foreign governments that have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations, and for which the tax treaty procedures are still open.
Between 2014 and 2025, we paid approximately $205.2 million in foreign taxes to foreign governments that have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations, and for which the tax treaty procedures are still open.
Non-cash revenue: Q1 Q2 Q3 Q4 Total Fixed fee cash receipts (a) $ 190,985 $ 33,705 $ 160,300 $ 240,945 $ 625,935 Other cash receipts (b) 10,773 14,583 9,919 12,700 47,975 Decrease (increase) in deferred revenue 27,542 26,866 (50,495) 20,422 24,335 Increase (decrease) in receivables 28,337 78,011 (11,220) (24,118) 71,010 Other 5,905 70,328 20,175 2,853 99,261 Total Revenue $ 263,542 $ 223,493 $ 128,679 $ 252,802 $ 868,516 Net cash provided by (used in) operating activities $ 50,773 $ (48,910) $ 77,631 $ 192,034 $ 271,528 2023 Cash vs.
Non-cash revenue: Q1 Q2 Q3 Q4 Total Fixed fee cash receipts (a) $ 190,985 $ 33,705 $ 160,300 $ 240,945 $ 625,935 Other cash receipts (b) 10,773 14,583 9,919 12,700 47,975 Change in deferred revenue 27,542 26,866 (50,495) 20,422 24,335 Change in receivables 28,337 78,011 (11,220) (24,118) 71,010 Other 5,905 70,328 20,175 2,853 99,261 Total Revenue $ 263,542 $ 223,493 $ 128,679 $ 252,802 $ 868,516 Net cash provided by (used in) operating activities $ 50,773 $ (48,910) $ 77,631 $ 192,034 $ 271,528 (a) Fixed fee cash receipts are comprised of cash receipts from Dynamic Fixed-Fee Agreement royalties, including the associated catch-up revenue.
However, under GAAP, since the impact of the 2027 Note Hedge Transactions is anti-dilutive, we exclude from the calculation of fully diluted shares the number of shares of our common stock that we would receive from the counterparties to these agreements upon settlement.
However, under GAAP, since the impact of the 2027 Note Hedge Transactions is anti-dilutive, we exclude from the calculation of diluted EPS the shares of our common stock that we would receive from the counterparties upon settlement of the 2027 Note Hedge Transactions.
Income Taxes In 2024, based on the statutory federal tax rate net of discrete federal and state taxes, our effective tax rate is 16.5%, as compared to an effective tax of 10.0% in 2023.
Income Taxes In 2025, based on the statutory federal tax rate net of discrete federal and state taxes, our effective tax rate is 13.4%, as compared to an effective tax of 16.5% in 2024.
On the consolidated statements of cash flows, tax windfalls and shortfalls related to employee share-based compensation awards are included within operating activities and cash paid to tax authorities for shares withheld are included within financing activities. The inclusion of windfalls and shortfalls in the tax provision could increase our earnings volatility between periods.
Tax windfalls and shortfalls related to the tax effects of employee share-based compensation are included in our tax provision. On the consolidated statements of cash flows, tax windfalls and shortfalls related to employee share-based compensation awards are included within operating activities and cash paid to tax authorities for shares withheld are included within financing activities.
The impact that a five percent change in the aggregate amount allocated to catch-up revenues under these agreements would have had on 2024 revenue is summarized in the following table (in thousands): Change in amount allocated Allocation to catch-up revenues +5% -%5 Change in revenue $ 8,733 $ (8,733) Revenue from Non-financial Sources During 2024, 2023, and 2022, approximately 2%, 3% and 4%, respectively, of our total revenue was based on the estimated fair value of non-financial consideration received, principally patents.
The impact that a five percent change in the aggregate amount allocated to catch-up revenue under these agreements would have had on 2025 revenue is summarized in the following table (in thousands): Change in amount allocated Allocation to catch-up revenue +5% -5% Change in revenue $ 11,689 $ (11,689) 35 Table of Contents Revenue from Non-financial Sources During 2025, 2024, and 2023, less than 1%, 2% and 3%, respectively, of our total revenue was based on the estimated fair value of non-financial consideration received, principally patents.
However, under GAAP, we are required to exclude the impact of the shares received from the 2027 Note Hedge Transactions counterparties from the calculation of weighted average diluted shares outstanding.
However, under Generally Accepted Accounting Principles in the United States ("GAAP"), we are required to exclude the impact of the shares received from the 2027 Note Hedge Transactions counterparties from the calculation of weighted-average diluted shares outstanding.
As the principal amount must be paid in cash and only the conversion spread is settled in shares, we only include the net number of incremental shares that would be issued upon conversion.
As the principal amount is required to be paid in cash and only the conversion spread may result in shares being issued, we only include the net number of incremental shares that would be issued upon conversion.
