InterDigital, Inc. (Nasdaq: IDCC), a mobile and video technology
research and development company, today announced selected
unaudited preliminary financial results for the quarter ended
December 31, 2023, and an initial outlook for first quarter 2024.
Q4 2023 Preliminary Results
GAAP
- The company expects
total revenue to be approximately $105 million, comprised primarily
of recurring revenue and in line with prior guidance.
- The company expects
operating expenses to be approximately $81 million, updated from
its previous expectation of $77 to $79 million. The increase
related to higher litigation costs and performance-based
compensation.
- Net income1 is
expected to be approximately $34 million, above the previous
expectation of $18 to $21 million. The diluted earnings per share
is expected to be approximately $1.20, above the previous
expectation of $0.70 to $0.80. These increases are primarily
related to the company’s expected release of a value allowance
against deferred tax assets in certain foreign jurisdictions.
Non-GAAP
- Adjusted EBITDA2 is
expected to be approximately $52 million, at the top end of the
prior guidance.
- Non-GAAP net income3
is expected to be approximately $36 million, above the previous
expectation of $31 to $34 million.
- Non-GAAP diluted
earnings per share3 is expected to be approximately $1.34, above
the previous expectation of $1.17 to $1.29.
Q1 2024 Outlook
- Total revenue is
expected to be in the range of $245 to $255 million, including
approximately $152 to $160 million of catch-up sales.
- Operating expenses
are expected to be in the range of $146 to $154 million, including
revenue share expense of $66 to $69 million.
- Net income1 is
expected to be in the range of $70 to $85 million, or $2.50 to
$3.00 per diluted share.
This outlook is based on estimates covering existing licenses,
and does not include any new agreements we may sign over the
balance of the first quarter.
The company has not yet finalized its financial results for the
quarter and full year ended December 31, 2023 or outlook for first
quarter 2024. These preliminary financial results and outlook
reflect the company’s current estimates, based on information
available to management as of the date of this release, and are
subject to further changes upon completion of the company’s
standard quarter and year-end closing procedures, as applicable.
This update does not present all necessary information for an
understanding of InterDigital’s financial condition as of the date
of this release, or its results of operations for the fourth
quarter and full year ended December 31, 2023 or first quarter
2024. As InterDigital completes its quarter-end and year-end
financial close processes and finalizes its financial statements
for the quarter and year-end, it will be required to make
significant judgments in a number of areas and expects to receive
new information including customer royalty reports for periods
ended December 31, 2023. It is possible that InterDigital may
identify items or receive new information that require it to make
adjustments to the preliminary financial information set forth
above and those changes could be material. InterDigital does not
intend to update such financial information prior to release of its
final fourth quarter and full year ended December 31, 2023
financial statement information and updated first quarter 2024
guidance, which is currently scheduled for Thursday, February 15,
2024.
Conference Call and Webcast Information
The company will discuss its business and outlook for first
quarter 2024 at the 26th Annual Needham Growth Conference on
Thursday, January 18th, 2024, at 3:00 PM ET.
InterDigital executives will also host a conference call on
Thursday, February 15, 2024 at 10:00 a.m. Eastern Time (ET) to
discuss the company's performance.
To access the live webcasts of these events, please visit the
Investors section of the company's website. Archived replays will
also be available following the events.
About InterDigital®
InterDigital develops mobile and video technologies that are at
the core of devices, networks, and services worldwide. We solve
many of the industry’s most critical and complex technical
challenges, inventing solutions for more efficient broadband
networks, better video delivery, and richer multimedia experiences
years ahead of market deployment. InterDigital has licenses and
strategic relationships with many of the world’s leading technology
companies. Founded in 1972, InterDigital is listed on Nasdaq.
InterDigital is a registered trademark of InterDigital, Inc.
