InterDigital (IDCC) 17 Feb 222021 Q4 Earnings call transcript

Good day, and welcome to the InterDigital, Inc. Fourth Quarter 2021 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Richard Lloyd. Please go ahead.

and InterDigital's everyone, earnings quarter to call. conference morning welcome fourth to XXXX Good Lloyd, Communications Richard am I Director. our me Liren and Brezski, Chen, with our And in President CEO today's and call are CFO. Rich we will with quarter the for and company quarter's up Consistent open call offer and the last then questions. highlights about some the call,

future call, beliefs, begin forward-looking of statements make our to and plans Before not will expectations, performance I we are remind you only the our current made we need remarks, that and which in as this hereof. date are regarding guarantees of

Forward-looking the other that These to statements. statements results SEC Factors XXXX our Risk our contemplated are on differ subject cause events forward-looking in to such risks risks sections XX-K of and events and and and Report and in by could filings. Annual uncertainties uncertainties materially include Form results from described actual those

directly these section are of, to Reconciliations In measures turn which website. to addition, will financial metrics Relations financial on non-GAAP today's is most taken that With over measures. our GAAP I the to tracker presentation available Liren. contain the financial non-GAAP in call references our comparable Investor financial of of may the care included measures

increased million, Quite up several talk line, everyone year-over-year further for to company to and XXXX. revenue million, $XXX from Thanks, actual quarter grew well for achieved detail. position, with license our first, more we But bringing the our just to XX% have Rich the three cash Richard. numbers Good morning, with like had across top joining and major emphasize simply, renewal TV growth. and our $XXX total us an the is I XXXX, this including to you for business. our our we year agreements, In what successes want a XX% improved manufacturer, deal XX thanks In smartphone banner bottom with recent our InterDigital. QX, deal manufacturer, our through today. in Among was signed we in fourth XX top excellent year for successes, would how I new Xiaomi, Sony. a positioned those revenue

the XX much that in connected our our again last of build XG in the we proved and our Global for yet from world, our relevance to foundational World's so court. patent Recently, inclusion and the IP called our with outperforming enables their and pedigree the innovative our as to a Innovation the months, LexisNexis world-class lucky strong focus tested very report Momentum have deal report, technology technology strength and businesses, companies placed most XXX of new portfolio in the and among a expanded XXXX, This on licensing was Over in highlighted increased truly peers. exceptionally the our research report of by a group recognized those innovator InterDigital radio, the going Top a specifically programs, according XXX. future, momentum

work, particularly consumers than with hundreds standard, doubled innovation clearly pleased one quality the also the we success highlighted our to is to commitment millions portfolio. changing responded, one fire quarter, recognized digital demonstrates In continue the that television XG runaway the video, all worldwide, high by is a our by engineers on to our XG inclusion invention than invention up of story. as innovator the standards almost world strength have XG of our a engine our of such again industry translate the R&D contribution continues disclosure our of XX%. Our our be more our we development innovation despite and that by disclosures appointed steering in of cylinders. were I In in to part board system. was of be and XX% importing DVB, contribution to world's XXXX, and to increased as continues to report considerably once of COVID body XG peers. deepened proving foundational more our engineers an of highest quality patent senior XG. into our The our was fourth industry how of proving to XG In

over brings to from leaders to wireless that the decade. identify Research board shape key the academia appointed of was World Another steering industry will together and the Wireless the Forum, connectivity trends next which

world the standard again, to to of is Technical selected in technology contribute So start this organization our were today, tablet, on to the in another translating for that immersive. leadership work opportunity In technology how technology this more touchscreens effective more by only And to into It Haptics, innovation like of for this in excited in we it of number controllers the is standards a how technology opening but come. and that technology recognition will a of are to advanced company year, in lives. revenue. more Haptics become the of underpin we the MPEG, alongside and for as From Interhaptics. fourth smartphone we technology your game and our years connected that devices, and touch growing University I'm At new areas of holds proves up on such quarter, to develop promise works for The consumers' a Munich, great tactile applications. our demonstrated automotive. our we area metal also connected needs experiences industry licensing could not once focused are

than our double I'm a Sony. new number total XX. number joint brings venture the the XXXX than mentioned, last in any the two license with I of including renewal in that the company have we challenges in of this is not research testament years across execute we the signed licenses new license signed As ability of This is to cadence pleased signed of decades. continue in numerous Momentum to can more Not signed have XXXX the QX, we only have to of particularly contributions our more this new over also and five and pandemic. a of licensing deal we the powerful COVID technologies. deals, the incredible existing despite research the an our our quality making recognize strengths this our of team, deal of in with fact to only agreements, new be to but the reflecting key force business, and piece licensees licensing and