As of December 31, 2024, 5.9 million warrants remain outstanding related to the 2027 Warrant Transactions at a weighted average strike price of $106.22 per share, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028.
As of December 31, 2025, 6.0 million warrants remain outstanding related to the 2027 Warrant Transactions at a weighted-average strike price of $105.67 per share, subject to adjustment, which mature on a net-share basis beginning September 2027 through April 2028.
The below table summarizes our supplemental compensation expense for 2024, 2023 and 2022, in thousands: Year Ended December 31, 2024 2023 2022 Short-term incentive compensation $ 27,589 $ 19,780 $ 24,341 Time-based awards (a) 25,499 26,426 15,422 Performance-based awards (a) 20,756 10,035 8,155 Total supplemental compensation expense $ 73,844 $ 56,241 $ 47,918 (a) For 2024, 2023 and 2022, approximately 1%, 3%, and 8%, respectively, of the aggregate expense associated with time-based and performance-based awards related to cash awards.
The below table summarizes our supplemental compensation expense for 2025, 2024 and 2023, in thousands: Year Ended December 31, 2025 2024 2023 Short-term incentive compensation $ 30,231 $ 27,589 $ 19,780 Time-based awards (a) 27,188 25,499 26,426 Performance-based awards (a) 16,249 20,756 10,035 Total supplemental compensation expense $ 73,668 $ 73,844 $ 56,241 (a) For 2025, 2024 and 2023, approximately 1%, 1%, and 3%, respectively, of the aggregate expense associated with time-based and performance-based awards related to cash awards.
As a result of this agreement, the Company does not anticipate any tax consequences. New Accounting Guidance Refer to Note 2, " Summary of Significant Accounting Policies and New Accounting Guidance " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for a discussion of recently issued accounting guidance.
New Accounting Guidance Refer to Note 2, " Summary of Significant Accounting Policies and New Accounting Guidance " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for a discussion of recently issued accounting guidance.
Throughout the following discussion and elsewhere in this Form 10-K, we refer to “recurring revenues” and “catch-up revenues.” For variable and dynamic fixed-fee license agreements, “catch-up revenues” primarily represents revenue associated with reporting periods prior to the execution of the license agreement, while “recurring revenue” represents revenue associated with reporting periods beginning with the execution of the license agreement.
Throughout the following discussion and elsewhere in this Form 10-K, we refer to “catch-up revenue.” For variable and dynamic fixed-fee license agreements, “catch-up revenue” primarily represents revenue associated with reporting periods prior to the execution of the license agreement. 28 Table of Contents Business InterDigital, Inc.
The table below sets forth the total number of shares repurchased and the dollar value of shares repurchased under the Share Repurchase Program, cash dividends on outstanding common stock declared, and the total capital returned to our shareholders (in thousands): Share Repurchase Program Cash Dividends Declared Total Capital Returned to Shareholders # of Shares Value Per Share Value 2024 644 $ 66,726 $ 1.70 $ 43,130 $ 109,856 2023 4,411 339,704 1.50 39,296 379,000 2022 1,224 74,445 1.40 41,949 116,394 2021 458 30,000 1.40 43,041 73,041 2020 6 349 1.40 43,111 43,460 2019 2,962 196,269 1.40 43,718 239,987 2018 1,478 110,505 1.40 47,922 158,427 2017 107 7,693 1.30 45,122 52,815 2016 1,304 64,685 1.00 34,359 99,044 2015 1,836 96,410 0.80 28,726 125,136 2014 3,554 152,625 0.70 27,153 179,778 Total 17,984 $ 1,139,411 $ 14.00 $ 437,527 $ 1,576,938 Impact of Macroeconomic and Geopolitical Factors We have been actively monitoring the impact of the current macroeconomic environment in the U.S. and globally characterized by inflation, supply chain issues, high interest rates, labor shortages, and the potential for a recession.
Combined with previous increases, we have increased the dividend by 75% since the start of 2024. 32 Table of Contents The table below sets forth the total number of shares repurchased and the dollar value of shares repurchased under the Share Repurchase Program, cash dividends on outstanding common stock declared, and the total capital returned to our shareholders (in thousands): Share Repurchase Program Cash Dividends Declared Total Capital Returned to Shareholders # of Shares Value Per Share Value 2025 385 $ 102,319 $ 2.60 $ 67,105 $ 169,424 2024 644 66,726 1.70 43,130 109,856 2023 4,411 339,704 1.50 39,296 379,000 2022 1,224 74,445 1.40 41,949 116,394 2021 458 30,000 1.40 43,041 73,041 2020 6 349 1.40 43,111 43,460 2019 2,962 196,269 1.40 43,718 239,987 2018 1,478 110,505 1.40 47,922 158,427 2017 107 7,693 1.30 45,122 52,815 2016 1,304 64,685 1.00 34,359 99,044 2015 1,836 96,410 0.80 28,726 125,136 2014 3,554 152,625 0.70 27,153 179,778 Total 18,369 $ 1,241,730 $ 16.60 $ 504,632 $ 1,746,362 Impact of Macroeconomic and Geopolitical Factors We have been actively monitoring the impact of the current macroeconomic environment in the U.S. and globally characterized by market volatility, inflation, supply chain issues, high interest rates, tariffs and other potential trade-related sanctions, and the potential for a recession.
