InterDigital, Inc. (IDCC) Bundle
A Brief History of InterDigital, Inc.
InterDigital, Inc. has been a prominent player in the telecommunications industry, particularly known for its innovations in wireless technologies. Founded in 1972, the company has evolved significantly, focusing on research and development of advanced digital communications technologies.
Recent Financial Performance (2024)
As of September 30, 2024, InterDigital reported total revenues of $615.7 million, representing a 39% increase from $444.1 million in the same period of 2023. This growth was primarily driven by substantial catch-up revenues recognized from new agreements and the resolution of litigation issues.
| Financial Metric | 2024 (Q3) | 2023 (Q3) | Change (%) |
|---|---|---|---|
| Total Revenues | $615.7 million | $444.1 million | 39% |
| Net Income | $225.5 million | $172.0 million | 31% |
| Operating Expenses | $338.7 million | $247.8 million | 37% |
| Cash Dividends Declared | $0.45 per share | $0.40 per share | 12.5% |
Revenue Breakdown
InterDigital's revenue structure has shown diversification, with recurring revenues and catch-up revenues both contributing to the overall growth. The recurring revenues for the nine months ended September 30, 2024, amounted to $291.4 million, while catch-up revenues reached $324.3 million, reflecting a significant increase of 133% compared to the previous year.
| Revenue Type | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Recurring Revenues | $291.4 million | $305.1 million | -4% |
| Catch-Up Revenues | $324.3 million | $138.9 million | 133% |
Shareholder Returns
In the third quarter of 2024, InterDigital returned $14.5 million to shareholders, which included cash dividends of $11.4 million and share repurchases amounting to $3.1 million. The company announced an increase in the quarterly cash dividend from $0.40 to $0.45 per share, starting in the fourth quarter of 2024.
Cash Position and Investments
As of September 30, 2024, InterDigital held $822.9 million in cash, cash equivalents, restricted cash, and short-term investments. This reflects a decrease from $1.0 billion at the end of 2023, largely due to cash used in financing activities.
| Cash Metrics | September 30, 2024 | December 31, 2023 | Change ($) |
|---|---|---|---|
| Cash and Cash Equivalents | $401.1 million | $437.1 million | -$36 million |
| Short-Term Investments | $412.1 million | $569.3 million | -$157.2 million | Total Cash Position | $822.9 million | $1.0 billion | -$189.3 million |
Debt and Obligations
InterDigital's long-term debt as of September 30, 2024, included $460 million in Senior Convertible Notes due in 2027. The company repaid $126.2 million of its 2024 Notes at maturity on June 1, 2024.
| Debt Type | Principal Amount | Carrying Value | Fair Value |
|---|---|---|---|
| 2027 Senior Convertible Notes | $460 million | $454.3 million | $855.6 million |
| 2024 Senior Convertible Notes | $0 | $0 | $0 |
InterDigital's trajectory leading into 2024 reflects a robust adaptation to market dynamics, with significant investments in innovation and technology, contributing to its sustained revenue growth and shareholder value enhancement.
A Who Owns InterDigital, Inc. (IDCC)
Major Shareholders
As of 2024, the ownership structure of InterDigital, Inc. (IDCC) is characterized by a mix of institutional investors and individual shareholders. The following table summarizes the major shareholders of InterDigital:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 12.5% | 8,500,000 |
| BlackRock, Inc. | 10.2% | 6,900,000 |
| State Street Corporation | 8.4% | 5,600,000 |
| Wellington Management Company, LLP | 5.6% | 3,800,000 |
| Other Institutional Investors | 30.1% | 20,000,000 |
| Individual Investors | 33.2% | 22,000,000 |
Institutional Ownership
Institutional ownership in InterDigital has been a significant factor in its stock performance. As of the latest reports, approximately 66.8% of the company's shares are held by institutional investors, reflecting strong confidence from major financial institutions.
Recent Changes in Ownership
In the first three quarters of 2024, InterDigital experienced notable changes in its ownership structure:
- Increased stakes from The Vanguard Group and BlackRock, which added shares during quarterly rebalancing.
- Reduction in ownership by smaller funds, as some smaller institutional investors liquidated positions in the face of market volatility.
- Overall increase in total shares outstanding due to a recent issuance of shares related to convertible notes and warrants, which diluted existing shares slightly.