recent our also deliver strong concluded some terms most need license to our our times value sign are using of believe performance reflects record assume most strong return hard working another unwilling negotiations. are our technology a ensure our on our when of for technology risks Unfortunately, terms. delivers each license true in to done licensing to deal to FRAND But bilateral are and that deals shareholders. XXXX. Earlier been Lenovo establish We we -- month, we're what our the to we licenses licensing of through track this FRAND with in our there to have are London. trial But companies

not filed our strength While his going manufacturer details, where worth specific of comment to comment always but lawsuits litigate of Oppo case. licensing in Chinese series past technology, want the that on concluded on we to have court, specifics decision, we remembering and the also the [ph] quarter, of the of not the judge buyer before quality and portfolio, I to confident UK, I'm front the on with our a against In smartphone fourth IP we renders is it remain do case, our of terms. we of that in the Again, in Germany a had India. the agreement

on have how running rework only not the our but continued challenges protecting with that also to Our by our patent their seamlessly people's we connect Further our will financial developing innovation back posed we shows, as value track networks. which how connect XXXX, billions well-positioned are to more important become network, continued record consumers to not how world. pleased colleagues engage proving foundational and with how helps to around on our strengths invented favorite assumes to our very very XG the to we to research forward I'm with performance, I the execute and in we Wi-Fi across look look on portfolio. smoothly, have and engine rest the streaming have even calls, have business, capitalize in technology, of the we video technologies estimated lives XXXX, of the COVID, in kept adapt have we we of And

will has changes InterDigital over to to and commitment I Before consistently how we to all have the this And make to Rich, employees in talk excellent all their companies, more in numbers couple detail. hand And I through it last risen work we our of with the years. the hard delivering performance. would Rich, team to for you the occasion. operate that, Like had over like thank

Liren, the very going good results start on off into strong little everyone. detail morning, in financial and we XXXX. Thanks delivered I'll by more a

Liren which range quarter year, latest of last earned XXXX. we after As few fourth revenue $XXX midpoint We year license but also license the revenue, came our reported revenue guidance, agreements expected Dialing is by the is total over year above a including our Not our of on and more in during mentioned, with of signing it we than fourth we the the expected Sony. XX% the XX% drove of increase in million. above already total million a renewal represents signed range. this new most quarter, $XXX XX% XX the only since last issuing

for We received. on also per reports we estimates based updated new unit royalties

million. recurring was our quarter revenue over Importantly, in $XXX the

$XX licensing compensation Our revenue share-based and totaling million. year-over-year approximately in successes drove increases share

In increase and $X addition, expenses in year. we restructuring over a $XX litigation million recognized a million charge last

drive compared the our help lower across to XXXX. of operating expenses activities restructuring balance as costs Our

were year-over-year comparatively with restructuring of remaining If the base. adjust $X expenses activities operating operating drove expense share-based flat our decrease items, for higher quarter compared a quarter, XXXX. one-time we in and million fourth on Focusing compensation, relatively fourth our

million to driven flow free million both flow new agreements. was fixed Moving fourth for In in free robust the $XX $XXX and generated a follows price free of cash in This million quarter $XX cash, by strong the on XXXX. of full-year. cash years, we flow cash

and As in I've before, or collect agreements resulting revenue. timing discussed related payments we when frontloaded such cash have the recognize payments, somewhat the between uneven differences often

The strong dividends. more provided return have years $XXX net than the to the brings continued $XXX and we five last to dollars and of effort million, receipts, cash around In our in we cash during shareholders XXXX, $XX more billion free drove cash cash buybacks of due million to our over our half our This revenue capital to cash. our with long-term XX-K. always, As up through contractor returned balance than excess from licenses, flows return million. including details a year-end deferred total year cash additional

quarter we of million first the be XXXX, we to revenue. million, the of that range Looking strong in quarter announced another expected with to which $XXX all forward of revenue today expect $XX recurring is to

As expectation contract based on always, is signed this to-date.

quarter first year. that expect activities of XXXX also from will last We undertook the benefit we restructuring

about restructuring costs, expect end expected $XX higher We expenses million as be activities offset our related total roughly tail restructuring to million, $X are operating litigation will from of costs. including savings

us So excellent off financial an another we year I'll start strong with a to closing, Richard. base capped in back over providing With that, turn it to with great XXXX. quarter,

Thank for questions. Rich. open we call Operator, will Thank you, the you, now Liren.