For more information, visit: www.interdigital.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended. Such statements include information regarding our
current beliefs, plans and expectations. 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," and variations of any such
words or similar expressions 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. Forward-looking statements are
inherently subject to risks and uncertainties that could cause
actual results, and actual events that occur, to differ materially
from results contemplated by the forward-looking statements. These
risks and uncertainties include, but are not limited to, (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.
We undertake no duty to revise or update publicly any
forward-looking statement for any reason, except as otherwise
required by law.
Footnotes
1 Throughout this
press release, net income and diluted earnings per share (“EPS”)
are attributable to InterDigital, Inc. (e.g., after adjustments for
non-controlling interests), unless otherwise stated.
2 Adjusted EBITDA
is a supplemental non-GAAP financial measure 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. This non-GAAP financial measure may
be calculated differently from, and therefore may not be comparable
to, similarly titled measures used by other companies. A detailed
reconciliation of Adjusted EBITDA to the most directly comparable
GAAP financial measure is provided below.
3 Non-GAAP net
income, Non-GAAP diluted earnings per share, and Non-GAAP
weighted-average diluted shares are supplemental non-GAAP financial
measures that InterDigital believes provides investors with
important insight into the Company's ongoing business performance.
InterDigital defines Non-GAAP net income as net income attributable
to InterDigital, Inc. plus share-based compensation, acquisition
related amortization, depreciation and amortization, restructuring
costs, impairment charges and one-time adjustments, losses on
extinguishments of long-term debt, the related income tax effect of
the preceding items, and adjustments to income taxes. Non-GAAP
diluted earnings per share is defined as Non-GAAP net income
divided by Non-GAAP weighted average number of common shares
outstanding–diluted, which adjusts the weighted average number of
common shares outstanding for the dilutive effect of the
Convertible Notes, offset by our hedging arrangements.
InterDigital’s computation of these non-GAAP financial measures
might not be comparable to similarly named measures reported by
other companies. The presentation of these financial measures,
which are not prepared under any comprehensive set of accounting
rules or principles, is not intended to be considered in isolation
or as a substitute for the financial information prepared and
presented in accordance with GAAP. A reconciliation of each of
these metrics to its most directly comparable GAAP financial
measure is provided below.
RECONCILIATION OF NON-GAAP
MEASURES
The table below presents a reconciliation of Adjusted EBITDA to
Net income attributable to InterDigital, Inc., the most directly
comparable GAAP financial measure (in millions):
|
Q4 Preliminary |
|
|
2023 |
|
Net income attributable to InterDigital, Inc. |
$ |
34 |
|
Income tax provision |
|
(3) |
|
Other income (expense), net & interest expense |
|
(7) |
|
Depreciation and amortization |
|
19 |
|
Share-based compensation |
|
9 |
|
Adjusted EBITDA 2 |
$ |
52 |
|
|
|
|
|
The table below presents a reconciliation of Non-GAAP net income
to Net income attributable to InterDigital, Inc., the most directly
comparable GAAP financial measure (in millions):
|
Q4 Preliminary |
|
|
2023 |
|
Net income
attributable to InterDigital, Inc. |
$ |
34 |
|
Share-based compensation |
|
9 |
|
Acquisition related amortization |
|
10 |
|
Other non-operating items (a) |
|
(5) |
|
Related income tax and noncontrolling interest effect of above
items |
|
(3) |
|
Adjustments to income taxes |
|
(9) |
|
Non-GAAP net
income 3 |
$ |
36 |
|
|
|
Weighted average
dilutive shares - GAAP |
|
28.3 |
|
Less: Dilutive impact of the Convertible Notes |
|
1.2 |
|
Weighted average
dilutive shares - Non-GAAP 3 |
|
27.1 |
|
|
|
Non-GAAP net income
per diluted share 3 |
$ |
1.34 |
|
|
|
|
|
(a) Other non-operating items primarily includes gains from fair
value changes of our debt and long-term strategic investments
during the three months ended December 31, 2023.
|
|
CONTACT: |
InterDigital, Inc. |
|
Email: investor.relations@interdigital.com |
|
+1 (302) 300-1857 |
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