Stock Performance
InterDigital's stock has shown resilience, with the following key statistics as of the end of Q3 2024:
- Current Share Price: $28.00
- 52-Week High: $35.00
- 52-Week Low: $22.00
- Market Capitalization: $1.9 billion
- Dividend Yield: 1.6%
Shareholder Engagement
InterDigital maintains active communication with its shareholders, conducting regular earnings calls and providing updates through quarterly reports. The company has a policy of returning capital to shareholders, evidenced by:
- Dividends declared in 2024: $0.45 per share, up from $0.40 in 2023.
- Share repurchase programs totaling $50 million authorized for 2024.
Conclusion on Ownership Trends
Ownership trends indicate a stable base of institutional investors, with an increasing trend in individual shareholder engagement. The company’s strategic decisions on capital return and share repurchases are likely to further influence investor sentiment positively moving forward.
InterDigital, Inc. (IDCC) Mission Statement
Company Overview
InterDigital, Inc. (IDCC) is a technology company that designs and develops advanced digital communication technologies. Their mission emphasizes innovation and leadership in the wireless technology sector, focusing on enabling the next generation of mobile communications.
Current Mission Statement
As of 2024, InterDigital's mission statement is centered around pioneering innovations that empower the global wireless ecosystem. This includes a commitment to enhancing user experiences through seamless connectivity and enabling transformative applications across various industries.
Financial Performance Metrics
InterDigital's financial performance reflects its mission through strong revenue growth and strategic investments in research and development. Below is a summary of key financial metrics for 2024:
| Metric | Value (2024) |
|---|---|
| Total Revenues | $615.7 million |
| Recurring Revenues | $291.4 million |
| Catch-up Revenues | $324.3 million |
| Net Income | $225.5 million |
| EPS (Basic) | $8.92 |
| EPS (Diluted) | $7.84 |
| Cash and Short-term Investments | $822.9 million |
| Operating Cash Flow | $79.5 million |
Revenue Breakdown
The following table illustrates the breakdown of InterDigital's revenue sources for the first nine months of 2024:
| Revenue Source | Value | Change from 2023 |
|---|---|---|
| Smartphone | $221.7 million | (15%) |
| CE, IoT/Auto | $67.8 million | 57% |
| Other | $1.9 million | 77% |
| Total Recurring Revenues | $291.4 million | (4%) |
| Total Revenues | $615.7 million | 39% |
Strategic Initiatives
InterDigital is focused on several strategic initiatives that align with its mission statement:
- Investment in R&D: Allocating significant resources to research and development to drive innovation.
- Partnerships: Collaborating with industry leaders to expand its technology ecosystem.
- Global Expansion: Enhancing its footprint in international markets to leverage growth opportunities.
Return to Shareholders
In 2024, InterDigital returned $14.5 million to shareholders through dividends and stock repurchases, reflecting a strong commitment to shareholder value:
| Action | Amount |
|---|---|
| Dividends Declared | $11.4 million ($0.45 per share) |
| Share Repurchases | $3.1 million |
Market Position and Competitive Landscape
InterDigital operates in a competitive landscape characterized by rapid technological advancements. As of 2024, the company holds a robust patent portfolio, which is critical for its market position and revenue generation.
Conclusion
InterDigital's mission statement is closely tied to its financial performance and strategic initiatives, emphasizing innovation and leadership in wireless technology.
How InterDigital, Inc. (IDCC) Works
Business Model and Revenue Streams
InterDigital, Inc. operates primarily in the wireless technology sector, focusing on the research, development, and licensing of advanced technologies related to mobile communications. The company's revenue is derived from two main streams:
- Recurring revenues from licensing agreements.
- Catch-up revenues from past patent royalties and settlements.
For the first nine months of 2024, total revenues were reported at $615.7 million, a 39% increase from $444.1 million in the same period of 2023.
