Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

______________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 17, 2024

______________

INTERDIGITAL, INC.

(Exact name of Registrant as Specified in Charter)


Pennsylvania	1-33579	82-4936666
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

200 Bellevue Parkway, Suite 300

Wilmington, DE 19809-3727

(Address of principal executive offices, Zip code)

302-281-3600

Registrant's telephone number, including area code

Not Applicable

Former Name or Former Address, if Changed Since Last Report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Common Stock, par value $0.01 per share

IDCC

NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 7.01. Regulation FD Disclosure.

The slide presentation attached hereto as Exhibit 99.1 will be presented by InterDigital, Inc. (the “Company”) at the 26th Annual Needham Virtual Growth Conference on January 18, 2024. The presentation may also be used by the Company at future investor conferences or meetings.

The information in this report, including Exhibit 99.1, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.


99.1			InterDigital, Inc. Investor Presentation

104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


INTERDIGITAL, INC.


By: /s/ Joshua D. Schmidt
Joshua D. Schmidt
Chief Legal Officer and
Corporate Secretary

Date: January 17, 2024

InterDigital 26th Annual Needham Growth Conference | January 18, 2024

1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 2 Disclaimers Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Exchange Act. Such statements include information regarding our current beliefs, plans and expectations, including, without limitation, the matters set forth below. Words such as "believe," “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” "goal," "could," "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," variations of any such words or similar expressions contained herein are intended to identify such forward-looking statements. Forward-looking statements are made on the basis of management’s current views and assumptions and are not guarantees of future performance. Although the forward-looking statements in this presentation reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements concerning our business, results of operations and financial condition are inherently subject to risks and uncertainties. We 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: (i) unanticipated delays, difficulties or accelerations in the execution of patent license agreements; (ii) the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional or related legal proceedings, including appeals, changes in the schedules or costs associated with such proceedings or adverse rulings; (iii) our ability to leverage our strategic relationships and secure new patent license agreements on acceptable terms; (iv) our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets; (v) our ability to enter into partnerships with leading inventors and research organizations and identify and acquire technology and patent portfolios that align with our roadmap; (vi) our ability to commercialize our technologies and enter into customer agreements; (vii) the failure of the markets for our current or new technologies to materialize to the extent or at the rate that we expect; (viii) 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; (ix) risks associated with our capital allocation strategies, including risks associated with our planned dividend payments and share repurchases; (x) changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act, as well as further guidance that may be issued regarding such act; (xi) risks related to the potential impact of new accounting standards on our financial position, results of operations or cash flows; (xii) failure to accurately forecast the impact of our restructuring activities on our financial statements and our business; (xiii) the timing and impact of potential administrative and legislative matters; (xiv) changes or inaccuracies in market projections; (xv) our ability to obtain liquidity though debt and equity financings; (xvi) the potential effects that macroeconomic uncertainty could have on our financial position, results of operations and cash flows; (xvii) impacts from acts of terrorism, war or political or civil unrest, or any responses thereto, in the United States or elsewhere; (xviii) changes in our business strategy; (xix) changes or inaccuracies in our expectations with respect to royalty payments by our customers and (xx) risks related to our assumptions and application of relevant accounting standards, including with respect to revenue recognition. You should carefully consider these factors as well as the risk factors set forth in our Form 10-K and other SEC filings before making any investment decision with respect to our common stock. These factors, individually or in the aggregate, may cause our actual results to differ materially from our expected and historical results. You should understand that it is not possible to predict or identify all such factors. In addition, you should not place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. We undertake no obligation to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law. Industry Data This presentation contains statistical data, estimates, and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. While we believe the industry and market data included in this presentation are reliable and are based on reasonable assumptions, these data involve many assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and other publicly available information. Non-GAAP Financial Measures This presentation includes certain non-GAAP measures not based on generally accepted accounting principles. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP measures used by us may differ from the non-GAAP measures used by other companies. Definitions of and reconciliations between these non-GAAP measures and the most directly comparable GAAP measures are included in the appendix to this presentation.