These costs represented 33% of our total licensing costs of $169.2 million in 2024. Intellectual property enforcement costs will vary depending upon activity levels, and it is likely they will continue to be a significant expense for us in the future.
In 2025, our intellectual property enforcement costs decreased to $48.9 million, from $56.2 million in 2024. These costs represented 52% of our total licensing costs of $93.6 million in 2025. Intellectual property enforcement costs will vary depending upon activity levels, and it is likely they will continue to be a significant expense for us in the future.
Amount includes revenue share costs of $81.3 million and $3.3 million in 2024 and 2023, respectively. (b) Income taxes paid include foreign withholding taxes. Cash provided by or used in investing and financing activities Net cash provided by investing activities in 2024 was $109.5 million, a $194.6 million change from $85.2 million net cash used in investing activities in 2023.
Amount includes revenue share costs of $10.1 million and $81.3 million in 2025 and 2024, respectively. (b) Income taxes paid include foreign withholding taxes. Cash provided by or used in investing and financing activities Net cash used in investing activities in 2025 was $140.3 million, a $249.7 million change from $109.5 million net cash provided by investing activities in 2024.
Assuming a share price of $175, we would issue 2.3 million of common shares related to the 2027 Warrant Transactions. Refer to "Financial Position, Liquidity, and Capital Resources — Convertible Notes" for further information regarding how changes in our stock price would affect the number of shares issuable related to the 2027 Warrant Transactions.
Refer to " Financial Position, Liquidity, and Capital Resources — Convertible Notes " for further information regarding how changes in our stock price would affect the number of shares issuable related to the 2027 Warrant Transactions.
During periods in which the average market price of our common stock is above the applicable conversion price of the Convertible Notes ($77.49 per share for the 2027 Notes as of December 31, 2024) or above the weighted average strike price of the warrants ($106.22 per share for the 2027 Warrant Transactions s as of December 31, 2024), the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share.
During periods in which the average market price of our common stock is above the applicable conversion price of the 2027 Notes (initial conversion price of approximately $77.49 per share), or above the strike price of the warrants (weighted average strike price of $105.67 per share), the impact of conversion of the 2027 Notes or exercise of the warrants, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share.
The increase in the effective rate was primarily attributable the impact of a higher percentage of foreign derived intangible income and a larger reversal of a valuation allowance in the prior year. 45 Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Exchange Act.
The decrease in the effective rate was primarily attributable the impact of a higher percentage of foreign derived intangible income deduction and increase in share-based compensation deductions. 44 Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Exchange Act.
The following table shows the projected amortization of our current and long term deferred revenue as of December 31, 2024 (in thousands): Deferred Revenue 2025 $ 178,009 2026 139,017 2027 39,486 2028 1,141 2029 1,206 Thereafter 1,269 Total $ 360,128 Return of Capital In June 2014, our Board of Directors authorized a $300 million share repurchase program (the “Share Repurchase Program”).
The following table shows the projected amortization of our current and long term deferred revenue as of December 31, 2025 (in thousands): Deferred Revenue 2026 $ 193,722 2027 132,265 2028 1,141 2029 1,206 2030 1,270 Thereafter — Total $ 329,604 Return of Capital In June 2014, our Board of Directors authorized a $300 million share repurchase program (the “Share Repurchase Program”).
Refer to Note 10, " Obligations ," within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information.
Convertible Notes Refer to Note 10, " Obligations " in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for definitions of the capitalized terms used in this section.
We have contributed technology to video standards including standards established by ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others.
We have contributed technology to video standards including standards established by ISO/IEC Moving Picture Expert Group (MPEG), the ITU-T Video Coding Expert Group (VCEG), the Joint Collaborative Team on Video Coding (JCT-VC) and the Joint Video Expert Team (JVET), among others. We also develop technologies and associated patents enabling high dynamic range (HDR) production, distribution and display solutions.
Cash and Short-Term Investments As of December 31, 2024, we had $982.4 million of cash, restricted cash, and short-term investments and an additional $1.4 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under the Samsung and Lenovo arbitrations. 89% of our recurring revenue comes from fixed-fee royalties.
Cash and Short-Term Investments As of December 31, 2025, we had $1.3 billion of cash, restricted cash, and short-term investments and approximately $1.5 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under the Lenovo arbitration. 93% of our 2025 revenue comes from fixed-fee agreements.