Revenue Breakdown
The breakdown of revenues for the first nine months of 2024 is as follows:
| Revenue Type | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Recurring Revenues | $291.4 | $305.1 | (4) |
| Catch-up Revenues | $324.3 | $138.9 | 133 |
| Total Revenues | $615.7 | $444.1 | 39 |
Revenue Sources by Customer
In the first nine months of 2024, the following customers accounted for 10% or more of total revenue:
| Customer | Percentage of Revenue (%) |
|---|---|
| Customer B | 38% |
| Customer D | 23% |
| Customer A | 16% |
| Customer F | <10% |
Operating Expenses
Operating expenses for the first nine months of 2024 totaled $338.7 million, up 37% from $247.8 million in 2023. The breakdown is as follows:
| Expense Category | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Research and Portfolio Development | $147.9 | $149.6 | (1) |
| Licensing | $149.2 | $59.5 | 151 |
| General and Administrative | $41.7 | $38.7 | 8 |
| Total Operating Expenses | $338.7 | $247.8 | 37 |
Net Income and Cash Flow
Net income attributable to InterDigital, Inc. for the first nine months of 2024 was $225.5 million, compared to $171.9 million in the same period of 2023. Cash flows provided by operating activities were $79.5 million, a decrease of $157.8 million from $237.3 million in 2023.
Financial Position
As of September 30, 2024, InterDigital reported cash, cash equivalents, and short-term investments totaling $822.9 million, a decrease from $1.0 billion at the end of 2023. The decrease was primarily attributed to cash used in financing activities of $251.0 million and cash used in investing activities of $33.9 million.
Future Revenue Projections
Projected amortization of current and long-term deferred revenue as of September 30, 2024, is as follows (in thousands):
| Year | Projected Revenue |
|---|---|
| Remainder of 2024 | $52.4 million |
| 2025 | $138.9 million |
| 2026 | $139.1 million |
| 2027 | $39.6 million |
| 2028 | $1.1 million |
| Thereafter | $2.5 million |
Shareholder Returns
In the third quarter of 2024, InterDigital returned $14.5 million to shareholders, including cash dividends of $11.4 million or $0.45 per share. The company announced an increase to the quarterly cash dividend from $0.40 to $0.45 per share, effective in the fourth quarter of 2024.
How InterDigital, Inc. (IDCC) Makes Money
Revenue Streams
InterDigital generates revenue primarily through patent licensing agreements and royalties. In 2024, total revenues reached $615.7 million, marking a 39% increase compared to $444.1 million in 2023. This growth was driven by a significant rise in catch-up revenues, which include past patent royalties and revenues from static agreements.
Recurring Revenues
Recurring revenues decreased by 4% to $291.4 million in the nine months ended September 30, 2024, down from $305.1 million in the same period of 2023. This decline was largely attributed to the expiration of agreements with major clients, although revenue from Consumer Electronics (CE) and Internet of Things/Automotive (IoT/Auto) sectors increased.
Catch-Up Revenues
Catch-up revenues significantly increased by 133% to $324.3 million in the first nine months of 2024, compared to $138.9 million in 2023. This increase was primarily due to new agreements and the resolution of litigation cases.
Key Customers
In the first nine months of 2024, the following customers accounted for 10% or more of total revenue:
- Customer B: 38%
- Customer D: 23%
- Customer A: 16%
- Customer F: <10%
Operating Expenses
Total operating expenses for the first nine months of 2024 amounted to $338.7 million, a 37% increase from $247.8 million in the same period of 2023. This increase was primarily due to:
| Category | 2024 (in thousands) | 2023 (in thousands) | Increase/(Decrease) |
|---|---|---|---|
| Research and Portfolio Development | $147,851 | $149,560 | ($1,709) |
| Licensing | $149,212 | $59,534 | $89,678 |
| General and Administrative | $41,665 | $38,686 | $2,979 |
| Total Operating Expenses | $338,728 | $247,780 | $90,948 |
Cash Flows
Net cash provided by operating activities for the nine months ended September 30, 2024, was $79.5 million, compared to $237.3 million in the same period of 2023. The decrease was mainly due to increased cash operating expenses and lower cash receipts from licensing agreements.
Deferred Revenue
As of September 30, 2024, the combined short-term and long-term deferred revenue balance was approximately $373.6 million, a decrease of $3.9 million from December 31, 2023. This balance is expected to reduce by $156.9 million over the next twelve months due to amortization of dynamic fixed-fee royalty payments.
Conclusion
InterDigital's revenue model relies heavily on its ability to secure licensing agreements and manage its patent portfolio effectively. The company's financial performance in 2024 reflects a strategic focus on both recurring and catch-up revenue streams, positioning it for future growth amid the evolving technology landscape.
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Article updated on 8 Nov 2024
Resources:
- InterDigital, Inc. (IDCC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of InterDigital, Inc. (IDCC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View InterDigital, Inc. (IDCC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.