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The call presented multiple strong positives: revenue, EBITDA and EPS beat guidance; ARR rose 13% YoY to $567M; record smartphone ARR and broad market coverage; decisive enforcement wins; leadership in standards and patents; and a robust balance sheet with active capital returns. Near-term headwinds include a sizable catch-up revenue quarter that increased licensing expense, a $139M accounts receivable build leading to modest operating cash in Q1, some pending litigation and incomplete renewals, and Q2 guidance that is lower on a like-for-like basis absent additional deals or enforcement results. On balance, the positives — particularly recurring ARR growth, licensing pipeline, IP enforcement momentum, and strong margins — materially outweigh the near-term operational and timing challenges.
InterDigital reiterated that Q2 revenue from existing contracts is expected to be $139–$143 million (generally consistent with Q1 ARR), with adjusted EBITDA of $67–$73 million (about a 50% margin), GAAP diluted EPS of $0.80–$0.97 and non‑GAAP diluted EPS of $1.41–$1.60; management is maintaining its full‑year guidance at prior levels and noted that any new agreements or enforcement outcomes would be incremental to these ranges. For context, Q1 results were above guidance—total revenue $205 million (vs. guidance $194–$200M) including $64 million of catch‑up revenue, adjusted EBITDA $112 million (54% margin), GAAP diluted EPS $2.14, non‑GAAP EPS $2.57, ARR $567 million (up 13% YoY) with smartphone ARR $492 million—and cash from operations was $16 million while accounts receivable rose $139 million (collections of which management expects will drive strong Q2 cash flow).
Total revenue of $205 million in Q1 2026 beat guidance of $194–$200 million; GAAP diluted EPS was $2.14 (vs guidance $1.61–$1.86) and non-GAAP EPS was $2.57 (above midpoint guidance). Adjusted EBITDA was $112 million (vs guidance $101–$110 million) with an adjusted EBITDA margin of 54%.
Annualized recurring revenue (ARR) reached $567 million, up 13% year-over-year, providing increased revenue visibility and recurring cash-flow potential.
Smartphone ARR reached a record $492 million; eight of the top 10 global smartphone manufacturers are now under license, covering approximately 85% of the smartphone market. The top three vendors are licensed through the end of the decade, supporting multi-year runway.
Total contract value of agreements signed since 2021 is approximately $4.7 billion, showcasing sustained licensing demand and deal flow.
Multiple enforcement wins in the quarter including a fourth injunction against Disney in Germany, an injunction in Brazil against Tencent, and a reported six-for-six recent injunction success rate across proceedings, strengthening negotiating leverage and potential licensing settlements.
Re-election of a top wireless engineer to a 3GPP chair position (company is one of only three worldwide with multiple 3GPP chairs); seven engineers re-elected or newly appointed since start of year increasing standards leadership to >110 roles. Ranked among top five U.S. companies by EPO patent applications in 2025 and included in LexisNexis Innovation Momentum Global Top 100 for five years running.
Launched Haptic Excellence Center in partnership with Razer and introduced energy-efficient video streaming technology; demonstrated AI-native network, sensing and collaborative cellular/Wi‑Fi sensing (prototype six‑G architecture) at Mobile World Congress, highlighting future monetization opportunities.
Ended Q1 with cash and short-term investments in excess of $1 billion; paid down $88 million of debt and returned $26 million to shareholders in the quarter. After April repurchases, $108 million remained on the share repurchase authorization. Management describes the balance sheet as a 'fortress.'
Company was promoted to the S&P MidCap index, reflecting recent growth and market capitalization progress.
Hello, and thank you for standing by. My name is [inaudible] and I will be your conference operator for today. At this time, I would like to welcome everyone to the InterDigital, Inc. first quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on the telephone keypad. If you would like to withdraw your question, press star one again.
I would now like to turn the call over to Raiford Garrabrant, Vice President of Investor Relations. Sir, please go ahead.
Thank you, [inaudible], and good morning, everyone. Welcome to InterDigital, Inc.'s first quarter 2026 Earnings Conference Call. I am Raiford Garrabrant, VP of Investor Relations for InterDigital, Inc. With me on today's call are Liren Chen, our President and CEO, and Rich Brezski, our CFO. As in prior calls, we will offer some highlights about the quarter and the company, and then open the call up for questions. For additional details, you can access our earnings release and slide presentation that accompany this call on our Investor Relations website. Before we begin our remarks, I need to remind you that in this call, we will make forward-looking statements regarding our current beliefs and plans. Expectations are not guarantees of future performance and are made only as of the date hereof.
Forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ mat...