Subsequently our Board of Directors authorized five $100 million increases to the program, an additional $333 million in December 2022, and an additional $235 million in December 2023, bringing the total amount of the Share Repurchase Program to nearly $1.4 billion. Since 2014, we have repurchased $1.1 billion of shares at an average price of $63.27, adjusted for dividends.
Subsequently our Board of Directors authorized additional increases to the program, most recently in December 2023, bringing the total authorization of the Share Repurchase Program to nearly $1.4 billion. Since 2014, we have repurchased $1.2 billion of shares at an average price of $62.50, adjusted for dividends.
Refer to the sections below for further discussion of these items. 38 Table of Contents Cash flows from operations We generated the following cash flows from our operating activities in 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Increase / (Decrease) Cash flows provided by operating activities $ 271,528 $ 213,733 $ 57,795 Our cash flows provided by operating activities are principally derived from cash receipts from patent license agreements, offset by cash operating expenses and income tax payments.
Cash flows from operations We generated the following cash flows from our operating activities in 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Increase / (Decrease) Cash flows provided by operating activities $ 544,450 $ 271,528 $ 272,922 38 Table of Contents Our cash flows provided by operating activities are principally derived from cash receipts from patent license agreements, offset by cash operating expenses and income tax payments.
These steps include (1) identifying the contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity satisfies the performance obligation(s). Additionally, we have elected to utilize certain practical expedients in the application of ASC 606.
These steps include (1) identifying the contract with the customer, (2) identifying the performance obligations, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue as the entity satisfies the performance obligation(s).
From the period January 1, 2024 through March 31, 2025, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes.
From the period January 1, 2024 through March 31, 2026, the holders of the 2027 Notes have the right, but not the obligation, to convert any portion of the principal amount of the 2027 Notes. In December 2025, certain holders elected to convert $80.0 million of principal, which will settle in first quarter 2026.
We are actively working to renew these agreements on terms consistent with the licensees' respective market positions and utilization of our technology.
We are actively working to renew these agreements on terms consistent with each licensee’s market position and use of our technology.
Intellectual Property Rights Enforcement If we believe a party is required to license our patents in order to manufacture, use and/or sell certain products or services and such party refuses to do so, we typically offer such party to have royalties, or other terms, set by third party adjudicators (such as arbitrators).
For example, if the share price was $350, we would issue 4.2 million of common shares related to the 2027 Warrant Transactions. 30 Table of Contents Intellectual Property Rights Enforcement If we believe a party is required to license our patents in order to manufacture, use and/or sell certain products or services and such party refuses to do so, we typically offer such party to have royalties, or other terms, set by third party adjudicators (such as arbitrators).
Our patented inventions have also been implemented in a wide variety of services, such as video streaming, user generated content sharing, video conferencing, video gaming, and other cloud-based services. Revenue In 2024 and 2023, our total revenues were $868.5 million and $549.6 million, respectively. Our recurring revenues were $408.4 million in both 2024 and 2023.
Our patented inventions have also been implemented in a wide variety of services, such as video streaming, user generated content sharing, video conferencing, video gaming, and other cloud-based services.
We allocated the transaction price to each performance obligation for accounting purposes using our best estimate of the term and value.
Agreements with Multiple Performance Obligations During 2025, we signed new fixed-fee agreements that had multiple performance obligations. We allocated the transaction price to each performance obligation for accounting purposes using our best estimate of the term and value.
Under the if-converted method, we must assume that conversion of convertible securities occurs at the beginning of the reporting period. The 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any remaining obligation may be settled in cash, shares of the Company’s common stock or a combination thereof.
The 2027 Notes are convertible into cash up to the aggregate principal amount of the 2027 Notes to be converted and any value in excess of the principal amount ("the conversion spread") may be settled in cash, shares of the Company’s common stock, or a combination thereof.
Tax windfalls and shortfalls related to share-based compensation was windfalls of $4.9 million and $3.1 million for the years ended 2024 and 2023, respectively, and shortfalls for the year ended 2022 of $0.4 million.
The inclusion of windfalls and shortfalls in the tax provision could increase our earnings volatility between periods. Tax windfalls related to share-based compensation was windfalls of $7.4 million, $4.9 million, and $3.1 million for the years ended 2025, 2024, and 2023, respectively.
As of December 31, 2024, we have a debt obligation of $17.0 million related to the Technicolor Patent Acquisition. Additionally, we are subject to a revenue-sharing arrangement with Technicolor resulting from the Technicolor Acquisitions.
As of December 31, 2025, we have a debt obligation of $17.9 million related to the Technicolor Patent Acquisition and due to the uncertainty regarding the timing and amount of future payments, the amounts are excluded from the contractual obligations table above. Additionally, we are subject to a revenue-sharing arrangement with Technicolor resulting from the Technicolor Acquisitions.