We invent the technologies that make life boundless Strong Financial Performance Double-digit revenue growth, exceptional margins, robust return of capital Large Market Opportunity $650M+ recurring revenue target in device markets. Expanding into greenfield of video streaming and cloud services opportunities Licensing Momentum Experienced leadership team with long industry track record. Over $2.5B of new contracts completed in past 3 years Differentiated Patent Portfolio One of the strongest and highest quality patent portfolios in the world with > 30,000 patents across wireless, video and AI Deep Industry Expertise Five decades of pioneering wireless and video innovation. Highest concentration of inventors 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 3

InterDigital Business Model We are a foundational R&D company. We share our innovation through standard process and monetize our technology through IP licensing. 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 4

Pioneering research integral to the evolution of cellular wireless and video innovation since 1972 We reinvest ~half our recurring revenue into research and portfolio development Over Five Decades of Wireless & Video Innovation 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 5 Over half of our employees are engineers hold advanced degrees are inventors Of our engineers… ~90% ~90%

Management Team of Industry Veterans Liren Chen President & CEO Previously SVP, Global Head of IP; Qualcomm Inc. Richard Brezski EVP, CFO More than 20 years at InterDigital, CFO since 2012 Eeva Hakoranta EVP, CLO Previously SVP, Head of IP and Litigation & GC; Nokia Technologies Rajesh Pankaj EVP, CTO Previously SVP & Head of Corporate R&D; Qualcomm Inc. 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 6

>100 Leadership Positions in Wireless & Video Standards 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 7 JVT Cellular & WiFi Standards Video Standards RAN2 Chair CT Vice Chair SAI Vice Chair PDL Vice Chair ETSI Board Member ISAC ISG Chair RIS ISG Chair Steering Committee Board Member SA Board of Governers Policy & Procedures C/SAB Chair AIML TIG Chair Internet WG Vice Chair NNVC Co-Chair NNVC SW Chair Beyond VVC Co-chair of Two AHG Beyond VVC Co-chair of Two AHG AI AHG Co-chair AI-PCC Chair Haptic AHG Chair Steering Board Member TSAG Vice Chair

1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 8 Recognized Global Innovation Leader For the 2nd year in a row, LexisNexis recognized InterDigital amongst the World’s 100 Most Innovative Businesses. Innovation Momentum 2023: The Global Top 100, “represents the world’s leading patent owners with the highest innovation momentum.”

Wireless Video Implementation DTV Broadcast & Home Network 2017 ~19,000 Assets 2023 >30,000 Assets Increasingly Diverse Patent Portfolio Our patent portfolio grew >60% between 2017 & 2023 with the addition of video & DTV related technologies and continuing growth of wireless assets 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 9

Average Competitive Impact InterDigital Ranks Among the Highest in Patent Quality for 5G and Video Codec Patents1 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 10 0 4 8 12 InterDigital Company #1 Company #2 Company #3 Company #4 Company #5 Company #6 Company #7 Company #8 Company #9 0 2 4 6 8 Company # 9 Company # 8 Company # 7 Company # 6 Company # 5 Company # 4 InterDigital Company # 2 Company #1 Video Codec Patent Holders 5G Patent Holders 1 Patentsight Jan 2023

We have well-established licensing programs and lead the industry in transparency and fair licensing practices Our Licensing Principles We complete the vast majority of our licensing agreements through bilateral negotiations On the rare occasions we had to enforce our rights in court, our patents have been repeatedly found to be valid, essential to standards and infringed Our past enforcement actions have always resulted in license agreements 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 11

1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 12 Target: $650M ARR; 60% Adj EBITDA Margin + Additional opportunity from Streaming and Cloud Services $500M Revenue Per Yeara $150M+ Greenfield Opportunity ~$500 Billion TAMb SMARTPHONES CE, IoT/AUTO STREAMING & CLOUD SERVICES PORTFOLIO RESEARCH >30,000 PATENT ASSETS MARKETS WIRELESS RESEARCH: CELLULAR & WI-FI VIDEO RESEARCH ARTIFICIAL INTELLIGENCE Revenue Per Yeara a Annual recurring revenue target b OMDIA

Recent Progress Toward our Target Over 30 licenses signed in past 3 years driving > $2.5B of contract value; 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 13 2021 a Currently in binding arbitration to set license rate 2024 #1 Chinese Smartphone vendor 2022 2023 Top-10 TV vendor Largest license in company history Major CE/IoT License 80% of connected car market under license #1 Court wins result in cellular and HEVC licenses #1 Television vendor Smartphone vendor a