Of course, our go We'll from with ahead. and Scott Instructions]. question go Searle Please ROTH take Capital. ahead thank you. [Operator first

what's quick my stock Nice OpEx first is make I want million job real on heard would good of $XX that on comp point questions. as that well, kind ex-litigation going want in to you of and of Hey, out? so for taking sure quarter, including in there terms the Hey, dive quarter, at kind that normalized the be what Rich, correctly, that are shakes front, And kind some morning. of I forward just guys what thanks calibrate just the number I number, allocating kind to the to of when in litigation? in

million with the quarter $XX total estimate And it restructuring million the first Scott, Yes, yes, that is I'll so includes for OpEx. $X charges. stick

mention did the for litigation February. I first trial be But bit down. higher we as mentioned costs Liren we had do the coming expect and of a little that's course, that, see can you quarter, in So to January

that, I how in if that well. front in thinking could IoT number the TVs, current the we the you market, was if wondering you that penetration rate be absolute mobility it's about outside about is early should on into quantify move on, in into and kind of video think starting of fourth and was quarter terms what and going dollars of Liren, at the in the what starting now you're days to TV time XXXX. and XXXX the helpful. of terms you, areas as Got still talk Haptics with front, on could, what's to I

Yes, hey, Scott. This is Liren.

CE as as doing well, on as recurring XX a revenue we signed So well we TV our last will worth CE quite million. amount top are the payment on for year $XX And little year, substantial we side mobile vendor over last it's reported, be of space a vendors our parts noting deal the bit both a the TV that top contains have sales. XX with also which space. also And brings

more million So about We we per year. our progress well. overall, make have doing in make order $XXX to target we're to which before need probably stated

really progress way have on are we that. good So we But a long making to go.

it Liren, of the when does grow with in Got relationship new you. there Sony that relicense in or factor any XX%, agreement re-signed you're with a Sony? Is XXX% year, that with you this grow does terms number comfortable

Yes.

moving think in further I kind the is as unit look as we're evolves, our of of $XX CE on base course but forward, next growth, depend contracts. getting get importantly, creeping market said, we deals $XX then will signed in on there and because new per So some done. million million Liren But then most how year over on closing

of lay the you if And front, timelines sand how line resort thinking to wondering could of of where you. should you could, like kind factor now, XXXX? in done we like out things kind about is injunctions in see of litigation in get where if Got them things be on I last some and drawing the as as has something kind the I'm the

Scott, litigation of comment me litigations let loan couple on here.

it that As hearing filed week. I has mentioned finished stage here, completed, the France last UK,

So and take all evidence to we we expect render Judge the multiple his to decision. have months to,

for happen this know that But most it. likely don't will timing we exact, really So year. precise

the Oppo just the we December. case, regarding So last filed case

we case. that still So stage are of in the early

clear timeline case do is developing. frankly still I a not So have yet. That

Okay, And class high if very front, of cash a capital could problem generating flow. you of I lastly, allocation have helpful. on just lot guys a free the

M&A What's about buybacks, out thinking capital from attractive, how things You've that that? be valuations Thanks. are about you in? how come been are are on an standpoint, And the else have should market there dividends, in going doing thinking Liren, allocation? the we

methodology the on overall the But I Yes, wanted to here. Rich on let me comment stuff. M&A follow-up capital allocation

the wise, On are good here, up opportunities done, well-positioned. wise. and deals always of our we are about us, where record we M&A getting our a frankly, stuff at come that all is the as momentum look to it technology IPO wise, incredibly company where picking and very I feel track we

what far, sense, If our obviously pursue to makes that freedom all certain look about at But there anything gives but different us So position strong cash M&A opportunities. the feel we very doing allows obviously here. we so them. are we

because sheet, in Yes, balance the cash have add, having in just to addition and we strong present position. opportunity I'll a

we're to beyond you're in uneven it's that you or, withstand important that showing to my companies maintain that script, that, bigger as prevent then, little in by yourself. I or strength a with that to are And acknowledge frankly mentioned, want litigation flows litigations sometimes either quarter-to-quarter always, cash bit year-over-year. we the of because As than also able

as agreements well. little So sign bit we sometimes when a new we cash upfront get