In 2024 and 2023, we recognized $460.1 million and $141.2 million, respectively, of catch-up revenues as more fully discussed below. In 2024, fixed-fee royalties accounted for 89% of our recurring revenues. These fixed-fee revenues are not affected by the related licensees’ success in the market or the general economic climate.
Revenue In 2025 and 2024, our total revenue was $834.0 million and $868.5 million, respectively, which includes $277.4 million and $460.1 million, respectively, of catch-up revenue as more fully discussed below. In 2025, fixed-fee agreements accounted for 93% of our revenue. These fixed-fee revenue are not affected by the related licensees’ success in the market or the general economic climate.
These market factors, as well as the impacts of the Ukraine-Russia and Middle East conflicts, have not had a material impact on our business to date.
These market factors, as well as the impacts of the Ukraine-Russia, Middle East and other global conflicts, have not had a material impact on our business to date. However, if these conditions continue or worsen, they could have an adverse effect on our operating results and our financial condition.
In such cases, we estimate and recognize licensing revenues only when we have a contract, as defined in the revenue recognition guidance. Such estimates are only recognized to the extent it is probable that a significant reversal of cumulative revenues recognized will not occur.
Such estimates are only recognized to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur.
Cash, cash equivalents, restricted cash, and short-term investments As of December 31, 2024 and 2023, we had the following amounts of cash, cash equivalents, restricted cash, and short-term investments (in thousands): December 31, 2024 December 31, 2023 Increase / (Decrease) Cash and cash equivalents $ 527,360 $ 437,076 $ 90,284 Restricted cash included within prepaid and other current assets 24,187 5,885 18,302 Short-term investments 430,848 569,280 (138,432) Total cash, cash equivalents, restricted cash, and short-term investments $ 982,395 $ 1,012,241 $ (29,846) The net decrease in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash used in financing activities of $272.4 million and cash used in investing activities of $47.2 million, excluding sales and purchases of short-term investments, partially offset by cash provided by operating activities of $271.5 million.
Cash, cash equivalents, restricted cash, and short-term investments As of December 31, 2025 and 2024, we had the following amounts of cash, cash equivalents, restricted cash, and short-term investments (in thousands): December 31, 2025 December 31, 2024 Increase / (Decrease) Cash and cash equivalents $ 738,960 $ 527,360 $ 211,600 Restricted cash included within prepaid and other current assets 15,308 24,187 (8,879) Short-term investments 504,200 430,848 73,352 Total cash, cash equivalents, restricted cash, and short-term investments $ 1,258,468 $ 982,395 $ 276,073 The net increase in cash, cash equivalents, restricted cash, and short-term investments was attributable to cash provided by operating activities of $544.5 million partially offset by cash used in financing activities of $201.4 million and cash used in investing activities of $79.7 million, excluding sales and purchases of short-term investments.
The $57.8 million change in net cash provided by operating activities was driven by higher cash receipts from new agreements and due to timing of cash receipts under existing agreements. This increase was partially offset by an increase in cash operating expenses primarily due to increased revenue share costs from new patent license agreements.
The $272.9 million change in net cash provided by operating activities was driven by higher cash receipts resulting from timing of cash receipts on existing agreements and new agreements, and was partially offset by higher foreign withholding tax payments on those cash receipts. Additionally, cash operating expenses were lower primarily due to lower revenue share and litigation costs.
These matters are more fully discussed in Note 12, “ Litigation and Legal Proceedings ,” to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K. In 2024, our intellectual property enforcement costs increased to $56.2 million, from $48.8 million in 2023.
The Company anticipates that the arbitration hearing will occur before year end. These matters are more fully discussed in Note 12, “ Litigation and Legal Proceedings ,” to the Notes to Consolidated Financial Statements included below in Part II, Item 8 of this Form 10-K.
We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services.
("InterDigital") is a global research and development company focused primarily on wireless, video, artificial intelligence ("AI"), and related technologies. We design and develop foundational technologies that enable connected, immersive experiences in a broad range of communications and entertainment products and services.
In the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated financial condition or results of operations. 37 Table of Contents The financial statement recognition of the benefit for an uncertain tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable tax authority.
In the event that the IRS or another taxing jurisdiction levies an assessment in the future, it is possible the assessment could have a material adverse effect on our consolidated financial condition or results of operations.
Fixed-Fee Agreements Fixed-fee license agreements include fixed, non-refundable royalty payments that fulfill the licensee’s obligations to us under a patent license agreement for a specified time period or for the term of the agreement for specified products, under certain patents or patent claims, for sales in certain countries, or a combination thereof - in each case for a specified time period (including for the life of the patents licensed under the agreement).