Revenue Growth Double-digit growth in both Smartphone and CE, IoT/Auto licensing programs $40M $24M $68M $104M $80M $267M 2019 $323M 2020 $352M 2021 $353M 2022 $468M 2023E $319M $359M $425M $458M $549M Smartphone CE, IoT/Auto Other 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 14 19% CAGR 15% CAGR a a Based on Preliminary Results published Jan 16, 2024

$131M $155M $208M $255M $344M 41% 43% 49% 56% 63% 0% 10% 20% 30% 40% 50% 60% 70% $0M $100M $200M $300M $400M $500M 2019 2020 2021 2022 2023E Revenue Growth and Cost Control drive Expanding Margins 1/17/2024 15 $319M $359M $425M $458M $549M 2019 2020 2021 2022 2023E $281M $304M $354M $307M $329M 2019 2020 2021 2022 2023E Revenue15% CAGR Expenses 4% CAGR $0.66 $1.44 $1.77 $3.07 $7.53 2019 2020 2021 2022 2023E Diluted EPS >10X growth Adjusted EBITDA > 2.5X growth a Based on Preliminary Results published Jan 16, 2024 b Non-GAAP financial measure. Refer to non-GAAP reconciliation in appendix a a a a b - - - - Adj EBITDA Marginb

1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 16 Increasing Momentum Into 2024 $105M $250M Revenue Q4 2023 Preliminary Results (published Jan 16, 2024) Q1 2024 Guidance Midpoint (published Jan 16, 2024) $1.20 $2.75 Diluted EPS

Robust Return of Capital Cash Returned to Shareholders ~$852M since 2019 Stock Buyback ~$639M in share repurchases since 2019 ~24% net reduction in basic share count Dividends ~$212M in dividends paid since 2019 14% increase in Sep ‘23 $43M 2019 2020 2021 2022 2023 $241M $73M $117M $378M Dividends Paid Shares Repurchased 1/17/2024©2024 InterDigital, Inc. All Rights Reserved. 17

Questions?

Appendix

1/17/2024 21 Non-GAAP Reconciliations 1 Adjusted EBITDA and Adjusted EBITDA margin are supplemental non-GAAP financial measures that InterDigital believes provide investors with important insight into the company's ongoing business performance. InterDigital defines Adjusted EBITDA as net income attributable to InterDigital Inc. plus net loss attributable to non-controlling interest, income tax (provision) benefit, other income (expense) & interest expense, depreciation and amortization, share-based compensation, and other items. Other items include restructuring costs, impairment charges and other non-recurring items. Adjusted EBITDA margin is Adjusted EBITDA over total revenues. These non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. a a Based on Preliminary Results published Jan 16, 2024 ©2024 InterDigital, Inc. All Rights Reserved. (In Millions) 2019 2020 2021 2022 2023E Net income (loss) attributable to InterDigital, Inc. 21$ 45$ 55$ 94$ 209$ Add: Net loss attributable to non-controlling interest (6) (7) (13) (2) (3) Add: Income tax (provision) benefit 11 (7) 15 26 27 Add: Other expense & interest expense 12 24 14 33 (12) Add: Depreciation and amortization 77 81 78 79 78 Add: Share-based compensation 8 10 29 22 36 Add: Other operating items 9 9 30 3 10 Adjusted EBITDA 1 131$ 155$ 208$ 255$ 344$ Adjusted EBITDA Margin 1 41% 43% 49% 56% 63% Other Operating Items Restructuring - - 28 3 - Other non-cash charges 1 9 - - 3 Non-Recurring Personnel-Related - - 2 - - Net Litigation Fee Reimbursement 8 Transaction related costs 8 - - - - Total Other Operating Items 9$ 9$ 30$ 3$ 10$ For The Year Ended December 31, a

Cover	Jan. 17, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jan. 17, 2024
Entity Registrant Name	INTERDIGITAL, INC.
Entity Central Index Key	0001405495
Amendment Flag	false
Entity Incorporation, State or Country Code	PA
Entity File Number	1-33579
Entity Tax Identification Number	82-4936666
Entity Address, Address Line One	200 Bellevue Parkway
Entity Address, Address Line Two	Suite 300
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19809-3727
City Area Code	302
Local Phone Number	281-3600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	IDCC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false