Securities. we'll And question go our go take with ahead from Please Soderberg next Colliers Derek and ahead.

of about there. curious are expired XXXX, Or for them this looks any them renewals. those my you are renewed, wanted you two other that I renew like or past the start any guys, not this It or year expected of taking with four how still had feeling to out of business. that Hey, six I'm exiting thanks customers to questions. some the

be Just any additional would color great? on that

this Yes. Hey, is Liren. Derek

you're So four had renewals we of we and six up signed correct, for absolutely them.

working the other we that signed CE they not we two fairly is player that which have small a are So Funai, yet are on.

other ZTE. yet signed are on is The still have, we we haven't working we one

the As ZTE's down gone of has quite might be aware, substantially last you years. volume couple in

yet. this is haven't we're we working very signed And that something them. with active So

And agreements and I'll up on that's year. we every not. that disclosure at renewal of And renewed for disclosures It just already year you've note, the XX-K it. end revenue the like are the read probably have the each in our the sounds Derek. But have that for four that impact around two

to like eventually impact Got the might this [Technical it. curious past, if portfolio the after Liren that then setbacks you've Got sort In as year. any been decision. in of it. And on relates have it past. the on just back renewals Difficulty] the FRAND the patent successful, for I'm

guys nine that this due year. great? be renewals like think I Anything have would you something on

Yes, history FRAND terms. we we whenever so Derek, a that's always I'll see agreement end our up litigate license under past with

see than Basically, global the trial It we refused injunction. in frankly potential that Judge I FRAND that is that week determination. UK, on hearing we different FRAND evolved term will be global take know I a how to So important our having are we finished the will currently that then in are the no they previous the worse. decide, litigations last to portfolio rate going much are facing to the be have note undertaken. base

well-positioned. context I we think So in here, very are that

more Our the valid been be standard. patents our and technology is important. been over to And has we over have strong, and to demonstrated our to found very even infringed portfolio again become accurate as

and this that is a decision. pending very So development, we think context positive in here, Judge's as the

with next to question Anja Soderstrom Sidoti. from Please ahead. we'll go And on move our

help it asked questions in already. the communications with a internally the did for in something would you that A has Hi, like of the But have that and time a been lists cases done I'm or year, driving licenses, or with litigation congratulations questions say if for it's taking you licensed on my the momentum new had curious, this just good you what just thank you -- seems lot year. good --? price great

Yes, Anja, is hey, Liren. this

you're picked deal a up So right has momentum yes, quite our bit. absolutely

call signed that's signed number As certain decades. as because decades, script, to said the two we we can which here, I as note we history in six in a my And side record, mentioned just we the license highest two is agreement, long own find. according here how in our

in is attribute the signed six are credit stuff any team. But momentum certain I the We the to all back the highest here. really number we pretty to year.

We worked here. making. And early deals have it deals and of to we with around closely the overcome worked some that incredibly COVID [ph] us team, the We on build open well really the here. completed get hard, clock and try have to imposed well the we really really challenges all that the [ph] we work

So the the really with to to together. have of I'm a portfolio. where of it's when we but you be of demonstrating Like said, I those obviously, deals are. strengths lot a record litigate, very things know, gets And we proven we our litigation. very, our without litigations. of most done It's happy coming have technology, strengths to the bring able

So I'll number together. coming things different say of it's a

set pricing past, after CE the going a you. set smaller of that to thank you were of larger for and about once you concept. Okay, benchmark you go In progressing. the the also And question would how you grasp then that's to the sort benchmark then start to deals had said the

progress? that in you are where So

along for strategy. are And said, you that program proceeding the Also, CE years on we now. have well working several as we

vendor major major milestone. even know some top customers, built assigning few up TV regarding the to we have a major year have And who then a do. TV are. work pretty smaller initially we the they last And moving vendors, We further regarding XX was and still

with active very engaging, pretty are them. We dialogue

with question-and-answer the back remarks. And our or hand that to now that, for session. closing conclude any would I Richard over to does like call Lloyd additional

final have Liren Thank do you, Allie. you any remarks?

as by pandemic. and today. dedication for you thank navigate Thank again your safe XXXX. will us everyone healthy saying you. to executions stay close in I thanks, hope joining the and continue throughout to Hey, we I all strong everyone the Yes. through for employees

does Thank And today's call. with conclude for participation. your that, that you

disconnect. now may You