Fixed-Fee Agreements Fixed-fee license agreements include fixed, non-refundable royalty payments that fulfill the licensee’s obligations to us under a patent license agreement for a specified time period or for the term of the agreement for specified products, under certain patents or patent claims, for sales in certain countries, or a combination thereof - in each case for a specified time period (including for the life of the patents licensed under the agreement). 34 Table of Contents Dynamic fixed-fee license agreements contain a performance obligation that represents ongoing access to a portfolio of technology over the license term, since our promise to transfer to the licensee access to the portfolio as it exists at inception of the license, along with promises to provide any technology updates to the portfolio during the term, are not separately identifiable.
In 2024 and 2023, the following licensees or customers accounted for 10% or more of our total revenues: Year Ended December 31, 2024 2023 Customer A 30% 14% Customer B 20% 27% Customer C 15% 24% Customer D 14% —% Customer E 11% 43 Table of Contents Operating Expenses The following table summarizes the change in operating expenses by category (in thousands): Year Ended December 31, 2024 2023 Increase/(Decrease) Research and portfolio development $ 196,903 $ 195,285 $ 1,618 1 % Licensing 169,239 79,397 89,842 113 % General and administrative 62,862 53,291 9,571 18 % Total operating expenses $ 429,004 $ 327,973 $ 101,031 31 % Operating expenses increased 31% to $429.0 million in 2024 from $328.0 million in 2023.
In 2025 and 2024, the following licensees or customers accounted for 10% or more of our total revenue: Year Ended December 31, 2025 2024 Customer A 31% 30% Customer B 16% 15% Customer C 14% —% Customer D 20% Customer E 14% 42 Table of Contents Operating Expenses The following table summarizes the change in operating expenses by category (in thousands): Year Ended December 31, 2025 2024 Increase/(Decrease) Research and portfolio development $ 211,432 $ 196,903 $ 14,529 7 % Licensing 93,642 169,239 (75,597) (45) % General and administrative 68,088 62,862 5,226 8 % Total operating expenses $ 373,162 $ 429,004 $ (55,842) (13) % Operating expenses decreased 13% to $373.2 million in 2025 from $429.0 million in 2024.
For grants that cliff vest, we amortize the associated unrecognized compensation cost on a straight-line basis over their vesting term. For awards containing performance conditions, we recognize compensation expense ratably over the vesting period when it is probable that the stated performance targets will be achieved and record cumulative adjustments in the period in which estimates change.
For awards containing performance conditions, we recognize compensation expense ratably over the vesting period when it is probable that the stated performance targets will be achieved and record cumulative adjustments in the period in which estimates change. 36 Table of Contents In the event of canceled awards, we adjust compensation expense recognized to date as they occur.
Our long-term incentives, including equity awards, typically include annual equity or cash award grants with three to five year vesting periods; as a result, in any one year, we are typically accounting for at least three active cycles. 36 Table of Contents The aggregate amount of performance compensation expense we record in a period, under both short-term and long-term incentive compensation programs, requires the input of subjective assumptions and is a function of our estimated progress toward performance goals at both the beginning and the end of the period.
Our long-term incentives, including equity awards, typically include annual equity or cash award grants with three to five year vesting periods; as a result, in any one year, we are typically accounting for at least three active cycles.
The table below sets forth the significant items comprising our cash flows provided by operating activities during the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Increase / (Decrease) Total Cash Receipts $ 673,910 $ 492,004 $ 181,906 Cash Outflows: Cash operating expenses (a) (313,125) (211,525) (101,600) Income taxes paid (b) (67,541) (59,202) (8,339) Total cash outflows (380,666) (270,727) (109,939) Other working capital adjustments (21,716) (7,544) (14,172) Cash flows provided by operating activities $ 271,528 $ 213,733 $ 57,795 (a) Cash operating expenses include operating expenses less depreciation of fixed assets, amortization of patents, and non-cash compensation.
The table below sets forth the significant items comprising our cash flows provided by operating activities during the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Increase / (Decrease) Total Cash Receipts $ 877,641 $ 673,910 $ 203,731 Cash Outflows: Cash operating expenses (a) (252,302) (313,125) 60,823 Income taxes paid (b) (109,131) (67,541) (41,590) Total cash outflows (361,433) (380,666) 19,233 Other working capital adjustments 28,242 (21,716) 49,958 Cash flows provided by operating activities $ 544,450 $ 271,528 $ 272,922 (a) Cash operating expenses include operating expenses less depreciation, amortization, and share-based compensation.
Total revenues of $868.5 million increased 58% from $549.6 million in 2023 primarily due to catch-up revenues from new agreements signed in 2024, including the Samsung TV and OPPO agreements, as well as revenue recognized on the Lenovo cellular license resulting from the UK proceedings and arbitration agreement.
Total revenue of $834.0 million decreased $34.5 million from 2024 primarily due to larger catch-up revenue in 2024 resulting primarily from the Samsung TV and OPPO agreements, as well as the Lenovo UK ruling and arbitration agreement, partially offset by catch-up revenue on the Samsung arbitration decision and the vivo agreement in 2025.
The majority of the remaining portion of our recurring revenue was variable in nature due to the per-unit structure of the related license agreements. The Company considers Smartphone and CE, Auto/IoT as the groupings that best reflect the Company's core licensing programs.
The majority of the remaining portion of our revenue was variable in nature due to the per-unit structure of the related license agreements. Smartphone, CE, IoT/Auto, and Video Services are the Company's licensing programs. The Smartphone revenue grouping consists primarily of smartphones and also includes other wireless communication devices and infrastructure equipment, such as tablets, and base stations.
If the matter had been resolved as of December 31, 2024, we would have recognized a loss up to $22.8 million based on exchange rates and prior competent authority resolutions.
If the matter had been resolved as of December 31, 2025, we would have recognized a loss up to $22.5 million based on exchange rates and prior competent authority resolutions. The One Big Beautiful Bill Act (the “OBBBA”) was signed into law on July 4th, 2025. The OBBBA contains significant tax law changes with various effective dates affecting business taxpayers.
The agreement licenses Samsung’s digital TVs and computer display monitors under InterDigital's joint licensing program with Sony and includes licenses to key technologies including ATSC 3.0, as well as licenses under InterDigital’s patents including HEVC, VVC and Wi-Fi. In June 2024, we signed a new device license agreement with Google.
The agreement licenses LG’s digital TVs and computer display monitors under InterDigital´s joint licensing program with Sony and includes licenses to technologies including ATSC 3.0, Wi-Fi and video codecs. In January 2026, we renewed a worldwide, non-exclusive, royalty bearing license with Xiaomi.
During 2024, we sold $156.7 million of short-term marketable securities, net of purchases, and capitalized $63.0 million of patent costs, patent purchases, and property and equipment purchases. Additionally, we received $15.8 million of net cash receipts from the sales our long-term strategic investments.
During 2025, we purchased $60.6 million of short-term marketable securities, net of sales, and capitalized $70.5 million of patent costs and property and equipment purchases. During 2024, we sold $156.7 million of short-term marketable securities, net of purchases, and capitalized $58.7 million of patent costs and property and equipment purchases.
We must calculate the number of shares of our common stock issuable under the terms of the 2027 Notes based on the average market price of our common stock during the applicable reporting period and include that number in the total diluted shares figure for the period.
In those periods, we calculate the incremental shares associated with the 2027 Notes (under the if‑converted method) or the warrants based on the average market price of our common stock during the period and include those incremental shares in weighted‑average diluted shares outstanding.
Licensing expense: The $89.8 million increase in licensing expense primarily resulted from the above-noted increases in revenue share, intellectual property enforcement, and performance-based compensation costs, partially offset by the net litigation fee reimbursement activity. General and administrative expense: The $9.6 million increase in general and administrative expense was primarily driven by the above-noted increase in performance-based compensation.
Licensing expense: Licensing expense decreased by $75.6 million compared to 2024 primarily resulting from the above-noted decreased revenue share and intellectual property enforcement costs, partially offset by the above-noted litigation fee reimbursements and severance costs. General and administrative expense: General and administrative expense increased by $5.2 million compared to 2024 primarily due to the above noted increases in severance costs.
As a result, in periods where the average market price of our common stock is above the conversion price or strike price, as applicable, under the if-converted method, we calculate the number of shares issuable under the terms of the 2027 Notes and the warrants based on the average market price of the stock during the period, and include that number in the total diluted shares outstanding for the period. 40 Table of Contents Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the fully diluted earnings per share calculation.
Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the diluted EPS calculation.
Notes, Hedge, and Warrant Transactions Refer to Note 10, " Obligations " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for definitions of capitalized terms used below. 2024 Notes and Related Note Hedge and Warrant Transactions On June 1, 2024, the 2024 Notes matured and we repaid $126.2 million in aggregate principal in cash and issued 0.3 million common shares to settle the remaining obligation.
Notes, Hedge, and Warrant Transactions Refer to Note 10, " Obligations " within the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for definitions of capitalized terms used below. 2027 Notes and Related Note Hedge and Warrant Transactions During 2025, the 2027 Notes had a dilutive impact of 4.1 million shares, which are offset from an economic standpoint by the 2027 Note Hedge Transactions and would result in no incremental shares being issued upon conversion.
At the time we issued the 2027 Notes, we entered into the 2027 Call Spread Transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the 2027 Notes by, in effect, increasing the conversion price of the 2027 Notes from our economic standpoint.
We calculate the number of shares of our common stock issuable under the terms of the 2027 Notes based on the average market price of our common stock during the applicable reporting period and include that number in the weighted‑average diluted shares outstanding for the period. 39 Table of Contents At the time we issued the 2027 Notes, we entered into the 2027 Call Spread Transactions that together were designed to have the economic effect of reducing potential dilution upon conversion of the 2027 Notes by, in effect, increasing the conversion price of the 2027 Notes on an economic basis.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe warrants along with any shares issuable upon conversion of the 2027 Notes will have a dilutive effect on our earnings per share to the extent that the average market price of our common stock for a given reporting period exceeds the applicable strike price or conversion price of the warrants or convertible 2027 Notes. 48 Table of Contents
Biggest changeThe warrants will have a dilutive effect for any incremental shares issued upon settlement and on our earnings per share to the extent that the average market price of our common stock for a given reporting period exceeds the applicable strike price or conversion price of the warrants or convertible 2027 Notes. 47 Table of Contents
The following table provides information about our interest-bearing securities that are sensitive to changes in interest rates as of December 31, 2024. The table presents principal cash flows, weighted-average yield at cost and contractual maturity dates. Additionally, we have assumed that these securities are similar enough within the specified categories to aggregate these securities for presentation purposes.
The following table provides information about our interest-bearing securities that are sensitive to changes in interest rates as of December 31, 2025. The table presents principal cash flows, weighted-average yield at cost and contractual maturity dates. Additionally, we have assumed that these securities are similar enough within the specified categories to aggregate these securities for presentation purposes.
If the matter had been resolved as of December 31, 2024, we would have recognized a loss up to $22.8 million based on exchange rates and prior competent authority resolutions. 47 Table of Contents Investment Risk — We are exposed to market risk as it relates to changes in the market value of our short-term and long-term investments in addition to the liquidity and creditworthiness of the underlying issuers of our investments.
If the matter had been resolved as of December 31, 2025, we would have recognized a loss up to $22.5 million based on exchange rates and prior competent authority resolutions. 46 Table of Contents Investment Risk — We are exposed to market risk as it relates to changes in the market value of our short-term and long-term investments in addition to the liquidity and creditworthiness of the underlying issuers of our investments.
Our marketable securities, consisting of government obligations, corporate bonds and commercial paper, are primarily classified as available-for-sale with a fair value of $446.7 million as of December 31, 2024. Equity Risk — We are exposed to changes in the market-traded price of our common stock as it influences the calculation of earnings per share.
Our marketable securities, consisting of government obligations, corporate bonds and commercial paper, are primarily classified as available-for-sale with a fair value of $513.4 million as of December 31, 2025. Equity Risk — We are exposed to changes in the market-traded price of our common stock as it influences the calculation of earnings per share.
Interest Rate Risk — We invest our cash in a number of diversified high quality investment-grade fixed and floating rate securities with a fair value of $982.4 million as of December 31, 2024. Our exposure to interest rate risks is not significant due to the short average maturity, quality and diversification of our holdings.
Interest Rate Risk — We invest our cash in a number of diversified high quality investment-grade fixed and floating rate securities with a fair value of $1,258.5 million as of December 31, 2025. Our exposure to interest rate risks is not significant due to the short average maturity, quality and diversification of our holdings.
Between 2014 and 2024, we paid approximately $141.9 million in foreign taxes to foreign governments that have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations, and for which the tax treaty procedures are still open.
Between 2014 and 2025, we paid approximately $205.2 million in foreign taxes to foreign governments that have tax treaties with the U.S., for which we have claimed foreign tax credits against our U.S. tax obligations, and for which the tax treaty procedures are still open.
Bank Liquidity Risk — As of December 31, 2024, we had approximately $535.7 million in operating accounts that are held with domestic and international financial institutions. The majority of these balances are held with domestic financial institutions.
Bank Liquidity Risk — As of December 31, 2025, we had approximately $745.0 million in money market and operating accounts that are held with domestic and international financial institutions. The majority of these balances are held with domestic financial institutions.
Interest Rate Sensitivity Principal Amount by Expected Maturity Average Interest Rates (in thousands) 2025 2026 2027 2028 2029 Thereafter Total Money market and demand accounts $535,745 — — — — — $535,745 Short-term investments $323,784 $86,499 $36,367 — — — $446,650 Average interest rate 4.3 % 4.5 % 4.4 % — % — % — % 4.4 % Cash and cash equivalents and available-for-sale securities are recorded at fair value.
Interest Rate Sensitivity Principal Amount by Expected Maturity Average Interest Rates (in thousands) 2026 2027 2028 2029 2030 Thereafter Total Money market and demand accounts $745,024 — — — — — $745,024 Short-term investments $371,936 $116,894 $24,614 — — — $513,444 Average interest rate 3.7 % 3.7 % 3.9 % — % — % — % 3.7 % Cash and cash equivalents and available-for-sale securities are recorded at fair value.

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